UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Filed Pursuant to Section 13 OR 15(d) of
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 24, 1999
GOLDEN STAR RESOURCES LTD.
(Exact name of registrant as specified in its charter)
Canada 0-21708 98-0101955
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification Number)
1660 Lincoln Street, Suite 3000
Denver, Colorado 80264-3001
(Address of principal executive offices)
Registrant's telephone number, including area code: (303) 830-9000
Not Applicable
(Former name or former address, if changed since last report)
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2
Item 5. Other Events
On August 24, 1999, Golden Star Resources Ltd. (the "Company")
announced the closing of a United States offering (the "Offering") of $7,616,500
of the Company's securities, consisting of (i) $4,155,000 aggregate principal
amount of its subordinated convertible debentures (the "Debentures"), with
interest to be paid semi-annually, together with 200 common share purchase
warrants (the "Four-Year Warrants") for each $1,000 aggregate principal amount
of Debentures issued entitling the holder thereof to purchase 200 common shares
of the Company for a four-year term after the closing of the offering at $1.50
per share during the first two years of the term and at $1.75 per share during
the balance of the term, and (ii) 6,923,000 equity units at $0.50 per unit, each
consisting of one common share of the Company (the "Common Shares") and one-half
of a common share purchase warrant (together with the Four-Year Warrants, the
"Warrants"), with each whole warrant entitling the holder thereof to purchase
one additional common share at $0.70 for a period of 18 months following the
closing of the offering. The Debentures are convertible into Common Shares at a
rate of $0.70 per share.
Without giving effect to the exercise of the warrants, the Company
received net proceeds, after deducting approximately $1.3 million for agency
fees and offering expenses, of approximately $6.3 million, $4.5 million of which
will be used to fund the initial purchase price payment of a 70% interest in
Bogoso Gold Limited ("BGL") in Ghana. The balance of the net proceeds of the
offering will be used for working capital and general corporate purposes. The
$4.5 million purchase price payment will be held in escrow until the closing of
the Company's acquisition of its interest in BGL.
On August 23, 1999, the Company filed a final prospectus supplement
(the "Prospectus Supplement") with the Securities and Exchange Commission in
connection with the financing of the initial purchase price of its interest in
BGL. A copy of the Prospectus Supplement is incorporated herein by reference as
Exhibit 99. In addition, filed herewith are copies of certain of the agreements
and other documents entered into and delivered in connection with the closing of
the Offering.
Item 7. Financial Statements and Exhibits.
(a) Financial statements of businesses acquired.
Not Applicable
(b) Pro forma financial information.
Not Applicable
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3
(c) Exhibits.
Exhibit Number (Referenced to
Item 601
of Regulation S-K) Description of Exhibit
------------------ ----------------------
4.1 Indenture, dated as of August 24, 1999,
between the Company and IBJ Whitehall Bank
& Trust Company, as trustee (the
"Trustee").
4.2 Indenture Supplement, dated as of August
24, 1999, between the Company and the
Trustee.
4.3 Form of Specimen of Debenture.
4.4 Form of Specimen of Four-Year Warrant.
4.5 Form of Specimen of Eighteen-Month
Warrant.
4.6 Form of Specimen of Broker Warrant.
5.1 Opinion of Koffman Kalef, with respect to
the legality of the Common Shares and
certain other matters.
5.2 Opinion of Paul, Weiss, Rifkind, Wharton &
Garrison, with respect to the legality of
the Debentures and the Warrants and
certain other matters.
10.1 Agency Agreement, dated August 16, 1999,
between the Company and TD Securities
(USA) Inc., as agent (the "Agent").
10.2 Registration Rights Agreement, dated as of
August 24, 1999, between the Company and
the Agent.
10.3 Escrow Agreement, dated as of August 24,
1999, among the Company, the Agent, IBJ
Whitehall Bank & Trust Company, as escrow
agent, and International Finance
Corporation.
12.1 Statement Regarding Computation of Ratios.
23.1 Consent of PricewaterhouseCoopers LLP -
Canada.
23.2 Consent of PricewaterhouseCoopers - Ghana.
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4
23.3 Consent of SRK Consulting Engineers and
Scientists.
23.4 Consent of Associated Mining Consultants
Ltd.
23.5 Consent of John Danio PE.
23.6 Consent of Herbert Osborne.
23.7 Consent of Koffman Kalef (included in
Exhibit 5.1).
23.8 Consent of Paul, Weiss, Rifkind, Wharton &
Garrison (include in Exhibit 5.2).
25 Statement of Eligibility of the Trustee.
99 Prospectus Supplement, dated August 16,
1999, filed pursuant to Rule 424(b)
promulgated under the Securities Act of
1933 (incorporated herein by reference to
the Registration Statement on Form S-3 of
the Company (File No. 333-33237)).
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5
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
GOLDEN STAR RESOURCES LTD.
By: /s/ James E. Askew
------------------
Name: James E. Askew
Title: President and Chief Executive
Officer
Dated: August 31, 1999
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6
EXHIBIT INDEX
Exhibit Number
(Referenced to Item 601
of Regulation S-K) Description of Exhibit Page Number
------------------ ---------------------- -----------
4.1 Indenture, dated as of August 24, 1999,
between the Company and the Trustee.
4.2 Indenture Supplement, dated as of August
24, 1999, between the Company and the
Trustee.
4.3 Form of Specimen of Debenture.
4.4 Form of Specimen of Four-Year Warrant.
4.5 Form of Specimen of Eighteen-Month Warrant.
4.6 Form of Specimen of Broker Warrant.
5.1 Opinion of Koffman Kalef, with respect to
the legality of the Common Shares and
certain other matters.
5.2 Opinion of Paul, Weiss, Rifkind, Wharton &
Garrison, with respect to the legality of
the Debentures and the Warrants and
certain other matters.
10.1 Agency Agreement, dated August 16, 1999,
between the Company and the Agent.
10.2 Registration Rights Agreement, dated as of
August 24, 1999, between the Company and
the Agent.
10.3 Escrow Agreement, dated as of August 24,
1999, among the Company, the Agent, IBJ
Whitehall Bank & Trust Company, as escrow
agent, and International Finance
Corporation.
12.1 Statement Regarding Computation of Ratios.
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7
23.1 Consent of PricewaterhouseCoopers LLP -
Canada.
23.2 Consent of PricewaterhouseCoopers - Ghana.
23.3 Consent of SRK Consulting Engineers and
Scientists.
23.4 Consent of Associated Mining Consultants
Ltd.
23.5 Consent of John Danio PE.
23.6 Consent of Herbert Osborne.
23.7 Consent of Koffman Kalef (included in
Exhibit 5.1).
23.8 Consent of Paul, Weiss, Rifkind, Wharton &
Garrison (include in Exhibit 5.2).
25 Statement of Eligibility of the Trustee.
99 Prospectus Supplement, dated August 16,
1999, filed pursuant to Rule 424(b)
promulgated under the Securities Act of
1933 (incorporated herein by reference to
the Registration Statement on Form S-3 of
the Company (File No. 333-33237)).
GOLDEN STAR RESOURCES LTD.
Issuer
TO
IBJ WHITEHALL BANK & TRUST COMPANY
Trustee
INDENTURE
Dated as of August 24, 1999
Convertible Debt Securities
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GOLDEN STAR RESOURCES LTD.
Issuer
Certain Sections of this Indenture relating to Section 310
through 318, inclusive, of the Trust Indenture Act of 1939
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Trust Indenture Act Section Indenture Section
ss.310
(a)(1)..................................... 6.9
(a)(2)..................................... 6.9
(a)(3)..................................... Not Applicable
(a)(4)..................................... Not Applicable
(a)(5)..................................... 6.9
(b)........................................ 6.8
(c)........................................ Not Applicable
ss.311
(a)........................................ 6.13
(b)........................................ 6.13
(c)........................................ Not Applicable
ss.312
(a)........................................ 7.1, 7.2(a)
(b)........................................ 7.2(b)
(c)........................................ 7.2(c)
ss.313
(a)........................................ 7.3(a)
(b)........................................ 7.3(a)
(c)........................................ 7.3(a)
(d)........................................ 7.3(b)
ss.314
(a)........................................ 7.4
(a)(4)..................................... 10.4
(b)........................................ Not Applicable
(c)(1)..................................... 1.2
(c)(2)..................................... 1.2
(c)(3)..................................... Not Applicable
(d)........................................ Not Applicable
(e)........................................ 1.2
ss.315
(a)........................................ 6.1
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Trust Indenture Act Section Indenture Section
(b)........................................ 6.2
(c)........................................ 6.1
(d)........................................ 6.1
(e)........................................ 5.14
ss.316
(a)(1)(A).................................. 5.12
(a)(1)(B).................................. 5.13
(a)(2)..................................... Not Applicable
(b)........................................ 5.8
(c)........................................ 1.4(e)
ss.317
(a)(1)..................................... 5.3
(a)(2)..................................... 5.4
(b)........................................ 10.3
ss.318....................................... 1.7
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Note: This reconciliation shall not, for any purpose, be deemed to be a part of
the Indenture.
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TABLE OF CONTENTS
Pages
-----
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
.................................................................1
1.1 Definitions................................................1
1.2 Compliance Certificates and Opinions.......................9
1.3 Form of Documents Delivered to Trustee....................10
1.4 Acts of Holders; Record Dates.............................10
1.5 Notices, Etc., to Trustee and Company.....................12
1.6 Notice to Holders: Waiver................................13
1.7 Conflict with Applicable Legislation......................13
1.8 Effect of Headings and Table of Contents..................13
1.9 Successors and Assigns....................................13
1.10 Separability Clause.......................................14
1.11 Benefits of Indenture.....................................14
1.12 Governing Law.............................................14
1.13 Legal Holidays............................................14
1.14 Conversion of Currency....................................14
ARTICLE 2 SECURITY FORMS
................................................................16
2.1 Forms Generally...........................................16
2.2 Form of Face of Security..................................16
2.3 Form of Reverse of Security...............................18
2.4 Form of Legend for Global Securities......................23
2.5 Form of Trustee's Certificate of Authentication...........23
ARTICLE 3 THE SECURITIES
................................................................24
3.1 Amount Unlimited; Issuable in Series.....................24
3.2 Denominations.............................................28
3.3 Execution, Authentication, Delivery and Dating............28
3.4 Temporary Securities......................................29
3.5 Registration, Registration of Transfer and Exchange.......30
3.6 Mutilated, Destroyed, Lost and Stolen Securities..........31
3.7 Payment of Interest: Interest Rights Preserved............32
3.8 Persons Deemed Owners.....................................34
3.9 Cancellation..............................................34
3.10 Computation of Interest...................................35
3.11 Payment of Additional Amounts.............................35
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ARTICLE 4 SATISFACTION AND DISCHARGE
................................................................36
4.1 Satisfaction and Discharge of Indenture...................36
4.2 Application of Trust Money................................38
ARTICLE 5 REMEDIES
................................................................38
5.1 Events of Default.........................................38
5.2 Acceleration of Maturity; Rescission and Annulment........40
5.3 Suits for Enforcement by Trustee..........................41
5.4 Trustee May File Proofs of Claim..........................42
5.5 Trustee May Enforce Claims Without Possession of
Securities................................................42
5.6 Application of Money Collected............................43
5.7 Limitation on Suits.......................................43
5.8 Unconditional Right of Holders to Receive Principal,
Premium and Interest......................................44
5.9 Restoration of Rights and Remedies........................44
5.10 Rights and Remedies Cumulative............................44
5.11 Delay or Omission Not Waiver..............................44
5.12 Control by Holders........................................45
5.13 Waiver of Past Defaults...................................45
5.14 Undertaking for Costs.....................................45
5.15 Waiver of Stay or Extension Laws..........................46
5.16 Waiver of Certain Covenants...............................46
ARTICLE 6 THE TRUSTEE
................................................................46
6.1 Certain Duties and Responsibilities.......................46
6.2 Notice of Defaults........................................47
6.3 Certain Rights of Trustee.................................47
6.4 Not Responsible for Recitals or Issuance of Securities....48
6.5 May Hold Securities.......................................48
6.6 Money Held in Trust.......................................49
6.7 Compensation and Reimbursement............................49
6.8 Disqualification; Conflicting Interests...................50
6.9 Corporate Trustee Required; Eligibility...................50
6.10 Resignation and Removal; Appointment of Successor.........50
6.11 Acceptance of Appointment by Successor....................52
6.12 Merger, Conversion, Consolidation or Succession to
Business..................................................53
6.13 Preferential Collection of Claims Against Company.........54
6.14 Appointment of Authenticating Agent.......................54
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ARTICLE 7 HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
................................................................56
7.1 Company to Furnish Trustee Names and Addresses of Holders.56
7.2 Preservation of Information; Communications to Holders....57
7.3 Reports by Trustee........................................57
7.4 Reports by Company........................................57
ARTICLE 8 CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
................................................................58
8.1 Company May Consolidate, Etc., Only on Certain Terms......58
8.2 Successor Substituted.....................................59
ARTICLE 9 SUPPLEMENTAL INDENTURES
................................................................59
9.1 Supplemental Indentures Without Consent of Holders........59
9.2 Supplemental Indentures with Consent of Holders...........61
9.3 Execution of Supplemental Indentures......................62
9.4 Effect of Supplemental Indentures.........................62
9.5 Conformity with Applicable Legislation....................63
9.6 Reference in Securities to Supplemental Indentures........63
ARTICLE 10 COVENANTS
................................................................63
10.1 Payment of Principal, Premium and Interest................63
10.2 Maintenance of Office or Agency...........................63
10.3 Money for Securities Payments to Be Held in Trust.........64
10.4 Statement by Officers as to Default.......................65
10.5 Existence.................................................65
10.6 Maintenance of Properties.................................66
10.7 Payment of Taxes and Other Claims.........................66
10.8 Limitation on Subordinated Indebtedness...................66
ARTICLE 11 REDEMPTION OF SECURITIES
................................................................66
11.1 Applicability of Article..................................66
11.2 Right of Redemption.......................................66
11.3 Election to Redeem; Notice to Trustee.....................67
11.4 Selection by Trustee of Securities to Be Redeemed.........67
11.5 Notice of Redemption......................................68
11.6 Deposit of Redemption Price...............................69
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11.7 Securities Payable on Redemption Date.....................69
11.8 Securities Redeemed in Part...............................69
ARTICLE 12 SINKING FUNDS
................................................................70
12.1 Applicability of Article..................................70
12.2 Satisfaction of Sinking Fund Payments with Securities.....70
12.3 Redemption of Securities for Sinking Fund.................70
ARTICLE 13 COVENANT DEFEASANCE
................................................................71
13.1 Company's Option to Effect Covenant Defeasance............71
13.2 Covenant Defeasance.......................................71
13.3 Conditions to Covenant Defeasance.........................71
13.4 Deposited Money and Government Obligations to be Held in
Trust; Other Miscellaneous Provisions.....................73
13.5 Reinstatement.............................................74
ARTICLE 14 CONVERSION OF SECURITIES
................................................................74
14.1 Conversion Privilege and Conversion Price.................74
14.2 Exercise of Conversion Privilege..........................75
14.3 Fractions of Shares.......................................76
14.4 Adjustment of Conversion Price............................76
14.5 Notice of Adjustments of Conversion Price.................82
14.6 Notice of Certain Corporation Action......................82
14.7 Company to Reserve Common Shares..........................83
14.8 Taxes on Conversion.......................................83
14.9 Covenant as to Common Shares..............................83
14.10 Cancellation of Converted Securities......................84
14.11 Provisions in Case of Consolidation, Merger or Sale of
Assets....................................................84
14.12 Responsibility of Trustee and Conversion Agent............85
ARTICLE 15 SUBORDINATION....................................................85
15.1 Securities Subordinate to Senior Indebtedness.............85
15.2 Payment Over of Proceeds Upon Dissolution, Etc............85
15.3 Prior Payment to Senior Indebtedness upon
Acceleration of Securities................................86
15.4 No Payment When Senior Indebtedness in Default............87
15.5 Payment Permitted If No Default...........................88
15.6 Subrogation to Rights of Holders of Senior Indebtedness...88
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15.7 Provisions Solely to Define Relative Rights and
Subject to Applicable Laws................................88
15.8 Trustee to Effectuate Subordination.......................89
15.9 No Waiver of Subordination Provisions.....................89
15.10 Notice to Trustee.........................................89
15.11 Reliance on Judicial Order or Certificate of Liquidating
Agent.....................................................90
15.12 Trustee Not Fiduciary for Holders of Senior Indebtedness..90
15.13 Rights of Trustee as Holder of Senior Indebtedness;
Preservation of Trustee's Rights..........................91
15.14 Article Applicable to Paying Agents.......................91
15.15 Subsidiaries..............................................91
15.16 Rescission................................................91
15.17 Certain Conversions or Exchanges Deemed Payment...........91
ARTICLE 16 SUBMISSION TO JURISDICTION
................................................................92
16.1 Agent for Service; Submission to Jurisdiction.............92
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INDENTURE, dated as of August 24, 1999, between GOLDEN STAR
RESOURCES LTD., a corporation duly incorporated and existing under the laws of
Canada, having its registered office at 885 West Georgia Street, 19th Floor,
Vancouver, British Columbia V6C 3H4 (herein called the "Company"), and IBJ
Whitehall Bank & Trust Company, as Trustee hereunder (herein called the
"Trustee").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of convertible unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities") to be issued by the Company, unlimited as to principal amount, to
bear such rates of interest, to mature at such time or times, to be issued in
one or more series and to have such other provisions as shall be fixed as
hereinafter provided.
