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ATTACHMENT ITEM 19(b)3(h) ASSET PURCHASE AGREEMENT
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ASSET PURCHASE AGREEMENT
THIS AGREEMENT is made, as of the 19th day of December, 1996,
BETWEEN:
ENERGY FUELS, LTD., a limited partnership organized under the
laws of the State of Colorado, with an office at Suite 900 -
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter called "EFL" or a "Vendor")
ENERGY FUELS EXPLORATION CO., a corporation incorporated
under the laws of the State of Colorado, with an office at
Suite 900 - ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter called "EFEX" or a "Vendor")
ENERGY FUELS NUCLEAR, INC, a corporation incorporated under
the laws of the State of Colorado with an office at Suite 900
- ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(hereinafter called "EFN" or a "Vendor" and, together with
EFL and EFEX, collectively the "Vendors")
AND:
INTERNATIONAL URANIUM HOLDINGS CORPORATION, a corporation
incorporated under the laws of the State of Delaware with an
office at 1320 - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
(hereinafter called the "Purchaser").
WHEREAS:
A. The Vendors own, lease or have an interest in, either
directly or indirectly, certain uranium properties and mines located in
Colorado, Arizona, Utah, Wyoming, South Dakota and
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Mongolia, a uranium processing mill in Utah, a joint venture with certain
Russian entities, certain uranium purchase and sale contracts and related
assets and businesses;
B. EFL and EFEX each filed a petition for relief under Chapter
11 of the United States Bankruptcy Code on February 23, 1995 in the United
States Bankruptcy Court for the District of Colorado, and each currently
remains in possession of its assets as a debtor-in-possession; and
C. The Vendors wish to sell, and the Purchaser or its nominee or
nominees wish to purchase, such assets from the Vendors on the terms and
conditions set out below,
NOW, THEREFORE, in consideration of the premises and the
covenants and agreements of the respective parties hereto as hereinafter set
forth, the parties hereto covenant and agree as follows:
SECTION 1 - DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS. In this Agreement including the recitals hereof
and the schedules attached hereto, the following words and expressions have the
following meanings:
(a) "AFFILIATE" has the meaning set out in Rule 405 promulgated
under the United States Securities Act of 1933 as amended;
(b) "AGREEMENT" means this document, including the recitals
hereto and all schedules referred to herein and attached
hereto, all as may be amended from time to time by a signed
agreement in writing between the Vendors and the Purchaser;
(c) "ARGUNEXCO JOINT VENTURE" means the joint venture for the
mining, processing and marketing of uranium ore and uranium
oxides between EFEX, the Priargunsky Gorno-Himichesky
Kombinat, the Chitea Region Property Committee and
Techsnabexport;
(d) "ARIZONA 1 MINE" means the Arizona 1 Mine located in the
Arizona Strip area of Arizona, together with all associated
Lands, Permits and Licenses, Mineral Rights, any ore
stockpiles, Equipment, Buildings and Other Assets;
(e) "ARIZONA STRIP EXPLORATION PROPERTIES" means certain uranium
exploration properties located in the Arizona Strip area in
Arizona, together with all associated Lands, Permits and
Licenses, Mineral Rights, Equipment, Buildings and Other
Assets;
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(f) "ASP" means Arizona Strip Partners L.P., a limited
partnership organized under the laws of the State of
Delaware;
(g) "ASP ASSETS" means all of the assets and business of ASP
(other than Excluded Assets), including, without limitation:
(i) the Canyon Mine;
(ii) the Arizona Strip Exploration Properties; and
(iii) the Hermit Mine;
(h) "ASSUMED OBLIGATIONS" means all obligations and Liabilities
of the Vendors and the Subsidiaries under, arising from or
imposed with respect to:
(i) all Contracts (other than Excluded Assets);
(ii) all Permits and Licenses;
(iii) all Environmental and Reclamation Obligations;
(iv) the Permitted Encumbrances; and
(v) the Surety Bonds;
and without limiting the generality of the foregoing:
(i) all amounts owing by ASP under the note payable
to ▇▇▇▇ Trust relating to the purchase of the
Lands for the Fredonia Field Office; and
(ii) all amounts owing by H-B in connection with the
purchase of the Lands included as part of the
Mill;
but the Purchaser and its nominees shall not assume any other
Liabilities or obligations of any of the Vendors or the
Subsidiaries including, without limitation, the Revolving
Loan, the Term Loan and the Option Agreement. For greater
clarification, such Assumed Obligations do not include:
(i) any obligations or Liabilities arising from or
related to the Colorado State School of Mines
situation or the Day Loma Property;
(ii) any wages, salaries, benefits or other
Liability to any of the Employees and any
benefit, bonus, profit-sharing, retirement
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income, termination, severance, dental, medical
disability, health, pension or other plans,
programs, policies or other arrangements in
place for the benefit or advantage of the
Employees;
(iii) any Liability of the Vendors to any state,
federal, county or other taxing authority
relating to or arising from the Purchased
Assets or the Business incurred, accrued or
arising prior to Closing;
(iv) any obligations or Liability to KKL, KKG, NOK
or P-H (other than the Swiss Royalty) under or
in connection with the Dissolution Agreement
and all related documents (including, without
limitation, the Release and Indemnity Agreement
dated June 12, 1996); and
(v) any Liability or obligation arising from or
relating to the Dial Litigation or the Bradford
Litigation;
(i) "AZ1" means Arizona 1 Partners, Limited Partners, a limited
partnership organized under the laws of the State of
Delaware;
(j) "AZ1 ASSETS" means all of the assets and business of AZ1
(other than Excluded Assets) including, without limitation,
the Arizona 1 Mine;
(k) "BANKRUPTCY CASE" means the bankruptcy proceedings being
jointly administered before the United States Bankruptcy
Court for the District of Colorado whereby EFL and EFEX are
the Debtors and known as case numbers 95-11645-CEM and
95-11648- CEM;
(l) "BANKRUPTCY CODE" means Title 11 of the United States Code,
11 U.S.C. '101, et seq., as it may be amended from time to
time during the Bankruptcy Case;
(m) "BANKRUPTCY COURT" means the United States Bankruptcy Court
for the District of Colorado and any other court of competent
jurisdiction;
(n) "BANKRUPTCY RULES" means the Federal Rules of Bankruptcy
Procedure, as amended from time to time, as applicable to the
Bankruptcy Case, promulgated under 28 U.S.C. '2075 of the
United States Code and the local rules for the Bankruptcy
Court and the District Court for the District of Colorado;
(o) "BONDING SECURITY" means the collateral for the Surety Bonds,
as more particularly described in Schedule "J" hereto;
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(p) "BOOKS AND RECORDS" means all books, records, files,
documents and other written information relating to the
Purchased Assets or the Business which are situated at any of
the offices of the Vendors or the Subsidiaries or any of the
Field Offices including, without limitation, the following:
(i) the Information Materials;
(ii) personnel records of existing employees; and
(iii) correspondence files relating to the Purchased
Assets and Business;
but excluding information from accounting, tax and litigation
files provided such information is retained and made
available to Purchaser as required under section 11.7;
(q) "BOOK VALUE" means the amount of all assets as recorded on
the Purchaser's books less the amount of all liabilities
recorded on the Purchaser's books (excluding from such
liabilities any and all subordinated debt owed by the
Purchaser to any Affiliate), which assets and liabilities
shall be recorded in accordance with United States generally
accepted accounting principles;
(r) "BRADFORD LITIGATION" means the case known as Bradford et ▇▇
▇. ▇▇▇▇▇ et al pending before the United States District
Court for the District of Utah, Civil Action No. 2:96CV
0563G;
(s) "BRIDGE LOAN" means the bridge loan of up to $2,000,000 to
EFL by International Uranium Corporation in accordance with
those terms and conditions set forth in the letter attached
hereto as Schedule "W";
(t) "BUILDINGS" means the mining and processing facilities,
storage facilities, offices and all other buildings,
structures, infrastructure and fixtures situated on the Lands
or on any of the Mineral Rights, including all fixtures and
improvements forming part thereof, but excluding the Excluded
Assets;
(u) "BULLFROG PROPERTY" means the Bullfrog property located in
Utah approximately 130 road miles west of the Mill, together
with all associated Lands, Permits and Licenses, Mineral
Rights, Equipment, Buildings and Other Assets;
(v) "BUSINESS" means all business carried on by any of the
Vendors or the Subsidiaries in connection with the Purchased
Assets including, without limitation, the uranium and
vanadium exploration, mining, milling,
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purchasing and selling business currently carried on by the
Vendors and the Subsidiaries in connection with the Purchased
Assets;
(w) "BUSINESS DAY" means any day other than a Saturday, Sunday or
any statutory holiday in the State of Colorado;
(x) "CAMECO AGREEMENT" means the agreement between Cameco
Corporation and EFEX dated April 25, 1989 for the purchase by
EFEX of U308 from Cameco including the letter agreement dated
March 20, 1996 between EFEX and Cameco but excluding the
supplemental agreement dated September 23, 1996;
(y) "CAMECO MATCHING SALES AGREEMENTS" means the sales agreements
entered into or which may be entered into between EFEX and
purchasers of uranium from time to time which match EFEX's
purchase obligations under the Cameco Agreement after January
1, 1997;
(z) "CANYON MINE" means the Canyon Mine located near the south
rim of the Grand Canyon in Arizona, together with all
associated Lands, Permits and Licenses, Mineral Rights, any
ore stockpiles, Equipment, Buildings and Other Assets;
(aa) "CASH COLLATERAL" means the Bonding Security that is in the
form of cash;
(ab) "CHARTER DOCUMENTS" means Articles, Articles of
Incorporation, Memorandum, Memorandum of Association,
Articles of Association, By-laws or any similar charter or
organizational document of a corporate or other entity;
(ac) "CLAIM" means any and all debts, claims, actions, lawsuits,
causes of action, demands, notices and obligations of
whatsoever nature and howsoever incurred;
(ad) "CLOSING" means the completion of the sale of the Purchased
Assets and Business to the Purchaser or its nominee or
nominees pursuant to paragraph 8.2 herein;
(ae) "CLOSING DATE" means the date specified in paragraph 8.1 as
the date for completion of the Closing;
(af) "COLORADO PROPERTIES" means all of the mines and mineral
properties in the Colorado plateau area of Colorado and Utah
including, without limitation, the Sunday, Carnation, St.
Jude, West Sunday, Snowball, Pandora, Beaver, Hecla JV, La
▇▇▇, Rim and Humbug Mines; the ▇▇▇▇ Block 4, any rights H-B
has in the Cam 19 and 20 properties, and the Topaz, Van 4,
Monogram, ▇▇ ▇▇▇▇▇,
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Burro Canyon, Paradox D, Thunderbolt, Deer Creek (East), East
Canyon, Marysvale Area, and the CSR-10 properties; and the
Egnar Plains and ▇▇▇▇▇▇▇ properties, together with all
associated Lands, Permits and Licenses, Mineral Rights, ore
stockpiles, Equipment, Buildings and Other Assets;
(ag) "COMMITTEE" means the Official Joint Creditors' Committee For
The Jointly Administered Bankruptcy Estates of CSI
Enterprises, et al.;
(ah) "CONTRACTS" means all those licenses, leases, franchises,
contracts, agreements, engagements or commitments, whether
written or oral, relating to the Purchased Assets or the
Business to which any of the Vendors or any of the
Subsidiaries is a party and which are listed on Schedule
"D";
(ai) "CRP" means Cheyenne River Partners, L.P., a limited
partnership organized under the laws of the State of
Delaware;
(aj) "CRP ASSETS" means all of the assets and business of CRP
(other than the Excluded Assets) including, without
limitation:
(i) the Reno Creek Project;
(ii) the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Property; and
(iii) the ▇▇▇▇▇▇▇▇ Field Office;
(ak) "▇▇▇▇▇-▇▇▇▇▇▇▇ PROPERTY" means the ▇▇▇▇▇-▇▇▇▇▇▇▇ in-situ
▇▇▇▇▇ uranium prospect located along the southwest flank of
the Black Hills, near the South Dakota/Wyoming border,
together with all associated Lands, Permits and Licenses,
Mineral Rights, Equipment, Buildings and Other Assets;
(al) "DIAL LITIGATION" means the case known as ▇▇▇▇▇▇ ▇▇▇▇ et al
v. Energy Fuels Mining Joint Venture et al, pending before
the Third Judicial District Court, Salt Lake County, State of
Utah, Civil No. 960902608PI;
(am) "DISSOLUTION AGREEMENT" means the agreement made, as of the
12th day of June 1995, among EFL, EFEX, KKG, KKL, NOK and
P-H, and related agreements and instruments under which the
parties agreed, among other things, to refurbish the Mill and
to process certain stockpiled uranium ore, and upon the Mill
Run Completion Date, as defined therein, KKG, KKL, NOK and
P-H agreed to the distribution of Residual Partnership Assets
as defined therein, to EFL subject to the distribution by the
Subsidiaries to KKL, NOK and KKG of the Swiss Royalty, as
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approved by the Bankruptcy Court pursuant to an order dated
May 30, 1995;
(an) "DOVE CREEK FIELD OFFICE" means all Lands, Permits and
Licenses, Buildings, Equipment, and Other Assets comprising
or associated with the Dove Creek field office in Colorado;
(ao) "▇▇▇▇▇▇▇ MONEY ESCROW AGREEMENT" means that certain escrow
agreement dated November 4, 1996 by and among Rio Frio
Holdings, Inc. as assigned to the Purchaser, the Vendors and
Colorado National Bank refered to in paragraph 3.1;
(ap) "EFFECTIVE DATE" has the meaning set out in paragraph 2.3
hereof;
(aq) "EFFECTIVE TIME" means 12:01 a.m. mountain standard time on
the Effective Date;
(ar) "EFEX ROYALTY" means a royalty payable to EFEX or any other
party on U308 pursuant to the terms and conditions of the
Master Conveyance and Royalty Agreement dated October 1, 1984
between EFEX and ASP;
(as) "EMPLOYEES" means all employees of the Vendors and the
Subsidiaries who are employed in the Business at the
Effective Date, which as at the date hereof are the
individuals listed in Schedule "A" hereto;
(at) "EMPLOYEE RECEIVABLES" means all amounts, if any, owing to
any of the Vendors or Subsidiaries by Employees who agree to
become employed by the Purchaser or its nominee, that are
outstanding at the Effective Date including, without
limitation, housing loans made by any of the Vendors or
Subsidiaries to such Employees;
(au) "ENCUMBRANCES" means and includes, whether or not registered
or recorded, any and all:
(i) mortgages, assignments of rent, liens,
licenses, leases, charges, security interests,
hypothecations and pledges, whether fixed or
floating, against property (whether real,
personal, mixed, tangible or intangible), or
conditional sales contracts or title retention
agreements or equipment trusts or financing
leases relating thereto, or any subordination
to any right or claim of others in respect
thereof;
(ii) Claims, interests and estates against or in
property (whether real, personal, mixed,
tangible or intangible) including easements,
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rights-of-way, servitudes or other similar
rights in property granted to or reserved or
taken by any person or any governmental body or
authority;
(iii) any option or other right to acquire, or
acquire any interest in, any property;
(iv) any royalties; and
(v) other liens, charges or encumbrances of
whatsoever nature and kind against property
(whether real, personal, mixed, tangible or
intangible);
(av) "ENVIRONMENTAL AND RECLAMATION OBLIGATIONS" means all
Environmental Contamination and reclamation obligations
arising in, on or under any of the Purchased Assets, whether
or not such Environmental Contamination has migrated off of
the Purchased Assets by wind, water flow, gravity or other
natural forces ("Natural Forces"). For greater
clarification, Environmental and Reclamation Obligations
include, without limitation, the reclamation and
decommissioning obligations associated with the Mill and
reclamation obligations and related Liabilities associated
with the U.S. Mining and Exploration Properties. For greater
clarification, Environmental and Reclamation Obligations do
not include: (i) any Environmental Contamination and
Liabilities relating to or arising from any use, handling,
storage, treatment, transportation or disposal of Hazardous
Materials by other than Natural Forces which is not in, on or
under any of the Purchased Assets; or (ii) Environmental
Contamination or Liabilities related to or arising from the
Colorado State School of Mines situation or the Day Loma
Property;
(aw) "ENVIRONMENTAL CONTAMINATION" means the discharge, emission,
leaking, spilling, pumping, pouring, injecting, escaping,
dumping, leaching, release or disposal into the environment
at any time prior to the Effective Time including, without
limitation, land, air and water, of Hazardous Materials or
other materials so as to result in a violation of any
Environmental Laws;
(ax) "ENVIRONMENTAL LAWS" means federal, state and local laws,
statutes, ordinances, regulations and rules, or any permits
and orders of any governmental or regulatory authority and
common law in force from time to time prior to the Effective
Time with respect to environmental protection and Hazardous
Materials;
(ay) "EQUIPMENT" means all Supplies and all machinery, equipment,
automobiles, trucks, bulldozers, shovels,
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trailers, tractors, office equipment, computer hardware and
software, yard equipment, furniture, furnishings and tools of
all kinds owned by any of the Vendors (and related to the
Purchased Assets or the Business) or owned by any of the
Subsidiaries, whether or not situated on the Lands or on any
Mineral Rights on the Closing Date, and used or intended for
use in connection with the Purchased Assets or the Business,
including, without limitation, the machinery, equipment and
other property described in Schedule "B" hereto but excluding
the Excluded Assets;
(az) "EQUIPMENT COSTS" means:
(i) for the purposes of the Mill property, the cost of
the property as shown on the Vendors' books, which
is 30% of the cost of the property;
(ii) for the purposes of Equipment acquired from Umetco,
the Vendors' estimate of value; and
(iii) for all other Equipment, the amount shown on the
Vendors' books;
(ba) "ESCROW AGENT" means Colorado National Bank;
(bb) "ESCROW AGREEMENT" means the escrow agreement referred to in
paragraph 3.5 and scheduled hereto as Schedule "C";
(bc) "EXCLUDED ASSETS" means all of the Vendors' and the
Subsidiaries' right, title and interest in, to and under:
(i) any cash or receivable held by any of the Vendors or
the Subsidiaries (other than the Cash Collateral and
all receivables, U308, cash and cash proceeds
derived, directly or indirectly, from the Processing
Contract);
(ii) any agreements, that are not Contracts, under which
any of the Vendors or the Subsidiaries have the
right or obligation to supply U308 to any Vendor or
Affiliate of a Vendor or any third parties;
(iii) the matched sales agreement dated November 29, 1994
between EFEX and Peco Energy Company;
(iv) the Option Agreement;
(v) the URI Agreement;
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(vi) any agreements not necessary for the reasonable
operation of any of the Purchased Assets or Business
that are not listed on Schedule "D";
(vii) the Mill Run Inventories and all other uranium
inventories owned by the Vendors, the Subsidiaries
or the Swiss Utilities (other than U308 derived from
the performance of the Processing Contract and the
proceeds thereof);
(viii) such other assets of the Vendors and the
Subsidiaries that are not identified as Purchased
Assets;
(ix) any intercompany accounts payable or receivable by
or between any of the Vendors and the Subsidiaries,
provided further that the Purchaser shall not be
responsible for any outstanding intercompany
accounts payable of any of the Vendors or the
Subsidiaries;
(x) the Employee Receivables;
(xi) Vendors' equity interest in JRA Sports and Nuclear
Developers, Ltd.;
(xii) the Pathfinder J.V.;
(xiii) the property or properties commonly referred to as
the Day Loma property and any entity that holds any
of such properties; and
(xiv) the ▇▇▇▇ and RePete properties;
(bd) "EXISTING ROYALTIES" means the lessors' royalties, overriding
royalties, reversionary interests and similar burdens granted
in accordance with normal and customary practice listed in
Schedule "E" hereto, which for greater certainty, shall not
include: (i) royalties held by entities owned or controlled,
directly or indirectly, by ▇▇▇▇ ▇▇▇▇▇▇ or which otherwise are
insiders (as that term is defined in the United States
Bankruptcy Code) of ▇▇▇▇ ▇▇▇▇▇▇; (ii) royalties granted to
collateralize any outstanding obligation of any kind to any
entity or (iii) any recoupment claim or royalty owed by any of
the Vendors or Subsidiaries to Nuclear Developers, Ltd.;
(be) "FIELD OFFICES" means the Grand Junction Field Office, the
