EXHIBIT 4.2
WARRANT INDENTURE
PROVIDING FOR THE ISSUE OF UP TO __
SHARE PURCHASE WARRANTS
BETWEEN
GOLDEN STAR RESOURCES LTD.
- AND -
CIBC MELLON TRUST COMPANY
DATED AS OF JUNE __, 2002
TABLE OF CONTENTS
PAGE
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ARTICLE 1....................................................................................1
INTERPRETATION...............................................................................1
1.1 Definitions......................................................................1
1.2 Gender and Number................................................................5
1.3 Interpretation not Affected by Headings, etc. ...................................5
1.4 Day not a Business Day...........................................................5
1.5 Time of the Essence..............................................................5
1.6 Currency.........................................................................5
1.7 Applicable Law...................................................................6
ARTICLE 2....................................................................................6
ISSUE OF PURCHASE WARRANTS...................................................................6
2.1 Issue of Purchase Warrants.......................................................6
2.2 Form and Terms of Purchase Warrants..............................................6
2.3 Warrantholder not a Shareholder..................................................7
2.4 Purchase Warrants to Rank Pari Passu.............................................7
2.5 Signing of Warrant Certificates..................................................7
2.6 Certification by the Trustee.....................................................7
2.7 Issue in Substitution for Warrant Certificates Lost, etc. .......................7
2.8 Exchange of Warrant Certificates.................................................8
2.9 Charges for Exchange.............................................................8
2.10 Transfer and Ownership of Purchase Warrants......................................8
ARTICLE 3....................................................................................9
EXERCISE OF PURCHASE WARRANTS................................................................9
3.1 Intentionally Left Blank.........................................................9
3.2 Method of Exercise of Purchase Warrants.........................................10
3.3 Effect of Exercise of Purchase Warrants.........................................11
3.4 Partial Exercise of Purchase Warrants; Fractions................................11
3.5 Extension of Time of Expiry.....................................................12
3.6 Expiration of Purchase Warrants.................................................12
3.7 Cancellation of Surrendered Purchase Warrants...................................12
3.8 Accounting and Recording........................................................12
3.9 Postponement of Delivery of Certificates........................................13
ARTICLE 4...................................................................................13
ADJUSTMENT OF NUMBER OF COMMON SHARES.......................................................13
4.1 Adjustment of Number of Common Shares...........................................13
4.2 Other Action....................................................................17
4.3 Entitlement to Shares on Exercise of Purchase Warrant...........................17
4.4 No Adjustment for Stock Options.................................................18
4.5 Determination by Corporation's Auditors.........................................18
4.6 Proceedings Prior to any Action Requiring Adjustment............................18
4.7 Certificate of Adjustment.......................................................18
4.8 Notice of Special Matters.......................................................18
4.9 No Action after Notice..........................................................19
4.10 Protection of Trustee...........................................................19
ARTICLE 5...................................................................................19
RIGHTS OF THE CORPORATION AND COVENANTS.....................................................19
5.1 Optional Purchases by the Corporation...........................................19
5.2 General Covenants...............................................................20
5.3 Trustee's Remuneration and Expenses.............................................21
5.4 Securities Qualification Requirements...........................................21
5.5 Performance of Covenants by Trustee.............................................22
ARTICLE 6...................................................................................22
ENFORCEMENT.................................................................................22
6.1 Suits by Warrantholders.........................................................22
6.2 Immunity of Shareholders, etc. .................................................23
6.3 Limitation of Liability.........................................................23
6.4 Waiver of Default...............................................................23
ARTICLE 7...................................................................................24
MEETINGS OF WARRANTHOLDERS..................................................................24
7.1 Right to Convene Meetings.......................................................24
7.2 Notice..........................................................................24
7.3 Chairman........................................................................24
7.4 Quorum..........................................................................24
7.5 Power to Adjourn................................................................25
7.6 Show of Hands...................................................................25
7.7 Poll and Voting.................................................................25
7.8 Regulations.....................................................................25
7.9 Corporation and Trustee May be Represented......................................26
7.10 Powers Exercisable by Extraordinary Resolution..................................26
7.11 Meaning of Extraordinary Resolution.............................................28
7.12 Powers Cumulative...............................................................28
7.13 Minutes.........................................................................29
7.14 Instruments in Writing..........................................................29
7.15 Binding Effect of Resolutions...................................................29
7.16 Holdings by Corporation or Subsidiaries of Corporation Disregarded..............29
ARTICLE 8...................................................................................30
SUPPLEMENTAL INDENTURES.....................................................................30
8.1 Provision for Supplemental Indentures for Certain Purposes......................30
8.2 Successor Corporations..........................................................31
ARTICLE 9...................................................................................31
CONCERNING THE TRUSTEE......................................................................31
9.1 Trust Indenture Legislation.....................................................31
9.2 Rights and Duties of Trustee....................................................31
9.3 Evidence, Experts and Advisers..................................................32
9.4 Documents, Monies, etc. Held by Trustee.........................................33
9.5 Actions by Trustee to Protect Interest..........................................34
9.6 Trustee Not Required to Give Security...........................................34
9.7 Protection of Trustee...........................................................34
9.8 Replacement of Trustee; Successor by Merger.....................................34
9.9 Conflict of Interest............................................................35
9.10 Indemnity of Trustee............................................................35
9.11 Acceptance of Trust.............................................................36
9.12 Trustee Not to be Appointed Receiver............................................36
9.13 Purchase Warrant Register.......................................................36
9.14 Register Open for Inspection....................................................36
9.15 Trustee Not Required to Give Notice of Default..................................36
ARTICLE 10..................................................................................37
GENERAL.....................................................................................37
10.1 Notice to the Corporation and the Trustee.......................................37
10.2 Notice to Warrantholders........................................................38
10.3 Ownership and Transfer of Purchase Warrants.....................................38
10.4 Evidence of Ownership...........................................................39
10.5 Counterparts....................................................................39
10.6 Satisfaction and Discharge of Indenture.........................................39
10.7 Successors......................................................................39
10.8 Sole Benefit of Parties and Warrantholders......................................40
10.9 Common Shares or Purchase Warrants Owned by the Corporation or its
Subsidiaries - Certificate to be Provided.......................................40
THIS WARRANT INDENTURE is made as of the ___ day of June, 2002.
BETWEEN:
GOLDEN STAR RESOURCES LTD., a body corporate amalgamated under the laws
of Canada having an office in Littleton, in the State of Colorado
(hereafter referred to as the "Corporation")
- and --
CIBC MELLON TRUST COMPANY, a trust company incorporated under the laws
of Canada and authorized to carry on business in all provinces of Canada
(hereinafter referred to as the "Trustee")
WHEREAS:
A. the Corporation has agreed to issue up to ___ Units, including Units
issuable to the Underwriters and the U.S. Agents pursuant to the
Underwriting Agreement and the Agency Agreement, each Unit entitling the
holder to acquire one Common Share and one half of one Purchase Warrant;
B. the Corporation is duly authorized to create and issue the Purchase Warrants
to be issued as herein provided;
C. one whole Purchase Warrant shall, subject to adjustment, entitle the holder
thereof to acquire one Common Share upon payment of the Exercise Price, upon the
terms and conditions herein set forth;
D. all acts and deeds necessary have been done and performed to make the
Purchase Warrants, when issued as provided in this Indenture, legal, valid and
binding upon the Corporation with the benefits and subject to the terms of this
Indenture; and
E. the foregoing statements of fact and recitals are made by the Corporation and
not the Trustee;
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In this Indenture, including the recitals and schedules hereto, and in all
indentures supplemental hereto:
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a. "AMEX" means the American Stock Exchange LLC;
b. "APPLICABLE LEGISLATION" means the provisions of the Statutes of Canada
and its provinces, and the regulations under those statutes, relating to
trust indentures or to the rights, duties and obligations of trustees
and of corporations under trust indentures, to the extent that such
provisions are at the time in force and applicable to this Indenture;
c. "BUSINESS DAY" means a day which is not Saturday or Sunday or a legal
holiday in the United States or in the City of Vancouver, British
Columbia;
d. "CLOSING" means the completion of the purchase and sale of Units other
than Units issued upon exercise of the Over-Allotment Option, pursuant
to the Prospectus;
e. "CLOSING DATE" means the day the Closing occurs;
f. "COMMON SHARES" means fully paid and non-assessable common shares of the
Corporation as presently constituted provided that in the event of an
adjustment of subscription rights pursuant to Article 4, then "Common
Share" shall thereafter mean a share or other security or property
purchasable upon exercise of one Purchase Warrant as a result of any
such adjustment;
g. "CORPORATION'S AUDITORS" means a firm of chartered accountants duly
appointed as auditors of the Corporation;
h. "COUNSEL" means a barrister or solicitor or a firm of barristers and
solicitors retained by the Trustee or retained by the Corporation and
acceptable to the Trustee;
i. "CURRENT MARKET PRICE" means at any date the weighted average closing
price at which the Common Shares have been traded on AMEX during the 30
consecutive Trading Days ending one Trading Day before such date; and in
the event the Common Shares are not listed on AMEX but are listed on
another stock exchange or stock exchanges in Canada or the United
States, the foregoing references to AMEX shall be deemed to be
references to such other stock exchange or, if more than one, to such
one as shall have the highest trading volume during such 30 consecutive
trading day period, and in the event the Common Shares are not so traded
on any stock exchange in Canada or the United States, the "Current
Market Price" thereof shall be determined by the board of directors of
the Corporation who shall rely upon the advice of independent financial
agents with respect thereto. If the Current Market Price is based on
U.S. Dollars, it will be converted into Canadian dollars using the noon
rate calculated by the Bank of Canada on the date in question;
j. "DIRECTOR" means a director of the Corporation for the time being and,
unless otherwise specified herein, reference to action "by the
directors" means action by the directors of the Corporation as a board
or, whenever duly empowered, action by any committee of such board;
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k. "EXERCISE DATE" means, with respect to any Purchase Warrant, the date on
which the Warrant Certificate representing such Purchase Warrant is
surrendered for exercise together with full payment of the Exercise
Price, in accordance with Article 3;
l. "EXERCISE PRICE" means, with respect to a Purchase Warrant, the price at
which a Common Share may be purchased upon the exercise of a Purchase
Warrant, the initial Exercise Price being $__, subject to adjustment as
provided in Article 4;
m. "EXPIRY DATE" means the date which is the two year anniversary of the
Closing Date;
n. "EXTRAORDINARY RESOLUTION" has the meaning set forth in section 7.11;
o. "FILING JURISDICTIONS" means the Provinces of Alberta, British Columbia,
Manitoba and Ontario;
p. "ISSUE DATE" means the date upon which the Purchase Warrants are issued;
q. "OVER-ALLOTMENT OPTION" means a non-transferable option to be granted to
the Underwriters, entitling the Underwriters to purchase up to ___ Units
at a price of $___ per Unit, exercisable within 30 days of the Closing
Date to cover the Underwriters' over-allotments, if any;
r. "PERSON" means an individual, body corporate, partnership, trust,
trustee, executor, administrator, legal representative or any
unincorporated organization;
s. "PROSPECTUS" means collectively the final prospectus of the Corporation
dated ___, 2002 filed in the Filing Jurisdictions and the final form of
the prospectus included as part of the Corporation's registration
statement on Form S-3 (file No. 333-_____) when such registration
statement became effective qualifying or registering the offering for
sale to the public ___ Units at a price of $___ per Unit and pursuant to
which an additional up to ___ Units are issuable to the Underwriters
pursuant to the Over-Allotment Option;
t. "PURCHASE WARRANT" means one whole purchase warrant created and
authorized by, and issuable under, this Indenture. Each whole purchase
warrant will entitle the Warrantholder to acquire one common share of
the Corporation upon payment of the Exercise Price;
u. "SECURITIES COMMISSION" means the Securities Commission or similar
regulatory authority in each of the Filing Jurisdictions;
v. "SHAREHOLDER" means a holder of record of one or more Common Shares;
w. "SUBSIDIARY" or "SUBSIDIARY OF THE CORPORATION" means any corporation of
which more than 50% of the outstanding voting shares are owned, directly
or indirectly, by or for the Corporation, provided that the ownership of
such shares confers the right to elect
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at least a majority of the board of directors of such corporation and
includes any corporation in like relation to a Subsidiary;
x. "TSX" means the Toronto Stock Exchange;
y. "TIME OF EXPIRY" means 4:30 p.m. (Vancouver time) on the Expiry Date;
z. "TRADING DAY" means, with respect to a stock exchange, a day on which
such exchange is open for the transaction of business and, with respect
to the over-the-counter market, means a day on which the TSX or the AMEX
is open for the transaction of business;
aa. "TRANSFER AGENT" means the transfer agent for the time being of the
Common Shares;
bb. "TRUSTEE" means CIBC Mellon Trust Company or its successors from time to
time in the trust hereby created;
cc. "UNDERWRITING AGREEMENT" means the Underwriting Agreement effective June
___, 2002 between the Corporation and the Underwriters relating to the
offering of Units;
dd. "UNDERWRITERS" means collectively, Canaccord Capital Corporation and BMO
▇▇▇▇▇▇▇ ▇▇▇▇▇ Inc.;
ee. "UNITS" means units as described in the Prospectus, each unit consisting
of one Common Share and one half of one Purchase Warrant;
ff. "U.S. AGENCY AGREEMENT" means the agency agreement effective June ___,
2002 between the Corporation and the U.S. Agents relating to the
offering of Units;
gg. "U.S. AGENTS" means, collectively, Canaccord Capital Corporation (USA)
Inc. and BMO ▇▇▇▇▇▇▇ ▇▇▇▇▇ Corp.;
hh. "U.S. SECURITIES ACT" means the United States Securities Act of 1933, as
amended;
ii. "WARRANT AGENCY" means the principal office of the Trustee in the City
of Vancouver, or such other place as may be designated in accordance
with subsection 3.2(c);
jj. "WARRANT CERTIFICATE" means a certificate evidencing Purchase Warrants;
kk. "WARRANTHOLDERS", or "HOLDERS" without reference to Common Shares, means
the persons who are registered holders of Purchase Warrants;
ll. "WARRANTHOLDERS' REQUEST" means an instrument signed in one or more
counterparts by Warrantholders entitled to acquire in the aggregate not
less than 25% of the aggregate number of Common Shares which could be
acquired pursuant to all Purchase Warrants then unexercised and
outstanding, requesting the Trustee to take some action or proceeding
specified therein;
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mm. "WARRANT INDENTURE", "INDENTURE", "HEREIN", "HEREBY", "HEREOF" and
similar expressions mean and refer to this indenture and any other
indenture, deed or instrument supplemental hereto, and the expressions
"ARTICLE", "SECTION", "SUBSECTION" and "PARAGRAPH" followed by a number,
letter or both mean and refer to the specified article, section,
subsection or paragraph of this Indenture;
nn. "WARRANT PROSPECTUS" means the form of Prospectus included in the
registration statement referred to in Section 5.2(k), as amended from
time to time.
oo. "WARRANT REGISTER" means the register maintained by the Trustee for the
Purchase Warrants; and
pp. "WRITTEN ORDER OF THE CORPORATION", "WRITTEN REQUEST OF THE
CORPORATION", "WRITTEN CONSENT OF THE CORPORATION" and "CERTIFICATE OF
THE CORPORATION" mean, respectively, a written order, request, consent
and certificate or other document signed in the name of the Corporation
by its President, Chief Financial Officer, a Vice-President or
Secretary, and may consist of one or more instruments so executed.
