UNDERWRITING AGREEMENT
Exhibit 99.1
March 3,
2021
Xxxxxxx Mines Corp.
00 Xxxxxxxxxx
Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention:
Xxxxx Xxxxx, President and Chief Executive Officer
Dear
Sirs/Mesdames:
RE:
Bought Deal Private Placement of Flow-Through Shares
Subject to the
terms and conditions hereof, Cantor Xxxxxxxxxx Canada Corporation
and Xxxxxxx Securities Inc., (together, the “Underwriters” and each
individually, an “Underwriter”), hereby offer and
agree to purchase from Xxxxxxx Mines Corp. (the “Corporation”), and the Corporation
by its execution of this Agreement (as defined herein) agrees to
issue and sell to the Underwriters, on a private placement basis at
the Closing Time (as defined herein), 5,926,000 common shares in
the capital of the Corporation to be issued as “flow-through
shares” as defined in subsection 66(15) of the Tax Act (as
defined herein) (each, an “Offered Share”) at a price of
$1.35 per Offered Share (the “Offering Price”) for aggregate
gross proceeds of $8,000,100 (the “Offering”).
Subject to the
terms and conditions hereof, the Underwriters shall offer the
Offered Shares on a private placement basis in such provinces in
Canada as the Underwriters may designate (the “Offering
Jurisdictions”).
Interpretation
Unless expressly
provided otherwise, where used in this Agreement the following
terms shall have the following meanings, respectively:
“affiliate”
has the meaning ascribed thereto in NI 45-106;
“Agreement”
means this agreement as modified, amended and/or supplemented from
time to time;
“APG”
means Anglo Pacific Group PLC;
“APG
Loan” means the $43.5 million lending and streaming
arrangement between the Corporation’s subsidiaries, DMI and
937321 Canada Inc. with APG and its wholly-owned subsidiary
Centaurus Royalties Ltd.;
“Applicable
Securities Laws” mean, collectively, the applicable
securities laws of each of the jurisdictions in Canada in which the
Corporation is a reporting issuer and, to the extent applicable,
the U.S. Securities Act and the U.S. Exchange Act, the regulations,
rules, companion policies, rulings and orders made thereunder, the
applicable published policy statements issued by the Securities
Commissions thereunder and the securities legislation, stock
exchange rules and published policies of each other jurisdiction
the securities laws of which are applicable to the sale of the
Offered Shares on the terms and conditions set out in this
Agreement;
“associate”,
“distribution”,
“material
change”, “material fact” and
“misrepresentation” have the
respective meanings ascribed thereto in the Securities Act (Ontario);
“Business
Day” means any day other than a Saturday, Sunday or
statutory holiday in Toronto, Ontario;
“Canadian
Exploration Expense” or “CEE” means one or more expenses
described in paragraph (f) of the definition of “Canadian
exploration expense” in subsection 66.1(6) of the Tax Act, or
would be described in paragraph (h) of that definition if the
reference therein to paragraphs (a) to (d) and (f) to (g.4) was a
reference to paragraph (f), excluding expenses that are prescribed
“Canadian exploration and development overhead
expenses” for the purposes of paragraph 66(12.6)(b) of the
Tax Act, the amount of any assistance described in paragraph
66(12.6(a) of the Tax Act, amounts which constitute specified
expenses for seismic data described in paragraph 66(12.6)(b.1) of
the Tax Act, or any expense for prepaid services or rent that do
not qualify as outlays and expenses for the period as described in
the definition of “expense” in subsection 66(15) of the
Tax Act;
“CDS”
means CDS Clearing and Depository Services Inc.;
“Closing”
means the completion of the issue and sale by the Corporation of
the Offered Shares pursuant to this Agreement and the Subscription
Agreements;
“Closing
Date” means the date
of the Closing, being March 3, 2021 or such other date as the
Underwriters and the Corporation may agree in writing;
“Closing
Time” means 8:00 a.m.
(Toronto time) on the Closing Date or such other time on the
Closing Date as the Underwriters and the Corporation may
agree;
“Commitment
Amount” means an
amount equal to the aggregate dollar amount of the Offered Shares
subscribed for by the Purchasers pursuant to the Subscription
Agreements;
“Common
Shares” means the
issued and outstanding common shares in the capital of the
Corporation, including where applicable, the Offered
Shares;
“CRA”
means the Canada Revenue Agency;
“December
2020 FT Private Placement” means the sale of 1,081,959
Common Shares pursuant to the December 2020 FT Private Placement
Subscription Agreements, which Common Shares were issued as
“flow-through shares” as defined in subsection 66(15)
of the ITA at a price of $0.86 per Common Share;
“December
2020 FT Private Placement Subscription Agreements”
means the subscription agreements dated December 31, 2020 between
the Corporation and various individual subscribers with respect to
the December 2020 FT Private Placement;
“Disclosure
Documents” means any
statement contained in any press release, material change report,
financial statement, annual information form, annual or interim
report, proxy circular or other document of the Corporation, which
has been or is publicly disseminated by or with the consent of the
Corporation, whether pursuant to any Applicable Securities Laws or
otherwise, and which has been filed on SEDAR or with the SEC
pursuant to the Exchange Act since December 31, 2019, including,
without limitation, the Corporation’s prospectus supplement
dated February 16, 2021;
“DMI”
means Xxxxxxx Mines Inc.;
“Employee
Plans” has the meaning
ascribed thereto in subsection 5(kk)(iii);
“Encumbrance”
means any encumbrance, lien, charge, hypothec, pledge, mortgage,
title retention agreement or other security interest;
“Environmental
Laws” has the meaning
ascribed thereto in subsection 5(hh)(i);
“Environmental
Permits” has the
meaning ascribed thereto in subsection 5(hh)(ii);
“Expenditure
Period” for any Subscription Agreement means the
period commencing on the date of acceptance by the Corporation of
such Subscription Agreement and ending on the earlier of (i) the
date on which the Commitment Amount has been fully expended in
accordance with the terms hereof and the Subscription Agreements;
and (ii) December 31, 2022;
“FCPA
Legislation” means all
applicable foreign corrupt practices legislation, including the
Corruption of Foreign Public
Officials Act (Canada), the Proceeds of Crime (Money
Laundering) and Terrorist
Financing Act (Canada), any equivalent legislation under
U.S. law and any applicable law implementing either the United
Nations Convention Against Corruption or the OECD Convention on
Combating Bribery of Foreign Public Officials in International
Business Transactions), all as amended;
“Financial
Statements” has the
meaning ascribed thereto in subsection 5(q);
“Flow-Through
Mining Expenditure” means an expense
which, once renounced, is a “flow-through mining
expenditure” as defined in subsection 127(9) of the Tax
Act;
“Gross
Proceeds” means the
gross proceeds raised from the sale of the Offered
Shares;
“Hazardous
Substances” has the
meaning ascribed thereto in subsection 5(hh)(i);
“IFRS”
means International Financial Reporting Standards as issued by the
International Accounting Standards Board;
“including”
means including without limitation and shall not be construed to
limit any general statement which it follows to the specific or
similar items or matters immediately following it;
“Joint
Venture Entities” means each person or
body corporate, howsoever constituted in any jurisdiction, which is
an owner or operator of any of the Material Properties, including,
to the extent applicable, the Corporation and DMI, provided that
any representation or warranty of the Corporation in this Agreement
relating to Joint Venture Entities other than the Corporation or
DMI shall be deemed to be limited to only apply in respect of the
Material Properties, and “Joint Venture Entity” means
any one of the Joint Venture Entities;
“KHNP
Strategic Relationship Agreement” means the amended
and restated strategic relationship agreement made as of September
19, 2017 between the Corporation and KHNP Canada Energy
Ltd.;
“Material
Adverse Effect” or “Material Adverse Change” means any effect or change
on the Corporation and the Material Subsidiaries or their
respective businesses that is or is reasonably likely to be
materially adverse to the results of operations, financial
condition, assets, properties, capital, liabilities (contingent or
otherwise), cash flow, income or business operations of the
Corporation and the Material Subsidiaries, taken as a whole, or
that is or is reasonably likely to be materially adverse to the
completion of the transactions contemplated by this
Agreement;
“Material
Agreements” mean any
mortgage, note, indenture, contract, agreement (written or oral),
instrument, lease or other document to which the Corporation, a
Subsidiary or a Joint Venture Entity is a party or by which the
Corporation, a Subsidiary or a Joint Venture Entity or a material
portion of the assets thereof are bound which is material to the
Corporation (on a consolidated basis);
“Material
Properties” means,
collectively: (i) the Xxxxxxx River uranium project consisting of
19 mineral claims covering an aggregate area of 11,720 hectares;
(ii) the Waterbury Lake project comprised of 12 contiguous
claims and one separate claim covering 40,256 hectares that is
owned by the Corporation and the Korea Waterbury Uranium Limited
Partnership, as limited partners, and Waterbury Lake Uranium
corporation, as general partner, in the Waterbury Lake Uranium
Limited Partnership; (iii) the XxXxxxx Lake project consisting of
13 mineral claims covering an aggregate area of 3,111 hectares, 4
mineral leases covering an area of 1,147 hectares, and the XxXxxxx
Lake uranium processing facility; and (iv) the Midwest project
consisting of 3 contiguous mineral leases covering an area of 1,426
hectares, all located in the Athabasca Basin region of
Saskatchewan;
“Material
Subsidiaries” means DMI (Ontario) (100%); Xxxxxxx XX
Holdings Corp. (British Columbia) (100%); 9373721 Canada Inc.
(Canada) (100%); Xxxxxxx Waterbury Corp. (“DWC”) (Ontario) (100%); Waterbury
Lake Uranium Corporation (“WLUC”) (British Columbia) (60%
held by DWC); and Waterbury Lake Uranium Limited Partnership
(“WLULP”)
(British Columbia) (66.89% held by DWC and 0.02% held by
WLUC);
“NI
43-101” means National Instrument 43-101 –
Standards of Disclosure for
Mineral Projects;
“NI
45-106” means National Instrument 45-106 –
Prospectus
Exemptions;
“NI
51-102” means National Instrument 51-102 –
Continuous Disclosure
Obligations;
“NI
52-109” means National Instrument 52-109 –
Certification of Disclosure in
Issuers’ Annual and Interim Filings;
“NYSE
American” means the trading market operated by NYSE
American LLC;
“Offered
Shares” has the
meaning ascribed thereto in the second paragraph of this
Agreement;
“Offering”
has the meaning ascribed thereto in the first paragraph of this
Agreement;
“Offering
Jurisdictions” has the
meaning ascribed thereto in the third paragraph of this
Agreement;
“Offering
Price” has the meaning ascribed thereto in the first
paragraph of this Agreement;
“Outstanding
Convertible Securities” means all options
(whether put or call options), including options granted or
proposed to be granted to officers, directors, employees or
consultants of the Corporation or the Subsidiaries, share purchase
or acquisition rights or warrants and other securities convertible
or exercisable for Common Shares outstanding as at the date of this
Agreement, whether issued pursuant to an established plan or
otherwise;
“Permits”
has the meaning ascribed thereto in subsection 5(ff)(i);
“person”
shall be interpreted broadly and shall include any individual,
corporation, limited partnership, general partnership, joint stock
company or association, joint venture association, company, trust,
bank, trust company, land trust, 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;
“Prescribed
Share” has the meaning set forth in Regulation
6202.1;
“President’s
List” means a list of
Substituted Purchasers (all such Substitute Purchasers who are
current officers or directors of the Corporation) provided by the
Corporation for subscriptions up to $1,000,000 of the Offered
Shares, provided that each such investor must be eligible for a
Private Placement Exemption under NI 45-106, such list to be
provided to the Underwriters not later than two Business Days prior
to the Closing Date;
“Principal-Business
Corporation” has the
meaning set forth in subsection 66(15) of the Tax Act;
“Private
Placement Exemption” means the
“accredited investor” exemption under Section 2.3 of NI
45-106 or Section 73.3 of the Securities Act (Ontario), as
applicable, the “minimum amount investment” exemption
under Section 2.10 of NI 45-106, the “family, friends and
business associates” exemption under Section 2.5 of NI 45-106
or the “employee, executive officer, director and
consultant” exemption under Section 2.24 of NI
45-106;
“Purchasers”
mean, collectively, those persons who are purchasing the Offered
Shares as contemplated herein, including Substituted Purchasers
and/or the Underwriters;
"Qualified Expenditures" means expenses
that are CEE and qualify as Flow-Through Mining Expenditures which
are incurred during the Expenditure Period which may be renounced
by the Corporation pursuant to subsections 66(12.6) and 66(12.66)
of the Tax Act (with an effective date not later than December 31,
2021, provided the Purchaser and any beneficial purchaser, and if a
partnership, every member thereof, deals at arm’s length with
the Corporation at all relevant times for purposes of the Tax Act)
and in respect of which, but for the renunciation, the Corporation
would be entitled to a deduction from income for income tax
purposes;
“Regulations”
refers to regulations promulgated under the Tax Act from time to
time;
“SEC”
means the United States Securities and Exchange
Commission;
“Securities
Commissions” mean the applicable securities
commissions where the Corporation is a reporting issuer or other
securities regulatory authorities in the Offering
Jurisdictions;
“SEDAR”
means the System for Electronic Document Analysis and
Retrieval;
“Senior
Secured Credit Facility” means the revolving term
credit facility for CDN$24,000,000 established pursuant to the
fourth amended and restated credit agreement dated as of January
30, 2015, as amended by agreements dated January 27, 2016, January
31, 2017, January 19, 2018, April 9, 2018, January 29, 2019,
January 29, 2020 and January 14, 2021 among the Corporation and
DMI, as borrowers, Scotia Capital as the sole and lead arranger and
bookrunner, The Bank of Nova Scotia, as administrative agent and
the lending institutions from time to time parties to such
agreement as lenders, as amended from time to time;
“Subscription
Agreements” mean, collectively, the subscription (and
renunciation) agreements in the form mutually acceptable to the
Corporation and the Underwriters to be entered into between the
Purchasers and the Corporation in respect of the Offering, as
amended or supplemented;
“Substituted
Purchasers” has the
meaning ascribed thereto in subsection 2(a);
“Tax
Act” means the
Income Tax Act (Canada), as
amended from time to time;
“Taxes”
has the meaning ascribed thereto in subsection 5(vv);
“Technical
Reports” means,
collectively, the most recent NI 43-101 technical report with
respect to each of the Material Properties.