Fredonia Field Office, the ▇▇▇▇▇▇▇▇ Field Office, the Dove
Creek Field Office and the Nucla Field Office;
(bf) "FOUNDING AGREEMENT" means the agreement dated January 15,
1994 between EFEX, the state owned Russian geological concern
Geologorazvedka and the Ministry of
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Geology and Mineral Resources of Mongolia through its
designated representative URAN, relating to the establishment
of a joint venture company to pursue the exploration of
uranium in the Gobi region of Mongolia;
(bg) "FREDONIA FIELD OFFICE" means all Lands, Permits and
Licenses, Buildings, Equipment and Other Assets comprising or
associated with the Fredonia Field Office;
(bh) "▇▇▇▇▇▇▇▇ FIELD OFFICE" means all Lands, Permits and
Licenses, Buildings, Equipment and Other Assets comprising or
associated with the field office in Gillette, Wyoming;
(bi) "GOBI REGION MINERAL AGREEMENT" means the mineral agreement
dated January 15, 1994 among EFEX, the Ministry of Geology
and Mineral Resources of Mongolia and the state owned Russian
geological concern Geologorazvedka relating to the
exploration for uranium in the Gobi region of Mongolia;
(bj) "GOODWILL" means the goodwill attributable to the Business;
(bk) "GRAND JUNCTION FIELD OFFICE" means all Lands, Permits and
Licenses, Buildings, Equipment and Other Assets comprising or
associated with the Grand Junction Field Office;
(bl) "H-B" means Hanksville-▇▇▇▇▇▇▇▇ Limited Partnership, a
limited partnership organized under the laws of the State of
Delaware;
(bm) "H-B ASSETS" means all of the assets and business of H-B
(other than Excluded Assets) including, without limitation:
(i) the Mill;
(ii) the UMETCO Note;
(iii) the Pinenut Mine;
(iv) the Bullfrog Property;
(v) the Colorado Properties;
(vi) the Pigeon Mine;
(vii) the Three Hack Canyon Mines;
(viii) the Grand Junction Field Office;
(ix) the Fredonia Field Office;
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(x) the Dove Creek Field Office;
(xi) the Nucla Field Office;
(xii) the Processing Contract and all revenues and U3O8
derived from the performance of the Processing
Contract, whether or not accrued or paid to the
Vendors before or after the Effective Date, other
than U3O8 used to pay the transportation costs
directly associated with the Processing Contract;
and
(xiii) the Waste Processing Contracts;
(bn) "HAZARDOUS MATERIALS" means any hazardous, toxic or
radioactive substance, material or waste, asbestos, urea
formaldehyde, petroleum hydrocarbons, pollutants,
contaminants and other substances, materials and wastes of
any kind, including, without limitation, special wastes,
compounds known as chlorobiphenyls, and any substance,
material or waste the use, storage, manufacture, treatment,
generation, transport, or disposal of which is prohibited,
controlled, regulated or licensed under Environmental Laws;
(bo) "HERMIT MINE" means the Hermit mine located in the Arizona
Strip area of Arizona, together with all associated Lands,
Permits and Licenses, Mineral Rights, Equipment, Buildings
and Other Assets;
(bp) "HOLDBACK" means the amount of $1,500,000 deposited with the
Escrow Agent under the Escrow Agreement, pursuant to
paragraph 3.3(b) below;
(bq) "HOLDBACK CLAIM" means any claim by the Purchaser against any
of the Vendors for any alleged breach of a representation,
warranty, covenant or other obligation under this Agreement
including, without limitation, a claim of indemnification as
set forth in paragraph 11.2 below;
(br) "INFORMATION MATERIALS" means all the drawings, plans,
reports, records, agreements, exploration results and other
documents and materials relating to the Purchased Assets or
the Business owned by the Vendors or the Subsidiaries or
otherwise situated at any of the offices of the Vendors or
the Subsidiaries or any of the Field Offices at the date
hereof, together with such additional similar documents and
materials as may be added thereto before the Closing Date;
(bs) "INTELLECTUAL PROPERTY" means all trade or brand names,
business names, trade marks, trade ▇▇▇▇ registrations and
applications, service marks, service ▇▇▇▇ registrations
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and applications, logos, design marks, copyrights, copyright
registrations and applications, patents, patent
registrations and applications and other patent rights
(including any patents issued on such applications or
rights), trade secrets, proprietary information and know-
how, equipment and parts lists and descriptions, instruction
manuals, inventions, inventors' notes, research data,
unpatented blue prints, drawings and designs, formulae,
processes, technology and other intellectual property,
together with all rights under licenses, registered user
agreements, technology transfer agreements and other
agreements or instruments relating to any of the foregoing,
that are owned by: (i) any of the Vendors and related to the
Purchased Assets or Business; or (ii) any of the
Subsidiaries;
(bt) "INTERIM STATEMENT OF ADJUSTMENTS" means the Interim
Statement of Adjustments described in paragraph 3.7(d) below;
(bu) "INTERNAL REVENUE CODE" means the United States Internal
Revenue Code of 1986, as amended;
(bv) "JAPANESE CONTRACTS" means the Agreement for the Sale and
Purchase of Uranium Concentrates dated August 19, 1991 by and
between EFEX and Kyushu Electric Power Company, the Agreement
for the Sale and Purchase of Uranium Concentrates dated June
24, 1991 by and between EFEX and Chubu Electric Power Company
and the Agency Agreement dated June 15, 1989 by and between
Sumitomo Corporation and EFEX (but specifically excluding any
other contracts with Sumitomo);
(bw) "JOINTLY ADMINISTERED BANKRUPTCY CASES" means the jointly
administered bankruptcy proceedings of EFL, EFEX, ▇▇▇▇
▇▇▇▇▇▇, Nuexco Trading Corporation, CSI Enterprises, Inc. and
Energy Fuels Mining Joint Venture;
(bx) "KANAB NORTH MINE" means the Kanab North mine located in the
Arizona Strip area of Arizona, together with all associated
Lands, Permits and Licenses, Mineral Rights, Equipment,
Buildings and Other Assets;
(by) "KKG" means KERNKRAFTWERK GOESGEN-DAENIKEN AG, a Swiss
corporation;
(bz) "KKL" means KERNKRAFTWERK LEIBSTADT AG, a Swiss corporation;
(ca) "KNP" means Kanab North Partners, Limited Partnership, a
limited partnership organized under the laws of the State of
Delaware;
- 14 -
15
(cb) "KNP ASSETS" means all of the assets and business of KNP
(other than Excluded Assets) including, without limitation:
(i) the Kanab North Mine; and
(ii) the KNP Exploration Properties;
(cc) "KNP EXPLORATION PROPERTIES" means certain mineral
exploration properties, together with all associated Lands,
Permits and Licenses, Mineral Rights, Equipment, Buildings
and Other Assets;
(cd) "LANDS" means the fee simple lands (other than patented
mining claims) and premises described in Schedule "F" hereto
and all plants, improvements, appurtenances and fixtures
situated thereon or forming part thereof including, without
limitation:
(i) the Buildings situated thereon; and
(ii) all reserves or uranium in situ within, upon or
under such lands;
but does not include the Excluded Assets.
(ce) "LIABILITY" means any:
(i) right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated,
fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured;
or
(ii) right to an equitable remedy or breach of
performance if such breach gives rise to a right to
payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured or
unsecured;
(cf) "LIMESTONE PROJECT" means the Limestone project, including
the Tad claims, as well as the ▇▇▇▇▇ property near Moab,
Utah, together with all associated Lands, Permits and
Licenses, Mineral Rights, Equipment and Other Assets;
(cg) "LIQUIDATION" means the dissolution and completion of winding
up of each of ▇-▇, ▇▇▇,▇▇▇, ▇▇▇ and KNP in accordance with
the Dissolution Agreement and related agreements and
instruments prior to the Closing;
(ch) "MATERIAL CONTRACTS" means all executory agreements, other
than the Existing Royalties or Excluded Assets,
- 15 -
16
which are material to the Vendors or the Subsidiaries. For
the purposes of this Agreement, a contract shall be Material
if:
(i) performance of any right or obligation by any party
to such contract (other than a contract with a
customer in the ordinary course of business) may
occur over a period of time greater than one year,
or
(ii) if an expenditure, receipt or transfer or other
disposition of property or Liability with a value of
greater than $50,000 may arise under such contract
(other than a contract with a customer in the
ordinary course of business), or
(iii) if such contract has been entered into outside of
the ordinary course of business;
(ci) "MILL" means the White Mesa Mill, a fully permitted 2,000-ton
per day uranium mill with an associated vanadium recovery
process facility and tailings system, near Blanding, Utah,
together with all associated Lands, Permits and Licenses,
Mineral Rights, ore stockpiles, Equipment, Buildings and
Other Assets;
(cj) "MILL BOND" means the bond required under applicable law to
be maintained in connection with the Mill, currently posted
by Umetco and Union Carbide Corporation;
(ck) "MILL RUN COMPLETION DATE" has the meaning set forth in the
Dissolution Agreement;
(cl) "MILL RUN INVENTORIES" means the inventories of U3O8 acquired
by EFL as a result of the ▇▇▇▇ ▇▇▇▇ ▇▇▇;
(cm) "MINERAL RIGHTS" means all water, water ▇▇▇▇▇, water rights,
mining claims (patented or unpatented), mining leases,
mineral interests, surface interests, surface agreements,
easements, reserves or any other mineral interest including,
without limitation, the Mineral Rights set out in Schedule
"G" hereto;
(cn) "MONGOLIAN EXPENDITURES" means the expenditures made by EFEX
up to the Closing to meet its obligations under the Mongolian
Joint Venture, such expenditures to be made in accordance
with and not to exceed the 1996 budget approved by the
Mongolian Joint Venture, a copy of which is attached as
Schedule "H" hereto, and any future budget for the calendar
year 1997 that is approved by the Mongolian Joint Venture
prior to Closing with the consent of Purchaser as set forth
in Section 6.1(b);
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17
(co) "MONGOLIAN JOINT VENTURE" means Gurvan Saihan, BBHK, a
Mongolian limited liability company, together with the Gobi
Region Mineral Agreement and the Founding Agreement;
(cp) "MONGOLIAN JOINT VENTURE INTEREST" means EFEX's interest in
the Mongolian Joint Venture and any related rights and assets
associated therewith that are owned by EFEX;
(cq) "NOK" means NORDOSTSCHWEIZERISCHE KRAFTWERKE AG, a Swiss
corporation;
(cr) "NUCLA FIELD OFFICE" means all Lands, Permits and Licenses,
Buildings, Equipment and Other Assets comprising or
associated with the Nucla field office in Colorado;
(cs) "OPTION AGREEMENT" means the agreement dated May 1, 1990
between EFL on behalf of and as the sole general partner of
H- B, and on behalf of and as one of the general partners of
ASP, of the first part, and KKL of the second part, under
which, among other things, EFL, on behalf of H-B and ASP,
granted to KKL the right and option to participate in the
development, mining and milling of up to two uranium bearing
ore bodies within a specified area of interest;
(ct) "OTHER ASSETS" means all of the Vendors' and Subsidiaries'
right, title and interest in and to all other assets, not
otherwise specifically mentioned or defined in this
Agreement, used by or relating to the Purchased Assets or the
Business, but excluding the Excluded Assets;
(cu) "P-H" means P-H Holding, Inc., a Delaware corporation;
(cv) "PATHFINDER J.V." means the joint venture between ASP and
Pathfinder Mines under which ASP has or had a 50% joint
venture interest, and Pathfinder Mines has or had a 50% joint
venture interest;
(cw) "PERMITTED CAPITAL EXPENDITURES" means the Mongolian
Expenditures and the Processing Contract Expenditures;
(cx) "PERMITS AND LICENSES" means all licenses, consents, permits,
authorities, approvals, certificates, rights of way,
registrations and other rights relating to the operation,
ownership or leasing of the Purchased Assets or the operation
of the Business, all of which are described in Schedule "I"
hereto, including, without limitation, all of the permits and
licenses relating to the Mill and all of the mines, all
highway access and crossing permits and right of way and
easement crossing agreements relating thereto and also
including, without
- 17 -
18
limitation, the environmental permits, water licenses, mining
permits and reclamation permits;
(cy) "PERMITTED ENCUMBRANCES" means:
(i) the Swiss Royalty;
(ii) the Bonding Security;
(iii) the Existing Royalties;
(iv) the EFEX Royalty;
(v) [this section intentionally left blank]
(vi) those liens and security interests, if any, conveyed
to secure all amounts owing by ASP under the note
payable to ▇▇▇▇ Trust relating to the purchase of
the lands for the Fredonia Field Office;
(vii) those liens and security interests, if any, conveyed
to secure all amounts owing by H-B in connection
with the purchase of the lands included as part of
the White Mesa Mill;
(viii) the conventional rights of reassignment upon the
surrender or expiration of any lease;
(ix) easements, rights-of-way, servitudes, permits,
surface leases and other rights in respect of
surface operations, provided that they do not
interfere materially with the operation of the
Business or the use of the Purchased Assets in
connection with the Business;
(x) those encumbrances in the nature of customary
defects expected to be encountered in the area
involved and customarily acceptable to prudent
operators and interest owners in that area,
including defects that have been cured by possession
under applicable statutes of limitation, defects in
the early chain of title such as failure to recite
marital status in documents, omission of heirship or
succession proceedings, lack of survey or failure to
record releases of liens, or mortgages that have
expired of their own terms or which through the
passage of time or statute are no longer
enforceable, or other defects that either as a
practical matter have not resulted and are not
likely to result in a material claim or are
considered waivable under local bar association-
approved title
- 18 -
19
standards or customary title practices in the area;
and
(xi) any security for the Bridge Loan;
(cz) "PERSON" means an individual, a corporation, a partnership, a
limited liability company, a trust, an unincorporated
organization or a federal, state or local government agency
or instrumentality;
(da) "PIGEON MINE" means the reclaimed Pigeon Mine located in the
Arizona Strip area of Arizona, together with all associated
Lands, Permits and Licenses, Mineral Rights, Equipment,
Buildings, ore stockpiles and Other Assets;
(db) "PINENUT MINE" means the Pinenut Mine located in the Arizona
Strip area of Arizona, together with all associated Lands,
Permits and Licenses, Mineral Rights, Equipment, Buildings,
ore stockpiles and Other Assets;
(dc) "PREPAID EXPENSES" means all prepaid expenses of the Vendors
and the Subsidiaries relating to the Business or the
ownership, leasing or operation of the Purchased Assets that
are paid by the Vendors or the Subsidiaries prior to Closing
but which relate to the ownership or leasing of the Purchased
Assets or the carrying on of the Business subsequent to
Closing, including without limitation any amounts actually
spent on the Mongolian Joint Venture Interest prior to
Closing that are in satisfaction of budgeted items that apply
after Closing and prepaid royalties;
(dd) "PROCESSING CONTRACT" means the processing contract dated
September 1, 1995 between EFN acting on behalf of H-B and
Converdyn acting on behalf of Allied Signal Inc., relating to
the processing of uranium bearing calcium fluoride;
(de) "PROCESSING CONTRACT EXPENDITURES" means all the costs and
expenditures required to be made,or that have been made, by
the Vendors or the Subsidiaries to perform their obligations
under the Processing Contract up until Closing, excluding any
Mill and headquarters overhead;
(df) "PROCESSING CONTRACT U308 AND PROCEEDS" means all U308 and
other proceeds or revenues derived by the Vendors or the
Subsidiaries from the performance of the Processing Contract
up until Closing;
(dg) "PROCESSING CONTRACT PRICE ADJUSTMENT AMOUNT" means the
direct costs and expenditures required to be made, or that
have been made, by the Vendors and the Subsidiaries to
perform their obligations under the Processing
- 19 -
20
Contract but excluding any Mill and headquarters overhead and
the value of U3O8 (as valued at the date of payment) used to
pay the transportation costs directly associated with the
Processing Contract. For greater certainty, the Processing
Contract Price Adjustment Amount is approximately $1,200,000;
(dh) "PURCHASE PRICE" means the aggregate of the amounts payable
by the Purchaser to the Vendors for the Purchased Assets, as
set forth in paragraph 3.2;
(di) "PURCHASED ASSETS" means collectively:
(i) the U.S. Mining and Exploration Properties;
(ii) the Argunexco Joint Venture;
(iii) the Bonding Security;
(iv) the Books and Records;
(v) the Buildings;
(vi) the Cameco Agreement (but only with respect to post
1996 deliveries);
(vii) the Cameco Matching Sales Agreements (but only with
respect to post 1996 deliveries);
(viii) the Contracts;
(ix) the EFEX Royalty;
(x) the Equipment;
(xi) the Field Offices;
(xii) the Goodwill;
(xiii) the Information Materials;
(xiv) the Intellectual Property;
(xv) the Japanese Contracts (but only with respect to
post 1996 deliveries);
(xvi) the Lands;
(xvii) the Mill;
(xviii) the Mineral Rights;
(xix) the Mongolian Joint Venture Interest;
(xx) the Other Assets;
- 20 -
21
(xxi) the Permits and Licenses;
(xxii) the Prepaid Expenses;
(xxiii) the Processing Contract U308 and Proceeds;
(xxiv) the Supplies;
(xxv) the Surety Bonds;
(xxvi) the UMETCO Note;
(xxvii) the Warranties;
(xxviii) the Waste Processing Contracts;
(xxix) all intangibles and other assets comprised in the
Business that are not otherwise described herein;
and
(xxx) all ASP Assets, AZI Assets, CRP Assets, H-B Assets
and KNP Assets not referred to elsewhere in this
definition including, without limitation, any
contract entered into by any of the Vendors or the
Subsidiaries after September 15, 1996 but prior to
the Closing and which contract is approved by
Purchaser;
but does not include any of the Excluded Assets:
(dj) "RENO CREEK PROJECT" means the Reno Creek project located in
the Powder River Basin of Wyoming and consisting of
approximately 8,000 acres of uranium mineral leases and
claims containing U308 reserves recoverable by in-situ
leaching methods, together with all associated Lands, Permits
and Licenses, Mineral Rights, Equipment, Buildings and all
Other Assets;
(dk) "REVOLVING LOAN" means the revolving loan not to exceed the
amount of $8,000,000 plus interest provided by KKG, KKL and
NOK in connection with the ▇▇▇▇ ▇▇▇▇ ▇▇▇, secured by the
Revolving Loan Security and to be paid out of the
Subsidiaries' Inventories;
(dl) "REVOLVING LOAN SECURITY" means the security for the
Revolving Loan, being a first lien and security interest on
certain assets of EFL, ▇-▇, ▇▇▇, ▇▇▇, ▇▇▇ and KNP;
(dm) "SUBSIDIARIES" means, collectively, ▇-▇, ▇▇▇, ▇▇▇, ▇▇▇ and
KNP;
- 21 -
22
(dn) "SUPPLIES" means the Vendors' and Subsidiaries' ownership
interest in all operating stores, fuel and lubricants,
processing materials, spare parts and supplies, whether or
not recorded on the books of the Vendors or Subsidiaries as
inventory and whether or not situated on the Lands or Mineral
Rights on the Closing Date, used or intended for use in
connection with the Purchased Assets or Business, but does
not include any Excluded Assets;
(do) "SURETY BONDS" means the surety bonds to secure the estimated
environmental and reclamation costs of the Mill and the other
Purchased Assets, as more fully detailed in Schedule "J"
hereto;
(dp) "SWISS ROYALTY" means the royalty to be distributed by the
Subsidiaries, upon the Mill Run Completion Date and
Liquidation, to KKL, KKG and NOK, pursuant to the Dissolution
Agreement of 9% of yellowcake and 5% of all other minerals
produced in the future from any of the mining properties of
H- B, ASP, CRP, and AZ1 , documented by royalty deeds
following generally the format shown in the royalty deed
attached as Schedule "P", with the form of the executed
royalty deeds to be approved by the Purchaser. For greater
clarification, other than the royalty and other obligations
set forth in the Swiss Royalty deeds, the Swiss Royalty does
not include any obligation or liability under the Dissolution
Agreement and related documents (including, without
limitation, the Release and Indemnity Agreement dated June
12, 1995);
(dq) "SWISS UTILITIES" means KKG, KKL, NOK and P-H;
(dr) "TAX OR TAXES" means all taxes, charges, fees, levies, or
other assessments including, without limitation, all federal,
state, local or foreign income, gross income, gross receipts,
sales, use, ad valorem, transfer, franchise, profits,
license, withholding, payroll, employment, social security,
unemployment, excise, estimated, severance, stamp,
occupation, property (real or personal), production, windfall
profits, premium, environmental (including taxes under
Section 59A of the Internal Revenue Code), capital stock,
disability, registration, alternative or added-on minimum, or
other taxes, customs duties, fees, assessments or charges of
any kind whatsoever including, without limitation, all
interest and penalties thereon, and additions to tax or
additional amounts, whether disputed or not, imposed by any
taxing authority, domestic or foreign.