1.2 GENDER AND NUMBER
Unless herein otherwise expressly provided or unless the context otherwise
requires, words importing the singular include the plural and vice versa and
words importing gender include all genders.
1.3 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of this Indenture into articles and sections, the provision of a
table of contents and the insertion of headings are for convenience of reference
only and shall not affect the construction or interpretation of this Indenture.
1.4 DAY NOT A BUSINESS DAY
In the event that any day on or before which any action is required to be taken
hereunder is not a Business Day, then such action shall be required to be taken
at or before the requisite time on the next succeeding day that is a Business
Day.
1.5 TIME OF THE ESSENCE
Time shall be of the essence of this Indenture.
1.6 CURRENCY
Except as otherwise stated, all dollar amounts herein are expressed in Canadian
currency. If a reference is made to a dollar amount that is expressed in U.S.
currency, such an amount will be converted into Canadian currency based on the
Bank of Canada noon rate.
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1.7 APPLICABLE LAW
This Indenture and the Warrant Certificates shall be construed in accordance
with the laws of the Province of Alberta and the federal laws of Canada
applicable therein and shall be treated in all respects as Alberta contracts.
ARTICLE 2
ISSUE OF PURCHASE WARRANTS
2.1 ISSUE OF PURCHASE WARRANTS
a. A maximum of __ Purchase Warrants are hereby created and authorized to
be issued upon the terms and conditions herein set forth.
b. ____ Purchase Warrants shall be issuable at the Closing pursuant to the
terms of the Canadian Underwriting Agreement or, to the extent
applicable, the U.S. Agency Agreement relating to the sale of the Units,
and an additional ___ Purchase Warrants may be issuable on exercise of
the Over-allotment Option. All such Purchase Warrants shall be issuable
in such names and denominations as the Corporation may specify to the
Trustee not less than five Business Days prior to the issue date
thereof.
c. The Warrant Certificates (including all replacements issued in
accordance with this Indenture) shall be substantially in the form set
out in Schedule "A" hereto, shall bear such distinguishing letters and
numbers as the Corporation may, with the approval of the Trustee,
prescribe, and shall be issuable in any denomination, excluding
fractions.
d. The Warrant Certificates and the Purchase Warrants represented thereby
shall be registered, together with the name and address of the
registered holder thereof, in the Warrant Register maintained by the
Trustee.
2.2 FORM AND TERMS OF PURCHASE WARRANTS
a. Each whole Purchase Warrant authorized to be issued hereunder shall
entitle the holder thereof, upon exercise, together with payment of the
Exercise Price, to acquire one Common Share, subject to adjustment in
accordance with Article 4, at any time after the Issue Date and until
the Time of Expiry.
b. No fractional Purchase Warrants shall be issued or otherwise provided
for hereunder. If any fraction of a Purchase Warrant would otherwise be
issuable, the number of Purchase Warrants shall be rounded down to the
nearest whole Purchase Warrant.
c. The Exercise Price and the number of Common Shares that may be acquired
pursuant to the exercise of the Purchase Warrants shall be adjusted in
the events and in the manner specified in Article 4.
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2.3 WARRANTHOLDER NOT A SHAREHOLDER
Nothing in this Indenture or in the holding of a Purchase Warrant or Warrant
Certificate or otherwise, shall, in itself, confer or be construed as conferring
upon a Warrantholder any right or interest whatsoever as a Shareholder or as any
other shareholder of the Corporation, including, but not limited to, the right
to vote at, to receive notice of, or to attend, meetings of shareholders or any
other proceedings of the Corporation, or the right to receive dividends and
other distributions.
2.4 PURCHASE WARRANTS TO RANK PARI PASSU
All Purchase Warrants shall rank pari passu, whatever may be the actual date of
issue thereof.
2.5 SIGNING OF WARRANT CERTIFICATES
The Warrant Certificates shall be signed by any one director or officer of the
Corporation and need not be under seal. The signature of any such director or
officer may be mechanically reproduced in facsimile and Warrant Certificates
bearing such facsimile signatures shall be binding upon the Corporation as if
they had been manually signed by such director or officer. Notwithstanding that
any person whose manual or facsimile signature appears on any Warrant
Certificate as a director or officer may no longer hold office at the date
issued of such Warrant Certificate or at the date of certification or delivery
thereof, any Warrant Certificate signed as aforesaid shall, subject to section
2.6, be valid and binding upon the Corporation and the holder thereof shall be
entitled to the benefits of this Indenture.
2.6 CERTIFICATION BY THE TRUSTEE
a. No Warrant Certificate shall be issued or, if issued, shall be valid for
any purpose or entitle the holder to the benefits hereof or thereof
until it has been certified by manual signature by or on behalf of the
Trustee in the form of the certificate set out in Schedule "A" hereto,
and such certification by the Trustee upon any Warrant Certificate shall
be conclusive evidence as against the Corporation that the Warrant
Certificate so certified has been duly issued hereunder and that the
holder is entitled to the benefits hereof.
b. The certification of the Trustee on a Warrant Certificate issued
hereunder shall not be construed as a representation or warranty by the
Trustee as to the validity of this Indenture or the Warrant Certificate
(except the due certification thereof) and the Trustee shall in no
respect be liable or answerable for the use made of the Warrant
Certificate or any of them or of the consideration therefor except as
otherwise specified herein.
2.7 ISSUE IN SUBSTITUTION FOR WARRANT CERTIFICATES LOST, ETC.
a. In case any Warrant Certificate becomes mutilated or is lost, destroyed
or stolen, the Corporation, subject to applicable law, shall issue and
upon written instructions from the Corporation the Trustee shall certify
and deliver a new Warrant Certificate of like tenor
7
as the one mutilated, lost, destroyed or stolen in exchange for and in
place of and upon cancellation of such mutilated Warrant Certificate, or
in lieu of and in substitution for such lost, destroyed or stolen
Warrant Certificate, and the substitute Warrant Certificate shall be in
a form approved by the Trustee, and the Purchase Warrants evidenced
thereby shall be entitled to the benefits hereof and shall rank equally
in accordance with its terms with all other Purchase Warrants issued or
to be issued hereunder.
b. The applicant for the issue of a new Warrant Certificate pursuant to
this section 2.7 shall bear the cost of the issue thereof (which is
payable in advance) and in case of loss, destruction or theft shall
furnish, as a condition precedent to the issue thereof, to the Trustee
such evidence of ownership and of the loss, destruction or theft of the
Warrant Certificate so lost, destroyed or stolen as shall be
satisfactory to the Trustee, in its sole discretion, and such applicant
may also be required to furnish an indemnity or security in amount and
form satisfactory to the Trustee, in its sole discretion, and shall pay
the reasonable charges of the Trustee in connection therewith.
2.8 EXCHANGE OF WARRANT CERTIFICATES
a. One or more Warrant Certificates representing any number of Purchase
Warrants may, upon compliance with the reasonable requirements of the
Trustee, be exchanged for another Warrant Certificate or Warrant
Certificates representing the same aggregate number of Purchase Warrants
as represented by the Warrant Certificate or Warrant Certificates so
exchanged.
b. Warrant Certificates may be exchanged only at the Warrant Agency or at
any other place that is designated by the Corporation with the approval
of the Trustee. Any Warrant Certificate tendered for exchange shall be
cancelled and surrendered by the Warrant Agency to the Trustee.
2.9 CHARGES FOR EXCHANGE
Except as otherwise provided herein, the Warrant Agency may charge to the holder
requesting an exchange a reasonable sum for each new Warrant Certificate issued
in exchange for a Warrant Certificate(s), and payment of such charges and
reimbursement of the Trustee or the Corporation for any and all stamp taxes or
governmental or other charges required to be paid shall be made by such holder
as a condition precedent to such exchange.
2.10 TRANSFER AND OWNERSHIP OF PURCHASE WARRANTS
a. The Purchase Warrants may only be transferred on the Warrant Register
kept at the Warrant Agency only by the holder or its legal
representative or its attorney duly appointed by an instrument in
writing in form and execution satisfactory to the Trustee and only upon
surrendering to the Trustee at the Warrant Agency the Warrant
Certificate or Warrant Certificates representing the Purchase Warrants
to be transferred, with the transfer form thereon duly completed and
executed, signed by the Warrantholder or by the duly appointed legal
representative thereof or a duly authorized attorney, together
8
with evidence of authority of any such legal representative or attorney
and with such signature properly guaranteed, and upon compliance with:
(i) the conditions herein;
(ii) such reasonable requirements as the Trustee may prescribe; and
(iii) all applicable securities legislation and requirements of
regulatory authorities relating to the transferability of the
Purchase Warrants or restrictions thereon;
and such transfer shall be duly noted in the Warrant Register by the
Trustee. Upon compliance with such requirements, the Trustee shall issue
to the transferee a Warrant Certificate representing the Purchase
Warrants transferred. Such new Warrant Certificate shall be sent by
first class mail or held for pick up by the transferee in accordance
with the instructions given on the transfer form and, if no such
instructions are given, shall be sent by first class mail to the address
of the transferee appearing on the form of transfer. If less than all
the Purchase Warrants represented by a Warrant Certificate are
transferred, the Trustee shall issue a new Warrant Certificate
representing those Purchase Warrants not transferred in the same name as
the name appearing on the Warrant Certificate surrendered for transfer.
Such new Warrant Certificate shall be sent by first class mail or held
for pick up in accordance with instructions given on the transfer form
and, if no instructions are given, shall be sent by first class mail to
the address of the holder of the Purchase Warrants surrendered for
transfer appearing on the Warrant Register.
b. The Corporation and the Trustee may deem and treat the registered owner
of any Purchase Warrant as the beneficial owner thereof for all purposes
and such person will, for all purposes of this Indenture be and be
deemed the absolute owner thereof and neither the Corporation nor the
Trustee shall be affected by any notice or knowledge to the contrary,
except as required by statute or a court of competent jurisdiction.
c. Subject to the provisions of this Indenture and applicable law, the
Warrantholder shall be entitled to the rights and privileges attaching
to the Purchase Warrants and the issue of Common Shares upon the
exercise of Purchase Warrants by any Warrantholder in accordance with
the terms and conditions herein contained shall discharge all
responsibilities of the Corporation and the Trustee with respect to such
Purchase Warrants and neither the Corporation nor the Trustee shall be
bound to inquire into the title of any such holder.
ARTICLE 3
EXERCISE OF PURCHASE WARRANTS
3.1 INTENTIONALLY LEFT BLANK
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3.2 METHOD OF EXERCISE OF PURCHASE WARRANTS
a. The holder of any Purchase Warrant may exercise the right conferred on
such holder to acquire Common Shares by surrendering, after the Issue
Date and prior to the Time of Expiry, to the Trustee the Warrant
Certificate with a duly completed and executed exercise form, together
with a wire transfer, certified cheque, money order or bank draft, in
lawful money of Canada payable to or to the order of the Corporation for
the Exercise Price for the Common Shares subscribed for.
A Warrant Certificate with the duly completed and executed exercise form
referred to in this subsection shall, together with the payment of the
Exercise Price for the Common Shares subscribed for, be deemed to be
surrendered only upon personal delivery thereof or, if sent by mail or
other means of transmission, upon actual receipt thereof by, in each
case, the Trustee.
b. Any exercise form referred to in subsection 3.2(a) shall be signed by
the Warrantholder or by the duly appointed legal representative thereof
or a duly authorized attorney, with evidence of authority of any such
legal representative or attorney attached thereto with such signature
properly guaranteed, and shall specify:
(i) the number of Common Shares which the holder wishes to acquire
(being not more than those which the holder is entitled to
acquire pursuant to the Warrant Certificate(s) surrendered);
(ii) the person or persons in whose name or names such Common Shares
are to be issued;
(iii) the address or addresses of such person(s); and
(iv) the number of Common Shares to be issued to each such person if
more than one is so specified.
