UNDERWRITING AGREEMENT
April 23,
2007
0000
Xxxxx Xxxx
P. O. Xxx
000
Xxxxxxxx,
Xxxxxxx
X0X
0X0
Attention: Xxxxxxx
Xxxxxx, President and Chief Executive Officer
Dear
Sirs:
GMP Securities L.P., Xxxxxxx Xxxxx
Ltd., Cormark Securities Inc. and Canaccord Capital Corporation (collectively,
the “Underwriters”)
hereby offer to purchase from Ur-Energy Inc. (the “Company”), and the Company
agrees to issue and sell to the Underwriters, 15,158,000 common shares of the
Company (the “Offered
Securities”) at a price of $4.75 per Offered Security for aggregate gross
proceeds to the Company of $72,000,500 upon the terms described in this
Agreement.
The Underwriters shall have an option
(the “Over-Allotment
Option”), which Over-Allotment Option may be exercised in the
Underwriters' sole discretion and without obligation, to purchase up to an
additional 2,273,000 Offered Securities (the “Additional Offered
Securities”) on the same basis as the Offered Securities for a period of
30 days following the Closing Date, solely for the purpose of covering
over-allotments made in connection with the Offering and for market
stabilization purposes. The Underwriters shall notify the Company in writing of
their election to exercise the Over-Allotment Option, which notice shall specify
the number of Additional Offered Securities to be purchased by the Underwriters
and the date (the “Option
Closing Date”) on which such Additional Offered Securities are to be
purchased. Such Option Closing Date may be the same as the Closing Date but not
later than 30 days following the Closing Date. If any Additional Offered
Securities are purchased, each Underwriter agrees, severally and not jointly, to
purchase the percentage of such Additional Offered Securities (subject to such
adjustments to eliminate fractional Additional Offered Securities as the
Underwriters may determine) equal to the percentage set out opposite the name of
such Underwriter in Section 12.1 of this Agreement. In the event that
the Company shall subdivide, consolidate, reclassify or otherwise change its common shares during the period in
which the Over-Allotment Option is exercisable, appropriate adjustments will be
made to the exercise price of the Over-Allotment Option and to the number of
Additional Offered Securities issuable on exercise thereof such that the
Underwriters are entitled to receive the same number and type of securities that
the Underwriters would have otherwise received had they exercised such
Over-Allotment Option immediately prior to such subdivision, consolidation,
reclassification or change.
Unless
the context otherwise requires, references herein to the "Offered Securities" include
the Additional Offered Securities. The offering of the Offered Securities (which
term shall include any
Additional
Offered Securities to be purchased in the event of the exercise of the
Over-Allotment Option) by the Company is hereinafter referred to as the “Offering”.
In consideration of the Underwriters'
services to be rendered in connection with the Offering, including assisting in
preparing documentation relating to the Offered Securities including the
Preliminary Prospectus and the Final Prospectus (in each case as hereinafter
defined), distributing the Offered Securities, directly and through other
investment dealers and brokers, and performing administrative work in connection
with the Offering, the Company agrees to pay the Underwriting Fee (as
hereinafter defined) to the Underwriters.
The Company agrees that the
Underwriters will be permitted to appoint, at their sole expense, other
registered dealers or other dealers duly qualified in their respective
jurisdictions, in each case acceptable to the Company, acting reasonably, as
their agents to assist in the Offering in the Qualifying Provinces and that the
Underwriters may determine the remuneration payable to such other dealers
appointed by them.
This offer is conditional upon and
subject to the additional terms and conditions set forth below.
1. Interpretation
1.1 Definitions: Unless expressly
provided otherwise, where used in this Agreement or any schedule hereto, the
following terms shall have the following meanings, respectively:
“Agreement” means the Agreement
resulting from the acceptance by the Company of the offer made by the
Underwriters by this letter;
“Applicable Securities Laws”
means, collectively, the applicable securities laws of each of the Qualifying
Provinces, their respective regulations, rulings, rules, orders and prescribed
forms thereunder, the applicable policy statements issued by the Securities
Commissions thereunder and the securities legislation of and policies issued by
each other relevant jurisdiction;
“Closing Date” means May 10,
2007 or such earlier or later date as the Company and the Underwriters may
agree, but in any event no later than May 24, 2007;
“Company” shall have the
meaning ascribed thereto in the first paragraph of this Agreement;
“Company's Information Record”
means all information contained in any press release, material change report
(excluding any confidential material change report), financial statements or
other document of the Company which has been publicly filed by or on behalf of
the Company pursuant to Applicable Securities Laws or otherwise;
“Eligible Issuer” means an
issuer which meets the criteria and has complied with the requirements of NI
44-101 so as to allow it to offer securities using a short form
prospectus;
“Exchange” means the Toronto
Stock Exchange;
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“Final Prospectus” means the
(final) short form prospectus of the Company qualifying the distribution of the
Offered Securities and the materials incorporated therein by
reference;
“including” means including
without limitation;
“material change” means a
material change for the purposes of the Applicable Securities Laws of the
applicable jurisdiction or where such term is undefined under such Applicable
Securities Laws means a change in the business, operations or capital of the
Company and the Material Subsidiaries, on a consolidated basis, that would
reasonably be expected to have a significant effect on the market price or value
of any of the Company's securities and includes a decision to implement such a
change made by the Company's board of directors or by senior management of the
Company who believe that confirmation of the decision by the board of directors
is probable;
“material fact” means a
material fact for the purposes of the Applicable Securities Laws of the
applicable jurisdiction or where such term is undefined under such Applicable
Securities Laws means a fact that would reasonably be expected to have a
significant effect on, the market price or value of the Company's
securities;
“Material Subsidiaries” means
the entities listed on Schedule “B” hereto;
“misrepresentation” means a
misrepresentation for the purposes of the Applicable Securities Laws of the
applicable jurisdiction or where such term is undefined under such Applicable
Securities Laws means (i) an untrue statement of a material fact, or (ii) an
omission to state a material fact that is required to be stated or that is
necessary to make a statement not misleading in the light of the circumstances
in which it was made;
“NI 44-101” means National
Instrument 44-101- Short Form Prospectus Distributions;
“NP 43-201” means National
Policy 43-201 - Mutual Reliance Review System for Prospectuses and Annual
Information Forms;
“Offered Securities” shall have
the meaning ascribed thereto in the first paragraph of this Agreement and shall,
if applicable, include any Additional Offered Securities in respect of which the
Over-Allotment Option may be exercised;
“Offering” shall have the
meaning ascribed thereto in the third paragraph of this Agreement;
“Offering Documents” means,
collectively, the Preliminary Prospectus, the Final Prospectus and any
Supplementary Material;
“Option Closing Date” shall
have the meaning ascribed thereto in the second paragraph of this
Agreement;
“Over-Allotment Option” shall
have the meaning ascribed thereto in the second paragraph of this
Agreement;
“person” includes any
individual, corporation, limited partnership, general partnership, joint stock
company or association, joint venture association, company, trust, bank, trust
company, land trust,
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investment
trust, society or other entity, organization, syndicate, whether incorporated or
not, trustee, executor or other legal personal representative, and governments
and agencies and political subdivisions thereof;
“Preliminary Prospectus” means
the preliminary short form prospectus of the Company prepared in connection with
the qualification of the distribution of the Offered Securities and the
materials incorporated therein by reference;
“Purchasers” means,
collectively, each of the purchasers of Offered Securities arranged by the
Underwriters pursuant to the Offering, including, if applicable, the
Underwriters;
“Qualifying Provinces” means,
the provinces of British Columbia, Alberta, Manitoba and Ontario;
“Securities Commissions” means,
collectively, the securities commissions or similar regulatory authorities in
each of the Qualifying Provinces;
“Selling Group” means,
collectively, those registered dealers appointed by the Underwriters to assist
in the Offering as contemplated in the fifth paragraph of this
Agreement;
“subsidiary” shall have the
meaning ascribed thereto in the Securities Act
(Ontario);
“Supplementary Material” means,
collectively, any amendment to the Final Prospectus, any amended or supplemental
prospectus or ancillary material required to be filed with any of the Securities
Commissions in connection with the distribution of the Offered Securities and
any material incorporated therein by reference;
“Survival Limitation Date”
means the later of:
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(i)
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the
second anniversary of the Closing Date or the Option Closing Date, as
applicable; and
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(ii)
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the
latest date under the Applicable Securities Laws relevant to a Purchaser
(non-residents of Canada being deemed to be resident in the Province of
Ontario for such purposes) that a Purchaser may be entitled to commence an
action or exercise a right of rescission, with respect to a
misrepresentation contained in the Final Prospectus or, if applicable, any
Supplementary Material;
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“Time of Closing” means 8:00
a.m. (Toronto time) on the Closing Date or the Option Closing Date, as
applicable;
“Underwriters” shall have the
meaning ascribed thereto in the first paragraph of this Agreement;
“Underwriting Fee” means the
cash commission equal to 6.0% of the gross proceeds of the Offering, payable to
the Underwriters; and
“United States” means the
United States of America, its territories and possessions, any state of the
United States, and the District of Columbia.
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1.2 Division and Headings: The
division of this Agreement into sections, subsections, paragraphs and other
subdivisions and the insertion of headings are for convenience of reference only
and shall not affect the construction or interpretation of this Agreement.
Unless something in the subject matter or context is inconsistent therewith,
references herein to sections, subsections, paragraphs and other subdivisions
are to sections, subsections, paragraphs and other subdivisions of this
Agreement.
1.3 Governing Law: This Agreement
shall be governed by and construed in accordance with the laws of the Province
of Ontario and the federal laws of Canada applicable therein.
1.4 Currency: Except as otherwise
indicated, all amounts expressed herein in terms of money refer to lawful
currency of Canada and all payments to be made hereunder shall be made in such
currency.
1.5 Schedules: The following are
the schedules attached to this Agreement, which schedules are deemed to be a
part hereof and are hereby incorporated by reference herein: Schedule “A” -
Opinion of Company's Counsel; Schedule “B” - Material Subsidiaries; Schedule “C”
- U.S. Securities Law Provisions; and Schedule “D” – Outstanding Convertible
Securities.
2. Nature
of Transaction
2.1 Each
Purchaser resident in a Qualifying Province shall purchase the Offered
Securities pursuant to the Final Prospectus. Except as set forth in Section 3.3,
each other Purchaser shall purchase in accordance with such procedures as the
Company and the Underwriters may mutually agree, acting reasonably, in order to
fully comply with the Applicable Securities Laws. The Company hereby agrees to
secure compliance with all applicable securities regulatory requirements of the
Qualifying Provinces on a timely basis in connection with the distribution of
the Offered Securities. Subject to being notified by the Underwriters
of the requirements thereof and upon request by the Underwriters, the Company
also agrees to file within the periods stipulated under Applicable Securities
Laws outside of Canada and at the Company's expense all private placement forms
required to be filed by the Company and the Purchasers, respectively, in
connection with the Offering and agrees to pay all filing fees required to be
paid in connection therewith so that the distribution of the Offered Securities
outside of Canada may lawfully occur without the necessity of filing a
prospectus or any similar document under the Applicable Securities Laws outside
of Canada, if applicable. The Underwriters agree to assist the Company in all
reasonable respects to secure compliance with all regulatory requirements in
connection with the Offering.
3. Covenants
and Representations of the Underwriters
3.1 Each
Underwriter severally, and not jointly and severally, covenants with the Company
that it will (and will use its commercially reasonable best efforts to cause the
members of the Selling Group to):
(i) conduct
activities in connection with arranging for the sale and distribution of the
Offered Securities in compliance with all Applicable Securities Laws and the
provisions of this Agreement;
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(ii)
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not,
directly or indirectly, sell or solicit offers to purchase the Offered
Securities or distribute or publish any offering circular, prospectus,
form of application, advertisement or other offering materials in any
country or jurisdiction so as to require registration or filing of a
prospectus with respect thereto or compliance by the Company with
regulatory requirements (including any continuous disclosure obligations)
under the laws of, or subject the Company (or any of its directors,
officers or employees) to any inquiry, investigation or proceeding of any
securities regulatory authority, stock exchange or other authority in, any
jurisdiction (other than the filing of the Preliminary Prospectus and the
Final Prospectus in the Qualifying
Provinces);
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(iii)
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use
all reasonable efforts to complete and to cause the members of the Selling
Group to complete the distribution of the Offered Securities as soon as
practicable; and
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(iv)
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upon
the Company obtaining the necessary receipts therefor from each of the
Securities Commissions, deliver one copy of the Final Prospectus and any
Supplementary Material to each of the
Purchasers.