All things necessary to make this Indenture a valid agreement of the
Company in accordance with its terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually agreed, for the equal and
proportionate benefit of all Holders of the Securities or of a series thereof,
as follows:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
1.1 Definitions
For all purposes of this Indenture and of any indenture supplemental
hereto, except as otherwise expressly provided or unless the context otherwise
requires:
(a) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the
singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference herein, have
the meanings assigned to them therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally
accepted accounting principles in Canada, and, except as
otherwise herein expressly provided,
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the term "generally accepted accounting principles" with
respect to any computation required or permitted hereunder
shall mean such accounting principles as are generally
accepted in Canada at the date of such computation; and
(d) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not
to any particular Article, Section or other subdivision.
"Act", when used with respect to any Holder, has the meaning specified in
Section 1.4.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Applicable Legislation" means, with respect to any series of Securities which
was required to be registered under the Securities Act, the Trust Indenture Act,
and with respect to any series of Securities which was distributed pursuant to a
prospectus filed with the Ontario Securities Commission, the Business
Corporations Act, and with respect to each series of Securities, the Canada
Business Corporations Act, unless the Company has received an exemption with
respect to a particular series of Securities pursuant to subsection 82(3) of the
Canada Business Corporations Act.
"Authenticating Agent" means any Person authorized by the Trustee pursuant to
Section 6.14 to act on behalf of the Trustee to authenticate Securities of one
or more series.
"Bankruptcy Law" means Title 11 of the United States Code, as amended, or any
similar United States federal or state law, or any similar law of any other
jurisdiction, relating to bankruptcy, insolvency, receivership, winding up,
liquidation, reorganization or relief of debtors or any amendment to, succession
to or change in any such law.
"Board of Directors" means, when used with reference to the Company, the board
of directors of the Company or any committee of the board of directors of the
Company empowered to act for the Company with respect to this Indenture.
"Board Resolution" means a copy of a resolution certified by the Secretary or an
Assistant Secretary of the Company to have been duly adopted by the Board of
Directors and to be in full force and effect on the date of such certification,
and delivered to the Trustee.
"Business Corporations Act" means the Business Corporations Act (Ontario) as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Business Corporations Act (Ontario) is amended after such
date, "Business Corporations Act"
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means, to the extent required by any such amendments, the Business Corporations
Act (Ontario) as so amended.
"Business Day" means, when used with respect to any Place of Payment, each
Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which
banking institutions in that Place of Payment are authorized or obligated by law
or executive order to close, except as may otherwise be provided in the form of
Securities of any particular series pursuant to the provisions of this
Indenture.
"Canada Business Corporations Act" means the Canada Business Corporations Act as
in force at the date as of which this instrument was executed; provided,
however, that in the event the Canada Business Corporations Act is amended after
such date, "Canada Business Corporations Act" means, to the extent required by
any such amendments, the Canada Business Corporations Act as so amended.
"Commission" means the Securities and Exchange Commission, as from time to time
constituted, or, if at any time after the execution of this instrument such
Commission is not existing and performing the duties now assigned to it under
the Trust Indenture Act, then the body performing such duties at such time.
"Common Shares" or "Common Shares of the Company" means the Common Shares of the
Company and the shares of any other class of the Company which has no preference
in respect of dividends or of amounts payable in the event of any voluntary or
involuntary liquidation, dissolution or winding up of the Company and which is
not subject to redemption by the Company. However, subject to the provisions of
3.1(s) and Section 14.11, shares issuable on conversion of Securities shall
include only shares of the class designated as Common Shares in the articles of
the Company at the date of this instrument or shares of any class or classes
resulting from any reclassification or reclassifications thereof and which have
no preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which are not subject to redemption by the Company; provided, however, that
if at any time there shall be more than one such resulting class, the shares of
each such class then so issuable shall be substantially in the proportion which
the total number of shares of such class resulting from all such
reclassifications bears to the total number of shares of all such classes
resulting from all such reclassifications.
"Company" means the Person named as the "Company" in the first paragraph of this
instrument until a successor Person shall have become such pursuant to the
applicable provisions of this Indenture and thereafter "Company" shall mean such
successor Person.
"Company Request" or "Company Order" means a written request or order signed in
the name of the Company by its Chairman of the Board, President or a Vice
President, and by its Treasurer, Assistant Treasurer, Controller, Secretary or
Assistant Secretary, and delivered to the Trustee.
"Corporate Trust Office" means the principal office of the Trustee in New York,
New York, at which at any particular time its corporate trust business shall be
conducted.
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"corporation" means a corporation, association, company, joint-stock company,
business trust or similar organization.
"Covenant Defeasance" has the meaning specified in Section 13.2.
"Defaulted Interest" has the meaning specified in Section 3.7.
"Defeasible Series" has the meaning specified in Section 13.1.
"Depositary" means, with respect to Securities of any series issuable in whole
or in part in the form of one or more Global Securities, a clearing agency
designated to act as Depositary for such Securities as contemplated by Section
3.1, that is registered under the Exchange Act if the Securities of such series
were required to be registered under the Exchange Act, and that has been
designated as a recognized clearing agency under applicable Canadian securities
legislation if the Securities of such series were distributed by the Company
pursuant to a prospectus filed with Canadian securities regulatory authorities.
"Event of Default" has the meaning specified in Section 5.1.
"Exchange Act" means the United States Securities Exchange Act of 1934, as
amended from time to time, and any statute successor thereto.
"Global Security" means a Security that evidences all or part of the Securities
of any series and is authenticated and delivered to, and registered in the name
of, the Depositary for such Securities or a nominee thereof.
"Government Obligations" means securities which are (i) direct full faith and
credit obligations of the government which issued the currency in which the
Securities of a particular series are denominated and in which payment of
principal and interest are to be made or (ii) obligations of a Person controlled
or supervised by and acting as an agency or instrumentality of such government,
the payment of which is unconditionally guaranteed as a full faith and credit
obligation by such government, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depository receipt issued by a bank (as defined in Section 3(a)(2) of the United
States Securities Act of 1933, as amended) as custodian with respect to any such
Government Obligation or a specific payment of principal of or interest on
account of the holder of such depository receipt from any amount received by the
custodian in respect of such Government Obligation or the specific payment of
principal of or interest on such Government Obligation evidenced by such
depository receipt.
"Holder" means a Person in whose name a Security is registered in the Security
Register.
"Income Tax Act" means the Income Tax Act (Canada) as in force as at the date as
of which this instrument was executed; provided, however, that in the event the
Income Tax Act (Canada) is amended after such date, "Income Tax Act" means, to
the extent required by such amendment, the Income Tax Act (Canada), as so
amended.
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"Indenture" means this instrument as originally executed, as it may from time to
time be supplemented or amended by one or more indentures supplemental hereto
entered into pursuant to the applicable provisions hereof, including, for all
purposes of this instrument and any such supplemental indenture, the provisions
of the Trust Indenture Act that are deemed to be a part of and govern this
instrument and any such supplemental indenture, respectively. The term
"Indenture" shall also include the terms of any particular series of Securities
established as contemplated by Section 3.1.
"Interest Payment Date" means, when used with respect to any Security, the
Stated Maturity of an instalment of interest on such Security.
"Maturity" means, when used with respect to any Security, the date on which the
principal of such Security or an instalment of principal becomes due and payable
as therein or herein provided, whether at the Stated Maturity or by declaration
of acceleration, call for redemption or otherwise.
"Notice of Default" means a written notice of the kind specified in Section 5.1
(d).
"Officers' Certificate" means, when used with reference to the Company, a
certificate signed on behalf of the Company by any one of the Chairman of the
Board, the President or any Vice President of the Company, and by any one of the
Treasurer, the Assistant Treasurer, the Controller, the Secretary or an
Assistant Secretary of the Company, and delivered to the Trustee. One of the
officers signing an Officers' Certificate given pursuant to Section 10.4 shall
be the principal executive, chief financial or principal accounting officer of
the Company.
"Opinion of Counsel" means a written opinion of counsel (who may be counsel for
the Company and who may be an employee of the Company, except as otherwise
expressly provided in this Indenture) and who shall be acceptable to the
Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
"Outstanding", when used with respect to Securities, means, as of the date of
determination, all Securities theretofore authenticated and delivered under this
Indenture, except:
(a) Securities theretofore canceled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore
deposited with the Trustee or any Paying Agent (other than the
Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for
the Holders of such Securities; provided that, if such
Securities are to be redeemed, notice of such redemption has
been duly
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given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(c) Securities as to which Defeasance has been effected pursuant
to Section 13.2; and
(d) Securities which have been replaced pursuant to Section 3.6 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other
than any such Securities in respect of which there shall have
been presented to the Trustee proof satisfactory to it that
such Securities are held by a bona fide purchaser in whose
hands such Securities are valid obligations of the Company;
provided, however, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder or are present at
a meeting of Holders for quorum purposes, (i) the principal amount of an
Original Issue Discount Security that shall be deemed to be Outstanding shall be
the amount of the principal thereof (excluding premium or penalty, if any) that
would be due and payable as of the date of such determination upon acceleration
of the Maturity thereof pursuant to Section 5.2, (ii) the principal amount of a
Security denominated in one or more foreign currencies or currency units shall
be the U.S. dollar equivalent, determined in the manner provided as contemplated
by Section 3.1 on the date of original issuance of such Security, of the
principal amount (or, in the case of an Original Issue Discount Security, the
U.S. dollar equivalent on the date of original issuance of such Security of the
amount determined as provided in (i) above) of such Security, (iii) if the
principal amount payable at Stated Maturity of any Security is not determinable
upon original issuance, the principal amount of such Security that shall be
deemed to be Outstanding shall be the amount as specified or determined as
contemplated by Section 3.1, and (iv) Securities owned by the Company, or any
other obligor upon the Securities or any Affiliate of the Company, or of such
other obligor shall be disregarded and deemed not to be Outstanding, except
that, in determining whether the Trustee shall be protected in relying upon any
such request, demand, authorization, direction, notice, consent or waiver or
upon any such determination as to the presence of a quorum, only Securities
which the Trustee knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company, or any other obligor upon the Securities or any Affiliate of the
Company, or of such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the principal
of or any premium or interest on any Securities on behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture, trust,
association, company, joint-stock company, business trust, unincorporated
organization or government or any agency or political subdivision thereof.
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"Place of Payment" means, when used with respect to the Securities of any
series, the place or places where the principal of and any premium and interest
on the Securities of that series are payable as specified as contemplated by
Section 3.1.
"Predecessor Security" of any particular Security means every previous Security
evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"Proceeding" has the meaning specified in Section 15.2.
"Redemption Date" means, when used with respect to any Security to be redeemed,
the date fixed for such redemption by or pursuant to this Indenture;
"Redemption Price" means, when used with respect to any Security to be redeemed,
the price at which it is to be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on any Interest Payment Date on
the Securities of any series means the date specified for that purpose as
contemplated by Section 3.1.
"Responsible Officer" means, when used with respect to the Trustee, the
chairman, or any vice-chairman of the board of directors, the chairman or any
vice-chairman of the executive committee of the board of directors, the chairman
of the trust committee, the president, any vice president, the secretary, any
assistant secretary, the treasurer, any assistant treasurer, the cashier, any
assistant cashier, any trust officer or assistant trust officer, the controller
or any assistant controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Securities Act" means the United States Securities Act of 1933 as in force at
the date as of which this instrument was executed; provided, however, that in
the event the United States Securities Act of 1933 is amended after such date,
"Securities Act" means, to the extent required by any such amendments, the
United States Securities Act of 1933, as so amended.
"Securities Payment" has the meaning specified in Section 15.2.
"Security" or "Securities" has the meaning stated in the first recital of this
Indenture and more particularly means any Security or Securities authenticated
and delivered under this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 3.5.