(ds) "TERM LOAN" means the term loan in the amount of $1,000,000
plus interest provided by KKL, KKG and NOK to the
Subsidiaries to fund the Subsidiaries' ongoing efforts to
maintain and market their assets, secured by the Term Loan
Security;
- 22 -
23
(dt) "TERM LOAN SECURITY" means the security for the Term Loan,
being a first lien and security interest on all assets of
▇-▇, ▇▇▇, ▇▇▇, ▇▇▇ and KNP;
(du) "THREE HACK CANYON MINES" means the reclaimed three Hack
Canyon mines in the Arizona Strip area of Arizona, together
with all associated Lands, Permits and Licenses, Mineral
Rights, Equipment, Buildings and Other Assets;
(dv) "UMETCO NOTE" means a note receivable from Union Carbide
Chemicals and Plastics Company, Inc., the parent corporation
of Umetco Minerals Corporation ("Umetco"), in the principal
amount of $14,500,000 plus accrued interest, which note shall
accrue interest at the then current reference rate of
interest as published by Chemical Bank and be due and payable
in accordance with the terms and conditions set forth in
paragraph 7.1(o);
(dw) "UMETCO AGREEMENT" means the Acquisition Agreement dated May
17, 1994 under which EFL, as general partner for H-B,
acquired, among other things, Umetco's interest in the Mill
and certain properties;
(dx) "UMETCO SECURITY AGREEMENT" means the security agreement
granted to Umetco to secure H-B's obligations under that
certain Acquisition Agreement dated May 17, 1994;
(dy) "URI AGREEMENT" means the agreement, dated November 18, 1994,
between Uranium Resources, Inc. ("URI") and EFL, pursuant to
which EFL agreed to sell to URI a 45% general partnership
interest in CRP in consideration of the issuance by URI to
EFL of 360,000 shares of URI, at a closing date to be agreed
upon;
(dz) "US MINING AND EXPLORATION PROPERTIES" means:
(i) the Arizona 1 Mine;
(ii) the Arizona Strip Exploration Properties;
(iii) the Bullfrog Property;
(iv) the Canyon Mine;
(v) the Colorado Properties;
(vi) the ▇▇▇▇▇-▇▇▇▇▇▇▇ Property;
(vii) the Hermit Mine;
(viii) the Kanab North Mine;
(ix) the KNP Exploration Properties;
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(x) the Limestone Project;
(xi) the Pigeon Mine;
(xii) the Pinenut Mine;
(xiii) the Reno Creek Project; and
(xiv) the Three Hack Canyon Mines;
(ea) "U308" means dry uranium concentrate which meets current
uranium concentrate specifications;
(eb) "WARRANTIES" means the Vendors' or any of the Subsidiaries'
right, title and interest in, to and under all warranties,
guarantees or indemnities granted to or issued in favor of
any of the Vendors or any of the Subsidiaries by third
parties in connection with the sale or supply to any of the
Vendors or Subsidiaries of tangible assets that form part of
the Purchased Assets;
(ec) "WASTE PROCESSING CONTRACTS" means H-B's interest in all
waste processing contracts with Crow Butte, URI and IEC; and
(ed) "1995 MILL RUN" means the Mill run contemplated in the
Dissolution Agreement.
1.2 NUMBER AND GENDER. All words contained in this Agreement
shall be read as the singular or the plural and as the masculine, feminine or
neuter gender, as may be applicable in the particular context and as shall
result in the particular clause being given the most reasonable interpretation.
1.3 REFERENCES WITHIN AGREEMENT. The words "herein", "hereby",
"hereunder", "hereof", "hereto", and words of similar import refer to this
Agreement as a whole and not to any particular section, paragraph or clause of
this Agreement. References to sections, paragraphs or clauses refer to the
sections, paragraphs and clauses of this Agreement unless otherwise stated.
1.4 MEANING OF "TO THE BEST OF THE KNOWLEDGE OF THE VENDORS." In
this Agreement, the phrase "to the best of the knowledge of the Vendors" means
the actual knowledge at any time of the Vendors as determined by the actual
knowledge at any time of any current or former officers, directors or employees
of any of the Vendors. Any representation to the best of the knowledge of the
Vendors shall be made by the Vendors solely and shall not be deemed to have
been made by any current or former officers, directors or employees in their
individual capacity. The sole recovery for any breach of such representation
and warranty shall be limited to the Holdback.
- 24 -
25
1.5 CURRENCY. All sums of money expressed in this Agreement are
expressed in legal tender of the United States of America.
1.6 INDEX, HEADINGS AND CAPTIONS. The index of this Agreement
and the headings and captions of sections and paragraphs contained in this
Agreement are all inserted for convenience of reference only and are not to be
considered when interpreting this Agreement.
1.7 APPLICABLE LAW. Except as otherwise provided herein, and
subject to the applicable provisions of the Bankruptcy Code, this Agreement
shall be governed by and construed in accordance with the laws applicable to
contracts made and to be performed entirely within the State of Colorado. Each
party hereby submits to the jurisdiction of courts of competent jurisdiction in
the State of Colorado.
1.8 ENTIRE AGREEMENT. This Agreement, together with all
schedules and exhibits hereto, contains the whole agreement between the parties
in respect of the subject matters hereof, and there are no warranties,
representations, terms, conditions or collateral agreements, express, implied
or statutory, other than as expressly set forth in this Agreement. This
Agreement supersedes all previous invitations, proposals, letters,
correspondence, negotiations, promises, agreements, covenants, conditions,
representations, warranties and understandings, whether oral or written,
between the parties hereto.
1.9 SCHEDULES. The following schedules are attached hereto and
form part of this Agreement:
Schedule Description
-------- -----------
A . . . . . . . . Employees
B . . . . . . . . Equipment
C . . . . . . . . Escrow Agreement
D . . . . . . . . Contracts
E . . . . . . . . Existing Royalties
F . . . . . . . . Lands
G . . . . . . . . Mineral Rights
H . . . . . . . . Mongolian Joint Venture
Budget
I . . . . . . . . Permits and Licenses
J . . . . . . . . Surety Bonds
K . . . . . . . . Outstanding Operating
Costs
L . . . . . . . . Outstanding Liabilities
and Claims
M . . . . . . . . Insurance Policies
N . . . . . . . . Environmental Matters
O . . . . . . . . Employment Contracts
P . . . . . . . . Swiss Royalty
Q . . . . . . . . Litigation
R . . . . . . . . Material Contracts
- 25 -
26
S . . . . . . . . Third Party Consents
T . . . . . . . . Opinion of Vendors' Counsel
U . . . . . . . . Opinion of Purchaser's Counsel
V . . . . . . . . Curative Matters
W . . . . . . . . Letter Regarding Bridge Loan
X . . . . . . . . [INTENTIONALLY DELETED]
Y . . . . . . . . Limited Indemnity Agreement
Z . . . . . . . . Existing Defaults not to be Cured Prior
to Closing
SECTION 2 - PURCHASE AND SALE
2.1 PURCHASED ASSETS. The Vendors hereby agree to sell or cause
to be sold to the Purchaser or to its nominee or nominees, and the Purchaser
hereby agrees to purchase and take title to, the Purchased Assets, free and
clear of any and all Encumbrances, except for the Permitted Encumbrances,
pursuant to a final non-appealable order of the United States Bankruptcy Court,
at the Closing with effect as of the Effective Date, upon and subject to the
terms and conditions herein contained.
2.2 EXCLUDED ASSETS. The parties hereto acknowledge and agree
that:
(a) the sale and purchase provided for in this Agreement is
restricted to the Purchased Assets only; and
(b) for greater certainty, the Purchaser is not acquiring any of
the Excluded Assets.
2.3 EFFECTIVE DATE. The Effective Date of the acquisition of the
Purchased Assets and Business shall be the date on which the Closing occurs.
2.4 RISK OF LOSS AND DAMAGE PRIOR TO CLOSING. Risk of loss of
the Purchased Assets shall pass to the Purchaser at Closing, and the Vendors
shall bear all risk of loss or damage to the Purchased Assets until Closing and
the Purchaser shall bear all risk of loss after Closing.
SECTION 3 - PURCHASE PRICE, ADJUSTMENTS AND PAYMENT
3.1 ▇▇▇▇▇▇▇ MONEY DEPOSIT. On or before the execution and
delivery of this Agreement, the Purchaser shall obtain an irrevocable letter of
credit in the sum of $1,500,000 for a term of twelve months naming "Energy
Fuels, Ltd., as Debtor-in-Possession" as the beneficiary. This letter of
credit shall be the sole measure of recovery against the Purchaser and shall be
liquidated damages to compensate the Vendors if the Vendors fulfill their
obligations then due under this Agreement prior to Closing and the Purchaser
fails to fulfill its obligations under this Agreement
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27
prior to Closing. The letter of credit shall be held by an escrow agent
according to the ▇▇▇▇▇▇▇ Money Escrow Agreement.
3.2 PURCHASE PRICE. Subject to adjustment as provided in
paragraph 3.6, the Purchase Price for the Purchased Assets shall be an amount
equal to the aggregate of:
(a) $20,425,000;
(b) the Processing Contract Price Adjustment Amount;
(c) the Mongolian Expenditures budgeted to be paid and actually
paid after September 30, 1996; and
(d) the assumption by the Purchaser or its nominee or nominees of
the Assumed Obligations (a non-cash amount).
3.3 PAYMENT OF PURCHASE PRICE. The Purchaser shall pay the
Purchase Price to the Vendors or to third parties as may be ordered or directed
by the Bankruptcy Court and instructed by the Vendors as follows:
(a) an amount equal to the sum of:
(i) $18,925,000, plus or minus any applicable Interim
Adjustment Amount set out in the Interim Statement
of Adjustments;
(ii) the estimated Processing Contract Price Adjustment
Amount as set out in the Interim Statement of
Adjustments; and
(iii) the Mongolian Expenditures budgeted to be paid and
estimated to have been actually paid after September
30, 1996 as set out in the Interim Statement of
Adjustments;
shall be payable at Closing by the delivery of one or more
certified or official bank checks or drafts payable to or to
the direction or order of the Vendors or third parties;
(b) an amount equal to $1,500,000 shall be deposited with the
Escrow Agent at Closing by the delivery of a certified check
or bank draft payable to the Escrow Agent to be held and
disbursed by the Escrow Agent in accordance with the terms of
the Escrow Agreement; and
(c) the assumption by the Purchaser or its nominee or nominees of
the Assumed Obligations (a non-cash amount).
3.4 ALLOCATION OF PURCHASE PRICE. The Purchase Price for the
Purchased Assets shall be allocated among the Purchased Assets in a manner to
be agreed upon between the Vendors, the Committee and
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28
the Purchaser prior to Closing, after taking into account Section 1060 of the
Internal Revenue Code, the applicable Treasury Regulations and the respective
fair market values of the Purchased Assets, based on the relative fair market
value of such assets, but in any event shall provide for the allocation of such
portion of the Purchase Price to EFN to reflect the reasonably equivalent
value, if any, of such Purchased Assets owned by EFN. The Vendors and the
Purchaser agree to report the sale and purchase of the Purchased Assets for all
federal, state, provincial and local tax purposes in a manner consistent with
such allocation. If the Vendors, the Committee and the Purchaser are unable to
agree on an allocation of the Purchase Price prior to Closing, the matter shall
be referred to the Bankruptcy Court for resolution. The Vendors shall provide
information that may be reasonably required by the Purchaser for the purpose of
preparing any returns that may be required with respect to the transaction
provided for herein pursuant to Section 1060 of the Internal Revenue Code, any
Treasury Regulations promulgated thereunder, any other similar provision of the
Internal Revenue Code and any other similar, applicable foreign, state or local
tax law or regulation.
3.5 DEDUCTIONS FROM HOLDBACK. If the Purchaser has identified a
Holdback Claim against any of the Vendors for any breach of representation,
warranty, covenant or other obligation under this Agreement, on or before the
first anniversary of the Closing Date, and gives notice in writing to the
Vendors and the Escrow Agent to that effect, specifying in reasonable detail
the nature of the Holdback Claim and specifying the amount that the Purchaser
reasonably considers to be necessary to satisfy the amount of the Holdback
Claim, the Escrow Agent shall retain such amount together with interest
accruing thereon in escrow pursuant to the Escrow Agreement until the validity
and amount of the Holdback Claim is determined by agreement between the parties
or by a court, at which time the amount of the Holdback Claim, to the extent
funds are then held in escrow, shall be provided to the Purchaser to the extent
so agreed or determined by the Court. Upon the first anniversary of the date
hereof, the Escrow Agent shall disburse all amounts then held in escrow to the
Vendors except for those amounts set aside to satisfy unresolved Holdback
Claims, which shall be disbursed upon the agreement of the parties or the
Court's determination of the validity and amount of each such Holdback Claim;
all pursuant to the Escrow Agreement. The amount of any unresolved Holdback
Claim, when so determined, shall be payable to the Purchaser plus accrued
interest thereon and the remainder of the escrow funds, if any, to the Vendors.
If any such Holdback Claims are so determined to be payable to the Purchaser,
the Purchase Price shall be adjusted accordingly. The amount payable to the
Purchaser for all such claims plus all accrued interest thereon shall not
exceed $1,500,000 in aggregate plus all accrued interest thereon (except for
any Claim relating to the Vendors' obligation to pay all remaining Liabilities
of the Subsidiaries not assumed by the Purchaser, which Claims shall not be
limited). No Holdback Claim (other than a Claim relating to the Vendors'
obligation to pay all remaining Liabilities of the Subsidiaries not assumed by
the Purchaser) shall be allowed unless
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it is submitted within 12 months of the Closing Date and the alleged breach of
the representation or warranty or covenant accrued prior to the end of such 12-
month period.
3.6 ADJUSTMENTS TO PURCHASE PRICE. The Purchase Price shall be
adjusted in the following circumstances:
(a) to reflect any payments to the Purchaser under the Escrow
Agreement; and
(b) by adjusting for any amounts referred to in paragraph 3.7.
3.7 ADJUSTMENTS. The Vendors and the Purchaser will make
Purchase Price adjustments as follows:
(a) The Purchase Price will be reduced by the following amounts:
(i) an amount agreed to between the Vendors and the
Purchaser, or failing such agreement, three times
the amount of the gross proceeds of the sale of any
Equipment, Lands, Supplies, or Mineral Rights that
are sold between July 30, 1996 and the Closing Date,
as liquidated damages, it being agreed that this is
a fair and reasonable estimate of the replacement
cost of such assets;
(ii) 100% of the gross proceeds of the sale of any U308
derived from the Processing Contract, other than any
such U308 used to pay the direct transportation
costs involved in performing the Processing
Contract;
(iii) the gross proceeds of the sale of any other
Purchased Asset between July 30, 1996 and the
Closing Date;
(iv) the net profits realized by the Vendors between any
purchases under the Cameco Agreement and sales under
the Cameco Matching Sales Agreements which occur on
or after January 1, 1997; and
(v) any amounts required to be paid by the Purchaser
after the Closing on account of maintenance of
Purchased Assets, Mineral Rights maintenance fees,
operating costs and expenses, Taxes, permit and
license fees and lease fees payable, rentals and
other permit and license fees received or
receivable, vehicle license fees and insurance
premiums that had accrued prior to Closing but that
had not been paid at or prior to Closing;
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(b) The Purchase Price will be increased by:
(i) any Prepaid Expenses relating to any of the
Purchased Assets;
(ii) any amounts paid by the Vendors or the Subsidiaries
prior to the Closing on account of maintenance of
Purchased Assets, Mineral Rights maintenance fees,
operating costs and expenses, Taxes, permit and
license fees and lease fees payable, rentals and
other permit and license fees, vehicle license fees,
and insurance premiums, that relate to the operation
of the Business and ownership of the Purchased
Assets on and after the Closing Date, that are not
otherwise included as Prepaid Expenses; and
(iii) any net profits realized by the Purchaser between
any purchases under the Cameco Agreement (for any
1996 purchase obligations) and sales under the
Cameco Matching Sales Agreements which occur after
Closing but on or before December 31, 1996;
(c) Except as specifically provided for in this Agreement, no
other adjustments will be made for any other operating costs,
required maintenance expenditures, or Taxes, property
maintenance payments, reclamation payments or insurance
premiums paid by the Vendors or the Subsidiaries prior to
Closing;
(d) At Closing, the Purchaser and the Vendors shall agree upon an
Interim Statement of Adjustments setting out, to the extent
reasonably practicable, the adjustments to the Purchase Price
pursuant to paragraphs (a) and (b) above. The net amount
(the "Interim Adjustment Amount") shall be added to or
deducted from, as appropriate, the amount payable under
paragraph 3.2(a) by the Purchaser to the Vendors on Closing.