“Transfer
Agent” means the registrar and transfer agent of the
Corporation, namely Computershare Investor Services
Inc.;
“TSX”
means the Toronto Stock Exchange;
“TSX
Conditional Approval Letter” has the meaning ascribed
thereto in subsection 5(k);
“Underwriters”
has the meaning ascribed thereto in the first paragraph of this
Agreement;
“Underwriting
Fee” has the meaning
ascribed thereto in subsection 3(a);
“United
States” means the
United States of America, its territories and possessions, any
state of the United States and the District of
Columbia;
“U.S.
Exchange Act” means the United States Securities
Exchange Act of 1934, as amended; and
“U.S.
Securities Act” means the United States Securities Act
of 1933, as amended.
In this
Agreement, “to the best of
the knowledge of” or “to its knowledge” means, unless
otherwise expressly stated, a statement of the declarant’s
knowledge of the facts or circumstances to which such phrase is
related, after having made reasonable inquiries and investigations
in connection with such facts and circumstances; and
“to the knowledge of the
Corporation”, “to the best of the knowledge of the
Corporation”, “to the best knowledge of the
Corporation” or a similar expression means, unless
otherwise expressly stated, a statement as to the best knowledge of
each of the senior officers of the Corporation about the facts or
circumstances to which such phrase is related, after having made
reasonable inquiries and investigations in connection with such
facts and circumstances.
In this
Agreement, unless there is something in the subject matter or
context inconsistent therewith:
(a)
words used herein importing
the singular number include the plural and vice versa, words
importing the use of any gender include all genders;
(b)
references herein to any
agreement or instrument, including this Agreement, are deemed to be
references to the agreement or instrument as varied, amended,
modified, supplemented or replaced from time to time, and any
specific references herein to any legislation or enactment are
deemed to be references to such legislation or enactment as the
same may be amended or replaced from time to time;
(c)
the division of this
Agreement into sections, subsections and paragraphs and the
insertion of headings are for convenience of reference only and do
not affect the construction or interpretation of this Agreement.
The terms “this Agreement”, “hereof”,
“herein”, “hereunder” and similar
expressions refer to this Agreement and not to any particular
section, subsection, paragraph or other portion hereof and include
any agreement or instrument supplementary or ancillary hereto;
and
(d)
any reference to a word or
term defined in the Tax Act shall include, for purposes of
Québec income taxation, a reference to the equivalent word or
term, if any, defined in the Taxation Act (Québec) as such act
may be amended, re-enacted or replaced from time to time. Any
reference to the Tax Act or a provision thereof shall include, for
purposes of Québec income taxation, a reference to the
Taxation Act (Québec)
or the equivalent provision thereof as such act may be amended,
re-enacted or replaced from time to time. Any reference to a filing
or similar requirement imposed under the Tax Act shall include, for
purposes of Québec income taxation, a reference to the
equivalent filing or similar requirement, where applicable, under
the Taxation Act
(Québec) as the Tax Act may be amended, re-enacted or replaced
from time to time; provided that, if no filing or similar
requirement is provided under the Taxation Act (Québec), a copy of
any material filed under the Act shall be filed with the
ministère du Revenu du Québec.
2.
Nature of Transaction
(a)
The Corporation understands
that although the offer to purchase the Offered Shares is being
made by the Underwriters, as purchasers, the Underwriters will
endeavour to arrange for substituted purchasers (collectively, the
“Substituted
Purchasers”) for the Offered Shares in the Offering
Jurisdictions, subject to acceptance by the Corporation, acting
reasonably, of the Subscription Agreements. The Corporation and the
Underwriters agree that no offers, sales or re-sales of Offered
Shares will be made to persons in the United States, and that all
offers, sales and re-sales of Offered Shares will be made in
“offshore transactions” (as such term is defined in
Regulation S under the U.S. Securities Act) in compliance with
Regulation S under the U.S. Securities Act. The Underwriters
acknowledge that, subject to the conditions contained in Section 7
being satisfied and subject to the rights of the Underwriters
contained in Section 9, the
Underwriters are obligated to purchase or cause to be purchased all
of the Offered Shares and that such obligation is not subject to
the Underwriters being able to arrange for Substituted Purchasers.
Notwithstanding the foregoing, the Corporation shall be entitled to
include investors (who are current officers or directors of the
Corporation) on the President’s List for up to $1,000,000 of
the Offering, provided that such investors are eligible for a
prospectus exemption under NI 45-106.
(b)
Each Purchaser shall purchase
the Offered Shares under a Private Placement Exemption. The
Corporation hereby agrees to use its commercially reasonable best
efforts to secure compliance with all applicable securities
regulatory requirements on a timely basis in connection with the
distribution of the Offered Shares to the Purchasers, including by
filing within the periods stipulated under Applicable Securities
Laws in Canada and at the Corporation’s expense all reports
of the issue and sale of the Offered Shares required to be filed by
the Corporation in connection with the Offering and paying all
filing fees required to be paid in connection therewith so that the
distribution of the Offered Shares may lawfully occur without the
necessity of filing a prospectus or any similar document under the
Applicable Securities Laws (including so as to ensure that the
requirements under NI 45-102 are complied with by the Corporation
such that the Offered Shares will be subject to a “hold
period” which expires on the date that is four months and one
day following the Closing Date). The Underwriters agree to use
commercially reasonable best efforts to assist the Corporation to
secure compliance with all regulatory requirements in connection
with the Offering. The Underwriters will notify the Corporation
with respect to the identity of each Purchaser and other necessary
information respecting each Purchaser as soon as practicable and
with a view to leaving sufficient time to allow the Corporation to
secure compliance with all relevant regulatory requirements under
Applicable Securities Laws relating to the sale of the Offered
Shares. If requested by the Corporation, the Underwriters undertake
to use commercially reasonable best efforts to cause Purchasers to
complete any forms required by Applicable Securities
Laws.
(c)
Any certificates representing
the Offered Shares delivered at Closing shall contain such
restrictive legends regarding resale of the Offered Shares as are
set forth in the Subscription Agreements.
3.
Underwriters’ Compensation
(a)
In consideration for the
performance of their obligations hereunder, the Corporation shall,
subject to the provisions of this Agreement, pay to the
Underwriters an aggregate fee (the “Underwriting Fee”) equal to 6.0%
of the Gross Proceeds, except with respect to any President’s
List orders, for which the Corporation shall pay to the
Underwriters a cash fee equal to 3.0%. The obligation of the
Corporation to pay the Underwriting Fee shall arise at the Closing
Time and the Underwriting Fee shall be fully earned by the
Underwriters upon the completion of the Offering. The Corporation
shall pay any goods and services tax and harmonized sales tax
imposed by the Excise Tax
Act (Canada) and any other applicable sales tax applicable
in respect of the Underwriting Fee.
(b)
The Underwriters may retain one or
more registered securities brokers or investment dealers to act as
selling agents in connection with the sale of the Offered Shares
but the compensation payable to such selling agents shall be the
sole responsibility of the Underwriters, and only as permitted by
and in compliance with Applicable Securities Laws, upon the terms
and conditions set forth in this Agreement and the Underwriters
will require each such selling agent to so agree.
4.
Covenants and Certification of the Underwriters
Each of the
Underwriters hereby severally covenants to the Corporation as
follows:
(a)
it will conduct activities in
connection with arranging for purchasers of the Offered Shares in
compliance with Applicable Securities Laws and only solicit offers
to purchase Offered Shares from such persons and in such manner
that, pursuant to Applicable Securities Laws, no prospectus,
registration statement or similar document needs be delivered or
filed, other than any prescribed reports of the issue and sale of
the Offered Shares;
(b)
it will not deliver to any
prospective Purchaser any document or material which constitutes or
is deemed to be an offering memorandum under Applicable Securities
Laws;
(c)
it will not solicit offers to
purchase or sell the Offered Shares in any jurisdiction other than
the Offering Jurisdictions;
(d)
it will refrain from any form
of general advertising or any form of general solicitation in
connection with the Offering in: (i) printed media of general and
regular circulation or any similar medium; (ii) radio; (iii)
television; or (iv) electronic media or conduct any seminar or
meeting concerning the offer and sale of the Offered Shares whose
attendees have been invited by any form of general solicitation or
general advertising, and not make use of any green sheet or other
internal marketing document without the written consent of the
Corporation, such consent to be promptly considered and not to be
unreasonably withheld;
(e)
it will obtain from each
Purchaser an executed and duly completed Subscription Agreement,
together with all documentation as may be necessary in connection
with the distribution of the Offered Shares; and
(f)
it will take such steps as
required by Applicable Securities Laws to confirm that the
Purchaser is eligible to rely on the applicable Private Placement
Exemption and will retain, or provide the Corporation with a copy
of, a record of any additional steps, processes or information used
to confirm such eligibility.
5.
Representations and Warranties of the Corporation
The Corporation
hereby represents and warrants to the Underwriters (on their own
behalf and on behalf of each of the Purchasers) that as at the date
hereof:
(a)
Organization. The
Corporation and each of its Material Subsidiaries are, and will be,
duly organized, validly existing as a corporation and in good
standing (where such concept is recognized) under the laws of their
respective jurisdictions of organization. The Corporation and each
of the Material Subsidiaries are, and will be, duly licensed or
qualified as a foreign corporation for transaction of business and
in good standing under the laws of each other jurisdiction in which
their respective ownership or lease of property or the conduct of
their respective businesses requires such license or qualification,
and have all corporate power and authority necessary to own or hold
their respective properties and to conduct their respective
businesses as described in the Disclosure Documents, except where
the failure to be so qualified or in good standing or have such
power or authority would not, individually or in the aggregate,
have a Material Adverse Effect;
(b)
Subsidiaries. The
Material Subsidiaries include all of the Corporation’s
significant subsidiaries (as such term is defined in Rule 1-02 of
Regulation S-X promulgated by the SEC). Except for the Material
Subsidiaries and investments in other issuers and the other
subsidiaries of the Corporation that are not material to the
Corporation, the Corporation does not beneficially own or exercise
control or direction over the securities of any person. Other than
encumbrances under the Senior Secured Credit Facility and the APG
Loan, the Corporation owns, directly or indirectly, all of the
equity interests of the Material Subsidiaries free and clear of all
encumbrances. All the equity interests of the Material Subsidiaries
and the Joint Venture Entities held by the Corporation have been
validly issued and are fully paid, non-assessable and free of
preemptive and similar rights. Other than (i) the relevant
partnership and/or joint venture agreement with respect to its
Material Subsidiaries or Joint Venture Entities, and (ii) under the
KHNP Strategic Relationship Agreement, no person has any agreement,
option, right or privilege (whether present or future, contingent
or absolute, pre-emptive or contractual) capable of becoming an
agreement, for the purchase from the Corporation or any of the
Material Subsidiaries of any interest in any of the shares or for
the issue or allotment of any unissued shares in the capital of the
Material Subsidiaries or Joint Venture Entities or any other
security convertible into or exchangeable for any such
shares;
(c)
Minute Books. Since
January 1, 2018, all existing minute books of the Corporation and
each of the Material Subsidiaries, including all existing records
of all meetings and actions of the board of directors (including,
all board committees) and securityholders of the Corporation
(collectively, the “Corporate
Records”) have been made available to the Underwriters
and their counsel, and all such Corporate Records are complete in
all material respects. There are no transactions, agreements or
other actions of the Corporation or any of the Material
Subsidiaries that are required to be recorded in the Corporate
Records that are not properly approved and/or recorded in the
Corporate Records. All required filings have been made with the
appropriate Governmental Authorities in a timely fashion, except
for such filings where the failure to file would not have a
Material Adverse Effect, either individually or in the
aggregate.
(d)
No Conflicts.
Neither the execution of this Agreement, nor the issuance, offering
or sale of the Offered Securities, nor the consummation of any of
the transactions contemplated herein and therein, nor the
compliance by the Corporation with the terms and provisions hereof
and thereof will conflict with, or will result in a breach of, any
of the terms and provisions of, or has constituted or will
constitute a default under, or has resulted in or will result in
the creation or imposition of any lien, charge or encumbrance upon
any property or assets of the Corporation pursuant to the terms of
any agreements, contracts, arrangements or understandings (written
or oral) to which the Corporation may be bound or to which any of
the property or assets of the Corporation is subject, except (i)
such conflicts, breaches or defaults as may have been waived, and
(ii) such conflicts, breaches and defaults that would not
reasonably be expected to have a Material Adverse Effect; nor will
such action result (x) in any violation of the provisions of the
organizational or governing documents of the Corporation, or (y) in
any violation of the provisions of any statute or any order, rule
or regulation applicable to the Corporation or of any Governmental
Authority having jurisdiction over the Corporation, except such
violations that would not reasonably be expected to have a Material
Adverse Effect, either individually or in the
aggregate.
(e)
No Violation or
Default. Neither the Corporation nor any of the Material
Subsidiaries is (i) in violation of its articles or by-laws or
similar organizational documents; (ii) except as are disclosed in
the Disclosure Documents, in violation or default, and no event has
occurred that, with notice or lapse of time or both, would
constitute such a violation or default, in the due performance or
observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Corporation or any of the
Material Subsidiaries is a party or by which the Corporation or any
of the Material Subsidiaries is bound or to which any of the
property or assets of the Corporation or any of the Material
Subsidiaries are subject; or (iii) except as disclosed in the
Disclosure Documents, in violation of any Applicable Law, except in
the case of each of clauses (ii) and (iii) above, for any such
violation or default that would not, individually or in the
aggregate, have a Material Adverse Effect. To the
Corporation’s knowledge, no other party under any material
agreements, contracts, arrangements or understandings (written or
oral) to which it or any of the Material Subsidiaries is a party is
in violation or default in any respect thereunder where such
violation or default would have a Material Adverse
Effect
(f)
Capitalization. The
issued and outstanding Common Shares have been validly issued, are
fully paid and non-assessable and, to the knowledge of the
Corporation, are not subject to any pre-emptive rights, rights of
first refusal or similar rights. The Corporation has an authorized,
issued and outstanding capitalization as set forth in the
Disclosure Documents as of the dates referred to therein (other
than the grant of additional equity under the Corporation’s
existing equity compensation plans, or changes in the number of
outstanding Common Shares of the Corporation due to the issuance of
shares upon the exercise or conversion of securities exercisable
for, or convertible into, Common Shares outstanding on the date
hereof) and such authorized capital stock conforms in all material
respects to the description thereof set forth in the Disclosure
Documents. The description of the securities of the Corporation in
the Disclosure Documents is complete and accurate in all material
respects. Except as disclosed in or contemplated by the Disclosure
Documents, as of the date referred to therein, the Corporation does
not have outstanding any options to purchase, or any rights or
warrants to subscribe for, or any securities or obligations
convertible into, or exchangeable for, or any contracts or
commitments to issue or sell, any Common Shares or other
securities. Except as disclosed in or contemplated by or included
or incorporated by reference in the Disclosure Documents, no person
has any agreement or option or right or privilege (whether by law,
pre-emptive or contractual) issued or capable of becoming an
agreement for: (i) the purchase, subscription or issuance of any
unissued shares, securities or warrants of the Corporation; or (ii)
the repurchase by or on behalf of the Corporation of any issued and
outstanding securities of the Corporation.
