THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES ACT); (B) IT IS AN ACCREDITED
INVESTOR (AS DEFINED IN REGULATION D UNDER THE SECURITIES ACT); OR (C) IT IS NOT
A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S ADOPTED UNDER THE SECURITIES ACT; (2) AGREES THAT
IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE
COMMON SHARES AND WARRANTS (AND UNDERLYING COMMON SHARES) ISSUABLE UPON EXERCISE
OF SUCH SECURITY, EXCEPT (A) TO THE ISSUER OR A SUBSIDIARY THEREOF; (B) TO A
QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A ADOPTED UNDER THE
SECURITIES ACT (IF AVAILABLE); (C) TO PERSONS OTHER THAN U.S. PERSONS OUTSIDE
THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE SECURITIES ACT; (D)
PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER
THE SECURITIES ACT OR ANOTHER AVAILABLE EXEMPTION UNDER THE SECURITIES ACT (IF
AVAILABLE); OR (E) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT, AND (3) AGREES THAT IT WILL, PRIOR TO ANY TRANSFER OF THIS
SECURITY FURNISH TO THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR OTHER
INFORMATION AS MAY BE REQUIRED TO CONFIRM THAT SUCH TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. AS USED HEREIN, THE TERMS
"OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE MEANING GIVEN
TO THEM BY REGULATION S UNDER THE SECURITIES ACT. IN ANY CASE, THE HOLDER HEREOF
WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD
TO THIS SECURITY OR ANY COMMON SHARES AND WARRANTS (AND UNDERLYING COMMON
SHARES) ISSUABLE UPON EXERCISE OF SUCH SECURITY, EXCEPT AS PERMITTED BY THE
SECURITIES ACT.
THE SECURITIES REPRESENTED BY THIS SPECIAL WARRANT CERTIFICATE HAVE NOT BEEN AND
WILL NOT BE REGISTERED UNDER THE 1933 ACT. THE SECURITIES TO BE ISSUED UPON
EXERCISE OF THE SECURITIES REPRESENTED BY THIS SPECIAL WARRANT CERTIFICATE WILL
NOT BE INITIALLY REGISTERED AND MAY OR MAY NOT LATER BECOME REGISTERED FOR
RESALE UNDER THE 1933 ACT. NEITHER ANY SECURITIES REPRESENTED BY THIS SPECIAL
WARRANT CERTIFICATE NOR ANY SECURITIES ISSUED UPON EXERCISE OF THE SECURITIES
REPRESENTED BY THIS SPECIAL WARRANT CERTIFICATE MAY BE EXERCISED BY OR ON BEHALF
OF ANY U.S. PERSON, AS SUCH TERM IS DEFINED IN REGULATION S PROMULGATED PURSUANT
TO THE 1933 ACT, UNLESS REGISTERED UNDER THE 1933 ACT OR AN EXEMPTION FROM SUCH
REGISTRATION IS AVAILABLE.
UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE MARCH 5, 2005.
APOLLO GOLD CORPORATION
(Continued under the Business Corporations Act (Yukon)
SPECIAL WARRANTS
TO ACQUIRE
UNITS
Certificate Number: 2004-SW-____ Number of Special Warrants:_____
THIS IS TO CERTIFY THAT, for value received, [INSERT REGISTRATION INFORMATION]
(the "HOLDER") is the registered holder of ____ special warrants (the "SPECIAL
WARRANTS") of Apollo Gold Corporation (the "CORPORATION") and is hereby
entitled, without payment of any additional consideration, until the Expiry Time
to acquire units ("Units") of the Corporation, on the basis of one Unit for each
Special Warrant, with each Unit comprised of one fully-paid and non-assessable
common share in the capital of the Corporation (a "COMMON SHARE") and six-tenths
of one (0.6) common share purchase warrant (a "WARRANT"), with each whole
Warrant entitling the holder thereof to purchase one additional Common Share (a
"WARRANT SHARE") at a price of US$0.80 per Warrant Share (the "EXERCISE PRICE")
at any time on or prior to 5:00 p.m. (Toronto time) on the third anniversary of
the date of issue. The number of Common Shares and Warrants which the holder is
entitled to acquire upon exercise of the Special Warrants is subject to
adjustment as hereinafter provided, subject to the limitations referred to
herein, by surrendering to the Corporation at its counsel's principal office in
Toronto, Ontario as set forth in Section 8.1(1) of SCHEDULE "A" hereto, during
the exercise period hereinafter referred to, this Special Warrant Certificate,
with a notice of exercise in the form set forth in APPENDIX "1" annexed hereto
duly completed and executed or upon the deemed exercise of the Special Warrants.
The Common Shares and Warrants issuable upon the exercise or deemed exercise of
the Special Warrants are hereafter collectively referred to as the "UNDERLYING
SECURITIES". The certificate representing the Warrants shall be in the form as
APPENDIX "3" annexed hereto.
2
The underlying Common Shares are subject to a Registration Rights Agreement
between the Corporation and the initial holders of the Special Warrants, dated
November 4, 2004.
Surrender of this Special Warrant Certificate will be deemed to have been
effected only on personal delivery thereof to, or, if sent by mail or other
means of transmission, on actual receipt thereof by, the Corporation at the
office specified above.
REFERENCE IS MADE TO SCHEDULE A ANNEXED HERETO (WHICH SCHEDULE IS INCORPORATED
BY REFERENCE HEREIN AND IS DEEMED TO BE A PART HEREOF) FOR PARTICULARS OF THE
RIGHTS OF THE HOLDER OF THE SPECIAL WARRANT OF THE CORPORATION EVIDENCED HEREBY
AND OF THE TERMS AND CONDITIONS UPON WHICH THE SPECIAL WARRANT IS ISSUED AND
HELD, TO ALL OF WHICH THE HOLDER, BY ACCEPTANCE HEREOF, ASSENTS. TO THE EXTENT
OF ANY INCONSISTENCY BETWEEN THE TERMS OF SCHEDULE A ANNEXED HERETO AND THE
TERMS OF THIS SPECIAL WARRANT CERTIFICATE, THE TERMS OF SCHEDULE A ANNEXED
HERETO SHALL PREVAIL.
The Holder may convert the Special Note at any time until the Time of Expiry by
completing the election to convert form attached as Exhibit "1" to this
certificate. The term "TIME OF EXPIRY" shall mean 5:00 p.m. (Toronto time) on
the date (the "EXPIRY DATE") that is the earlier of:
(i) the fifth (5th) Business Day (as hereinafter defined) after the
issuance of the Receipt (as hereinafter defined) in respect of a
(final) prospectus qualifying, among other things, the issuance of
the Common Shares and Warrants issuable on the conversion or deemed
conversion of the Special Warrants (the "PROSPECTUS") by the Ontario
Securities Commission (the "COMMISSION") and any other securities
regulatory authority in each of the jurisdictions in Canada in which
purchasers of Special Notes and Special Warrants (as defined in the
in the agency agreement among, inter alia, the Holder and the
Corporation dated as of November 4, 2004) reside; and
(ii) November 4, 2005.
The term "RECEIPT" means, in respect of the Commission, the decision document,
receipt or similar notice or document in respect of the Prospectus issued by the
Commission.
If the Corporation has not obtained the Receipt for the Prospectus on or before
December 20, 2004 (the "QUALIFICATION DEADLINE"), each Special Warrant will
thereafter entitle the holder thereof to acquire upon the conversion thereof and
for no additional consideration, one and one-tenth of one (1.1) Common Share and
sixty-six-one-hundredth of one (0.66) Warrant (in lieu of one (1 common share
and six-tenths of one (0.6) Warrant).
On and after the date of any conversion or deemed conversion of the Special
Warrants evidenced by this Special Warrant Certificate, the holder will have no
rights hereunder except to receive within five Business Days of such conversion
or deemed conversion certificates representing the Underlying Securities thereby
issued to the holder.
3
The Corporation will not be obligated to issue any fraction of a Common Share or
Warrant on the exercise or deemed exercise of the Special Warrants. No
compensation will be paid by the Corporation for such fractional Common Share or
Warrant.
Nothing contained in this Special Warrant Certificate shall be constructed as
conferring upon the holder any right or interest whatsoever as a holder of
Common Shares or any other right or interest except as herein provided.
Time will be of the essence hereof.
This Special Warrant Certificate shall be governed and construed in accordance
with the laws of the Province of Ontario.
IN WITNESS WHEREOF Apollo Gold Corporation has caused this Special Warrant
Certificate to be signed by its officer or other individual duly authorized in
that behalf as of November 4, 2004.