The Interim Statement of Adjustment shall also set out the
estimated Processing Contract Price Adjustment Amount and the
estimated Mongolian Expenditures initially paid after
September 30, 1996;
(e) Within the 90 day period following Closing, the Vendors and
the Purchaser shall prepare and agree upon a final statement
of adjustments to be made pursuant to the provisions of this
Section 3.7 and any other provisions of this Agreement. Upon
agreement as to the amounts of such adjustments, the net
amount thereof shall be remitted by the party who is obliged
to make payment to the other party. No adjustments shall be
made pursuant
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to this Agreement after the end of the 90 day period
following Closing except in respect of any matters of which
either party has given written notice to the other within
such period. At any time prior to the end of the 90 day
period, the Purchaser and the Vendors shall each have the
right upon 7 days prior written notice, to examine, copy and
audit the records of the other that are relevant to effecting
the adjustments pursuant to this Agreement. The party
obliged to make the said net payment shall pay interest
thereon from the Closing until payment at the rate of 8% per
year, calculated and compounded monthly. Any payments made
in accordance with this paragraph shall be made independently
of the Holdback.
SECTION 4 - REPRESENTATIONS AND WARRANTIES OF THE VENDORS
4.1 DISCLAIMER
4.1.1 THERE ARE NO WARRANTIES, REPRESENTATIONS OR COVENANTS
EXPRESSED OR IMPLIED BETWEEN THE PARTIES EXCEPT THE MATTERS EXPRESSLY PROVIDED
FOR IN THIS AGREEMENT AND THE SCHEDULES ATTACHED HERETO AND THE DOCUMENTS,
CONVEYANCES AND INSTRUMENTS TO BE DELIVERED BY THE PARTIES AT AND AFTER CLOSING.
THE PARTIES RESPECTIVELY DISCLAIM ANY OTHER WARRANTIES OR REPRESENTATIONS
INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES AND REPRESENTATIONS IMPLIED UNDER
ANY STATUTE OR LAW.
4.1.2 Prior to the execution of this Agreement, the Purchaser has
been afforded the opportunity to inspect the Purchased Assets and to examine
the records of the Vendors at their offices with respect to the Purchased
Assets, and has been afforded access to all Books and Records and Information
Materials in the Vendors' possession with respect to the Purchased Assets. THE
PURCHASER ACKNOWLEDGES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT,
THE VENDORS AND THE SUBSIDIARIES, AND THEIR RESPECTIVE PARTNERS, OFFICERS,
DIRECTORS, EMPLOYEES, REPRESENTATIVES AND AGENTS HAVE, MADE NO, AND VENDORS
HEREBY EXPRESSLY DISCLAIM ANY, REPRESENTATIONS OR WARRANTIES AS TO THE ACCURACY
OR COMPLETENESS OF SUCH INFORMATION, AS TO VENDORS' TITLE TO THE PURCHASED
ASSETS, OR AS TO ANY OTHER INFORMATION, DATA OR OTHER MATERIALS (WRITTEN OR
ORAL), FURNISHED TO THE PURCHASER BY OR ON BEHALF OF THE VENDORS (INCLUDING THE
EXISTENCE OR EXTENT OF MINERAL RESERVES, THE RECOVERABILITY OF OR THE COST OF
RECOVERING ANY SUCH RESERVES, THE VALUE OF SUCH RESERVES, ANY PRODUCTION
PRICING ASSUMPTIONS, PRESENT OR PAST PRODUCTION RATES, COMPLIANCE WITH LEASE
TERMS, THE CONDITION OF ANY MINE OR MILL, THE ABILITY TO SELL URANIUM OR
VANADIUM PRODUCTION AFTER CLOSING AND THE ENVIRONMENTAL AND RECLAMATION
OBLIGATIONS ASSOCIATED WITH THE PURCHASED ASSETS).
4.1.3 EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE VENDORS
EXPRESSLY DISCLAIM ANY WARRANTY OR REPRESENTATION AS TO THE CONDITION OF ANY
BUILDINGS, EQUIPMENT, FIELD OFFICES, INTELLECTUAL PROPERTY, SUPPLIES,
WARRANTIES AND OTHER ASSETS IN THE NATURE OF
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PERSONAL PROPERTY, FIXTURES AND ITEMS OF MOVABLE PROPERTY COMPRISING ANY PART
OF THE PURCHASED ASSETS, INCLUDING (i) ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY, (ii) ANY IMPLIED OR EXPRESS WARRANTY OF FITNESS FOR A
PARTICULAR PURPOSE, (iii) ANY IMPLIED OR EXPRESS WARRANTY ON CONFORMITY TO
MODELS OR SAMPLES OF MATERIALS, (iv) ANY RIGHTS OF THE PURCHASER UNDER
APPLICABLE STATUTES TO CLAIM DIMINUTION OF CONSIDERATION, AND (v) ANY CLAIM BY
THE PURCHASER FOR DAMAGES BECAUSE OF DEFECTS, WHETHER KNOWN OR UNKNOWN, IT
BEING EXPRESSLY UNDERSTOOD BY THE PURCHASER THAT, EXCEPT AS EXPRESSLY PROVIDED
IN THIS AGREEMENT, THE BUILDINGS, EQUIPMENT, FIELD OFFICES, INTELLECTUAL
PROPERTY, SUPPLIES, WARRANTIES AND OTHER ASSETS IN THE NATURE OF PERSONAL
PROPERTY, FIXTURES AND ITEMS ARE TO BE ACCEPTED AS IS, WHERE IS, WITH ALL
FAULTS AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR AND THAT THE
PURCHASER HAS MADE OR CAUSED TO BE MADE SUCH INSPECTIONS AS THE PURCHASER DEEMS
APPROPRIATE.
4.2 REPRESENTATIONS AND WARRANTIES. The Vendors each
individually represent, warrant and covenant to the Purchaser, as to their
respective Purchased Assets and Business and Purchased Assets owned by and
Business carried on by their respective Subsidiaries, as follows and
acknowledge that the Purchaser is relying upon the following representations,
warranties and covenants in connection with its purchase of the Purchased
Assets:
4.2.1 Corporate Status and Authority
(a) STATUS OF EFEX AND EFN: Each of EFEX and EFN is a duly
incorporated and validly existing corporation in good
standing under the laws of the State of Colorado, and has the
corporate power and capacity to own the Purchased Assets
stated herein to be owned by it, to carry on the Business and
to carry out the transactions contemplated by this Agreement.
(b) STATUS OF EFL: EFL is a duly formed and validly existing
limited partnership in good standing under the laws of the
State of Colorado, and has the power and capacity to own the
Purchased Assets stated herein to be owned by it, to carry on
the Business and to carry out the transactions contemplated
by this Agreement.
(c) DUE AUTHORIZATION: The execution and delivery of this
Agreement and the completion of the transactions contemplated
hereby have been duly authorized by all necessary corporate
or partnership action (as the case may be) on the part of
each of the Vendors and appropriate orders of the Bankruptcy
Court, and this Agreement has been duly executed and
delivered by each of the Vendors and constitutes a legal,
valid and binding obligation of each of the Vendors
enforceable in accordance with its terms.
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4.2.2 Purchased Assets
(a) OWNERSHIP: The Vendors or the Subsidiaries have good and
marketable title to all of the Lands and patented mining
claims set forth on Schedule "F" and "G", free and clear of
all Encumbrances except Permitted Encumbrances, and the
Vendors own all other Purchased Assets free and clear of all
Encumbrances other than Permitted Encumbrances. Without
limiting the generality of the foregoing, the Vendors or the
Subsidiaries own, subject, in the case of unpatented mining
claims, to the paramount title of the United States, and are
in exclusive possession of the Mineral Rights described in
Schedule "Q"; and the Vendors or the Subsidiaries have the
ability to convey to the Purchaser or its nominee or nominees
all of their right, title and interest in and to the Mineral
Rights and all of the other Purchased Assets.
(b) ZONING: To the best of the knowledge of the Vendors, all
Lands are zoned to permit the particular activity carried out
on such Lands by the Vendors or the Subsidiaries or any
person to whom the Vendors or the Subsidiaries have given
occupancy rights in respect of such Lands.
(c) TAXES: There are no liens for Taxes upon any of the
Purchased Assets, except liens for Taxes not yet due except
for certain property taxes coming due in December, 1996 which
will be paid by the Vendors prior to or at Closing.
(c) ROYALTY PAYMENTS: Except as set forth in Schedule "V", all
holders of landowners' royalties, overriding royalties, net
profits interests, working interests and similar interests in
any of the Purchased Assets or Business have been timely and
properly paid. There are no accrued and unpaid amounts in
respect of landowner's royalties, overriding royalties, net
profits interests or similar interests.
(d) OPERATING COSTS: Except as set out in Schedule "K", all
operating costs and expenses chargeable to any joint venture
interest included in the Purchased Assets, under applicable
operating agreements, as of the date hereof have been paid in
full.
(e) CONFLICTING RIGHT OR INTEREST. To the best of the knowledge
of the Vendors there is no right or interest in any of the
Lands or Mineral Rights asserted by others because of
overlapping or conflicting mining claims, mill sites, tunnel
sites, or government leases other than as set forth on
Schedules "F" or "G".
(f) PROPER PERFORMANCE. With respect to the Mineral Rights
comprising the Purchased Assets, subject, in the case of
unpatented mining claims, only to the paramount title of
- ▇▇ -
▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇: (i) in the case only of Mineral Rights
located by the Vendors or the Subsidiaries, the Mineral
Rights were properly laid out and monumented; (ii) in the
case only of Mineral Rights located by the Vendors or the
Subsidiaries, all required location and validation work was
properly performed; (iii) in the case only of Mineral Rights
located by the Vendors or the Subsidiaries, location notices
and certificates were properly recorded and filed with
appropriate governmental agencies; (iv) all assessment work
or payment in lieu thereof required to hold the Mineral
Rights has been performed through the most recent assessment
year and up to the date hereof; (v) all assessment work
required to hold the mining claims through the most recent
assessment year and up to the date hereof has been or will be
timely performed by the Vendors or the Subsidiaries prior to
Closing; and (vi) all affidavits of assessment work and other
filings required to maintain the Mineral Rights in good
standing have been properly and timely recorded and filed
with appropriate governmental agencies except for certain
assessment work notices filed with the State of Utah in 1995
and associated with the Bradford Litigation. Provided,
however, that the Vendors shall not be in breach of this
representation and warranty as to unpatented mining claims on
account of any determination of any court or governmental
agency that the work performed as assessment work did not
constitute the required annual assessment work or occupancy
for the purposes of preserving or maintaining ownership of
the unpatented mining claims, provided that the work done was
of the kind generally accepted in the mining industry as
assessment work under existing law.
(g) NO DEFECTS, LIENS OR ENCUMBRANCES. There are no defects,
liens or Encumbrances (other than Permitted Encumbrances)
that will have a material adverse effect on the Mineral
Rights, that will not be otherwise discharged or released
prior to or at Closing, provided however, nothing contained
herein shall be deemed to be a representation or warranty
that any of the unpatented mining claims has a discovery of
mineral resources within its respective boundaries.
(h) LANDS: To the best of the knowledge of the Vendors, the list
of Lands set out in Schedule "F" accurately reflects all fee
simple interests of the Vendors and the Subsidiaries in real
property (other than patented mining claims) used in the
conduct of the Business.
(i) EQUIPMENT: To the best of the knowledge of the Vendors, the
list of Equipment set out in Schedule "B" accurately
describes the Equipment and other personal property owned by
the Vendors or the
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Subsidiaries having a Equipment Cost in excess of $1,000 per
item. The Vendors or the Subsidiaries own the Equipment set
forth on Schedule B free of all Encumbrances except for
Permitted Encumbrances.
(j) ENCROACHMENTS: To the best of the knowledge of the Vendors,
all Lands and Buildings owned by the Vendors or Subsidiaries
are located wholly within the boundaries of the Lands and do
not infringe upon or contravene the provisions of any
easement, right of way or encumbrance registered against or
otherwise affecting the Lands, and there are no buildings,
fixtures, improvements or facilities on any adjoining lands,
whether public or private, that encroach on the Lands.
4.2.3 Business Operations
(a) OPERATING AUTHORITIES: The Vendors and Subsidiaries have
acquired, and currently hold the Licenses and Permits set
forth in Schedule "I" except for those certain Permits and
Licenses held by Umetco and shown on Schedule "I". To the
best of the knowledge of the Vendors, no other licenses,
consents, authorizations, approvals, privileges, waivers,
exemptions, orders, certificates, rulings, agreements and
other concessions granted by or entered into with any
governmental or regulatory authority are required in
connection with, or applicable to, the Purchased Assets or
the Business, that are material to the Purchased Assets or
the Business. The Licenses and Permits set forth in Schedule
I are in good standing and are being complied with in all
material respects. The Purchaser acknowledges that Reno
Creek has not yet been permitted by the State of Wyoming or
the Nuclear Regulatory Commission and that the Purchaser will
have to comply with any additional laws or regulations
applicable to any Permit or License that have been
promulgated by governmental agencies after the issuance of
such Permit or License, and with any laws or regulations
applicable to the transfer of the Permits and Licenses, prior
to the operation of the U.S. Mining and Exploration
Properties.
(b) COMPLIANCE WITH LAWS: Except as otherwise expressly
represented in this Agreement, the Vendors and the
Subsidiaries are operating and using the Purchased Assets,
and are conducting the Business, in compliance with all
applicable laws and regulations of each jurisdiction in which
the Purchased Assets are located or in which they conduct the
Business. Except as set out in Section 4.2.6, the Vendors
make no representations regarding compliance with
Environmental Laws.
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4.2.4 Financial
(a) LIABILITIES: To the best of the knowledge of the Vendors,
neither the Vendors nor the Subsidiaries have any debts or
Liabilities (whether accrued, contingent, absolute or
otherwise and whether or not determined or determinable)
including Liabilities relating to Taxes, except:
(i) Liabilities listed in Schedules and Statements of
Financial Affairs filed in the Jointly Administered
Bankruptcy Cases as of August 1, 1996;
(ii) Liabilities set forth in Proofs of Claim filed in
the Bankruptcy Case as of August 1, 1996;
(iii) Liabilities in the amounts and to the persons
described in Schedule "L" hereto; or
(iv) Liabilities disclosed in this Agreement, including
but not limited to Liabilities under or in
connection with the Swiss Royalty, the KKL Option,
the Term Loan and the Dissolution Agreement
The inclusion of an obligation or purported obligation on any
schedule attached hereto does not constitute an admission by
any of the Vendors that such obligation or purported
obligation is in fact valid or that any of the Vendors are
liable on such obligation.
(b) NO BROKERS: Neither the Vendors nor the Subsidiaries have
incurred any Liability and will incur no Liability,
contingent or otherwise, for broker's or finder's fees in
connection with this transaction for which the Purchaser
shall have any responsibility whatsoever.
(c) LIABILITIES OF THE SUBSIDIARIES: As of the Closing Date, all
Liabilities (except for Assumed Obligations) of the
Subsidiaries shall have been paid in full or reserved for as
set forth herein. The Vendors shall place in trust from the
proceeds of sale of the Purchased Assets an amount sufficient
to satisfy all such Liabilities which may exist after the
Closing Date. The amount the Vendors place in trust shall be
no less than the sum of:
(i) all known and asserted, but disputed or otherwise
unpaid, Liabilities of the Subsidiaries; and
(ii) such other sums as the Vendors using reasonable
business judgment determine is necessary to satisfy
any other unpaid Liabilities (which
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37
are not assumed by Purchaser) or other amounts owing
or reasonably expected to be owing by the
Subsidiaries, including, without limitation,
unliquidated or contingent Liabilities.
These sums shall remain in trust to satisfy the Claims of all
holders of a Liability or such other amounts against the
Subsidiaries until all such Liabilities are satisfied in full
or the Bankruptcy Court enters an order authorizing the
disbursal or reduction of such trust funds. The Swiss
Utilities, but no other parties, shall be considered as third
party benificiaries of this section 4.2.4(c).
4.2.5 Insurance
(a) LIST OF POLICIES: Schedule "M" contains a complete and
accurate listing of all insurance policies of the Vendors and
the Subsidiaries relating to the Purchased Assets or the
Business including, but not limited to, all property damage,
general liability, motor vehicle, director and officer
liability and life policies.
(b) GOOD STANDING: Each of the insurance policies listed in
Schedule "M" is in good standing, all premiums required to be
paid by the Vendors or the Subsidiaries have been properly
paid, there have been no misrepresentations or failures to
disclose material facts in connection with such policies, and
the Vendors have no knowledge of any facts which might render
any of the policies invalid or unenforceable.
(c) OUTSTANDING CLAIMS: Except as discussed in Schedule "M", no
threatened or actual pending Claims against any of the
policies described in Schedule "M" have been made in the
preceding 5 years. The Vendors or the Subsidiaries have
given timely notice of or have otherwise presented in a
timely fashion every claim under each such insurance policy.
4.2.6 Environmental
Except as set forth in Schedule "N" hereto, to the best of
the knowledge of the Vendors:
(a) HAZARDOUS MATERIAL: No Hazardous Materials used in or
generated by any of the Purchased Assets or Business have
been or are currently placed, used, stored, treated,
manufactured, disposed of, released, discharged, spilled or
emitted in a manner which has been asserted to be a violation
of any Environmental Laws or the Permits and Licenses by any
governmental or regulatory agency other
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38
than notices of a violation of an administrative or reporting
requirement.
(b) WASTE DISPOSAL: All of the Purchased Assets and Business
that were or are used for the generation, handling,
treatment, storage or disposal of Hazardous Materials used in
or generated by the Purchased Assets or Business on the Lands
or on any of the Mineral Rights have been and are or were
properly permitted and operated in compliance with all
Environmental Laws at the time such activities were
undertaken by the Vendors.
(c) ENVIRONMENTAL CONTAMINATION: There has been no Environmental
Contamination on any of the Purchased Assets or Business
which has been asserted to be a violation of any
Environmental Laws or the Permits and Licenses by any
governmental or regulatory agency other than notices of a
violation of an administrative or reporting requirement.
(d) ENVIRONMENTAL ORDERS AND AGREEMENTS: There are no orders,
agreements or consent orders to which the Vendors or any
Subsidiary is a party relating to compliance of any of the
Purchased Assets or the Business with Environmental Laws.