"Senior Indebtedness" means, unless otherwise defined in the applicable
indenture supplement, all amounts due on and obligations in connection with any
of the following, whether outstanding
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at the date of execution of the Indenture, or thereafter incurred, assumed,
guaranteed or otherwise created (including, without limitation, interest
accruing on or after a bankruptcy or other similar event, whether or not an
allowed claim therein): (a) indebtedness, obligations and other liabilities
(contingent or otherwise) of the Company for money borrowed, or evidenced by
bonds, debentures, notes or similar instruments; (b) reimbursement obligations
and other liabilities (contingent or otherwise) of the Company with respect to
letters of credit or banker's acceptances issued for the account of the Company
and interest rate protection agreements and currency exchange or purchase
agreements; (c) obligations and liabilities (contingent or otherwise) related to
capitalized lease obligations; (d) indebtedness, obligations and other
liabilities (contingent or otherwise) of the Company related to agreements or
arrangements designed to protect the Company or any of its Subsidiaries against
fluctuations in commodity prices, including, without limitation, commodity
futures contracts or similar hedging instruments; (e) indebtedness of others of
kinds described in the preceding clauses (a) through (d) that the Company has
assumed, guaranteed or otherwise assured the payment of directly or indirectly;
(f) any indebtedness of another Person of the type described in the preceding
clauses (a) through (e) secured by any mortgage, pledge, lien or other
encumbrance on property owned or held by the Company; and (g) any and all
deferrals, renewals, extensions and refundings of, or amendments, modifications
or supplements to, any indebtedness, obligation or liability described in
clauses (a) through (f) whether or not there is any notice to or consent of the
Holders of such series of Securities; unless, in any case, in the instrument
creating or evidencing such indebtedness, obligation, liability, guaranty,
assumption, deferral, renewal, extension or refunding, it is expressly stated
that such indebtedness, obligation, liability, guarantee, assumption, deferral,
renewal, extension or refunding is not senior in right of payment to the
Securities or that such indebtedness is pari passu with or junior to the
Securities; provided, however, that any series of Securities designated as
Senior Subordinated Indebtedness shall constitute Senior Indebtedness to any
series of Securities designated as Subordinated Indebtedness.
"Subordinated Indebtedness" means the Securities and any other indebtedness,
guarantee or obligation of the Company that specifically provides that such
indebtedness, guarantee or obligation is to rank pari passu with other
Subordinated Indebtedness of the Company and is not subordinated by its terms to
any indebtedness, guarantee or obligation of the Company which is not Senior
Indebtedness or Senior Subordinated Indebtedness.
"Significant Subsidiary" shall mean any subsidiary that would be a "significant
subsidiary" as defined under Rule 1-02(w) of Regulation S-X under the Securities
Act or such other or different Subsidiary as shall be designated a Significant
Subsidiary pursuant to the provisions of Section 3.1(y).
"Special Record Date" for the payment of any Defaulted Interest means a date
fixed by the Trustee pursuant to Section 3.7.
"Stated Maturity" means, when used with respect to any Security or any
instalment of principal thereof or interest thereon, the date specified in such
Security as the fixed date on which the principal of such Security or such
instalment of principal or interest is due and payable.
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"Subsidiary" means any corporation more than 50% of the outstanding voting stock
of which is owned, directly or indirectly, by the Company or by one or more
other Subsidiaries, or by the Company and one or more other Subsidiaries. For
the purposes of this definition, "voting stock" means stock which ordinarily has
voting power for the election of directors, whether at all times or only so long
as no senior class of stock has such voting power by reason of any contingency.
"Trust Indenture Act" means the United States Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939, as so amended.
"Trustee" means the Person named as the "Trustee" in the first paragraph of this
instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean or
include each Person who is then a Trustee hereunder, and if at any time there is
more than one such Person, "Trustee" as used with respect to the Securities of
any series shall mean the Trustee with respect to Securities of that series.
"Vice President" means, when used with respect to the Company or the Trustee,
any vice president, whether or not designated by a number or a word or words
added before or after the title "vice president".
1.2 Compliance Certificates and Opinions
Upon any application or request by the Company to the Trustee to
take any action under any provision of this Indenture, the Company shall furnish
to the Trustee an Officers' Certificate stating that all conditions precedent,
if any, provided for in this Indenture relating to the proposed action have been
complied with and, where required or if requested, an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent, if any, have
been complied with, except that in the case of any such application or request
as to which the furnishing of such documents is specifically required by any
provision of this Indenture relating to such particular application or request,
no additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (including certificates
provided for in Section 10.4) shall include:
(a) a statement that each individual signing such certificate or
opinion has read and understood such covenant or condition and
the definitions herein related thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based;
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(c) a statement that, in the opinion of each such individual, he
has made such examination or investigation as is necessary to
enable him to express an informed opinion as to whether or not
such covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
individual, such condition or covenant has been complied with.
1.3 Form of Documents Delivered to Trustee
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be
based, insofar as it relates to legal matters, upon a certificate or opinion of,
or representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or opinion of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters has been provided by the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
1.4 Acts of Holders; Record Dates
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced
by one or more instruments of substantially similar tenor
signed by such Holders in person or by an agent duly appointed
in writing; and, except as herein otherwise expressly
provided, such action shall become effective when such
instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose
of this Indenture and
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(subject to Section 6.1) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary
public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual
signing such instrument or writing acknowledged to him the
execution thereof. Where such execution is by a signer acting
in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient
proof of his authority. The fact and date of the execution of
any such instrument or writing, or the authority of the Person
executing the same, may also be proved in any other manner
which the Trustee deems sufficient.
(c) The principal amount at maturity and serial numbers of
Securities held by any Person, and the date of holding the
same shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other Act of the Holder of any Security
shall bind every future Holder of the same Security and the
Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in
respect of anything done, omitted or suffered to be done by
the Trustee or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
(e) The Company may, in the circumstances permitted by the Trust
Indenture Act, where the series of Securities was required to
be registered under the Securities Act, and in the
circumstances permitted by the securities legislation of the
provinces of Canada and the policies of Canadian securities
regulatory authorities, where the series of Securities was
distributed pursuant to a prospectus filed with Canadian
securities regulatory authorities, fix any day as the record
date for the purpose of determining the Holders of Outstanding
Securities of any series entitled to give or take any request,
demand, authorization, direction, notice, consent, waiver or
other action, or to vote on any action, authorized or
permitted to be given or taken by Holders of Securities of
such series. If not set by the Company prior to the first
solicitation of a Holder of Securities of such series made by
any Person in respect of any such action, or, in the case of
any such vote, prior to such vote, the record date for any
such action or vote shall be the 30th day (or, if later, the
date of the most recent list of Holders required to be
provided pursuant to Section 7.1) prior to such first
solicitation or vote, as the case may be. With regard to any
record date for action to be taken by the Holders of one or
more series of Securities, only the Holders of Securities of
such
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series on such date (or their duly designated proxies) shall
be entitled to give or take, or vote on, the relevant action.
With regard to any record date set pursuant to this paragraph,
the Holders of Outstanding Securities of the relevant series
on such record date (or their duly appointed agents), and only
such Persons, shall be entitled to give or take the relevant
action, whether or not such Holders remain Holders after such
record date. With regard to any action that may be given or
taken hereunder by Holders of a requisite principal amount of
Outstanding Securities of any series (or their duly appointed
agents) and for which a record date is set pursuant to this
paragraph, the Company may, at its option, set an expiration
date after which no such action purported to be given or taken
by any Holder shall be effective hereunder unless given or
taken on or prior to such expiration date by Holders of the
requisite principal amount of Outstanding Securities of such
series on such record date (or their duly appointed agents).
On or prior to any expiration date set pursuant to this
paragraph, the Company may, on one or more occasions at its
option, extend such date to any later date. Nothing in this
paragraph shall prevent any Holder (or any duly appointed
agent thereof) from giving or taking, after any expiration
date, any action identical to, or, at any time, contrary to or
different from, any action given or taken, or purported to
have been given or taken, hereunder by a Holder on or prior to
such date, in which event the Company may set a record date in
respect thereof pursuant to this paragraph. Notwithstanding
the foregoing, the Trust Indenture Act or the securities
legislation of the provinces of Canada and the policies of
Canadian securities regulatory authorities, the Company shall
not set a record date for, and the provisions of this
paragraph shall not apply with respect to, any action to be
given or taken by Holders pursuant to Sections 5.1, 5.2 or
5.12.
(f) Without limiting the foregoing, a Holder entitled hereunder to
give or take any action hereunder with regard to any
particular Security may do so with regard to all or any part
of the principal amount of such Security or by one or more
duly appointed agents each of which may do so pursuant to such
appointment with regard to all or any different part of such
principal amount.
1.5 Notices, Etc., to Trustee and Company
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Holders or other document provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company shall be
sufficient for every purpose hereunder if made, given,
furnished or filed in writing to or with the Trustee at its
Corporate Trust Office, Attention: Corporate Finance
Department; or
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(b) the Company by the Trustee or by any Holder shall be
sufficient for every purpose hereunder (unless otherwise
herein expressly provided) if in writing and mailed,
first-class postage prepaid, to the Company, addressed to it
at the address of its principal office specified in the first
paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
1.6 Notice to Holders: Waiver
Where this Indenture provides for notice to Holders of any event,
such notice shall be sufficiently given (unless otherwise herein expressly
provided) if in writing and mailed, first-class postage prepaid, to each Holder
affected by such event, at his address as it appears in the Security Register,
not later than the latest date (if any), and not earlier than the earliest date
(if any), prescribed for the giving of such notice. In any case where notice to
Holders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Holder shall affect the
sufficiency of such notice with respect to other Holders. Where this Indenture
provides for notice in any manner, such notice may be waived in writing by the
Person entitled to receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers of notice by Holders
shall be filed with the Trustee, but such filing shall not be a condition
precedent to the validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
1.7 Conflict with Applicable Legislation
If any provision hereof limits, qualifies or conflicts with a
provision of any Applicable Legislation that is required under such legislation
to be a part of and govern this Indenture, the latter provision shall control.
If any provision of this Indenture modifies or excludes any provision of any
Applicable Legislation that may be so modified or excluded, the latter provision
shall be deemed to apply to this Indenture as so modified or to be excluded, as
the case may be.
1.8 Effect of Headings and Table of Contents
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
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1.9 Successors and Assigns
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
1.10 Separability Clause
In case any provision in this Indenture or in the Securities shall
be invalid, illegal or unenforceable, the validity, legality and enforceability
of the remaining provisions shall not in any way be affected or impaired
thereby.
1.11 Benefits of Indenture
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, any Authenticating Agent, Paying Agent, Security Registrar and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Indenture.
1.12 Governing Law
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York, but without regard to
principles of conflicts of laws.
1.13 Legal Holidays
In any case where any Interest Payment Date, Redemption Date or
Stated Maturity of any Security shall not be a Business Day at any Place of
Payment, then (notwithstanding any other provision of this Indenture or the
Securities (other than a provision of the Securities of any series which
specifically states that such provision shall apply in lieu of this Section))
payment of interest or principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next succeeding Business
Day at such Place of Payment with the same force and effect as if made on the
Interest Payment Date or Redemption Date, or at the Stated Maturity, provided
that no interest shall accrue for the period from and after such Interest
Payment Date, Redemption Date or Stated Maturity, as the case may be.
1.14 Conversion of Currency
The Company covenants and agrees that the following provisions shall
apply to conversion of currency in the case of the Securities and this
Indenture:
(a) (i) If for the purpose of obtaining judgment in, or enforcing
the judgment of, any court in any country, it becomes
necessary to convert into a currency (the "Judgment Currency")
an amount due in any other currency (the "Base Currency"),
then the conversion shall be made at the rate of exchange
prevailing on the Business Day before the day on which
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the judgment is given or the order of enforcement is made, as
the case may be (unless a court shall otherwise determine).
(ii) If there is a change in the rate of exchange prevailing
between the Business Day before the day on which the judgment
is given or an order of enforcement is made, as the case may
be (or such other date as a court shall determine), and the
date of receipt of the amount due, the Company will pay such
additional (or, as the case may be, such lesser) amount, if
any, as may be necessary so that the amount paid in the
Judgment Currency when converted at the rate of exchange
prevailing on the date of receipt will produce the amount in
Base Currency originally due.
(b) In the event of the winding-up of the Company at any time
while any amount or damages owing under the Securities and
this Indenture, or any judgment or order rendered in respect
thereof, shall remain outstanding, the Company shall indemnify
and hold the Holders and the Trustee harmless against any
deficiency arising or resulting from any variation in rates of
exchange between (1) the date as of which the equivalent of
the amount in Base Currency due or contingently due under the
Securities and this Indenture (other than under this
Subsection (b)) is calculated for the purposes of such
winding-up and (2) the final date for the filing of proofs of
claim in such winding-up. For the purpose of this Subsection
(b) the final date for the filing of proofs of claim in the
winding-up of the Company shall be the date fixed by the
liquidator or otherwise in accordance with the relevant
provisions of applicable law as being the latest practicable
date as at which liabilities of the Company may be ascertained
for such winding-up prior to payment by the liquidator or
otherwise in respect thereto.
(c) The obligations contained in Subsections (a)(ii) and (b) of
this Section 1.14 shall constitute separate and independent
obligations of the Company from its other obligations under
the Securities and this Indenture, shall give rise to separate
and independent causes of action against the Company, shall
apply irrespective of any waiver or extension granted by any
Holder or the Trustee or either of them from time to time and
shall continue in full force and effect notwithstanding any
judgment or order or the filing of any proof of claim in the
winding-up of the Company for a liquidated sum in respect of
amounts due hereunder (other than under Subsection (b) above)
or under any such judgment or order. Any such deficiency as
aforesaid shall be deemed to constitute a loss suffered by the
Holders or the Trustee, as the case may be, and no proof or
evidence of any actual loss shall be required by the Company
or its liquidator. In the case of Subsection (b) above, the
amount of such deficiency shall not be deemed to be increased
or reduced by any variation in rates of exchange occurring
between the said final date and the date of any liquidating
distribution.
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(d) The term "rate(s) of exchange" shall mean the rate of exchange
quoted by The Bank of Canada, or such Canadian chartered bank
as may be designated in writing by the Company to the Trustee
from time to time, at its central foreign exchange desk in its
main office in Toronto at 12:00 noon (Toronto time) on the
relevant date for purchase of the Base Currency with the
Judgment Currency and includes any premiums and costs of
exchange payable.
(e) The Trustee shall have no duty or liability with respect to
monitoring or enforcing this Section 1.14.
ARTICLE 2
SECURITY FORMS
2.1 Forms Generally
The Securities of each series shall be in substantially the form set
forth in this Article, or in such other form as shall be established by or
pursuant to Board Resolutions of the Board of Directors of the Company or in one
or more indentures supplemental hereto, in each case with such appropriate
insertions, omissions, substitutions and other variations as are required or
permitted by this Indenture, and may have such letters, numbers or other marks
of identification and such legends or endorsements placed thereon as may be
required to comply with the rules of any securities exchange or as may,
consistently herewith, be determined by the officers executing such Securities,
as evidenced by their execution of the Securities. If the form of Securities of
any series is established by action taken pursuant to such Board Resolutions, a
copy of an appropriate record of such action shall be certified by the Secretary
or an Assistant Secretary of the Company and delivered to the Trustee at or
prior to the delivery of the Company Order contemplated by Section 3.3 for the
authentication and delivery of such Securities.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced in any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
2.2 Form of Face of Security
GOLDEN STAR RESOURCES LTD.