If any of the Common Shares subscribed for are to be issued to a person
or persons other than the Warrantholder, a transfer form must be
completed by the current Warrantholder, and then each such person shall
complete and deliver an exercise form in the form attached to the
Warrant Certificate and the Warrantholder shall pay to the Corporation
or the Trustee on behalf of the Corporation, all applicable transfer or
similar taxes and the Corporation shall not be required to issue or
deliver certificates evidencing Common Shares unless or until such
Warrantholder shall have paid to the Corporation, or the Trustee on
behalf of the Corporation, the amount of such tax or shall have
established to the satisfaction of the Corporation that such tax has
been paid or that no tax is due.
c. In connection with the exchange of Warrant Certificates and exercise of
Purchase Warrants and in compliance with such other terms and conditions
hereof as may be required, the Corporation has appointed the principal
offices of the Trustee in Vancouver as the agency at which Warrant
Certificates may be surrendered for exchange or at which
10
Purchase Warrants may be exercised. The Corporation may from time to
time designate alternate or additional places as the Warrant Agency
subject to receiving the consent of the Trustee of any change of the
Warrant Agency.
d. The Trustee will only disburse monies to the Corporation according to
this Indenture only to the extent that monies have been deposited with
it.
3.3 EFFECT OF EXERCISE OF PURCHASE WARRANTS
a. Upon compliance by the holder of any Warrant Certificate with the
provisions of section 3.2, and subject to section 3.4, the Common Shares
subscribed for shall be deemed to have been issued and the person or
persons to whom such Common Shares are to be issued shall be deemed to
have become the holder or holders of record of such Common Shares on the
Exercise Date unless the transfer registers of the Corporation shall be
closed on such date, in which case the Common Shares subscribed for
shall be deemed to have been issued, and such person or persons deemed
to have become the holder or holders of record of such Common Shares, on
the date on which such transfer registers are reopened.
b. Within five Business Days after the Exercise Date with respect to a
Purchase Warrant, the Corporation shall cause to be mailed to the person
or persons in whose name or names the Common Shares so subscribed for
have been issued, as specified in the subscription, at the address
specified in such subscription or, if so specified in such subscription,
cause to be delivered to such person or persons at the Warrant Agency
where the Warrant Certificate was surrendered, a certificate or
certificates for the appropriate number of Common Shares subscribed for
together with a copy of the current form of Warrant Prospectus, in the
form most recently provided to the Trustee. In the absence of
instructions to the contrary, such certificates shall be issued in the
name of the registered holder of the surrendered Warrant Certificate and
shall be mailed by first class mail to the address of such Warrantholder
appearing on the Warrant Register.
3.4 PARTIAL EXERCISE OF PURCHASE WARRANTS; FRACTIONS
a. The holder of any Purchase Warrants may acquire a number of Common
Shares less than the number which the holder is entitled to acquire
pursuant to the surrendered Warrant Certificate(s). In the event of any
exercise of a number of Purchase Warrants less than the number which the
holder is entitled to exercise, the holder of the Purchase Warrants upon
such exercise shall also be entitled to receive, without charge
therefor, a new Warrant Certificate(s) in respect of the balance of the
Purchase Warrants represented by the surrendered Warrant Certificate(s)
not then exercised. In the absence of written instructions from the
registered holder to the contrary, such new Warrant Certificate shall be
issued in the name of the registered holder of the surrendered Warrant
Certificate and shall be mailed by first class mail to the address of
such Warrantholder appearing on the Warrant Register.
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b. Notwithstanding anything herein contained, including any adjustment
provided for in Article 4, the Corporation shall not be required, upon
the exercise of any Purchase Warrants, to issue fractions of Common
Shares or to distribute certificates which evidence fractional Common
Shares. The holder shall not be entitled to any compensation or other
right in lieu of fractional Common Shares.
3.5 EXTENSION OF TIME OF EXPIRY
If the Corporation shall give a notice to a Warrantholder that the exercise of
Purchase Warrants will not be honoured, the Expiry Date shall be deferred by the
number of days from the date of such notice until the Trustee receives notice
that the exercise of Purchase Warrants may again be honoured.
3.6 EXPIRATION OF PURCHASE WARRANTS
Immediately after the Time of Expiry, all rights under any Purchase Warrant in
respect of which the right of acquisition herein and therein provided for shall
not have been exercised shall cease and terminate and such Purchase Warrant
shall be void and of no further force or effect.
3.7 CANCELLATION OF SURRENDERED PURCHASE WARRANTS
All Warrant Certificates surrendered to the Warrant Agency pursuant to sections
2.7, 2.8, 3.2, 3.4 or 5.1 shall be returned to the Trustee for cancellation and,
after the expiry of any period of retention prescribed by law, destroyed by the
Trustee. Upon written request by the Corporation, the Trustee shall furnish to
the Corporation a destruction certificate identifying the Warrant Certificates
so destroyed and the number of Purchase Warrants evidenced thereby.
3.8 ACCOUNTING AND RECORDING
a. The Trustee shall as soon as practically (or reasonably) possible notify
the Corporation when Purchase Warrants are exercised and forward to the
Corporation at the times hereinafter set forth (or into an account or
accounts of the Corporation with the bank or trust corporation
designated by the Corporation for that purpose) all money received on
exercise of Purchase Warrants. The Trustee shall forward such money to
the Corporation (or into an account or accounts of the Corporation with
the bank or trust corporation designated by the Corporation for that
purpose) within five Business Days from the date of receipt thereof.
b. The Trustee shall record the particulars of the Purchase Warrants
exercised which shall include the names and addresses of the persons who
have exercised Purchase Warrants, the number of Common Shares subscribed
for upon such exercise, the Exercise Date and the Exercise Price. Upon
request of the Corporation, the Trustee shall provide within five
Business Days such particulars in writing to the Corporation.
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3.9 POSTPONEMENT OF DELIVERY OF CERTIFICATES
The Corporation shall not be required to deliver certificates for Common Shares
during the period when the stock transfer books of the Corporation are closed
due to an impending meeting of shareholders or a proposed payment of dividends
or for any other purpose and in the event of a surrender of a Warrant
Certificate for the purchase of Common Shares during such period, the delivery
of certificates may be postponed for a period not exceeding ten days after the
date of the re-opening of the stock transfer books.
ARTICLE 4
ADJUSTMENT OF NUMBER OF COMMON SHARES
4.1 ADJUSTMENT OF NUMBER OF COMMON SHARES
The acquisition rights in effect at any date attaching to the Purchase Warrants
shall be subject to adjustment from time to time as follows:
a. if and whenever at any time from the date hereof and prior to the Time
of Expiry, the Corporation shall:
(i) subdivide, redivide or change its outstanding Common Shares into
a greater number of shares;
(ii) reduce, combine or consolidate its outstanding Common Shares
into a smaller number of shares; or
(iii) issue Common Shares (or securities convertible into Common
Shares) to all or substantially all of the holders of
outstanding Common Shares by way of a stock dividend or other
distribution of Common Shares or securities convertible into
Common Shares (other than in lieu of Dividends Paid in the
Ordinary Course);
the Exercise Price in effect on the effective date of such subdivision
or consolidation, or on the record date of such stock dividend, as the
case may be, shall be adjusted by the Corporation to equal the price
determined by multiplying the Exercise Price in effect immediately prior
to such effective date or record date by a fraction of which the
numerator shall be the total number of Common Shares outstanding
immediately prior to such date and the denominator shall be the total
number of Common Shares immediately after such date. Such adjustment
shall be made successively whenever any event referred to in this
subsection (a) shall occur, and any such issue of Common Shares by way
of a stock dividend shall be deemed to have been made on the record date
for the stock dividend for the purpose of calculating the number of
outstanding Common Shares under subsections (b) and (c) of this section
4.1. Upon any adjustment of the Exercise Price pursuant to subsections
(a), (b) and (d) of this section 4.1, the number of Common Shares
subject to the right of purchase under each Purchase Warrant not
previously exercised shall be contemporaneously adjusted by multiplying
the number of Common Shares
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which theretofore may have been purchased under such Purchase Warrant by
a fraction of which the numerator shall be the respective Exercise Price
in effect immediately prior to such adjustment and the denominator shall
be the respective Exercise Price resulting from such adjustments;
b. if and whenever at any time after the date hereof and prior to the Time
of Expiry, the Corporation shall fix a record date for the distribution
to all or substantially all of the holders of Common Shares of rights,
options or warrants entitling them for a period expiring not more than
forty-five (45) days after such record date to subscribe for or purchase
Common Shares (or securities convertible into, or exchangeable for,
Common Shares) at a price per share (or having a conversion price or
exchange price per share) less than 95% of the Current Market Price on
such record date, the Exercise Price shall be adjusted immediately after
such record date by the Corporation so that it shall equal the price
determined by multiplying the Exercise Price in effect on such record
date by a fraction, of which the numerator shall be the total number of
Common Shares outstanding on such record date plus the number arrived at
by dividing the aggregate subscription or purchase price of the total
number of additional Common Shares offered for subscription or purchase
(or the aggregate conversion or exchange price of the convertible
securities or exchangeable securities so offered) by such Current Market
Price, and of which the denominator shall be total number of Common
Shares outstanding on such record date plus the total number of
additional Common Shares offered for subscription or purchase (or into
which the convertible securities or exchangeable securities so offered
are convertible or exchangeable); any Common Shares owned by or held for
the account of the Corporation or any Subsidiary of the Corporation
shall be deemed not to be outstanding for the purpose of any such
computation; such adjustment shall be made successively whenever such a
record date is fixed; to the extent that any rights, options or warrants
are not so issued or any such rights, options or warrants are not
exercised prior to the expiration thereof, the Exercise Price shall then
be readjusted to the Exercise Price which would then be in effect if
such record date had not been fixed or to the Exercise Price which would
then be in effect based upon the number and aggregate price of Common
Shares (or securities convertible into Common Shares) actually issued
upon the exercise of such rights, option or warrants, as the case may
be;
c. if and whenever at any time from the date hereof and prior to the Time
of Expiry, there is a reclassification of the Common Shares or a capital
reorganization of the Corporation other than as described in subsection
4.1(a) or a consolidation, amalgamation or merger of the Corporation
with or into any other body corporate, trust, partnership or other
entity, or a sale or conveyance of the property and assets of the
Corporation as an entirety or substantially as an entirety to any other
body corporate, trust, partnership or other entity, any Warrantholder
who has not exercised its right of acquisition prior to the effective
date of such reclassification, reorganization, consolidation,
amalgamation, merger, sale or conveyance, upon the exercise of such
right thereafter, shall be entitled to receive and shall accept, in lieu
of the number of Common Shares then sought to be acquired by it, the
number of shares or other securities or property of the Corporation or
of the body corporate, trust, partnership or other entity resulting from
such merger, amalgamation or consolidation, or to which such sale or
conveyance may be made, as the
14
case may be, that such Warrantholder would have been entitled to receive
on such reclassification, reorganization, consolidation, amalgamation,
merger, sale or conveyance, if, on the record date or the effective date
thereof, as the case may be, the Warrantholder had been the registered
holder of the number of Common Shares sought to be acquired by it. If
determined appropriate by the Corporation or its directors to give
effect to or to evidence the provisions of this subsection, the
Corporation, its successor, or such purchasing body corporate,
partnership, trust or other entity, as the case may be, shall, prior to
or contemporaneously with any such reclassification, reorganization,
consolidation, amalgamation, merger, sale or conveyance, enter into an
indenture which shall provide, to the extent possible, for the
application of the provisions set forth in this Indenture with respect
to the rights and interests thereafter of the Warrantholders to the end
that the provisions set forth in this Indenture shall thereafter
correspondingly be made applicable, as nearly as may reasonably be, with
respect to any shares, other securities or property to which a
Warrantholder is entitled on the exercise of its acquisition rights
thereafter. Any indenture entered into between the Corporation and the
Trustee pursuant to the provisions of this subsection 4.1(c) shall be a
supplemental indenture entered into pursuant to the provisions of
Article 8 hereof. Any indenture entered into between the Corporation,
any successor to the Corporation or such purchasing body corporate,
partnership, trust or other entity and the Trustee shall provide for
adjustments which shall be as nearly equivalent as may be practicable to
the adjustments provided in this section 4.1 and which shall apply to
successive reclassifications, reorganizations, amalgamations,
consolidations, mergers, sales or conveyances;
d. if and whenever at any time from the date hereof and prior to the Time
of Expiry, the Corporation fixes a record date for the making of a
distribution to all or substantially all the holders of its outstanding
Common Shares of: (i) shares of any class other than Common Shares,
other than shares distributed to holders of Common Shares pursuant to
their exercise of options to receive dividends in the form of such
shares in lieu of Dividends Paid in the Ordinary Course on the Common
Shares, or (ii) rights, options or warrants (excluding rights
exercisable for 45 days or less where the exercise price per share is
not less than 95% of the Current Market Price on such record date), or
(iii) evidences of its indebtedness, or (iv) assets (excluding Dividends
Paid in the Ordinary Course), including shares of other corporations,
then, provided that subsection 4.1(a) or subsection 4.1(b) do not apply,
then, and in each such case, the Exercise Price shall be adjusted by the
Corporation immediately after such record date so that it shall equal
the price determined by multiplying the Exercise Price in effect on such
record date by a fraction, of which the numerator shall be the total
number of Common Shares outstanding on such record date multiplied by
the Current Market Price on such record date, less the excess of the
aggregate fair market value (as determined by the directors, which
determination shall be conclusive) of such shares, rights, options,
warrants, evidences of indebtedness or assets so distributed are the
fair market value of the consideration received therefor by the
Corporation from the holders of Common Shares as determined by action by
the directors (whose determination shall be conclusive), and of which
the denominator shall be that total number of Common Shares outstanding
on such record date multiplied by such Current Market Price; any Common
Shares owned by or held for
15
the account of the Corporation or any subsidiary of the Corporation