(e) ENVIRONMENTAL CLAIMS: There have been no orders issued or
administrative or judicial proceedings, threatened or
pending, and no investigations, removal, remedial or response
actions ordered, conducted, commenced, taken or threatened,
under or pursuant to any Environmental Laws with respect to
the Purchased Assets or the Business or any other businesses
conducted on or from the Lands or any Mineral Rights other
than routine inspections. No Claims, actions or other
proceedings are pending or threatened with respect to
Environmental Contamination, the violation of any
Environmental Laws or Permits and Licenses.
(f) PERMITS: All permits, licenses, approvals, authorizations,
consents, registrations or other actions required under
Environmental Laws to own and operate the Purchased Assets
and the Business have been obtained and all terms and
conditions attached thereto have been duly complied with and
all such licenses, approvals, authorizations, consents and
registrations are in full force and effect and in good
standing. The Purchaser acknowledges that Reno Creek has not
yet been permitted by the State of Wyoming or the Nuclear
Regulatory Commission and that the Purchaser will have to
comply with any additional laws or regulations applicable to
any Permit or License that have been promulgated by
governmental agencies after the issuance of such Permit or
License, and with any laws or regulations applicable
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39
to the transfer of the Permits and Licenses, prior to the
operation of the U.S. Mining and Exploration Properties.
(g) NUISANCE: No Claims of nuisance have been made or
threatened related to the use of, and operations relating to,
the Purchased Assets and the Business or any other business
conducted on or from the Lands or any Mineral Rights.
(h) RESOLUTION OF ASSERTED VIOLATIONS: All actions required of
the Vendors by the agency asserting each violation of
Environmental Laws or Permits and Licenses set out in
Schedule "N" hereto have been performed by the Vendors and
there are no further actions required of the Vendors with
regard to such asserted violations.
4.2.7 Tax Matters
(a) VENDORS RESPONSIBLE FOR TAX LIABILITIES. The Vendors shall
be responsible for all taxes incurred or accrued or resulting
from any Business or use of the Purchased Assets prior to the
Effective Time, and the Purchaser shall assume no obligation
or Liabilities with respect to any such Taxes.
(b) OUTSTANDING CLAIMS: Subject to Section 4.2.4(a), Schedule
"L" hereto describes all federal, state, municipal and other
taxation authorities that have asserted Claims for taxes
relating to any of the Vendors, the Subsidiaries, the
Purchased Assets or Business, and the nature and amount of
the Claims. There are no other taxation authorities that may
validly assert any such Claims except as described in
Schedule "L" hereto.
(c) EMPLOYEE WITHOLDING\SOCIAL SECURITY TAXES: The Vendors have
timely and properly withheld from Employee wages and paid
over to the proper governmental authorities all amounts
required to be so withheld and paid over under all local,
county, state and federal tax and witholding tax requirements
related to the wages, salaries, commissions, bonuses and
other remuneration payable to Employees, and the Vendors
shall have executed and filed all reports, returns and
declarations related thereto.
4.2.8 Employee Matters
(a) LIST OF EMPLOYEES: The list of employees set out in Schedule
"A" is a complete list of the employees of each of the
Vendors and the Subsidiaries as of December 1, 1996.
(b) EMPLOYMENT CONTRACTS: Other than as set out in Schedule "O",
none of the Vendors or Subsidiaries is party to any oral or
written consulting contract,
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40
management contract, labor services contract or similar
agreement for the services of a particular individual to the
Vendors or Subsidiaries, and none of the employees of any of
the Vendors or Subsidiaries is employed on other than an
indefinite hiring basis by the Vendors or Subsidiaries
terminable at will on reasonable notice according to law
without further liability to any of the Vendors or
Subsidiaries.
(c) UNION CONTRACTS: There are no collective bargaining
agreements with any trade union or employee association
currently in force with any of the Vendors or the
Subsidiaries, and there are no pending applications for
certification or decertification of any collective bargaining
unit notice of which has been served upon any of the Vendors
or the Subsidiaries or of which any of the Vendors or the
Subsidiaries is aware, and there are no oral understandings
with union negotiators which extend beyond current collective
bargaining agreements.
(c) BENEFIT PLANS/LABOR: The Vendors shall be responsible for
all benefit, bonus, profit-sharing, retirement income,
termination, severance, dental, medical disability, health,
pension or other plans, programs, policies or other
arrangements in place for the benefit or advantage of the
employees of any of the Vendors or Subsidiaries as at the
date hereof, and there are no pending or threatened work
stoppages or labor disputes, charges of unfair labor practice
or charges of violation of individual rights by any present
or former employee of any of the Vendors or Subsidiaries
accrued or resulting from the Business prior to the Effective
Time.
(d) EMPLOYER ASSOCIATIONS: None of the Vendors or Subsidiaries
is a member of any employer, management, industry or other
trade, or business association under which any of the Vendors
or Subsidiaries is obligated to contribute to any employee or
contractor employee benefit fund, including any pension
plans, health benefit plans or other similar employee
entitlements.
(e) WORKERS COMPENSATION ASSESSMENT: No events have occurred with
respect to any of the Vendors or Subsidiaries which, to the
best of the knowledge of the Vendors, is likely to result in
any claim or action against any of the Vendors or
Subsidiaries or any significant increase in any workers
compensation board assessment or any similar assessment
payable by the Vendors or Subsidiaries.
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4.2.9 Litigation and Claims
(a) ADVERSE PROCEEDINGS: The list and description of outstanding
Claims contained in Schedule "Q" is a complete and accurate
listing of all outstanding actions, Claims, demands,
lawsuits, prosecutions, arbitrations or other alternative
dispute resolution proceedings or governmental or regulatory
actions, claims or proceedings by or against any of the
Vendors or any of the Subsidiaries relating to any of the
Purchased Assets or the Business, and there is no other
adverse proceeding pending or, to best of the knowledge of
the Vendors, threatened by or against, or relating to, any of
the Vendors or any of the Subsidiaries, any of the Purchased
Assets or the Business. To the best of the knowledge of the
Vendors, they are not aware of any basis for any other
action, claim, demand, lawsuit, prosecution, arbitration or
other alternative dispute resolution proceeding or other
adverse proceeding which, if pursued, would have a material
adverse effect on any of the Vendors or Subsidiaries or any
of the Purchased Assets or the Business. Except as set out
in Schedule "Q", there are no actions, claims, demands,
lawsuits, prosecutions, arbitrations or other alternative
dispute resolution proceedings or other adverse proceedings
in respect of which there is any possibility of any material
liability on the part of any of the Vendors or the
Subsidiaries,relating to the Purchased Assets or the
Business.
(b) COMPLIANCE DIRECTIVES: Except as disclosed in Schedule "Q",
there are no outstanding compliance orders, notices of
violations, enforcement proceedings, claims, actions or other
proceedings of which the Management Group is aware relating to
the Purchased Assets, or the Business, from any police, fire
department, sanitation or health authorities, or
environmental agencies, or from any other federal, state or
local authority, department or agency, nor do any of the
Vendors or the Subsidiaries have notice that there are any
matters under or subject to consideration by any such
authorities relating to any of the Vendors or Subsidiaries.
(c) NOTICE OF DEFAULT/CLAIMS: Except as expressly disclosed in
this Agreement, none of the Vendors or Subsidiaries has
received any notice of any default, violation or termination
of any Material Contract, law or Permits or Licenses and, to
the best of knowledge of the Vendors, no fact or circumstance
exists which will, or is likely to, result in such a default,
violation or termination.
(d) NO SEIZURE: There is no eminent domain, appropriation,
expropriation or seizure proceeding in respect of any of the
Purchased Assets that is pending or has been
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threatened against any of the Vendors or Subsidiaries, the
Purchased Assets or the Business.
(e) TRADEMARK AND PATENT INFRINGEMENT: The conduct of the
Business by the Vendors and the Subsidiaries does not
infringe upon any patent, trademark or other proprietary
right, domestic or foreign, of any person which could, if
prosecuted, have a material adverse effect on any of the
Purchased Assets or the Business.
4.2.10 Material Contracts
(a) MATERIAL CONTRACTS: Schedule "R" contains a complete and
accurate listing and description of all Material Contracts to
which any of the Vendors or Subsidiaries is a party, by which
any of the Vendors or Subsidiaries is bound or under which
any of the Vendors or Subsidiaries is entitled to any
benefits.
(b) GOOD STANDING: Except as disclosed in Schedule "R" hereto,
none of the Vendors or Subsidiaries is in breach or default
of any of the terms of the Contracts that are Material
Contracts, and none of the Vendors is aware of or should
reasonably be expected to be aware of any breach or default
of any terms of such Material Contracts by any other party
thereto, and each such contract is in good standing and in
full force and effect without amendment thereto. No state of
facts exists which, after notice or lapse of time or both,
would constitute such a default or breach where there is any
significant likelihood that such breach or default referred
to in this clause (b) would have a material adverse effect on
any of the Purchased Assets or the Business.
4.2.11 Effect of this Transaction
(a) NO ADVERSE IMPLICATIONS: Neither the execution and delivery
of this Agreement nor the completion and performance of the
transactions contemplated hereby will:
(i) give any person the right to terminate or cancel any
contractual or other rights with any of the Vendors
or Subsidiaries where such termination or
cancellation would have a material adverse effect on
any of the Vendors or Subsidiaries;
(ii) result in the creation of any Encumbrances, other
than the Swiss Royalty, on any of the Purchased
Assets or in the default under any agreement giving
a third party security against any of the Purchased
Assets or in the attachment of any floating security
interest or general security interest in a security
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agreement granted, issued or assumed by any of the
Vendors or Subsidiaries where any of such events
could have a material adverse effect on any of the
Vendors or Subsidiaries;
(iii) violate any provision of any indenture, mortgage,
lien, lease, agreement, instrument, order, statute,
ordinance, rule, regulation, permit, arbitration
award, judgment or decree to which any of the
Vendors or Subsidiaries is a party or by which any
of the Vendors or Subsidiaries or the Purchased
Assets are bound, the violation of which could have
a material adverse effect on any of the Vendors or
Subsidiaries or impair the legality or
enforceability of this Agreement or the transactions
contemplated hereby; nor
(iv) be contrary to the provisions of the Charter
Documents of any of the Vendors or Subsidiaries;
(b) THIRD PARTY APPROVALS: Except as disclosed on Schedule "S"
hereto and other than the software licenses, fax and copier
rental agreements, which are not material to the Business, or
as obviated by a valid, enforceable Bankruptcy Court order,
there are no approvals, consents, orders, legislation,
regulations or any other action of any governmental or
regulatory body or other third parties that may be required
by any of the Vendors or the Subsidiaries in connection with
the execution, delivery or performance by any of the Vendors
or the Subsidiaries of this Agreement or the transactions
contemplated in this Agreement.
4.2.12 Accuracy of Schedules. To the best of the knowledge of the
Vendors, all of the Schedules to this Agreement are complete and accurate, and
without limiting the generality of the foregoing:
(a) Schedule "J" hereto contains a complete list and description
of all of the collateral for the Surety Bonds;
(b) Schedule "J" hereto is a complete list and description of all
of the surety bonds to secure the estimated environmental and
reclamation costs of the Mill and the other Purchased Assets;
(c) Schedule "I" hereto is a complete list of all Permits and
Licenses; and
(d) Schedule "G" hereto is a complete list of all Mineral Rights.
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44
SECTION 5 - REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
5.1 REPRESENTATIONS AND WARRANTIES OF THE PURCHASER. The
Purchaser represents, warrants and covenants to the Vendors as follows and
acknowledges that the Vendors are relying upon the following representations,
warranties and covenants in connection with the sale of the Purchased Assets
and Business:
(a) STATUS OF PURCHASER: The Purchaser is a duly incorporated
and validly existing corporation in good standing under the
laws of the State of Delaware and has the corporate power and
capacity to carry out the transactions contemplated by this
Agreement.
(b) DUE AUTHORIZATION: The execution and delivery of this
Agreement and the completion of the transactions contemplated
hereby have been duly authorized by all necessary corporate
action on the part of the Purchaser, and this Agreement has
been duly executed and delivered by the Purchaser and
constitutes a legal, valid and binding obligation of the
Purchaser enforceable in accordance with its terms.
(c) NON-CONTRAVENTION: Neither the execution, delivery and
performance of this Agreement nor the completion of the
transactions contemplated hereby will conflict with or result
in a breach of or default under any agreement or other
instrument or obligation to which the Purchaser is a party or
by which the Purchaser is bound.
(d) LITIGATION: There are no actions, suits, judgments,
litigations, investigations, proceedings, consent decrees or
settlement agreements outstanding, pending or threatened
against or affecting the Purchaser which would prevent the
Purchaser from entering into this Agreement and completing
the transactions contemplated hereby.
(e) FINANCIAL CAPABILITY: The Purchaser has or has access to
sufficient funds in order to close the transaction
contemplated by this Agreement and provide adequate assurance
of future performance for all Assumed Obligations. The
Purchaser will, on the Closing Date, have at least:
(i) $30,000,000 in working capital (which working
capital may consist of subordinated debt); and
(ii) a Book Value of $30,000,000;
for the purpose of paying the Purchase Price and operating
the Business; provided, however, if at Closing or subsequent
thereto, the Purchaser transfers or assigns the Mongolian
Joint Venture Interests (or grants or conveys the right to be
transferred the Mongolian Joint
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45
Venture Interest) to a nominee which is not a wholly owned
subsidiary of the Purchaser, then the Purchaser will either:
(x) increase the minimum amount of such working capital and
Book Value on the Closing Date to $35,000,000 or, if the
transfer occurs after the Closing Date, increase the working
capital on the date of such transfer, by $5,000,000; or (y)
arrange for the nominee (or the nominee's parent company)
which obtains the Mongolian Joint Venture Interest to
guarantee payment and performance of the Purchaser's
obligations hereunder. For greater certainty, subject to
paragraph 6.5(c) below, the Purchaser shall not be required
to maintain any level of working capital or Book Value
subsequent to the Closing, or if $5,000,000 is added to the
working capital pursuant to clause (x) of paragraph
5.1(e)(ii), subsequent to the date such working capital is
added.
(f) NO BROKERS: The Purchaser has incurred no Liability and will
incur no Liability, contingent or otherwise, for broker's or
finder's fees in connection with this transaction for which
the Vendors shall have any responsibility whatsoever.
(g) INVESTMENT EXPERIENCE OF PURCHASER: The Purchaser's
principals and their advisors have experience in these types
of transactions and as a result the Purchaser is fully
capable of evaluating the transactions contemplated by this
Agreement.
SECTION 6 - COVENANTS
6.1 OPERATIONS UNTIL CLOSING. Except as otherwise provided in
this Agreement or as otherwise agreed in writing by the Purchaser, the Vendors
and the Subsidiaries will, from the date of this Agreement to Closing:
(a) CONDUCT OF BUSINESS: carry on and conduct the Business in
the ordinary course, consistent with past practice and, in
particular:
(i) will use all reasonable efforts to maintain the
Purchased Assets in accordance with standard
industry practice;
(ii) except with respect to Permitted Encumbrances, will
not mortgage, pledge, subject to lien or otherwise
encumber the Purchased Assets in whole or in part or
sell, transfer or dispose of, or agree to dispose
of, any of the Purchased Assets;
(iii) use all reasonable efforts to keep available the
services of the present employees of the
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46
Vendors and the Subsidiaries and to maintain the
relations and goodwill with suppliers, customers and
others having relations with the Vendors or the
Subsidiaries;
(iv) the Vendors will not sell any U308 derived from the
performance of the Processing Contract at any time
prior to December 23, 1996, except for U3O8 used to
pay the transportation costs directly associated
with the Processing Contract;
(v) if the Bridge Loan is not funded by December 23,
1996, the Vendors shall have the right to sell U308
derived from the Processing Contract provided that
the Vendors grant the Purchaser with a right of
first refusal to purchase such U3O8, except for U3O8
used to pay the transportation costs directly
associated with the Processing Contract. Prior to
selling any such U3O8, the Vendors shall furnish to
the Purchaser, in writing, the proposed terms and
conditions of such sale of U3O8. Within five
business days after receipt of the terms and
conditions of the proposed sale, the Purchaser shall
notify the Vendors, in writing, if it wishes to
exercise its right of first refusal and thereby
purchase the U3O8. If the Purchaser fails to
exercise its right of first refusal within five
business days after its receipt of the terms and
conditions of a proposed sale of the U3O8, the
Purchaser shall be deemed to have rejected its right
of first refusal with respect to the proposed sale;
(vi) will not negotiate or enter into or terminate, prior
to its expiration, any Material Contract;
(vii) will not pay any dividends or make any other
distributions in respect of capital stock or repay
any debts to affiliated entities;
(viii) will not fail to make any property or joint venture
payment that is due and payable prior to the
Effective Date except for those expressly disclosed
in this Agreement;
(ix) will not close the transaction set out in the URI
Agreement; and
(x) if Closing occurs before January 31, 1997, will not
enter into any sales agreements with purchasers of
U308 from time to time which
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match EFEX's purchase obligations under the Cameco
Agreement after January 1, 1997
unless otherwise agreed to in writing by the Purchaser.
Notwithstanding that Section 3.7 of this Agreement provides
an adjustment mechanism for certain sales of Purchased
Assets, any activities that violate this paragraph (a) shall
be considered a breach of this Agreement. However, if the
Purchaser agrees in writing to an activity in violation of
this paragraph (a), then the adjustment mechanism set out in
Section 3.7 of this Agreement shall apply. However,
Purchaser will not unreasonably withhold consent with respect
to any matters above except those matters set forth in
subsections iv,v and ix, provided that the value of the
Purchased Assets is not materially affected.
(b) NEW CAPITAL PROJECTS: not, without the Purchaser's prior
written consent or unless required by law or required to
repair or replace any loss or damage to the Purchased Assets
arising subsequent to the execution of this Agreement,
commence or commit to any new capital projects or make any
capital or exploration expenditures except Permitted Capital
Expenditures;
(c) AGREEMENTS: not, without the prior written consent of the
Purchaser, amend or vary any of the Material Contracts, the
Permits and Licenses or the Mineral Rights or enter into any
agreement or lease or obtain any additional permit, right of
way, license or other similar right in connection with the
Business or Purchased Assets except:
(i) renewals or replacements of any of the Permits and
Licenses or Surety Bonds on substantially the same
terms and conditions; and
(ii) any additional permits, leases, rights-of-way,
licenses or similar rights obtained or entered into
in the ordinary course of the Business, consistent
with past practice, or as required by law;
(d) INSURANCE: maintain and cause the Subsidiaries to maintain
in full force and effect the insurance coverage described in
Schedule "M", and the Vendors or the Subsidiaries shall pay
all premiums in connection with such insurance coverage and
shall not act or fail to act so as to invalidate such
insurance coverage; the proceeds of any such insurance which
shall become payable as a result of any physical loss or
damage to the Purchased Assets or any part of the Purchased
Assets after the date of this Agreement until the Closing
Date, to the extent not applied to the repair or replacement
of such
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Purchased Assets prior to the Closing Date, shall be deemed
to be included as part of the Purchased Assets, and the
parties to this Agreement agree that any such insurance
proceeds and all rights in respect of such insurance proceeds
shall from the date of execution of this Agreement be held in
trust for the Purchaser by the Vendors and the Subsidiaries
and shall be assigned by the Vendors to the Purchaser in
respect of and in replacement for any of the Purchased Assets
or any part of the Purchased Assets lost, destroyed or
damaged by any of the causes in respect of which the policies
of insurance are maintained; the Vendors shall take all
necessary steps to the satisfaction of the Purchaser, acting
reasonably, to ensure that any assignments of the benefits of
insurance in respect of the Purchased Assets in favor of any
party other than the Purchaser or its nominee or nominees by
either of them are subject to and subordinate to the interest
and entitlement of the Purchaser or its nominee or nominees
to proceeds of such insurance as provided in this Agreement;
(e) ACCESS: subject to the provisions of the confidentiality
agreement that has been executed by the Purchaser relating to
the Business and the Purchased Assets, provide to the
Purchaser, its employees, representatives and agents access
during normal business hours to the facilities, properties
and all books, accounts, data and records relating to the
Business or the Purchased Assets, including electronically
stored data and records, and to the Vendors' and
Subsidiaries' personnel including, without limitation, all
financial and operating data relating to the Business or the
Purchased Assets and all, or true copies of all, title
documents, contracts, agreements, mortgages, instruments,
leases and other documents relating to the Purchased Assets
or the Business as the Purchaser from time to time reasonably
requests.