APOLLO GOLD CORPORATION
By:
-------------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Senior Vice President
Finance and Corporate Development
Title:
A-1
SCHEDULE "A"
TO SPECIAL WARRANT CERTIFICATE
ARTICLE 1
INTERPRETATION
1.1 DEFINITIONS
In these Terms and Conditions, unless there is something in the subject
matter or context inconsistent therewith:
"ADJUSTMENT PERIOD" has the meaning ascribed to the term in section 4.7;
"AFFILIATE" shall have the meaning ascribed to such term in the Securities Act
(Ontario);
"BUSINESS DAY" means any day that is not a Saturday, Sunday or any other day on
which the principal chartered banks located in the city of Toronto, Ontario,
Canada are not open for business;
"CLOSING DATE" means the date on which this Special Warrant Certificate is
issued to the Holder;
"COMMISSION" means the Ontario Securities Commission;
"COMMON SHARES" means the common shares in the capital of the Corporation;
"CORPORATION" means Apollo Gold Corporation and includes any successor
corporation to or of the Corporation;
"CORPORATION'S AUDITORS" means the auditors to be duly appointed by the
directors as auditors of the Corporation;
"COUNSEL" means Fogler, ▇▇▇▇▇▇▇▇ LLP;
"DEEMED EXERCISE DATE" means, with respect to the deemed exercise of the Special
Warrants by the holder thereof pursuant to subsection 4.2(1), the date on which
the Special Warrants are so deemed to have been exercised as provided in such
subsection;
"DIRECTOR" means a director of the Corporation for the time being, and reference
without more to action by the directors means action by the directors of the
Corporation as a board or, to the extent empowered, by a committee of the board,
in each case by resolution duly passed;
"EXCHANGE RATE" has the meaning ascribed to the term in section 4.7;
"EXERCISE DATE" means, with respect to the Special Warrants exercised by the
holder thereof pursuant to subsection 4.1(1), the day on which the Special
Warrant Certificate evidencing such Special Warrants is surrendered to the
Corporation in accordance with the provisions of section 4.1;
"EXERCISE PRICE" shall have the meaning ascribed to such term on the first page
hereof;
"EXPIRY TIME" shall have the meaning ascribed to such term on the first page
hereof;
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"PERSON" means an individual, corporation, firm, sole proprietorship, syndicate,
joint venture trust, partnership, trustee or unincorporated organization, and
words importing persons have a similar extended meaning;
"PROSPECTUS" means the final prospectus qualifying the distribution of the
Common Shares and Warrants in the Province of Ontario and such other
jurisdictions where the Special Warrants are lawfully sold;
"QUALIFICATION DEADLINE" means December 20, 2004;
"RECEIPT" means the receipt for the Prospectus to be issued by the Commission;
"SPECIAL WARRANTS" means the special warrants issued by the Corporation to
acquire the Common Shares and Warrants created and authorized for issuance
hereunder and evidenced by this Special Warrant Certificate issued and certified
in accordance with the provisions hereof and that have not for the time being
expired or been exercised or deemed to have been exercised;
"SPECIAL WARRANT CERTIFICATE" means the certificate evidencing one or more
Special Warrants to which these Terms and Conditions are attached;
"SPECIAL WARRANTHOLDERS" or "HOLDERS" means the persons for the time being
entered in a register of holders described in section 3.1 as holders of Special
Warrants;
"SUBSCRIBERS" means the subscribers of the Special Warrants;
"THESE TERMS AND CONDITIONS", "HERETO", "HEREUNDER", "HEREOF", "HEREIN",
"HEREBY" and similar expressions mean or refer to these Terms and Conditions and
any indenture, deed or instrument supplemental or ancillary hereto, and the
expressions "ARTICLE", "SECTION", "SUBSECTION" and "PARAGRAPH" followed by a
number mean the specified Article, section, subsection or paragraph of these
Terms and Conditions;
"UNDERLYING SECURITIES" means the Common Shares and the Warrants comprising the
Units, which are issuable upon the exercise or deemed exercise of the Special
Warrants;
"UNITS" shall have the meaning ascribed to such term on the first page hereof;
"U.S. SECURITIES ACT" United States Securities Act of 1933, as amended;
"WARRANTS" means the common share purchase warrants of the Corporation, each
exercisable at a price of US$0.80 until the third anniversary of the issue date
of the Warrants; and
"WRITTEN ORDER OF THE CORPORATION", "WRITTEN REQUEST OF THE CORPORATION",
"WRITTEN CONSENT OF THE CORPORATION", "WRITTEN DIRECTION OF THE CORPORATION" and
"CERTIFICATE OF THE CORPORATION" mean, respectively, a written order, request,
consent, direction and certificate signed in the name of the Corporation by any
director or officer of the Corporation or by any other individual to whom such
signing authority is delegated by the directors from time to time, and may
consist of one or more instruments so executed.
1.2 WORDS IMPORTING THE SINGULAR
Words importing the singular include the plural and vice versa and words
importing a particular gender include all genders.
A-3
1.3 INTERPRETATION NOT AFFECTED BY HEADINGS, ETC.
The division of these Terms and Conditions into Articles, sections,
subsections, paragraphs, subparagraphs, clauses and subclauses, the provision of
a table of contents and the insertion of headings are for convenience of
reference only and will not affect the construction or interpretation of these
Terms and Conditions.
1.4 DAY NOT A BUSINESS DAY
If the day on or before which any action that would otherwise be required
to be taken hereunder is not a Business Day in the place where the action is
required to be taken, that action will be required to be taken on or before the
requisite time on the next succeeding day that is a Business Day.
1.5 TIME OF THE ESSENCE
Time will be of the essence in all respects in these Terms and Conditions
and this Special Warrant Certificate.
1.6 CURRENCY
Except as otherwise stated, all dollar amounts herein are expressed in
United States dollars.
1.7 APPLICABLE LAW
These Terms and Conditions and this Special Warrant Certificates will be
construed and enforced in accordance with the laws prevailing in Ontario and
will be treated in all respects as Ontario contracts.
ARTICLE 2
THE SPECIAL WARRANTS
2.1 CREATION AND ISSUE OF SPECIAL WARRANTS
The Special Warrants set forth on the attached certificate, entitling the
holder hereof, without payment of any additional consideration, to be issued an
equal number of Units on the terms and subject to the conditions herein
provided, is hereby created and authorized for issuance at a price of $0.75 for
each Special Warrant, paid for in cash.
2.2 TERMS OF SPECIAL WARRANTS
(1) Subject to subsections 2.2(2) and 2.2(3) hereof, each Special
Warrant issued hereunder, will entitle the holder thereof, upon the
exercise or deemed exercise thereof in accordance with the
provisions of Article 4, and without payment of any additional
consideration, to be issued one (1) Unit, comprising of one (1)
Common Share and six-tenths of one (0.6) Warrant.
(2) If the Corporation has not obtained the Receipt for the Prospectus
on or before the Qualification Deadline, each Special Warrant will
thereafter entitle the holder thereof to acquire upon the conversion
thereof and for no additional consideration, one and one-tenth of
one (1.1) Common Share and sixty-six-one-hundredth of one (0.66)
Warrant. (in lieu of one (1 common share and six-tenths of one (0.6)
Warrant).
A-4
2.3 ISSUE IN SUBSTITUTION FOR LOST CERTIFICATES, ETC.
(1) If any Special Warrant Certificate becomes mutilated or is lost,
destroyed or stolen, the Corporation, subject to applicable law and
to subsection (2), will issue and deliver, a new Special Warrant
Certificate of like tenor as the one mutilated, lost, destroyed or
stolen in exchange for and in place of and on surrender and
cancellation of such mutilated certificate or in lieu of and in
substitution for such lost, destroyed or stolen certificate.
(2) The applicant for the issue of a new Special Warrant Certificate
pursuant to this section will bear the reasonable cost of the issue
thereof and in case of loss, destruction or theft will, as a
condition precedent to the issue thereof:
(a) furnish to the Corporation such evidence of ownership and of
the loss, destruction or theft of the Special Warrant
Certificate to be replaced as is satisfactory to the
Corporation in its discretion;
(b) if so required, furnish an indemnity in amount and form
satisfactory to the Corporation in its discretion; and
(c) pay the reasonable charges of the Corporation in connection
therewith.
2.4 CANCELLATION OF SURRENDERED SPECIAL WARRANTS
All Special Warrant Certificates surrendered to the Corporation pursuant
to sections 2.3 or 4.1 will be cancelled by the Corporation.
2.5 SPECIAL WARRANTHOLDER NOT A SHAREHOLDER
Nothing in these Terms and Conditions or in the holding of the Special
Warrants evidenced by this Special Warrant Certificate, or otherwise, will be
construed as conferring on any Special Warrantholder any right or interest
whatsoever as a shareholder of the Corporation, including but not limited to any
right to vote at, to receive notice of, or to attend any meeting of shareholders
or any other proceeding of the Corporation or any right to receive any dividend
or other distribution.
ARTICLE 3
REGISTRATION AND OWNERSHIP OF SPECIAL WARRANTS
3.1 REGISTRATION OF SPECIAL WARRANTS
(1) The Corporation will cause to be kept at the offices of its counsel
a register of holders in which shall be entered in alphabetical
order the names and addresses of the holders of Special Warrants and
particulars of the Special Warrants held by them.
(2) The register referred to in subsection 3.1(1), will at all
reasonable times be open for inspection by any Special
Warrantholder. The Corporation will from time to time when requested
to do so in writing by any Special Warrantholder (upon payment of
the Corporation's reasonable charges), furnish such Special
Warrantholder with a list of the names and addresses of holders of
Special Warrants entered on such register and showing the number of
Special Warrants held by each such holder.
A-5
3.2 TRANSFERABILITY OF SPECIAL WARRANTS
(1) The Special Warrants evidenced by this Special Warrant Certificate
may only be transferred in accordance with applicable laws.
(2) The Special Warrants will be subject to certain resale restrictions
imposed under applicable securities laws and the rules of regulatory
bodies having jurisdiction including, without limiting the
generality of the foregoing, the requirement that the Special
Warrants issuable not be traded for a period of four months from the
Closing Date as required under the applicable securities laws of
Canada, and the applicable restriction period under the U.S.
Securities Act, except as permitted by applicable securities laws in
the United States.