shall be deemed not to be outstanding for the purpose of any such
computation; such adjustment shall be made successively whenever such a
record date is fixed; to the extent that such distribution is not so
made, the Exercise Price shall then be readjusted to the Exercise Price
which would then be in effect if such record date had not been fixed or
to the Exercise Price which would then be in effect based upon such
shares, rights, options, warrants, evidences of indebtedness or assets
actually distributed, as the case may be;
e. the adjustments provided for in this Article 4 in the Exercise Price and
number of Common Shares and classes of securities which are to be
received on the exercise of Purchase Warrants are cumulative. After any
adjustment pursuant to this section, the term "Common Shares" where used
in this Indenture shall be interpreted to mean securities of any class
or classes which, as a result of such adjustment and all prior
adjustments pursuant to this section, the Warrantholder is entitled to
receive upon the exercise of its Purchase Warrant, and the number of
Common Shares indicated by any exercise made pursuant to a Purchase
Warrant shall be interpreted to mean the number of Common Shares or
other property or securities a Warrantholder is entitled to receive, as
a result of such adjustment and all prior adjustments pursuant to this
section, upon the full exercise of Purchase Warrant;
f. for the purposes of this section 4.1, "Dividends Paid in the Ordinary
Course" means cash dividends declared payable on the Common Shares in
any fiscal year of the Corporation to the extent that such cash
dividends do not exceed, in the aggregate, the greater of: (i) 200% of
the aggregate amount of cash dividends declared payable by the
Corporation on the Common Shares in its immediately preceding fiscal
year; (ii) 300% percent of the arithmetic mean of the aggregate amounts
of cash dividends declared payable by the Corporation on the Common
Shares in its three immediately preceding fiscal years; and (iii) 50%
percent of the aggregate consolidated net income of the Corporation,
before extraordinary items, for its immediately preceding fiscal year;
g. in any case which this section 4.1 shall require that an adjustment
shall become effective immediately after a record date for an event
referred to herein, the Corporation may defer, until the occurrence of
such event, issuing to the holder of any Warrant exercised after such
event the additional Common Shares issuable upon such conversion by
reason of the adjustment required by such event before giving effect to
such adjustment; provided, however, that the Corporation shall deliver
to such holder an appropriate instrument evidencing such holder's rights
to receive such additional Common Shares upon the occurrence of the
event requiring such adjustment and the right to receive any
distributions made on such additional Common Shares declared in favour
of holders of record of Common Shares on and after the relevant date of
exercise or such later date as such holder would, but for the provisions
of this subsection (g), have become the holder of record of such
additional Common Shares;
h. if the purchase price provided for in any right, warrant or option
issued as described in subsection (b) or (d) is decreased, or the price
at which Common Shares are issued as described in subsection (a) is
decreased or the rate of conversion at which any convertible
16
securities which are issued as described in subsection (a) is increased,
the Exercise Price shall, subject to subsection (g), forthwith be
changed so as to decrease the Exercise Price to such Exercise Price as
would have been obtained had the adjustment made in connection with the
issuance of all such rights, options or securities been made upon the
basis of such purchase price as so decreased or such rate as so
increased;
i. no adjustment in the Exercise Price or in the number of shares to be
issued pursuant to the exercise of the Warrants shall be required unless
such adjustment would result in a change of at least 1% in the Exercise
Price then in effect or unless the number of shares to be issued would
change by at least 1/100th of a share, provided, however, that any
adjustments, which, except for the provisions of this subsection 4.1(i)
would otherwise have been required to be made, shall be carried forward
and taken into account in any subsequent adjustment;
j. no adjustment in the Exercise Price shall be made in respect of any
event described in paragraph 4.1(a)(iii) and subsections 4.1(b) or
4.1(d):
i. if the Warrantholders are entitled to participate in such event
on the same terms mutatis mutandis as if they had exercised
their purchase rights prior to the effective date or record date
or such event, subject to the prior approval of TSX to such
participation if the Common Shares or the Warrants are then
listed on such exchange; or
ii. in respect of any rights to acquire shares which are presently
outstanding; and
k. in determining at any time and from time to time the number of Common
Shares outstanding at any particular time for purposes of this section
4.1, there shall be included that number of Common Shares which would be
outstanding upon conversion of all convertible securities then
outstanding, and upon exercise of all rights, options or warrants then
outstanding to purchase Common Shares, and there shall be excluded any
Common Shares (and Common Shares which would be outstanding upon
conversion of convertible securities) held by or for the account of the
Corporation.
4.2 OTHER ACTION
In case the Corporation, after the date hereof, shall take any action affecting
the Common Shares other than actions described in subsection 5.1, which in the
opinion of the directors of the Corporation would materially affect the rights
of the Warrantholders, the number of Common Shares which may be acquired upon
exercise of the Purchase Warrants shall be adjusted by the Corporation in such
manner and at such time, by action of the director, as they determine, acting
reasonably, to be equitable in the circumstances.
4.3 ENTITLEMENT TO SHARES ON EXERCISE OF PURCHASE WARRANT
All shares of any class or other securities which a Warrantholder is at the time
in question entitled to receive on the exercise of its Purchase Warrant, whether
or not as a result of
17
adjustments made pursuant to this section, shall, for the purposes of the
interpretation of this Indenture, be deemed to be shares which such
Warrantholder is entitled to acquire pursuant to such Purchase Warrant.
4.4 NO ADJUSTMENT FOR STOCK OPTIONS
Notwithstanding anything to the contrary, in this Article 4, no adjustment shall
be made in the acquisition rights attached to the Purchase Warrants if the issue
of Common Shares is being made pursuant to this Indenture or pursuant to any
stock option or stock purchase plan in force from time to time.
4.5 DETERMINATION BY CORPORATION'S AUDITORS
In the event of any question arising with respect to the adjustments provided
for in this Article 4, such question shall be conclusively determined by the
Corporation's Auditors who shall have access to all necessary records of the
Corporation, and such determination shall be binding upon the Corporation, the
Trustee, all Warrantholders and all other persons interested therein.
4.6 PROCEEDINGS PRIOR TO ANY ACTION REQUIRING ADJUSTMENT
As a condition precedent to the taking of any action which would require an
adjustment in any of the acquisition rights pursuant to any of the Purchase
Warrants, including the number of Common Shares which are to be received upon
the exercise thereof, the Corporation shall take any corporate action which may,
in the opinion of counsel, be necessary in order that the Corporation has
unissued and reserved in its authorized capital and may validly and legally
issue as fully paid and non-assessable all the shares which the holders of such
Purchase Warrants are entitled to receive on the full exercise thereof in
accordance with the provisions hereof.
4.7 CERTIFICATE OF ADJUSTMENT
The Corporation shall from time to time immediately after the occurrence of any
event which requires an adjustment or readjustment as provided in Article 4,
deliver a certificate of the Corporation to the Trustee specifying the nature of
the event requiring the same and the amount of the adjustment necessitated
thereby and setting forth in reasonable detail the method of calculation and the
facts upon which such calculation is based, which certificate shall be supported
by a certificate of the Corporation's Auditors verifying such calculation.
4.8 NOTICE OF SPECIAL MATTERS
The Corporation covenants with the Trustee that, so long as any Purchase Warrant
remains outstanding, it will give notice to the Trustee and to the
Warrantholders of its intention to fix a record date that is prior to the Expiry
Date for any event referred to in subsections (a), (b), (c) or (d) of section
4.1 which may give rise to an adjustment in the Exercise Price. Such notice
shall specify the particulars of such event and the record date for such event,
provided that the Corporation shall only be required to specify in the notice
such particulars of the event as shall
18
have been fixed and determined on the date on which the notice is given. The
notice shall be given in each case not less than 14 days prior to such
applicable record date.
4.9 NO ACTION AFTER NOTICE
The Corporation covenants with the Trustee that it will not close its transfer
books or take any other corporate action which might deprive the holder of a
Purchase Warrant of the opportunity to exercise its right of acquisition
pursuant thereto during the period of 14 days after the giving of the
certificate or notices set forth in sections 4.7 and 4.8.
4.10 PROTECTION OF TRUSTEE
Except as provided in section 9.2, the Trustee:
a. shall not at any time be under any duty or responsibility to any
Warrantholder to determine whether any facts exist which may require any
adjustment contemplated by section 4.1 or with respect to the nature or
extent of any such adjustment when made, or with respect to the method
employed in making the same;
b. shall not be accountable with respect to the validity or value (or the
kind or amount) of any Common Shares or of any shares or other
securities or property which may at any time be issued or delivered upon
the exercise of the rights attaching to any Purchase Warrant;
c. shall not be responsible for any failure of the Corporation to issue,
transfer or deliver Common Shares or certificates for the same upon the
surrender of any Purchase Warrants for the purpose of the exercise of
such rights or to comply with any of the covenants contained in this
Article;
d. shall not incur any liability or responsibility whatsoever or be in any
way responsible for the consequences of any breach on the part of the
Corporation of any of the representations, warranties or covenants
herein contained or of any acts of the directors, officers, employees,
agents or servants of the Corporation; and
e. shall be entitled to act and rely on any adjustment calculation of the
Corporation or the Corporation's auditors.
ARTICLE 5
RIGHTS OF THE CORPORATION AND COVENANTS
5.1 OPTIONAL PURCHASES BY THE CORPORATION
The Corporation may from time to time purchase, by private contract or
otherwise, any of the Purchase Warrants. Any such purchase shall be made at the
lowest price or prices at which, in the opinion of the directors, such Purchase
Warrants are then obtainable, plus reasonable costs of
19
purchase, and may be made in such manner, from such persons and on such other
terms as the Corporation, in its sole discretion, may determine. Any Warrant
Certificates representing the Purchase Warrants purchased pursuant to this
section shall forthwith be delivered to and cancelled by the Trustee. No
Purchase Warrants shall be issued in replacement thereof.
5.2 GENERAL COVENANTS
The Corporation covenants with the Trustee for the benefit of the Warrantholder
that so long as any Purchase Warrants remain outstanding:
a. it shall reserve and keep available a sufficient number of Common Shares
for the purpose of enabling it to satisfy its obligations to issue
Common Shares upon the exercise of the Purchase Warrants;
b. it shall cause the Common Shares and the certificates representing the
Common Shares acquired pursuant to the valid exercise of the Purchase
Warrants to be duly issued and delivered in accordance with the Warrant
Certificates and the terms hereof;
c. all Common Shares issued upon exercise of the right to acquire provided
for herein and in the Warrant Certificates shall be issued as fully paid
and non-assessable;
d. the Corporation will direct the Trustee to keep open the Warrant
Register and will not take any action or omit to take any action that
would have the effect of preventing the Warrantholders from exercising
any of the Purchase Warrants or receiving any of the Common Shares upon
such exercise;
e. the Corporation will make all requisite filings, including filings with
securities regulatory authorities in Canada and the United States, in
connection with the exercise of the Purchase Warrants and the issue of
the Common Shares issuable upon exercise thereon, and will maintain its
status as a reporting issuer not in default in the Filing Jurisdictions;
f. the Corporation will perform and comply with all of its covenants and
agreements set forth in the Underwriting Agreement and the Agency
Agreement;
g. it will use its reasonable best efforts to maintain the listing of the
Common Shares on the TSX and the AMEX;
h. it will use its reasonable best efforts to maintain its status as a
reporting issuer not in default under, and not be in default in any
material respect of the applicable requirements of, the applicable
securities laws of each of the provinces of Canada and the federal
securities laws of the United States from the date hereof up to and
including the Time of Expiry;
i. the Corporation covenants and agrees that for so long as the Purchase
Warrants are exercisable, it will register (and maintain such
registration of) the Common Shares issuable upon exercise of the
Purchase Warrants under the securities laws of all U.S.
20
States in which the Common Shares are not otherwise exempt from such
securities registration requirements. For purposes of the foregoing,
"U.S. States" means the 50 states of the United States of America, the
District of Columbia, Puerto Rico and Guam;
j. it shall use its reasonable best efforts to maintain its registration
statement on Form S-3 (File No. 333-____), or another registration
statement on such form filed with the United States Securities and
Exchange Commission with respect to the Common Shares and Purchase
Warrants, continuously effective under the U.S. Securities Act of 1933,
as amended;
k. the Corporation will do, or cause to be done, all things necessary to
preserve and keep in full force and effect its corporate existence and
carry on and conduct its business in accordance with good business
practice; and
l. generally, it will well and truly perform and carry out all of the acts
or things to be done by it as provided in this Indenture or as the
Trustee may reasonably require for the better accomplishing and
effecting of the intentions and provisions of this Indenture.
5.3 TRUSTEE'S REMUNERATION AND EXPENSES
The Corporation covenants that it will pay to the Trustee from time to time
reasonable remuneration for its services hereunder and will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in the administration or execution of the trusts
hereby created (including the reasonable compensation and the disbursements of
its Counsel and all other advisers and assistants not regularly in its employ)
both before any default hereunder and thereafter until all duties of the Trustee
hereunder shall be finally and fully performed, except any such expense,
disbursement or advance as may arise out of or result from the Trustee's gross
negligence, wilful misconduct or bad faith.
5.4 SECURITIES QUALIFICATION REQUIREMENTS
a. If, in the opinion of Counsel, any instrument is required to be filed
with, or any permission is required to be obtained from, any
governmental authority or regulatory body in Canada or the United States
or any other step is required under any federal or provincial law of
Canada or federal or state law of the United States before any Common
Shares which a Warrantholder is entitled to acquire pursuant to the
exercise of any Purchase Warrant may properly and legally be issued upon
due exercise thereof and thereafter traded, without further formality or
restriction, the Corporation covenants that it will take such required
action at its expense, as is required or appropriate in the
circumstances.
b. The Corporation or, if required in writing by the Corporation, the
Trustee, will give notice of the issue of Common Shares pursuant to the
exercise of Purchase Warrants, in such detail as may be required, to
each securities commission or similar regulatory authority in each of
the Filing Jurisdictions in which there is legislation or regulation
permitting or requiring the giving of any such notice.