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3.2 GMP
Securities L.P. shall notify the Company when, in its opinion, the Underwriters
and Selling Group have ceased distribution of the Offered Securities (and in any
event such notice shall be given no later than 21 days after the Closing Date or
the Option Closing Date, as applicable) and, if required for regulatory
compliance purposes, provide a breakdown of the number of Offered Securities
distributed and proceeds received (A) in each of the Qualifying Provinces and
(B) in any other jurisdiction.
3.3 Each
Underwriter severally covenants with the Company that it will only solicit and
offer to sell to purchasers of Offered Securities in the United States in
accordance with Schedule “C” to this Agreement. The representations, warranties
and covenants of the Underwriters and the Company set forth in Schedule “C” are
incorporated herein by reference.
4. Representations,
Warranties and Covenants of the Company
4.1 The
Company hereby represents, warrants and covenants to and with the Underwriters
that:
4.1.1 General
Matters
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(a)
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the
Company (i) has been continued under the Canada Business Corporations
Act and is and will at the Time of Closing be up-to-date in all
material corporate filings and in good standing under such Act; (ii) has
all requisite corporate power and authority to carry on its business as
now conducted and to own, lease and operate its properties and assets; and
(iii) has all requisite corporate power and authority to issue and sell
the Offered Securities, to enter into this Agreement and to carry out the
provisions of this Agreement;
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(b)
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the
subsidiaries listed on Schedule “B” are the only subsidiaries of the
Company which are material to the Company and, all securities of such
subsidiaries are held, directly or indirectly, by the Company free and
clear of all mortgages, liens, charges, pledges, security interests,
encumbrances, claims and demands whatsoever. All
of
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such
shares in the capital of the Material Subsidiaries have been dully
authorized and validly issued and are outstanding as fully paid and
non-assessable shares and no person has any right, agreement or option,
present or future, contingent or absolute, or any right capable of
becoming a right, agreement or option, for the purchase from the Company
of any interest in any of such shares or for the issue or allotment of any
unissued shares in the capital of the Material Subsidiaries or any other
security convertible into or exchangeable for any such shares. The
Company’s other subsidiaries, CBM –Energy Inc. and ISL Wyoming Inc. are
not material subsidiaries of the Company, do not own any material assets
and do not have any material
liabilities.
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(c)
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each
of the Material Subsidiaries (i) has been incorporated in its respective
jurisdiction of incorporation and is and will at the Time of Closing be
up-to-date in all material corporate filings and in good standing under
the laws of such jurisdiction, as the case may be and (ii) has all
requisite corporate power and authority to carry on its business as now
conducted and to own, lease and operate its properties and
assets;
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(d)
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no
proceedings have been taken, instituted or, to the knowledge of the
Company, are pending for the dissolution or liquidation of the Company or
the Material Subsidiaries;
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(e)
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the
Company and each of the Material Subsidiaries are, in all material
respects, conducting their respective businesses in compliance with all
applicable laws, rules and regulations (including all material applicable
federal, provincial, municipal, and local environmental anti-pollution and
licensing laws, regulations and other lawful requirements of any
governmental or regulatory body, including but not limited to relevant
exploration, concessions and permits) of each jurisdiction in which its
respective businesses are carried on and each is licensed, registered or
qualified in all jurisdictions in which it owns, leases or operates its
property or carries on business to enable its business to be carried on as
now conducted and its property and assets to be owned, leased and operated
and all such licences, registrations and qualifications are valid,
subsisting and in good standing and it has not received a notice of
non-compliance, nor knows of, nor has reasonable grounds to know of, any
facts that could give rise to a notice of non-compliance with any such
laws, regulations or permits which could have an adverse material effect
on the Company or the Material Subsidiaries and will at the Time of
Closing be valid, subsisting and in good
standing;
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(f)
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all
necessary corporate action has been taken or will have been taken prior to
the Time of Closing by the Company so as to validly issue and sell the
Offered Securities;
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(g)
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the
execution and delivery of this Agreement and the performance of the
transactions contemplated hereby and thereby have been authorized by
all
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necessary
corporate action of the Company and this Agreement has been executed and
delivered by the Company and constitutes a valid and binding obligation of
the Company, enforceable against the Company in accordance with its terms,
provided that enforcement thereof
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may
be limited by laws affecting creditors’ rights generally, that specific
performance and other equitable remedies may only be granted in the
discretion of a court of competent jurisdiction, that the provisions
relating to indemnity, contribution and waiver of contribution may be
unenforceable and that enforceability is subject of the provisions of the
Limitations Act,
2002 (Ontario);
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(h)
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the
execution and delivery of this Agreement, the fulfilment of the terms
hereof by the Company and the issuance, sale and delivery of the Offered
Securities to be issued and sold by the Company at the Time of Closing do
not and will not require the consent, approval, authorization,
registration or qualification of or with any governmental authority, stock
exchange, Securities Commission or other third party, except such as have
been obtained or such as may be required (and shall be obtained prior to
the Time of Closing) under Applicable Securities Laws or stock exchange
regulations;
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(i)
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the
Offered Securities to be issued and sold as hereinbefore described have
been, or prior to the Time of Closing will be reserved and authorized for
issuance by the Company and, upon payment of the issue price for the
Offered Securities and when certificates for the Offered Securities are
countersigned by the Transfer Agent, the Offered Securities will be
validly issued and fully paid and non-assessable, and all statements made
in the Final Prospectus describing the Offered Securities will be accurate
in all material respects;
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(j)
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the
authorized capital of the Company consists of an unlimited number of Class
A Preference Shares, issuable in series, and an unlimited number of common
shares, of which, as of April 20, 2007, no Class A Preference Shares were
outstanding and 74,100,239 common
shares were outstanding as fully paid and non-assessable shares of the
Company;
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(k)
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the
Company and the Material Subsidiaries are not aware of any legislation, or
proposed legislation published by a legislative body, which they
anticipate will materially and adversely affect the business, affairs,
operations, assets, liabilities (contingent or otherwise) or prospects of
the Company or the Material
Subsidiaries;
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(l)
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the
currently issued and outstanding common shares of the Company are listed
on the Exchange and no order ceasing, suspending or prohibiting trading in
any securities of the Company or prohibiting the sale of the Offered
Securities has been issued and no proceedings for such purpose are pending
or, to the best of the Company’s knowledge, information and belief,
threatened;
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(m)
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except
as referred to in Schedule “D” hereto, or as described in the Final
Prospectus, no person now has any agreement or option or right or
privilege (whether at law, preemptive or contractual) capable of becoming
an
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agreement
for the purchase, subscription or issuance of, or conversion into, any
unissued shares, securities, warrants or convertible obligations of any
nature of the Company or any of the Material
Subsidiaries;
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(n)
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since
December 31, 2006, except as disclosed in the Company's Information
Record:
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(i)
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there
has not been any material change in the assets, liabilities, obligations
(absolute, accrued, contingent or otherwise), business, condition
(financial or otherwise) or
results of operations of the Company and the Material Subsidiaries, on a
consolidated basis;
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(ii)
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there
has not been any material change in the capital stock or long-term debt of
the Company and the Material Subsidiaries, on a consolidated basis;
and
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(iii)
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the
Company and the Material Subsidiaries have carried on their respective
businesses in the ordinary course;
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(o)
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the
audited consolidated financial statements of the Company for the fiscal
year ended December 31, 2006 present fairly, in all material respects, the
financial condition of the Company and the Material Subsidiaries, on a
consolidated basis, for the period then
ended;
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(p)
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there
are no material actions, proceedings or investigations (whether or not
purportedly by or on behalf of the Company or any subsidiary) pending or
threatened against or affecting the Company or its Material Subsidiaries
at law or in equity (whether in any court, arbitration or similar
tribunal) or before or by any federal, provincial, state, municipal or
other governmental department, commission, board or agency, domestic or
foreign;
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(q)
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neither
the Company nor any of the Material Subsidiaries is in default or in
breach in any material respect of, and the execution and delivery of this
Agreement by the Company, the performance and compliance with the terms of
this Agreement and the sale of the Offered Securities (including the grant
of the Over-Allotment Option by the Company) will not result in any
material breach of, or be in conflict with or constitute a default under,
or create a state of facts which, after notice or lapse of time, or both,
would constitute a default under any term or provision of the constating
documents, by-laws or resolutions of the Company or any of the Material
Subsidiaries or any material mortgage, note, indenture, contract,
agreement, instrument, lease or other document to which the Company or any
of the Material Subsidiaries is a party or by which any of them is bound
or any judgment, decree, order, statute, rule or regulation applicable to
any of them, which breach or default would have a material adverse affect
on the Company and the Material Subsidiaries, on a consolidated
basis;
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(r)
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the
Company is, and will at the Time of Closing be, an Eligible Issuer and a
“reporting issuer”, not included in a list of defaulting reporting issuers
maintained by the Securities Commissions in the provinces of British
Columbia, Alberta, Saskatchewan, Manitoba and Ontario and in
particular,
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without
limiting the foregoing, the Company has at all times complied with its
obligations to make timely disclosure of all material changes relating to
it and there is no material change relating to the Company which has
occurred and with respect to which the requisite material
change report has not been filed with the Securities Commissions, except
to the extent that the Offering constitutes a material
change;
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(s)
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all
filings and fees required to be made and paid by the Company and the
subsidiaries pursuant to Applicable Securities Laws and general corporate
law have been made and paid and the information and statements set forth
in the Company's Information Record were accurate in all material respects
and did not contain any misrepresentation as of the date of such
information or statement, and the Company has not filed any confidential
material change report with any Securities Commission that is still
maintained on a confidential basis;
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(t)
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the
auditors of the Company who audited the consolidated financial statements
of the Company most recently delivered to the securityholders of the
Company and delivered their report with respect thereto, have confirmed to
the Company that they are independent public accountants as required by
the Applicable Securities Laws;
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(u)
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there
has not been any “reportable event” (within the meaning of National
Instrument 51-102 of the Canadian Securities Administrators) with the
present or any former auditor of the
Company;
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(v)
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there
is not, in the constating documents, by-laws or in any debt
instrument, agreement, mortgage, note, debenture, indenture or
other instrument or document to which the Company is a party, any
restriction upon or impediment to, the declaration of dividends by the
directors of the Company or the payment of dividends by the Company to the
holders of its common shares;
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(x)
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the
Company is not, nor are any of its subsidiaries, party to or bound or
affected by any commitment, agreement or document containing any covenant
which expressly limits the freedom of the Company or any of its
subsidiaries to compete in any line of business, transfer or move any of
their assets or operations or which materially or adversely affects the
business practices, operations or condition of the Company and its
subsidiaries, taken as a whole;
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(y)
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other
than the Company, there is no person that is or will be entitled to the
proceeds of this Offering under the terms of any debt instrument,
mortgage, note, indenture, contract, instrument, lease agreement (written
or unwritten);
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(z)
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the
Company is not party to any agreement, nor is the Company aware of any