(3) The Special Warrants are "restricted securities" as defined under
Rule 144 under the U.S. Securities Act and shall bear a restrictive
legend to this effect until such time as the Special Warrants are no
longer "restricted securities" under Rule 144 and are transferred
pursuant to the requirements of Rule 144 or subject to an effective
registration statement under the U.S. Securities Act.
3.3 OWNERSHIP OF SPECIAL WARRANTS
(1) The Corporation may deem and treat the person in whose name the
Special Warrants are registered as the absolute owner of such
Special Warrants for all purposes, and such person will for all
purposes of these Terms and Conditions be and be deemed to be the
absolute owner thereof, and the Corporation will not be affected by
any notice or knowledge to the contrary except as required by
statute or by order of a court of competent jurisdiction.
(2) The registered holder of the Special Warrants will be entitled to
the rights evidenced thereby free from all equities and rights of
set-off or counterclaim between the Corporation and the original or
any intermediate holder thereof and all persons may act accordingly,
and the delivery to any such registered holder of the Underlying
Securities issued on exercise or deemed exercise of such Special
Warrants will be a good discharge to the Corporation therefore and,
unless the Corporation is required by statute or by an order of a
court of competent jurisdiction, the Corporation will not be bound
to inquire into the title of any such registered holder.
ARTICLE 4
EXERCISE OF SPECIAL WARRANTS
4.1 EXERCISE
(1) Subject to the limitation set forth in subsection 4.1(2) and
provided that the holder of the Special Warrants exercises not less
than all of the Special Warrants evidenced by this Special Warrant
Certificate at the same time, holders of Special Warrants may at any
time prior to the Expiry Time exercise the right thereby conferred
to be issued Underlying Securities by surrendering to the
Corporation at its counsel's office at Suite 4400, P.O. Box 95,
Royal Trust Tower, Toronto-Dominion Centre, Toronto, Ontario, M5K
1G8 Canada, or to any other person at any other place designated by
the Corporation in respect of which notice has been given to the
holders of the Special Warrants, during normal business hours on a
Business Day at such place, the Special Warrant Certificate
evidencing such Special Warrants, with a duly completed and executed
notice of exercise substantially in the form set out in Appendix 1
to such Special Warrant Certificate exercising all of the Special
Warrants evidenced by this Special Warrant Certificate. The holder
of this Special Warrant Certificate may not exercise less than all
of the Special Warrants evidenced by the Special Warrant
Certificate.
A-6
(2) Any Special Warrant Certificate with a duly completed and executed
notice of exercise referred to in subsection 4.1(1) will be deemed
to have been surrendered only on personal delivery thereof to, or,
if sent by mail or other means of transmission, on actual receipt
thereof by, the Corporation or one of the other persons at the
office or one of the other places specified in subsection 4.1(1).
(3) Any notice of exercise referred to in subsection 4.1(1) must be
signed by the Special Warrantholder, or his executors,
administrators or other legal representatives or his or their
attorney duly appointed by an instrument in writing in form and
execution satisfactory to the Corporation, acting reasonably, and,
if any Underlying Securities thereby issuable are to be issued to a
person or persons other than the Special Warrantholder, must specify
the name or names and the address or addresses of each such person
or persons and the number of Common Shares and Warrants to be issued
to each such person if more than one is so specified.
4.2 DEEMED EXERCISE
(1) If any of the Special Warrants have not been exercised pursuant to
section 4.1, such Special Warrants will be deemed to have been
exercised by the holder thereof (without any further action on the
part of such holder or the Corporation) immediately prior to the
Expiry Time. In such event, the Corporation will, within five
Business Days following the Expiry Time, give notice of such deemed
exercise to the holders of such Special Warrants. Such notice shall
specify that the Special Warrants are deemed to have been exercised
automatically in accordance with their terms and will indicate the
place or places at which, pursuant to subsection 4.2(2), Special
Warrant Certificates may thereafter be surrendered in exchange for
certificates representing the Common Shares and Warrants issued upon
such deemed exercise of Special Warrants.
(2) The holder of the Special Warrants deemed to have been exercised
pursuant to subsection 4.2(1) will have no rights thereunder except
to receive certificates representing the Common Shares and Warrants
thereby issued to him upon such exercise.
4.3 EFFECT OF EXERCISE OR DEEMED EXERCISE
(1) Upon the exercise of the Special Warrants in accordance with section
4.1 or upon the deemed exercise of the Special Warrants in
accordance with section 4.2, the Underlying Securities thereby
issuable will be deemed to have been issued, and the person or
persons to whom such Underlying Securities are to be issued will be
deemed to have become the holder or holders of record thereof, on
the Exercise Date or the Deemed Exercise Date, as the case may be,
unless the transfer registers for the Common Shares and Warrants are
closed on that date, in which case such Common Shares and Warrants
will be deemed to have been issued and such person or persons will
be deemed to have become the holder or holders of record thereof on
the date on which such transfer registers are reopened, but such
Common Shares and Warrants will be issued on the basis of the number
of Common Shares and Warrants to which such person or persons were
entitled on the Exercise Date or the Deemed Exercise Date, as the
case may be.
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(2) As soon as practicable and in any event not later than, in the case
of the exercise of the Special Warrants in accordance with section
4.1, the fifth Business Day on which the transfer registers for the
Common Shares and Warrants have been open after such exercise or, in
the case of the deemed exercise of the Special Warrants in
accordance with section 4.2, within five Business Days after the
surrender to the Corporation of the Special Warrant Certificate
evidencing such Special Warrants in accordance with subsection
4.2(2), the Corporation will mail to the person or persons in whose
name or names the Underlying Securities thereby issued have been
issued, at his or their respective addresses, or, if so specified,
cause to be delivered to such person or persons at the place where
the Special Warrant Certificate evidencing such Special Warrants was
surrendered, certificates representing the Common Shares and
Warrants so issued.
(3) If any Underlying Securities issuable pursuant to the Special
Warrants are to be issued to a person or persons other than the
Special Warrantholder, the Special Warrantholder must pay to the
Corporation an amount equal to all exigible transfer taxes or other
government charges, and the Corporation will not be required to
issue or deliver any certificates representing any such Common
Shares or Warrants unless or until such amount has been so paid or
the Special Warrantholder has established to the satisfaction of the
Corporation that such taxes and charges have been paid or that no
such taxes or charges are owing.
4.4 NO FRACTIONAL COMMON SHARES
The Corporation will not, whether pursuant to an adjustment in accordance
with section 4.7 or under any other circumstances, be obligated to issue any
fraction of a Common Share or Warrant on the exercise or deemed exercise of
Special Warrants. No compensation will be paid by the Corporation for any such
fractional Common Share or Warrant.
4.5 RECORDING
The Corporation will record particulars of each Special Warrant exercised
or deemed to have been exercised which will include the name and address of each
person to whom Common Shares and Warrants are thereby issued, the number of
Common Shares and Warrants so issued and the Exercise Date or Deemed Exercise
Date in respect thereof.
4.6 SECURITIES RESTRICTIONS
(1) No Underlying Securities will be issued on exercise or deemed
exercise of the Special Warrants, if in the opinion of counsel to
the Corporation, the issuance of such Underlying Securities would
constitute a violation of the securities laws of any applicable
jurisdiction or require the Corporation to qualify the Underlying
Securities issuable on exercise or deemed exercise of the Special
Warrants for distribution in any jurisdiction.
(2) Without limiting the generality of Section 4.6(1), the certificates
representing the Underlying Securities thereby issued will bear such
legends as may, in the opinion of counsel to the Corporation, be
necessary or advisable in order to avoid a violation of any
securities laws of any country, province or state or to comply with
the requirements of any stock exchange on which the Common Shares
are listed, provided that if, at any time, in the opinion of counsel
to the Corporation, such legends are no longer necessary or
advisable in order to avoid a violation of any such laws, or the
holder of any such legended certificate, at his expense, provides
the Corporation with evidence satisfactory in form and substance to
the Corporation (which may include an opinion of counsel
satisfactory to the Corporation) to the effect that such holder is
entitled to sell or otherwise transfer such Common Shares in a
transaction in which such legends are not required, such legended
certificate may thereafter be surrendered to the Corporation in
exchange for a certificate which does not bear such legends.
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4.7 LEGENDS
(1) The holder, if resident in Canada, acknowledges that the appropriate
legend as follows will be placed upon certificates representing any
Underlying Securities issued upon the exercise of the Special
Warrants represented by this certificate until the earlier of (1)
the Receipt being issued by the securities regulatory authority in
the holder's jurisdiction of residence; and (2) the applicable
restricted period under the Multilateral Instrument 45-102 "Resale
of Securities" has expired, may be endorsed with the following
legends to that effect.
"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF
THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE MARCH 5,
2005."
(2) The holder understands that upon the original issuance thereof, and
until such time as the same is no longer required under the
applicable requirements of the U.S. Securities Act or applicable
U.S. state laws and regulations, the certificates representing the
Underlying Securities, and all securities issued in exchange
therefor or in substitution thereof, will bear a legend in
substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES
ACT); (B) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN
REGULATION D UNDER THE SECURITIES ACT); OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S ADOPTED UNDER THE
SECURITIES ACT; (2) AGREES THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED, EXCEPT (A) TO THE
ISSUER OR A SUBSIDIARY THEREOF; (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A ADOPTED UNDER
THE SECURITIES ACT (IF AVAILABLE); (C) TO PERSONS OTHER THAN
U.S. PERSONS OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT; (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER
THE SECURITIES ACT OR ANOTHER AVAILABLE EXEMPTION UNDER THE
SECURITIES ACT (IF AVAILABLE); OR (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (3)
AGREES THAT IT WILL, PRIOR TO ANY TRANSFER OF THIS SECURITY,
FURNISH TO THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS MAY BE REQUIRED TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO
THIS, EXCEPT AS PERMITTED BY THE SECURITIES ACT."