(f) COOPERATION/PRE-CLOSING ACTIVITIES: to facilitate Closing on
or before December 31, 1996 or as soon as possible, the
Vendors shall have commenced pre-closing activities
immediately upon the execution of this Agreement, which pre-
closing activities include, without limitation: (i) making
all reasonable efforts to seek and obtain all consents and
approvals necessary for the assignment of the Vendors'
interests in contracts, licenses, and joint venture interests
(including consents and approvals, if any needed for the
Nuclear Regulatory Commission, the parties to the Mongolian
Joint Venture, Umetco Mineral Corporation, Cameco
Corporation, Techsnabexport, Chubu Electric Power Company,
Kyushu Electric Power Company and Sumitomo Corporation); (ii)
providing ▇▇▇▇- ▇▇▇▇▇-▇▇▇▇▇▇ notices or other required
notices, and (iii) providing Purchaser with access to the
Vendors facilities and personnel, as reasonably requested
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49
by Purchaser to aid it in connection with the pre-closing
activities.
6.2 REBUILDING FACILITIES. In the event of any loss or
destruction of the Purchased Assets in whole or in part after the date of this
Agreement and up to the Closing, the Vendors and the Purchaser shall negotiate
in good faith to agree upon the application of any proceeds of insurance to
rebuilding, repairing or replacement of the lost or destroyed Purchased Assets
in the best interests of the maintenance and continuation of the Business, and
in accordance with the plans of the Purchaser for the Purchased Assets and
Business. If the Purchaser and the Vendors are unable to agree upon the
application of such proceeds, the proceeds shall be held by the Vendors and
conveyed to the Purchaser at Closing.
6.3 REQUESTS FOR CONSENTS. The Vendors and the Purchaser will
use all reasonable efforts to obtain, prior to Closing:
(a) all consents and approvals necessary for the assignment of
the Vendor's interest in the Contracts, the Permits and
Licenses and the Surety Bonds to the Purchaser; or
(b) if applicable, the re-issuance of any one or more of the
Contracts, Permits and Licenses and Surety Bonds in the name
of the Purchaser or its nominee or nominees,
and the Vendors will not, except as presently contemplated by the terms thereof
or with the prior written consent of the Purchaser, agree to any amendment or
variation to the terms of such Contracts, Permits and Licenses or Surety Bonds
in connection with, or as a condition of, such assignment or re-issuance.
6.4 AGREEMENTS REQUIRING CONSENT. Where a consent of a third
party is required to permit the transfer or assignment to the Purchaser of any
of the Vendors' interest in any of the Contracts, Permits and Licenses or
Surety Bonds, the assignment of those agreements and rights in respect of which
the required consent has not been received on or before the Closing Date will
not be effective in each case until the applicable consent has been received or
the Bankruptcy Court enters an order authorizing the Vendors to assume such
agreement and assign it to the Purchaser and, in the absence of such consent or
Bankruptcy Court Order, such agreement or right will be held by the Vendors
following the Closing in trust for the benefit and exclusive use of the
Purchaser. The Vendors shall continue to use all reasonable efforts to obtain
the required consents. The Vendors shall only make use of such agreements and
rights in accordance with the directions of the Purchaser that do not conflict
with the terms of such Contracts, Permits and Licenses or Surety Bonds provided
that the Purchaser shall reimburse the Vendors for all reasonable costs and
expenses incurred as a result of the direction of the Purchaser.
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50
6.5 PURCHASER'S COVENANTS.
(a) GENERAL: The Purchaser will, prior to and on the Closing
Date, use all reasonable efforts to obtain all consents in
form and substance reasonably satisfactory to the Purchaser.
(b) CAPITAL STRUCTURE: The Purchaser will, on the Closing Date,
have at least:
(i) $30,000,000 in working capital (which working
capital may consist of subordinated debt); and
(ii) a Book Value of $30,000,000
for the purpose of paying the Purchase Price and operating
the Business; provided, however, if at Closing or subsequent
thereto, Purchaser transfers or assigns the Mongolian Joint
Venture Interests (or grants or conveys the right to be
transferred the Mongolian Joint Venture Interest) to a
nominee which is not a wholly owned subsidiary of Purchaser,
then Purchaser will either: (x) increase the minimum amount
of such working capital and Book Value on the Closing Date to
$35,000,000 or, if the transfer occurs after the Closing
Date, increase the working capital on the date of such
transfer, by $5,000,000; or (y) arrange for the nominee (or
the nominee's parent company) which obtains the Mongolian
Joint Venture Interest to guarantee payment and performance
of Purchaser's obligations hereunder. For greater certainty,
subject to paragraph 6.5(c) below, Purchaser shall not be
required to maintain any level of working capital or Book
Value subsequent to the Closing, or if $5,000,000 is added to
the working capital pursuant to clause (x) of paragraph
6.5(b)(ii), subsequent to the date such working capital is
added.
(c) TRANSFER RESTRICTIONS: At any time during the one-year
period after the Closing, without the consent of the Vendors,
acting reasonably, the Purchaser will not:
(i) on account of any debt to any parent company or
other affiliated entities, repay any principal sums
due thereunder; or
(ii) in the case of equity, make any capital
distributions,
other than from net income or profits, unless at the time of
and after giving effect to such repayment or distribution,
the Purchaser has a Book Value in excess of $30,000,000.
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51
(d) NOMINEE ENTITIES: The Purchaser shall be responsible for
all the Assumed Obligations and shall continue to be liable
for and hereby guarantees payment and performance of any
Assumed Obligation which may be assigned to a nominee at
Closing.
6.6 BANKRUPTCY COURT APPROVAL. The Vendors will have obtained on
or before December 16, 1996 an order from Bankruptcy Court which implements the
sale of the Purchased Assets to the Purchaser in accordance with the terms and
conditions set forth herein. Such order shall be in a form reasonably approved
by the Purchaser and its bankruptcy counsel. The order and the bankruptcy
approval process shall include:
(a) the Court's approval of the sale of the Purchased Assets to
the Purchaser upon the terms and conditions set forth herein;
(b) the entry of an appropriate and final Order which, inter
alia, finds and concludes that:
(i) EFL and EFEX are authorized to proceed with the sale
of the Purchased Assets upon the terms and
conditions set forth herein pursuant to '363(b) and
(f) of the Bankruptcy Code;
(ii) any objections timely filed with respect to the sale
of the Purchased Assets shall be overruled or the
interest of such objectors have been satisfied or
adequately provided for by the Court or EFL and
EFEX;
(iii) the estates of EFL and EFEX are authorized to
proceed with the sale of the Purchased Assets upon
the terms and conditions set forth herein pursuant
to '363(b) and (f) of the Bankruptcy Code;
(iv) no competitive bid for the Purchased Assets has been
received which complies with the bidding
requirements approved by the Bankruptcy Court;
(v) the Purchase Price as set forth herein represents a
fair value of the Purchased Assets;
(vi) the sale of the Purchased Assets on the terms
contemplated herein is in the best interest of the
estates of EFL and EFEX;
(vii) EFL, EFEX, the Committee and the Purchaser have
acted and negotiated this transaction in good faith
as set forth in ' 363(m) of the Bankruptcy Code;
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52
(viii) the Court shall retain jurisdiction for the purposes
of enforcing the provisions of the Order;
(ix) the sale to the Purchaser of the Purchased Assets by
the estates of EFL or EFEX shall be made, pursuant
to ' 363(f), free and clear of any and all liens,
security interests, charges, and other encumbrances
and claims of any kind, except for the Permitted
Encumbrances and Assumed Obligations;
(x) any fees or commissions due to any brokers involved
in the consummation of this transaction as a result
of the acts of the Committee, the Vendors or the
Subsidiaries shall be paid from the proceeds of the
Purchase Price and shall not be the obligations of
the Purchaser, provided, however, that the
Purchaser shall be responsible for its own broker's
fees or commission, if any;
(xi) upon completion of the winding up of the
Subsidiaries, the Liquidation is final, effective
and complete, and the Vendors are authorized to sell
all of the Purchased Assets of the Subsidiaries
(except the Swiss Royalty) of every kind and nature,
including, without limitation, all lands, licenses,
permits, mineral rights, reserves, ore stockpiles,
equipment, infrastructure, contracts, inventory,
intellectual property, general intangibles, notes,
receivables, machinery, vehicles, equipment,
furniture and fixtures, such assets are property of
the estate of EFL and all remaining liabilities (not
assumed by the Purchaser), if any, of the
Subsidiaries will be paid in full by the liquidating
agent. Under no circumstances shall any such
unpaid liabilities be the obligation of the
Purchaser or its nominees except as expressly set
forth herein;
(xii) the estates of EFL and EFEX are authorized to assume
and assign to the Purchaser or its nominees, the
following executory contracts:
A. the Processing Contract;
B. the Gobi Region Mineral Agreement;
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C. the Founding Agreement;
D. the Argunexco Joint Venture;
E. the Cameco Agreement;
F. the Japanese Contracts; and
G. any other Contracts necessary for
the reasonable operation of the
Business and any of the Purchased
Assets;
(xiii) the Purchased Assets shall be sold free and clear of
all liens, security interests, charges, encumbrances
and claims of any kind (except for Permitted
Encumbrances and Assumed Obligations), including
without limitation those liens, security interests,
charges, encumbrances and claims relating to the
Term Loan, which shall be released at Closing and
the outstanding balance of which shall be paid at
Closing to the Swiss Utilities from the proceeds of
the Purchase Price; and
(xiv) such other findings of fact and conclusions of law
reasonably requested by the Purchaser and agreed to
by the Vendors acting reasonably;
(c) provisions to the effect that other persons shall have the
right to submit a competing bid in accordance with the Motion
For Approval of (1) Overbid Procedures For Sale Of Assets,
(2) Minimum Overbids, (3) Breakup Fee and (4) Cost
Reimbursement filed in the Bankruptcy Case as amended by the
Stipulation Resolving Official Joint Creditors' Committee's
Application To Expand The Scope Of The Blackstone Group L.P.
As Financial Advisor, Motion For Approval of (1) Overbid
Procedures For Sale of Assets, (2) Minimum Overbids, (3)
Breakup Fee and (4) Cost Reimbursement, And Objections
Thereto and in accordance therewith and as modified hereby:
(i) if the Vendors are unable to consummate the sale of
the Purchased Assets to the Purchaser in accordance
with the terms and conditions set forth herein or
if the Purchaser terminates the Purchase Agreement
as set forth herein, but after February 14, 1997,
then the Purchaser shall be granted an
administrative expense claim under '503(b)(1), for
all its reasonable out-of-pocket fees, costs and
expenses (up to a maximum of $500,000) (the "Cost
Reimbursement") it incurred in connection with its
attempt to acquire the
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Purchased Assets, including, without limitation,
those fees (including without limitation attorneys'
and consultants' fees), costs and expenses incurred
in conducting due diligence efforts, negotiating the
terms and conditions of the proposed sale and
drafting the letter of intent dated July 30, 1996,
this Agreement and other documents to effectuate the
proposed sale. The Cost Reimbursement shall be
payable in accordance with subsequent orders of the
Bankruptcy Court, taking into account the Vendors'
operations and the existence of other administrative
claims. If the Cost Reimbursement is not paid
within sixty days of the allowance of the
administrative expense claim, the Purchaser shall be
entitled to interest on the Cost Reimbursement at
the London Interbank Offered Rate;
(ii) if the Sale is not approved by December 19, 1996,
the Purchaser shall have the right to terminate this
Agreement, which termination shall be effective upon
written notice to the Committee; and
(iii) if the Purchaser terminates its obligations under
this Agreement after December 11, 1996 but before
February 14, 1997, then the Cost Reimbursement shall
not become due and payable to the Purchaser.
However, if the Purchaser terminates its obligations
under this Agreement on or after February 14, 1997,
then the Cost Reimbursement shall become due and
payable to the Purchaser.
6.7 ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ APPROVAL. As soon as reasonably
practicable after the entry of the Order, the Vendors and the Purchaser shall
file an application under the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of
1976, as amended ("▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇") as "acquired parties" in connection with
the transactions contemplated hereby and shall request expedited treatment
thereof and shall file an application for an Exon-▇▇▇▇▇▇ waiver. To the extent
reasonably practicable, the Vendors and the Purchaser will cooperate in the
preparation of their respective applications prior to the entry of the Order.
The Vendors and the Purchaser shall use their reasonable best efforts to ensure
that all required ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ approvals in connection with the
transactions contemplated hereby are obtained prior to the Closing Date or all
required waiting periods under ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ have expired. The filing fee
for such ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ applications shall be shared equally by the
Purchaser on the one hand and the Vendors on the other hand.
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6.8 LIABILITIES OF SUBSIDIARIES. The Vendors shall pay or cause
to be paid in full or reserve, prior to the Closing Date, all Liabilities
(except for Assumed Obligations) of the Subsidiaries. The Vendors shall place
in trust from the proceeds of sale of the Purchased Assets an amount sufficient
to satisfy all such Liabilities which may exist after the Closing Date. The
amount the Vendors place in trust shall be no less than the sum of:
(a) all known and asserted, but disputed or otherwise unpaid
Liabilities of the Subsidiaries; and
(b) such other sums as the Vendors using reasonable business
judgment determine are necessary to satisfy any other unpaid
Liabilities (which are not assumed by Purchaser) or other
amounts owing or reasonably expected to be owing by the
Subsidiaries, including, without limitation, unliquidated or
contingent Liabilities.
These sums shall remain in trust to satisfy the Claims of all holders of a
Liability against the Subsidiaries until all such Liabilities or amounts are
satisfied in full or the Bankruptcy Court enters an order authorizing the
disbursement or reduction of such trust funds. The Swiss Utilities, but no
other parties, shall be considered as third party benificiaries of this section
6.8.
SECTION 7 - CONDITIONS OF CLOSING
7.1 CONDITIONS OF THE PURCHASER: The obligation of the Purchaser
to complete the purchase of the Business and the Purchased Assets contemplated
by this Agreement is subject to the fulfilment of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES: The representations and
warranties of the Vendors contained in this Agreement shall,
except as contemplated in this Agreement, be true and correct
on and as of the Closing in all material respects with the
same effect as though such representations and warranties had
been made as of the Closing;
(b) COVENANTS: All of the covenants and agreements of the
Vendors to be performed on or before the Closing pursuant to
this Agreement shall have been duly performed in all material
respects;
(c) COMPLETION OF LIQUIDATION: At least five business days prior
to Closing, the Liquidation shall have been completed to the
reasonable satisfaction of the Purchaser such that at least
five business days prior to Closing:
(i) all of the assets and liabilities of ▇-▇, ▇▇▇, ▇▇▇,
▇▇▇ or KNP, except the Swiss Royalty, will be assets
and liabilities of EFL; and
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(ii) the only interest that KKL, KKG, NOK and P-H will
have in any of ▇-▇, ▇▇▇, ▇▇▇, ▇▇▇ or KNP or any of
their respective assets or in EFL or any of its
assets will be the Swiss Royalty, the KKL Option and
the Term Loan;
provided however, that nothing herein shall be considered a
waiver by KKL, KKG or NOK of any rights and remedies against
the Vendors, their Affiliates, the Subsidiaries or ▇▇▇▇
▇▇▇▇▇▇ under or in connection with the Dissolution Agreement.
In addition and without limiting the foregoing, the
Liquidation shall have been completed as set forth in
paragraph 6.6(b)(x) and the Subsidiaries shall have executed
and delivered the Swiss Royalty;
(d) RECEIPT OF COURT ORDER REGARDING LIQUIDATION: The entry of a
non-appealable bankruptcy court order confirming that all of
the assets and liabilities of each of ▇-▇, ▇▇▇, ▇▇▇, ▇▇▇ and
KNP were acquired and assumed by EFL upon the Liquidation;
(e) ACCESS TO BOOKS AND RECORDS: The Purchaser shall have
received unrestricted access to the books and records and
personnel of each of the Vendors and the Subsidiaries, having
received all requested information relating to the Purchased
Assets and Business and having received all requested
cooperation from each of such parties, commencing on the date
hereof;
(f) BUSINESS IN ORDINARY COURSE: The Business of each of the
Vendors and Subsidiaries being carried on in the ordinary
course until Closing and there being no material adverse
change in the Business of any of the Vendors or the
Subsidiaries or in the Purchased Assets prior to Closing
(with the exception of changes arising as a result of the
transactions contemplated by this Agreement);
(g) MAINTENANCE OF PROPERTIES: Except as disclosed herein, the
Vendors and Subsidiaries making all payments and expenditures
and taking all steps necessary to keep each of the Purchased
Assets in good standing until Closing including, without
limitation, making the following payments:
(i) all payments required to be paid to employees for
wages, salaries and benefits and all state, federal
and local taxes and other required payments;
(ii) all payments required to keep all existing
properties and joint venture interests in good
standing;
(iii) all office and mill holding costs; and
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57
(iv) all real property and personal property taxes and
assessments;
(h) TRANSFER OF MONGOLIAN JOINT VENTURE INTEREST: Suitable
arrangements having been made with the other parties to the
Mongolian Joint Venture to enable the Mongolian Joint Venture
Interest to be transferred to the Purchaser or its nominee in
its present form (free of any new or additional liens,
charges, royalty interests, encumbrances and security
interests on any of the underlying assets of the Mongolian
Joint Venture);
(i) TRANSFER OF TITLE: Subject to paragraph 7.4 hereof, title to
the Purchased Assets having been transferred to the Purchaser
or its nominee or nominees as contemplated herein;
(j) URI AGREEMENT NOT CLOSED: The transactions set out in the
URI Agreement shall not have been completed, nor shall any
steps have been taken towards such completion;
(k) CANCELLATION OF OPTION AGREEMENT: The Option Agreement is
surrendered and cancelled by KKL to the reasonable
satisfaction of the Purchaser at Closing;
(l) TREATMENT OF LIENS: Any and all agreements between the
Vendors or the Subsidiaries and any other parties providing
for the creation or attachment of a lien, security interest,
royalty interest, option or other encumbrance (other than the
Permitted Encumbrances) upon any of the Purchased Assets
shall either, by agreement in writing satisfactory to the
Purchaser, be borne by EFL or EFEX or attach to the proceeds
of sale of the Purchased Assets;
(m) TREATMENT OF BENCO FAMILY PARTNERSHIP: ▇▇▇▇ ▇▇▇▇▇▇ and the
Benco Family Partnership shall surrender and cancel in
writing or other satisfactory evidence to the Purchaser
acting reasonably any and all agency agreements and other
agreements relating to or affecting the Mongolian Joint
Venture Interest or its underlying assets or any other
Purchased Assets;
(n) LIABILITIES OF SUBSIDIARIES: As of the Closing Date, the
Term Loan shall have been paid and, subject to clause (k)
above, all other Liabilities (except for Assumed Obligations)
of the Subsidiaries shall have been paid in full or the
Vendors shall have reserved from the proceeds of sale of the
Purchased Assets an amount sufficient to satisfy all such
Liabilities in a manner as set forth in paragraph 6.8 above;
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(o) UMETCO MATTERS: On or before Closing:
(i) the Purchaser shall have received written consents
executed by authorized officers of Umetco and Union
Carbide Corporation consenting to the payment-in-
full of the Umetco Note at Closing upon the
replacement of the Mill Bond in a form reasonably
satisfactory to the Purchaser. Such payment shall
consist of: (x) the lesser of the face amount of the
replacement Mill Bond or the principal and interest
due on the Umetco Note (excluding any offsets or
defenses) as of the date of the transfer of the Mill
Bond; and (y) a promissory note in the amount equal
to the residual amount owing under the Umetco Note,
if any, after payment of the amount set forth in
subsection (x) above, which note shall bear interest
at the rate set forth in the Umetco Note. Such note
shall be a negotiable instrument, free of any
claims, defenses and offsets as purchaser may
reasonably approve.