____% Convertible Subordinated Debentures Due 2004
No. _______ U.S. $_______________
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GOLDEN STAR RESOURCES LTD., a corporation duly incorporated and
existing under the laws of Canada (herein called the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to _________________________________,
or registered assigns, the principal sum of ________________________________
United States Dollars on _______ __, 2004 and to pay interest thereon from
_________________________ or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on _______ __ and
__________ __ in each year, commencing _________________, at the rate of ____%
per annum, until the principal hereof is paid or made available for payment,
from the dates such amounts are due until they are paid or made available for
payment. The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on the Regular Record Date for such
interest, which shall be the _________ or __________ (whether or not a Business
Day), as the case may be, next preceding such Interest Payment Date. Any such
interest not so punctually paid or duly provided for will forthwith cease to be
payable to the Holder on such Regular Record Date and may either be paid to the
Person in whose name this Security (or one or more Predecessor Securities) is
registered at the close of business on a Special Record Date for the payment of
such Defaulted Interest to be fixed by the Trustee, notice thereof shall be
given to Holders of Securities of this series not less than 10 days prior to
such Special Record Date, or be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
Securities of this series may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
Payment of principal of (and premium, if any) and any such interest
on this Security will be made at the office or agency of the Company maintained
for that purpose in New York, New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
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Unless the certificate of authentication has been executed by the
Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be
duly executed under its corporate seal.
Dated:
GOLDEN STAR RESOURCES LTD.
By:
Attest:
2.3 Form of Reverse of Security
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of _______ __, 1999 (herein called the
"Indenture"), among the Company and IBJ Whitehall Bank & Trust Company, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof, limited in aggregate amount to U.S. $__________.
Subject to and upon compliance with the provisions of the Indenture,
the Holder of this Security is entitled, at his option, at any time on or before
the close of business on _______ __, 2004, or in case this Security or a portion
hereof is called for redemption, then in respect of this Security or such
portion hereof until and including, but (unless the Company defaults in making
the payment due upon redemption) not after, the close of business on the 10th
calendar day before the Redemption Date, to convert this Security (or any
portion of the principal amount hereof which is U.S. $1,000 or an integral
multiple thereof), at the principal amount hereof, or of such portion, into
fully paid and non-assessable Common Shares (calculated as to each conversion to
the nearest 1/100 of a share) at an initial Conversion Price per Common Share
equal to U.S. $0.70 per each Common Share (or at the current adjusted Conversion
Price if an adjustment has been made as provided in the Indenture) by surrender
of this Security, duly endorsed or assigned to the Company or in blank, to the
Company at its office or agency in New
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York, New York, accompanied by written notice to the Company that the Holder
hereof elects to convert this Security, or if less than the entire principal
amount hereof is to be converted, the portion hereof to be converted, and, in
such case such surrender shall be made during the period from the close of
business on any Regular Record Date next preceding any Interest Payment Date
(unless this Security or the portion thereof being converted has been called for
redemption on a Redemption Date within such period), also accompanied by payment
in New York Clearing House or other funds acceptable to the Company of an amount
equal to the interest payable on such Interest Payment Date on the principal
amount of this Security then being converted. Subject to the aforesaid
requirement for payment and, in the case of a conversion after the Regular
Record Date next preceding any Interest Payment Date and on or before such
Interest Payment Date, to the right of the Holder of this Security (or any
Predecessor Security) of record at such Regular Record Date to receive an
instalment of interest (with certain exceptions provided in the Indenture), no
payment or adjustment is to be made on conversion for interest accrued hereon or
for dividends on the Common Shares issued on conversion. No fractions or shares
or scrip representing fractions of shares will be issued on conversion, but
instead of any fractional interest the Company shall pay a cash adjustment as
provided in the Indenture. The Conversion Price is subject to adjustment as
provided in the Indenture. In addition, the Indenture provides that in case of
certain consolidations or mergers to which the Company is a party or the
transfer of substantially all of the assets of the Company, the Indenture shall
be amended, without the consent of any Holders of Securities, so that this
Security, if then outstanding, will be convertible thereafter, during the period
this Security shall be convertible as specified above, only into the kind and
amount of securities, cash and other property receivable upon the consolidation,
merger or transfer by a holder of the number of Common Shares into which this
Security might have been converted immediately prior to such consolidation,
merger or transfer (assuming such holder of Common Shares failed to exercise any
rights of election and received per share the kind and amount received per share
by a plurality of non-electing shares). Adjustments in the Conversion Price of
less than one percent of such price will not be required, but any adjustment
that would otherwise be required to be made will be carried forward and taken
into account in the computation of any subsequent adjustment.
The Securities of this series are subject to redemption upon not
less than 30 days' notice by mail, at any time on or after _______ __, 2002, as
a whole or in part, at the election of the Company, at the following Redemption
Prices (expressed as percentages of the principal amount): if redeemed during
the 12 month period beginning _______ __ of the years indicated,
Redemption
Year Price
- ------------------------ --------------
2002.................... ______%
2003.................... ______%
2004.................... 100.000%
and thereafter at a Redemption Price equal to 100% of the principal amount,
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders
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of such Securities, or one or more Predecessor Securities, of record at the
close of business on the relevant record dates referred to on the face hereof,
all as provided in the Indenture.
The Securities shall be subject to redemption as a whole, but not in
part, at the option of the Company at any time at 100% of the principal amount
thereof, together with accrued interest thereon to the redemption date, in the
event that the Company has become or would become obligated to pay, on the next
date on which any amount would be payable with respect to the Securities, any
Additional Amounts as a result of a change in the laws (including any
regulations promulgated thereunder) of Canada (or any political subdivision or
taxing authority thereof or therein), or any change in any official position
regarding the application or interpretation of such laws or regulations, which
change is announced or becomes effective after the date of the issuance of the
Securities; provided that the Company determines, in its business judgment, that
the obligation to pay such Additional Amounts cannot be avoided by use of
reasonable measures available to the Company (not including substitution of the
obligor under the Securities).
The Securities shall be subject to redemption, in whole or in part,
at the option of the Company on or after August ___, 2002, at 100% of the
principal amount thereof, together with accrued interest thereon to the
redemption date, if the reported closing trading price on the American Stock
Exchange, or such other principle stock exchange on which the Company's Common
Shares are then traded, of the Common Shares as reported on the close of
business for any 20 of the 25 consecutive trading days immediately prior to the
date notice of redemption is given by the Company is at least 125% of the
conversion price set forth in any indenture supplemental to the Indenture.
In the event of redemption or conversion of this Security in part
only, a new Security or Securities of this series and of like tenor for the
unredeemed or unconverted portion hereof will be issued in the name of the
Holder hereof upon the cancellation hereof.
The indebtedness evidenced by this Security is, to the extent
provided in the Indenture, (i) subordinate and subject in right of payment to
the prior payment in full of all Senior Indebtedness and (ii) pari passu with
all other Subordinated Indebtedness, and this Security is issued subject to the
provisions of the Indenture with respect thereto. Each Holder of this Security,
by accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes.
If an Event of Default with respect to Securities of this series
shall occur and be continuing, the principal of the Securities of this series
may be declared due and payable in the manner and with the effect provided in
the Indenture.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of
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the Securities at the time Outstanding of each series to be affected. The
Indenture also contains provisions permitting the Holders of specified
percentages in principal amount of the Securities of each series at the time
Outstanding, on behalf of the Holders of Securities of such series, to waive
compliance by the Company with certain past provisions of the Indenture and
certain defaults under the Indenture and their consequences. Any such consent or
waiver by the Holder of this Security shall be conclusive and binding upon such
Holder and upon all future Holders of this Security and of any Security issued
upon the registration of transfer hereof or in exchange herefor or in lieu
hereof, whether or not notation of such consent or waiver is made upon this
Security.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
Subject to the rights of holders of Senior Indebtedness, as set
forth in the Indenture, no other reference herein to the Indenture and no other
provision of this Security or of the Indenture shall alter or impair the
obligations of the Company, which are unconditional, to pay the principal of and
any premium and interest on this Security at the times, place and rate, and in
the coin and currency, herein prescribed or to convert this Security as so
provided in the Indenture.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of and any
premium and interest on this Security are payable, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new Securities of
this series and of like tenor, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of U.S. $1,000 and any integral multiple
thereof. As provided in the Indenture and subject to certain limitations therein
set forth, Securities of this series are exchangeable for a like aggregate
principal amount of Securities of this series and of like tenor of a different
authorized denomination, as requested by the Holder surrendering the same.
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No service charge shall be made for any such registration of
transfer or exchange, but the Company may require payment of a sum sufficient to
cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee,
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
The terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
FORM OF CONVERSION NOTICE
To: GOLDEN STAR RESOURCES LTD.
The undersigned owner of this Security hereby irrevocably exercises
the option to convert this Security, or the portion hereof (which is U.S. $1,000
or an integral multiple thereof) below designated, into Common Shares of Golden
Star Resources Ltd., in accordance with the terms of the Indenture referred to
in this Security, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and any
Securities, representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
Dated:
Fill in for registration of Common Shares and Securities if to be issued
otherwise than to the registered holder.
Principal Amount to be converted (in an
Name integral multiple of U.S. $1,000, if less
than all):
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<PAGE>
U.S. $
Address
(Please print name and address, Signature
including zip/postal code number)
SOCIAL SECURITY OR OTHER SIGNATURE GUARANTEED
TAXPAYER IDENTIFYING NUMBER
2.4 Form of Legend for Global Securities
Unless otherwise specified as contemplated by Section 3.1 for the
Securities evidenced thereby, every Global Security authenticated and delivered
hereunder shall bear a legend in substantially the following form:
This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a
Depositary or a nominee thereof. This Security may not be
transferred to, or registered or exchanged for Securities registered
in the name of, any Person other than the Depositary or a nominee
thereof and no such transfer may be registered, except in the
limited circumstances described in the Indenture. Every Security
authenticated and delivered upon registration of transfer of, or in
exchange for or in lieu of, this Security shall be a Global Security
subject to the foregoing, except in such limited circumstances.
2.5 Form of Trustee's Certificate of Authentication
The Trustee's certificates of authentication shall be in
substantially the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
As Trustee
By:
Authorized Officer
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ARTICLE 3
THE SECURITIES
3.1 Amount Unlimited; Issuable in Series
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is unlimited.
The Securities may be issued from time to time in one or more
series. All Securities of each series under this Indenture shall in all respects
be equally and ratably entitled to the benefits hereof with respect to such
series without preference, priority or distinction on account of the actual time
of the authentication and delivery or Stated Maturity of the Securities of such
series. There shall be established in or pursuant to Board Resolutions of the
Company and, subject to Section 3.3, set forth, or determined in the manner
provided, in an Officers' Certificate of the Company, or established in one or
more indentures supplemental hereto, prior to the issuance of Securities of any
series:
(a) the title of the Securities of the series (which shall
distinguish the Securities of the series from Securities of
any other series);
(b) any limit upon the aggregate principal amount of the
Securities of the series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Securities of the
series pursuant to section 3.4, 3.5, 3.6, 9.6 or 11.7 and
except for any Securities which, pursuant to section 3.3, are
deemed never to have been authenticated and delivered
hereunder);
(c) if the Securities will be issuable at a premium over or
discount from their stated principal amount, specification of
such premium or discount, as applicable;
(d) whether any Securities of the series are to be listed for
trading on a securities exchange or otherwise;
(e) the Person to whom any interest on a Security of the series
shall be payable, if other than the Person in whose name that
Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such
interest;
(f) the date or dates on which the principal of the Securities of
the series is payable and on which the Securities will mature;
(g) the rate or rates (which may be fixed or variable) at which
the Securities of the series shall bear interest, if any, or
the method by which such rate
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or rates are determined, the date or dates from which such
interest shall accrue or the method of determination of such
date or dates, the Interest Payment Dates on which any such
interest shall be payable on any Securities and the Regular
Record Date for any interest payable on any Interest Payment
Date, and the basis upon which interest shall be calculated if
other than that of a 360-day year of twelve 30-day months;
(h) the place or places where the principal of and any premium and
interest on the Securities of the series shall be payable;
(i) the period or periods within which, the price or prices at
which, and the terms and conditions upon which Securities of
the series may be redeemed, in whole or in part, at the option
of the Company and, if other than by a Board Resolution, the
manner in which any election by the Company to redeem the
Securities shall be evidenced;
(j) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund,
purchase fund or analogous obligation or at the option of a
Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon
which Securities of the series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation;
(k) if other than denominations of U.S. $1,000 and any integral
multiple thereof, the denominations in which Securities of the
series shall be issuable;
(l) the currency, currencies or currency unit or units in which
the Securities of such series shall be denominated and in
which payment of the principal of and any premium and interest
on any Securities of such series shall be payable if other
than the currency of the United States of America and the
manner of determining the equivalent thereof in the currency
of the United States of America for purposes of the definition
of "Outstanding" in Section 1.1;
(m) if the amount of payments of principal of or any premium or
interest on any Securities of the series may be determined by
reference to an index, formula or other method, including,
without limitation, such method based on (i) currency,
currencies or currency units other than that in which the
Securities of such series are payable, (ii) changes in the
price of one or more other securities or groups or indices of
securities, or (iii) changes in the prices of one or more
commodities or groups or indexes of commodities or any
combination of the foregoing, the manner in which such amounts
shall be determined and any commodities, currencies, currency
units or indices, value, rate or price relevant to such
determination;
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(n) if the principal of or any premium or interest on any
Securities of the series are to be payable, at the election of
the Company or a Holder thereof, in one or more currencies or
currency units other than that or those in which the
Securities are stated to be payable, the currency, currencies
or currency units in which payment of the principal of and any
premium and interest on Securities of such series as to which
such election is made shall be payable, and the period or
periods within which, and the terms and conditions upon which,
such election is to be made and the amount so payable for the
manner in which such amount shall be determined;
(o) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be
payable upon declaration of acceleration of the Maturity
thereof pursuant to Section 5.2;
(p) if the principal amount payable at the Stated Maturity of any
Securities of the series is not determinable upon original
issuance thereof, the amount which shall be deemed to be the
principal amount of such Securities for any other purpose
hereunder, including the principal amount thereof which shall
be due and payable upon any Maturity other than the Stated
Maturity or which shall be deemed to be Outstanding as of any
date (or, in any such case, the manner in which such principal
amount shall be determined);
(q) if applicable, that the Securities of the series shall be
subject to Covenant Defeasance as provided in Article 13;
(r) if and as applicable, that the Securities of the series shall
be issuable in whole or in part in the form of one or more
Global Securities and, in such case, the respective
Depositaries for such Global Securities, the form of any
legend or legends which shall be borne by any such Global
Security in addition to or in lieu of that set forth in
Section 2.4 and any circumstances other than those set forth
in Section 3.5 in which any such Global Security may be
transferred to, and registered and exchanged for Securities
registered in the name of, a Person other than the Depositary
for such Global Security or a nominee thereof and in which any
such transfer may be registered;
(s) the terms and conditions pursuant to which the Securities are
convertible into or exchangeable at the option of the Holders
thereof or the Company, for or into new Securities of a
different series, other Securities of the same series of the
same aggregate principal amount of a different kind or
different authorized denomination or denominations, or other
securities or other property, including shares in the capital
of the Company or any subsidiaries of the Company or
securities directly or indirectly convertible into or
exchangeable for such shares;
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(t) if applicable, any covenants in addition to those set forth in
Article 10 to which the Company may be subject with respect to
Securities of such series; or any other additions, deletions
or changes to the provisions of Article 10 or any definitions
relating to such Article that shall be applicable to the
Securities of the series (including a provision making any
Section of such Article inapplicable to the Securities of such
series);
(u) any Event of Default with respect to the Securities of such
series, if not set forth herein, and any additions, deletions
or other changes to the Events of Default set forth herein
that shall be applicable to the Securities of such series
(including a provision making any Event of Default set forth
herein inapplicable to the Securities of that series);
(v) provisions, if any, regarding the appointment by the Trustee
of an Authenticating Agent in one or more places other than
the location of the office of the Trustee with power to act on
behalf of the Trustee and subject to its direction in the
authentication and delivery of the Securities of any one or
more series in connection with such transactions as shall be
specified in the provisions of this Indenture or in or
pursuant to the Board Resolution or other supplemental
indenture creating such series;
(w) the provisions for the payment of any additional amounts, to
the extent not set forth herein;
(x) designation of the series of Securities as Senior
Indebtedness, Senior Subordinated Indebtedness or Subordinated
Indebtedness, and any additions, deletions or changes to the
provisions of Article 15 or any definition relating to such
Article that shall be applicable to the Securities of the
series defining the rights of holders of Senior Indebtedness
in respect of the Securities of such series;
(y) any addition to or deletion from the definition of Significant
Subsidiary; and
(z) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture, except as
permitted by Section 9.1).