A-9
provided, that if any of the Underlying Securities are being sold
pursuant to Rule 144 of the U.S. Securities Act, the legend may be
removed by delivery to the Corporation's transfer agent of an
opinion of counsel satisfactory to the Corporation to the effect
that such Underlying Securities are not "restricted securities" as
defined in Rule 144 under the U.S. Securities Act and the legend is
no longer required under applicable requirements of the U.S.
Securities Act or state securities laws.
(3) The holder acknowledges that the certificates representing the
Underlying Securities and all certificates issued in exchange or
substitution thereof, will bear a legend in substantially the
following form as long as the legend referred to in either
subsection 4.7(1) or 4.7(2) remains on such certificate:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON
THE TORONTO STOCK EXCHANGE; HOWEVER, THE SAID SECURITIES
CANNOT BE TRADED THROUGH THE FACILITIES OF SUCH EXCHANGE SINCE
THEY ARE NOT FREELY TRADABLE, AND CONSEQUENTLY ANY CERTIFICATE
REPRESENTING SUCH SECURITIES IS NOT 'GOOD DELIVERY' IN
SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK EXCHANGE."
4.8 NOTICE OF ADJUSTMENTS TO WARRANTS
(1) Upon the occurrence of any event requiring an adjustment of the
Exercise Price pursuant to the terms of the Warrants from the date hereof until
the issue date of the Warrants, then and in each such case, the Corporation
shall give written notice thereof to the Holder, which notice shall state the
Exercise Price and the number of Warrants Shares or other securities subject to
the unexercised Warrants resulting from such adjustment, and shall set forth in
reasonable detail the method of calculation and the facts upon which such
calculation is based. Upon the request of the Holder, there shall be transmitted
promptly to the Holder a statement of the firm of independent chartered
accountants retained to audit the financial statements of the Corporation to the
effect that such firm concurs in the Corporation's calculation of the change.
(2) In case at any time from the date hereof until the issue date of the
Warrants:
(a) the Corporation shall declare any dividend upon its Common Shares
payable in Common Shares or other securities of the Corporation;
(b) the Corporation shall offer for subscription pro rata to the holders
of its Common Shares any additional shares of any class or other
rights;
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(c) there shall be any capital reorganization or reclassification of the
capital stock of the Corporation, or consolidation, amalgamation or
merger of the Corporation with, or sale of all or substantially all
of its assets to, another corporation; or
(a) there shall be a voluntary or involuntary dissolution, liquidation
or winding-up of the Corporation,
then, in any one or more of such cases, the Corporation shall give to the
Holder: (A) at least 10 days' prior written notice of the date on which a
record shall be taken for such dividend, distribution or subscription
rights or for determining rights to vote in respect of any such
reorganization, reclassification, consolidation, merger, amalgamation,
sale, dissolution, liquidation or winding-up; and (B) in the case of any
such reorganization, reclassification, consolidation, merger, sale,
dissolution, liquidation or winding-up, at least 10 days' prior written
notice of the date when the same shall take place. Such notice in
accordance with the foregoing clause (A) shall also specify, in the case
of any such dividend, distribution or subscription rights, the date on
which the holders of Common Shares shall be entitled thereto, and such
notice in accordance with the foregoing clause (B) shall also specify the
date on which the holders of Common Shares shall be entitled to exchange
their Common Shares for securities or other property deliverable upon such
reorganization, reclassification, consolidation, merger, amalgamation,
sale, dissolution, liquidation or winding-up, as the case may be.
ARTICLE 5
COVENANTS
5.1 GENERAL COVENANTS
(1) The Corporation represents, warrants, covenants and agrees with the
Special Warrantholders that so long as any Special Warrant remains
outstanding and may be exercised:
(a) the Corporation is duly authorized to create and issue the
Special Warrants and that this Special Warrant Certificate be
valid and enforceable against the Corporation;
(b) the Corporation will at all times maintain its corporate
existence, carry on and conduct its business in a proper and
business-like manner and keep or cause to be kept proper books
of account in accordance with generally accepted accounting
practice;
(c) the Corporation will reserve for the purpose and keep
available sufficient unissued or created Common Shares and
Warrants to enable it to satisfy its obligations on the
exercise or deemed exercise of the Special Warrants;
(d) the Corporation will cause the Common Shares and Warrants from
time to time issued pursuant to the exercise or deemed
exercise of the Special Warrants, and the certificates
representing such Common Shares and Warrants, to be duly
issued and delivered in accordance with the Special Warrants
and the terms hereof;
(e) all Common Shares that are issued or created on exercise or
deemed exercise of the Special Warrants will be fully paid and
non-assessable;
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(f) the Corporation will keep open on Business Days the registers
of holders referred to in section 3.1 and will not take any
action or omit to take any action which would have the effect
of preventing the Special Warrantholders from exercising any
of the Special Warrants or receiving any of the Common Shares
and Warrants upon such exercise;
(g) the Corporation will make all requisite filings in connection
with the exercise of the Special Warrants and issue of the
Common Shares and the Warrants;
(h) the Corporation will provide the Special Warrantholders with
the financial statements and other continuous disclosure
documents required to be delivered by it to its shareholders
under applicable corporate and securities laws;
(i) the Corporation will provide the Special Warrantholders with a
copy of any prospectus filed by the Corporation qualifying the
distribution of the Underlying Securities issuable upon the
exercise or deemed exercise of the Special Warrants; and
(j) generally, the Corporation will well and truly perform and
carry out all acts and things to be done by it as provided in
these Terms and Conditions.
ARTICLE 6
ENFORCEMENT
6.1 SUITS BY SPECIAL WARRANTHOLDERS
All or any of the rights conferred upon any Special Warrantholder by these
Terms and Conditions or the Special Warrant Certificates may be enforced by a
Special Warrantholder by appropriate proceedings.
6.2 IMMUNITY OF SHAREHOLDERS, ETC.
By the acceptance of the Special Warrant Certificates and as part of the
consideration for the issue of the Special Warrants, the Special Warrantholders
hereby waive and release any right, cause of action or remedy now or hereafter
existing in any jurisdiction against any person in his capacity as an
incorporator or any past, present or future shareholder or other securityholder,
director, officer, employee or agent of the Corporation for the creation and
issue of the Common Shares and the Warrants pursuant to any Special Warrant or
on any covenant, agreement, representation or warranty by the Corporation
herein.
6.3 LIMITATION OF LIABILITY
The obligations hereunder are not personally binding upon, nor shall
resort hereunder be had to, the directors or shareholders of the Corporation or
any of the past, present or future directors or shareholders of the Corporation
or any of the past, present or future officers, employees or agents of the
Corporation, but only the property of the Corporation shall be bound in respect
hereof.
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ARTICLE 7
SUCCESSOR CORPORATIONS
7.1 SUCCESSOR CORPORATIONS
In the case of the consolidation, amalgamation, arrangement, merger or
transfer of the undertaking or assets of the Corporation as an entirety, or
substantially as an entirety, to another corporation, the successor corporation
resulting from such consolidation, amalgamation, arrangement, merger or transfer
(if not the Corporation) will be bound by the provisions hereof and for the due
and punctual performance and observance of each and every covenant and
obligation contained in these Terms and Conditions to be performed by the
Corporation.
ARTICLE 8
GENERAL
8.1 NOTICE TO THE CORPORATION
(1) Unless herein otherwise expressly provided, a notice to be given
hereunder to the Corporation will be validly given if delivered or
if sent by registered letter, postage prepaid, or if sent by
facsimile transmission (receipt of such transmission is confirmed in
writing), to:
Apollo Gold Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
Suite 750
Denver, Colorado
▇▇▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to the Corporation's counsel at
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ LLP
Suite 4400, P.O. Box 95
Royal Trust Tower
Toronto-Dominion Centre
Toronto, Ontario M5K 1G8
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
-and-
▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
Denver, Colorado
80202
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and any such notice, if delivered personally, shall be deemed
to have been given and received on the day on which it was
delivered, provided that if such day is not a Business Day
then the notice shall be deemed to have been given and
received on the first Business Day next following such day and
if transmitted by fax, shall be deemed to have been given and
received on the day of its transmission, provided that if such
day is not a Business Day or if it is transmitted or received
after the end of normal business hours then the notice shall
be deemed to have been given and received on the first
Business Day next following the day of such transmission and
if mailed, shall be deemed to be given and received on the
fifth Business Day following the day of the mailing of the
notice.
A-13
(2) The Corporation may from time to time notify the other in the manner
provided in subsection (1) of a change of address which, from the
effective date of such notice and until changed by like notice, will
be the address of the Corporation for all purposes of these Terms
and Conditions.
(3) If, by reason of a strike, lockout or other work stoppage, actual or
threatened, involving Canadian postal employees, a notice to be
given to the Corporation hereunder could reasonably be considered
unlikely to reach or likely to be delayed in reaching its
destination, the notice will be valid and effective only if it is
delivered to an officer of the party to which it is addressed or if
it is delivered to such party at the appropriate address provided in
subsection (1) by confirmed facsimile transmission.