agreement, which in any manner affects the voting control of any of the
securities of the Company or its
subsidiaries;
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(aa)
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all
taxes (including income tax, capital tax, payroll taxes, employer health
tax, workers’ compensation payments, property taxes, custom and land
transfer taxes), duties, royalties, levies, imposts, assessments,
deductions, charges
or withholdings and all liabilities with respect thereto including any
penalty and interest payable with respect thereto (collectively, “Taxes”) due and payable
by the Company or any of the Material Subsidiaries have been paid except
for where the failure to pay such taxes would not constitute an adverse
material fact of the Company and of the
Material
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Subsidiaries,
on a consolidated basis, or result in an adverse material change to the
Company and the Material Subsidiaries, on a consolidated
basis. All tax returns, declarations, remittances and filings
required to be filed by the Company have been filed with all appropriate
governmental authorities and all such returns, declarations, remittances
and filings are complete and accurate and no material fact or facts have
been omitted therefrom which would make any of them misleading except
where the failure to file such documents would not constitute an adverse
material fact of the Company and the Material Subsidiaries, on a
consolidated basis, or result in an adverse material change to the Company
and the Material Subsidiaries, on a consolidated basis. To the
best of the knowledge of the Company, no examination of any tax return of
the Company or any of the Materials Subsidiaries is currently in progress
and there are no issues or disputes outstanding with any governmental
authority respecting any taxes that have been paid, or may be payable, by
the Company or any Material Subsidiary, in any case, except where such
examinations, issues or disputes would not constitute an adverse material
fact of the Company and the Material Subsidiaries, on a consolidated
basis, or result in an adverse material change to the Company and the
Material Subsidiaries, on a consolidated
basis;
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(bb)
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neither
the Company nor any of the Material Subsidiaries, nor to the best of the
Company's knowledge, information and belief, any other person, is in
default in any material respect in the observance or performance of any
term, covenant or obligation to be performed by the Company or any of the
Material Subsidiaries or such other person under any material contract,
agreement, or arrangement (including all joint venture agreements) to
which the Company or any of the Material Subsidiaries is a party or
otherwise bound and all such contracts, agreements or arrangements
(including all joint venture agreements) are in good standing, and no
event has occurred which with notice or lapse of time or both would
constitute such a default by the Company, a Material Subsidiary or, to the
best of the Company’s knowledge, information and belief, any other
party;
|
|
|
(cc)
|
the
net proceeds of the Offering will be used as described in the Final
Prospectus;
|
|
|
(dd)
|
the
attributes of the Offered Securities will conform in all material respects
with the description thereof to be described in the Final
Prospectus;
|
|
|
(ee)
|
other
than as contemplated by the Offering and this Agreement, the Company will
not, for a period of 90 days from the Closing Date, issue or sell or agree
to issue or sell (or announce any intention to do so) any equity or voting
shares of the Company or financial instruments convertible or exchangeable
into such shares, other than for purposes of (i) the grant or exercise of
stock options and other similar issuances pursuant to the share incentive
plans of the Company (including as described in Schedule “D” hereto); (ii)
outstanding warrants (including as described in Schedule “D” hereto);
and
|
- 11
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|
|
(iii)
obligations in respect of existing agreements (including as described in
Schedule “D” hereto), without the prior written consent of GMP Securities
L.P. on behalf of the Underwriters, which consent shall not be
unreasonably withheld;
|
|
|
(ff)
|
the
Company will use its best efforts to obtain the necessary regulatory
consents from the Exchange to the sale of the Offered Securities hereunder
on such conditions as are acceptable to the Underwriters and the Company,
acting reasonably;
|
|
|
(gg)
|
the
Company will use its best efforts to arrange for the listing on the
Exchange of the Offered Securities effective as of the Closing Date and
the Option Closing Date, as
applicable;
|
|
|
(hh)
|
the
Company will use its best efforts to maintain its status as a “reporting
issuer” (or the equivalent thereof) not in default of the requirements of
the Securities Laws of each of the provinces of British Columbia, Alberta,
Saskatchewan, Manitoba and Ontario until the date that is two years
following the Closing Date, provided that this covenant shall not prevent
the Company from completing any transaction which would result in the
Company ceasing to be a “reporting issuer” so long as the holders of
common shares receive securities of an entity which is listed on a stock
exchange in Canada or the holders of the common shares have approved the
transaction;
|
|
|
(ii)
|
Equity
Transfer & Trust Company has been appointed the registrar and transfer
agent in Canada for the common shares of the Company at its principal
transfer office in the city of Toronto,
Ontario;
|
|
|
(jj)
|
none
of the directors, officers or employees of the Company, any known holder
of more than ten per cent of any class of shares of the Company, or any
known associate or affiliate of any of the foregoing persons or companies
(as such terms are defined in the Securities Act
(Ontario)), has had any material interest, direct or indirect, in any
material transaction within the previous two years or any proposed
material transaction with the Company or any Material Subsidiary which, as
the case may be, materially affected, is material to or will materially
affect the Company and the Material Subsidiaries, on a consolidated
basis;
|
|
|
(kk)
|
other
than the Underwriters pursuant to this Agreement, there is no person
acting or purporting to act at the request of the Company who is entitled
to any brokerage, agency or other fiscal advisory or similar fee in
connection with the transactions contemplated
herein;
|
|
|
(ll)
|
none
of the Company or the Material Subsidiaries is party to any debt
instrument or has any material loans or other indebtedness outstanding
which has been made to any of its shareholders, officers, directors or
employees, past or present, or any person not dealing at arm’s length with
them;
|
|
|
(mm)
|
the
assets of the Company and the Material Subsidiaries and their business and
operations are insured against loss or damage with responsible insurers on
a basis consistent with insurance obtained by reasonably prudent
participants in comparable businesses, and such coverage is in full force
and
|
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|
|
effect,
and none of the Company or any of the Material Subsidiaries has failed to
promptly give any notice or present any material claim thereunder;
and
|
|
|
(nn)
|
the
Company and the Material Subsidiaries own or possess the right to use all
material patents, trademarks, trademark registrations, service marks,
service xxxx registrations, trade names, copyrights, licenses, inventions,
trade secrets and rights necessary for the conduct of their respective
businesses, and the Company is not aware of any claim to the contrary or
any challenge by any other person to the rights of the Company and the
Material Subsidiaries with respect to the foregoing. To the
best of the Company’s knowledge, the Company’s business, including that of
its subsidiaries, as now conducted does not, and as currently proposed to
be conducted will not, infringe or conflict with in any material respect
patents, trademarks, service marks, trade names, copyrights, trade
secrets, licenses or other intellectual property or franchise right of any
person.
|
4.1.2 Prospectus
Matters
|
|
(a)
|
the
Company will, provided the Underwriters have taken all action required by
them hereunder to permit the Company to do so, use all reasonable efforts
to file the Final Prospectus pursuant to NP 43-201 and to obtain a final
expedited review receipt document from the Ontario Securities Commission
in respect of each Qualifying Province and if a Securities Commission in
any Qualifying Province opts out of the expedited review system, a final
receipt (or a decision document equivalent thereof) from such Securities
Commission, and shall have taken all other steps and proceedings that may
be necessary in order to qualify the Offered Securities for distribution
pursuant to the Final Prospectus in each of the Qualifying Provinces
before the close of business on May 17, 2007 (or
such other date as may be agreed to in writing by the Company and the
Underwriters);
|
|
|
(b)
|
the
Company will deliver from time to time without charge to the Underwriters
as many copies of the Preliminary Prospectus, the Final Prospectus and any
Supplementary Material as they may reasonably request for the purposes
contemplated hereunder and contemplated by the Applicable Securities Laws
in the Qualifying Provinces and such delivery shall constitute the consent
of the Company to their use of such documents in the Qualifying Provinces
in connection with the distribution or the distribution to the public of
the Offered Securities, subject to the Underwriters complying with the
provisions of the Applicable Securities Laws in the Qualifying Provinces
and the provisions of this
Agreement;
|
|
|
(c)
|
all
the information and statements to be contained in the Offering Documents
shall, at the respective dates of delivery thereof, constitute full, true
and plain disclosure of all material facts relating to each of the
Offering, the Company, the Material Subsidiaries and the Offered
Securities (provided that this representation and warranty is not intended
to extend to information and statements included in reliance upon and in
conformity with information furnished to the Company by or on behalf of
the Underwriters specifically for use
therein);
|
|
|
(d)
|
at
the time of filing and qualification thereof, no Offering Document will
contain a misrepresentation (provided that this representation and
warranty is not intended to extend to information and statements included
in reliance upon and in conformity
|
- 13
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|
|
with
information furnished to the Company by or on behalf of the Underwriters
specifically for use therein);
|
|
|
(e)
|
the
Offering Documents shall contain the disclosure required by and conform to
all requirements of the Applicable Securities
Laws;
|
|
|
(f)
|
during
and prior to completion of the distribution of the Offered Securities, the
Company will otherwise take or cause to be taken all steps and proceedings
(including the filing of, and obtaining the issuance of a final receipt
(or a decision document equivalent thereof) for, the Final Prospectus)
that may be required under the Applicable Securities Laws of the
Qualifying Provinces to qualify the Offered Securities for sale to the
public in the Qualifying Provinces through registrants registered under
the Applicable Securities Laws of the Qualifying Provinces who have
complied with the relevant provisions thereof;
and
|
|
|
(g)
|
at
all times until the distribution of the Offered Securities has been
completed, but in any event not later than 21 days following the Closing
Date or the Option Closing Date, as applicable, the Company will, to the
reasonable satisfaction of counsel to the Underwriters, promptly take or
cause to be taken all reasonable additional steps and proceedings that may
be required from time to time under the Applicable Securities Laws of the
Qualifying Provinces to continue to so qualify the Offered Securities or,
in the event that the Offered Securities have, for any reason, ceased to
so qualify, to again so qualify the Offered
Securities.
|
4.1.3 Due
Diligence Matters
|
|
(a)
|
prior
to the filing of the Final Prospectus and any Supplementary Material
(other than any material filed prior to the date hereof and incorporated
by reference therein), the Company will allow the Underwriters to
participate fully in the preparation of the Preliminary Prospectus, the
Final Prospectus and any Supplementary Material and shall allow the
Underwriters to conduct all due diligence which they may reasonably
require to conduct in order to fulfil their obligations and in order to
enable them to responsibly execute the certificates required to be
executed by them at the end of each of the Preliminary Prospectus, the
Final Prospectus and any applicable Supplementary
Material;
|
|
|
(b)
|
the
Company will promptly notify the Underwriters in writing if, prior to
termination of the distribution of the Offered Securities, there shall
occur any material change or change in a material fact (in either case,
whether actual, anticipated, contemplated or threatened and other than a
change or change in fact relating solely to the Underwriters) or any event
or development involving a prospective material change or a change in a
material fact or any other material change in any or all of the business,
affairs, operations, assets (including information or data relating to the
estimated value or book value of
assets), liabilities (contingent or otherwise), capital, ownership,
control or management of the Company or any of the Material Subsidiaries
which would constitute a material change to, or a change in a material
fact concerning the Company and the Material Subsidiaries on a
consolidated basis
|
|
|
|
- 14
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|
|
or
any other change which is of such a nature as to result in, or could be
considered reasonably likely to result in, a misrepresentation in the
Final Prospectus or any Supplementary Material, as they exist immediately
prior to such change, or could render any of the foregoing, as they exist
immediately prior to such change, not in compliance with any of the
Applicable Securities Laws;
|
|
|
(c)
|
the
Company will promptly notify the Underwriters in writing with full
particulars of any such actual, anticipated, contemplated, threatened or
prospective change referred to in the preceding paragraph and the Company
shall, to the satisfaction of the Underwriters, acting reasonably,
provided the Underwriters have taken all action required by them hereunder
to permit the Company to do so, file promptly and, in any event, within
all applicable time limitation periods with the Securities Commissions a
new or amended Final Prospectus or Supplementary Material, as the case may
be, or material change report as may be required under the Applicable
Securities Laws and shall comply with all other applicable filing and
other requirements under the Applicable Securities Laws including any
requirements necessary to qualify the distribution of the Offered
Securities and shall deliver to the Underwriters as soon as practicable
thereafter their reasonable requirements of conformed or commercial copies
of any such new or amended Final Prospectus or Supplementary Material. The
Company will not file any such new or amended disclosure documentation or
material change report without first obtaining the written approval of the
form and content thereof by the Underwriters, which approval shall not be
unreasonably withheld or delayed; provided that the Company will not be
required to file a registration statement or otherwise register or qualify
the Offered Securities for sale or distribution outside
Canada;
|
|
|
(d)
|
the
Company will in good faith discuss with the Underwriters as promptly as
possible any circumstance or event which is of such a nature that there is
or there ought to be consideration given as to whether there may be a
material change or change in a material fact or other change described in
the preceding two paragraphs; and
|
|
|
(e)
|
the
minute books of the Company and each of the Material Subsidiaries provided
to counsel to the Underwriters contain copies of all constating documents
and all proceedings of securityholders and directors (and committees
thereof) (or drafts pending the approval thereof) and are complete in all
material respects.