All Securities of any one series shall be substantially identical
except as to denomination and except as may otherwise be provided in or pursuant
to the Board Resolutions of the Company referred to above and (subject to
Section 3.3) set forth, or determined in the manner provided, in the Officers'
Certificate referred to above or in any such indenture supplemental hereto. All
Securities of any one series need not be issued at the same time and, unless
otherwise provided, a series may be reopened for issuances of additional
Securities of such series.
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If any of the terms of the series are established by action taken
pursuant to Board Resolutions of the Company, a copy of an appropriate record of
such action shall be certified by the Secretary or an Assistant Secretary of the
Company and delivered to the Trustee at or prior to the delivery of the
Officers' Certificates setting forth the terms of the series.
3.2 Denominations
The Securities of each series shall be issuable in registered form
without coupons in such denominations and in such currencies as shall be
specified as contemplated by Section 3.1. In the absence of any such provisions
with respect to the Securities of any series, the Securities of such series
shall be issuable in denominations of U.S. $1,000 and any integral multiple
thereof.
3.3 Execution, Authentication, Delivery and Dating
The Securities shall be executed on behalf of the Company by its
President, one of its Vice Presidents or its Treasurer, under its corporate seal
reproduced thereon attested by its Secretary. The signature of any of these
officers on the Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery
of this Indenture, the Company may deliver Securities of any series executed by
the Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities, and the Trustee in
accordance with the Company Order (which may provide that Securities that are
the subject thereof will be authenticated and delivered by the Trustee upon the
telephonic or written order of Persons designated in said Company Order and that
such Persons are authorized to determine such terms and conditions of said
Securities as are specified in the Company Order) shall authenticate and deliver
such Securities. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions of the Company as
permitted by Sections 2.1 and 3.1, in authenticating such Securities, and
accepting the additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and (subject to
Section 6.1) shall be fully protected in relying upon, an Opinion of Counsel
stating:
(a) if the form of such Securities has been established by or
pursuant to Board Resolutions of the Company as permitted by
Section 2.1, that such form has been established in conformity
with the provisions of this Indenture;
(b) if the terms of such Securities have been established by or
pursuant to Board Resolutions of the Company as permitted by
Section 3.1, that such
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terms have been established in conformity with the provisions
of this Indenture; and
(c) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to
any conditions specified in such Opinion of Counsel, will
constitute valid and legally binding obligations of the
Company enforceable in accordance with their terms, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity
principles and to such other matters as counsel may specify.
If such form or terms have been so established, the Trustee shall not be
required to authenticate such Securities if the issue of such Securities
pursuant to this Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 3.1 and of the preceding
paragraph, if all Securities of a series are not to be originally issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 or the Company Order and Opinion of Counsel
otherwise required pursuant to such preceding paragraph at or prior to the time
of authentication of each Security of such series if such documents are
delivered at or prior to the authentication upon original issuance of the first
Security of such series to be issued and contemplate issuance of all Securities
of such series.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 3.9, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall never be entitled to the
benefits of this Indenture.
3.4 Temporary Securities
Pending the preparation of definitive Securities of any series, the
Company may execute, and upon Company Order the Trustee shall authenticate and
deliver, temporary Securities, which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other
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variations as the officers executing such Securities may determine, as evidenced
by their execution of such Securities.
If temporary Securities of any series are issued, the Company will
cause definitive Securities of that series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at the office or agency of the Company maintained pursuant to Section
10.2 in a Place of Payment for that series for the purpose of exchanges of
Securities of such series, without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any series the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor one or more definitive Securities of the same series, of any authorized
denominations and of a like aggregate principal amount and tenor. Until so
exchanged the temporary Securities of any series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series and tenor.
3.5 Registration, Registration of Transfer and Exchange
The Company shall cause to be kept at the Corporate Trust Office of
the Trustee a register (the register maintained in such office and in any other
office or agency of the Company in a Place of Payment being herein sometimes
collectively referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities. The Trustee is hereby
appointed "Security Registrar" for the purpose of registering Securities and
transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security or of
any series at the office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like aggregate
principal amount and tenor.
At the option of the Holder, Securities of any series may be
exchanged for other Securities of the same series of any authorized
denominations and of a like aggregate principal amount and tenor, upon surrender
of the Securities to be exchanged at such office or agency. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee shall authenticate and deliver, the Securities which the Holder making
the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by
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a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed by the Holder thereof or his attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4, 9.6 or 11.7 not involving any transfer.
The Company shall not be required to (a) issue or register the
transfer or exchange of Securities of any series during a period beginning at
the opening of business 15 days before the day of the mailing of a notice of
redemption of Securities of that series selected for redemption under Section
11.3 and ending at the close of business on the day of such mailing, or (b)
register the transfer or exchange of any Security so selected for redemption in
whole or in part, except in the case of any Security to be redeemed in part, the
portion thereof not to be redeemed.
Notwithstanding any other provision in this Indenture, no Global
Security may be transferred to, or registered or exchanged for Securities
registered in the name of, any Person other than the Depositary for such Global
Security or any nominee thereof, and no such transfer may be registered, unless
(a) such Depositary (i) notifies the Company and the Trustee that it is
unwilling or unable to continue as Depositary for such Global Security or (ii)
ceases to be a clearing agency registered under the Exchange Act and a successor
Depositary is not appointed by the Company within 90 days after the Company
receives the notice referred to in subclause (i) or becomes aware of the
condition specified in subclause (ii), (b) the Company executes and delivers to
the Trustee a Company Order that such Global Security shall be so transferable,
registrable and exchangeable, and such transfers shall be registrable, (c) there
shall have occurred and be continuing an Event of Default with respect to the
Securities evidenced by such Global Security or (d) there shall exist such other
circumstances, if any, as have been specified for this purpose as contemplated
by Section 3.1. Notwithstanding any other provision in this Indenture, a Global
Security to which the restriction set forth in the preceding sentence shall have
ceased to apply may be transferred only to, and may be registered and exchanged
for Securities registered only in the name or names of, such Person or Persons
as the Depositary for such Global Security shall have directed and no transfer
thereof other than such a transfer may be registered.
Every Security authenticated and delivered upon registration of
transfer of, or in exchange for or in lieu of, a Global Security to which the
restriction set forth in the first sentence of the preceding paragraph shall
apply, whether pursuant to this Section, Sections 3.4, 3.6, 9.6 or 11.7 or
otherwise, shall be authenticated and delivered in the form of, and shall be, a
Global Security.
3.6 Mutilated, Destroyed, Lost and Stolen Securities
If any mutilated Security is surrendered to the Trustee, the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a new Security of the same
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series and of like tenor and principal amount and bearing a number not
contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (a)
evidence to their satisfaction of the destruction, loss or theft of any Security
and (b) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and the Trustee shall authenticate and
deliver in lieu of any such destroyed, lost or stolen Security, a new Security
of the same series and of like tenor and principal amount and bearing a number
not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has
become or is about to become due and payable, the Company in its discretion,
may, instead of issuing a new Security and subject to the above provisions
regarding security or indemnity, pay such Security.
Upon the issuance of any new Security under this Section, the
Company may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in
exchange for any mutilated Security or in lieu of any destroyed, lost or stolen
Security shall constitute an original additional contractual obligation of the
Company, whether or not the mutilated, destroyed, lost or stolen Security shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Securities
of that series duly issued hereunder.
The provisions of this Section 3.6 are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
3.7 Payment of Interest: Interest Rights Preserved
Except as otherwise provided as contemplated by Section 3.1 with
respect to any series of Securities, interest on any Security which is payable,
and is punctually paid or duly provided for, on any Interest Payment Date shall
be paid to the Person in whose name that Security (or one or more Predecessor
Securities) is registered at the close of business on the Regular Record Date
for such interest.
In the case of Securities represented by a Global Security
registered in the name of or held by a Depositary or its nominee, unless
otherwise specified by Section 3.1, payment of principal, premium, if any, and
interest, if any, will be made to the Depositary or its nominee, as the case may
be, as the registered owner or Holder of such Global Security. None of the
Company, the Trustee, any Paying Agent, any Authenticating Agent nor the
Security Registrar for such Securities will have any responsibility or liability
for any aspect of the records
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relating to or payments made on account of beneficial ownership interest in a
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interest.
Any interest on any Security of any series which is payable, but is
not punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been such Holder, on
such date, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in clause (a) or (b) below:
(a) The Company may elect to make payment of any Defaulted
Interest to the Persons in whose names the Securities of such
series (or their respective Predecessor Securities) are
registered at the close of business on a Special Record Date
for the payment of such Defaulted Interest, which shall be
fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each Security of such series and the
date of the proposed payment, and at the same time the Company
shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to
the Trustee for such deposit prior to the date of the proposed
payment, such money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted Interest as
in this clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at
the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date
therefor to be mailed, first-class postage prepaid, to each
Holder of Securities of such series at his address as it
appears in the Security Register, not less than 10 days prior
to such Special Record Date. Notice of the proposed payment of
such Defaulted Interest and the Special Record Date therefor
having been so mailed, such Defaulted Interest shall be paid
to the Persons in whose names the Securities of such series
(or their respective Predecessor Securities) are registered at
the close of business on such Special Record Date and shall no
longer be payable pursuant to the following clause (b).
(b) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not
inconsistent with the requirements of any securities exchange
on which such Securities may be listed, and upon such notice
as may be required by such exchange, if, after notice is given
by the Company to the Trustee of the proposed
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payment pursuant to this clause, such manner of payment shall
be deemed practicable by the Trustee.
At the option of the Company, interest on Securities of any series
that bear interest may be paid by mailing a check to the address of the Person
entitled thereto as such address shall appear in the Security Register.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
3.8 Persons Deemed Owners
Prior to due presentment of a Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee shall treat
the Person in whose name such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of and any premium
and (except as otherwise specified as contemplated by Section 3.1(e) and subject
to Section 3.7) any interest on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee nor any agent of the Company or the Trustee shall be affected by
notice to the contrary.
In the case of a Global Security, so long as the Depositary for such
Global Security, or its nominee, is the registered owner of such Global
Security, such Depositary or such nominee, as the case may be, will be
considered the sole owner or Holder of the Securities represented by such Global
Security for all purposes under this Indenture. Except as provided in Section
3.5, owners of beneficial interests in a Global Security will not be entitled to
have Securities that are represented by such Global Security registered in their
names, will not receive or be entitled to receive physical delivery of such
Securities in definitive form and will not be considered the owners or Holders
thereof under this Indenture.
Notwithstanding the foregoing, with respect to any Global Security,
nothing herein shall (a) prevent the Company, the Trustee, or any agent of the
Company or the Trustee, from giving effect to any written certification, proxy
or other authorization furnished by a Depositary or (b) impair, as between a
Depositary and holders of beneficial interests in any Global Security, the
operation of customary practices governing the exercise of the rights of the
Depositary as Holder of such Global Security.
3.9 Cancellation
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be delivered to the Trustee
and shall be promptly cancelled by it. The Company may at any time deliver to
the Trustee for cancellation any Securities previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee)
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for cancellation any Securities previously authenticated hereunder which the
Company has not issued and sold, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of as directed by a Company Order.
3.10 Computation of Interest
Except as otherwise specified as contemplated by Section 3.1 for
Securities of any series, interest on the Securities of each series shall be
computed on the basis of a 360-day year of twelve 30-day months.
3.11 Payment of Additional Amounts
(a) All payments made by the Company under or with respect to the
Securities will be made free and clear of and without withholding or deduction
for or on account of any present or future tax, duty, levy, impost, assessment
or other governmental charge imposed or levied by or on behalf of the Government
of Canada or of any province or territory thereof or by any authority or agency
therein or thereof having power to tax (hereinafter "Taxes"), unless the Company
is required to withhold or deduct Taxes by law or by the interpretation or
administration thereof. If the Company is so required to withhold or deduct any
amount for or on account of Taxes from any payment made under or with respect to
the Securities, the Company will pay such additional amounts ("Additional
Amounts") as may be necessary so that the net amount received by each Holder
(including Additional Amounts) after such withholding or deduction will not be
less than the amount the Holder would have received if such Taxes had not been
withheld or deducted; provided that no Additional Amounts will be payable with
respect to a payment made to a Holder (an "Excluded Holder") (i) with which the
Company does not deal at arm's length (within the meaning of the Income Tax Act)
at the time of making such payment or (ii) which is subject to such Taxes by
reason of its being connected with Canada or any province or territory thereof
otherwise than by the mere holding of Securities or the receipt of payments
thereunder. The Company will also (i) make such withholding or deduction and
(ii) remit the full amount deducted or withheld to the relevant authority in
accordance with applicable law. The Company will furnish to the Holders of the
Securities, within 30 days after the date the payment of any Taxes is due
pursuant to applicable law, certified copies of tax receipts evidencing such
payment by the Company. The Company will indemnify and hold harmless each Holder
(other than an Excluded Holder) and upon written request reimburse each such
Holder for the amount of (i) any Taxes so levied or imposed and paid by such
Holder as a result of payments made under or with respect to the Securities,
(ii) any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, and (iii) any Taxes imposed with respect to
any reimbursement under (i) or (ii), but excluding any such Taxes on such
Holders' net income.
At least 30 days prior to each date on which any payment under or
with respect to the Securities is due and payable, if the Company will be
obligated to pay Additional Amounts with respect to such payment, the Company
will deliver to the Trustee an Officers' Certificate stating the fact that such
Additional Amounts will be payable, stating the amounts so payable and
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setting forth such other information as is necessary to enable the Trustee to
pay such Additional Amounts to Holders on the payment date. Whenever in this
Indenture there is mentioned, in any context, the payment of principal (and
premium, if any), Redemption Price, interest or any other amount payable under
or with respect to any Security, such mention shall be deemed to include mention
of the payment of Additional Amounts provided for in this Section to the extent
that, in such context, Additional Amounts are, were or would be payable in
respect thereof pursuant to the provisions of this Section and express mention
of the payment of Additional Amounts (if applicable) in any provisions hereof
shall not be construed as excluding Additional Amounts in those provisions
hereof where such express mention is not made (if applicable).