8.2 NOTICE TO SPECIAL WARRANTHOLDERS
(1) Unless herein otherwise expressly provided, a notice to be given
hereunder to Special Warrantholders will be deemed to be validly
given if the notice is sent by ordinary surface or air mail, postage
prepaid, addressed to the Special Warrantholders or delivered (or so
mailed to certain Special Warrantholders and so delivered to the
other Special Warrantholders) at their respective addresses
appearing on any of the registers of holders described in section
3.1, provided, however, that if, by reason of a strike, lockout or
other work stoppage, actual or threatened, involving Canadian postal
employers, the notice could reasonably be considered unlikely to
reach or likely to be delayed in reaching its destination, the
notice will be valid and effective only if it is so delivered or is
given by publication twice in the Report on Business section in the
national edition of The Globe and Mail newspaper.
(2) A notice so given by mail or so delivered will be deemed to have
been given on the fifth business day after it has been mailed or on
the day which it has been delivered, as the case may be, and a
notice so given by publication will be deemed to have been given on
the day on which it has been published as required. In determining
under any provision hereof the date when notice of a meeting or
other event must be given, the date of giving notice will be
included and the date of the meeting or other event will be
excluded. Accidental error or omission in giving notice or
accidental failure to mail notice to any Special Warrantholder will
not invalidate any action or proceeding founded thereon.
8.3 SOLE BENEFIT OF PARTIES AND SPECIAL WARRANTHOLDERS
Nothing in these Terms and Conditions or the Special Warrant Certificates,
expressed or implied, will give or be construed to give to any person other than
the Corporation and the Special Warrantholders, any legal or equitable right,
remedy or claim under these Terms and Conditions or the Special Warrant
Certificates, or under any covenant or provision herein or therein contained,
all such covenants and provisions being for the sole benefit of the Special
Warrantholders.
A-14
8.4 DISCRETION OF DIRECTORS
Any matter provided herein to be determined by the directors will be
determined by the directors of the Corporation in their sole discretion, and a
determination so made will be conclusive, provided that the directors acted
reasonably and in good faith in the absence of any malice or prejudice.
1-1
APPENDIX "1"
TO SPECIAL WARRANT CERTIFICATE
NOTICE OF EXERCISE
To: APOLLO GOLD CORPORATION (the "CORPORATION")
The undersigned holder of the Special Warrants evidenced by the within Special
Warrant Certificate hereby exercises its right to be issued Common Shares and
Warrants of the Corporation (or such other securities or property to which such
exercise entitles him in lieu thereof or in addition thereto under the
provisions of the Special Warrant Certificate to which this Notice is appended)
that are issuable upon the exercise of such Special Warrant, on the terms
specified in such Special Warrant Certificate.
The undersigned hereby acknowledges that it is aware that the Common Shares and
Warrants received on conversion may be subject to restrictions on resale under
applicable securities legislation.
The undersigned hereby irrevocably directs that the said Common Shares and
Warrants be issued, registered and delivered as follows:
Number(s) of Number(s) of
Name(s) in Full Address(es) Common Shares Warrants
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print full name in which certificates for Common Shares and Warrants are
to be issued. If any securities are to be issued to a person or persons other
than the holder, the holder must pay to the Corporation all exigible transfer
taxes or other government charges and sign the Form of Transfer, which is
attached as Appendix 2 to the Special Warrant Certificate to which this Appendix
is attached).
DATED this _____ day of ________________ 200 _______.
)
)
)
)
) ------------------------------
) Signature of Registered Holder
)
)
) ------------------------------
) Name of Registered Holder
NOTE: The name of the Registered Holder on this Notice of Exercise must be the
same as the name appearing on the face page of the Special Warrant Certificate
to which this Appendix is attached.
Please check if the Common Share and Warrant certificates are to be
delivered at the office where this Special Warrant Certificate is surrendered,
failing which such certificates will be mailed.
Certificates will be delivered or mailed within 3 Business Days after the
due surrender of the Special Warrant Certificate to which this Appendix is
attached.
2-1
APPENDIX "2"
TO SPECIAL WARRANT CERTIFICATE
ASSIGNMENT FORM
(TO BE COMPLETED IF SPECIAL WARRANTS ARE TO BE ASSIGNED)
TO: APOLLO GOLD CORPORATION
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇
FOR VALUE RECEIVED, _____________ Special Warrants represented by this Special
Warrant Certificate
hereby transferred to
-----------------------------------------------------------
residing at
--------------------------------------------------------------------
You are hereby instructed to take the necessary steps to effect this transfer.
DATED ________ at ________ , ________ this ________ day ________ of ________ ,
______.
Witness: )
) ----------------------------------
) Holder's Name
)
) ----------------------------------
) Authorized Signature
)
) ----------------------------------
) Title (if applicable)
Signature guaranteed:
The signature must be guaranteed by a Canadian chartered bank or a member of a
recognized stock exchange or other entity acceptable to the Corporation.
3-1
APPENDIX "3"
TO SPECIAL WARRANT CERTIFICATE
FORM OF WARRANT CERTIFICATE
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND ACCORDINGLY, MAY NOT BE OFFERED OR
SOLD EXCEPT AS SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF,
THE HOLDER (1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS
DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES ACT); (B) IT IS AN ACCREDITED
INVESTOR (AS DEFINED IN REGULATION D UNDER THE SECURITIES ACT); OR (C) IT IS NOT
A U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE TRANSACTION IN
COMPLIANCE WITH REGULATION S ADOPTED UNDER THE SECURITIES ACT; (2) AGREES THAT
IT WILL NOT RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY OR THE
COMMON SHARES ISSUABLE UPON EXERCISE OF SUCH SECURITY, EXCEPT (A) TO THE ISSUER
OR A SUBSIDIARY THEREOF; (B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE
WITH RULE 144A ADOPTED UNDER THE SECURITIES ACT (IF AVAILABLE); (C) TO PERSONS
OTHER THAN U.S. PERSONS OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION
S UNDER THE SECURITIES ACT; (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 ADOPTED UNDER THE SECURITIES ACT OR ANOTHER AVAILABLE
EXEMPTION UNDER THE SECURITIES ACT (IF AVAILABLE); OR (E) PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (3) AGREES THAT
IT WILL, PRIOR TO ANY TRANSFER OF THIS SECURITY, FURNISH TO THE ISSUER SUCH
CERTIFICATIONS, LEGAL OPINIONS OR OTHER INFORMATION AS MAY BE REQUIRED TO
CONFIRM THAT SUCH TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.
AS USED HEREIN, THE TERMS "OFFSHORE TRANSACTION," "UNITED STATES" AND "U.S.
PERSON" HAVE THE MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR INDIRECTLY, ENGAGE IN ANY
HEDGING TRANSACTION WITH REGARD TO THIS SECURITY OR ANY COMMON SHARES ISSUABLE
UPON EXERCISE OF SUCH SECURITY, EXCEPT AS PERMITTED BY THE SECURITIES ACT.
THE WARRANTS REPRESENTED BY THIS WARRANT CERTIFICATE HAVE NOT BEEN AND WILL NOT
BE REGISTERED UNDER THE 1933 ACT. THE SECURITIES TO BE ISSUED UPON EXERCISE OF
SUCH WARRANTS WILL NOT BE INITIALLY REGISTERED AND MAY OR MAY NOT LATER BECOME
REGISTERED FOR RESALE UNDER THE 1933 ACT. NEITHER ANY WARRANT REPRESENTED BY
THIS WARRANT CERTIFICATE NOR ANY SECURITIES ISSUED UPON EXERCISE OF SUCH WARRANT
MAY BE EXERCISED BY OR ON BEHALF OF ANY U.S. PERSON, AS SUCH TERM IS DEFINED IN
REGULATION S PROMULGATED PURSUANT TO THE 1933 ACT, UNLESS REGISTERED UNDER THE
1933 ACT OR AN EXEMPTION FROM SUCH REGISTRATION IS AVAILABLE.
[INSERT LEGEND ONLY IF REQUIRED UNDER SECTION 4.6 OF SCHEDULE "A" OF THE SPECIAL
WARRANT CERTIFICATE.] UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER
OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE MARCH 5, 2005.
WARRANTS
TO PURCHASE COMMON SHARES OF
APOLLO GOLD CORPORATION
(Continued under the laws of the Yukon Territory)
Void after 5:00 p.m. (Toronto time) on the ____ day of
____, 200____.
WARRANT CERTIFICATE NUMBER: W-2004-____ NUMBER OF WARRANTS: ____
THIS CERTIFIES THAT, for value received, ____, [ADDRESS] (the "HOLDER") is
entitled, at any time and from time to time up to 5:00 p.m. (Toronto time) on
____ day of ____, 200____ (the "EXPIRY TIME"), one fully paid and non-assessable
Common Share for each warrant (individually, a "WARRANT") represented by this
certificate (the "WARRANT CERTIFICATE") at a price of US$0.80 per share (the
"EXERCISE PRICE"), upon and subject to the terms and conditions herein.
3-2
The Warrants are issued pursuant to the exercise or deemed exercise of a Special
Warrant (the "SPECIAL WARRANT") issued by the Corporation to the Holder on
November 4, 2004 (the "CLOSING DATE").