(g)
Voting or Control
Agreements. To the knowledge of the Corporation, no
agreement is in force or effect which in any manner affects the
voting or control of any of the securities of the Corporation. No
agreement is in force or effect which in any manner affects the
voting or control of any of the securities of any Material
Subsidiary other than in respect of the security interests granted
by the Corporation and the Material Subsidiaries in connection with
the Senior Secured Credit Facility and the APG Loan pursuant to the
Limited Partnership Agreement of Waterbury Lake Uranium Limited
Partnership dated August 16 2010 between Fission Energy Corp.,
Korea Waterbury Uranium Limited Partnership and Waterbury Lake
Uranium Corporation.
(h)
Restrictions on
Business. Neither the Corporation nor any Material
Subsidiary or, to the knowledge of the Corporation, any Joint
Venture Entity is a party to or bound or affected by any
commitment, agreement or document containing any covenant which
expressly limits the freedom of the subject person to compete in
any line of business, transfer or move any of its assets or
operations which materially and adversely affects, or could
reasonably be expected to materially and adversely affect, the
business practices, operations or condition of the Corporation (on
a consolidated basis), other than rights of first refusal and
similar restrictions governing transfer that are included in the
joint venture agreements to which the Corporation, the Material
Subsidiaries or the Joint Venture Entities are a
party.
(i)
Offered Securities.
The Corporation has taken, or will have taken prior to the Closing
Time, all necessary corporate action, to validly issue and sell the
Offered Shares, as fully paid and non-assessable Common
Shares.
(j)
Authorization;
Enforceability. The Corporation has full corporate right,
power and authority to enter into this Agreement and perform the
transactions contemplated hereby. This Agreement has been duly
authorized, executed and delivered by the Corporation and is a
legal, valid and binding agreement of the Corporation enforceable
in accordance with its terms, except to the extent that
enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general equitable
principles.
(k)
Consents. All
consents, approvals, permits, authorizations or filings as may be
required under Applicable Securities Laws necessary for the
execution and delivery of this Agreement and the Subscription
Agreements and the issuance of the Offered Shares and the
completion of the transactions contemplated hereby, have been made
or obtained, as applicable, subject to: (i) certain specified
conditions and exceptions contained in the conditional approval
letter dated February 12, 2021 from the TSX (the
“TSX Conditional Approval
Letter”); (ii) the Corporation filing with the
Securities Commissions in Canada, within ten (10) days from the
date of the sale of the Offered Shares, of a Form 45-106F1 prepared
and executed in accordance with Applicable Securities Laws in
Canada and accompanied by the prescribed fees and fee checklist
form, if any; and (iii) the Corporation promptly filing with the
SEC a Report on Form 6-K announcing the Closing of the
Offering.
(l)
No Preferential
Rights. Except as set forth in the Disclosure Documents
(including pursuant to the KHNP Strategic Relationship Agreement),
(i) no person, as such term is defined in Rule 1-02 of Regulation
S-X promulgated under the Securities Act (each, a
“Person”), has
the right, contractual or otherwise, to cause the Corporation to
issue or sell to such Person any Common Shares or other securities
of the Corporation, except pursuant to options and warrants to
purchase Common Shares pursuant to outstanding convertible
securities of the Corporation, (ii) the Corporation has not granted
to any Person any preemptive rights, resale rights, rights of first
refusal, or any other rights (whether pursuant to a “poison
pill” provision or otherwise) to purchase any Common Shares
or other securities of the Corporation, (iii) no Person has the
right to act as an underwriter or as a financial advisor to the
Corporation in connection with the offer and sale of the Offered
Securities, and (iv) no Person has the right, contractual or
otherwise, to require the Corporation to register under the
Securities Act or qualify for distribution under Canadian
Securities Laws any Common Shares or other securities of the
Corporation, or to include any such Common Shares or other
securities in the Disclosure Documents, whether as a result of the
filing of the Disclosure Documents (or documents incorporated by
reference therein) or the sale of the Offered Securities as
contemplated thereby or otherwise.
(m)
Certificates. The
form of certificates representing the Offered Securities, to the
extent that physical certificates are issued for such securities,
will be in due and proper form and conform to the requirements of
the Business Corporations
Act (Ontario), the articles of incorporation of the
Corporation and applicable requirements of the TSX, NYSE American,
The Depository Trust Corporation and CDS or will have been
otherwise approved by the TSX and NYSE American, if required. The
Offered Securities will have been made eligible by The Depository
Trust Corporation and CDS.
(n)
Transfer Agent.
Computershare Investor Services Inc. has been duly appointed as
registrar and transfer agent for the Common Shares .
(o)
Public Filings.
Since January 1, 2018, the Corporation has filed all documents or
information required to be filed by it under Applicable Securities
Laws with the Securities Commissions and the SEC, and the rules,
regulations and policies of the TSX and NYSE (the
“Exchanges”),
except where the failure to file such documents or information will
not have a Material Adverse Effect, either individually or in the
aggregate; all material change reports, annual information forms,
financial statements, management proxy circulars and other
documents filed by or on behalf of the Corporation with the
Exchanges, the SEC and the Securities Commissions, as of its date,
did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances under
which they were made, not misleading and did not contain a
misrepresentation at the time at which it was filed; the
Corporation has not filed any confidential material change report
or any document requesting confidential treatment with any
Governmental Authority that at the date hereof remains
confidential.
(p)
No Material Adverse
Effect. Subsequent to the respective dates as of which
information included or incorporated by reference in the Disclosure
Documents, if any (including any document deemed incorporated by
reference therein), there has not been (i) any Material Adverse
Effect, (ii) any transaction which is material to the Corporation
and the Material Subsidiaries taken as a whole, (iii) any
obligation or liability, direct or contingent (including any
off-balance sheet obligations), incurred by the Corporation or any
Material Subsidiary, which is material to the Corporation and the
Material Subsidiaries taken as a whole, (iv) any material change in
the capital stock or outstanding long-term indebtedness of the
Corporation or any of the Material Subsidiaries or (v) any dividend
or distribution of any kind declared, paid or made on the capital
stock of the Corporation or any Material Subsidiary, other than in
each case above in the ordinary course of business or as otherwise
disclosed in the Disclosure Documents.
(q)
Financial
Information. The consolidated financial statements of the
Corporation filed with the SEC and the Canadian Commissions as a
part of the Disclosure Documents, together with the related notes
and schedules (the “Financial
Statements”), present fairly, in all material
respects, the consolidated financial position of the Corporation
and the Material Subsidiaries as of the dates indicated and the
consolidated statements of comprehensive income,
shareholders’ equity and cash flows of the Corporation for
the periods specified. Such Financial Statements conform in all
material respects with International Financial Reporting Standards
as issued by the International Accounting Standards Board
(“IFRS”),
applied on a consistent basis during the periods involved. The
other financial data with respect to the Corporation and the
Material Subsidiaries contained or incorporated by reference in the
Disclosure Documents are accurately and fairly presented in all
material respects and prepared on a basis consistent with the
financial statements and books and records of the Corporation;
there are no financial statements (historical or pro-forma) that
are required to be included or incorporated by reference in the
Disclosure Documents that are not included or incorporated by
reference as required; the Corporation and the Material
Subsidiaries do not have any material liabilities or obligations,
direct or contingent (including any off-balance sheet obligations),
not described in the Disclosure Documents and all disclosures
contained or incorporated by reference therein; and no other
financial statements are required to be set forth or to be
incorporated by reference in the Disclosure Documents.
(r)
Independent
Accountants. PricewaterhouseCoopers LLP, who have delivered
their report with respect to the audited Financial Statements (as
defined below and which term as used in this Agreement includes the
related notes thereto) are independent public, certified public or
chartered accountants as required by the Securities Act, the
Exchange Act and applicable Canadian Securities Laws. There has not
been any “reportable event” (as that term is defined in
NI 51-102) with PricewaterhouseCoopers LLP or any other prior
auditor of the Corporation or any of its Material Subsidiaries. To
the Corporation’s knowledge, after due and careful inquiry,
PricewaterhouseCoopers LLP is not in violation of the auditor
independence requirements of the Xxxxxxxx-Xxxxx Act of 2002. The
Corporation is in compliance with its obligations in s. 4.11 of NI
51-102 with respect to the changing of its auditor.
(s)
Disclosure Controls.
The Corporation and each of the Material Subsidiaries (other than
Material Subsidiaries acquired not more than 365 days prior to the
Evaluation Date, as defined below) maintain systems of internal
accounting controls applicable under IFRS in applicable periods, or
sufficient to provide reasonable assurance that (i) transactions
are executed in accordance with management’s general or
specific authorizations; (ii) transactions are recorded as
necessary to permit preparation of financial statements in
conformity with IFRS and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with
management’s general or specific authorization; and (iv) the
recorded accountability for assets is compared with the existing
assets at reasonable intervals and appropriate action is taken with
respect to any differences. The Corporation’s internal
control over financial reporting is effective and the Corporation
is not aware of any significant deficiencies or material weaknesses
in its internal control over financial reporting. Since the date of
the latest audited financial statements of the Corporation included
or incorporated by reference in the Disclosure Documents, there has
been no change in the Corporation’s internal control over
financial reporting that has materially affected, or is reasonably
likely to materially affect, the Corporation’s internal
control over financial reporting. The Corporation has established
disclosure controls and procedures (as defined in U.S. Exchange Act
Rules 13a-15 and 15d-15) for the Corporation and designed such
disclosure controls and procedures to ensure that material
information relating to the Corporation and each of the Material
Subsidiaries is made known to the certifying officers by others
within those entities. The Corporation’s certifying officers
have evaluated the effectiveness of the Corporation’s
controls and procedures as at December 31, 2019 (such date, the
“Evaluation Date”) and the Corporation’s
certifying officers have concluded that the disclosure controls and
procedures are effective as of the Evaluation Date. Since the
Evaluation Date, there have been no significant changes in the
Corporation’s internal controls (as such term is defined in
Item 307(b) of Regulation S-K under the Securities Act) or, to the
Corporation’s knowledge, in other factors that could
significantly affect the Corporation’s internal
controls.
(t)
No Litigation.
Except as disclosed in or incorporated by reference in the
Disclosure Documents, there are no legal, governmental or
regulatory actions, suits or proceedings pending, nor, to the
Corporation’s knowledge, any legal, governmental or
regulatory audits or investigations, to which the Corporation or a
Subsidiary or, to the knowledge of the Corporation, any Joint
Venture Entity is a party or to which any property of the
Corporation or any of the Material Subsidiaries or Joint Venture
Entities is subject that, individually or in the aggregate, if
determined adversely to the Corporation or any of the Material
Subsidiaries or Joint Venture Entities, could reasonably be
expected to have a Material Adverse Effect or materially and
adversely affect the ability of the Corporation to perform its
obligations under this Agreement; except as disclosed in or
incorporated by reference in the Disclosure Documents, to the
Corporation’s knowledge, no such actions, suits or
proceedings are threatened or contemplated by any Governmental
Authority or threatened by others; and there are no current or
pending audits or investigations, actions, suits or proceedings by
or before any Governmental Authority that are required under the
Securities Act or Canadian Securities Laws to be described in or
included or incorporated by reference in the Disclosure Documents
that are not so described.
(u)
Material
Agreements. Neither
the Corporation nor, to the Corporation's knowledge, any other
party is in default in the observance or performance of any
material term or material obligation to be performed by any of them
under any Material Agreement and no event has occurred which with
notice or lapse of time or both would constitute such a default, in
any such case which default or event would have a Material Adverse
Effect on the Corporation. The Corporation has filed all Material
Agreements on SEDAR pursuant to Canadian Securities Laws that are
required to be filed by the Corporation as "material contracts"
pursuant to Section 12.2 of NI 51-102.
(v)
Labor Disputes. No
labor disturbance by or dispute with employees of the Corporation
or any of the Material Subsidiaries exists or, to the knowledge of
the Corporation, is threatened that could reasonably be expected to
have a Material Adverse Effect.
(w)
Local Disputes.
Except as set forth in the Disclosure Documents, no dispute between
the Corporation and any local, aboriginal or indigenous group
exists, or to the Corporation’s knowledge, is threatened or
imminent with respect to any of the Corporation’s properties
or exploration and development activities that could reasonably be
expected to have a Material Adverse Effect.
(x)
Proposed
Acquisition. Except as described in the Disclosure
Documents, there are no material agreements, contracts,
arrangements or understandings (written or oral) with any persons
relating to the acquisition or proposed acquisition by the
Corporation or its Material Subsidiaries of any material interest
in any business (or part of a business) or corporation, nor are
there any other specific contracts or agreements (written or oral)
in respect of any such matters in contemplation.
(y)
Intellectual Property
Rights. Except as disclosed in the Disclosure Documents, the
Corporation and the Material Subsidiaries own, possess, license or
have other rights to use all foreign and domestic patents, patent
applications, trade and service marks, trade and service xxxx
registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, Internet domain names, know-how and other
intellectual property (collectively, the “Intellectual Property”), necessary
for the conduct of their respective businesses as now conducted
except to the extent that the failure to own, possess, license or
otherwise hold adequate rights to use such Intellectual Property
would not, individually or in the aggregate, have a Material
Adverse Effect.
(z)
No Material
Defaults. Neither the Corporation nor any of the Material
Subsidiaries has defaulted on any installment on indebtedness for
borrowed money or on any rental on one or more long-term leases,
which defaults, individually or in the aggregate, would have a
Material Adverse Effect. The Corporation has not filed a report
pursuant to Section 13(a) or 15(d) of the Exchange Act since the
filing of its last Annual Report on Form 40-F, indicating that it
(i) has failed to pay any dividend or sinking fund installment on
preferred stock or (ii) has defaulted on any installment on
indebtedness for borrowed money or on any rental on one or more
long-term leases, which defaults, individually or in the aggregate,
would have a Material Adverse Effect.