|
- 15
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|
|
4.1.4
|
Mining
and Environmental Matters
|
|
|
(a)
|
the
Company and the Material Subsidiaries are in material compliance with all
applicable federal, provincial, state, municipal and local laws, statutes,
ordinances, by-laws and regulations and orders, directives and decisions
rendered by any ministry, department or administrative or regulatory
agency, domestic or foreign, including laws, ordinances, regulations or
orders, relating to the protection of the environment, occupational health
and safety or the processing, use, treatment, storage, disposal,
discharge, transport or handling of any pollutants, contaminants,
chemicals or industrial, toxic or hazardous wastes or substance (the
“Environmental
Laws”);
|
|
|
(b)
|
the
Company and the Material Subsidiaries have, collectively, obtained all
material licences, permits, approvals, consents, certificates,
registrations and other authorizations under all applicable Environmental
Laws (the “Environmental
Permits”) necessary as at the date hereof for the operation of the
businesses carried on or proposed to be commenced by the Company and the
Material Subsidiaries, and each Environmental Permit is valid, subsisting
and in good standing and neither the Company nor any of the Material
Subsidiaries is in material default or breach of any Environmental Permit
and, to the best of the knowledge of the Company, no proceeding is pending
or threatened to revoke or limit any Environmental
Permit;
|
|
|
(c)
|
neither
the Company nor any of the Material Subsidiaries has used, except in
material compliance with all Environmental Laws and Environmental Permits,
any property or facility which it owns or leases or previously owned or
leased, to generate, manufacture, process, distribute, use, treat, store,
dispose of, transport or handle any Hazardous
Substance;
|
|
|
(d)
|
neither
the Company nor any of the Material Subsidiaries nor, if applicable, to
the knowledge of the Company, any predecessor company, has received any
notice of or been prosecuted for an offence alleging non-compliance with
any laws, ordinances, regulations and orders, including Environmental
Laws, and neither the Company nor any of the Material Subsidiaries nor, if
applicable, to the knowledge of the Company, any predecessor company has
settled any allegation of non-compliance short of prosecution. There are
no orders or directions relating to environmental matters requiring any
material work, repairs, construction or capital expenditures to be made
with respect to any of the assets of the Company or any of its Material
Subsidiaries, nor has the Company or any of its Material Subsidiaries
received notice of any of the same;
|
|
|
(e)
|
there
have been no past unresolved, and there are no pending or threatened
claims, complaints, notices or requests for information received by the
Company with respect to any alleged material violation of any law, statue,
order, regulation, ordinance or decree; and to the best of the Company’s
knowledge, information and belief, no conditions exist at, on or under any
property
now or previously owned, operated or leased by the Company which, with the
passage of time, or the giving of notice or both, would give rise to
liability under any law, statue, order,
regulation,
|
- 16
-
|
|
ordinance
or decree that, individually or in the aggregate, has or may reasonably be
expected to have any adverse effect with respect to the Company and the
Material Subsidiaries, taken as a
whole;
|
|
|
(f)
|
except
as ordinarily or customarily required by applicable permit, neither the
Company nor any of the Material Subsidiaries has received any notice
wherein it is alleged or stated that it is potentially responsible for a
federal, provincial, state, municipal or local clean-up site or corrective
action under any Environmental Laws. Neither the Company nor
any of the Material Subsidiaries has received any request for information
in connection with any federal, state, municipal or local inquiries as to
disposal sites;
|
|
|
(g)
|
the
Company and its Material Subsidiaries are the absolute legal and
beneficial owners of, and have good and marketable title to, all of the
material property or assets thereof as described in the Company’s
Information Record, free of all mortgages, liens, charges, pledges,
security interests, encumbrances, claims or demands whatsoever, other than
those described in the Company’s Information Record, and no other property
rights are necessary for the conduct of the business of the Company and
its Material Subsidiaries (taken as a whole) as currently conducted or
contemplated to be conducted; the Company knows of no claim or basis for
any claim that might or could adversely affect the right of the Company
and its Material Subsidiaries to use, transfer or otherwise exploit such
property rights; and, except as disclosed in the Company’s Information
Record, the Company and its Material Subsidiaries have no responsibility
or obligation to pay any commission, royalty, licence fee or similar
payment to any person with respect to the property rights
thereof;
|
|
|
(h)
|
the
Company and its Material Subsidiaries hold either freehold title, mining
leases, mining claims or other conventional property, proprietary or
contractual interests or rights, recognized in the jurisdiction in which a
particular property is located in respect of the ore bodies and minerals
located in properties in which the Company and its Material Subsidiaries
have an interest as described in the Company’s Information Record under
valid, subsisting and enforceable title documents or other recognized and
enforceable agreements or instruments, sufficient to permit the Company
and its Material Subsidiaries to explore the minerals relating thereto;
all such property, leases or claims and all property, leases or claims in
which the Company or its Material Subsidiaries have any interest or right
have been validly located and recorded in accordance with all applicable
laws and are valid and subsisting; the Company or its Material
Subsidiaries have all necessary surface rights, access rights and other
necessary rights and interest relating to the properties in which the
Company or its Material Subsidiaries have an interest as described in the
Company’s Information Record granting the Company or its Material
Subsidiaries the right and ability to explore for minerals for development
purposes as are appropriate in view of their respective rights and
interests therein, with only such exceptions as do not materially
interfere with the use made by the Company or its Material Subsidiaries of
the rights or interests so held and each of the proprietary interests or
rights and each of the documents, agreements and instruments
and
|
- 17
-
|
|
obligations
relating thereto referred to above are currently in good standing in the
name of the Company or its Material
Subsidiaries;
|
|
|
(i)
|
any
and all of the agreements and other documents and instruments pursuant to
which the Company and its Material Subsidiaries hold their property and
assets (including any interest in, or right to earn an interest in, any
property) are valid and subsisting agreements, documents or instruments in
full force and effect, enforceable in accordance with the terms thereof,
the Company and its Material Subsidiaries are not in default of any of the
material provisions of any such agreements, documents or instruments, nor
has any such default been alleged. None of the properties (or
any interest in, or right to earn an interest in, any property) of the
Company and its Material Subsidiaries are subject to any right of first
refusal or purchase or acquisition rights which are not disclosed in the
Company’s Information Record;
|
|
|
(j)
|
there
are no claims with respect to native rights currently or, to the best
knowledge of the Company, pending or threatened with respect to any of the
material properties of the Company or the Material
Subsidiaries
|
|
|
(k)
|
all
mining operations on the properties of the Company and the Material
Subsidiaries have been conducted in all respects in accordance with good
mining and engineering practices and all applicable material workers'
compensation and health and safety and workplace laws, regulations and
policies have been complied with;
|
|
|
(l)
|
except
as disclosed in the Company’s Information Record, there are no
environmental audits, evaluations, assessments, studies or tests relating
to the Company or any of the Material Subsidiaries except for ongoing
assessments conducted by or on behalf of the Company in the ordinary
course; and
|
|
|
(m)
|
the
Company is in material compliance with the provisions of National
Instrument 43-101–Standards of Disclosure for Mineral Projects, and has
filed all required technical reports required
thereby.
|
4.1.5 Employment
Matters
|
|
(a)
|
each
material plan for retirement, bonus, stock purchase, profit sharing, stock
option, deferred compensation, severance or termination pay, insurance,
medical, hospital, dental, vision care, drug, sick leave, disability,
salary continuation, legal benefits, unemployment benefits, vacation,
incentive or otherwise contributed to or required to be contributed to, by
the Company for the benefit of any current or former director, officer,
employee or consultant of the Company (the “Employee Plans”) has
been maintained in compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations that are
applicable to such Employee Plans, in each case in all material respects
and has been publicly disclosed to the extent required by Applicable
Securities Laws;
|
|
|
(b)
|
all
material accruals for unpaid vacation pay, premiums for unemployment
insurance, health premiums, federal or state pension plan premiums,
accrued wages, salaries and
|
- 18
-
|
|
commissions
and employee benefit plan payments have been reflected in the books and
records of the Company or the Material Subsidiaries;
and
|
|
|
(c)
|
there
is not currently any labour disruption which is adversely affecting or
could adversely affect, in a material manner, the carrying on of the
business of the Company and the Material Subsidiaries, on a consolidated
basis.
|
5. Conditions
to Purchase Obligation
5.1 The
following are conditions of the Underwriters' obligations to close the purchase
of the Offered Securities from the Company as contemplated hereby, which
conditions the Company covenants to exercise its reasonable best efforts to have
fulfilled on or prior to the Closing Date, which conditions may be waived in
writing in whole or in part by the Underwriters:
|
|
(a)
|
the
Company will have made and/or obtained the necessary filings, approvals,
consents and acceptances to or from, as the case may be, the Securities
Commissions and the Exchange required to be made or obtained by the
Company in connection with the Offering, on terms which are acceptable to
the Company and the Underwriters, acting reasonably, prior to the Closing
Date, it being understood that the Underwriters will do all that is
reasonably required to assist the Company to fulfil this
condition;
|
|
|
(b)
|
the
Company shall have delivered to the Underwriters within 24 hours of the
issuance of the receipt for the Preliminary Prospectus by each of the
Qualifying Provinces, or such later time as may be agreed upon by the
Company and the Underwriters, in such Canadian cities as the Underwriters
may reasonably request, the reasonable requirements of conformed
commercial copies of the Preliminary
Prospectus;
|
|
|
(c)
|
the
Company shall have delivered to the Underwriters within 24 hours of the
issuance of the receipt for the Final Prospectus by each of the Qualifying
Provinces, or such later time as may be agreed upon by the Company and the
Underwriters, in such Canadian cities as the Underwriters may reasonably
request, the reasonable requirements of conformed commercial copies of the
Final Prospectus;
|
|
|
(d)
|
the
Offered Securities will have been accepted for listing by the Exchange,
subject to the usual conditions, and will, at the opening of trading on
the Exchange on the Closing Date, be accepted for trading on the
Exchange;
|
|
|
(e)
|
the
Company's board of directors will have authorized and approved this
Agreement, the sale and issuance of the Offered Securities and all matters
relating to the foregoing;
|
|
|
(f)
|
the
Company will deliver a certificate of the Company and signed on behalf of
the Company, but without personal liability, by the Chief Executive
Officer of the Company and the Chief Financial Officer of the Company
or
|
- 19
-
|
|
such
other senior officers of the Company as may be acceptable to the
Underwriters, acting reasonably, addressed
to the Underwriters and their counsel and dated the Closing Date, in form
and content satisfactory to the Underwriters, acting reasonably,
certifying that:
|
|
|
(i)
|
no
order ceasing or suspending trading in any securities of the Company or
prohibiting the sale of the Offered Securities or any of the Company's
issued securities has been issued and no proceedings for such purpose are
pending or, to the knowledge of such officers,
threatened;
|
|
|
(ii)
|
to
the knowledge of such officers, there has been no adverse material change
(actual, proposed or prospective, whether financial or otherwise) in the
business, affairs, operations, assets, liabilities (contingent or
otherwise) or capital of the Company and the Material Subsidiaries on a
consolidated basis since the date hereof which has not been generally
disclosed;
|
|
|
(iii)
|
since
the date hereof, no material change relating to the Company and the
Material Subsidiaries on a consolidated basis, except for the Offering,
has occurred with respect to which the requisite material change statement
or report has not been filed and no such disclosure has been made on a
confidential basis;
|
|
|
(iv)
|
the
representations and warranties of the Company contained in this Agreement
are true and correct in all material respects at the Time of Closing, with
the same force and effect as if made by the Company as at the Time of
Closing after giving effect to the transactions contemplated hereby;
and
|
|
|
(v)
|
the
Company has complied with all the covenants and satisfied all the terms
and conditions of this Agreement on its part to be complied with or
satisfied, other than conditions which have been waived by the
Underwriters, at or prior to the Time of
Closing;
|
|
|
(g)
|
the
Company will have caused a favourable legal opinion to be delivered by its
Canadian counsel addressed to the Underwriters and the Underwriters'
counsel, acceptable in all reasonable respects to the Underwriters,
including in respect of those matters identified in Schedule “A” hereto.