1. For the purpose of this Warrant, the term "COMMON SHARES" means common
shares in the capital of the Corporation as constituted on the date
hereof; provided that in the event of a change, subdivision, re-division,
reduction, combination or consolidation thereof or any other adjustment
under clause 7 hereof, or such successive changes, subdivisions,
re-divisions, reductions, combinations, consolidations or other
adjustments, then subject to the adjustments, if any, having been made in
accordance with the provisions of this Warrant Certificate, "COMMON
SHARES" shall thereafter mean the shares, other securities or other
property resulting from such change, subdivision, re-division, reduction,
combination or consolidation or other adjustment.
2. All rights under any of the Warrants in respect of which the right of
subscription and purchase therein provided for shall not theretofore have
been exercised shall wholly cease and determine and such Warrants shall be
wholly void and of no valid or binding effect after the Expiry Time.
3. The right to purchase Common Shares pursuant to the Warrants may only be
exercised by the Holder before the Expiry Time by:
(a) duly completing and executing a subscription substantially in the
form attached hereto, in the manner therein indicated; and
(b) surrendering this Warrant Certificate and the duly completed and
executed subscription form to the Corporation at the principal
office of the Corporation in the City of Denver, Colorado, together
with payment of the purchase price for the Common Shares subscribed
for in the form of cash or a certified cheque payable to the
Corporation in an amount equal to the then applicable Exercise Price
multiplied by the number of Common Shares subscribed for.
4. Issue of Common Shares upon Exercise.
(a) Upon such delivery and payment as set forth in clause 3, the
Corporation shall cause to be issued to the Holder the number of
Common Shares to be issued and the Holder shall become a shareholder
of the Corporation in respect of such Common Shares with effect from
the date of such delivery and payment and shall be entitled to
delivery of a certificate or certificates evidencing such shares.
The Corporation shall cause such certificate or certificates to be
delivered via bonded overnight courier to the Holder at the address
or addresses specified in such subscription form within five (5)
business days of such delivery and payment as herein provided.
(b) The Corporation shall not be required to issue fractional Common
Shares upon the exercise of the Warrants and no payment shall be
made by the Corporation in lieu of issuing any fractional interest
in a Common Share.
5. The holding of a Warrant shall not constitute the Holder a shareholder of
the Corporation nor entitle him to any right or interest in respect
thereof except as herein expressly provided.
6. The Corporation covenants and agrees that until the Expiry Time, while any
of the Warrants shall be outstanding, it shall reserve and there shall
remain unissued out of its authorized capital a sufficient number of
Common Shares to satisfy the right of purchase herein provided, as such
right of purchase may be adjusted pursuant to clauses 7 and 8 hereof. All
Common Shares which shall be issued upon the exercise of the right to
purchase herein provided for, upon payment therefor of the amount at which
such Common Shares may at the time be purchased pursuant to the provisions
hereof, shall be issued as fully paid and non-assessable shares and the
holders thereof shall not be liable to the Corporation or its creditors in
respect thereof.
3-3
7. Adjustment
(a) If and whenever at any time after the Closing Date and prior to the
Expiry Time the Corporation shall:
(i) subdivide, re-divide or change its then outstanding Common
Shares into a greater number of Common Shares,
(ii) reduce, combine or consolidate its then outstanding Common
Shares into a lesser number of Common Shares, or
(iii) issue Common Shares (or securities exchangeable for or
convertible into Common Shares) to the holders of all or
substantially all of its then outstanding Common Shares by way
of a stock dividend or other distribution;
(any of such events herein called a "COMMON SHARE REORGANIZATION"),
then the Exercise Price shall be adjusted effective immediately
after the effective date of any such event in 7(a)(i) or 7(a)(ii)
above or the record date at which the holders of Common Shares are
determined for the purpose of any such dividend or distribution in
7(a)(iii) above, as the case may be, by multiplying the Exercise
Price in effect on such effective date or record date, as the case
may be, by a fraction, the numerator of which shall be the number of
Common Shares outstanding on such effective date or record date, as
the case may be, before giving effect to such Common Share
Reorganization and the denominator of which shall be the number of
Common Shares outstanding immediately after giving effect to such
Common Share Reorganization including, in the case where securities
exchangeable for or convertible into Common Shares are distributed,
the number of Common Shares that would be outstanding if such
securities were exchanged for or converted into Common Shares.
(b) If and whenever at any time after the Closing Date and prior to the
Expiry Time, the Corporation shall distribute any class of shares or
rights, options or warrants or other securities (other than those
referred to in 7(a) above), evidences of indebtedness or property
(excluding cash dividends paid in the ordinary course) to holders of
all or substantially all of its then outstanding Common Shares, the
Holder shall receive, in addition to the number of Common Shares in
respect of which the right to purchase is then being exercised, the
aggregate number of Common Shares or other securities or property
that the Holder would have been entitled to receive as a result of
such event, as if, on the record date thereof, the Holder had been
the registered holder of the number of Common Shares to which the
Holder was theretofore entitled upon the exercise of the rights of
the Holder hereunder.
(c) If and whenever at any time after the Closing Date and prior to the
Expiry Time there is a capital reorganization of the Corporation or
a reclassification or other change in the Common Shares (other than
a Common Share Reorganization) or a consolidation or merger or
amalgamation of the Corporation with or into any other corporation
or other entity (other than a consolidation, merger or amalgamation
which does not result in any reclassification of the outstanding
Common Shares or a change of the Common Shares into other
securities), or a transfer of all or substantially all of the
Corporation's undertaking and assets to another corporation or other
entity in which the holders of Common Shares are entitled to receive
shares, other securities or other property (any of such events being
called a "CAPITAL REORGANIZATION"), the Holder, where he has not
exercised the right of subscription and purchase under this Warrant
Certificate prior to the effective date of such Capital
Reorganization, shall be entitled to receive and shall accept, upon
the exercise of such right, on such date or any time thereafter, for
the same aggregate consideration in lieu of the number of Common
Shares to which he was theretofore entitled to subscribe for and
purchase, the aggregate number of shares or other securities or
property which the Holder would have been entitled to receive as a
result of such Capital Reorganization as if, on the effective date
thereof, he had been the registered holder of the number of Common
Shares to which he was theretofore entitled to subscribe for and
purchase.
3-4
(d) If and whenever at any time after the Closing Date and prior to the
Expiry Time, the Corporation shall fix a record date for the
issuance of rights, options or warrants to all or substantially all
of the holders of the outstanding Common Shares entitling them, for
a period expiring not more than forty-five (45) days after the
record date, to subscribe for or purchase Common Shares or
securities convertible, exercisable or exchangeable into Common
Shares (each, a "CONVERTIBLE SECURITY") at a price per share (or
having a conversion, exercise or exchange price per share) less than
95% of the Current Market Price (as defined below) on the earlier of
the record date and the date on which the Corporation announces its
intention to make such issuance (any such issuance being herein
called a "RIGHTS OFFERING"), the Exercise Price shall be adjusted on
the record date so that it shall equal the number which is the
product of the Exercise Price in effect immediately prior to the
record date and the fraction:
(i) the numerator of which shall be the total number of Common
Shares outstanding immediately prior to the record date plus a
number of Common Shares equal to the number arrived at by
multiplying the total number of additional Common Shares
offered for subscription or purchase or into or for which the
total number of rights, options or warrants so offered are
convertible or exchangeable by the quotient obtained by
dividing the purchase or subscription price for each Common
Share or conversion price for each Convertible Security
offered for subscription or purchase by such Current Market
Price for the Common Shares, and
(ii) the denominator of which shall be the total number of Common
Shares outstanding immediately prior to such record date plus
the total number of additional Common Shares offered for
subscription or purchase or into or for which the total number
of rights, options or warrants so offered are convertible or
exchangeable.
To the extent that any rights, options or warrants are not so issued
or any of the rights, options or warrants so issued are not
exercised prior to the expiration thereof, the Exercise Price will
be readjusted to the Exercise Price in effect immediately prior to
the record date, and the Exercise Price will be further adjusted
based upon the number of additional Common Shares actually delivered
upon the exercise of the rights, options or warrants, as the case
may be.
3-5
For the purposes of this clause 7(d), "CURRENT MARKET PRICE", at any
date, means the weighted average price per Common Share at which the
Common Shares have traded: (a) on the Toronto Stock Exchange; or (b)
if the Common Shares are not quoted on the Toronto Stock Exchange,
on any stock exchange or over-the-counter market upon which the
Common Shares are then listed or quoted for trading, during the
twenty (20) consecutive trading days (on each of which at least five
hundred (500) Common Shares are traded in board lots) ending the
third (3rd) trading day before such date, and the weighted average
price shall be determined by dividing the aggregate sale price of
all Common Shares sold in board lots on the exchange or market, as
the case may be, during the twenty (20) consecutive trading days by
the number of Common Shares sold, provided that if the Common Shares
are not listed or quoted for trading on any stock exchange or
market, the price shall be determined by the board of directors of
the Corporation in its sole discretion, acting reasonably.
(e) If and whenever at any time after the Closing Date and prior to the
Expiry Time, any of the events set out in clause 7(a) or 7(b) shall
occur and the occurrence of such event results in an adjustment of
the Exercise Price pursuant to the provisions of clause 7(a) or
7(b), then the number of Common Shares purchasable pursuant to this
Warrant shall be adjusted contemporaneously with the adjustment of
the Exercise Price by multiplying the number of Common Shares then
otherwise purchasable on the exercise thereof by a fraction, the
numerator of which shall be the Exercise Price in effect immediately
prior to the adjustment and the denominator of which shall be the
Exercise Price resulting from such adjustment.