(ii) At the Closing, the payment referred to in clause
(i)(x) of this paragraph and the issuance of the
note referred to in clause (i)(y) of this paragraph
shall have occured;
(p) TRANSFER OF PERMITS AND LICENSES: Subject to paragraph 7.4
hereof, the Vendors shall have obtained receipt of any
necessary and material United States governmental state and
other regulatory approvals that are required in order to
complete the transfer of the Permits and Licenses so
contemplated hereunder including, without limitation,
issuances or transfer of all Nuclear Regulatory Commission
licenses relating to the Mill and other assets to the
Purchaser or its nominees.
(q) UMETCO PERMIT TRANSFERS. All Permits and Licenses relating
to any of the Purchased Assets held by Umetco, or any of
Umetco's Affiliates or other third parties shall have been
transferred to the Purchaser or its nominees or the Vendors
shall have posted an amount in escrow equal to two (2) times
the amount of the reclamation bond or surety obligation
associated with any delayed mine permit transfer.
(r) REQUIRED BANKRUPTCY NOTICE PROCEDURES. The Vendors shall
have advertised and provided notice of the Motion, the
Liquidation and the proposed sale to all parties in interest
and all entities holding a Liability against the Subsidiaries
or Vendors or their Affiliates in the jointly administered
bankruptcy proceedings. Such
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59
advertisement and notice shall have included, without
limitation, the following:
(i) the notice shall have been mailed, no less than
thirty days prior to a Bankruptcy Court hearing to
approve the sale or otherwise implement this
Agreement, to all known creditors and other entities
holding a Liability against the Subsidiaries or
Vendors or their Affiliates in the jointly
administered bankruptcy proceedings;
(ii) the notice shall have described, in reasonable
detail, the Liquidation and the proposed sale of the
Purchased Assets to the Purchaser;
(iii) the notice shall also have been served upon all
local, state and federal taxing and environmental
authorities as reasonably designated by Purchaser,
including those local, state and federal taxing and
environmental authorities in Colorado, Wyoming,
Utah, Arizona and Washington D.C.;
(iv) the Liquidation and sale of the Purchased Assets to
Purchaser shall have been advertised to provide
reasonable notice to all known or unknown creditors
of the Vendors and Subsidiaries of the transactions
contemplated herein and shall have included, without
limitation, advertisements or announcements (in a
form reasonably acceptable to the Purchaser) in the
following periodicals, newspapers or journals:
A. the Denver Post;
B. Nuclear Fuel;
C. South Utah News;
D. The Blue Mountain Panorama;
E. The Daily Sentinel;
F. The Casper Star-Tribune; and
G. Salt Lake Tribune.
(s) HECLA ACKNOWLEDGEMENT. The Purchaser shall have received an
acknowledgement and consent from Hecla consenting to the transfer by the
Vendors of their rights and interest in the Hecla Joint Venture and the
underlying property and acknowledging that the Purchaser or its nominee has the
rights and obligations of
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Union Carbide and Umetco under the joint venture documents and that such rights
and obligations are in good standing.
The foregoing conditions set forth in this Section 7.1 are inserted for the
exclusive benefit of the Purchaser and may be waived in whole or in part by the
Purchaser at any time.
7.2 CONDITIONS OF THE VENDORS. The obligation of the Vendors to
complete the sale of the Business and the Purchased Assets contemplated by this
Agreement is subject to the fulfilment of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES: The representations and
warranties of the Purchaser contained in this Agreement
shall, except as contemplated herein, be true on and as of
Closing in all material respects with the same effect as
though such representations and warranties had been made as
of Closing; and
(b) COVENANTS: All of the covenants and agreements of the
Purchaser to be performed on or before Closing pursuant to
this Agreement shall have been duly performed in all material
respects.
The foregoing conditions set forth in this Section 7.2 are inserted for the
exclusive benefit of the Vendors and may be waived in whole or in part by the
Vendors at any time.
7.3 MUTUAL CONDITIONS. The obligation of the Vendors to complete
the sale of the Business and Purchased Assets as contemplated by this Agreement
and of the Purchaser to complete the purchase of the Business and Purchased
Assets as contemplated by this Agreement is subject to fulfilment of the
following conditions:
(a) NO ORDERS OR PROCEEDINGS: No injunction or restraining order
of a court or administrative tribunal of competent
jurisdiction shall be in effect which prohibits the
transactions contemplated by this Agreement, and no action or
proceeding shall have been instituted or remain pending
before any such court or administrative tribunal to restrain
or prohibit the transactions contemplated by this Agreement;
(b) RECEIPT OF BANKRUPTCY COURT ORDERS: The Vendors shall have
complied with the procedures and obtained the court orders
referred to in paragraph 6.6;
(c) RECEIPT OF ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ APPROVAL: Receipt by the
Vendors and the Purchaser of ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ approval of
the transactions contemplated hereby or the expiration of all
▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ waiting periods;
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(d) TRANSFER OF SURETY BONDS: Appropriate arrangements having
been made to validly transfer all of the Surety Bonds and the
Bonding Security to the Purchaser or its nominees or, in the
event any such Surety Bonds are not transferred to the
Purchaser, the Purchaser shall have made reasonable efforts
to replace such Surety Bonds on terms acceptable to the
Purchaser in its reasonable discretion;
(e) THIRD PARTY CONSENTS: Receipt of all third-party consents
other than the software licenses, fax and copier rental
agreements, which are not material to the Business, or an
enforceable final and nonappealable Bankruptcy Court order
obviating the need for any such consents listed in Schedule
"S" hereto;
(f) JAPANESE CONSENTS: Receipt of all consents required for the
valid and enforceable assignment of the Japanese Contracts to
the Purchaser, which consents shall be in a form reasonably
acceptable to the Purchaser;
(g) ARGUNEXCO CONSENTS: Receipt of all consents required for the
valid and enforceable assignment of the Argunexco Joint
Venture to the Purchaser, which consents shall be in a form
reasonably acceptable to the Purchaser , provided that for
all such consents to be deemed to have been obtained, EFN
shall have been released from its guaranty of the agreement
dated _______ with respect to the supply of uranium to Duke
Power, or the Purchaser shall have agreed to provide such
guaranty to Duke Power;
(h) MILL BOND TRANSFER: Subject to the payment-in-full of the
Umetco Note, the Purchaser shall have replaced the Mill Bond
and thereby shall have released Umetco and Union Carbide from
the Mill Bond.
The foregoing conditions are inserted for the mutual benefit of the Vendors and
the Purchaser and may be waived in whole or in part only if jointly waived by
the Vendors and the Purchaser. If any of the foregoing conditions have not
been fulfilled by the Closing or shall, prior to the Closing, have become
incapable of fulfilment, either the Vendors or the Purchaser may terminate this
Agreement by notice to the other to that effect, without prejudice however to
any right or remedy of the Vendors or the Purchaser with respect to a breach of
any covenant in this Article or a failure to close the transaction contemplated
hereby within the time frames set out herein.
7.4 AGREEMENT TO WAIVE CONDITIONS: The Purchaser hereby
agrees to waive the condition set out in paragraphs 7.1(i) and (p) above with
respect to the transfer of any Permits and Licenses at or before Closing if the
Purchaser is satisfied, acting reasonably, that any such Permits or Licenses
not so transferred at or before Closing are:
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(a) not material to the Purchased Assets or Business; or
(b) if material, the Purchaser is satisfied that either
(i) the approval of the transfer of the Permit or
License is routine and will be granted within ninety
(90) days after the Closing; or
(ii) an adequate amount of the Purchase Price is held
back at Closing, over and above the Holdback amount
referred to in paragraph 3.3(b), to protect the
Purchaser if the Permit or License is not
transferred within a reasonable amount of time after
Closing.
For greater certainty, and without limitation, any Permits or
Licenses required to allow the Purchaser to fully operate the
Mill and operate and mine the Arizona 1 Mine, Canyon Mine,
Sunday Mine Complex and West Sunday Mine Complex and the Reno
Creek property are considered to be material to the Purchased
Assets and Business.
7.5 FURTHER ADJUSTMENTS. If one or more of the conditions referred to in
sections 7.1, 7.2 or 7.3 are not satisfied at or prior to Closing and the
Purchaser and Vendors mutually agree, the Purchaser and Vendors may negotiate a
change to the Purchase Price and/or an additional holdback (over and above the
holdback referred to in paragraph 3.3(b) to compensate for the failure of such
condition or conditions being satisfied.
SECTION 8 - CLOSING TRANSACTIONS
8.1 CLOSING DATE. Closing shall occur as soon as reasonably
practicable after the entry of the final Order of the Bankruptcy Court
approving the Purchase Agreement or the sale of the Purchased Assets in
accordance with '363(b) and (f), and in any event no later than February 14,
1997. If Closing does not occur by February 14, 1997, the Purchaser shall have
the right upon five days written notice to the Vendors and Committee following
February 14, 1997 to extend Closing for a thirty day period (the "First
Extension Period"). If the Purchaser does not elect to extend Closing, then
the Purchaser and the Vendors and Committee shall at such time and at all times
thereafter until Closing has occurred each have the right to terminate this
Agreement upon written notice to the other party without further obligation
except as provided herein. If the Purchaser elects to so extend Closing and
Closing does not occur before the end of the First Extension Period then the
Purchaser shall have the right upon five (5) days' written notice to the
Vendors and Committee following the expiration of the First Extension Period,
to extend Closing for a further thirty day period (the "Second Extension
Period"). If the Purchaser does not so elect to further extend Closing or
Closing does not occur within the Second Extension Period, then the Purchaser
and the Vendors and
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Committee shall at such time and at all times thereafter until Closing has
occurred each have the right to terminate this Agreement upon written notice to
the other party without further obligation except as provided herein. The
provisions of this paragraph 8.1 are subject to modification on the terms and
conditions set out in paragraph 8.9. The Vendors and the Purchaser shall be
obligated to close during any Extension Period upon the satisfaction or waiver
of the Closing Conditions set forth in Section 7.
8.2 TIME AND PLACE OF CLOSING. Closing shall be 10:00 a.m.
(M.S.T.) on the Closing Date, or such other time as the Vendors and the
Purchaser may agree upon in writing. The place for Closing shall be at the
offices of ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP, Denver, Colorado, or at such other place as
the Vendors and the Purchaser may agree upon in writing.
8.3 POSSESSION. Subject to Closing occurring, the Purchaser
shall be entitled to have possession of the Purchased Assets and Business as of
and from Closing, and the Vendors will, on Closing, forthwith deliver to the
Purchaser all keys in the possession of the Vendors relative to the Purchased
Assets. The parties agree to cooperate to achieve a swift but orderly transfer
of control of the Purchased Assets after Closing.
8.4 VENDOR'S CLOSING DOCUMENTS. At Closing, the Vendors will
deliver the following to the Purchaser:
(a) all deeds, bills of sale, transfers and assignments which are
necessary to assign or transfer the Purchased Assets or the
Vendors' interest in the Purchased Assets to the Purchaser as
contemplated by this Agreement in such form as the parties
may agree, acting reasonably;
(b) certified copies of resolutions of the directors and a
special resolution of the shareholders, partners, or
liquidating agent as the case may be, of each of the Vendors
approving the sale of the Business and Purchased Assets as
contemplated by this Agreement and the execution and delivery
of this Agreement and all documents required to be executed
by the Vendors pursuant to this Agreement;
(c) documents executed by the Swiss Utilities acknowledging their
consent to, and authorization of the Liquidating Agent (as
defined in the Dissolution Agreement) of the Subsidiaries to
implement the completion of the Liquidation, unless this
requirement is waived by the Purchaser;
(d) a certificate dated the Closing Date of an authorized officer
of each of the Vendors certifying that, to the best of the
officer's knowledge, the representations and warranties made
by the Vendors in this Agreement are true
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and correct in all material respects as at Closing and that
all covenants and agreements to be observed or performed by
the Vendors on or before Closing pursuant to the terms of
this Agreement have been duly observed and performed in all
material respects, with particulars of any applicable
exceptions;
(e) [This paragraph intentionally omitted]
(f) an opinion of the Vendors' counsel substantially in the form
of Schedule "T";
(g) evidence of the satisfaction or waiver of all conditions set
out in Section 7;
(h) good standing certificates and other customary closing
documents required by the Purchaser or its counsel, acting
reasonably;
(h) valid and binding releases, in a form reasonably acceptable
to the Purchaser, whereby Vendors and their successors and
assigns release the Purchaser from all claims arising under
''544-549 of the Bankruptcy Code;
(i) a statement from Vendors to the Purchaser regarding the
employees listed on Schedule "A", setting forth an accurate
description of the compensation, benefits, whether or not
unionized, position, job, classification, date of hire, age
and working location of each such employee and representing
and warranting to Purchaser the accuracy and validity of such
information; and
(j) a certificate from the Vendors stating that the Liquidation
has been completed as contemplated by this Agreement.
8.5 PURCHASER'S CLOSING DOCUMENTS. At the Closing the Purchaser
will deliver to the Escrow Agent a certified or an official bank check or draft
payable to the Escrow Agent in the amount of $1,500,000, pursuant to paragraph
3.3(b), and will deliver the following to the Vendors:
(a) a certified or official bank check or draft payable to the
Vendors, or as the Vendors or the Bankruptcy Court may order
or direct, in the amount specified in paragraph 3.3(a);
(b) documents with respect to the assumption by the Purchaser
from and after the Closing of the Assumed Obligations, in
such form as the parties may agree, acting reasonably;
(c) a certified copy of resolutions of the directors of the
Purchaser approving the purchase of the Business and the
Purchased Assets as contemplated by this Agreement and the
execution and delivery of this Agreement and all
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documents required to be executed by the Purchaser pursuant
to this Agreement;
(d) a certificate dated the Closing Date of an authorized officer
of the Purchaser certifying that, to the best of the
officer's knowledge, the representations and warranties made
by the Purchaser in this Agreement are true and correct in
all material respects as at the Closing and that the
covenants and agreements to be observed or performed by the
Purchaser on or before the Closing pursuant to the terms of
this Agreement have been duly observed and performed in all
material respects, with particulars of any applicable
exceptions;
(e) an opinion of the Purchaser's counsel substantially in the
form of Schedule "U";
(f) good standing certificates and other customary closing
documents required by the Vendors or its counsel, acting
reasonably;
(g) an assumption and assignment agreement relating to
Purchaser's assumption of that portion of Assumed Obligations
comprised of all Environmental and Reclamation Obligations in
a form as the parties may agree, acting reasonably; and
(h) an indemnification agreement, in a form set forth in Schedule
"Y".
8.6 CONCURRENT DELIVERY. It shall be a condition of the Closing
that all matters of payment and the execution and delivery of documents by each
party to the other all pursuant to the terms of this Agreement shall be
concurrent requirements and that nothing shall be complete at the Closing until
everything required as a condition precedent to the Closing has been paid,
executed and delivered.
8.7 DELIVERY OF BOOKS AND RECORDS. Immediately following the
Closing, the Vendors shall deliver or make available to the Purchaser in the
respective places where such documents are now located, the Books and Records,
together with the original Contracts, Permits and Licenses and Surety Bonds
which relate thereto to the extent in the possession of the Vendors.
8.8 TRANSFER. Subject to compliance with the terms and
conditions of this Agreement, the transfer of possession of the Purchased
Assets shall be deemed to take effect as at Closing.
SECTION 9 - ASSUMPTION OF OBLIGATIONS AND LIABILITIES
9.1 ASSUMPTION OF OBLIGATIONS AND LIABILITIES. Effective on the
Closing, the Purchaser or its nominee or nominees shall assume
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and be responsible for the performance of all obligations which are to be
observed or performed from and after the Closing Date under the Assumed
Obligations.
9.2 VENDOR'S OBLIGATIONS AND LIABILITIES. The Vendors shall be
responsible for the performance of all obligations and satisfaction of all
Liabilities pertaining to the Business and the Purchased Assets other than
those to be observed and performed by the Purchaser. The Vendors shall be
responsible for curing any defaults or arrearages relating to all Contracts and
other Purchased Assets which are to be assumed and assigned to Purchaser
including, without.limitation those defaults or arrearages set out in Schedule
"V" but excluding the defaults set forth in Schedule "Z".
9.3 COST AND TAX ALLOCATIONS. The Vendors shall pay any and all
federal or foreign taxes associated with or resulting from the transactions
contemplated hereby. Any state sales or use taxes shall be borne by the
Purchaser. Any state or local transfer taxes associated with or resulting from
the transactions contemplated hereby shall be borne equally by the Purchaser
and the Vendors with the Purchaser paying one-half of such tax obligations and
the remaining half paid by the Vendors. The Purchaser shall bear all
administrative costs and related filing fees imposed by governmental agencies
associated with the transfer of Permits and Licenses.
SECTION 10 - POST-CLOSING EVENTS
10.1 TRANSFERS OF EMPLOYMENT. The Vendors and the Purchaser shall
cooperate to effect an orderly transfer of employment of the Employees of the
Vendors and in that regard the Vendors shall give or cause to be given notice
of termination of employment effective the Closing Date to all Employees of the
Vendors and simultaneously therewith the Purchaser shall give offers of
employment (such employment to commence on the Closing Date) to each of such
Employees of the Vendors terminated by the Vendors.