(b) The Securities shall be subject to redemption as a whole, but
not in part, at the option of the Company at any time at 100% of the principal
amount thereof, together with accrued interest thereon to the redemption date,
in the event that the Company has become or would become obligated to pay, on
the next date on which any amount would be payable with respect to the
Securities, any Additional Amounts as a result of a change in the laws
(including any regulations promulgated thereunder) of Canada (or any political
subdivision or taxing authority thereof or therein), or any change in any
official position regarding the application or interpretation of such laws or
regulations, which change is announced or becomes effective after the date of
the issuance of the Securities; provided that the Company determines, in its
business judgment, that the obligation to pay such Additional Amounts cannot be
avoided by use of reasonable measures available to the Company (not including
substitution of the obligor under the Securities). Any such redemption shall be
subject to the provisions of Article 11 hereof.
(c) The obligations of the Company under this Section 3.11 survive
the termination of the Indenture and the payment of all amounts under or with
respect to the Securities.
ARTICLE 4
SATISFACTION AND DISCHARGE
4.1 Satisfaction and Discharge of Indenture
This Indenture shall, upon Company Request, cease to be of further
effect (except as to any surviving rights or registration of transfer or
exchange of Securities herein expressly provided for) and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture, when:
(a) either,
(i) all Securities theretofore authenticated and delivered
(other than (i) Securities which have been destroyed,
lost or stolen and which have been replaced or paid as
provided in Section 3.6 and (ii) Securities for whose
payment money has theretofore been deposited in trust or
segregated and held in trust by the Company
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and thereafter repaid to the Company or discharged from
such trust, as provided in Section 10.3) have been
delivered to the Trustee for cancellation, or
(ii) all such Securities not theretofore delivered to the
Trustee for cancellation
(A) have become due and payable, or
(B) will become due and payable at their Stated
Maturity within one year, or
(C) are to be called for redemption within one year
under arrangements satisfactory to the Trustee for
the giving of notice of redemption by the Trustee
in the name, and at the expense, of the Company,
and the Company, in the case of (A), (B) or (C) above, has
irrevocably deposited or caused to be deposited with the
Trustee, as trust funds in trust for the purpose, money in the
currency in which the Securities of such series are
denominated or Government Obligations of the government
issuing the currency in which the Securities of such series
are denominated which through the payment of interest and
principal in respect thereof in accordance with their terms
will provide lawful money not later than one day before the
due dates of principal (and premium, if any) or interest, or
any combination thereof, in an amount sufficient to pay and
discharge the entire indebtedness on such Securities not
theretofore delivered to the Trustee for cancellation, for
principal and any premium and interest to the date of such
deposit (in the case of Securities which have become due and
payable) or to the Stated Maturity or Redemption Date, as the
case may be;
(b) the Company has paid or caused to be paid all other sums
payable hereunder by the Company; and
(c) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent herein provided for relating to the
satisfaction and discharge of this Indenture have been
complied with.
In the event there are Securities of two or more series hereunder,
the Trustee shall be required to execute an instrument acknowledging
satisfaction and discharge of this Indenture only if requested to do so with
respect to the Securities of all series to which it is Trustee and if the other
conditions thereto are met. In the event there are two or more Trustees
hereunder, then the effectiveness of any such instrument shall be conditioned
upon receipt of such instruments from all Trustees hereunder.
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Notwithstanding the satisfaction and discharge of this Indenture,
the obligations of the Company to the Trustee under Section 6.7, the obligations
of the Trustee to any Authenticating Agent under Section 6.14 and, if money
shall have been deposited with the Trustee pursuant to subclause (ii) of clause
(a) of this Section, and the obligations of the Trustee under Section 4.2 and
the last paragraph of Section 10.3 shall survive.
4.2 Application of Trust Money
Subject to the provisions of the penultimate paragraph of Section
10.3, all money deposited with the Trustee pursuant to Section 4.1 shall be held
in trust and applied by it, in accordance with the provisions of the Securities
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal and any premium and
interest for whose payment such money has been deposited with the Trustee and
shall not be subject to the claims of the holders of Senior Indebtedness.
ARTICLE 5
REMEDIES
5.1 Events of Default
"Event of Default", wherever used herein with respect to Securities
of any series, means any one of the following events (whatever the reason for
such Event of Default and whether it shall be voluntary or involuntary or be
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body), unless such event is either inapplicable to a particular series or it is
specifically deleted or modified in the Board Resolutions or supplemental
indenture creating such series of Securities or in the form of Security for such
series:
(a) default in the payment of any interest upon any Security of
that series when it becomes due and payable, and continuance
of such default for a period of 30 days (whether or not such
failure is a result of the subordination provisions relating
to such series); or
(b) default in the payment of the principal of (or premium, if
any, on) any Security of that series at its Maturity (whether
or not such failure is a result of the subordination
provisions relating to such series); or
(c) default in the deposit of any sinking fund payment made in
accordance with the terms of Article 12, when and as due by
the terms of a Security of that series; or
(d) default in the performance, or breach of any covenant or
warranty of the Company in this Indenture or of any other
covenant to which the
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Company or any Significant Subsidiary is subject with respect
to such series of Securities by virtue of Section 3.1(t)
(other than a covenant or warranty a default in whose
performance or whose breach is specifically dealt with
elsewhere in this Section or which has expressly been included
in this Indenture or in the applicable Board Resolutions or
supplemental indenture with respect to such series of
Securities solely for the benefit of a series of Securities
other than that series or which has been included in this
Indenture or in the applicable Board Resolutions or
supplemental indenture with respect to such series of
Securities but not made applicable to the Securities of such
series) and continuance of such default or breach for a period
of 90 days after there has been given, by registered or
certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in
principal amount of the Outstanding Securities of that series,
a written notice specifying such default or breach and
requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(e) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or any
Significant Subsidiary (including a default with respect to
Securities of any series other than that series) having an
aggregate principal amount outstanding of at least U.S.
$10,000,000 or under any mortgage, indenture or instrument
(including this Indenture) under which there may be issued or
by which there may be secured or evidenced any indebtedness
for money borrowed by the Company or any Significant
Subsidiary having an aggregate principal amount outstanding of
at least U.S. $10,000,000, whether such indebtedness now
exists or shall hereafter be created, after the expiration of
any applicable grace period with respect thereto; or
(f) the entry by a court having jurisdiction in the premises of
(i) a decree or order for relief in respect of the Company or
any Significant Subsidiary in an involuntary case or
proceeding under the Companies' Creditors Arrangement Act
(Canada), the Bankruptcy and Insolvency Act (Canada) or the
Winding-Up Act (Canada) or any other bankruptcy, insolvency,
reorganization or similar law, or (ii) a decree or order
adjudging the Company or any Significant Subsidiary bankrupt
or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition
of or in respect of the Company or any Significant Subsidiary
under any applicable Canadian or provincial law, or appointing
a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or any
Significant Subsidiary or of any substantial part of its
respective property, or ordering the winding up or liquidation
of its affairs, and the continuance of any such decree or
order for relief specified in this clause (ii) unstayed and in
effect for a period of 60 consecutive days; or
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(g) the commencement by the Company or any Significant Subsidiary
of a voluntary case or proceeding under the Companies'
Creditors Arrangement Act (Canada), the Bankruptcy and
Insolvency Act (Canada) or the Winding- Up Act (Canada) or any
other bankruptcy, insolvency, reorganization or similar law,
or of any other case or proceeding to be adjudicated a
bankrupt or insolvent, or the consent by the Company or any
Significant Subsidiary to the entry of a decree or order for
relief in respect of the Company or any Significant Subsidiary
in an involuntary case or proceeding under the Companies'
Creditors Arrangement Act (Canada), the Bankruptcy and
Insolvency Act (Canada) or the Winding-Up Act (Canada) or any
other bankruptcy, insolvency, reorganization or similar law,
or to the commencement of any bankruptcy or insolvency case or
proceeding against the Company or any Significant Subsidiary
or the filing by the Company or any Significant Subsidiary of
a petition or answer or consent seeking reorganization or
relief under any applicable Canadian or provincial law, or the
consent by it to the filing of such petition or to the
appointment of or taking possession by a custodian, receiver,
liquidator, assignees, trustee, sequestrator or other similar
official of the Company or any Significant Subsidiary or of
any substantial part of its property, or the making by the
Company or any Significant Subsidiary of an assignment for the
benefit of creditors, or the admission by the Company or any
Significant Subsidiary in writing its inability to pay its
debts generally as they become due, or the taking of corporate
action by the Company or any Significant Subsidiary in
furtherance of any such action; or
(h) any other Event of Default provided in the supplemental
indenture or Board Resolution of the Company under which such
series of Securities is issued or in the form of Security for
such series.
5.2 Acceleration of Maturity; Rescission and Annulment
(a) If an Event of Default with respect to Securities of any
series at the time Outstanding occurs and is continuing, then
in every such case, the Trustee or the Holders of not less
than 25% in principal amount of the Outstanding Securities of
that series may declare the principal amount (or, if any of
the Securities of that series are Original Issue Discount
Securities, such portion of the principal amount of such
Securities as may be specified in the terms thereof) of all of
the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to the
Trustee if given by Holders) and upon any such declaration
such principal amount (or specified amount) shall become
immediately due and payable, except that if the Event of
Default is an event described in clause 5.1(f) or 5.1(g)
above, the principal amount (or in the case of Original Issue
Discount Securities, such portion thereof) of all Securities
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shall become due and payable immediately, without notice of
further action of any kind whatsoever.
(b) At any time after such a declaration of acceleration with
respect to Securities of any series has been made, but before
a judgment or decree for payment of the money due has been
obtained by the Trustee as hereinafter in this Article
provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to
the Company and the Trustee, may rescind and annul such
declaration and its consequences if:
(i) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that
series,
(B) the principal of (and premium, if any, on) any
Securities of that series which have become due
otherwise than by such declaration of acceleration
and any interest thereon at the rate or rates
prescribed therefore in such Securities, to the
extent that payment of such interest is lawful,
(C) to the extent that payment of such interest is
lawful, interest upon overdue interest at the rate
or rates prescribed therefor in such Securities,
and
(D) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses,
disbursements and advances of the Trustee, its
agents and counsel; and
(ii) all Events of Default with respect to Securities of that
series, other than the non-payment of the principal of
Securities of that series which have become due solely
by such declaration of acceleration, have been cured or
waived as provided in Section 5.13.
No such rescission shall affect any subsequent default or impair any
right consequent thereon.
5.3 Suits for Enforcement by Trustee
The Trustee, in its own name and as trustee of an express trust, may
institute a judicial proceeding for the collection of any sums due and unpaid as
a consequence of the action set froth in Section 5.2(a), and may prosecute such
proceedings to judgment or final decrees, and may enforce the same against the
Company or any other obligor upon the Securities of such series and collect the
money adjudged or decreed to be payable in the manner provided by law
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out of the property of the Company or any other obligor upon such Securities,
wherever situated.
If an Event of Default with respect to Securities of any series
occurs and is continuing, the Trustee may in its discretion proceed to protect
and enforce its rights and the rights of the Holders of Securities of such
series by such appropriate judicial proceedings as the Trustee shall deem most
effectual to protect and enforce any such rights, whether for the specific
enforcement of any covenant or agreement in this Indenture or in aid of the
exercise of any power granted herein, or to enforce any other proper remedy.
5.4 Trustee May File Proofs of Claim
In case of any judicial proceeding relative to the Company or any
other obligor upon the Securities, its property or its creditors, the Trustee
(irrespective of whether the principal of the Notes shall then be due and
payable as therein expressed or by declaration or otherwise and irrespective of
whether the Trustee shall have made any demand on the Company for the payment of
overdue principal, premium, if any, or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise, to take any and all
actions authorized under Applicable Legislation in order to have claims of the
Holders and the Trustee allowed in any such proceeding. In particular, the
Trustee shall be authorized (i) to file and prove a claim for the whole amount
of principal (and premium, if any) and interest owing and unpaid in respect of
the Notes and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel) and of the Holders allowed in such judicial
proceeding, and (ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Holder to make such
payments to the Trustee and, in the event that the Trustee shall consent to the
making of such payments directly to the Holders, to pay to the Trustee any
amount due it for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, and any other amounts due the
Trustee under Section 6.7.
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding.
5.5 Trustee May Enforce Claims Without Possession of Securities
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name as trustee of an express trust, and any recovery of judgment shall,
after provision for the payment of the reasonable compensation, expenses,
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disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
5.6 Application of Money Collected
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or any premium
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
(a) first, to the payment of all amounts due the Trustee under
Section 6.7;
(b) second, to the payment of the amounts then due and unpaid for
principal of and any premium and interest on the Securities in
respect of which or for the benefit of which such money has
been collected, ratably, without preference or priority of any
kind, according to the amounts due and payable on such
Securities for principal and any premium and interest,
respectively; and
(c) third, the balance, if any, to the Company or any other Person
or Persons entitled thereto.
5.7 Limitation on Suits
No Holder of any Security of any series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless:
(a) such Holder has previously given written notice to the Trustee
of a continuing Event of Default with respect to the
Securities of that series;
(b) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written
request to the Trustee to institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
(c) such Holder or Holders have offered to the Trustee reasonable
security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with
such request;
(d) the Trustee for 60 days after receipt of such notice, request
and offer of indemnity has failed to institute any such
proceeding; and
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(e) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders
of a majority in principal amount of the Outstanding
Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other of
such Holders, or to obtain or to seek to obtain priority or preference over any
other of such Holders or to enforce any right under this Indenture, except in
the manner herein provided and for the equal and ratable benefit of all of such
Holders.
5.8 Unconditional Right of Holders to Receive Principal, Premium and
Interest
Notwithstanding any other provision of this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, any premium and (except as specified as
contemplated by Section 3.1(e) and subject to Section 3.7) any interest on such
Security on the Stated Maturity or Maturities expressed in such Security (or, in
the case of redemption, on the Redemption Date) and to institute suit for the
enforcement of any such payment and such rights shall not be impaired without
the consent of such Holder.
5.9 Restoration of Rights and Remedies
If the Trustee or any Holder has instituted any proceeding to
enforce any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
5.10 Rights and Remedies Cumulative
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 3.6, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
5.11 Delay or Omission Not Waiver
No delay or omission of the Trustee or of any Holder of any
Securities to exercise any right or remedy accruing upon any Event of Default
shall impair any such right or remedy
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or constitute a waiver of any such Event of Default or an acquiescence therein.
Every right and remedy given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as may be deemed
expedient, by the Trustee or by the Holders, as the case may be.
5.12 Control by Holders
The Holders of a majority in principal amount of the Outstanding
Securities of any series shall have the right to direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee, or
to exercise any trust or power conferred on the Trustee, with respect to the
Securities of such series, provided that:
(a) such direction shall not be in conflict with any rule of law
or with this Indenture;
(b) the Trustee need not take any action which might involve it in
personal liability or be unjustly prejudicial to Holders of
Securities of that series, or any other series not taking part
in such direction; and
(c) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
5.13 Waiver of Past Defaults
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default:
(a) in the payment of the principal of or any premium or interest
on any Security of such series; or
(b) in respect of a covenant or provision hereof which under
Article 9 cannot be modified or amended without the consent of
the Holder of each Outstanding Security of such series
affected.