(aa)
Certain Market
Activities. Neither the Corporation, nor any of the Material
Subsidiaries, nor to the knowledge of the Corporation any of their
respective directors or officers has taken, directly or indirectly,
any action designed, or that has constituted or might reasonably be
expected to cause or result in, under the Exchange Act, Canadian
Securities Laws or otherwise, the stabilization, maintenance or
manipulation of the price of any security of the Corporation to
facilitate the sale or resale of the Offered Securities or any
other “reference security” (as defined in Rule 100 of
Regulation M under the Exchange Act).
(bb)
Title to
Real and Personal Property.
(i)
The Corporation, a Material
Subsidiary or, to the knowledge of the Corporation, a Joint Venture
Entity, as applicable, is the beneficial owner of, or has the right
to acquire the interests in, the properties, business and assets
referred to in the Disclosure Documents, inclusive of the Material
Properties, free of all encumbrances whatsoever other than security
interests under the Senior Secured Credit Facility and the APG Loan
and the relevant joint venture agreements governing the Joint
Venture Entities.
(ii)
Any and all agreements
pursuant to which the Corporation, a Material Subsidiary or, to the
knowledge of the Corporation, a Joint Venture Entity, as
applicable, holds or will hold any such interest in property,
business or assets are in good standing in all material respects
according to their terms, and the properties are in good standing
under the applicable statutes and regulations of the jurisdictions
in which they are situated except, in any case, where it would not
result in a Material Adverse Effect.
(iii)
To the Corporation's
knowledge there are no unrecorded encumbrances on the properties,
business and assets in which the Corporation has or will have a
direct or indirect economic interest except for the rights of Joint
Venture Entities applicable to such properties, business or assets
and except security interests contemplated under the Senior Secured
Credit Facility and the APG Loan.
(iv)
No other property rights,
other than Permits to be acquired in the ordinary course, are
necessary for the conduct of the business of the Corporation, the
Material Subsidiaries or, to the knowledge of the Corporation, the
Joint Venture Entities as currently conducted or contemplated to be
conducted.
(v)
The Corporation knows of no
claim or basis for any claim that could adversely affect the right
of any such person to use, transfer or otherwise exploit such
property rights and, other than as described in the Disclosure
Documents, no such person has any responsibility or obligation to
pay any commission, royalty, license fee or similar payment to any
person with respect to the property rights thereof.
(cc)
Material
Properties.
(i)
The Material Properties are
the only mineral properties currently material to the Corporation
in which the Corporation, the Material Subsidiaries or the Joint
Venture Entities have an interest.
(ii)
The Corporation, either
directly or through the Material Subsidiaries or the Joint Venture
Entities, holds either freehold title, mining leases, mining
claims, mineral claims, exploration permits or other conventional
property, proprietary or contractual interests or rights,
recognized in the jurisdiction in which the Material Properties are
located in respect of the ore bodies and minerals located in the
Material Properties in which the Corporation has a direct or
indirect economic interest as described in the Disclosure Documents
under, to the knowledge of the Corporation, valid, subsisting and
enforceable title documents or other recognized and enforceable
agreements or instruments, sufficient to permit the subject person
to explore, develop, mine and exploit the minerals relating
thereto.
(iii)
All leases or claims and
permits relating to the Material Properties in which the
Corporation (through the applicable Material Subsidiary) has an
interest or right have been validly located and recorded in
accordance with all Applicable Laws and are valid and subsisting;
except as disclosed in the Disclosure Documents.
(iv)
The Corporation, the Material
Subsidiaries or, to the knowledge of the Corporation, the Joint
Venture Entities, or trustees on their respective behalfs, have all
necessary surface rights, access rights and other necessary rights
and interest relating to the Material Properties in which the
Corporation has a direct or indirect economic interest as described
in the Disclosure Documents granting the right and ability, as
applicable, to explore, access, develop, construct, mine and
exploit minerals, ore and metals for development purposes, subject
to the Corporation's ability to obtain the Permits (as defined
below), as are appropriate in view of rights and interests therein,
with only such exceptions as do not materially interfere with the
use made by the joint ventures of the rights or interests so held
and each of the proprietary interests or rights and each of the
documents, agreements and instruments and obligations relating
thereto referred to above are currently in good
standing.
(v)
The Corporation (through the
applicable Material Subsidiary or Joint Venture Entity) has all
necessary rights and interests relating to the Material Properties
in which the Corporation (through the applicable Material
Subsidiary) has an interest granting the Corporation (through the
applicable Material Subsidiary) the right and ability to explore,
develop, mine and exploit the minerals relating thereto as are
appropriate in view of the rights and interest therein of the
Corporation or the applicable Material Subsidiary or Joint Venture
Entity, with only such exceptions as do not materially interfere
with the current use made by the Corporation or the applicable
Material Subsidiary or Joint Venture Entity of the rights or
interest so held.
(vi)
Each of the proprietary
interests or rights and each of the agreements, contracts,
arrangements or understandings and obligations relating thereto
referred to above is currently in good standing in all respects in
the name of the Corporation or the applicable Material Subsidiary
or Joint Venture Entity.
(vii)
Except as disclosed in the
Disclosure Documents, the Corporation and the Material Subsidiaries
or Joint Venture Entities do not have any responsibility or
obligation to pay any commission, royalty, license, fee or similar
payment to any person with respect to the property rights thereof,
other than mineral claim fees, except where such fee or payment
would not have a Material Adverse Effect, either individually or in
the aggregate.
(viii)
There are no expropriations
or similar proceedings or any material challenges to title or
ownership, actual or threatened, of which the Corporation, any
Subsidiary or, to the knowledge of the Corporation, any Joint
Venture Entity has received notice against any Material
Property.
(dd)
Aboriginal Claims.
Other than as set forth in the Disclosure Documents, there are no
claims or actions with respect to aboriginal or indigenous rights
against or affecting the Corporation, any Subsidiary or, to the
knowledge of the Corporation, any Joint Venture Entity, or, to the
best of the knowledge of the Corporation, pending or threatened,
including with respect to any of the Material Properties, or, to
the knowledge of the Corporation, in respect of any of the other
properties in which the Corporation has an economic interest. Other
than as set forth in the Disclosure Documents, the Corporation is
not aware of any material land entitlement claims or aboriginal
land claims having been asserted or any legal actions relating to
aboriginal or community issues having been instituted with respect
to the properties, and no material dispute in respect of such
properties with any local or aboriginal or indigenous group exists
or, to the knowledge of the Corporation, is threatened or imminent
with respect thereto or activities thereon.
(ee)
Exploration
Activities. All
mineral exploration activities on the properties of the
Corporation, any Subsidiary or to the Corporation's knowledge, any
Joint Venture Entity have been conducted in all material respects
in accordance with good mining and engineering practices and all
applicable workers' compensation and health and safety and
workplace laws, regulations and policies have been duly complied
with except where the failure to so conduct operations could not
reasonably be expected to have a Material Adverse
Effect.
(ff)
Permits. Except as
disclosed in the Disclosure Documents,
(i)
each of the Material Subsidiaries
and, to the knowledge of the Corporation, each of the Joint Venture
Entities have obtained or identified all the material permits,
certificates, and approvals (collectively, the "Permits") which are required or will be
required for the exploration, development and eventual or actual
operation of the Material Properties, which Permits include but are
not limited to environmental assessment certificates, water
licenses, land tenures, rezoning or zoning variances and other
necessary local, provincial, state and federal
approvals;
(ii)
the required Permits have
either been received, applied for, or the processes to obtain such
Permits have been or will in due course be initiated by the
Corporation or the applicable Material Subsidiaries or Joint
Venture Entities;
(iii)
neither the Corporation nor
the applicable Material Subsidiaries know of any issue or reason
why the required Permits should not be approved and obtained in the
ordinary course; and
(iv)
all assessments or other work
required to be performed in relation to the material mineral claims
of the Corporation and the applicable Material Subsidiary in order
to maintain their respective interests therein, if any, have been
performed to date and, except as disclosed in the Disclosure
Documents, the Corporation and the applicable Material Subsidiary
have complied in all material respects with all Applicable Laws in
this regard as well as with regard to legal and contractual
obligations to third parties in this regard except in respect of
mineral claims that the Corporation and the applicable Material
Subsidiary intend to abandon or relinquish and except for any
non-compliance which would not either individually or in the
aggregate have a Material Adverse Effect; all such mineral claims
are in good standing in all respects as of the date of this
Agreement.
(gg)
NI 43-101
Technical Reports.
(i)
the Corporation made
available to the respective authors thereof prior to the issuance
of all of the applicable technical reports filed by the Corporation
on SEDAR relating to the Material Properties (the "Reports"), for the purpose of preparing
the Reports, as applicable, all information requested, and no such
information contained any material misrepresentation as at the
relevant time the relevant information was made
available;
(ii)
the Reports complied in all
material respects with the requirements of NI 43-101 as at the date
of each such Report;
(iii)
the Corporation is in
compliance, in all material respects, with the provisions of NI
43-101 and has filed all technical reports required thereby and, at
the time of filing, all such reports complied, in all material
respects, with the requirements of NI 43-101; and
(iv)
except as disclosed in the
Disclosure Documents, all scientific and technical information
disclosed in the Disclosure Documents: (i) is based upon
information prepared, reviewed and/or verified by or under the
supervision of a "qualified person" (as such term is defined in NI
43-101), (ii) has been prepared and disclosed in accordance with
Canadian industry standards set forth in NI 43- 101, and (iii) was
true, complete and accurate in all material respects at the time of
filing.
(hh)
Environmental
Laws. Except as
disclosed in the Disclosure Documents:
(i)
each of the Corporation, the
Material Subsidiaries and, to the knowledge of the Corporation, the
Joint Venture Entities is in compliance in all material respects
with all applicable federal, provincial, state, municipal and local
laws, statutes, ordinances, bylaws and regulations and orders,
directives and decisions rendered by any ministry, department or
administrative or regulatory agency (the "Environmental Laws") 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, including any
uranium or derivatives thereof (the "Hazardous Substances");
(ii)
each of the Corporation, the
Material Subsidiaries and, to the knowledge of the Corporation, the
Joint Venture Entities has obtained all licenses, 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 by the Corporation and the Material Subsidiaries and
Joint Venture Entities, other than those Environmental Permits that
are routine in nature and anticipated to be obtained in the
ordinary course and each Environmental Permit is valid, subsisting
and in good standing and to the knowledge of the Corporation
neither the Corporation nor the Material Subsidiaries or Joint
Venture Entities is in default or breach of any Environmental
Permit which would have a Material Adverse Effect, and no
proceeding is pending or, to the knowledge of the Corporation or
the Material Subsidiaries, threatened, to revoke or limit any
Environmental Permit;
(iii)
the Corporation, the Material
Subsidiaries and, to the knowledge of the Corporation, the Joint
Venture Entities, are in material compliance with all Environmental
Laws and Environmental Permits with respect to the use, storage,
transport and handling of Hazardous Substances;
(iv)
none of the Corporation, the
Material Subsidiaries nor, to the knowledge of the Corporation, the
Joint Venture Entities has received any notice of, or been
prosecuted for an offence alleging, non-compliance with any
Environmental Law that would have a Material Adverse Effect, and
neither the Corporation nor the Material Subsidiaries (including,
if applicable, any predecessor companies) has settled any
allegation of non-compliance that would have a Material Adverse
Effect 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 Corporation or the Material
Subsidiaries, nor has the Corporation or the Material Subsidiaries
received notice of any of the same which has not been
addressed;
(v)
none of the Corporation, any
Subsidiary or, to the knowledge of the Corporation, any Joint
Venture Entity has received any notice wherein it is alleged or
stated that the Corporation or the Material Subsidiaries is
potentially responsible for a federal, provincial, municipal or
local clean-up site or corrective action under any Environmental
Laws;
(vi)
none of the Corporation, any
Subsidiary or, to the knowledge of the Corporation, any Joint
Venture Entity has received any request for information in
connection with any federal, state, municipal or local inquiries as
to disposal sites and, to the best of the knowledge of the
Corporation, there are no environmental audits, evaluations,
assessments, studies or tests being conducted by any federal,
provincial, municipal or local except for ongoing audits,
evaluations, assessments, studies or tests being conducted in the
ordinary course;
(vii)
the Corporation, each of the
Material Subsidiaries and, to the knowledge of the Corporation,
each of the Joint Venture Entities is in compliance in all material
respects with all applicable workers' compensation and health and
safety and workplace laws, regulations and policies.
(ii)
December 2020 FT Private
Placement. The Corporation has complied with all covenants
and agreements with respect to the renunciation of Qualified
Expenditures to each purchaser in the December 2020 FT Private
Placement and the completion of the required filings under the ITA
to the extent that filings are required to have been made by the
date of this Agreement.
(jj)
Insurance. The
Corporation, the Material Subsidiaries and, to the knowledge of the
Corporation, the Joint Venture Entities maintain insurance covering
their properties, operations, personnel and businesses that the
Corporation reasonably deems adequate; such insurance insures
against such losses and risks to an extent which is adequate in
accordance with customary industry practice to protect such persons
and their respective businesses; all such insurance is fully in
force on the date hereof and will be fully in force on the Closing
Date. The Corporation has no reason to believe that such persons
will not be able to renew such existing insurance coverage as and
when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue their businesses
at a cost that would not be reasonably expected to have a Material
Adverse Effect on the Corporation.
(kk)
Employment
Matters:
(i)
The Corporation, each of the
Material Subsidiaries and, to the knowledge of the Corporation,
each of the Joint Venture Entities is in compliance in all material
respects with all laws respecting employment and employment
practices, terms and conditions of employment, pay equity and
wages.
(ii)
There has not been and there
is not currently any labour disruption or conflict which is
adversely affecting or could adversely affect, in a material
manner, the carrying on of the business of the Corporation, any
Subsidiary or, to the knowledge of the Corporation, any Joint
Venture Entity.
(iii)
Each material plan for retirement,
bonus, stock purchase, profit sharing, stock options, 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 Corporation or any Subsidiary for the benefit of any
current or former director, officer, employee or consultant of the
Corporation and the Material Subsidiaries (the "Employee Plans") has been maintained in
material compliance with its terms and with the requirements
prescribed by any and all statutes, orders, rules and regulations
that are applicable to such Employee Plan.
(iv)
All material accruals for
unpaid vacation pay, premiums for unemployment insurance, health
premiums, federal or provincial pension plan premiums, accrued
wages, salaries and commissions and Employee Plan payments have
been reflected in the books and records of the Corporation or the
relevant Subsidiary.
(v)
To the knowledge of the
Corporation, no officer, director, employee or security holder of
the Corporation has any cause of action or other claim whatsoever
against, or owes any amount to, the Corporation in connection with
its business except for claims in the ordinary and normal course of
the business such as for accrued vacation pay or other amounts or
matters which would not be material to the
Corporation.