21
c. The Corporation covenants that if any Common Shares, required to be
reserved for the purpose of issue upon exercise of the Purchase Warrants
hereunder, require registration with or approval of any governmental
authority under any federal or state law before such Common Shares may
be issued upon exercise of Purchase Warrants, the Corporation will use
all commercially reasonable efforts to cause such Common Shares to be
duly registered, or approved, as the case may be, and, to the extent
practicable, take all such action in anticipation of and prior to the
exercise of the Purchase Warrants, including, without limitation, filing
any and all post effective amendments to the Corporation's Registration
Statement on Form S-3 (Registration No. 333-_______) necessary to permit
a public offering of the Common Shares underlying the Purchase Warrants
at any and all times during the term of this Indenture, provided,
however, that in no event shall such Common Shares be issued, and the
Corporation is authorized to refuse to honor the exercise of any
Purchase Warrant, if such exercise would result in the opinion of the
Corporation's Board of Directors, upon advice of counsel, in the
violation of any law; and provided further that, in the case of a
Purchase Warrant exercisable solely for Common Shares listed on a
securities exchange or for which there are at least two independent
market makers, in lieu of obtaining such registration or approval, the
Corporation may elect to redeem Purchase Warrants submitted to the
Trustee for exercise for a price equal to the difference between the
aggregate low asked price, or closing price, as the case may be, of the
Common Shares for which such Purchase Warrant is exercisable on the date
of such submission and the Exercise Price of such Purchase Warrants; in
the event of such redemption, the Corporation will pay to the holder of
such Purchase Warrants the above described redemption price in cash
within ten business days after receipt of notice from the Trustee that
such Purchase Warrants have been submitted for exercise.
5.5 PERFORMANCE OF COVENANTS BY TRUSTEE
If the Corporation shall fail to perform any of its covenants contained in this
Purchase Warrant Indenture, the Trustee may notify the Warrantholders of such
failure on the part of the Corporation or may itself perform any of the
covenants capable of being performed by it but, subject to section 9.2, shall be
under no obligation to perform such covenants or to notify the Warrantholders of
such performance by it. All sums expended or advanced by the Trustee in so doing
shall be repayable as provided in section 5.3. No such performance, expenditure
or advance by the Trustee shall relieve the Corporation of any default hereunder
or of its continuing obligations under the covenants herein contained.
ARTICLE 6
ENFORCEMENT
6.1 SUITS BY WARRANTHOLDERS
All or any of the rights conferred upon any Warrantholder by any of the terms of
the Warrant Certificates or the Indenture or both may be enforced by the
Warrantholder by appropriate proceedings but without prejudice to the right
which is hereby conferred upon the Trustee to
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proceed in its own name to enforce each and all of the provisions herein
contained for the benefit of the Warrantholders.
6.2 IMMUNITY OF SHAREHOLDERS, ETC.
The Trustee and, by the acceptance of the Warrant Certificates and as part of
the consideration for the issue of the Purchase Warrants, the Warrantholders
hereby waive and release any right, cause of action or remedy now or hereafter
existing in any jurisdiction against any incorporator or any past, present or
future shareholder, director, officer, employee or agent of the Corporation or
any successor corporation, but for greater certainty, not the Corporation or any
successor corporation on any covenant, agreement, representation or warranty by
the Corporation contained herein or in the Warrant Certificates.
6.3 LIMITATION OF LIABILITY
The obligations hereunder are not personally binding upon, nor shall resort
hereunder be had to, the private property of any of the past, present or future
directors or shareholders of the Corporation or any successor Corporation or any
of the past, present or future officers, employees or agents of the Corporation
or any successor Corporation, but only the property of the Corporation or any
successor Corporation shall be bound in respect hereof.
6.4 WAIVER OF DEFAULT
Upon the happening of any default hereunder:
a. the holders of not less than 51% of the aggregate number of Purchase
Warrants then outstanding shall have power (in addition to the powers
exercisable by extraordinary resolution as provided in section 7.10) by
requisition in writing to instruct the Trustee to waive any default
hereunder and the Trustee shall thereupon waive the default upon such
terms and conditions as shall be prescribed in such requisition; or
b. the Trustee shall have power to waive any default hereunder upon such
terms and conditions as the Trustee may deem advisable, if, in the
Trustee's opinion, the same shall have been cured or adequate provision
made therefor;
provided that no delay or omission of the Trustee or of the Warrantholders to
exercise any right or power accruing upon any default shall impair any such
right or power or shall be construed to be a waiver of any such default or
acquiescence therein and provided further that no act or omission either of the
Trustee or of the Warrantholders in the premises shall extend to or be taken in
any manner whatsoever to affect any subsequent default hereunder of the rights
resulting therefrom.
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ARTICLE 7
MEETINGS OF WARRANTHOLDERS
7.1 RIGHT TO CONVENE MEETINGS
The Trustee may at any time and from time to time, and shall on receipt of a
written request of the Corporation or of a Warrantholders' Request and upon
being indemnified to its reasonable satisfaction by the Corporation or by the
Warrantholders signing such Warrantholders' Request against the cost which may
be incurred in connection with the calling and holding of such meeting, convene
a meeting of the Warrantholders. In the event of the Trustee failing to so
convene a meeting within seven days after receipt of such written request of the
Corporation or such Warrantholders' Request and indemnity given as aforesaid,
the Corporation or such Warrantholders, as the case may be, may convene such
meeting. Every such meeting shall be held in the City of Vancouver or at such
other place as may be approved or determined by the Trustee and approved by the
Corporation, acting reasonably.
7.2 NOTICE
At least 21 days prior notice of any meeting of Warrantholders shall be given to
the Warrantholders in the manner provided for in section 10.2 and a copy of such
notice shall be sent by mail to the Trustee (unless the meeting has been called
by the Trustee) and to the Corporation (unless the meeting has been called by
the Corporation). Such notice shall state the time when and the place where the
meeting is to be held, shall state briefly the general nature of the business to
be transacted thereat and shall contain such information as is reasonably
necessary to enable the Warrantholders to make a reasoned decision on the
matter, but it shall not be necessary for any such notice to set out the terms
of any resolution to be proposed or any of the provisions of this Article 7.
7.3 CHAIRMAN
An individual (who need not be a Warrantholder) designated in writing by the
Trustee shall be chairman of the meeting and if no individual is so designated,
or if the individual so designated is not present within 15 minutes from the
time fixed for the holding of the meeting, the Warrantholders present in person
or by proxy shall choose an individual present to be chairman.
7.4 QUORUM
Subject to the provisions of section 7.11, at any meeting of the Warrantholders
a quorum shall consist of Warrantholders present in person or by proxy and
entitled to purchase at least 10% of the aggregate number of Common Shares that
could be acquired pursuant to all the then outstanding Purchase Warrants,
provided that at least two persons entitled to vote thereat are personally
present. If a quorum of the Warrantholders is not present within 30 minutes from
the time fixed for holding any meeting, the meeting, if summoned by
Warrantholders or on a Warrantholders' Request, shall be dissolved; but in any
other case the meeting shall be adjourned to the same day in the next week
(unless such day is not a Business Day, in which case it shall be adjourned to
the next following Business Day) at the same time and place and no notice of the
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adjournment need be given. Any business may be brought before or dealt with at
an adjourned meeting that might have been dealt with at the original meeting in
accordance with the notice calling the same. No business shall be transacted at
any meeting unless a quorum be present at the commencement of business. At the
adjourned meeting the Warrantholders present in person or by proxy will
constitute a quorum and may transact the business for which the meeting was
originally convened, notwithstanding that they may not be entitled to acquire at
least 10% of the aggregate number of Common Shares that may be acquired pursuant
to all then outstanding Purchase Warrants.
7.5 POWER TO ADJOURN
The chairman of any meeting at which a quorum of the Warrantholders is present
may, with the consent of the meeting, adjourn any such meeting, and no notice of
such adjournment need be given except such notice, if any, as the meeting may
prescribe.
7.6 SHOW OF HANDS
Every question submitted to a meeting shall be decided in the first place by a
majority of the votes given on a show of hands except that votes on an
extraordinary resolution shall be given in the manner hereinafter provided. At
any such meeting, unless a poll is duly demanded as herein provided, a
declaration by the chairman that a resolution has been carried or carried
unanimously or by a particular majority or lost or not carried by a particular
majority shall be conclusive evidence of the fact.
7.7 POLL AND VOTING
On every extraordinary resolution, and on any other question submitted to a
meeting and after a vote by show of hands when demanded by the chairman or by
one or more of the Warrantholders acting in person or by proxy, a poll shall be
taken in such manner as the chairman shall direct. Questions other than those
required to be determined by extraordinary resolution shall be decided by a
majority of the votes cast on the poll.
On a show of hands, every person who is present and entitled to vote, whether as
a Warrantholder or as proxy for one or more absent Warrantholders, or both,
shall have one vote. On a poll, each Warrantholder present in person or
represented by a proxy duly appointed by instrument in writing shall be entitled
to one vote in respect of each whole Common Share which he is entitled to
acquire pursuant to the Purchase Warrant or Purchase Warrants then held or
represented by it. A proxy need not be a Warrantholder. The chairman of any
meeting shall be entitled, both on a show of hands and on a poll, to vote in
respect of the Purchase Warrants and proxies, if any, held or represented by
him.
7.8 REGULATIONS
The Trustee, or the Corporation with the approval of the Trustee, may make and
vary such regulations as it shall think fit for:
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a. the setting of the record date for a meeting for the purpose of
determining Warrantholders entitled to receive notice of and to vote at
the meeting;
b. the issue of voting certificates by any bank, trust company or other
depositary satisfactory to the Trustee stating that the Warrant
Certificates specified therein have been deposited with it by a named
person and will remain on deposit until after the meeting, which voting
certificate shall entitle the persons named therein to be present and
vote at any such meeting and at any adjournment thereof or to appoint a
proxy or proxies to represent them and vote for them at any such meeting
and at any adjournment thereof in the same manner and with the same
effect as though the persons so named in such voting certificates were
the actual bearers of the Warrant Certificates specified therein;
c. the deposit of voting certificates and instruments appointing proxies at
such place and time as the Trustee, the Corporation or the
Warrantholders convening the meeting, as the case may be, may in the
notice convening the meeting direct;
d. the deposit of voting certificates and instruments appointing proxies at
some approved place or places other than the place at which the meeting
is to be held and enabling particulars of such instruments appointing
proxies to be mailed or telecopied before the meeting to the Corporation
or to the Trustee at the place where the same is to be held and for the
voting of proxies so deposited as though the instruments themselves were
produced at the meeting;
e. the form of the instrument of proxy; and
f. generally for the calling of meetings of Warrantholders and the conduct
of business thereat.
Any regulations so made shall be binding and effective and the votes given in
accordance therewith shall be valid and shall be counted. Save as such
regulations may provide, the only persons who shall be recognized at any meeting
as a Warrantholder, or be entitled to vote or be present at the meeting in
respect thereof (subject to section 7.9) shall be Warrantholders or their
counsel (who may not vote), or proxies of Warrantholders.
7.9 CORPORATION AND TRUSTEE MAY BE REPRESENTED
The Corporation and the Trustee, by their respective directors, officers and
employees and the Counsel for the Corporation and for the Trustee may attend any
meeting of the Warrantholders, but shall not be entitled to vote thereat,
whether in respect of any Purchase Warrants held by them or otherwise.
7.10 POWERS EXERCISABLE BY EXTRAORDINARY RESOLUTION
In addition to all other powers conferred upon them by any other provisions of
this Indenture or by law, the Warrantholders at a meeting shall, subject to the
provisions of section 7.11 have the power, exercisable from time to time by
extraordinary resolution:
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a. to agree to any modification, abrogation, alteration, compromise or
arrangement of the rights of Warrantholders or the Trustee in its
capacity as trustee hereunder subject to the consent of the Trustee or
on behalf of the Warrantholders against the Corporation, whether such
rights arise under this Indenture or the Warrant Certificates or
otherwise;
b. to amend, alter or repeal any extraordinary resolution previously passed
or sanctioned by the Warrantholders;
c. to direct or to authorize the Trustee to enforce any of the covenants on
the part of the Corporation contained in this Indenture or the Warrant
Certificates or to enforce any of the rights of the Warrantholders in
any manner specified in such extraordinary resolution or to refrain from
enforcing any such covenant or right;
d. to waive, and to direct the Trustee to waive, any default on the part of
the Corporation in complying with any provision of this Indenture or the
Warrant Certificates either unconditionally or upon any conditions
specified in such extraordinary resolution;
e. to restrain any Warrantholder from taking or instituting any suit,
action or proceeding against the Corporation for the enforcement of any
of the covenants on the part of the Corporation in this Indenture or the
Warrant Certificates or to enforce any of the rights of the
Warrantholders;
f. to direct any Warrantholder who, as such, has brought any suit, action
or proceeding to stay or to discontinue or otherwise to deal with the
same upon payment of the costs, charges and expenses reasonably and
properly incurred by such Warrantholder in connection therewith;
g. to assent to any change in or omission from the provisions contained in
the Warrant Certificates and this Indenture or any ancillary or
supplemental instrument that may be agreed to by the Corporation, and to
authorize the Trustee to concur in and execute any ancillary or
supplemental indenture embodying the change or omission;
h. with the consent of the Corporation, such consent not to be unreasonably
withheld, to remove the Trustee or its successor in office and to
appoint a new trustee or trustees to take the place of the Trustee so
removed;
i. to assent to any compromise or arrangement with any creditor or
creditors of the Corporation or any class or classes of creditors of the
Corporation, whether secured or otherwise, and with holders of any
shares or other securities of the Corporation; and
j. to sanction any scheme for the reconstruction or reorganization of the
Corporation or for the consolidation, amalgamation or merger of the
Corporation with any other corporation or for the sale, lease, transfer
or other disposition of all or substantially all the property and assets
of the Corporation.
