Item 1.01 Entry into a Material Definitive Agreement.
On August 4, 2016, Energy Fuels Inc. (the “Company”) held a
special meeting (the “Meeting”) of the holders of its floating rate convertible
unsecured subordinated debentures (the “Debentures”) in order to approve the
following amendments to the Debentures (the “Amendments”):
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1.
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Extend the maturity date of the Debentures from June 30,
2017 to December 31, 2020;
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2.
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Reduce the conversion price of the Debentures from
Cdn$15.00 to Cdn$4.15 per common share of the Company;
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3.
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Add a redemption provision that enables the Company to
redeem the Debentures upon providing not less than 30-days’ notice, in
cash, in whole or in part, at any time after June 30, 2019, but prior to
maturity, at a price of 101% of the aggregate principal amount
redeemed;
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4.
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Add a right in favor of each Debentureholder to enable
the Debentureholder to require the Company to purchase, for cash, on June
30, 2017 up to 20% of the Debentures held by the Debentureholder at a
price equal to 100% of the principal amount purchased;
and
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5.
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Make amendments to the Indenture (as hereinafter defined)
as required by the U.S. Trust Indenture Act of 1939, and remove provisions
of the Indenture that no longer apply.
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The Debentures were originally issued on July 24, 2012 pursuant
to the Convertible Debenture Indenture dated July 24, 2012 (the “Indenture”) between
the Company and BNY Trust Company of Canada (the “Trustee”). Following the
Meeting, the Company entered into the Amended and Restated Convertible Debenture
Indenture dated August 4, 2016 (the “Amended Indenture”) among the Company, the
Trustee and The Bank of New York Mellon (the “U.S. Trustee”) in order to
implement the Amendments.
As of August 4, 2016, a total of Cdn$22,000,000 principal
amount of Debentures were outstanding. The Debentures accrue interest, payable
semi-annually in arrears on June 30 and December 31 of each year at a
fluctuating rate, of not less than 8.5% and not more than 13.5% per year, indexed to the
simple average spot price of uranium as reported on the UxC Weekly Indicator
(Spot
Price) published by the Ux Consulting Company, LLC. The Debentures may be redeemed in whole or part, at par plus accrued and
unpaid interest by the Company at any time prior to maturity provided the volume
weighted average trading price of the common shares of the Company (the “Common
Shares”) on the Toronto Stock Exchange (“TSX”) during the 20 consecutive trading days ending five days
preceding the date on which the notice of redemption is given is not less than
125% of the conversion price. The interest rate applicable to the Debentures
remains unchanged, and the following chart displays the interest rate applicable
to the Debentures at various U
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price levels:
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UxC U
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Weekly Indicator Price
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Annual Interest Rate
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Up to $54.99
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8.50%
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$55.00–$59.99
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9.00%
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$60.00–$64.99
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9.50%
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$65.00–$69.99
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10.00%
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$70.00–$74.99
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10.50%
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$75.00–$79.99
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11.00%
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$80.00–$84.99
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11.50%
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$85.00–$89.99
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12.00%
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$90.00–$94.99
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12.50%
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$95.00–$99.99
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13.00%
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$100 and above
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13.50%
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Interest is paid in cash and in addition, unless an event of
default has occurred and is continuing, the Company may elect, from time to
time, subject to applicable regulatory approval, to satisfy its obligation to
pay interest on the Debentures, on the date it is payable under the indenture
(i) in cash; (ii) by delivering sufficient Common Shares to the Trustee, for
sale, to satisfy the interest obligations in accordance with the Amended
Indenture in which event holders of the Debentures will be entitled to receive a
cash payment equal to the proceeds of the sale of such Common Shares; or (iii)
any combination of (i) and (ii).
Upon redemption or at maturity, the Company will repay the
indebtedness represented by the Debentures by paying to the Trustee in Canadian
dollars an amount equal to the aggregate principal amount of the outstanding
Debentures which are to be redeemed or which have matured, as applicable,
together with accrued and unpaid interest thereon.
Subject to any required regulatory approval and provided no
event of default has occurred and is continuing, the Company has the option to
satisfy its obligation to repay the Cdn$1,000 principal amount of the
Debentures, in whole or in part, due at redemption or maturity, upon at least 40
days’ and not more than 60 days’ prior notice, by delivering that number of
Common Shares obtained by dividing the Cdn$1,000 principal amount of the
Debentures maturing or to be redeemed as applicable, by 95% of the
volume-weighted average trading price of the Common Shares on the TSX during the
20 consecutive trading days ending five trading days preceding the date fixed
for redemption or the maturity date, as the case may be.
In the event of a change in control of the Company, as that
term is defined in the Amended Indenture, the Company must make a written offer
to the Debentureholders to purchase all of the then outstanding Debentures at a
price equal to 100% of the principal amount plus accrued and unpaid interest or
convert the Debentures into Common Shares pursuant to a formula set forth in the
Amended Indenture.
The Amended Indenture sets forth certain events which
constitute an event of default, as that term is defined in the Amended
Indenture, in the event of which, the principal, interest and premium (if any)
on all Debentures then outstanding may become immediately due and payable to the
Trustees. Such payment acceleration is within the discretion of the Trustees
unless at least 25% of the principal amount of Debentures outstanding request,
in writing, that such payment be accelerated, in which case acceleration is
non-discretionary.
The foregoing summary of the Amendments and the Amended
Indenture is subject to the full terms of the Amended Indenture which is filed
as Exhibit 4.1 to the Company’s Form 10-Q Quarterly Report for the quarter ended
June 30, 2016 filed with the SEC on August 5, 2016.