(ll)
Related Party
Transactions. Except
as disclosed in the Disclosure Documents:
(i)
neither the Corporation nor
any Material Subsidiary owes any monies to or has any present loans
to, or borrowed any monies from or is otherwise indebted to, any
officer, director, employee, shareholder or any person not dealing
at "arm's length" (as such term is defined in the ITA) with any of
them except for usual employee reimbursements and compensation paid
in the ordinary and normal course of its business;
(ii)
neither the Corporation nor
any Material Subsidiary is a party to any contract, agreement or
understanding, other than usual employee or consulting arrangements
made in the ordinary and normal course of business, with any
officer, director, employee, shareholder or any other person not
dealing at arm's length with it; and
(iii)
none of the directors,
officers or employees of the Corporation, any known holder of more
than ten percent (10%) of any class of shares of the Corporation,
or any known associate or affiliate of any of the foregoing persons
has had any material interest, direct or indirect, in any material
transaction with the Corporation or any Subsidiary, or any proposed
material transaction which, as the case may be, materially
affected, is material to or will materially affect the Corporation,
any Subsidiary or their respective businesses.
(mm)
Finder’s
Fee’s. Neither the Corporation nor any of the Material
Subsidiaries has incurred any liability for any finder’s
fees, brokerage commissions or similar payments in connection with
the transactions herein contemplated, except as may otherwise exist
with respect to the Underwriters pursuant to this
Agreement.
(nn)
Dividend
Restrictions. Except as may be restricted by Applicable Law,
no Material Subsidiary is prohibited or restricted, directly or
indirectly, from paying dividends to the Corporation, or from
making any other distribution with respect to such Material
Subsidiaries’ equity securities or from repaying to the
Corporation or any other Material Subsidiaries any amounts that may
from time to time become due under any loans or advances to such
Material Subsidiaries from the Corporation or from transferring any
property or assets to the Corporation or to any other Material
Subsidiaries.
(oo)
No Improper
Practices. (i) Neither the Corporation nor, to the
Corporation’s knowledge, the Material Subsidiaries, nor to
the Corporation’s knowledge, any of their respective
directors or officers has, in the past five years, made any
unlawful contributions to any candidate for any political office
(or failed fully to disclose any contribution in violation of
Applicable Law) or made any contribution or other payment to any
official of, or candidate for, any federal, state, provincial,
municipal, or foreign office or other person charged with similar
public or quasi-public duty in violation of any Applicable Law or
of the character required to be disclosed in the Disclosure
Documents; (ii) no relationship, direct or indirect, exists between
or among the Corporation or, to the Corporation’s knowledge,
any Material Subsidiary or any affiliate of any of them, on the one
hand, and the directors, officers and shareholders of the
Corporation or, to the Corporation’s knowledge, any Material
Subsidiary, on the other hand, that is required by the Securities
Act or Canadian Securities Laws to be described in the Disclosure
Documents that is not so described; (iii) no relationship, direct
or indirect, exists between or among the Corporation or any
Material Subsidiary or any affiliate of them, on the one hand, and
the directors, officers, or shareholders of the Corporation or, to
the Corporation’s knowledge, any Material Subsidiary, on the
other hand, that is required by the rules of FINRA (or Canadian
equivalent thereof) to be described in the Disclosure Documents
that is not so described; (iv) except as disclosed in the
Disclosure Documents, there are no material outstanding loans or
advances or material guarantees of indebtedness by the Corporation
or, to the Corporation’s knowledge, any Material Subsidiary
to or for the benefit of any of their respective officers or
directors or any of the members of the families of any of them; and
(v) the Corporation has not offered, or caused any placement agent
to offer, Common Shares or to make any payment of funds to any
person with the intent to influence unlawfully (A) a customer or
supplier of the Corporation or any Material Subsidiary to alter the
customer’s or supplier’s level or type of business with
the Corporation or any Material Subsidiary or (B) a trade
journalist or publication to write or publish favorable information
about the Corporation or any Material Subsidiary or any of their
respective products or services, and, (vi) neither the Corporation
nor any Material Subsidiary nor to the Corporation’s
knowledge, any director, officer, employee or agent of the
Corporation or any Material Subsidiary has made any payment of
funds of the Corporation or any Material Subsidiary or received or
retained any funds in violation of any Applicable Law (including,
without limitation, the Foreign Corrupt Practices Act of 1977 and
the Corruption of Foreign Public
Officials Act (Canada)).
(pp)
Operations. The
operations of the Corporation and the Material Subsidiaries are and
have been conducted at all times in compliance with applicable
financial record keeping and reporting requirements of the
Proceeds of Crime (Money
Laundering) and Terrorist Financing Act (Canada), the
Corruption of Foreign Public
Officials Act (Canada) and applicable rules and regulations
thereunder, and the money laundering statutes of all applicable
jurisdictions, the rules and regulations thereunder and any related
or similar applicable rules, regulations or guidelines, issued,
administered or enforced by any Governmental Authority
(collectively, the “Money
Laundering Laws”); and no action, suit or proceeding
by or before any court or Governmental Authority involving the
Corporation or any of the Material Subsidiaries with respect to the
Money Laundering Laws is pending or, to the knowledge of the
Corporation, threatened.
(qq)
Sanctions. (i) The
Corporation represents that, neither the Corporation nor any of the
Material Subsidiaries nor to the Corporation’s knowledge, any
director, officer, employee, agent, affiliate or representative of
the Corporation, is a government, individual, or entity (in this
paragraph (qq), “Member”) that is, or is owned or
controlled by a Member that is:
(A)
the subject of any sanctions
administered or enforced by the U.S. Department of Treasury’s
Office of Foreign Assets Control, the United Nations Security
Council, the European Union, Her Majesty’s Treasury, the
Office of the Superintendent of Financial Institutions (Canada), or
pursuant to the Special Economic
Measures Act (Canada) or other relevant sanctions authority
or Applicable Law (collectively, “Sanctions”), nor
(B)
located, organized or
resident in a country or territory that is the subject of Sanctions
(including, without limitation, Burma/Myanmar, Cuba, Iran, Libya,
North Korea, Russia, Sudan, Syria, Ukraine and
Zimbabwe).
(iv)
The Corporation represents
and covenants that it will not, directly or indirectly, use the
proceeds of the offering, or lend, contribute or otherwise make
available such proceeds to any subsidiary, joint venture partner or
other Member:
(A)
to fund or facilitate any
activities or business of or with any Member or in any country or
territory that, at the time of such funding or facilitation, is the
subject of Sanctions; or
(B)
in any other manner that will
result in a violation of Sanctions by any Member (including any
Member participating in the offering, whether as underwriter,
advisor, investor or otherwise).
(v)
The Corporation represents
and covenants that, except as disclosed in the Disclosure
Documents, for the past 5 years, it has not knowingly engaged in,
is not now knowingly engaged in, and will not engage in, any
dealings or transactions with any Member, or in any country or
territory, that at the time of the dealing or transaction is or was
the subject of Sanctions.
(rr)
Certification of
Disclosure. There has been no failure on the part of the
Corporation, or to the Corporation’s knowledge, any of the
Corporation’s directors or officers, in their capacities as
such, to comply in all material respects with any applicable
provisions of the Xxxxxxxx-Xxxxx Act, NI 52-109 and the rules and
regulations promulgated thereunder. Each of the principal executive
officer and the principal financial officer of the Corporation (or
each former principal executive officer of the Corporation and each
former principal financial officer of the Corporation as
applicable) and each certifying officer of the Corporation (or each
former certifying officer of the Corporation and each former
certifying officer of the Corporation as applicable) has made all
certifications required by Sections 302 and 906 of the
Xxxxxxxx-Xxxxx Act with respect to all reports, schedules, forms,
statements and other documents required to be filed by it or
furnished by it to the SEC and as required to be made and filed by
NI 52-109. For purposes of the preceding sentence, “principal
executive officer” and “principal financial
officer” shall have the meanings given to such terms in the
Xxxxxxxx-Xxxxx Act and “certifying officer” shall have
the meanings given to such term in NI 52-109.
(ss)
Due Diligence
Matters. To the knowledge of the Corporation, all documents
and information delivered and provided by or on behalf of the
Corporation to the Underwriters as a part of their due diligence in
connection with the Offering were complete and accurate in all
material respects.
(tt)
Cybersecurity. To
the knowledge of the Corporation, there has been no security breach
or other compromise of or relating to any of the
Corporation’s information technology and computer systems,
networks, hardware, software, data (including the data of their
respective customers, employees, suppliers, vendors and any third
party data maintained by or on behalf of them), equipment or
technology (collectively, “IT
Systems and Data”) and (i) the Corporation has not
been notified of, and has no knowledge of any event or condition
that would reasonably be expected to result in, any security breach
or other compromise to their IT Systems and Data; (ii) the
Corporation is presently in compliance with all applicable laws or
statutes and all judgments, orders, rules and regulations of any
court or arbitrator or governmental or regulatory authority,
internal policies and contractual obligations relating to the
privacy and security of IT Systems and Data and to the protection
of such IT Systems and Data from unauthorized use, access,
misappropriation or modification, except as would not, in the case
of this clause (ii), individually or in the aggregate, have a
Material Adverse Effect; and (iii) the Corporation has implemented
backup and disaster recovery technology consistent with industry
standards and practices.
(uu)
Exchange
Registration. The Common Shares are registered pursuant to
Section 12(b) of the Exchange Act and are accepted for trading on
the NYSE American under the symbol “DNN” and the TSX
under the symbol “DML”, and the Corporation has taken
no action designed to terminate the registration of the Common
Shares under the Exchange Act or delisting the Common Shares from
either of the Exchanges, nor, except as disclosed in the Disclosure
Documents, has the Corporation received any notification that the
SEC, the Canadian Commissions or either of the Exchanges is
contemplating terminating such registration or listing. Except as
disclosed in the Disclosure Documents, the Corporation has complied
in all material respects with the applicable
requirements of the Exchanges for maintenance of inclusion of the
Common Shares thereon. As at the Closing Date, the Corporation will
have obtained, all necessary consents, approvals, authorizations or
orders of, or filing, notification or registration with, the
Exchanges, the SEC and the Canadian Commissions, where applicable,
required for the listing and trading of the Offered Securities,
subject only to satisfying their standard listing and maintenance
requirements. The Corporation has no reason to believe that it will
not in the foreseeable future continue to be in compliance with all
such listing and maintenance requirements
of each Exchange
(vv)
Taxes. Except where
the failure to so file or pay would not have a Material Adverse
Effect, (i) all taxes (including income tax, capital tax, payroll
taxes, employer health tax, workers’ compensation payments,
property taxes, custom duties 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 or required to be collected or withheld and remitted by the
Corporation or any Subsidiary has been paid, collected or withheld
and remitted, as applicable; (ii) all Tax returns, declarations,
remittances and filings required to be filed by the Corporation or
any Subsidiary has been filed with all appropriate governmental
authorities and all such returns, declarations, remittances and
filings are complete and accurate and no material fact has been
omitted therefrom which would make any of them misleading. To the
best of the knowledge of the Corporation and, except as otherwise
disclosed to the Underwriters, no examination of any Tax return of
the Corporation or any of the 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 Corporation or any of the Subsidiaries, and
there are no agreements, waivers or other arrangements with any
governmental authority providing for an extension of time for any
assessment or reassessment of Taxes with respect to the Corporation
or any of the Subsidiaries, except where such examinations, issues,
disputes, assessments or reassessments could not, in the aggregate,
have a Material Adverse Effect on the Corporation.
6.