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7.11 MEANING OF EXTRAORDINARY RESOLUTION
a. The expression "extraordinary resolution" when used in this Indenture
means, subject as hereinafter provided in this section and in section
7.14, a resolution proposed at a meeting of Warrantholders duly convened
for that purpose and held in accordance with the provisions of this
Article 7 at which there are present in person or by proxy
Warrantholders entitled to acquire at least 25% of the aggregate number
of Common Shares which may be acquired pursuant to all the then
outstanding Purchase Warrants and passed by the affirmative votes of
Warrantholders entitled to acquire not less than 66 2/3% of the
aggregate number of Common Shares which may be acquired pursuant to all
the then outstanding Purchase Warrants represented at the meeting and
voted on the poll upon such resolution.
b. If, at the meeting at which an extraordinary resolution is to be
considered, Warrantholders entitled to acquire at least 25% of the
aggregate number of Common Shares which may be acquired pursuant to all
the then outstanding Purchase Warrants are not present in person or by
proxy within 30 minutes after the time appointed for the meeting, then
the meeting, if convened by Warrantholders or on a Warrantholders'
Request, shall be dissolved; but in any other case it shall stand
adjourned to such day, being not less than 15 or more than 60 days
later, and to such place and time as may be appointed by the chairman.
Not less than ten days' prior notice shall be given of the time and
place of such adjourned meeting in the manner provided for in section
10.2. Such notice shall state that at the adjourned meeting the
Warrantholders present in person or by proxy shall form a quorum but it
shall not be necessary to set forth the purposes for which the meeting
was originally called or any other particulars. At the adjourned meeting
the Warrantholders present in person or by proxy shall form a quorum and
may transact the business for which the meeting was originally convened
and a resolution proposed at such adjourned meeting and passed by the
requisite vote as provided in subsection 7.11(a) shall be an
extraordinary resolution within the meaning of this Indenture
notwithstanding that Warrantholders entitled to acquire at least 25% of
the aggregate number of Common Shares which may be acquired pursuant to
all the then outstanding Purchase Warrants are not present in person or
by proxy at such adjourned meeting.
c. Votes on an extraordinary resolution shall always be given on a poll and
no demand for a poll on an extraordinary resolution shall be necessary.
7.12 POWERS CUMULATIVE
Any one or more of the powers or any combination of the powers in this Indenture
stated to be exercisable by the Warrantholders by extraordinary resolution or
otherwise may be exercised from time to time and the exercise of any one or more
of such powers or any combination of powers from time to time shall not be
deemed to exhaust the right of the Warrantholders to exercise such power or
powers or combination of powers then or thereafter from time to time.
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7.13 MINUTES
Minutes of all resolutions and proceedings at every meeting of Warrantholders
shall be made and duly entered in books to be provided from time to time for
that purpose by the Trustee at the expense of the Corporation, and any such
minutes as aforesaid, if signed by the chairman or the secretary of the meeting
at which such resolutions were passed or proceedings had shall be prima facie
evidence of the matters therein stated and, until the contrary is proved, every
such meeting in respect of the proceedings of which minutes shall have been made
shall be deemed to have been duly convened and held, and all resolutions passed
thereat or proceedings taken shall be deemed to have been duly passed and taken.
7.14 INSTRUMENTS IN WRITING
All actions which may be taken and all powers that may be exercised by the
Warrantholders at a meeting held as provided in this Article 7 may also be taken
and exercised by Warrantholders entitled to acquire at least 66 2/3% of the
aggregate number of Common Shares which may be acquired pursuant to all the then
outstanding Purchase Warrants by an instrument in writing signed in one or more
counterparts by such Warrantholders in person or by attorney duly appointed in
writing, and the expression "extraordinary resolution" when used in this
Indenture shall include an instrument so signed.
7.15 BINDING EFFECT OF RESOLUTIONS
Every resolution and every extraordinary resolution passed in accordance with
the provisions of this Article 7 at a meeting of Warrantholders shall be binding
upon all the Warrantholders, whether present at or absent from such meeting, and
every instrument in writing signed by Warrantholders in accordance with section
7.14 shall be binding upon all the Warrantholders, whether signatories thereto
or not, and each and every Warrantholder and the Trustee (subject to the
provisions for indemnity herein contained) shall be bound to give effect
accordingly to every such resolution and instrument in writing.
7.16 HOLDINGS BY CORPORATION OR SUBSIDIARIES OF CORPORATION DISREGARDED
In determining whether Warrantholders holding Warrant Certificates evidencing
the entitlement to acquire the required number of Common Shares are present at a
meeting of Warrantholders for the purpose of determining a quorum or have
concurred in any consent, waiver, extraordinary resolution, Warrantholders'
Request or other action under this Indenture, Purchase Warrants owned legally or
beneficially by the Corporation or any Subsidiary of the Corporation shall be
disregarded in accordance with the provisions of section 10.9.
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ARTICLE 8
SUPPLEMENTAL INDENTURES
8.1 PROVISION FOR SUPPLEMENTAL INDENTURES FOR CERTAIN PURPOSES
From time to time the Corporation (when authorized by action of the directors)
and the Trustee may, subject to the provisions hereof, and they shall, when so
directed in accordance with the provisions hereof, execute and deliver by their
proper officers, indentures or instruments supplemental hereto, which thereafter
shall form part hereof, for any one or more or all of the following purposes:
a. setting forth any adjustments resulting from the application of the
provisions of Article 4;
b. adding to the provisions hereof such additional covenants and
enforcement provisions as, in the opinion of Counsel, are necessary or
advisable in the premises, provided that the same are not in the opinion
of the Trustee, relying on counsel, prejudicial to the interests of the
Warrantholders;
c. giving effect to any extraordinary resolution passed as provided in
Article 7;
d. making such provisions not inconsistent with this Indenture as may be
necessary or desirable with respect to matters or questions arising
hereunder or for the purpose of obtaining a listing or quotation of the
Purchase Warrants on any stock exchange, provided that such provisions
are not, in the opinion of the Trustee, relying on counsel, prejudicial
to the interests of the Warrantholders;
e. adding to or altering the provisions hereof in respect of the transfer
of Purchase Warrants, making provision for the exchange of Warrant
Certificates, and making any modification in the form of the Warrant
Certificates which does not affect the substance thereof;
f. modifying any of the provisions of this Indenture, including relieving
the Corporation from any of the obligations, conditions or restrictions
herein contained, provided that such modification or relief shall be or
become operative or effective only if, in the opinion of the Trustee,
relying on counsel, such modification or relief in no way prejudices any
of the rights of the Warrantholders or of the Trustee, and provided
further that the Trustee may in its sole discretion decline to enter
into any such supplemental indenture which in its opinion may not afford
adequate protection to the Trustee when the same shall become operative;
and
g. for any other purpose not inconsistent with the terms of this Indenture,
including the correction or rectification of any ambiguities, defective
or inconsistent provisions, errors, mistakes or omissions herein,
provided that in the opinion of the Trustee the rights of the Trustee,
acting on the advice of counsel, and of the Warrantholders are in no way
prejudiced thereby.
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8.2 SUCCESSOR CORPORATIONS
In the case of the consolidation, amalgamation, merger or transfer of all or
substantially all of the undertaking or assets of the Corporation to another
corporation ("Successor Corporation"), the Successor Corporation resulting from
such consolidation, amalgamation, merger or transfer (if not the Corporation)
shall expressly assume, by supplemental indenture satisfactory in form to the
Trustee and executed and delivered to the Trustee, the due and punctual
performance and observance of each and every covenant and condition of this
Indenture to be performed and observed by the Corporation.
ARTICLE 9
CONCERNING THE TRUSTEE
9.1 TRUST INDENTURE LEGISLATION
a. If and to the extent that any provision of this Indenture limits,
qualifies or conflicts with a mandatory requirement of Applicable
Legislation, such mandatory requirement shall prevail.
b. The Corporation and the Trustee agree that each will, at all times in
relation to this Indenture and any action to be taken hereunder, observe
and comply with and be entitled to the benefits of Applicable
Legislation.
9.2 RIGHTS AND DUTIES OF TRUSTEE
a. In the exercise of the rights and duties prescribed or conferred by the
terms of this Indenture, the Trustee shall exercise that degree of care,
diligence and skill that a reasonably prudent trustee would exercise in
comparable circumstances. No provision of this Indenture shall be
construed to relieve the Trustee from liability for its own negligent
action, its own negligent failure to act, or its own wilful misconduct
or bad faith.
b. The obligation of the Trustee to commence or continue any act, action or
proceeding for the purpose of enforcing any rights of the Trustee or the
Warrantholders hereunder shall be conditional upon the Warrantholders
furnishing, when required by notice by the Trustee, sufficient funds to
commence or to continue such act, action or proceeding and an indemnity
reasonably satisfactory to the Trustee to protect and to hold harmless
the Trustee against the costs, charges and expenses and liabilities to
be incurred thereby and any loss and damage it may suffer by reason
thereof. None of the provisions contained in this Indenture shall
require the Trustee to expend or to risk its own funds or otherwise to
incur financial liability in the performance of any of its duties or in
the exercise of any of its rights or powers unless indemnified as
aforesaid.
c. The Trustee may, before commencing or at any time during the continuance
of any such act, action or proceeding, require the Warrantholders, at
whose instance it is acting, to
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deposit with the Trustee the Warrant Certificates held by them, for
which Warrant Certificates the Trustee shall issue receipts.
d. Every provision of this Indenture that by its terms relieves the Trustee
of liability or entitles it to rely upon any evidence submitted to it,
is subject to the provisions of Applicable Legislation, this section and
of section 9.3.
e. The Trustee shall not be bound to give any notice or do or take any act,
action or proceeding by virtue of the powers conferred on it hereby
unless and until it shall have been required so to do under the terms
hereof; nor shall the Trustee be required to take notice of any default
hereunder, unless and until notified in writing of such default, which
notice shall distinctly specify the default desired to be brought to the
attention of the Trustee and in the absence of any such notice the
Trustee may for all purposes of this Indenture conclusively assume that
no default has been made in the observance or performance of any of the
representations, warranties, covenants, agreements or conditions
contained herein. Any such notice shall in no way limit any discretion
herein given to the Trustee to determine whether or not the Trustee
shall take action with respect to any default.
9.3 EVIDENCE, EXPERTS AND ADVISERS
a. In addition to the reports, certificates, opinions and other evidence
required by this Indenture, the Corporation shall furnish to the Trustee
such additional evidence of compliance with any provision hereof, and in
such form, as may be prescribed by Applicable Legislation or as the
Trustee may reasonably require by written notice to the Corporation.
b. In the exercise of its rights and duties hereunder, the Trustee may, if
it is acting in good faith, rely as to the truth of the statements and
the accuracy of the opinions expressed in statutory declarations,
opinions, reports, written requests, consents, or orders of the
Corporation, certificates of the Corporation or other evidence furnished
to the Trustee pursuant to any provision hereof or of Applicable
Legislation or pursuant to a request of the Trustee, provided that such
evidence complies with Applicable Legislation and that the Trustee
complies with Applicable Legislation and that the Trustee examines such
evidence and determines that such evidence complies with the applicable
requirements of this Indenture.
c. Whenever it is provided in this Indenture or under Applicable
Legislation that the Corporation shall deposit with the Trustee
resolutions, certificates, reports, opinions, requests, orders or other
documents, it is intended that the trust, accuracy and good faith on the
effective date thereof and the facts and opinions stated in all such
documents so deposited shall, in each and every such case, be conditions
precedent to the right of the Corporation to have the Trustee take the
action to be based thereon.
d. Proof of the execution of an instrument in writing, including a
Warrantholders' Request, by any Warrantholder may be made by the
certificate of a notary public, or other officer
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with similar powers, that the person signing such instrument
acknowledged to him the execution thereof, or by an affidavit of a
witness to such execution or in any other manner which the Trustee may
consider adequate.
e. The Trustee may employ or retain such Counsel, accountants, appraisers
or other experts or advisers as it may reasonably require for the
purpose of discharging its duties hereunder and may pay reasonable
remuneration for all services so performed by any of them, and shall not
be responsible for any misconduct or negligence on the part of any such
experts or advisers who have been appointed with due care by the
Trustee.
f. The Trustee may act and rely and shall be protected in acting and
relying upon any resolution, certificate, statement, instrument,
opinion, report, notice, consent, order, letter, telegram, cablegram or
other paper document believed by it to be genuine and to have been
signed, sent, or presented by or on behalf of the proper party or
parties.
9.4 DOCUMENTS, MONIES, ETC. HELD BY TRUSTEE
Any monies, securities, documents of title or other instruments that may at any
time be held by the Trustee subject to the trusts hereof may be placed in the
deposit vaults of the Trustee, or an Affiliate of the Trustee, or of any
Canadian chartered bank or deposited for safekeeping with any such bank. Unless
herein otherwise expressly provided, any monies held pending the application or
withdrawal thereof under any provisions of this Indenture may be deposited in
the name of the Trustee in the deposit department of the Trustee or in any
Canadian chartered bank at the rate of interest (if any) then current on similar
deposits or, with the consent or at the written direction of the Corporation,
may be: (i) deposited in the deposit department of the Trustee or any other
trust company authorized to accept deposits under the laws of Canada or a
province thereof; or (ii) invested in securities issued or guaranteed by the
Government of Canada or a province thereof or of any Canadian chartered bank or
trust company, provided that the securities shall not have a maturity date of
more than 60 days from the date of investment. Unless the Corporation shall be
in default hereunder or unless otherwise specifically provided herein, all
interest or other income received by the Trustee in respect of such deposits and
investments shall belong to the Corporation.