In giving such opinion, counsel to the Company shall be entitled to rely,
to the extent appropriate in the circumstances, upon local counsel and
shall be entitled as to matters of fact to rely upon a certificate of fact
from responsible persons in a position to have knowledge of such facts and
their accuracy;
|
|
|
(h)
|
the
Company will have caused a favourable legal opinion to be delivered by
local counsel in the jurisdiction of incorporation of each of the Material
Subsidiaries addressed to the Underwriters, in form and substance satisfactory
to the Underwriters, acting reasonably, and with respect to the following
matters:
|
|
|
(A)
|
the
incorporation and existence of each Material Subsidiary under the laws of
its jurisdiction of incorporation;
|
- 20
-
|
|
(B)
|
as
to the holder of the issued and outstanding shares of each Material
Subsidiary; and
|
|
|
(C)
|
that
each Material Subsidiary has all requisite corporate power under the laws
of its jurisdiction of incorporation to carry on its business as presently
carried on and own its properties;
|
|
|
(i)
|
if
any Offered Securities are being sold on the Closing Date to United States
purchasers pursuant to Schedule “C” to this Agreement, the Company shall
have caused a favourable legal opinion to be delivered by United States
counsel, in form and substance satisfactory to the Underwriters, to the
effect that the sale of such Offered Securities on the Closing Date to
such United States purchasers is not required to be registered under the
United States Securities
Act of 1933, as amended;
|
|
|
(j)
|
the
Company will have caused a favourable title opinion to be delivered, in
form and substance satisfactory to the Underwriters, acting reasonably,
with respect to each of the Company’s and Material Subsidiaries’
properties;
|
|
|
(k)
|
the
Company will have caused PricewaterhouseCoopers LLP to deliver an update
of its letter referred to in paragraph 6
below;
|
|
|
(l)
|
the
Company will cause its registrar and transfer agent to deliver a
certificate as to the issued and outstanding common shares of the
Company;
|
|
|
(m)
|
certificates
representing the Offered Securities registered as the Underwriters may
direct (or, in the case of Offered Securities being sold to United States
purchasers, as such purchasers may direct), which certificates will be
delivered in Toronto; and
|
|
|
(n)
|
the
Underwriters will have been satisfied in their sole discretion with the
due diligence review and investigation of the Company and the Material
Subsidiaries perform by the Underwriters and their
representatives.
|
5.2 The
following are conditions of the Underwriters' obligations to close the purchase
of the Additional Offered Securities from the Company as contemplated hereby,
which conditions the Company covenants to exercise its reasonable best efforts
to have fulfilled on or prior to the Option Closing Date, which conditions may
be waived in writing in whole or in part by the Underwriters:
|
|
(a)
|
the
Additional Offered Securities will have been accepted for listing by the
Exchange, subject to the usual conditions, and will, at the opening of
trading on the Exchange on the Option Closing Date, be accepted for
trading on the Exchange;
|
|
|
(b)
|
the
Underwriters shall have received an updated certificate referred to in
paragraph 5.1 (f) above dated the Option Closing
Date;
|
|
|
(c)
|
the
Underwriters shall have received updated favourable legal opinions
referred to in paragraphs 5.1 (g) and (h) above dated the Option Closing
Date;
|
- 21
-
|
|
(d)
|
if
any Additional Offered Securities are being sold on the Option Closing
Date to United States purchasers pursuant to Schedule “C” to this
Agreement, the Company shall have caused a favourable legal opinion to be
delivered by United States counsel, in form and substance satisfactory to
the Underwriters, to the effect that the sale of such Offered Securities
on the Option Closing Date to such United States purchasers is not
required to be registered under the United States Securities Act
of 1933, as amended;
|
|
|
(e)
|
the
Company will have caused PricewaterhouseCoopers LLP to deliver an update
of its letter referred to in paragraph 6
below;
|
|
|
(f)
|
the
Company will cause its registrar and transfer agent to deliver an updated
certificate referred to in paragraph 5.1(l)
above;
|
|
|
(g)
|
certificates
representing the Additional Offered Securities registered as the
Underwriters may direct (or, in the case of Additional Offered Securities
being sold to United States purchasers, as such purchasers may direct),
which certificates will be delivered in Toronto;
and
|
|
|
(h)
|
the
Underwriters shall have received such other certificates, agreements,
materials or documents as they may reasonably request with respect to the
good standing of the Company, the due authorization and issuance of the
Additional Offered Securities and other matters related to the issuance of
the Additional Offered Securities.
|
6. Additional
Documents Upon Filing of Final Prospectus
The
Company shall cause to be delivered to the Underwriters concurrently with the
filing of the Final Prospectus and any Supplementary Material, a comfort letter
dated the date of the Final Prospectus (or Supplementary Material, as
applicable) from the auditors of the Company and addressed to the Underwriters
and to the directors of the Company, in form and substance reasonably
satisfactory to the Underwriters, relating to the verification of the financial
information and accounting data and other numerical data of a financial nature
contained in the Final Prospectus (or Supplementary Material, as applicable) and
matters involving changes or developments since the respective dates as of which
specified financial information is given therein, to a date not more than two
business days prior to the date of such letter.
7. Closing
7.1 The
Offering will be completed at the offices of the Underwriters’ counsel in
Toronto at the Time
of Closing or such other place, date or time as may be mutually agreed to;
provided that if the Company has not been able to comply in any material respect
with any of the covenants or conditions set out herein required to be complied
with by the Time of Closing or such other date and time as may be mutually
agreed to or such covenant or condition has not been waived by the Underwriters,
the respective obligations of the parties will terminate without further
liability or obligation except for payment of expenses, indemnity
and contribution provided for in this Agreement.
- 22
-
7.2 At
the Time of Closing, the Company shall deliver to the Underwriters the
documents, legal opinions and certificates as contemplated in section 5.1 or
5.2, as the case may be; against payment of the aggregate purchase price for the
Offered Securities or the Additional Offered Securities, as applicable, net of
the Underwriting Fee and expenses incurred up to the Closing Date or Option
Closing Date, as applicable, by wire transfer payable to the
Company. Any additional expenses of the Underwriters incurred in
connection with the Offering not included in these expenses retained by the
Underwriters shall be paid by the Company forthwith upon invoices being provided
therefor.
7.3 All
terms and conditions of this Agreement shall be construed as conditions and any
breach or failure to comply with any such terms and conditions in any material
respect shall entitle the Underwriters to terminate their obligations to
purchase the Offered Securities or the Additional Offered Securities, as
applicable, by written notice to that effect given to the Company prior to the
Time of Closing. It is understood that the Underwriters may waive, in whole or
in part, or extend the time for compliance with, any of such terms and
conditions without prejudice to their rights in respect of any such terms and
conditions or any other subsequent breach or non-compliance; provided that to be
binding on the Underwriters, any such waiver or extension must be in
writing.
8. Termination
of Purchase Obligation
8.1 Without
limiting any of the other provisions of this Agreement, any Underwriter will be
entitled, at its option, to terminate and cancel, without any liability on its
part or on the part of the other Underwriters and the Purchasers, its
obligations under this Agreement, to purchase the Offered Securities or
Additional Offered Securities, as applicable, by giving written notice to the
Company at any time through to the applicable Time of Closing if:
|
|
(a)
|
material change - there
shall be any material change in the affairs of the Company, or there
should be discovered any previously undisclosed material fact required to
be disclosed in the Preliminary Prospectus, Final Prospectus or amendment
thereto or there should occur a change in a material fact contained in the
Offering Documents or amendment thereto, in each case which, in the
reasonable opinion of the Underwriters (or any of them), has or would be
expected to have a significant adverse effect on the market price or value
of the Offered Securities or any other securities of the
Company;
|
|
|
(b)
|
disaster out - (i) any
inquiry, action, suit, investigation or other proceeding (whether formal
or informal) (including matters of regulatory transgression or unlawful
conduct) is commenced, announced or threatened or any order made by any
federal, provincial, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality including, without
limitation, the Exchange or any securities regulatory authority or any law
or regulation is enacted or changed which in the opinion of the
Underwriters (or any of them), acting reasonably, operates to prevent or
restrict the issuance or trading of the Offered Securities or any other
securities of the Company or materially and adversely affects or will
materially and adversely affect the market price or value of the Offered
Securities
or any other securities of the Company; or (ii) if there should develop,
occur or come into effect or existence any event, action, state (including
terrorism), condition or major financial occurrence of national or
international consequence or any law or regulation
which in the reasonable opinion of the Underwriters seriously adversely
affects, or involves, or will, or could reasonably be expected to,
seriously adversely affect, or involve, the financial markets or the
business, operations or affairs of the Company and its subsidiaries taken
as a whole; or
|
|
|
|
- 23
-
|
|
(c)
|
breach - the Company is
in breach of any material terms, condition or covenant of this Agreement
or any material representation or warranty given by the Company in this
Agreement becomes or is false.
|
The
Underwriters shall make reasonable efforts to give notice to the Company (in
writing or by other means) of the occurrence of any of the events referred to in
this section; provided that neither the giving nor the failure to give such
notice shall in any way affect the Underwriters' entitlement to exercise this
right at any time to the Time of Closing.
The
Underwriters' rights of termination contained in this section are in addition to
any other rights or remedies they may have in respect of any default, act or
failure to act or noncompliance by the Company in respect of any of the matters
contemplated by this Agreement.
8.2 If
the obligations of an Underwriter are terminated under this Agreement pursuant
to the termination rights provided for in section 8.1, the Company's liabilities
to such Underwriter shall be limited to the Company's obligations under the
indemnity, contribution and expense provisions of this Agreement.
9. Indemnity
9.1 The Company hereby
covenants and agrees to indemnify and save each of the Underwriters, their
respective affiliate U.S. broker-dealers and their respective directors,
officers, employees and agents (each being hereinafter referred to as an
“Indemnified
Party”),
harmless from and against any and all expenses, losses (other than loss
of profits), claims, actions, suits, proceedings, damages or liabilities of
whatsoever nature or kind, whether joint or several (including the aggregate
amount paid in reasonable settlement of any actions, suits, proceedings or
claims), and the reasonable fees and expenses of their counsel that may be
incurred in advising with respect to and/or defending any claim that may be made
against any Indemnified Party, to which any Indemnified Party may become subject
or otherwise involved in any capacity under any statute or common law or
otherwise insofar as such expenses, losses, claims, damages, liabilities,
actions, suits or proceedings arise out of or are based, directly or indirectly,
upon the performance of professional services rendered to the Company by the
Underwriters and/or any Indemnified Party hereunder or otherwise in connection
with the matters referred to in this Agreement, including without limitation, in
any way caused by, or arising directly or indirectly from, or in consequence
of:
|
|
(a)
|
any
misrepresentation or alleged misrepresentation (except as may be contained
in any information or statement relating solely to the Underwriters)
contained herein or in the Offering Documents or the documents
incorporated in the Offering Documents by reference pursuant to the
Offering;
|
|
|
(b)
|
any information or statement (except any information or statement relating solely to the Underwriters) contained in any certificate or document of the Company delivered |
- 24
-
|
|
under
this Agreement or pursuant to this Agreement which at the time and in
light of the circumstances under which it was made contains or is alleged
to contain a misrepresentation;
|
|
|
(c)
|
any
omission or alleged omission to state in any certificate or document of
the Company delivered under this Agreement or any fact (except facts
relating solely to the Underwriters), or in the Offering Documents,
required to be stated in such document or necessary to make any statement
in such document not misleading in light of the circumstances under which
it was made; or
|
|
|
(d)
|
the
non-compliance or alleged non-compliance by the Company with any
requirements of the Applicable Securities Laws (other than any
non-compliance or alleged non-compliance caused by, arising directly or
indirectly from, or in consequence of any action or non-action of the
Underwriters).
|
Notwithstanding
anything to the contrary contained herein, this indemnity shall not apply to the
extent that a court of competent jurisdiction in a final judgment that has
become non-appealable shall determine that:
|
|
(i)
|
the
Underwriters or an Indemnified Party has been grossly negligent or has
committed any fraudulent or illegal act in the course of the performance
of professional services rendered to the Company by the Underwriters
and/or the Indemnified Party or otherwise in connection with the matters
referred to in this Agreement; and
|
|
|
(ii)
|
the
expenses, losses, claims, damages or liabilities, as to which
indemnification is claimed, were directly caused by the gross negligence,
illegality or fraud referred to in
(i).
|
The
Company agrees that in case any legal proceeding shall be brought against the
Company and/or any Indemnified Party by any governmental commission or
regulatory authority, or any stock exchange or other entity having regulatory
authority, either domestic or foreign, shall investigate the Company and/or any
Indemnified Party shall be required to testify in connection therewith or shall
be required to respond to procedures designed to discover information regarding,
in connection with, or by reason of the performance of professional services
rendered to the Company by any Indemnified Party under this Agreement, any
Indemnified Party shall have the right to employ its own counsel in connection
therewith, and the reasonable fees and expenses of such counsel as well as the
reasonable costs (including an amount to reimburse the Indemnified Party for
time spent by it in connection therewith) and out-of-pocket expenses incurred by
it in connection therewith shall be paid by the Company as they
occur.