Covenants of the Corporation
The Corporation
hereby covenants and agrees with the Underwriters (on their own
behalf and on behalf of the Purchasers) that:
(a)
the Corporation will use its
commercially reasonable best efforts to ensure that the Offered
Shares will be listed and posted for trading on the TSX and on the
NYSE American upon their issue, subject to transfer restrictions
under Applicable Securities Laws and the Corporation will use its
commercially reasonable efforts to maintain the listing of the
Common Shares on the TSX and on the NYSE American to the date which
is twelve (12) months following the Closing Date, provided that
this Section 5(a) shall not restrict
the Corporation from entering into an agreement with respect to, or
effecting, a transaction pursuant to which the Common Shares are
exchanged for: (i) cash; and/or (ii) securities of another person
that is or as a result of the transaction will be a reporting
issuer (or equivalent thereof) and listed on a recognized stock
exchange;
(b)
in the event any person
acting or purporting to act for the Corporation establishes a claim
from the Underwriters for any brokerage or agency fee in connection
with the transactions contemplated herein, the Corporation shall
indemnify and hold harmless the Underwriters with respect thereto
and with respect to all costs reasonably incurred in the defence
thereof unless such claim is made by a selling agent appointed by
the Underwriters pursuant to subsection 3(b);
(c)
the Corporation will use the
proceeds of the Offering to fund exploration and incur Qualified
Expenditures on a property or properties located in
Canada;
(d)
the Corporation will keep
proper and complete books, records and accounts in accordance with
IFRS showing true and accurate records of all Qualified
Expenditures of the Commitment Amount and, upon the reasonable
request of the Underwriters and/or the Purchasers, make such books,
records and accounts available for inspection by or on behalf of
the Underwriters and/or the Purchasers;
(e)
the Corporation will, as soon
as practicable, use its commercially reasonable best efforts to
receive all necessary consents to the transactions contemplated
herein;
(f)
the Corporation agrees, that
until May 20, 2021, the Corporation will not, without the prior
written consent of the Co-Lead Underwriters (not to be unreasonably
withheld) on behalf of the Underwriters, directly or indirectly
issue, offer, pledge, sell, contract to sell, contract to purchase,
purchase any option or contract to sell, grant any option, right or
warrant to purchase or otherwise transfer, lend or dispose of
directly or indirectly, any Common Shares or securities or other
financial instruments convertible into or having the right to
acquire Common Shares or enter into any agreement or arrangement
under which the Corporation would acquire or transfer to another,
in whole or in part, any of the economic consequences of ownership
of Common Shares, whether that agreement or arrangement may be
settled by the delivery of Common Shares or other securities or
cash, or agree to become bound to do so, or disclose to the public
any intention to do so, during the period from the date hereof and
ending 90 days following the Closing Date; provided that,
notwithstanding the foregoing, the Corporation may (i) grant of
options or other securities (including restricted stock units and
deferred stock units) in the normal course pursuant to the
Corporation’s employee stock option plan or other equity
compensation plans, and issue common shares upon the exercise of
such options or vesting of such securities, (ii) issue equity
securities pursuant to the exercise, vesting or conversion, as the
case may be, of any options, restricted stock units, warrants,
special warrants or other convertible securities of the Corporation
outstanding on the date hereof; and (iii) the issuance of equity
securities in connection with one or more bona fide acquisitions by the
Corporation. In addition, from the date hereof and ending 90 days
following the Closing Date, the Corporation shall not, without the
prior written consent of the Co-Lead Underwriters (not to be
unreasonably withheld) file a prospectus under Canadian Securities
Laws or a registration statement under the Securities
Act in connection with
any transaction by the Corporation or any person that is prohibited
pursuant to the foregoing and for registration statements on Form
S-8 relating to employee benefit plans;
(g)
the Corporation will promptly
notify the Underwriters in writing with full particulars, if, prior
to the Closing Time, 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
fact relating solely to the Underwriters or the Offering) or any
event or development involving a prospective material change or a
change in a material fact 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, management or prospects
of the Corporation or its Subsidiaries, taken as a
whole;
(h)
the Corporation 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
ought reasonably to be consideration given as to whether there may
be a material change or change in a material fact or other matter
as described in the preceding paragraph;
(i)
the Corporation shall incur
and renounce Qualifying Expenditures to Purchasers under the
Offering pro rata based on the number of Offered Shares issued or
to be issued pursuant thereto before or concurrent with renouncing
expenditures pursuant to any other agreement (a “Subsequent Agreement”) which the
Corporation shall enter into after the Closing Date. The
Corporation shall not, without the prior written consent of the
Underwriters (which consent may not be unreasonably withheld) enter
into any other agreement which would prevent or restrict its
ability to renounce Qualified Expenditures to the Purchasers in the
amount equal to the Commitment Amount. If the Corporation is
required under the Tax Act or by the Minister of National Revenue
to reduce Qualifying Expenditures previously renounced to
Purchasers under the Offering, such reduction shall be made, to the
extent possible, pro rata based on the number of Offered Shares
only after it has first reduced, to the extent possible, all
expenditures renounced to persons under Subsequent
Agreements;
(j)
it will file the necessary
prescribed forms, within the time period prescribed by the Tax Act,
so as to obtain a flow-through share issue identification number
from the CRA in accordance with subsection 66(12.68) of the Tax
Act, together with a copy of the Subscription Agreement and any
“selling instrument”;
(k)
the Corporation will maintain
its status as a Principal Business Corporation until the end of the
Expenditure Period;
(l)
it will incur (or be deemed
to incur), during the Expenditure Period, Qualified Expenditures in
an amount not less than the Commitment Amount so as to enable the
Corporation to renounce to the Purchasers (with an effective date
not later than December 31, 2021, provided the Purchaser and any
beneficial purchaser, and if a partnership, every member thereof,
deals at arm’s length with the Corporation at all relevant
times for purposes of the Tax Act ), Qualified Expenditures in an
amount equal to the Commitment Amount;
(m)
it will renounce to the
Purchasers, (with an effective date not later than December 31,
2021, provided the Purchaser and any beneficial purchaser, and if a
partnership, every member thereof, deals at arm’s length with
the Corporation at all relevant times for purposes of the Tax Act
), Qualified Expenditures incurred (or deemed to be incurred)
during the Expenditure Period in an amount equal to the Commitment
Amount;
(n)
all Qualified Expenditures
renounced to the Purchasers pursuant to this Agreement and the
Subscription Agreements will be Qualified Expenditures incurred (or
deemed to be incurred) by the Corporation that, but for the
renunciation to the Purchasers, the Corporation would be entitled
to deduct in computing its income for the purposes of Part I of the
Tax Act if it had sufficient income and will not include any amount
that has previously been renounced by the Corporation to the
Purchasers or any other person;
(o)
it will deliver to each
Purchaser, at the applicable Purchaser’s address as set forth
in the applicable Subscription Agreement, not later than March 1,
2022 (or such earlier date as may be specified in the applicable
Subscription Agreement), a statement and all relevant prescribed
forms (including T-101 forms) fully completed and executed setting
forth the aggregate amount of Qualified Expenditures renounced to
the Purchaser with an effective date not later than December 31,
2021 and shall timely file such forms with the relevant
governmental authority;
(p)
it will refrain from entering
into transactions, taking deductions or making any tax elections or
designations which would otherwise reduce its cumulative Canadian
Exploration Expense to an extent which, or for any other reason
that, would preclude a renunciation of Qualified Expenditures
hereunder in an amount equal to the Commitment Amount effective on
or before December 31, 2021 which could result in the Corporation
or the Minister of National Revenue reducing the Qualified
Expenditures renounced to the Purchasers;
(q)
it will file within the times
prescribed in the Tax Act on a timely basis all forms required
under the Tax Act necessary to effectively renounce Qualified
Expenditures in an amount equal to the Commitment Amount relating
to each Purchaser(with an effective date not later than December
31, 2021, provided the Purchaser and any beneficial purchaser, and
if a partnership, every member thereof, deals at arm’s length
with the Corporation at all relevant times for purposes of the Tax
Act );
(r)
it will file, before March of
the year following a particular year, any return required to be
filed under Part XII.6 of the Tax Act in respect of the particular
year, and shall pay any tax or other amount owing with respect to
that return on a timely basis;
(s)
it is not and will not become
subject to the provisions of subsection 66(12.67) of the Tax Act in
a manner which impairs its ability to renounce Qualified
Expenditures to each Purchaser in an aggregate amount equal to the
Commitment Amount;
(t)
will ensure that the
Qualified Expenditures to be renounced by the Corporation to the
Purchasers of the Offered Shares will not include any amount that
has previously been renounced by the Corporation to the Purchasers
or to any other person;
(u)
if the Corporation receives,
or becomes entitled to receive, or may reasonably be expected to
receive, any government assistance at any time which may reasonably
be related to the Qualifying Expenditures, which could otherwise
affect the amount that could be renounced pursuant to the terms of
the Subscription Agreements, the Corporation will incur sufficient
additional Qualifying Expenditures using funds from other sources
in an amount at least equal to such assistance, such that the
Corporation will ensure that the aggregate Qualifying Expenditures
renounced to the Purchasers pursuant to the Subscription Agreements
will not be less than nor exceed the Commitment
Amount;
(v)
it will not reduce the amount
to be renounced to any Purchaser other than as required by the
Minister of National Revenue pursuant to subsection 66(12.73) of
the Tax Act, and if there is a reduction pursuant to subsection
66(12.73) of the Tax Act of an amount renounced to any Purchaser or
any of the partners thereof if such Purchaser is a partnership or a
limited partnership (for the purposes of this subsection, each an
“Indemnified
Person”) pursuant to this Agreement, the Corporation
shall indemnify the Indemnified Person as to, and pay in settlement
therefor to the Indemnified Person, within 30 days of such
reduction, an amount equal to the amount of any tax payable under
the Tax Act (and any corresponding provincial legislation) by the
Indemnified Person as a consequence of such reduction. The
foregoing indemnity shall not derogate from any rights or remedies
a Purchaser may have at common law with respect to liabilities
other than those payable under the Tax Act and any corresponding
legislation. The foregoing indemnity shall have no force or effect
and the Purchasers shall not have any recourse or rights of action
to the extent that such indemnity, recourse or rights of action
would otherwise cause the Offered Shares to be Prescribed Shares.
To the extent that any person entitled to be indemnified hereunder
is not a party to this Agreement, the Underwriters shall obtain and
hold the rights and benefits of this Agreement in trust for, and on
behalf of, such person and such person shall be entitled to enforce
the provisions of this subsection, notwithstanding that such person
is not a party to this Agreement;
(w)
if the Corporation fails to
incur and renounce to a Purchaser, on the terms of the Subscription
Agreements, Qualified Expenditures in accordance with the terms of
this Agreement, the Corporation shall indemnify such Purchaser, or
each of the partners thereof if such Purchaser is a partnership or
a limited partnership (for the purposes of this subsection, each an
“Indemnified
Person”), as to, and pay in settlement therefor to the
Indemnified Person, within 30 days of such failure to renounce or
incur, as applicable, an amount equal to the amount of any tax
payable under the Tax Act (and any corresponding provincial
legislation) by the Indemnified Person as a consequence of such
failure. The foregoing indemnity shall have no force or effect and
the Purchasers shall not have any recourse or rights of action to
the extent that such indemnity, recourse or rights of action would
otherwise cause the Offered Shares to be Prescribed Shares. To the
extent that any person entitled to be indemnified hereunder is not
a party to this Agreement, the Underwriters shall obtain and hold
the rights and benefits of this Agreement in trust for, and on
behalf of, such person and such person shall be entitled to enforce
the provisions of this subsection, notwithstanding that such person
is not a party to this Agreement;
(x)
upon issue, and but for any
agreement or arrangement to which the Corporation is not a party
and of which it is unaware, the Offered Shares will be
“flow-through shares” as defined in subsection 66(15)
of the Tax Act and not “prescribed shares” for the
purposes of the definition of “flow-through share” in
subsection 66(15) of the Tax Act and for the purpose of Regulation
6202.1; and
(y)
if the Corporation
amalgamates with any one or more companies, any shares issued to
the initial Purchasers as a replacement for the Offered Shares as a
result of such amalgamation will, but for any agreement or
arrangement to which the Corporation is not a party and of which it
is unaware, qualify, by virtue of subsection 87(4.4) of the Tax
Act, as “flow-through shares” as defined in subsection
66(15) of the Tax Act and will not be “prescribed
shares” as defined in section 6202.1 of the regulations to
the Tax Act.
7.
Conditions to Closing
The obligation of
the Underwriters hereunder at the Closing Time shall be subject to
the satisfaction of the following conditions, which conditions the
Corporation covenants to exercise its commercially reasonable best
efforts to have fulfilled on or prior to the Closing Time and which
conditions may be waived in writing in whole or in part by the
Underwriters:
(a)
the Corporation will have
made and/or obtained the necessary filings, approvals, consents and
acceptances of the appropriate regulatory authorities required to
be made or obtained by the Corporation in connection with the sale
of the Offered Shares to the Purchasers prior to the Closing Time
as herein contemplated, it being understood that the Underwriters
shall use commercially reasonable best efforts to assist the
Corporation to fulfil this condition, subject to certain specified
conditions and exceptions contained in the TSX Conditional Approval
Letter and the Corporation filing with the Securities Commissions
in Canada, within ten (10) days from the date of the sale of the
Offered Shares, of a Form 45-106F1 prepared and executed in
accordance with the Applicable Securities Laws in Canada and
accompanied by the prescribed fees and fee checklist form, if
any;
(b)
the Corporation’s board
of directors shall have authorized and approved the execution and
delivery of this Agreement, the acceptance of the Subscription
Agreements, the allotment, issuance and delivery of the Offered
Shares, and all matters relating thereto;
(c)
the Corporation shall have
accepted the duly and fully completed Subscription Agreements with
the Purchasers and, unless the Corporation reasonably believes it
would be unlawful or contrary to exchange approval from the TSX or
the NYSE American or Applicable Securities Laws to do so, shall
have accepted each duly completed and executed Subscription
Agreement up to the maximum number of the Offered Shares
contemplated by the Offering;
(d)
the Underwriters shall have
received opinions, dated the Closing Date, of the
Corporation’s counsel Blake, Xxxxxxx & Xxxxxxx LLP and
local counsel in any other Offering Jurisdiction where the Offered
Shares are sold (it
being understood that such counsel may rely to the extent
appropriate in the circumstance: (i) as to matters of fact, on
certificates of the Corporation executed on its behalf by a senior
officer of the Corporation and on certificates of the Transfer
Agent, as to the issued capital of the Corporation; and (ii) as to
matters of fact not independently established, on certificates of
the Corporation’s auditors or a public official), in form and
substance satisfactory to the Underwriters, acting reasonably, with
respect to the following matters:
(i)
as to the incorporation and
existence of the Corporation under the laws of the Province of
Ontario and as to the corporate power of the Corporation to carry
out its obligations under this Agreement and to issue the Offered
Shares;
(ii)
the Corporation is a
“reporting issuer” or its equivalent;
(iii)
as to the authorized and
issued capital of the Corporation;
(iv)
that the Corporation has all
requisite corporate power and authority under the laws of its
jurisdiction of incorporation to carry on its business as presently
carried on and to own or lease its properties and
assets;
(v)
that none of the execution
and delivery of this Agreement, the Subscription Agreements, the
performance by the Corporation of its obligations hereunder and
thereunder, or the sale or issuance of the Offered Shares will
conflict with or result in any breach or violation of any of the
terms, conditions or provisions of the: (A) constating documents,
by-laws, or resolutions of the board of directors or the
shareholders of the Corporation; (B) the Business Corporations Act (Ontario); or
(C) Applicable Securities Laws in the Offering
Jurisdictions;
(vi)
that the Corporation has