For the purposes of this section 9.4, "Affiliate" means affiliated companies
within the meaning of the Business Corporations Act (Alberta) ("ABCA"); and
includes Canadian Imperial Bank of Commerce, CIBC Mellon Global Securities
Company and Mellon Bank, N.A. and each of their affiliates within the meaning of
the ABCA.
The Trustee and its Affiliates shall not be liable to account for any profit to
the Corporation or any other person or entirety other than at a rate, if any,
established from time to time by the Trustee or its Affiliates.
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9.5 ACTIONS BY TRUSTEE TO PROTECT INTEREST
The Trustee shall have power to institute and to maintain such actions and
proceedings as it may consider necessary or expedient to preserve, protect or
enforce its interests and the interests of the Warrantholders.
9.6 TRUSTEE NOT REQUIRED TO GIVE SECURITY
The Trustee shall not be required to give any bond or security in respect of the
execution of the trusts and powers of this Indenture or otherwise in respect of
the premises.
9.7 PROTECTION OF TRUSTEE
By way of supplement to the provisions of any law for the time being relating to
trustees it is expressly declared and agreed as follows:
a. the Trustee shall not be liable for or by reason of any statements of
fact or recitals in this Indenture or in the Warrant Certificates
(except the representations contained in section 9.9 and in the
certificate of the Trustee on the Warrant Certificates) or be required
to verify the same, but all such statements or recitals are and shall be
deemed to be made by the Corporation;
b. nothing herein contained shall impose any obligation on the Trustee to
see to or to require evidence of the registration or filing (or renewal
thereof) of this Indenture or any instrument ancillary or supplemental
hereto;
c. the Trustee shall not be bound to give notice to any person or persons
of the execution hereof; and
d. the Trustee shall not have any liability or responsibility whatever or
be in any way responsible for the consequence of any breach on the part
of the Corporation of any of the covenants herein contained or of any
acts of any directors, officers, employees, agents or servants of the
Corporation.
9.8 REPLACEMENT OF TRUSTEE; SUCCESSOR BY MERGER
a. The Trustee may resign its trust and be discharged from all further
duties and liabilities hereunder, subject to this section 9.8, by giving
to the Corporation not less than 90 days' prior notice in writing or
such shorter prior notice as the Corporation may accept as sufficient.
The Warrantholders by extraordinary resolution shall have power at any
time to remove the existing Trustee and to appoint a new Trustee. In the
event of the Trustee resigning or being removed as aforesaid or being
dissolved, becoming bankrupt, going into liquidation or otherwise
becoming incapable of acting hereunder, the Corporation shall forthwith
appoint a new trustee unless a new trustee has already been appointed by
the Warrantholders; failing such appointment by the Corporation, the
retiring Trustee at the expense of the Corporation or any Warrantholder
may apply to a justice of the Court
34
of Queen's Bench of the Province of Alberta on such notice as such
justice may direct, for the appointment of a new trustee; but any new
trustee so appointed by the Corporation or by the Court shall be subject
to removal as aforesaid by the Warrantholders. Any new trustee appointed
under any provision of this section 9.8 shall be a corporation
authorized to carry on the business of a trust company in the Province
of Alberta and, if required by the Applicable Legislation for any other
provinces, in such other provinces. On any such appointment the new
trustee shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as Trustee
hereunder.
b. Upon the appointment of a successor trustee, the Corporation shall
promptly notify the Warrantholders thereof in the manner provided for in
section 10.2 hereof.
c. Any corporation into or with which the Trustee may be merged or
consolidated or amalgamated, or any corporation resulting therefrom to
which the Trustee shall be a party, or any corporation succeeding to the
trust business of the Trustee shall be the successor to the Trustee
hereunder without any further act on its part or any of the parties
hereto, provided that such corporation would be eligible for appointment
as a successor trustee under subsection 9.8(a).
d. Any Warrant Certificates certified but not delivered by a predecessor
trustee may be certified by the successor trustee in the name of the
predecessor or successor trustee.
9.9 CONFLICT OF INTEREST
a. The Trustee represents to the Corporation that at the time of execution
and delivery hereof no material conflict of interest exists between its
role as a trustee hereunder and its role in any other capacity and
agrees that in the event of a material conflict of interest arising
hereafter it will, within 90 days after ascertaining that it has such
material conflict of interest, either eliminate the same or assign its
trust hereunder to a successor trustee approved by the Corporation and
meeting the requirements set forth in subsection 9.8(a). Notwithstanding
the foregoing provisions of this subsection 9.9(a), if any such material
conflict of interest exists or hereafter shall exist, the validity and
enforceability of this Indenture and the Warrant Certificate shall not
be affected in any manner whatsoever by reason thereof.
b. Subject to subsection 9.9(a), the Trustee, in its personal or any other
capacity, may buy, lend upon and deal in securities of the Corporation
and generally may contract and enter into financial transactions with
the Corporation or any Subsidiary of the Corporation without being
liable to account for any profit made thereby.
9.10 INDEMNITY OF TRUSTEE
The Corporation hereby indemnifies the Trustee from any and all costs, charges,
expenses, liabilities or damages which may be incurred or suffered by the
Trustee in respect of the performance of its duties under this Indenture except
for such costs, charges, expenses, liabilities or damages attributable to the
gross negligence or wilful misconduct of the Trustee.
35
9.11 ACCEPTANCE OF TRUST
This Indenture is entered into with the Trustee for the benefit of, and the
Trustee declares that it holds this Indenture and all rights, interests and
benefits of this Indenture for, such persons, firms and corporations, and each
of them, who are from time to time Warrantholders. The Trustee hereby accepts
the trusts in this Indenture declared and provided for and agrees to perform the
same upon the terms and conditions herein set forth.
9.12 TRUSTEE NOT TO BE APPOINTED RECEIVER
The Trustee and any person related to the Trustee shall not be appointed a
receiver, a receiver and manager or liquidator of all or any part of the assets
or undertaking of the Corporation.
9.13 PURCHASE WARRANT REGISTER
The Trustee shall, at all times while any Purchase Warrants are outstanding,
maintain, at its principal office in Vancouver, British Columbia, a Warrant
Register in which shall be recorded the following information:
(1) the numbers of all outstanding Warrant Certificates, including
the date of issuance;
(2) the numbers of all Warrant Certificates exchanged or exercised,
including the date of exchange or exercise;
(3) the names and addresses of all Warrantholders;
(4) the particulars of all transfers of Purchase Warrants; and
(5) such other information as the Trustee, in its discretion, deems
necessary or advisable.
9.14 REGISTER OPEN FOR INSPECTION
The Warrant Register shall be open at all reasonable times on a Business Day
during business hours for inspection by the Corporation, the Trustee or any
Warrantholder. The Trustee shall, from time to time when requested to do so by
the Corporation in writing, furnish the Corporation with a list of names and
addresses of holders of Purchase Warrants entered in the Register kept by the
Trustee.
9.15 TRUSTEE NOT REQUIRED TO GIVE NOTICE OF DEFAULT
The Trustee shall not be bound to give any notice or do or take any act, action
or proceeding by virtue of the powers conferred on it hereby unless and until it
shall have been required so to do under the terms hereof; nor shall the Trustee
be required to take notice of any default hereunder,
36
unless and until notified in writing of such default, which notice shall
distinctly specify the default desired to be brought to the attention of the
Trustee and in the absence of any such notice the Trustee may for all purposes
of this Indenture conclusively assume that no default has been made in the
observance or performance of any of the representations, warranties, covenants,
agreements or conditions contained herein. Any such notice shall in no way
limited any discretion herein given to the Trustee to determine whether or not
the Trustee shall take action with respect to any default.
ARTICLE 10
GENERAL
10.1 NOTICE TO THE CORPORATION AND THE TRUSTEE
a. Unless herein otherwise expressly provided, any notice to be given
hereunder to the Corporation or the Trustee shall be deemed to be
validly given if delivered or if sent by registered letter, postage
prepaid or telecopied:
If to the Corporation:
Golden Star Resources Ltd.
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ ▇.▇.▇.
Attention: ▇▇▇▇▇ ▇.▇. ▇▇▇▇▇▇▇▇, President
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Trustee:
CIBC Mellon Trust Company
1600, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇
Attention: Manager, Corporate Trust Department
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
and any such notice delivered in accordance with the foregoing shall be
deemed to have been received on the date of delivery or, if mailed, on
the fifth Business Day following the date of the postmark on such notice
or, if sent by telecopy, on the next Business Day following the date of
transmission, provided that its contents are transmitted and received
completely and accurately.
b. The Corporation or the Trustee, as the case may be, may notify the other
in the manner provided in subsection 10.1(a) of a change of address
which, from the effective date of such notice and until changed by like
notice, shall be the address of the Corporation or the Trustee, as the
case may be, for all purposes of this Indenture.
37
c. If, by reason of a strike, lockout or other work stoppage, actual or
threatened, involving postal employees, any notice to be given to the
Trustee or to the Corporation hereunder could reasonably be considered
unlikely to reach its destination, such notice shall be valid and
effective only if it is delivered to the named officer of the party to
which it is addressed or, if it is delivered to such party at the
appropriate address provided in subsection 10.1(a), by cable, telegram,
telecopy or other means of prepaid, transmitted and recorded
communication.
10.2 NOTICE TO WARRANTHOLDERS
a. Any notice to the Warrantholders under the provisions of this Indenture
shall be valid and effective if sent by telecopier or through the
ordinary post addressed to such holders at their postal addresses
appearing on the register hereinbefore mentioned and shall be deemed to
have been effectively given on the date of delivery or, if mailed, five
Business Days following actual posting of the notice or, if sent by
telecopy, on the next Business Day following the date of transmission,
provided that its contents are transmitted and received completely and
accurately. Accidental error or omission in giving notice or accidental
failure to mail notice to any holder will not invalidate any action or
proceeding founded thereon.
b. If, by reason of a strike, lockout or other work stoppage, actual or
threatened, involving postal employees, any notice to be given to the
Warrantholders hereunder could reasonably be considered unlikely to
reach its destination, such notice shall be valid and effective only if
it is delivered personally to such Warrantholders or if delivered to the
address for such Warrantholders contained in the register of Purchase
Warrants maintained by the Trustee, by telecopy or other means of
prepaid transmitted and recorded communication.
c. All notices may be given to whichever one of the Warrantholders (if more
than one) is named first in the appropriate register hereinbefore
mentioned, and any notice so given shall be sufficient notice to all
Warrantholders of any and any other persons (if any) interested in such
Warrants.
10.3 OWNERSHIP AND TRANSFER OF PURCHASE WARRANTS
A Warrantholder shall be entitled to the rights evidenced by its Warrant
Certificate free from all equities or rights of set off or counterclaim between
the Corporation and the original or any intermediate holder of the Purchase
Warrants and all persons may act accordingly and the receipt of any such
Warrantholder for the Common Shares which may be acquired pursuant thereto shall
be a good discharge to the Corporation and the Trustee for the same and neither
the Corporation nor the Trustee shall be bound to inquire into the title of any
such holder except where the Corporation or the Trustee is required to take
notice by statute or by order of a court of competent jurisdiction.
38
10.4 EVIDENCE OF OWNERSHIP
a. Upon receipt of a certificate of any bank, trust company or other
depositary satisfactory to the Trustee stating that the Purchase
Warrants specified therein have been deposited by a named person with
such bank, trust company or other depositary and will remain so
deposited until the expiry of the period specified therein, the
Corporation and the Trustee may treat the person so named as the owner,
and such certificate as sufficient evidence of the ownership by such
person of such Purchase Warrant during such period, for the purpose of
any requisition, direction, consent, instrument or other document to be
made, signed or given by the holder of the Purchase Warrant so
deposited.
b. The Corporation and the Trustee may accept as sufficient evidence of the
fact and date of the signing of any requisition, direction, consent,
instrument or other document by any person: (i) the signature of any
officer of any bank, trust company, or other depositary satisfactory to
the Trustee as witness of such execution, (ii) the certificate of any
notary public or other officer authorized to take acknowledgments of
deeds to be recorded at the place where such certificate is made that
the person signing acknowledged to him the execution thereof, or (iii) a
satisfactory declaration of a witness of such execution.
10.5 COUNTERPARTS
This Indenture may be executed in several counterparts, each of which when so
executed shall be deemed to be an original and such counterparts together shall
constitute one and the same instrument and notwithstanding their date of
execution they shall be deemed to be dated as of the date hereof.
10.6 SATISFACTION AND DISCHARGE OF INDENTURE
Upon the earlier of:
a. the date by which there shall have been delivered to the Trustee for
exercise or destruction all Warrant Certificates theretofore certified
hereunder; or
b. the Time of Expiry;
and if all certificates representing Common Shares required to be issued in
compliance with the provisions hereof have been issued and delivered hereunder
and if all payments required to be made pursuant to Article 3 have been made in
accordance therewith, this Indenture shall cease to be of further effect.
Notwithstanding the foregoing, the indemnities provided to the Trustee by the
Corporation hereunder shall remain in full force and effect and survive the
termination of this Indenture.
10.7 SUCCESSORS
All the covenants and provisions of this Indenture by or for the benefit of the
Corporation or the Trustee shall bind and enure to the benefit of their
respective successors and assigns hereunder.
39
10.8 SOLE BENEFIT OF PARTIES AND WARRANTHOLDERS
Nothing in this Indenture or in the Warrant Certificates, expressed or implied,
shall give or be construed to give to any person other than the parties hereto
and the Warrantholders, as the case may be, any legal or equitable right, remedy
or claim under this Indenture, or under any covenant or provision herein or
therein contained, all such covenants and provisions being for the sole benefit
of the parties hereto and the Warrantholders.