Upon any such waiver, such default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
5.14 Undertaking for Costs
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any
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party litigant in such suit of an undertaking to pay the costs of such suit, and
that such court may in its discretion assess reasonable costs, including
reasonable attorney's fees, against any party litigant in such suit, having due
regard to the merits and good faith of the claims or defenses made by such party
litigant; provided that this Section shall not be deemed to authorize any court
to require such an undertaking or to make such an assessment in any suit
instituted by the Company, in any suit instituted by the Trustee or to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities of any series.
5.15 Waiver of Stay or Extension Laws
The Company covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, or plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law wherever
enacted, now or at any time hereafter in force, which may affect the covenants
or the performance of this Indenture; and the Company hereby expressly waives
(to the extent that it may lawfully do so) all benefit or advantage of any such
law and each covenants that it will not hinder, delay or impede the execution of
any power herein granted to the Trustee, but will suffer and permit the
execution of every such power as though no such law had been enacted.
5.16 Waiver of Certain Covenants
The Company may omit in any particular instance to comply with any
term, provision or condition to which the Company is subject with respect to the
Securities of any series by virtue of Section 3.1(t), or any covenant provided
pursuant to Section 9.1(b) for the benefit of Holders of such series, if before
the time for such compliance the Holders of at least a majority in principal
amount of the Outstanding Securities of such series shall, by Act of such
Holders, either waive such compliance in such instance or generally waive
compliance with such term, provision or condition, but no such waiver shall
extend to or affect such term, provision or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee in respect of any such term,
provision or condition shall remain in full force and effect.
ARTICLE 6
THE TRUSTEE
6.1 Certain Duties and Responsibilities
Except as required under Applicable Legislation, the Trustee
undertakes to perform such duties and only such duties as are specifically set
forth in this Indenture, and no implied covenants or obligations shall be read
into this Indenture against the Trustee. Notwithstanding the foregoing (but
subject to Section 1.7), no provision of this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder, or in the exercise
of any of its rights or powers,
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if it shall have reasonable grounds for believing that repayment of such funds
or adequate indemnity against such risk or liability is not reasonably assured
to it. Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
6.2 Notice of Defaults
If a default occurs hereunder with respect to Securities of any
series, the Trustee shall give the Holders of Securities of such series notice
of such default as and to the extent provided by Applicable Legislation and in
the manner provided in Section 1.6. For the purpose of this Section, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an Event of Default with respect to Securities of such series.
6.3 Certain Rights of Trustee
Subject to the provisions of Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document believed
by it to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Company mentioned herein shall
be sufficiently evidenced by a Company Request or Company
Order (unless other evidence in respect thereof be herein
specifically prescribed) and any resolution of the Board of
Directors of the Company may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee
shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder,
the Trustee (unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its part, rely
upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of
such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and
in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the
request or direction of any of the Holders pursuant to this
Indenture, unless such Holders shall have offered to the
Trustee security or indemnity against the costs, expenses
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and liabilities which might be incurred by it in compliance
with such request or direction reasonably satisfactory to the
Trustee;
(f) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other
evidence of indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further inquiry or
investigation into such facts or matters as it may see fit,
and, if the Trustee shall determine to make such further
inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by
agent or attorney;
(g) the Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder;
(h) the Trustee shall not be liable for any action taken, suffered
or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers
conferred upon it by this Indenture; and
(i) the permissive right of the Trustee to act hereunder will not
be construed as a duty.
The Trustee shall not be required to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of its duties
hereunder, or in the exercise of any of its rights or powers if it shall have
reasonable grounds for believing that repayment of such funds or adequate
indemnify against such risk or liability is not reasonably assured to it.
6.4 Not Responsible for Recitals or Issuance of Securities
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and neither the Trustee nor any Authenticating Agent assumes
responsibility for their correctness. The Trustee makes no representations as to
the validity or sufficiency of this Indenture or of the Securities, except that
the Trustee represents that it is duly authorized to execute and deliver this
Indenture, authenticate the Securities and perform its obligations hereunder
and, if the series of Securities was required to be registered under the
Securities Act, that the statements made by it in a Statement of Eligibility on
Form T-1 supplied to the Company are true and accurate, subject to the
qualifications set forth therein. The Trustee or any Authenticating Agent shall
not be accountable for the use or application by the Company of Securities or
the proceeds thereof.
6.5 May Hold Securities
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The Trustee, any Authenticating Agent, any Paying Agent, any
Security Registrar or any other agent of the Company or of the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
and, subject to Sections 6.8 and 6.13, may otherwise deal with the Company with
the same rights it would have if it were not Trustee, Authenticating Agent,
Paying Agent, Security Registrar or such other agent.
6.6 Money Held in Trust
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed with the Company in writing.
6.7 Compensation and Reimbursement
The Company covenants and agrees:
(a) to pay to the Trustee from time to time reasonable
compensation for all services rendered by it hereunder (which
compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust);
(b) except as otherwise expressly provided herein, to reimburse
the Trustee upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in
accordance with any provision of this Indenture (including the
reasonable compensation and the expenses and disbursements of
its agents and counsel), except to the extent any such
expense, disbursement or advance may be attributable to its
gross negligence or bad faith; and
(c) to indemnify the Trustee for, and to hold it harmless against,
any loss, liability or expense, arising out of or in
connection with the acceptance or administration of the trust
or trusts hereunder, including the costs and expenses of
defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or
duties hereunder, except to the extent any such expense,
disbursement or advance may be attributable to its negligence
or bad faith.
The obligations of the Company under this Section 6.7 to compensate
the Trustee, to pay or reimburse the Trustee for expenses, disbursements and
advances and to indemnify and hold harmless the Trustee shall constitute
additional indebtedness hereunder and shall survive the satisfaction and
discharge of this Indenture. As security for the performance of such obligations
of the Company, the Trustee shall have a claim prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (and premium, if any) or interest on
particular Securities.
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When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(e) or (f), the expenses
(including the reasonable charges and expenses of its counsel) of the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
The provisions of this Section 6.7 shall survive the termination of
this Indenture.
"Trustee", for purposes of this Section 6.7, includes any
predecessor Trustee, provided that the gross negligence or bad faith of any
Trustee shall not affect the rights under this Section 6.7 of any other Trustee.
6.8 Disqualification; Conflicting Interests
If the Trustee has or shall acquire a conflicting interest within
the meaning of Applicable Legislation, the Trustee shall either eliminate such
interest or resign, to the extent and in the manner provided by, and subject to
the provisions of, Applicable Legislation and this Indenture, and the Company
shall take prompt action to have a successor Trustee appointed in the manner
provided herein.
6.9 Corporate Trustee Required; Eligibility
There shall at all times be a Trustee hereunder with respect to the
Securities of each series and the Trustee shall be a Person that is eligible
pursuant to the Canada Business Corporations Act to act as such, unless the
Company has obtained an exemption with respect to any particular series of
Securities pursuant to subsection 82(3) of the Canada Business Corporations Act.
Where the Securities of such series was required to be registered under the
Securities Act, the Trustee shall be a Person that is eligible pursuant to the
Trust Indenture Act to act as such, has a combined capital and surplus of at
least U.S. $50,000,000 and is subject to supervision or examination by United
States Federal, Territorial, District of Columbia or State authority. If such
Person publishes reports of condition at least annually, pursuant to law or to
the requirements of said supervising or examining authority, then, for the
purposes of this Section and to the extent permitted by the Trust Indenture Act,
the combined capital and surplus of such Person shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. Where the Securities of such series are distributed pursuant to a
prospectus filed with the Ontario Securities Commission, the Trustee shall be a
person that is eligible pursuant to the Business Corporations Act. If at any
time the Trustee shall cease to be eligible in accordance with the provisions of
this Section, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
6.10 Resignation and Removal; Appointment of Successor
(a) No resignation or removal of the Trustee and no appointment of
a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor
Trustee in accordance with the applicable requirements of
Section 6.11.
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(b) The Trustee may resign at any time with respect to the
Securities of one or more series by giving written notice
thereof to the Company. If the instrument of acceptance by a
successor Trustee required by Section 6.11 shall not have been
delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a
successor Trustee with respect to the Securities of such
series.
(c) The Trustee may be removed at any time with respect to the
Securities of any series by Act of the Holders of not less
than a majority in principal amount of the Outstanding
Securities of such series, delivered to the Trustee and the
Company.
(d) If at any time:
(i) the Trustee shall fail to comply with Section 6.8 after
written request therefor by the Company or by any Holder
who has been a bona fide Holder of a Security for at
least six months; or
(ii) the Trustee shall cease to be eligible under Section 6.9
and shall fail to resign after written request therefor
by the Company or by any Holder who has been a bona fide
Holder of a Note for at least six months; or
(iii) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver of the
Trustee or of its property shall be appointed or any
public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation of liquidation,
then, in any such case, (A) the Company by a Board Resolution,
may remove the Trustee with respect to all Securities, or (B)
subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with
respect to all Securities and the appointment of a successor
Trustee or Trustees.
(e) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee
for any cause, with respect to the Securities of one or more
series, the Company, by a Board Resolution, shall promptly
appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to
the Securities of one or more or all of such series and that
at any time there shall be only one Trustee with respect to
the Securities of any particular series)
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and shall comply with the applicable requirements of Section
6.11. If, within one year after such resignation, removal or
incapability, or the occurrence of such vacancy, a successor
Trustee with respect to the Securities of any series shall be
appointed by Act of the Holders of a majority in principal
amount of the Outstanding Securities of such series delivered
to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements of
Section 6.11, become the successor Trustee with respect to the
Securities of such series and to that extent supersede the
successor Trustee appointed by the Company. If no successor
Trustee with respect to the Securities of any series shall
have been so appointed by the Company or the Holders and
accepted appointment in the manner required by Section 6.11,
any Holder who has been a bona fide Holder of a Security of
such series for at least six months may, on behalf of himself
and all others similarly situated, petition any court of
competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities of such series.
(f) The Company shall give notice of each resignation and each
removal of the Trustee with respect to the Securities of any
series and each appointment of a successor Trustee with
respect to the Securities of any series to all Holders of
Securities of such series in the manner provided in Section
1.6. Each notice shall include the name of the successor
Trustee with respect to the Securities of such series and the
address of its Corporate Trust Office.
6.11 Acceptance of Appointment by Successor
(a) In case of the appointment hereunder of a successor Trustee
with respect to all Securities, every such successor Trustee
so appointed shall execute, acknowledge and deliver to the
Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of
the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall
become vested with all the rights, powers, trusts and duties
of the retiring Trustee; but, on the request of the Company or
the successor Trustee, such retiring Trustee shall, upon
payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers
and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee
with respect to the Securities of one or more (but not all)
series, the Company, the retiring Trustee and each successor
Trustee with respect to the Securities of one or more series
shall execute and deliver an indenture supplemental
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hereto wherein each successor Trustee shall accept such
appointment and which (i) shall contain such provisions as
shall be necessary or desirable to transfer and confirm to,
and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of
such successor Trustee relates, (ii) if the retiring Trustee
is not retiring with respect to all Securities, shall contain
such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or
those series as to which the retiring Trustee is not retiring
shall continue to be vested in the retiring Trustee, and (iii)
shall add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall
be trustee of a trust or trusts hereunder separate and apart
from any trust or trusts hereunder administered by any other
such Trustee; and upon the execution and delivery of such
supplemental indenture the resignation or removal of the
retiring Trustee shall become effective to the extent provided
therein and each such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request
of the Company or any successor Trustee, such retiring Trustee
shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those
series to which the appointment of such successor Trustee
relates.
(c) Upon request of any such successor Trustee, the Company shall
execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such
rights, powers and trusts referred to in paragraph (a) or (b)
of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at
the time of such acceptance such successor Trustee shall be
qualified and eligible under this Article.
6.12 Merger, Conversion, Consolidation or Succession to Business
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
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without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities. In the
event any Securities shall not have been authenticated by such predecessor
Trustee, any such successor Trustee may authenticate and deliver such
Securities, in either its own name or that of its predecessor Trustee, with the
full force and effect which this Indenture provides for the certificate of
authentication of the Trustee.
6.13 Preferential Collection of Claims Against Company
If and when the Trustee with respect to any series of Securities
which was required to be registered under the Exchange Act shall be or become a
creditor of the Company (or any other obligor upon the Securities), the Trustee
shall be subject to the provisions of the Trust Indenture Act regarding the
collection of claims against the Company (or any such other obligor).
6.14 Appointment of Authenticating Agent
The Trustee may appoint an Authenticating Agent or Agents with
respect to one or more series of Securities which shall be authorized to act on
behalf of the Trustee to authenticate Securities of such series issued upon
original issue and upon exchange, registration of transfer or partial redemption
thereof or pursuant to Section 3.6, and Securities so authenticated shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference is
made in this Indenture to the authentication and delivery of Securities by the
Trustee or the Trustee's certificate of authentication, such reference shall be
deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by an Authenticating Agent. Each Authenticating Agent shall be
acceptable to the Company and, if such Authenticating Agent is appointed with
respect to any series of Securities which was required to be registered under
the Exchange Act, shall at all times be a corporation organized and doing
business under the laws of the United States of America, any State thereof or
the District of Columbia, authorized under such laws to act as an Authenticating
Agent, having a combined capital and surplus of not less than U.S. $50,000,000
and subject to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then,
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion
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or consolidation to which such Authenticating Agent shall be a party, or any
corporation succeeding to the corporate agency or corporate trust business of an
Authenticating Agent, shall continue to be an Authenticating Agent, provided
such corporation shall be otherwise eligible under this Section, without the
execution or filing of any paper or any further act on the part of the Trustee
or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall mail written notice of
such appointment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve, as their names and addresses appear in the Security Register. Any
successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if
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originally named as an Authenticating Agent. No successor Authenticating Agent
shall be appointed unless eligible under the provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section, and the
Trustee shall be entitled to be reimbursed for such payments, subject to the
provisions of Section 6.7.
If an appointment with respect to one or more series is made
pursuant to this Section, the Securities of such series may have endorsed
thereon, in addition to the Trustee's certificate of authentication, an
alternative certificate of authentication in the following form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
As Trustee
By:
As Authenticating Agent
By:
Authorized Officer
ARTICLE 7
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
7.1 Company to Furnish Trustee Names and Addresses of Holders
The Company will furnish or cause to be furnished to the Trustee:
(a) semi-annually, not later than 15 days after the Regular Record
Date for each series of Securities, a list, in such form as
the Trustee may reasonably require, of the names and addresses
of the Holders of Securities as of such Regular Record Date,
or if there is no Regular Record Date for interest for such
series of Securities, semi-annually, upon such dates as are
set forth in the Board Resolution or indenture supplemental
hereto authorizing such series; and
(b) at such other times as the Trustee may request in writing,
within 30 days after the receipt by the Company of any such
request, a list of similar form and content as of a date not
more than 15 days prior to the time such list is furnished;
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provided, however, that so long as the Trustee is the Security Registrar, no
such list shall be required to be furnished.