taken all necessary corporate action to authorize the execution and
delivery of this Agreement and each of the Subscription Agreements,
and that this Agreement and the Subscription Agreements constitute
valid and legally binding obligation of the Corporation enforceable
against it in accordance with their terms (subject to customary
qualifications as to laws relating to insolvency and the
application of equitable remedies);
(vii)
that the Offered Shares have
been duly authorized and validly allotted for issuance by the
Corporation and, upon receipt by the Corporation of the payment in
full therefor, such Offered Shares will be validly issued as fully
paid and non-assessable securities in the capital of the
Corporation;
(viii)
that the issuance and sale by
the Corporation of the Offered Shares to the Purchasers are exempt
from the prospectus requirements of the Applicable Securities Laws
of the Offering Jurisdictions, and no documents are required to be
filed (other than specified forms accompanied by requisite filing
fees), proceedings taken or approvals, permits, consents or
authorizations obtained by the Corporation under the Applicable
Securities Laws of the Offering Jurisdictions to permit such
issuance and sale;
(ix)
that no other documents will
be required to be filed, and no other proceeding, approval, consent
or authorization is required to be made, taken or obtained by the
Corporation pursuant to Applicable Securities Laws in the Offering
Jurisdictions in connection with the first trade of the Offered
Shares, provided that the conditions of subsection 2.5(2) of
National Instrument 45-102 – Resale of Securities are
satisfied;
(x)
the form of share certificate
representing the Offered Shares has been duly approved and adopted
by the board of directors of the Corporation and complies in all
material respects with the constating documents of the Corporation,
the Business Corporations
Act (Ontario) and the requirements of the TSX;
(xi)
that the Offering has been
conditionally accepted by the TSX and that the Offered Shares have
been conditionally approved for listing on the TSX;
(xii)
that upon issue, and but for
any agreement or arrangement to which the Corporation is not a
party and of which it is unaware, the Offered Shares will be
“flow-through shares” as defined in subsection 66(15)
of the Tax Act and not “prescribed shares” for the
purposes of the definition of “flow-through share” in
subsection 66(15) of the Tax Act and for the purpose of Regulation
6202.1; and
(xiii)
as to such other matters as
the Underwriters’ legal counsel may reasonably request prior
to the Closing Time;
(e)
a favourable legal opinion,
dated the Closing Date from the Corporation's counsel, in form and
substance satisfactory to the Underwriters, acting reasonably,
regarding the Material Subsidiaries, with respect to the following:
(i) the incorporation and existence of each Material Subsidiary
under the laws of its jurisdiction of incorporation, (ii) as to the
registered ownership of the issued and outstanding shares of each
Material Subsidiary, and (iii) 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;
(f)
the Underwriters shall have
received a title opinion in respect of the Material Properties, in
form and substance satisfactory to the Underwriters, acting
reasonably;
(g)
the Underwriters shall have
received an incumbency certificate dated the Closing Date including
specimen signatures of the President and Chief Executive Officer,
the Vice President Finance and Chief Financial Officer and any
other officer of the Corporation signing this Agreement or any
document delivered hereunder;
(h)
the Underwriters shall have
received a certificate, dated the Closing Date, of the President
and Chief Executive Officer and the Vice President Finance and
Chief Financial Officer of the Corporation (or such other officer
or officers of the Corporation acceptable to the Underwriters,
acting reasonably) addressed to the Underwriters and their counsel,
in form and content satisfactory to the Underwriters’
counsel, acting reasonably, to the effect that, to the best of
their knowledge, information and belief, after due enquiry and
without personal liability:
(i)
the representations,
warranties and covenants of the Corporation set forth in this
Agreement and the Subscription Agreements are true and correct at
the Closing Time, as if made at such time and the Corporation has
performed or satisfied all conditions and complied with all
covenants on its part to be performed, satisfied or complied with
at or prior to the Closing Time which have not otherwise been
waived pursuant to the terms of this Agreement;
(ii)
no order, ruling or
determination having the effect of ceasing or suspending trading in
any securities of the Corporation, or prohibiting or restricting
the distribution of the Offered Shares has been made, or
proceedings have been announced, commenced or, to the knowledge of
such officers, threatened for the making of any such order, ruling
or determination by any securities commission or similar regulatory
authority or by any other competent authority, and has not been
rescinded, revoked or withdrawn, and no proceedings for such
purpose are pending, contemplated or threatened;
(iii)
the Corporation has made
and/or obtained, at or prior to the Closing Time, all necessary
filings, approvals, consents and acceptances of applicable
regulatory authorities and under any applicable agreement or
document to which the Corporation is a party or by which it is
bound in respect of the execution and delivery of this Agreement
and the Subscription Agreements, the sale of the Offered Shares and
the consummation of the other transactions contemplated hereby
(subject to completion of filings with certain regulatory
authorities, and the TSX following the Closing Date);
(iv)
the constating documents of
the Corporation delivered at Closing are full, true and correct
copies, unamended, and in effect on the date thereof;
(v)
the minutes or other records
of various proceedings and actions of the Corporation’s board
of directors relating to the Offering and delivered at Closing are
full, true and correct copies thereof and have not been modified or
rescinded as of the date thereof;
(vi)
there has been no Material
Adverse Change in the business, affairs, operations, assets,
liabilities or capital of the Corporation (on a consolidated basis)
and, without limiting the generality of any representation or
warranty given in this Agreement, there are no facts or
circumstances which might reasonably serve as the basis for, or
give rise to, any Material Adverse Change or obligation on the part
of the Corporation; and
(vii)
none of the Disclosure
Documents contained a misrepresentation as at the time the relevant
document was filed that has not since been corrected;
(i)
that final acceptance of the
Offering by the TSX is subject only to the official notices of
issuance and fulfilment of such other conditions of the TSX as set
out in the Conditional Approval Letter;
(j)
that final acceptance of the
Offering by the NYSE American is subject only to the official
notices of issuance;
(k)
the Underwriters shall have
received a certificate of status or the equivalent in respect of
the Corporation and each of the Subsidiaries;
(l)
the Corporation shall cause
its transfer agent to deliver a certificate: (i) as to its
appointment as transfer agent and registrar of the Common Shares;
and (ii) as to the number of Common Shares issued and outstanding
as at a date no more than one Business Day prior to the Closing
Date;
(m)
the Corporation is not on the
defaulting issuer’s list (or equivalent) maintained by any of
the Securities Commissions in Canada at the Closing Time;
and
(n)
the Underwriters shall have
received such other certificates, statutory declarations, opinions,
agreements and materials, in form and substance satisfactory to the
Underwriters and their counsel, as the Underwriters or their
counsel may reasonably request.
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 other of the foregoing
terms and conditions or any other or subsequent breach or
non-compliance, provided that to be binding on the Underwriters any
such waiver or extension must be in writing and signed by each of
them.
The Corporation
agrees that the aforesaid legal opinions and certificates to be
delivered at the Closing Time will also be addressed to the
Purchasers and that the Underwriters may deliver copies thereof to
such persons and the Underwriters’ counsel.
8.
Acknowledgement
The Corporation
acknowledges that the Underwriters are full service securities
firms engaged in securities trading and brokerage activities as
well as providing investment banking and financial advisory
services and that in the ordinary course of their respective
trading and brokerage activities, the Underwriters and their
respective affiliates at any time may hold long and short
positions, and may trade or otherwise effect transactions, for
their own account or the accounts of their clients, in debt or
equity securities of the Corporation or any other person that may
be involved in or related to the use of proceeds of the Offering or
related derivative securities.
The Underwriters
acknowledge their respective responsibility to comply with
Applicable Securities Laws, including prohibitions on trading
securities with knowledge of a material fact or material change
that has not been generally disclosed. Further, the Underwriters
each have strict internal procedures, which require the placing of
relevant securities on a “grey list” or
“restricted list” and for restrictions on trading by
the Underwriters and their respective investment banking personnel
for their own account in accordance with such
procedures.
The Corporation
further acknowledges that the Underwriters are acting solely as
underwriters in connection with the purchase and sale of the
Offered Shares. The Corporation further acknowledges that the
Underwriters are acting pursuant to a contractual relationship
created solely by this Agreement entered into on an arm’s
length basis, and in no event do the parties intend that the
Underwriters act or be responsible as a fiduciary to the
Corporation, its management, shareholders or creditors or any other
person in connection with any activity that the Underwriters may
undertake or have undertaken in furtherance of such purchase and
sale of the Corporation’s securities, either before or after
the date hereof. The Underwriters hereby expressly disclaim any
fiduciary or similar obligations to the Corporation, either in
connection with the transactions contemplated by this Agreement or
any matters leading up to such transactions, and the Corporation
hereby confirms its understanding and agreement to that effect. The
Corporation and the Underwriters agree that they are each
responsible for making their own independent judgments with respect
to any such transactions and that any opinions or views expressed
by the Underwriters to the Corporation regarding such transactions,
including any opinions or views with respect to the price or market
for the Corporation’s securities, do not constitute advice or
recommendations to the Corporation. The Corporation and the
Underwriters agree that the Underwriters are acting as principal
and not the agent or fiduciary of the Corporation and no
Underwriter has assumed, and no Underwriter will assume, any
advisory responsibility in favour of the Corporation with respect
to the transactions contemplated hereby or the process leading
thereto (irrespective of whether any Underwriter has advised or is
currently advising the Corporation on other matters).
Without limiting
any of the foregoing provisions of this Agreement, and in addition
to any other remedies which may be available to them, the
Underwriters (on their own behalf and on behalf of the Purchasers)
shall be entitled, at their option, to terminate and cancel,
without any liability, their obligations under this Agreement and
those of the Purchasers, by giving written notice to the
Corporation at any time through to the Closing Time,
if:
(a)
there should be discovered
any material fact regarding the Corporation which existed as of the
date hereof but which has not been publicly disclosed which, in the
opinion of either of the Underwriters, acting reasonably, has or
would be expected to have a significant adverse effect on the
market price or value of the common shares in the capital of the
Corporation;
(b)
there is, in the opinion of
either of the Underwriters, acting reasonably, a material change or
a change in any material fact regarding the Corporation or new
material fact shall arise which would be expected to have a
significant adverse effect on the business, affairs, or operations
of the Corporation and/or its subsidiaries (taken as a whole) or on
the market price or the value of the Common Shares;
(c)
there should develop, occur
or come into effect any event of any nature, including, without
limitation, an act of terrorism, accident, or new or change in
governmental law or regulation or other condition or financial
occurrence of national or international consequence, including by
way of the COVID-19 pandemic to the extent that there are material
adverse developments related thereto after February 16, 2021 which,
in the opinion of either of the Underwriters, acting reasonably,
seriously adversely affects or involves, or would seriously
adversely affect and involve, the financial markets in Canada or in
the United States or the business, affairs or operations of the
Corporation or its subsidiaries (taken as a whole) or the market
price or value of the Common Shares;
(d)
any inquiry, action, suit,
proceeding or investigation (whether formal or informal) including,
without limitation, matters of regulatory transgression or unlawful
conduct, is commenced, announced or threatened in relation to the
Corporation, its subsidiaries or any of their respective officers
or directors, which, in the opinion of either of the Underwriters,
acting reasonably, operates to prevent or materially restrict the
distribution or trading of the Common Shares or which has or would
be expected to have a material adverse effect on the market price
or value of the Common Shares;
(e)
any order to cease trading in
securities of the Corporation is made or threatened by a securities
regulatory authority; or
(f)
the Corporation is in
material breach of any term, condition or covenant of this
Agreement or any material representation or warranty given by the
Corporation in this Agreement becomes or is false.
Upon the
occurrence of any of the foregoing events, any Underwriter shall be
entitled to terminate and cancel its obligations to the Corporation
hereunder.
Any termination
pursuant to the foregoing provisions shall be effected by notice in
writing delivered by the Underwriters to the Corporation at its
address as herein set out. Notwithstanding the giving of any notice
of termination hereunder, the obligations of the Corporation under
Sections 11, 12 and 13 shall
survive.
In the event of a
termination pursuant to and in accordance with the provisions
hereof and notice having been given as aforesaid, there will be no
further liability on the part of the Underwriters under this
Agreement.
10.
Closing
Closing will be
completed at the offices of Blake, Xxxxxxx & Xxxxxxx LLP, Suite
2600, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X 0X0, or
at such other place or places as may be agreed upon by the
Corporation and the Underwriters, at the Closing Time, provided
that if the Corporation has not been able to comply with any of the
conditions to Closing set forth under “Conditions to
Closing” prior to the Closing Time, the Closing Date may be
extended by mutual agreement of the Corporation and the
Underwriters, failing which, the respective obligations of the
parties will terminate without further liability or obligation
except as set out under Sections 11,
12 and 13.
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: (i) termination of purchase obligations; (ii) waiver and
extension; or (iii) indemnification, contribution and settlement,
may be taken by the Underwriters on behalf of themselves and on
behalf of the other Underwriters and the execution of this
Agreement by the other Underwriters and by the Corporation shall
constitute the Corporation’s authority and obligation for
accepting notification of any such steps from, and for delivering
the Offered Shares in certificated or electronic form to or to the
order of the Underwriters. The Underwriters shall fully consult
with the other Underwriters with respect to all notices, waiver,
extensions or other communications to or with the
Corporation.
At or prior to
the Closing Time, the Corporation shall:
(a)
direct and cause the Transfer
Agent to issue and register the Offered Shares in the name of each
Purchaser or in such other name or names as the Underwriters may
notify the Corporation in writing not less than twenty-four (24)
hours prior to the Closing Time as book-entry only securities in
accordance with the “non-certificated inventory” rules
and procedures of CDS and/or shall duly and validly deliver to the
Underwriters certificates in definitive form representing the
Offered Shares;
(b)
deliver to the Underwriters
the requisite legal opinions and certificates as contemplated in
Section 7;
(c)
deliver to the Underwriters a
direction addressed to the Underwriters directing the Underwriters
to pay the Gross Proceeds less the proceeds paid directly to the
Corporation by members of the President’s List;
and
(d)
deliver such further
documentation as may be contemplated herein,
against payment
by the Underwriters to the Corporation in lawful money of Canada by
certified cheque, bank draft or wire transfer of an amount equal to
the Gross Proceeds less the proceeds paid directly to the
Corporation by members of the President’s List. The
Corporation will also, at the Closing Time, make payment in full of
(i) the Underwriting Fee and (ii) the reasonable out-of-pocket
costs and expenses of the Underwriters as specified in Section 12
of this Agreement.
Whether or not
the Closing occurs, the Corporation shall pay all reasonable
expenses and fees in connection with the Offering, including all
expenses of or incidental to the issue, sale and distribution of
the Offered Shares, the fees and expenses of the
Corporation’s counsel, all costs incurred in connection with
the preparation of documents relating to the Offering, and all
reasonable expenses and fees incurred by the Underwriters which
shall include the reasonable fees of the Underwriters’
counsel to a maximum of $20,000 (plus disbursements and all
applicable taxes). All such fees and expenses incurred by the
Underwriters or on their behalf (subject to the limitations set out
in the preceding sentence) shall be paid by the Corporation to the
Underwriters upon written direction from the Underwriters as to
such costs and expenses.