9.2 If
any action or claim shall be asserted against an Indemnified Party in respect of
which indemnity may be sought from the Company pursuant to the provisions of
section 9.1
- 25
-
or if any
potential claim contemplated hereby shall come to the knowledge of an
Indemnified Party, the Indemnified Party shall promptly notify the Company in
writing; but the omission to notify the Company will not relieve the Company
from any liability it may otherwise have to the Indemnified party
pursuant to section 9.1 except to the extent the Company is materially
prejudiced by such failure to notify. The Company shall be entitled but not
obligated to participate in or assume the defence thereof; provided, however,
that the defence shall be through experienced and competent legal
counsel. Upon the Company notifying the Indemnified Party in writing
of its election to assume the defense and retaining counsel, the Company shall
not be liable to the Indemnified Party for any legal expenses subsequently
incurred by them in connection with such defence. If such defence is
assumed by the Company, the Company throughout the course thereof will provide
copies of all relevant documentation to the Indemnified Party, will keep the
Indemnified Party advised of the progress thereof and will discuss with the
Indemnified Party all significant actions proposed. Notwithstanding
the above, the Indemnified Party shall also have the right to employ separate
counsel in any such action and participate in the defence thereof; provided that
the fees and expenses of such counsel shall be borne by the Indemnified Party
unless:
|
|
(a)
|
the
employment thereof has been specifically authorized in writing by the
Company;
|
|
|
(b)
|
the
Indemnified Party has been advised by counsel retained by the Company or
the Underwriters that representation of the Company and the Indemnified
Party by the same counsel would be inappropriate for any reason, including
without limitation because there may be legal defences available to the
Indemnified Party which are different from or in addition to those
available to the Company (in which event and to that extent, the Company
shall not have the right to assume or direct the defence on the
Indemnified Party’s behalf) or that there is a conflict of interest
between the Company and the Indemnified Party or the subject matter of the
action, suit, proceeding, claim or investigation may not fall within the
indemnity set forth herein (in either of which events the Company shall
not have the right to assume or direct the defence on the Indemnified
Party’s behalf); or
|
|
|
(c)
|
the
Company has failed within a reasonable time after receipt of such written
notice to assume the defence of such action or
claim;
|
provided
that the Company shall not be required to assume the fees and expenses of more
than one counsel to all of the Indemnified Parties. Neither the Company nor any
Indemnified Party shall effect any settlement of any such action or claim or
make any admission of liability without the written consent of the other party,
such consent to be promptly considered and not to be unreasonably
withheld.
The
indemnity and contribution obligations of the Company shall be in addition to
any liability which the Company may otherwise have, shall extend upon the same
terms and conditions to those Indemnified Parties who are not signatories hereto
and shall be binding upon and enure to the benefit of any successors, assigns,
heirs and personal representatives of the Company and the Indemnified
Parties. The foregoing provisions shall survive the completion of
professional services rendered under this Agreement or any termination of the
authorization given by this Agreement.
9.3 The
rights of indemnity contained in section 9.1 shall not accrue to the benefit of
any Indemnified Party if: (i) the Underwriters were provided with a copy of any
Supplementary Material which corrects any misrepresentation which is the basis
of a claim by a party against such Indemnified Party and which is required under
the Applicable Securities Laws in the Qualifying
- 26
-
Provinces
to be delivered to such party; and (ii) the person asserting the claim was not
provided with a copy of such amendment or supplement.
9.4 To
the extent that any Indemnified Party is not a party to this Agreement, the
Underwriters shall obtain and hold the right and benefit of the indemnity
provisions of section 9.1 in trust for and on behalf of such Indemnified
Party.
10. Contribution
10.1 In
the event that the indemnity provided for above is, for any reason, illegal or
unenforceable as being contrary to public policy or for any other reason is
unavailable or insufficient to hold an Indemnified Party harmless, the
Underwriters and the Company shall contribute to the aggregate of all losses,
claims, costs, damages, expenses or liabilities (including any legal or other
expenses reasonably incurred by an Indemnified Party in connection with
investigating or defending any action or claim which is the subject of this
section but excluding loss of profits or consequential damages) of the nature
provided for above in such proportion as is appropriate to reflect not only the
percentage that the portion of the Underwriting Fee payable by the Company to
the Underwriters bears to the gross proceeds realized from the sale of the
Offered Securities but also the relative fault of the Company and the
Underwriters, as well as any relevant equitable considerations; provided that,
in no event, will the Underwriters be responsible for any amount in excess of
the amount of the Underwriting Fee actually received by them and the Company
shall be responsible for the balance. In the event that the Company may be held
to be entitled to contribution from the Underwriters under the provisions of any
statute or law, the Company shall be limited to contribution in an amount not
exceeding the lesser of: (i) the portion of the full amount of losses, claims,
costs, damages, expenses and liabilities, giving rise to such contribution for
which the Underwriters are responsible, as determined above; and (ii) the amount
of the Underwriting Fee actually received by the Underwriters. Notwithstanding
the foregoing, a party guilty of fraudulent misrepresentation or material
non-compliance with the provisions of this Agreement or non-compliance with
applicable laws shall not be entitled to contribution from the other
party.
Any party entitled to contribution
will, promptly after receiving notice of commencement of any claim, action, suit
or proceeding against such party in respect of which a claim for contribution
may be made against the other party under this section, notify such party from
whom contribution may be sought. In no case shall such party from whom
contribution may be sought be liable under this Agreement unless such notice has
been provided, but the omission to so notify such party shall not relieve the
party from whom contribution may be sought from any other obligation it may have
otherwise than under this section, except to the extent such party is materially
prejudiced by the failure to receive such notice. The right to contribution
provided in this section shall be in addition to, and not in derogation of, any
other right to contribution which the Underwriters or the Company may have by
statute or otherwise by law.
10.2 The
right of the Company to assume the defence of any claim, action, suit or
proceeding shall apply as set forth in section 9.2 hereof, mutatis
mutandis.
10.3 The
Company hereby waives its right to recover contribution from the Underwriters or
any other Indemnified Party with respect to any liability of the Company solely
by reason of or arising out of any misrepresentation contained in any of the
Offering Documents or the Company's
- 27
-
Information
Record, other than a misrepresentation included in reliance upon information
furnished to the Company by or on behalf of the Underwriters specifically for
use therein or relating solely to the Underwriters.
11. Expenses
11.1 Whether
or not the closing of the Offering occurs, all expenses incurred from time to
time of or incidental to the sale, issue, distribution and qualification for
distribution of the Offered Securities and to all matters in connection with the
transactions herein set forth shall be borne by the Company including the
reasonable fees and disbursements of counsel to the Underwriters.
12. Liability
of Underwriters
12.1 The
obligations of the Underwriters to purchase the Offered Securities in connection
with the Offering at the Time of Closing shall be several (and not joint or
joint and several) and shall be as to the following percentages of the Offered
Securities to be purchased at that time:
| Name of Underwriter | Liability | ||
| GMP Securities L.P. | 40% | ||
| Xxxxxxx Xxxxx Ltd. | 25% | ||
| Cormark Securities Inc. | 17.5% | ||
| Canaccord Capital Corporation | 17.5% |
12.2 If
any of the Underwriters fails to purchase its applicable percentage of the
aggregate amount of the Offered Securities at the Time of Closing, the other
Underwriters shall have the right, but shall not be obligated, to purchase the
Offered Securities which would otherwise have been purchased by the Underwriter
which fails to purchase. If, with respect to the Offered Securities, the
non-defaulting Underwriters elect not to exercise such rights to assume the
entire obligations of the defaulting Underwriter, then the Company shall have
the right to terminate its obligations hereunder without liability except in
respect of its indemnity, contribution and expense obligations in respect of the
non-defaulting Underwriters. Nothing in this paragraph shall oblige the Company
to sell to the Underwriters less than all of the aggregate amount of the Offered
Securities or shall relieve an Underwriter in default hereunder from liability
to the Company.
13. Action
by Underwriters
13.1 All
steps which must or may be taken by the Underwriters in connection with the
closing of the Offering, with the exception of the matters relating to
termination of purchase obligations, may be taken by GMP Securities L.P. on
behalf of itself and the other Underwriters and the execution of this Agreement
by the other Underwriters and by the Company shall constitute the Company's
authority and obligation for accepting notification
- 28
-
of any
such steps from, and for delivering the definitive documents constituting the
Offered Securities to or to the order of, GMP Securities L.P. GMP
Securities L.P. shall fully consult with the other Underwriters with respect to
all notices, waivers, extensions or other communications to or with the
Company.
14. Survival
of Warranties, Representations, Covenants and Agreements
14.1 All
warranties, representations, covenants and agreements of the Company and the
Underwriters herein contained or contained in documents submitted or required to
be submitted pursuant to this Agreement shall survive the purchase by the
Underwriters of the Offered Securities and shall continue in full force and
effect for the benefit of the Underwriters or the Company, as applicable,
regardless of the closing of the sale of the Offered Securities and regardless
of any investigation which may be carried on by the Underwriters or the Company
or on their behalf until the Survival Limitation Date. For greater certainty,
and without limiting the generality of the foregoing, the provisions contained
in this Agreement in any way related to the indemnification of the Underwriters
by the Company or the contribution obligations of the Underwriters or those of
the Company shall survive and continue in full force and effect,
indefinitely.
15. General
Contract Provisions
15.1 Any
notice or other communication to be given hereunder shall be in writing and
shall be given by delivery or by telecopier, as follows:
|
if to the
Company:
|
|
||
| Ur-Energy Inc. | |||
| 0000 Xxxxx Xxxx | |||
| P. O. Xxx 000 | |||
| Xxxxxxxx, Xxxxxxx X0X 0X0 | |||
| Attention: | Xxxxxxx Xxxxxx | ||
| Telecopier Number: | (000) 000-0000 | ||
|
with a copy
to:
|
|
||
|
XxXxxxxx
Xxxxxxxx XXX
|
|||
|
Xxxxx
0000, Xxx Xxxxxxxx
|
|||
| 00 Xxxxx Xxxxxx | |||
| Xxxxxx, Xxxxxxx X0X 0X0 | |||
| Attention: | Xxxxxxxx Xxxxxxxxxx | ||
| Telecopier Number: | (000) 000-0000 | ||
- 29
-
|
or if to the
Underwriters:
|
|
||
|
GMP
Securities L.P.
|
|||
|
000
Xxxx Xxxxxx
|
|||
| Xxxxx 0000 | |||
| Xxxxxxx, Xxxxxxx X0X 0X0 | |||
| Attention: | Xxxx Xxxxxxxx | ||
| Telecopier Number: | (000) 000-0000 | ||
|
with a copy
to:
|
|||
|
Xxxxxxx
Xxxxx & Xxxxxxxxx
LLP
|
|||
|
2100
Scotia Plaza
|
|||
| 00 Xxxx Xxxxxx Xxxx | |||
| Xxxxxxx, Xxxxxxx X0X 0X0 | |||
| Attention: | Xxxx Xxxxxxx | ||
| Telecopier Number: | (000) 000-0000 |
and if so
given, shall be deemed to have been given and received upon receipt by the
addressee or a responsible officer of the addressee if delivered, or four hours
after being telecopied and receipt confirmed during normal business hours, as
the case may be. Any party may, at any time, give notice in writing to the
others in the manner provided for above of any change of address or telecopier
number.