(f) If the Corporation takes any action affecting its Common Shares to
which the foregoing provisions of this clause 7, in the opinion of
the board of directors of the Corporation, acting in good faith, are
not strictly applicable, or if strictly applicable would not fairly
adjust the rights of the Holder against dilution in accordance with
the intent and purposes hereof, or would otherwise materially affect
the rights of the Holder of the Warrants hereunder, then the
Corporation shall execute and deliver to the Holder an amendment
hereto providing for an adjustment in the application of such
provisions so as to adjust such rights as aforesaid in such manner
as the board of directors of the Corporation may determine to be
equitable in the circumstances, acting in good faith. The failure of
the taking of action by the board of directors of the Corporation to
so provide for any adjustment on or prior to the effective date of
any action or occurrence giving rise to such state of facts will be
conclusive evidence that the board of directors has determined that
it is equitable to make no adjustment in the circumstances.
8. The following rules and procedures shall be applicable to the adjustments
made pursuant to clause 7:
(a) no adjustment in the Exercise Price shall be required unless a
change of at least 1% of the prevailing Exercise Price would result,
provided, however, that any adjustment which, except for the
provisions of this clause 8(a), would otherwise have been required
to be made, shall be carried forward and taken into account in any
subsequent adjustment;
(b) the adjustments provided for in clause 7 are cumulative and shall
apply to successive subdivisions, consolidations, dividends,
distributions and other events resulting in any adjustment under the
provisions of such clause;
3-6
(c) in the absence of a resolution of the board of directors of the
Corporation fixing a record date for any dividend or distribution
referred to in clause 7(a)(iii) above, the Corporation shall be
deemed to have fixed as the record date therefor the date on which
such dividend or distribution is effected;
(d) if the Corporation sets a record date to take any action and
thereafter and before the taking of such action abandons its plan to
take such action, then no adjustment to the Exercise Price will be
required by reason of the setting of such record date;
(e) forthwith after any adjustment to the Exercise Price or the number
of Common Shares purchasable pursuant to the Warrants, the
Corporation shall provide to the Holder a certificate of an officer
of the Corporation certifying as to the amount of such adjustment
and, in reasonable detail, describing the event requiring and the
manner of computing or determining such adjustment; and
(f) any question that at any time or from time to time arises with
respect to the amount of any adjustment to the Exercise Price or
other adjustment pursuant to clause 7 shall be conclusively
determined by a firm of independent chartered accountants (who may
be the Corporation's auditors) and shall be binding upon the
Corporation and the Holder.
9. On the happening of each and every such event set out in clause 7, the
applicable provisions of this Warrant, including the Exercise Price,
shall, ipso facto, be deemed to be amended accordingly and the Corporation
shall take all necessary action so as to comply with such provisions as so
amended.
10. The Corporation shall not be required to deliver certificates for Common
Shares issuable upon the exercise of the Warrants while the share transfer
books of the Corporation are properly closed, having regard to the
provisions of clauses 7 and 8 hereof, prior to any meeting of shareholders
or for the payment of dividends or for any other purpose and in the event
of the surrender of any Warrant in accordance with the provisions hereof
and the making of any subscription and payment for the Common Shares
called for thereby during any such period delivery of certificates for
Common Shares may be postponed for not more than five (5) days after the
date of the re-opening of said share transfer books. Provided, however,
that any such postponement of delivery of certificates shall be without
prejudice to the right of the Holder so surrendering the same and making
payment during such period to receive after the share transfer books shall
have been re-opened such certificates for the Common Shares called for, as
the same may be adjusted pursuant to clause 7 hereof as a result of the
completion of the event in respect of which the transfer books were
closed.
11. Subject as hereinafter provided, all or any of the rights conferred upon
the Holder by the terms hereof may be enforced by the Holder by
appropriate legal proceedings. No recourse under or upon any obligation,
covenant or agreement contained herein shall be had against any
shareholder, director or officer of the Corporation either directly or
through the Corporation, it being expressly agreed and declared that the
obligations under the Warrants are solely corporate obligations and that
no personal liability whatever shall attach to or be incurred by the
shareholders, directors or officers of the Corporation or any of them in
respect thereof, any and all rights and claims against every such
shareholder, officer or director being hereby expressly waived as a
condition of and as a consideration for the issue of the Warrants.
12. The Holder may subscribe for and purchase any lesser number of Common
Shares than the number of shares expressed in this Warrant Certificate. In
the case of any subscription for a lesser number of Common Shares than
expressed in this Warrant Certificate, the Holder hereof shall be entitled
to receive at no cost to the Holder a new Warrant Certificate in respect
of the balance of Warrant not then exercised. Such new Warrant Certificate
shall be delivered by bonded overnight courier to the Holder by the
Corporation, contemporaneously with the delivery of the certificate or
certificates representing the Common Shares issued pursuant to clause 4.
3-7
13. If this Warrant Certificate is stolen, lost, mutilated or destroyed, the
Corporation shall, on such terms as it may in its discretion acting
reasonably impose, issue and sign a new Warrant Certificate of like
denomination, tenor and date, and if applicable, with the same legend, as
the Warrant Certificate so stolen, lost, mutilated or destroyed for
delivery to the Holder.
14. The Corporation shall keep at its principal office: (a) a register of
holders in which shall be entered the names and addresses of the Holder of
the Warrants and of the number of Warrants held by him; and (b) a register
of transfers in which shall be entered the date and other particulars of
each transfer of Warrants. The registers hereinbefore referred to shall be
open at all reasonable times for inspection by the Holder.
15. The transferee of a Warrant Certificate shall, after the transfer form
attached to the Warrant Certificate or any other form of transfer
acceptable to the Corporation, acting reasonably, is duly completed and
the Warrant Certificate is lodged with the Corporation and upon compliance
with all other conditions in that regard required by this Warrant, by the
Toronto Stock Exchange or by law, be entitled to have his name entered on
the register of holders as the owner of the Warrants represented thereby
free from all equities or rights of set-off or counterclaim between the
Corporation and the transferor or any previous holder of such Warrant,
save in respect of equities of which the Corporation or the transferee is
required to take notice by statute or by order of a court of competent
jurisdiction.
16. Warrant Certificates may, upon compliance with the reasonable requirements
of the Corporation, be exchanged for Warrant Certificates in any other
denomination representing in the aggregate the same number of Warrants.
The Corporation shall issue and sign all Warrant Certificates necessary to
carry out the exchanges contemplated herein, provided:
(i) Warrant Certificates may be exchanged only at the principal office
of the Corporation in the City of Denver, Colorado;
(ii) any Warrant Certificates tendered for exchange shall be surrendered
to the Corporation and cancelled; and
(iii) except as otherwise herein provided, the Corporation shall not
charge the Holder requesting an exchange any sum for any new Warrant
Certificate issued.
17. The Corporation may deem and treat the registered holder of any Warrant
Certificate as the absolute owner of the Warrants represented thereby for
all purposes, and the Corporation shall not be affected by any notice or
knowledge to the contrary except where the Corporation is required to take
notice by statute or by order of a court of competent jurisdiction. A
Holder shall be entitled to the rights evidenced by such Warrant free from
all equities or rights of set-off or counterclaim between the Corporation
and the original or any intermediate holder thereof and all persons may
act accordingly and the receipt by any such Holder of the Common Shares
purchasable pursuant to such Warrant shall be a good discharge to the
Corporation for the same and the Corporation shall not be bound to inquire
into the title of any such Holder except where the Corporation is required
to take notice by statute or by order of a court of competent
jurisdiction.
3-8
18. Legend
(a) The Holder, if resident in Canada, acknowledges that appropriate
legend as follows will be placed upon certificates representing any
Common Shares issued upon the exercise of the Warrants represented
by this certificate until the earlier of (1) the Receipt being
issued by the Commission; and (2) the applicable restricted period
under the Multilateral Instrument 45-102 "Resale of Securities" has
expired, may be endorsed with the following legends to that effect.
"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF
THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE MARCH 5,
2005."
(b) The Holder understands that upon the original issuance thereof, and
until such time as the same is no longer required under the
applicable requirements of the United States Securities Act of 1933,
as amended (the "U.S. SECURITIES ACT") or applicable U.S. state laws
and regulations, the certificates representing the Common Shares,
and all securities issued in exchange therefor or in substitution
thereof, will bear a legend in substantially the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND
ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN
THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER
(1) REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL
BUYER" (AS DEFINED IN RULE 144A ADOPTED UNDER THE SECURITIES
ACT); (B) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN
REGULATION D UNDER THE SECURITIES ACT); OR (C) IT IS NOT A
U.S. PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
TRANSACTION IN COMPLIANCE WITH REGULATION S ADOPTED UNDER THE
SECURITIES ACT; (2) AGREES THAT IT WILL NOT RESELL OR
OTHERWISE TRANSFER THE SECURITY EVIDENCED, EXCEPT (A) TO THE
ISSUER OR A SUBSIDIARY THEREOF; (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A ADOPTED UNDER
THE SECURITIES ACT (IF AVAILABLE); (C) TO PERSONS OTHER THAN
U.S. PERSONS OUTSIDE THE UNITED STATES IN COMPLIANCE WITH
REGULATION S UNDER THE SECURITIES ACT; (D) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 ADOPTED UNDER
THE SECURITIES ACT OR ANOTHER AVAILABLE EXEMPTION UNDER THE
SECURITIES ACT (IF AVAILABLE); OR (E) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (3)
AGREES THAT IT WILL, PRIOR TO ANY TRANSFER OF THIS SECURITY,
FURNISH TO THE ISSUER SUCH CERTIFICATIONS, LEGAL OPINIONS OR
OTHER INFORMATION AS MAY BE REQUIRED TO CONFIRM THAT SUCH
TRANSFER IS BEING MADE PURSUANT TO AN EXEMPTION FROM, OR IN A
TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT. AS USED HEREIN, THE TERMS "OFFSHORE
TRANSACTION," "UNITED STATES" AND "U.S. PERSON" HAVE THE
MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES
ACT. IN ANY CASE, THE HOLDER HEREOF WILL NOT, DIRECTLY OR
INDIRECTLY, ENGAGE IN ANY HEDGING TRANSACTION WITH REGARD TO
THIS, EXCEPT AS PERMITTED BY THE SECURITIES ACT."