The Corporation
covenants and agrees, on its own behalf and on behalf of its
subsidiaries, to indemnify and save harmless the Underwriters and
their respective affiliates, directors, officers, employees,
shareholders and agents (collectively, the “Indemnified Parties” and
individually, an “Indemnified
Party”) from and against all losses (other than loss
of profits), claims, action, damages, liabilities, costs and
expenses, whether joint or several, including reimbursement to the
Underwriters upon demand of the aggregate amount paid in reasonable
settlement of any actions, suits, proceedings, investigations or
claims and the reasonable fees and expenses of their counsel that
may be incurred in advising with respect to and/or defending any
action, suit, proceeding, investigations or claim that may be made
or threatened against the Indemnified Parties or in enforcing this
indemnity to which any of the Indemnified Parties may become
subject or otherwise involved in any capacity under any statute or
common law or otherwise, caused or incurred by reason of or in
connection with the transactions contemplated hereby, including the
following:
(a)
any information contained in
any document filed by the Corporation with the relevant securities
authorities in Canada since January 1, 2019, including all press
releases filed on SEDAR, which at the time and in light of the
circumstances under which it was made contains or is alleged to
contain a misrepresentation or any omission or any alleged omission
to state therein any fact or information required to be stated
therein or necessary to make any of the statements therein not
misleading in light of the circumstances in which they are
made;
(b)
the omission or alleged
omission to state in any certificate of the Corporation or of any
officers of the Corporation delivered in this Agreement or pursuant
to this Agreement or contained in any Disclosure Document, any
material fact required to be stated therein where such omission or
alleged omission constitutes or is alleged to constitute a
misrepresentation;
(c)
any order made or any
inquiry, investigation (whether formal or informal) or other
proceeding commenced or threatened by any securities regulatory
authority, stock exchange or by any other competent authority based
upon any failure or alleged failure to comply with Applicable
Securities Laws (other than any failure or alleged failure to
comply by the Underwriters) preventing and restricting the trading
in or the sale of the Offered Shares or any securities of the
Corporation in the provinces of Canada;
(d)
the non-compliance or alleged
non-compliance by the Corporation with any requirement of
Applicable Securities Laws, including the Corporation’s
non-compliance with any statutory requirement to make any document
available for inspection; or
(e)
any breach of any
representation, warranty or covenant of the Corporation contained
in this Agreement or the failure of the Corporation to comply with
any of its obligations hereunder.
Notwithstanding
anything to the contrary contained in this Agreement, this
indemnity shall cease to apply to any Claim to the extent that a
court of competent jurisdiction in a final judgment that has become
non-appealable shall determine that:
(a)
an Indemnified Party has
engaged in wilful misconduct, been grossly negligent or has
committed fraudulent or illegal acts in the course of the
performance of professional services rendered to the Corporation by
the Underwriters or otherwise in connection with the matters
referred to in this Agreement; and
(b)
the expenses, losses, claims,
damages or liabilities, as to which indemnification is claimed,
were directly caused by the wilful misconduct, gross negligence,
illegality or fraud referred to in (a).
The Corporation
shall not, without the prior written consent of the Underwriters,
which consent shall not be unreasonably withheld, settle or
compromise or consent to the entry of any judgment in any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification may be sought hereunder (whether or not the
Indemnified Parties are party to such claim, action, suit or
proceeding), unless such settlement, compromise or consent includes
an unconditional release of each of the Indemnified Parties from
all liability arising out of such claim, action, suit or
proceeding.
Notwithstanding
the foregoing, an indemnifying party shall not be liable for the
settlement of any claim or action in respect of which indemnity may
be sought hereunder effected without its written consent, which
consent shall not be unreasonably withheld.
If any matter
contemplated by this Section 12 (any
such matter or thing being referred to as a “Claim”) is asserted against any
Indemnified Party in respect of which indemnification is or might
reasonably be considered to be provided, such Indemnified Party
will notify the Corporation as soon as possible and in any event on
a timely basis after becoming aware of the nature of such Claim
(but the omission or delay so to notify the Corporation of any
potential Claim shall not relieve the Corporation from any
liability which it may have to any Indemnified Party and any
omission or delay so to notify the Corporation of any actual claim
shall affect the Corporation’s liability only to the extent
that it is prejudiced by that omission or delay) and the
Corporation shall be entitled (but not required) to the extent that
it shall wish and within thirty (30) days after receipt of such
notice, to assume the defence of any suit brought to enforce such
Claim; provided, however, that the defence shall be conducted
through experienced and competent legal counsel and that no
settlement of any such Claim may be made by the Corporation or the
Indemnified Party without the prior written consent of the other
party.
In any such
Claim, the Indemnified Party shall have the right to retain other
counsel to act on the Indemnified Party’s behalf and to
participate in the defence thereof, provided that the fees and
disbursements of such other counsel shall be paid by the
Indemnified Party, unless: (i) the Corporation and the Indemnified
Party shall have mutually agreed to the retention of the other
counsel at the expense of the Corporation; (ii) the Corporation
fails to assume the defence of such Claim on behalf of the
Indemnified Party within 30 days of receiving written notice to
assume the defence of such Claim; or (iii) the named parties to any
such Claim (including any third or implicated party) include both
the Indemnified Party and the Corporation and the Indemnified Party
shall have been advised by counsel that representation of the
Indemnified Party by counsel for the Corporation is inappropriate
due to potential or actual conflict of interests of those
represented; in each of which cases the Corporation shall be liable
to pay the reasonable fees and disbursements of counsel to the
Indemnified Party.
With respect to
any Indemnified Party who is not a party to this Agreement, the
Underwriters shall obtain and hold the rights and benefits of the
indemnity provisions hereunder in trust for and on behalf of such
Indemnified Party.
For greater
certainty, the parties agree that, if and to the extent that any
Underwriter shall purchase, as principal, any Offered Shares under
the Subscription Agreements, the indemnities provided by section 12
in respect of the Offered Shares are not given to such Underwriter
in its capacity as principal purchaser of any Offered
Shares.
In order to
provide for a just and equitable contribution in circumstances in
which the indemnity provided for above would otherwise be available
in accordance with its terms but is, for any reason, held to be
unavailable to or unenforceable by the Underwriters or enforceable
otherwise than in accordance with its terms, the Corporation and
the Underwriters shall contribute to the aggregate of all claims,
expenses, costs and liabilities (including any legal expenses
reasonably incurred by the Indemnified Party in connection with any
claim which is the subject of this Section) and all losses (other
than loss of profits) of a nature provided for above in such
proportions as is appropriate to reflect not only the benefits
received by the Corporation, on one hand, and the Underwriters, on
the other hand, but also the relative fault of the Corporation and
the Underwriters, as well as any equitable considerations; provided
that, the Underwriters shall not in any event be liable to
contribute, in the aggregate, any amounts in excess of the
Underwriting Fee paid by the Corporation to the Underwriters
realized from the sale of the Offered Shares and the Corporation
shall be responsible for the balance, whether or not it has been
sued, provided that, in no event, shall an Underwriter be
responsible for any amount in excess of the amount of the
Underwriting Fee actually received by such
Underwriter.
The Corporation
hereby waives all rights which it may have by statute or common law
to recover contribution from the Underwriters in respect of losses,
claims, costs, damages, expenses or liabilities which any of them
may suffer or incur directly or indirectly (in this paragraph,
“losses”) by reason of or in consequence of a document
containing a misrepresentation; provided, however, that such waiver
shall not apply in respect of losses by reason of or in consequence
of any misrepresentation which is based upon or results from
information or statements furnished by or relating solely to the
Underwriters.
In the event that
the Corporation may be held to be entitled to contribution from the
Underwriters under the provisions of any statute or law, or
pursuant to the foregoing paragraph, the Corporation 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 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
14.
The rights to
indemnity and contribution provided in this Agreement shall be in
addition to and not in derogation of any other right to indemnity
or contribution which the Underwriters may have by statute or
otherwise by law.
14.
Underwriters’ Obligations
In performing
their respective obligations under this Agreement, the Underwriters
shall be acting severally and not jointly and severally. Nothing in
this Agreement is intended to create any relationship in the nature
of a partnership or joint venture between the Underwriters, and the
Underwriters’ respective obligations and rights and benefits
hereunder shall be as to the following percentages:
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Cantor Xxxxxxxxxx
Canada Corporation
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50.0%
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Xxxxxxx
Securities Inc.
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50.0%
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If an Underwriter
(a “Refusing
Underwriter”) shall not complete the purchase and sale
of the Offered Shares which such Underwriter has agreed to purchase
hereunder for any reason whatsoever, the other Underwriters (the
“Continuing
Underwriters”) shall be entitled, at their option, to
purchase all but not less than all of the Offered Shares which
would otherwise have been purchased by such Refusing Underwriter.
If the Continuing Underwriters do not elect to purchase the balance
of the Offered Shares pursuant to the foregoing:
(a)
the Continuing Underwriters
shall not be obliged to purchase any of the Offered Shares that any
Refusing Underwriter is obligated to purchase; and
(b)
the Corporation shall not be
obliged to sell less than all of the Offered Shares,
and the
Corporation shall be entitled to terminate its obligations under
this Agreement, in which event there shall be no further liability
on the part of the Corporation or the Continuing Underwriters,
except pursuant to the provisions of Sections 11, 12 and
13 inclusive.
15.
Survival of Representations, Warranties, Covenants, Indemnities and
Agreements
All warranties,
representations, covenants, indemnities and agreements of the
Corporation 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 Purchasers of the
Offered Shares and shall continue in full force and effect for the
benefit of the Underwriters and the Purchasers.
16.
Public Announcement
If the
Underwriters so request, the Corporation shall include a reference
to the Underwriters and their role in the Offering in any press
release or other public communication issued by the Corporation
related to the Offering. The Corporation shall provide the
Underwriters with a reasonable opportunity to review a draft of any
proposed announcement and an opportunity to provide comments
thereon. Provided the Offering is completed, the Underwriters shall
be permitted to publish, at their own expense, after giving the
Corporation a reasonable opportunity to comment on the form and
content thereof, such advertisements or announcements relating to
the performance of services provided in respect of the Offering in
such newspapers or other publications as the Underwriters consider
appropriate, and shall further be permitted to post such
advertisements or announcements on their respective websites,
provided further that: (a) the Underwriters shall not make any such
publication in the United States; (b) such publication shall comply
with all Applicable Securities Laws and shall not be done in a
manner which would negatively impact the Corporation’s
reliance upon, or compliance with, any provisions of the Applicable
Securities Laws in connection with the offer and sale of the
Offered Shares; and (c) any such publication shall include an
appropriate legend as follows: “Not for distribution to U.S.
news wire services or dissemination in the United States” and
language substantially to the following effect: “This news release does not constitute an offer
to sell or a solicitation of an offer to buy the securities
described herein in the United States. The securities described
herein have not been and will not be registered under the United
States Securities Act of 1933, as amended, and may not be offered,
sold or resold in the United States.”
17.
Notice
Any notice or
other communication to be given by delivery, by facsimile (where
available) or by email transmission hereunder shall, in the case of
notice to be given to the Corporation, be addressed to the
Corporation at the address appearing on the first page of this
Agreement, Attention: Xxxxx Xxxxx, President and Chief Executive
Officer, Fax No.: 000-000-0000, with a copy to Blake, Xxxxxxx &
Xxxxxxx LLP, Suite 2600, 000 Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx
Xxxxxxxx, X0X 0X0, Attention: Xxxxxx Xxxxxxxxx, Fax No.:
000-000-0000, Email: xxxxxx.xxxxxxxxx@xxxxxx.xxx and
in the case of notice to the Underwriters:
Cantor Xxxxxxxxxx Canada Corporation
000 Xxxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx X0X 0X0
Attention: Xxxxxx
Xxxxxx
Fax
No.:
000-000-0000
Email:
xxxxxxx@xxxxxx.xxx
Cantor Xxxxxxxxxx Canada Corporation
000
Xxxx 00xx
Xxxxxx
Xxx
Xxxx, XX 00000
Attention:
Legal Department
Fax
No.: 000-000-0000
Xxxxxxx Securities Inc.
700 – 000 Xxxxxxx
Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx X0X
0X0
Attention: Xxxxx Xxxxxxxx
Email: xxxxxxxxx@xxxxxxx.xxx
XxXxxxxx LLP
1500 Royal
Centre, 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx,
Xxxxxxx Xxxxxxxx X0X 0X0
Attention: Xxxxxxx Xxxxxx
Email:
xxxxxxx.xxxxxx@xxxxxxxx.xx
18.
Time of the Essence
Time shall be of
the essence of this Agreement and every part hereof.
19.
Further Assurances
Each of the
parties hereto shall cause to be done all such acts and things or
execute or cause to be executed all such documents, agreements and
other instruments as may reasonably be necessary or desirable for
the purposes of carrying out the provisions and intent of this
Agreement.
20.
Severability
If one or more
provisions contained herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, such invalidity,
illegality or unenforceability shall not affect any other provision
hereof, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision or provisions had never been
contained herein.
21.
Assignment
Except as
contemplated herein, no party hereto may assign this Agreement or
any part hereof without the prior written consent of the other
parties hereto. Subject to the foregoing, this Agreement shall
enure to the benefit of, and shall be binding upon, the Corporation
and the Underwriters and each of their respective successors and
legal representatives, and nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other
person any legal or equitable right, remedy or claim under or in
respect of this Agreement, or any provisions contained in this
Agreement, this Agreement and all conditions and provisions of this
Agreement being intended to be and being for the sole and exclusive
benefit of such persons and for the benefit of no other person
except that the covenants and indemnities of the Corporation set
out under the heading “Indemnity” shall also be for the
benefit of the Underwriters’ personnel and the covenants and
indemnities of the Corporation set out under the heading
“Covenants of the Corporation” shall also be for the
benefit of the Indemnified Persons.
22.
Counterpart and Electronic Transmission
This Agreement
may be executed in one or more counterparts including by facsimile
or portable document format (pdf) each of which so executed shall
constitute an original and all of which together shall constitute
one and the same agreement.
23.
Entire Agreement
The provisions
herein contained constitute the entire agreement between the
parties relating to the Offering and supersede all previous
communications, representations, understandings and agreements
between the parties with respect to the subject matter hereof
whether verbal or written.
24.
Canadian Dollars
All references
herein to dollar amounts are to lawful money of Canada and all
payments to be made hereunder shall be made in such
currency.
25.
Governing Law
This Agreement
shall be governed by and construed in accordance with the internal
laws of the Province of Ontario and the federal laws of Canada
applicable therein, without reference to conflict of law rules, and
each of the parties hereto irrevocably attorn to the jurisdiction
of the courts of the Province of Ontario.
26.
Language
The parties
hereto confirm their express wish that this Agreement and all
documents and agreements directly or indirectly relating thereto be
drawn up in the English language. Les parties reconnaissent leur volonté
express que la présente convention ainsi que tous les
documents et contrats s’y rattachant directement ou
indirectement soient rédigés en
anglais.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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If the
Corporation is in agreement with the foregoing terms and
conditions, please so indicate by executing a copy of this
Agreement where indicated below and delivering the same to the
Underwriters.
Yours very
truly,
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CANTOR XXXXXXXXXX CANADA CORPORATION
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Per:
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(Signed) “Xxxxxxxxxxx Xxxxx”
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Authorized
Signing Officer
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XXXXXXX SECURITIES INC.
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Per:
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(Signed) “Xxxxx Xxxxxxxx”
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Authorized
Signing Officer
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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.
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XXXXXXX MINES CORP.
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Per:
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(Signed) “Xxxxx Xxxxx”
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Authorized
Signing Officer
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