15.2 This
Agreement and the other documents herein referred to constitute the entire
agreement between the Underwriters and the Company relating to the subject
matter hereof and supersede all prior agreements between the Underwriters and
the Company with respect to their respective rights and obligations in respect
of the Offering, including the revised offer letter between GMP Securities L.P.
and the Company dated April 17, 2007 and reconfirmed on
April 17, 2007 by GMP Securities L.P.
15.3 Time
shall be of the essence for all provisions of this Agreement.
15.4 This
Agreement may be executed by telecopier and in one or more counterparts which,
together, shall constitute an original copy hereof as of the date first noted
above.
[Rest
of Page Intentionally Left Blank]
- 30
-
If this
Agreement accurately reflects the terms of the transaction which we are to enter
into and if such terms are agreed to by the Company, please communicate your
acceptance by executing where indicated below.
Yours
very truly,
| GMP SECURITIES L.P. | ||||
| Per: | “Xxxxx Xxxx” | |||
| Authorized Signing Officer | ||||
| XXXXXXX XXXXX LTD. | ||||
| Per: | “Xxxx Xxxxxx” | |||
|
Authorized
Signing Officer
|
||||
| CANACCORD CAPITAL CORPORATION | ||||
| Per: | “Xxx Xxxxxx” | |||
| Authorized Signing Officer | ||||
| CORMARK SECURITIES INC. | ||||
| Per: | “Xxxxxx Xxxxxxx” | |||
| Authorized Signing Officer | ||||
The
foregoing accurately reflects the terms of the transaction which we are to enter
into and such terms are agreed to with effect as of the date provided at the top
of the first page of this Agreement.
| Company Name | |||
|
|
Per:
|
“Xxxx XxXxxxx” | |
| Authorized Signing Officer | |||
- 31
-
SCHEDULE
“A”
OPINION
OF THE COMPANY'S COUNSEL
This
is Schedule “A” to the underwriting agreement dated as of April 23, 2007 between
Ur-Energy Inc. and GMP Securities L.P., Xxxxxxx Xxxxx Ltd., Cormark Securities
Inc. and Canaccord Capital Corporation.
The
opinion of the Company's counsel shall be in respect of the following
matters:
|
|
(i)
|
the
Company is a “reporting issuer”, or its equivalent, in the provinces of
British Columbia, Alberta, Saskatchewan, Manitoba and Ontario and it is
not listed as in default of any requirement of the Applicable Securities
Laws in any of such provinces;
|
|
|
(ii)
|
the
Company is a corporation existing under the Canada Business Corporations
Act and has all requisite corporate power to carry on its business
as now conducted and to own, lease and operate its property and assets and
to execute, deliver and perform its obligations under this
Agreement;
|
|
|
(iii)
|
the
Company is authorized to issue, among other things, an unlimited number of
common shares;
|
|
|
(iv)
|
as
to the issued and outstanding common shares and preference shares of the
Company;
|
|
|
(v)
|
the
Company has all necessary corporate power and capacity: (i) to execute and
deliver this Agreement and perform its obligations under this Agreement;
(ii) to issue and sell the Offered Securities; and (iii) to issue the
Over-Allotment Option; and (iv) to issue the Additional Offered Securities
upon exercise of the Over- Allotment
Option;
|
|
|
(vi)
|
all
necessary corporate action has been taken by the Company to authorize the
execution and delivery of each of the Preliminary Prospectus and the Final Prospectus
and the filing thereof with the Securities
Commissions;
|
|
|
(vii)
|
upon
the payment therefor and the issue thereof, the Offered Securities will
have been validly issued as fully paid and
non-assessable;
|
|
|
(viii)
|
the
Additional Offered Securities issuable upon exercise of the Over-Allotment
Option have been validly reserved for issuance by the Company, and upon
payment at the purchase price therefore and the issuance thereof, will be
validly issued as fully paid and
non-assessable;
|
|
|
(ix)
|
all
necessary corporate action has been taken by the Company to authorize the
execution and delivery of this Agreement and the performance of
its
|
|
|
obligations
hereunder and this Agreement has been executed and delivered by the
Company and constitute legal, valid and binding obligations of the Company
enforceable against it in accordance with its terms, subject to
bankruptcy, insolvency and other laws affecting the rights of creditors
generally and subject to such other standard assumptions and
qualifications including the qualifications that equitable remedies may be
granted in the discretion of a court of competent jurisdiction and that
enforcement of rights to indemnity, contribution and waiver of
contribution set out in this Agreement may be limited by applicable law
and that enforceability is subject to the provisions of the Limitations Act, 2002
(Ontario);
|
|
|
(x)
|
the
rights, privileges, restrictions and conditions attaching to the Offered
Securities are accurately summarized in all material respects in the Final
Prospectus;
|
|
|
(xi)
|
all
necessary documents have been filed, all requisite proceedings have been
taken and all approvals, permits and consents of the appropriate
regulatory authority in each Qualifying Provinces have been obtained by
the Company to qualify the distribution or distribution to the public of
the Offered Securities, the Over-Allotment Option and the Additional
Offered Securities in each of the Qualifying Provinces through persons who
are registered under applicable legislation and who have complied with the
relevant provisions of such applicable
legislation;
|
|
|
(xii)
|
subject
only to the standard listing conditions, the Offered Securities and the
Additional Offered Securities have been conditionally listed on the
Exchange;
|
|
|
(xiii)
|
the
form and terms of the definitive certificate representing the common
shares at the Company have been approved by the directors of the Company
and comply in all material respects with the Canada Business Corporations Act and
the rules and by-laws of the
Exchange;
|
|
|
(xiv)
|
the
execution and delivery of this Agreement, the fulfilment of the terms
hereof by the Company and the issuance, sale and delivery of the Offered
Securities to be issued and sold by the Company at the Time of Closing and
the issuance of the Over-Allotment Option, and the issuance of the
Additional Offered Securities upon exercise of the Over-Allotment Option,
do not and will not result in a breach of or default under, and do not and
will not create a state of facts which, after notice or lapse of time or
both, will result in a breach of or default under, and do not and will not
conflict with any of the terms,
|
- 2
-
|
|
conditions
or provisions of the articles or by-laws of the Company or any applicable
corporate law or Applicable Securities
Laws;
|
|
|
(xv)
|
Equity
Transfer & Trust Company has been appointed the transfer agent and
registrar for the common
shares;
|
|
|
(xvi)
|
the
Offered Securities and the Additional Offered Securities will, on the
Closing Date and the Option Closing Date, be qualified investments under
the Income Tax
Act (Canada) for trusts governed by registered retirement savings
plans, registered retirement income funds, deferred profit sharing plans
and registered education savings plans. The Offered Securities
will not constitute “foreign property” to deferred income plans and
certain other persons who are generally exempt from tax;
and
|
|
|
(xvii)
|
the
statements set forth in the Final Prospectus under the caption
“Eligibility for Investment”, insofar as they purport to describe the
provisions of the laws referred to therein, are fair summaries of the
matters discussed therein.
|
- 3
-
SCHEDULE
“B”
MATERIAL
SUBSIDIARIES
This
is Schedule “B” to the underwriting agreement dated as of April 23, 2007 between
Ur-Energy Inc. and GMP Securities L.P., Xxxxxxx Xxxxx Ltd., Cormark Securities
Inc. and Canaccord Capital Corporation.
|
Name
|
Jurisdiction
|
%
Ownership
|
|
ISL
Resources Corporation
|
Ontario
|
100
|
|
Ur-Energy
USA Inc.
|
Colorado
|
100
|
|
NFU
Wyoming, LLC
|
Wyoming
|
100
|
SCHEDULE
“C”
U.S.
SECURITIES LAW PROVISIONS
This
is Schedule “C” to the underwriting agreement dated as of April 23, 2007 between
Ur-Energy Inc. and GMP Securities L.P., Xxxxxxx Xxxxx Ltd., Cormark Securities
Inc. and Canaccord Capital Corporation.
As used in this Schedule “C”,
capitalized terms used herein and not defined herein shall have the meanings
ascribed thereto in the underwriting agreement to which this Schedule “C” is
annexed and the following terms shall have the meanings indicated:
|
|
(a)
|
“affiliate”
means affiliate as that term is defined in Rule
405;
|
|
|
(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 Offered Securities 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 Offered
Securities;
|
|
|
(c)
|
“Final
U.S. Placement Memorandum” means the final U.S. placement memorandum, in
form satisfactory to the Company and the Underwriters, including the Final
Prospectus;
|
|
|
(d)
|
“Foreign
Issuer” shall have the meaning ascribed thereto in Regulation S. Without
limiting the foregoing, but for greater clarity, it means any issuer which
is (a) the government of any country other than the United States or of
any political subdivision thereof or a national of any country other than
the United States; or (b) a corporation or other organization incorporated
under the laws of any country other than the United States, except an
issuer meeting the following conditions: (1) more than 50 percent of the
outstanding voting securities of such issuer are held of record either
directly or indirectly by residents of the Unites States; and (2) any of
the following: (i) the majority of the executive officers or directors of
the issuer are United States citizens or residents, (ii) more than 50
percent of the assets of the issuer are located in the United States, or
(iii) the business of the issuer is administered principally in the United
States;
|
|
|
(e)
|
“General
Solicitation or General Advertising” means “general solicitation or
general advertising”, as used in Rule 502(c) under the U.S. Securities
Act, 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;
|
|
|
(f)
|
“Institutional
Accredited Investor” means an accredited investor, as defined in Rule
501(a) of Regulation D, that satisfies the criteria specified in Rule
501(a)(1),(2),(3) or (7) of Regulation
D;
|
|
|
(g)
|
“Preliminary
U.S. Placement Memorandum” means the preliminary U.S. placement
memorandum, in form satisfactory to the Company and the Underwriters,
including the Preliminary
Prospectus;
|
|
|
(h)
|
“Regulation
D” means Regulation D adopted by the SEC under the U.S. Securities
Act;
|
|
|
(i)
|
“Regulation
S” means Regulation S adopted by the SEC under the U.S. Securities
Act;
|
|
|
(j)
|
“SEC”
means the United States Securities and Exchange
Commission;
|
|
|
(k)
|
“Substantial
U.S. Market Interest” means “substantial U.S. market interest” as that
term is defined in Regulation S;
|
|
|
(l)
|
“U.S.
Exchange Act” means the United States Securities Exchange Act of 1934, as
amended;
|
|
|
(m)
|
“U.S.
Securities Act” means the United States Securities Act
of 1933, as amended; and
|
|
|
(n)
|
“United
States” means the United States of America, its territories and
possessions, any state of the United States, and the District of
Columbia.
|
Representations, Warranties
and Covenants of the Underwriters
Each Underwriter acknowledges that the
Offered Securities have not been and will not be registered under the U.S.