10.2 CERTAIN OBLIGATIONS RESPECTING EMPLOYEES. The Vendors and
the Purchaser agree that the Vendors will be responsible for and will pay to
those Employees all obligations and Liabilities of the Vendors and the
Subsidiaries owing on account of any of the Employees in respect of any period
prior to the Effective Time, including, without limitation, all salaries,
wages, vacation pay, bonuses, commissions, incentive payments, severance and
retention payments, if any, and other like payments to which those Employees
may be entitled, whether or not accrued, as being payable in respect of any
period prior to the Effective Time.
10.3 CHANGE AND USE OF NAME. The Vendors agree that as soon as
possible after the Closing Date the Vendors shall change their names and the
names of any of their Affiliates that include the words "Energy Fuels" to a
name that does not include the words
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"Energy Fuels" or any part thereof or any similar words. The Vendors agree
that from and after the Closing Date neither the Vendors nor any of their
Affiliates will use as a business name or name of an entity the words "Energy
Fuels" or any part thereof or any similar words. The Vendors will deliver to
the Purchaser at the Closing all documentation required to effect such name
changes.
The Vendors shall, prior to the Closing, pass all necessary
resolutions to change their names to names which do not include the words
"Energy Fuels" and shall take all steps reasonably required in order to permit
the Purchaser and its nominees to use that name. Purchaser acknowledges that
▇▇▇▇ ▇▇▇▇▇ may have the non-exclusive right to use the "Energy Fuels" name.
10.4 EXECUTORY CONTRACTS AND UNEXPIRED LEASES. Within sixty days
after the Closing Date, the Purchaser shall notify the Vendors of any executory
contracts or unexpired leases which Purchaser seeks to assume but which are not
listed on Schedule "D" which executory contracts or unexpired leases relate to
the Business and are not subject to a previous court order under '365 of the
Bankruptcy Code authorizing the assumption and assignment of such executory
contracts or unexpired lease to the Purchaser. The Vendors shall thereafter
use their best efforts to assume and assign to the Purchaser such executory
contracts and unexpired leases.
SECTION 11 - SURVIVAL OF REPRESENTATIONS AND RECOURSE
11.1 SURVIVAL. The representations and warranties of the
Purchaser contained in paragraph 5.1 of this Agreement shall survive the
completion of the transactions contemplated hereby and shall continue in full
force and effect thereafter for a period of 12 months after the Closing Date,
after which they shall expire; provided however, that if the Vendors assert a
claim based upon the representations and warranties of the Purchaser contained
in this Agreement within 12 months after the Closing Date, then such claim
shall continue until resolved or otherwise adjudicated. The Purchaser's
covenants and agreements set out in paragraphs 5.1(e), 5.1(f), 6.5, 9.1, 9.3,
10 and 11 and all other covenants and agreements of the Purchaser set out in
this Agreement including, but not limited to, assumption of the Assumed
Obligations that do not relate to obligations to be performed at or before
Closing, shall survive indefinitely or for such shorter time period as
expressly set out therein. The representations, warranties, and agreements of
the Vendors contained in this Agreement shall survive the completion of the
transactions contemplated hereby and shall continue in full force and effect
thereafter for a period of 12 months after the Closing Date with the exception
of the representations and warranties set out in paragraph 4.2.4(d), which
shall survive indefinitely; provided however, that if the Purchaser asserts a
claim based upon the representations, warranties, and agreements of the Vendors
contained in this Agreement within 12
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68
months after the Closing Date, then such claim shall continue until resolved or
otherwise adjudicated. The Vendors covenants set out in paragraphs 4.2.4(c),
4.2.7(a), 4.2.7(c), 4.2.8(d), 6.4, 6.8 and 9.3 and Sections 10 and 11 and all
other covenants and agreements of the Vendors set out of this Agreement that
do not relate to obligations to be performed at or before Closing shall survive
indefinitely or for such shorter time period as expressly set out therein.
11.2 INDEMNITY BY THE VENDORS. Subject to the limitations set
forth in paragraphs 11.1 and 11.5, in addition to any rights the Purchaser has
under this Agreement with respect to any claims, the Vendors will indemnify and
save the Purchaser harmless from and against all losses, costs, damages,
expenses, penalties and Liabilities suffered or incurred by the Purchaser or
its nominee or nominees:
(a) by reason of a breach of any representation, warranty,
covenant or agreement of the Vendors set forth in this
Agreement;
(b) arising out of or in connection with any Liabilities or
obligations of the Vendors that are not Assumed Obligations
by the Purchaser pursuant to this Agreement relating to the
Business or any of the Purchased Assets; and
(c) arising out of or in connection with any Liabilities of the
Subsidiaries which are not Assumed Obligations.
For greater certainty, the indemnity obligations of the Vendors to the
Purchaser shall be limited to the Holdback Amount except for claims arising
under paragraph 11.2(c) which shall be unlimited.
11.3 INDEMNITY BY THE PURCHASER: Subject to the limitations set
forth in paragraphs 11.1 and 11.5, in addition to any rights the Vendors have
under this Agreement with respect to any claims, the Purchaser will indemnify
and save the Vendors harmless from and against all losses, costs, damages,
expenses, penalties and Liabilities suffered or incurred by the Vendors:
(a) by reason of a breach of any representation, warranty,
covenant or agreement of the Purchaser set forth in this
Agreement; and
(b) arising out of or in connection with any obligations
comprising the Assumed Obligations.
11.4 DEFENSE OF INDEMNITY CLAIMS. In the event of a claim (an
"Indemnity Claim") being made by a third party against a party hereto (the
"Indemnified Party") in respect of which another party (the "Indemnifier") has
covenanted to indemnify the Indemnified Party, the following provisions shall
apply.
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The Indemnified Party shall promptly give notice to the
Indemnifier of any Indemnity Claim in respect of which the Indemnified Party
intends to claim for indemnification against the Indemnifier under this
Agreement. Such notice shall specify with reasonable particularity (to the
extent that the information is available) the nature of the Indemnity Claim.
The Indemnifier shall, at its own expense, assume control of the negotiation,
settlement and defense of such Indemnity Claim. The Indemnified Party shall
cooperate with the Indemnifier in respect of such Indemnity Claim, and the
Indemnifier shall reimburse the Indemnified Party for all the Indemnified
Party's reasonable expenses as a result of the Indemnifier's assumption of such
Indemnity Claim and arising from the Indemnified Party's cooperation. The
Indemnified Party shall have the right to participate in the negotiation,
settlement and defense of such Indemnity Claim at its own expense and shall
have the right to disagree on reasonable grounds with the selection and
retention of counsel, in which case counsel satisfactory to the Indemnifier and
the Indemnified Party shall be retained by the Indemnifier. If the Indemnifier
fails to defend any Indemnity Claim within a reasonable time, the Indemnified
Party shall be entitled to assume control of the Indemnity Claim at the expense
of the Indemnifier, and the Indemnifier shall be bound by the results obtained
by the Indemnified Party with respect to such Indemnity Claim.
11.5 EXTENT OF HOLDBACK CLAIMS. Any Holdback Claims made by the
Purchaser for any breaches of representation, warranty, covenant or agreement
of the Vendors contained herein or for indemnification shall be limited in
aggregate to the $1,500,000 deposited with the Escrow Agent under the Escrow
Agreement plus accrued interest except for any Holdback Claims in connection
with any Liabilities of the Subsidiaries which are not Assumed Obligations,
which such claims shall be unlimited. However, the parties agree that the
party substantially prevailing in any disputed Holdback Claim shall be entitled
to reimbursement for reasonable attorney's and other professional's actual fees
and disbursements incurred in prosecuting or defending any disputed Holdback
Claim. If the Claim is determined, as to liability, partially, but not
substantially in favor of the Purchaser and partially, but not substantially in
favor of the Vendors, or the amount of the Holdback Claim is decided somewhere
between the amount claimed by the Purchaser and Vendors but not substantially
in favor of either the Purchaser or the Vendors, then the court or other
appropriate authorities that made the determination shall apportion such fees
and expenses fairly between the parties.
11.6 ADDITIONAL RULES AND PROCEDURES. The following provisions
shall also apply with respect to Indemnity Claims:
(a) In the event that any Indemnity Claim is of a nature such
that the Indemnified Party is legally bound or required by
applicable law to make a payment to any person (a "Third
Party") with respect to such Indemnity Claim before the
completion of settlement negotiations or related legal
proceedings, including without limitation,
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the posting of any security to stay any process of execution
or judgment, the Indemnifier shall, subject to the
limitations set forth in paragraph 11.5 be obligated to make
such payment or post security therefor, on behalf of the
Indemnified Party. If the Indemnifier fails to do so, the
Indemnified Party may make such payment or post security
therefor and the Indemnifier shall, forthwith after demand by
the Indemnified Party, reimburse the Indemnified Party for
any such payment or cause the security to be replaced and
released. If the amount of any liability of the Indemnified
Party under the Indemnity Claim in respect of which such a
payment was made, as finally determined, is less than the
amount which was paid by the Indemnifier to the Indemnified
Party, the Indemnified Party shall, forthwith after receipt
of the difference from the third party, pay the amount of
such difference to the Indemnifier.
(b) Except in the circumstance contemplated by paragraph 11.6(a),
or unless the Indemnifier fails to assume control of the
negotiation, settlement and defense of any Indemnity Claim,
the Indemnified Party shall not negotiate, settle, compromise
or pay any Indemnity Claim except with the prior written
consent of the Indemnifier (which consent shall not be
unreasonably withheld).
(c) The Indemnified Party shall not permit any right of appeal in
respect of any Indemnity Claim to terminate without giving
the Indemnifier notice thereof and an opportunity to contest
such Indemnity Claim.
(d) The Indemnified Party and the Indemnifier shall cooperate
fully with each other with respect to Indemnity Claims, shall
keep each other fully advised with respect thereto (including
supplying copies of all relevant documentation promptly as it
becomes available) and shall each designate a senior officer
who will keep himself informed about and be prepared to
discuss the Indemnity Claim with his counterpart and with
counsel at all reasonable times.
(e) Notwithstanding anything else in this paragraph 11.6, the
Indemnifier shall not settle any Indemnity Claim or conduct
any related legal or administrative proceeding in a manner
which would, in the opinion of the Indemnified Party, acting
reasonably, have a material adverse impact on the Indemnified
Party.
(f) The provisions of paragraph 11.4 and this paragraph 11.6 are
intended to set out the procedures to be followed with
respect to an Indemnity Claim and, provided the Indemnified
Party follows such procedures in all material respects,
nothing contained in paragraph 11.4 and this paragraph 11.6
shall derogate from the Indemnifier's obligations to
indemnify the Indemnified Party as otherwise provided in this
Agreement.
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11.7 COOPERATION AND EXCHANGE OF INFORMATION. The Vendors, the
Subsidiaries and the Purchaser shall provide each other with such cooperation
and information as any of them reasonably may request of the others in
connection with their respective business operations including, without
limitation, litigation matters, accounting matters, filing any Tax Return,
determining a liability for Taxes or a right to a refund of Taxes or in
conducting any audit or proceeding in respect of Taxes. Such cooperation and
information shall include, without limitation, providing copies of relevant Tax
Returns or portions thereof, together with accompanying schedules and related
work papers and documents relating to rulings or other determinations by Taxing
authorities. Each party shall make its employees available on a mutually
convenient basis to provide explanation of any documents or information
provided hereunder. Each party shall, upon written request from the other
party, provide such factual information reasonably necessary for litigation
matters, accounting matters, filing Tax Returns, Tax planning, contesting any
Tax audit or for such other reasonable purposes. In addition, if the Purchaser
intends to offer employment to a former employee of the Vendors, the Vendors
shall, at the request of the Purchaser, provide the Purchaser with any records
or files relative to any such former employee. Vendors shall maintain and
safeguard all information relating to accounting matters, Tax returns, Tax
planning, contesting Tax amounts or litigation and all files relating to former
employees and shall not destroy it without at least 30 days prior written
notice to Purchaser.
Any information or copies thereof retained or acquired by the Vendors
that relates to any of the Purchased Assets or Business shall be maintained as
confidential by the Vendors and shall not be used by the Vendors for any
purpose that would be contrary to the interests of or competitive with the
Purchaser or that would impair the value to the Purchaser of any of the
Purchased Assets or the Business. Any such information shall cease to be
confidential if such information has been publicly disseminated other than as a
result of disclosure by any of the Vendors or by their directors, officers,
shareholders, owners, agents or representatives.
11.8 DISPUTE RESOLUTION. Unless otherwise specifically set forth
herein, for any dispute concerning the terms of this Agreement or either
party's performance hereunder which the parties have failed to resolve by good
faith negotiation, the following procedure shall apply:
(a) the dispute shall be submitted to the jurisdiction of the
Bankruptcy Court for resolution; and
(b) if the Bankruptcy Court declines jurisdiction, then the
dispute shall be resolved by the following arbitration
procedures:
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(i) Either party may serve a demand for arbitration upon
the other party, naming an arbitrator, via certified
mail. The party upon which the demand is served
shall serve a response upon the party serving the
demand naming a second arbitrator, within 30 days
after receipt of said demand. The two arbitrators
shall name a third arbitrator and, upon their
failure to do so within 15 days after the naming of
the second arbitrator, the third arbitrator shall be
named by the American Arbitration Association
("AAA"), Denver, Colorado.
(ii) The parties shall submit an agreed-upon statement of
issues to the arbitrators within 30 days after the
third arbitrator is selected, or, if they cannot
agree upon the issues, each party shall submit its
proposed statement of issues. Within 30 days after
the statement(s) of issues is filed, each party
shall submit a list of witnesses whom it intends to
call at the hearing, including a summary of
testimony which each witness will give at the
hearing. The parties may amend said list at any
time prior to 30 days before trial. In no event
shall either party be allowed to call a witness who
is not included in that party's witness list.
(iii) Before the hearing, the parties shall have the
opportunity to conduct reasonable discovery, which
shall include written interrogatories and requests
for admissions, document exchanges and limited
depositions; provided, however, that each party
shall only be allowed four depositions, 25
interrogatories (including all discrete subparts) 25
requests for production of documents and ten
requests for admissions or such other discovery
reasonably approved by the arbitrator.
(iv) The arbitration shall be conducted pursuant to the
Commercial Arbitration Rules of the AAA. The
arbitrators shall render a decision in writing based
upon the statement(s) of issues submitted by the
parties, the evidence presented at the hearing, the
Agreement, and the laws of the State of Colorado.
(v) Pending a decision by the arbitrators, the Agreement
shall remain in full force and effect and each party
shall fully perform its obligations under the
Agreement without prejudice to the dispute which is
being
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arbitrated, to the extent such performance is
practicable.
SECTION 12 - MISCELLANEOUS
12.1 NOTICES. Any notice, request, demand or communication
required or permitted to be given under this Agreement shall be in writing and
delivered by hand or facsimile transmission to the party to which it is to be
given as follows:
To the Vendors:
Holden & ▇▇▇▇▇▇, P.C.
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
To the Purchaser:
International Uranium Holdings Corporation
1320 - ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
or to such other address as a party may specify by notice given in accordance
with this Section. Any such notice, request, demand or communication given
shall be deemed to have been given, in the case of delivery by hand, when
delivered, and in the case of delivery by facsimile transmission, when a
legible facsimile is received by the recipient if received before 5:00 p.m. on
a Business Day or on the next Business Day if such facsimile is received on a
day which is not a Business Day or after 5:00 p.m. on a Business Day.
12.2 FURTHER ASSURANCES. Each of the parties shall execute and
deliver all such further documents and do such further acts and things as may
be reasonably required from time to time to convey title to the Purchased
Assets to the Purchaser or to otherwise give effect to this Agreement.
12.3 TIME IS OF THE ESSENCE. Time shall be of the essence of this
Agreement.
12.4 DISCLOSURE OF INFORMATION. The Vendors confirm their
understanding and agreement with the Purchaser that, upon execution and
delivery of this Agreement and the entry of the Bankruptcy Court Order
approving the transactions contemplated herein, the Purchaser shall be
permitted to disclose confidential information that it and its agents have
received from the Vendors to the public
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by way of offering memorandum, proxy statement or similar disclosure document
for the purposes of a public financing of the Purchaser, the proceeds of which
will be used in connection with the Purchased Assets. Provided, however, the
Purchaser shall obtain express consent from Chubu Electric Power Company,
Kyushu Electric Power Company and Sumitomo Corporation before disclosing any
confidential information relating to the Japanese Contracts.
12.5 ASSIGNMENT. Except with the written consent of the other
party, neither the Vendors nor the Purchaser may assign any of their respective
benefits, obligations or liabilities under or in respect of this Agreement,
provided that, at any time prior to the Closing, the Purchaser may, without any
such consent, assign all of its rights and benefits under this Agreement to one
or more nominees of the Purchaser which deliver to the Vendors an instrument in
writing executed under seal by such nominee or nominees confirming that they
are bound by and shall perform all of the obligations of the Purchaser under
the agreement as if they were an original signatory thereto, jointly and
severally bound thereby with the Purchaser, and such instrument in writing
shall contain an acknowledgement under seal of the Purchaser that it continues
to be bound by the Agreement. In the event of an assignment contemplated
above, any reference in this Agreement to the "Purchaser" shall be deemed to
include the assignee.
12.6 NO RIGHTS OF THIRD PARTIES. Other than the rights of parties
under the assumption and assignment agreements to be executed by the Purchaser
and except as otherwise provided in sections 4.2.4(c) and 6.8, nothing in this
Agreement is intended or shall be construed to confer upon or give any person
or entity any rights or remedies under or by reason of this Agreement or any
transaction that this Agreement contemplates.
12.7 INUREMENT. This Agreement shall inure to the benefit of and
shall be binding upon the parties hereto and their respective successors and
any nominees of the Purchaser which is an assignee of the Purchaser as
contemplated in paragraph 12.4.
12.8 FAILURE TO ACT IN GOOD FAITH. Notwithstanding any other
provision in this Agreement, the Purchaser and the Vendors shall act in good
faith and shall use good faith efforts to consummate the transactions
contemplated hereby. Notwithstanding any other provision in this Agreement, if
the Vendors do not act in good faith or do not use good faith efforts to
consummate the transactions contemplated hereby, whether because of changes in
the price of uranium or vanadium or the identification of other parties
interested in acquiring all or a portion of the Purchased Assets or Business or
otherwise, and the transactions contemplated hereby are not completed in
accordance with the terms hereof, the Purchaser shall be entitled to full
damages at law and in equity without any limitation or agreement to liquidated
damages or limitation as to cost reimbursement.
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IN WITNESS WHEREOF the parties hereto have executed this
Agreement as of the day and year first above written.
C/S ENERGY FUELS EXPLORATION CO.,
Debtor-in-Possession
By:
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
C/S ENERGY FUELS LTD., Debtor-in-
Possession
By Energy Fuels Mining Joint Venture,
Debtor-in-Possession
Its General Partner
By First Concord Mining Company
Its General Partner
By:
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
C/S ENERGY FUELS NUCLEAR INC.
By:
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇, Chairman
C/S INTERNATIONAL URANIUM HOLDINGS
CORPORATION
By:
----------------------------------
▇▇▇▇ ▇. ▇▇▇▇▇▇▇, President