10.9 COMMON SHARES OR PURCHASE WARRANTS OWNED BY THE CORPORATION OR ITS
SUBSIDIARIES - CERTIFICATE TO BE PROVIDED
For the purpose of disregarding any Purchase Warrants owned legally or
beneficially by the Corporation or any Subsidiary of the Corporation in section
7.16, the Corporation shall provide to the Trustee, from time to time, a
certificate of the Corporation setting forth as at the date of such certificate:
a. the names (other than the name of the Corporation) of the registered
holders of Purchase Warrants which, to the knowledge of the Corporation,
are owned by or held for the account of the Corporation or any
Subsidiary of the Corporation; and
b. the number of Purchase Warrants owned legally or beneficially by the
Corporation or any Subsidiary of the Corporation;
and the Trustee, in making the computations in section 7.16, shall be entitled
to rely on such certificate without any additional evidence.
IN WITNESS WHEREOF the parties hereto have executed this Indenture under their
respective corporate seals and the hands of their proper officers in that
behalf.
GOLDEN STAR RESOURCES LTD.
Per:
------------------------------------
CIBC MELLON TRUST COMPANY
Per:
------------------------------------
Per:
------------------------------------
40
THIS IS SCHEDULE "A" TO THE WARRANT INDENTURE MADE AS OF JUNE ___, 2002 BETWEEN
GOLDEN STAR RESOURCES LTD. AND CIBC MELLON TRUST COMPANY AS TRUSTEE.
THE PURCHASE WARRANTS REPRESENTED BY THIS CERTIFICATE WILL BE VOID AND OF NO
VALUE UNLESS EXERCISED AT OR BEFORE 4:30 P.M. (VANCOUVER TIME), ON ____________,
2004.
WARRANT CERTIFICATE
GOLDEN STAR RESOURCES LTD.
(A corporation amalgamated under the laws of Canada)
WARRANT CERTIFICATE NO. ________ _________________ PURCHASE WARRANTS
entitling the holder to acquire, subject
to adjustment, one Common Share for each
such Purchase Warrant.
THIS IS TO CERTIFY THAT ___________________________________________________
(hereinafter referred to as the "holder") is the registered holder of the number
of Purchase Warrants to acquire Common Shares, as hereinafter defined, of Golden
Star Resources Ltd. (the "Corporation") as set forth in this Warrant certificate
("Warrant Certificate"). One Purchase Warrant represented hereby plus $____
entitles the holder thereof to acquire, one fully paid and non-assessable common
share ("Common Share") of the Corporation, without nominal or par value, in the
manner and subject to the restrictions and adjustments set forth herein, at any
time and from time to time until 4:30 p.m. (Vancouver time) (the "Time of
Expiry") on _________, 2004 (the "Expiry Date").
The right to acquire Common Shares hereunder may only be exercised by the holder
within the time set forth above by:
a. duly completing and executing the Exercise Form attached hereto;
b. surrendering this Warrant Certificate to CIBC Mellon Trust Company (the
"Trustee") at the principal office of the Trustee in the City of
Vancouver; and
c. remitting certified cheque, bank draft or money order in lawful money of
Canada, payable to or to the order of the Corporation at par where this
Warrant Certificate is so surrendered, for the aggregate purchase price
of the Common Shares so subscribed for.
These Purchase Warrants shall be deemed to be surrendered only upon personal
delivery hereof or, if sent by mail or other means of transmission, upon actual
receipt thereof by the Trustee at the office referred to above.
41
Upon surrender of these Purchase Warrants, the person or persons in whose name
or names the Common Shares issuable upon exercise of the Purchase Warrants are
to be issued shall be deemed for all purposes (except as provided in the
Indenture hereinafter referred to) to be the holder or holders of record of such
Common Shares and the Corporation has covenanted that it will (subject to the
provisions of the Indenture) cause a certificate or certificates representing
such Common Shares to be delivered or mailed to the person or persons at the
address or addresses specified in the Exercise Form within five Business Days.
The registered holder of this Warrant Certificate may acquire any lesser number
of Common Shares than the number of Common Shares which may be acquired for the
Purchase Warrants represented by this Warrant Certificate. In such event, the
holder shall be entitled to receive a new certificate for the balance of the
Common Shares which may be acquired. No fractional Common Shares will be issued.
The holder hereby expressly waives the right to receive any fractional Common
Shares upon the exercise hereof in full or in part and further waives the right
to receive any cash or other consideration in lieu thereof.
The Purchase Warrants represented by this certificate are issued under and
pursuant to a Warrant Indenture (herein referred to as the "Indenture") made as
of ___, 2002 between the Corporation and the Trustee. Reference is made to the
Indenture and any instruments supplemental thereto for a full description of the
rights of the holders of the Purchase Warrants and the terms and conditions upon
which the Purchase Warrants are, or are to be, issued and held, with the same
effect as if the provisions of the Indenture and all instruments supplemental
thereto were set forth herein. By acceptance hereof, the holder assents to all
provisions of the Indenture. In the event of a conflict between the provisions
of the Warrant Certificate and the Indenture, the provisions of the Indenture
shall govern. A copy of the Indenture is available for inspection at the
principal office of the Trustee. Capitalized terms used in the Indenture have
the meaning herein as therein, unless otherwise defined.
In the event of any alteration of the Common Shares, including any subdivision,
consolidation or reclassification, and in the event of any form of
reorganization of the Corporation including any amalgamation, merger or
arrangement, the holders of Purchase Warrants shall, upon exercise of the
Purchase Warrants following the occurrence of any of those events, be entitled
to receive the same number and kind of securities that they would have been
entitled to receive had they exercised their Purchase Warrants immediately prior
to the occurrence of those events.
The registered holder of this Warrant Certificate may, at any time prior to the
Expiry Date, upon surrender hereof to the Trustee at its principal offices in
the City of Vancouver, exchange this Warrant Certificate for other certificates
entitling the holder to acquire, in the aggregate, the same number of Common
Shares as may be acquired under this Warrant Certificate.
The holding of the Purchase Warrants evidenced by this Warrant Certificate shall
not constitute the holder hereof a shareholder of the Corporation or entitle the
holder to any right or interest in respect thereof except as expressly provided
in the Indenture or in this Warrant Certificate.
42
The Indenture provides that all holders of Purchase Warrants shall be bound by
any resolution passed at a meeting of the holders held in accordance with the
provisions of the Indenture and resolutions signed by the holders of Purchase
Warrants entitled to acquire a specified majority of the Common Shares which may
be acquired pursuant to all then outstanding Purchase Warrants.
The Purchase Warrants evidenced by this Warrant Certificate may be transferred
on the register kept at the principal office of the Trustee in Vancouver,
British Columbia by the registered holder hereof or its legal representatives or
its attorney duly appointed by an instrument in writing in form and execution
satisfactory to the Trustee, only upon compliance with the conditions prescribed
in the Indenture and upon compliance with such reasonable requirements as the
Trustee may prescribe.
This Warrant Certificate shall not be valid for any purpose whatever unless and
until it has been certified by or on behalf of the Trustee.
Time shall be of the essence hereof. This Warrant Certificate shall be governed
by and construed in accordance with the laws of the Province of Alberta and the
federal laws of Canada applicable therein and shall be treated in all respects
as an Alberta contract.
IN WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be
signed by its duly authorized officers as of ______________________________.
GOLDEN STAR RESOURCES LTD.
Per:
------------------------------------
Certified by:
CIBC MELLON TRUST COMPANY
Trustee
By:
-----------------------------------
--------------------------------------
43
TRANSFER OF PURCHASE WARRANTS
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to
______________________________________, _______________________ Purchase
Warrants of Golden Star Resources Ltd. registered in the name of the undersigned
on the records of CIBC Mellon Trust Company represented by the Warrant
Certificate attached and irrevocably appoints
_____________________________________ the attorney of the undersigned to
transfer the said securities on the books or register with full power of
substitution.
If less than all the Purchase Warrants represented by this Warrant Certificate
are being transferred, the Warrant Certificate representing those Purchase
Warrants not transferred will be registered in the name appearing on the face of
this Warrant Certificate and such certificates (please check one):
(a) __________ should be sent by first class mail to the following address:
____________________________________________________________
____________________________________________________________
(b) __________ should be held for pick up at the office of the Trustee at
which this Warrant Certificate is deposited.
DATED the _____ day of __________, ______.
----------------------------------------
Signature Guaranteed (Signature of Warrantholder)
Instructions:
1. Signature of the Warrantholder must be the signature of the person
appearing on the face of this Warrant Certificate.
2. If the Transfer Form is signed by a trustee, executor, administrator,
curator, guardian, attorney, trustee in bankruptcy, liquidator, officer
of a corporation or any person acting in a judiciary or representative
capacity, the certificate must be accompanied by evidence of authority
to sign satisfactory to the Trustee and the Corporation.
3. The signature on the Transfer Form must be guaranteed by an authorized
officer of an Eligible Institution, as defined below.
44
4. The signature(s) must be guaranteed by an "Eligible Institution" which
means a Canadian Schedule 1 chartered bank, a major trust company in
Canada, a member of the Securities Transfer Association Medallion
Program (STAMP), a member of the Stock Exchange Medallion Program (SEMP)
or a member of the New York Stock Exchange Inc. Medallion Signature
Program (MSP). Members of these programs are usually members of a
recognized stock exchange in Canada and the United States, members of
the Investment Dealers Associates of Securities Dealers or banks and
trust companies in the United States. The Guarantor must affix a stamp
bearing the actual words "Signature Guaranteed".
Please note - signature guarantees are not accepted from treasury
branches or credit unions unless they are members of the Stamp Medallion
Program.
Please note in the United States, signature guarantees must be done by
members of the Signature Medallion Guarantee Program, a member of the
Stock Exchanges Medallion Program or a member of the New York Stock
Exchange Ins. Medallion Signature Program.
OFFICE OF THE TRUSTEE
CIBC Mellon Trust Company
1600, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
45
EXERCISE FORM
TO: Golden Star Resources Ltd. and
CIBC Mellon Trust Company
(a) The undersigned hereby irrevocably exercises the right to acquire
__________ Common Shares of Golden Star Resources Ltd. (or such number
of other securities or property to which such Purchase Warrants entitle
the undersigned in lieu thereof or in addition thereto under the
provisions of the Indenture referred to in the accompanying Warrant
Certificate) in accordance with and subject to the provisions of such
Indenture. A certified cheque, bank draft of money order payable to
Golden Star Resources Ltd. in payment of the Common Shares hereby
subscribed for is enclosed.
(b) The Common Shares (or other securities or property) are to be issued as
follows:
Name:
-------------------------------------------------------------------
(print clearly)
Address in full:
--------------------------------------------------------
------------------------------------------------------------------------
Number of Common Shares:
------------------------------------------------
Note: If further nominees intended, please attach (and initial) schedule
giving these particulars.
Such securities (please check one):
(a) should be sent by first class mail to the following address:
-----------
----------------------------------------------------------------
----------------------------------------------------------------
OR
(b) should be held for pick up at the office of the Trustee at which
----------- this Warrant Certificate is deposited.
If the number of Purchase Warrants exercised are less than the number of
Purchase Warrants represented hereby, the undersigned requests that the new
Warrant Certificate representing the balance of the Purchase Warrants be
registered in the name of
______________________________________________________
_______________________________________________________________________________
46
whose address is
_______________________________________________________________
________________________________________________________________________________
Such securities (please check one):
(a) should be sent by first class mail to the following address:
----------
------------------------------------------------------------------------
------------------------------------------------------------------------
OR
(b) should be held for pick up at the office of the Trustee at
---------- which this Warrant Certificate is deposited.
In the absence of instructions to the contrary, the securities or other property
will be issued in the name of or to the holder hereof and will be sent by first
class mail to the last address of the holder appearing on the register
maintained for the Purchase Warrants.
DATED this ____ day of __________, _______.
---------------------------------- ---------------------------------------
Signature Guaranteed (Signature of Warrantholder)
----------------------------------------
Print full name
----------------------------------------
----------------------------------------
Print full address
Instructions:
1. The registered holder may exercise its right to receive Common Shares by
completing this form and surrendering this form and the Warrant
Certificate representing the Purchase Warrants being exercised to CIBC
Mellon Trust Company at its principal office at 1600, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇. Certificates for Common
Shares will be delivered or mailed within five business days after the
exercise of the Purchase Warrants.
47
2. If the Exercise Form indicates that Common Shares are to be issued to a
person or persons other than the registered holder of the Certificate,
the signature of such holder of the Exercise Form must be guaranteed by
an authorized officer of an Eligible Institution, as defined below.
4. The signature(s) must be guaranteed by an "Eligible Institution" which
means a Canadian Schedule 1 chartered bank, a major trust company in
Canada, a member of the Securities Transfer Association Medallion
Program (STAMP), a member of the Stock Exchange Medallion Program (SEMP)
or a member of the New York Stock Exchange Inc. Medallion Signature
Program (MSP). Members of these programs are usually members of a
recognized stock exchange in Canada and the United States, members of
the Investment Dealers Associates of Securities Dealers or banks and
trust companies in the United States. The Guarantor must affix a stamp
bearing the actual words "Signature Guaranteed".
Please note - signature guarantees are not accepted from treasury
branches or credit unions unless they are members of the Stamp Medallion
Program.
Please note in the United States, signature guarantees must be done by
members of the Signature Medallion Guarantee Program, a member of the
Stock Exchanges Medallion Program or a member of the New York Stock
Exchange Ins. Medallion Signature Program.
4. If the Exercise Form is signed by a trustee, executor, administrator,
curator, guardian, attorney, trustee in bankruptcy, liquidator, officer
of a corporation or any person acting in a fiduciary or representative
capacity, the certificate must be accompanied by evidence of authority
to sign satisfactory to the Trustee and the Corporation.
OFFICE OF THE TRUSTEE
CIBC Mellon Trust Company
1600, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
48