Securities Act and may be offered and sold only in transactions exempt from or
not subject to the registration requirements of the U.S. Securities Act and U.S.
state securities laws. Accordingly, each Underwriter represents,
warrants and covenants to the Company that:
|
|
1.
|
It
has not offered and sold, and will not offer and sell, any Offered
Securities forming part of its allotment described in section 12.1 of the
underwriting agreement except (a) in an offshore transaction to a person
that is not in the United States in accordance with Rule 903 of Regulation
S or (b) in the United States as provided in paragraphs 2 through 10
below. Accordingly, except as provided in paragraphs 2 through 10 below,
neither the Underwriter nor any of its affiliates nor any persons acting
on its or their behalf, (i) has made or will make any offer to sell, or
any solicitation of any offer to buy, any Offered Securities to a person
in the United States, (ii) has made or will make any sale of Offered
Securities unless, at the time the buy order was or will have been
originated, either the purchaser is outside the United States or the
Underwriter, its affiliates and any person acting on their behalf
reasonably believe that the purchaser is outside the United States, or
(iii) has engaged or will
|
- 2
-
|
|
engage
in any Directed Selling Efforts in the United States with respect to the
Offered Securities.
|
|
|
2.
|
It
has not entered and will not enter into any contractual arrangement with
respect to the distribution of the Offered Securities, except with its
affiliates, any selling group members or with the prior written consent of
the Company. It shall require each of its U.S. broker-dealer affiliate and
each selling group member to agree, for the benefit of the Company, to
comply with, and shall use its best efforts to ensure that each of its
U.S. broker-dealer affiliate and each selling group member complies with,
the provisions of this Schedule “C” applicable to such Underwriter as if
such provisions applied to such U.S. broker-dealer affiliate or selling
group member.
|
|
|
3.
|
All
offers and sales of Offered Securities in the United States shall be made
through the Underwriter’s U.S. broker-dealer affiliate in compliance with
all applicable U.S. federal and state broker-dealer
requirements. Such U.S. broker-dealer affiliate is duly
registered as a broker-dealer pursuant to Section 15(b) of the U.S.
Exchange Act, is duly registered as a broker-dealer under the laws of each
U.S. state in which it has offered or sold or will offer or sell the
Offered Securities (except where an exemption from state broker-dealer
registration requirements is available), and is a member in good standing
with the National Association of Securities Dealers,
Inc.
|
|
|
4.
|
In
connection with offers and sales of Offered Securities in the United
States (i) no General Solicitation or General Advertising has been or
shall be used, and (ii) such offers and sales have not been and shall not
be made in any manner involving a public offering within the meaning of
Section 4(2) of the U.S. Securities
Act.
|
|
|
5.
|
Any
offer, sale or solicitation of an offer to buy Offered Securities that has
been made or will be made in the United States was or will be made only to
Institutional Accredited Investors that are offered the Offered Securities
for sale directly by the Company to such Institutional Accredited
Investors in transactions that are exempt from registration pursuant to
Rule 506 of Regulation D and applicable U.S. state securities
laws.
|
|
|
6.
|
The
Underwriter, acting through its U.S. broker-dealer affiliate, may offer
the Offered Securities in the United States only to offerees with respect
to which such Underwriter has a pre-existing relationship and has
reasonable grounds to believe are Institutional Accredited
Investors.
|
|
|
7.
|
Prior
to any sale of Offered Securities in the United States, it shall cause
each U.S. purchaser thereof to execute a subscription agreement in the
form attached to the Final U.S. Placement
Memorandum.
|
|
|
8.
|
Each
offeree of Offered Securities in the United States shall be provided with
a copy of either the Preliminary U.S. Placement Memorandum, including the
Preliminary Prospectus, or the Final U.S. Placement Memorandum, including
the Final Prospectus. Each purchaser of Offered Securities in
the United States shall be provided, prior to the time of purchase of any
Offered Securities, with a copy of
the
|
- 3
-
|
|
Final
U.S. Placement Memorandum, including the Final Prospectus. No
other written material shall be used in connection with the offer and sale
of the Offered Securities.
|
|
|
9.
|
At
least one business day prior to the Closing Date and, if the
Over-Allotment Option is exercised, at least one business day prior to the
Option Closing Date, the transfer agent will be provided with a list of
all purchasers of the Offered Securities in the United
States.
|
|
|
10.
|
At
the closing of the Offering and at the closing of any exercise of the
Over-Allotment Option, each U.S. broker-dealer who offered or sold any
Offered Securities together with its Canadian affiliated Underwriter will
provide a certificate, substantially in the form of Appendix I, relating
to the manner of the offer and sale of the Offered Securities in the
United States. If the Underwriter does not deliver such
certificate, it will be deemed to represent and warrant to the Company, as
at such closing, that none of it, any of its affiliates or any person
acting on any of their behalf has offered or sold any of the Offered
Securities in the United States.
|
|
|
11.
|
None
of the Underwriter, any of its affiliates or any person acting on any of
their behalf has taken or will take any action in violation of Regulation
M under the U.S. Exchange Act in connection with the offer and sale of the
Offered Securities.
|
Representations, Warranties
and Covenants of the Company
The Company represents, warrants,
covenants and agrees that:
|
|
1.
|
The
Company is, and at each closing will be, a Foreign Issuer with no
Substantial U.S. Market Interest in the common shares of the
Company.
|
|
|
2.
|
The
Company is not, and as a result of the sale of the Offered Securities
contemplated hereby will not be, registered or required to be registered
under the United States Investment Company Act of 1940, as
amended.
|
|
|
3.
|
Except
with respect to offers and sales to Institutional Accredited Investors in
reliance upon Rule 506 of Regulation D in the manner described in this
Schedule “C”, neither the Company nor any of its affiliates, and assuming
the representations, warranties and covenants of the Underwriters are true
and accurate, nor any person acting on its or their behalf, has made or
will make, in connection with offers and sales of the Offered Securities
pursuant to this Agreement: (A) any offer to sell, or any solicitation of
an offer to buy, any Offered Securities to a person in the United States;
or (B) any sale of Offered Securities unless, at the time the buy order
was or will have been originated, either (i) the purchaser is 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.
|
|
|
4.
|
None
of the Company or any of its affiliates or, assuming the representations,
warranties and covenants of the Underwriters are true and accurate, any
person acting on its or their behalf, has made or will make any Directed
Selling Efforts in the United States with respect to the Offered
Securities, or has taken or will take any action that would cause the
exemption afforded by Rule 506 of Regulation D or Rule 903 of Regulation
S, as applicable, to be unavailable for offers and sales of the Offered
Securities pursuant to this
Agreement.
|
- 4
-
|
|
5.
|
None
of the Company, any of its affiliates or, assuming the representations,
warranties and covenants of the Underwriters are true and accurate, any
person acting on its or their behalf has
engaged or will engage in any form of General Solicitation or General
Advertising or any manner involving a public offering within the meaning
of Section 4(2) of the U.S. Securities Act, with respect to offers or
sales of the Offered Securities in the United
States.
|
|
|
6.
|
The
Company has not offered or sold, and will not offer or sell, any of its
securities in a manner that would be integrated with offers and sales of
Offered Securities in the United States pursuant to this Schedule “C” and
that would cause such sales of Offered Securities to be ineligible for the
exemption from registration provided by Rule 506 of Regulation
D.
|
|
|
7.
|
None
of the Company, any of its affiliates or, assuming the representations,
warranties and covenants of the Underwriters are true and accurate, any
person acting on any of their behalf has taken or will take any action in
violation of Regulation M under the U.S. Exchange Act in connection with
the offer and sale of the Offered
Securities.
|
|
|
8.
|
None
of the Company or any of its predecessors or affiliates has been subject
to any order, judgment or decree of any court of competent jurisdiction
temporarily, preliminarily or permanently enjoining such person for
failure to comply with Rule 503 of Regulation
D.
|
|
|
9.
|
The
Company may qualify as a "passive foreign investment company" ("PFIC") as
defined in section 1297 of the Internal Revenue Code of 1986, as amended,
(the "Code"). For each taxable year, if any, that the Company qualifies as
a PFIC, in the case of a Purchaser that is a "United States person" (as
defined in section 7701(a)(30) of the Code) and that has made an effective
"qualified electing fund" election (as defined in section 1295 of the
Code) with respect to the Company (a "QEF Election"), the Company upon
receiving the written request of such Purchaser will provide to such
Purchaser (a) a "PFIC Annual Information Statement" as described in
Treasury Regulation section 1.1295-1(g) (or any successor Treasury
Regulation), including all representations and statements required by such
PFIC Annual Information Statement, and (b) all additional information that
such Purchaser is required to obtain in connection with maintaining such
QEF Election. With regard to the PFIC Annual Information Statement, as
permitted by Treasury Regulation section 1.1293-1(a)(2) the Company will
calculate and report the amount of each category of long-term capital gain
described in section 1(h) of the Code that was recognized by the
Company.
|
- 5
-
APPENDIX
I
TO
SCHEDULE “C”
UNDERWRITERS'
CERTIFICATE
In
connection with the private placement in the United States of the common shares
(the “Offered Securities”) of Ur-Energy Inc. (the “Company”) pursuant to the
Underwriting Agreement dated April 23, 2007 among the Company and the
Underwriters named therein (the “Underwriting Agreement”), the undersigned
Underwriter and _______________, its U.S. broker-dealer affiliate (the “U.S.
Placement Agent”) do hereby certify as follows:
|
|
(i)
|
we
have offered and sold the Offered Securities in the United States
exclusively through the U.S. Placement Agent, which is duly registered as
a broker-dealer pursuant to Section 15(b) of the U.S. Exchange Act, is
duly registered as a broker-dealer under the laws of each U.S. state in
which it has offered or sold the Offered Securities (except where an
exemption from state broker-dealer registration requirements is available)
and is a member of and is in good standing with the National Association
of Securities Dealers, Inc. on the date
hereof;
|
|
|
(ii)
|
all
offers and sales of the Offered Securities by us in the United States have
been effected in accordance with all applicable U.S. federal and state
broker-dealer requirements;
|
|
|
(iii)
|
each
offeree in the United States that we offered the Offered Securities was
provided with a copy of either the Preliminary U.S. Placement Memorandum,
including the Preliminary Prospectus, or the Final U.S. Placement
Memorandum, including the Final Prospectus, each purchaser in the United
States that we have arranged to purchase Offered Securities from the
Company was provided with a copy of the Final U.S. Placement Memorandum,
including the Final Prospectus, and we have not used any other written
material in connection with the offer and sale of the Offered
Securities;
|
|
|
(iv)
|
immediately
prior to making any offer or solicitation to an offeree in the United
States, we had reasonable grounds to believe and did believe that each
offeree was an Institutional Accredited Investor and, on the date hereof,
we continue to believe that each purchaser that we have arranged to
purchase Offered Securities in the United States is an Institutional
Accredited Investor;
|
|
|
(v)
|
no
General Solicitation or General Advertising was used by us in connection
with the offer or sale of the Offered Securities in the United
States;
|
|
|
(vi)
|
prior
to any sale of Offered Securities in the United States, we caused each
U.S. purchaser to execute a subscription agreement in the form attached to
the Final U.S. Placement Memorandum;
and
|
|
|
(vii)
|
the
offering of the Offered Securities has been conducted by us in accordance
with the terms of the Underwriting
Agreement.
|
|
|
Terms
used in this certificate have the meanings given to them in the
Underwriting Agreement unless otherwise defined
herein.
|
Dated
this __ day of __________, 2007.
| [CANADIAN UNDERWRITER] | [U.S. AFFILIATE OF CANADIAN UNDERWRITER] | ||
| By: _____________________________ | By: _____________________________ | ||
| Name: _____________________________ | Name: _____________________________ | ||
| Title: ______________________________ | Title: _____________________________ |
- 2 -
SCHEDULE
“D”
OUTSTANDING
CONVERTIBLE SECURITIES
This
Schedule “D” to the underwriting agreement dated as of April 23, 2007 between
Ur-Energy Inc. and GMP Securities L.P., Xxxxxxx Xxxxx Ltd., Cormark Securities
Inc. and Canaccord Capital Corporation.
Convertible
Securities of Ur-Energy Inc.
As
at April 20, 2007
|
No.
of Shares
|
|
|
Compensation
options
|
|
|
Expiring
November 29, 2007 @ $1.25
|
55,568
|
|
Stock
options
|
|
|
Expiring
November 17, 2010 @ $1.25
|
2,956,800
|
|
Expiring
March 25, 2011 @ $2.01
|
75,000
|
|
Expiring
April 21, 2011 @ $2.35
|
1,525,000
|
|
Expiring
September 27, 2011 @ $2.75
|
435,000
|
|
Expiring
January 1, 2012 @ $4.08
|
200,000
|
|
Expiring
February 15, 2012 @ $5.03
|
600,000
|
|
Total
stock options
|
5,791,800
|
|
Total
Convertible Securities
|
5,847,368
|