3-9
provided, that if any of the Common Shares are being sold pursuant
to Rule 144 of the U.S. Securities Act, the legend may be removed by
delivery to the Corporation's transfer agent of an opinion of
counsel satisfactory to the Corporation to the effect that such
Common Shares are not "restricted securities" as defined in Rule 144
under the U.S. Securities Act and the legend is no longer required
under applicable requirements of the U.S. Securities Act or state
securities laws.
(c) The Holder acknowledges that the certificates representing the
Common Shares and all certificates issued in exchange or
substitution thereof, will bear a legend in substantially the
following form as long as the legend referred to in either
subsection 18(a) or 18(b) remains on such certificate:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON
THE TORONTO STOCK EXCHANGE; HOWEVER, THE SAID SECURITIES
CANNOT BE TRADED THROUGH THE FACILITIES OF SUCH EXCHANGE SINCE
THEY ARE NOT FREELY TRADABLE, AND CONSEQUENTLY ANY CERTIFICATE
REPRESENTING SUCH SECURITIES IS NOT 'GOOD DELIVERY' IN
SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK EXCHANGE."
19. This Warrant Certificate shall be governed by and construed in accordance
with the laws of the Province of Ontario and the federal laws of Canada
applicable therein, regardless of the laws that might otherwise govern
under applicable principles of conflicts of laws thereof, except to the
extent mandatorily governed by the law of another jurisdiction. Each of
the Holder and the Corporation: (i) irrevocably consents to the exclusive
jurisdiction and venue of the Courts of Ontario in connection with any
matter or dispute based upon or arising out of this Warrant Certificate or
the matters contemplated herein; (ii) agrees that process may be served
upon them in any manner authorized by the laws of the Province of Ontario
for such persons; and (iii) waives and covenants not to assert or plead
any objection which they might otherwise have to such jurisdiction, venue
and such process.
20. The Warrants represented by this Warrant Certificate may not be exercised
by a U.S. person or person within the United States (or on behalf of any
such person) unless registered under the U.S. Securities Act or unless an
exemption from such registration is available and the holder has furnished
an opinion of counsel of recognized standing in form and substance
satisfactory to the Corporation to such effect or unless the Holder
acquired the Warrant in the exercise or conversion of the Special Warrants
was a U.S. person at the time of acquisition of the Special Warrants
directly from the Corporation and each of the representations and
warranties made by the undersigned in the subscription agreement between
the undersigned and the Corporation, pursuant to which the undersigned
acquired the Special Warrants, is true and correct as of the date hereof.
Terms used in this clause 20 have the meanings assigned to them in
Regulation S under the U.S. Securities Act.
3-10
21. The Warrants represented by this Warrant Certificate may not, unless
transferred to an affiliate of the holder, be transferred or assigned in
whole or in part without the prior written consent of the Corporation,
such consent not to be unreasonably withheld, or without compliance with
all applicable United States federal and state securities laws, all
applicable securities laws in Canada and other applicable securities laws
and the rules of the Toronto Stock Exchange, by the transferor and the
transferee (including the delivery of investment representation letters
and legal opinion reasonably satisfactory to the Corporation, if requested
by the Corporation).
22. Notwithstanding anything to the contrary in this Warrant Certificate, no
supplement or amendment to the terms of this Warrant Certificate may be
made without the prior written approval of the Toronto Stock Exchange.
23. The Holder, by acceptance hereof, agrees that the Warrants represented by
this Warrant Certificate, and the Common Shares issuable upon exercise
thereof, are being acquired solely for its own account and not as a
nominee for any other party and not with a view toward the resale or
distribution thereof and that it will not offer, sell or otherwise dispose
of the Warrants or the Common Shares issuable upon exercise thereof except
under circumstances which will not result in a violation of the U.S.
Securities Act, any applicable securities laws in Canada and other
applicable securities laws or the rules of the Toronto Stock Exchange.
24. All references herein to monetary amounts are references to lawful money
of the United States, unless otherwise specified herein.
25. Any notice, document or other communication required or permitted by this
Warrant Certificate to be given by the Holder or the Corporation shall be
in writing and is sufficiently given if delivered personally, or if sent
by prepaid registered mail or if transmitted by any form of recorded
telecommunication tested prior to transmission, to such person addressed
as follows:
(a) if to the Holder:
to the address on the face page hereof
(b) if to the Corporation:
Apollo Gold Corporation
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
80237-2571
Attention: ▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Chief Financial Officer
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Notice so mailed shall be deemed to have been given on the fourth Business Day
after deposit in a post office or public letter box. Neither the Holder nor the
Corporation shall mail any notice, request or other communication hereunder
during any period in which applicable postal workers are on strike or if such
strike is imminent and may reasonably be anticipated to affect the normal
delivery of mail. Notices transmitted by a form of recorded telecommunication or
delivered personally shall be deemed given on the day of transmission or
personal delivery, as the case may be. The Holder or the Corporation may from
time to time notify the other in the manner provided herein of any change of
address or facsimile number which thereafter, until changed by like notice,
shall be the address or facsimile number of such person for all purposes hereof.
3-11
IN WITNESS WHEREOF, the Corporation has caused this Warrant Certificate to
be signed by its duly authorized officer.
DATED this _________ day of ________________, 200______.
APOLLO GOLD CORPORATION
By:
-------------------------------------
Authorized Signing Officer
3-12
SUBSCRIPTION FORM
(TO BE COMPLETED IF WARRANTS ARE TO BE EXERCISED)
TO: APOLLO GOLD CORPORATION
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇
THE UNDERSIGNED hereby subscribes for common shares of APOLLO GOLD CORPORATION
according to the terms and conditions set forth in the annexed warrant
certificate (or such number of other securities or property to which such
warrant entitles the undersigned to acquire under the terms and conditions set
forth in the annexed warrant certificate).
Address for Delivery of Shares:
-------------------------------------------------
-------------------------------------------------
-------------------------------------------------
Attention:
---------------------------------------
Exercise Price Tendered
(US$0.80 per share or as adjusted) US$
-----------------------------
The undersigned represents, warrants and certifies as follows (one (only) of the
following must be checked):
A. The undersigned holder (i) at the time of exercise of these Warrants
is not in the United States; (ii) is not a "U.S. person" as defined
in Regulation S under the United States Securities Act of 1933, as
amended (the "U.S. Securities Act") and is not exercising these
Warrants on behalf of a "U.S. person"; and (iii) did not execute or
deliver this Exercise Form in the United States.
B. The undersigned holder has delivered to CIBC Mellon Trust Company an
opinion of counsel (which will not be sufficient unless it is from
counsel of recognized standing and in form and substance
satisfactory to the Corporation) to the effect that an exemption
from the registration requirements of the U.S. Securities Act and
applicable state securities laws is available for the exercise of
the Warrants.
C. The undersigned acquired the Warrants in the conversion of Special
Warrants and was a U.S. person at the time of acquisition of the
Special Warrants directly from the Corporation and each of the
representations and warranties made by the undersigned in the
subscription agreement between the undersigned and the Corporation,
pursuant to which the undersigned acquired the Special Warrants.
The undersigned holder understands that the certificates representing the common
shares issuable upon the exercise of the Warrants will bear a legend restricting
transfer without registration under the U.S. Securities Act and applicable state
securities laws or applicable exemptions therefrom.
3-13
If Box B is checked, any opinion tendered must be in form and substance
satisfactory to the Corporation. Holders planning to deliver an opinion of
counsel in connection with the exercise of the Warrants should contact the
Corporation in advance to determine whether any opinions to be tendered will be
acceptable to the Corporation.
(If any common shares are to be issued to a person or persons other than the
undersigned holder, the undersigned holder must pay all applicable transfer
taxes or other government charges.)
DATED at _______________, this _____day of _______________, 200___.
Witness: )
) ----------------------------------
) Holder's Name
)
-----------------------------------------) ----------------------------------
) Authorized Signature
)
) ----------------------------------
) Title (if applicable)
3-14
ASSIGNMENT FORM
(TO BE COMPLETED IF WARRANTS ARE TO BE ASSIGNED)
TO: APOLLO GOLD CORPORATION
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇
FOR VALUE RECEIVED, ____________ Warrants represented by this Warrant
Certificate are
hereby transferred to
---------------------------------------------------------
residing at
--------------------------------------------------------------------
You are hereby instructed to take the necessary steps to effect this transfer.
DATED at ___________________, this _______________ day
of______________,__________.
Witness: )
) ----------------------------------
) Holder's Name
)
-----------------------------------------) ----------------------------------
) Authorized Signature
)
) ----------------------------------
) Title (if applicable)
Signature guaranteed:
The signature must be guaranteed by a Canadian chartered bank or a member of a
recognized stock exchange or other entity acceptable to the Corporation.