7.2 Preservation of Information; Communications to Holders
(a) The Trustee shall preserve, in as current a form as is
reasonably practicable, the names and addresses of Holders of
Securities (i) contained in the most recent list furnished to
the Trustee for each series as provided in Section 7.1 and
(ii) received by the Trustee for each series in the capacity
as Security Registrar if the Trustee is acting in such
capacity. The Trustee may destroy any list furnished to it as
provided in Section 7.1 upon receipt of a new list so
furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the
Securities, and the corresponding rights and privileges of the
Trustee, shall be as provided by Applicable Legislation and
any other relevant provisions of United States and Canadian
securities laws.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that neither the
Company nor the Trustee nor any agent of either of them shall
be held accountable by reason of any disclosure of information
as to names and addresses of Holders made pursuant to
Applicable Legislation regardless of the source from which
such information was derived, and that the Trustee shall not
be held accountable by reason of mailing any material pursuant
to a request made under Applicable Legislation.
7.3 Reports by Trustee
(a) The Trustee shall transmit to Holders of Securities, as their
names and addresses appear in the Security Register, such
reports concerning the Trustee and its actions under this
Indenture as may be required pursuant to Applicable
Legislation at the times and in the manner provided pursuant
thereto.
(b) A copy of such report shall, at the time of such transmission
to Holders, be filed by the Trustee with each stock exchange
upon which any Securities are listed, with the Commission and
with the Company. The Company will notify the Trustee when any
Securities are listed on any stock exchange.
7.4 Reports by Company
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may
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be required pursuant to the Trust Indenture Act at the times and in the manner
provided pursuant to such Act; provided that any such information, documents or
reports required to be filed with the Commission pursuant to Section 13 or 15(d)
of the Exchange Act shall be filed with the Trustee within 15 days after the
same is so required to be filed with the Commission and transmitted to Holders
within 30 days after the filing thereof with the Trustee. The provisions of this
section shall not require the Company to make any filing with the Commission
with respect to any series of Securities to which the Exchange Act and the Trust
Indenture Act are not applicable.
ARTICLE 8
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
8.1 Company May Consolidate, Etc., Only on Certain Terms
The Company shall not consolidate with or merge into any other
corporation (other than a wholly-owned Subsidiary of the Company) or convey,
transfer, sell or lease its properties and assets substantially as an entirety
(treating the Company and each Subsidiary of the Company as a single
consolidated entity and treating any sale by a Subsidiary or of a Subsidiary
(including by merger) as a sale by the Company for such purpose) to any
corporation (other than a wholly-owned Subsidiary of the Company), and the
Company shall not permit any corporation (other than a wholly owned Subsidiary
of the Company) to consolidate with or merge into the Company or convey,
transfer or lease its properties and assets substantially as an entirety to the
Company, unless:
(a) the Company shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and
assets substantially as an entirety (treating the Company and
each Subsidiary or of a Subsidiary (including by merger)) of
the Company as a single consolidated entity and treating any
sale by a Subsidiary or of a Subsidiary (including by merger)
as a sale by the Company for such purpose) to any corporation,
where the corporation formed by such consolidation or into
which the Company is merged or the corporation which acquires
by conveyance or transfer, or which leases, the properties and
assets of the Company substantially as an entirety (treating
the Company and each Subsidiary of the Company as a single
consolidated entity and treating any sale by a Subsidiary or
of a Subsidiary (including by merger) as a sale by the Company
for such purpose), shall be organized and existing under the
laws of the United States of America or a state thereof or the
District of Columbia, or the laws of Canada or a province
thereof, and such corporation shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and
punctual payment of the principal of and any premium and
interest on all the Securities and the performance or
observance of every covenant of this Indenture on the part of
the Company to be performed or observed;
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(b) the Trustee shall have received an Opinion of Counsel to the
effect that the transaction will not result in the successor
being required to make any deduction or withholding on account
of any present or future tax, duty, levy, impost, assessment
or other governmental charge imposed or levied by or on behalf
of the Government of Canada or of any province or territory
thereof or by any authority or agency therein or thereof
having power to tax from any payments in respect of the
Securities, which deduction or withholding is greater than any
deduction or withholding to which the Company was subject
prior to the transaction;
(c) immediately after giving effect to such transaction and
treating any indebtedness which becomes an obligation of the
Company, or any Subsidiary, as a result of such transaction as
having been incurred by the Company, or such Subsidiary, at
the time of such transaction, no Event of Default, and no
event which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be
continuing; and
(d) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger, conveyance, transfer or lease and, if a
supplemental indenture is required in connection with such
transaction, such supplemental indenture, comply with this
Article and that all conditions precedent herein provided for
relating to such transaction have been complied with.
8.2 Successor Substituted
Upon any consolidation of the Company with, or merger of the Company
into, any other corporation or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 8.1, the successor corporation formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor corporation had been named as the Company herein, and thereafter the
predecessor corporation shall be relieved of all obligations and covenants under
this Indenture and the Securities.
ARTICLE 9
SUPPLEMENTAL INDENTURES
9.1 Supplemental Indentures Without Consent of Holders
Without the consent of any Holders, the Company, when authorized by
a Board Resolution, and the Trustee, at any time and from time to time, may
enter into one or more
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indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(a) to evidence the succession of another corporation to the
Company and the assumption by any such successor of the
covenants of the Company herein and in the Securities; or
(b) to add to the covenants of the Company or to surrender any
right or power herein conferred upon the Company for the
benefit of the Holders of all or any series of Securities (and
if such covenants or the surrender of such right or power are
to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included
solely for the benefit of such series); or
(c) to add any additional Events of Default with respect to the
Securities of any or all series (and if such additional Events
of Default are to be for the benefit of less than all series
of Securities, stating that such additional Events of Default
are expressly being included solely for the benefit of one or
more specified series); or
(d) to add or change any of the provisions of this Indenture to
such extent as shall be necessary to permit or facilitate the
issuance of Securities in bearer form, registrable or not
registrable as to principal, and with or without interest
coupons, or to permit or facilitate the issuance of Securities
in uncertificated form; or
(e) to add, change or eliminate any of the provisions of this
Indenture in respect of one or more series of Securities,
provided that any such addition, change or elimination (i)
shall neither (A) apply to any Security of any series created
prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor (B) modify the
rights of the Holder of any such Security with respect to such
provision or (ii) shall become effective only when there is no
such Security Outstanding of such series; or
(f) to secure the Securities; or
(g) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 3.1; or
(h) to evidence and provide for the acceptance of appointment
hereunder by another corporation as a successor Trustee with
respect to the Securities of one or more series and to add to
or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the
requirements of Section 6.11(b); or
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(i) to comply with the requirements of the Commission in
connection with the qualification of this Indenture under the
Trust Indenture Act; or
(j) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision
herein, or to make any other provisions with respect to
matters or questions arising under this Indenture, provided
that such action pursuant to this clause 9.1(j) shall not
adversely affect the interests of the Holders of Outstanding
Securities of any series.
9.2 Supplemental Indentures with Consent of Holders
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series affected by such
supplemental indenture or indentures, by Act of said Holders delivered to the
Company and the Trustee, the Company, when authorized by a Board Resolution, and
the Trustee may enter into an indenture or indentures supplemental hereto for
the purpose of adding any provisions to or changing in any manner or eliminating
any of the provisions of this Indenture or of modifying in any manner the rights
of the Holders of Securities of each such series under this Indenture; provided,
however, that no such supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,
(a) change the Maturity or the Stated Maturity of the principal
of, or any instalment of principal of or interest on, any
Security, or reduce the principal amount thereof or the rate
of interest thereon or any premium payable upon the redemption
thereof, or reduce the amount of the principal of an Original
Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant
to Section 5.2, or change the method of computing the amount
of principal thereof or interest thereon on any date, or
change any Place of Payment where, or the coin or currency in
which, any Security or any premium or interest thereon is
payable, or impair the right to institute suit for the
enforcement of any such payment on or after the Maturity or
the Stated Maturity, as the case may be, thereof (or, in the
case of redemption, on or after the Redemption Date); or
(b) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is
required for any such supplemental indenture, or the consent
of whose Holders is required for any waiver of compliance with
certain provisions of this Indenture or certain defaults
hereunder and their consequences, provided for in this
Indenture; or
(c) modify any of the provisions of this Section, Section 5.13 or
Section 5.16, except to increase any such percentage, or to
designate, in any supplemental indenture, additional
provisions of this Indenture which, with
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respect to such series, cannot be modified or waived without
the consent of the Holder of each Outstanding Security
affected thereby; provided, however, that this clause shall
not be deemed to require the consent of any Holder with
respect to changes in the references to "the Trustee" and
concomitant changes in this Section and Section 5.16, or the
deletion of this proviso, in accordance with the requirements
of Sections 6.11(b) and 9.1(h); or
(d) modify the provisions of Article 14 hereof relating to
conversion of Securities of a series in a manner adverse to
the Holders of Securities of such series; or
(e) modify the provisions of Article 15 hereof as it relates to
Outstanding Securities of a series in a manner adverse to the
Holders of Securities of such series;
A supplemental indenture which changes or eliminates any covenants or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
It shall not be necessary for any Act of Holders under this Section
to approve the particular form of any proposed supplemental indenture, but it
shall be sufficient if such Act shall approve the substance thereof.
9.3 Execution of Supplemental Indentures
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.1) shall be fully protected in relying upon, an
Opinion of Counsel stating that the execution of such supplemental indenture is
authorized or permitted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture which affects the
Trustees's own rights, duties or immunities under this Indenture or otherwise.
9.4 Effect of Supplemental Indentures
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby to the extent provided therein.
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9.5 Conformity with Applicable Legislation
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of Applicable Legislation.
9.6 Reference in Securities to Supplemental Indentures
Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of any series so modified as to conform, in the
opinion of the Company and the Trustee, to any such supplemental indenture may
be prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities of such series.
ARTICLE 10
COVENANTS
10.1 Payment of Principal, Premium and Interest
The Company covenants and agrees for the benefit of each series of
Securities that it will duly and punctually pay the principal of and any premium
and interest on the Securities of such series in accordance with the terms of
the Securities and this Indenture and will duly comply with all the other terms,
agreements and conditions contained in, or made in this Indenture for the
benefit of, the Securities of such series.
10.2 Maintenance of Office or Agency
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of such series may be presented
or surrendered for payment, where Securities of such series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of such series and this Indenture
may be served. The Company will give prompt written notice to the Trustee of the
location, and any change in the location, of such office or agency. If at any
time the Company shall fail to maintain any such required office or agency or
shall fail to furnish the Trustee with the address thereof, such presentations,
surrenders, notices and demands may be made or served at the Corporate Trust
Office of the Trustee, Attention: Corporate Finance Department, and the Company
hereby appoints the Trustee as its agent to receive all such presentations,
surrenders, notices and demands.
The Company may also from time to time designate one or more other
offices or agencies where the Securities of one or more series may be presented
or surrendered for any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designation or rescission
shall in any manner relieve the Company of its obligation to
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maintain an office or agency in each Place of Payment for Securities of any
series for such purposes. The Company will give prompt written notice to the
Trustee of any such designation or rescission and of any change in the location
of any such other office or agency.
10.3 Money for Securities Payments to Be Held in Trust
If the Company shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of, or any premium or interest on, any of the Securities of such
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal and any premium and interest so
becoming due until such sums shall be paid to such Persons or otherwise disposed
of as herein provided and the Company will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying Agents for any
series of Securities, it will, prior to each due date of the principal of, or
any premium or interest on, any Securities of such series, deposit with any such
Paying Agent a sum sufficient to pay such principal, premium (if any) or
interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium (if any) or interest thereon and
(unless such Paying Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any series of
Securities, other than the Trustee, to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will: (a) hold all sums
held by it for the payment of the principal of (and premium, if any) or interest
on Securities in trust for the benefit of the Persons entitled thereto until
such sums shall be paid to such Persons or otherwise disposed of as herein
provided; (b) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities) in the making of any payment of principal
(and premium, if any) or interest on the Securities of such series; and (c) at
any time during the continuance of any such default, upon the written request of
the Trustee, forthwith pay to the Trustee all sums so held in trust by such
Paying Agent for payment in respect of such series.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture with respect to any series of
Securities or for any other purpose, pay, or the Company may by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in trust by the
Company or such Paying Agent, such sums to be held by the Trustee upon the same
trusts as those upon which such sums were held by the Company or such Paying
Agent; and, upon such payment by any Paying Agent to the Trustee, such Paying
Agent shall be released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the principal of, or any
premium or interest on, any Security of any series and remaining unclaimed for
two years after such principal, premium or interest has become due and payable
shall be paid to the Company on Company Request (including interest income
accrued on such funds, if any), or (if then held by the Company) shall
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be discharged from such trust; and the Holder of such Security shall thereafter,
as an unsecured general creditor, look only to the Company for payment thereof,
and all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company cause to
be published once in the Wall Street Journal and once in the national edition of
The Globe and Mail or other daily newspapers of national circulation in each of
the United States and Canada or mail to each Holder of the Securities for which
the money to be repaid is held in trust, as their names and addresses appear in
the Security Register, a notice that such money remains unclaimed and that,
after a date specified therein, which shall not be less than 30 days from the
date of such publication or mailing, any unclaimed balance of such money then
remaining will be repaid to the Company.
The Company initially authorizes the Trustee to act as Paying Agent
for the Securities on its behalf. The Company may at any time and from time to
time authorize one or more Persons to act as Paying Agent in addition to or in
place of the Trustee with respect to any series of Securities issued under this
Indenture.
10.4 Statement by Officers as to Default
The Company will deliver to the Trustee, within 120 days after the
end of each fiscal year of the Company ending after the date hereof, an
Officers' Certificate, stating whether or not to the best knowledge of the
signers thereof the Company, is in default in the performance and observance of
any of the terms, provisions and conditions of this Indenture (without regard to
any period of grace or requirement of notice provided hereunder) and, if the
Company shall so be in default, specifying all such defaults and the nature and
status thereof of which they may have knowledge. Such statement need not include
reference to any default which has been fully cured prior to the date as of
which such statement speaks.
When any Event of Default has occurred and is continuing under this
Indenture, the Company shall deliver to the Trustee by registered or certified
mail or by telegram, telex or facsimile transmission an Officers' Certificate
specifying such event, notice or other action within five Business Days of its
occurrence.
10.5 Existence
Subject to Article 8, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence, rights (charter and statutory) and franchises; provided, however,
that the Company shall not be required to preserve any such right or franchise
if the Board of Directors of the Company shall determine that the preservation
thereof is no longer desirable in the conduct of the business of the Company and
that the loss thereof is not disadvantageous in any material respect to the
Holders.
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10.6 Maintenance of Properties
The Company will cause all material properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as (and to the extent)
in the judgment of the Company may be necessary or appropriate in connection
with its business; provided, however, that nothing in this Section shall prevent
the Company from discontinuing the operation or maintenance of any such
properties if such discontinuance is, in the judgment of the Company, desirable
in the conduct of its business or the business of any Subsidiary and not
disadvantageous in any material respect to the Holders.
10.7 Payment of Taxes and Other Claims
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (a) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (b)
all lawful claims for labour, materials and supplies which, if unpaid, might by
law become a material lien upon the property of the Company or any Subsidiary;
provided, however, that the Company shall not be required to pay or discharge or
cause to be paid or discharged any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings.
10.8 Limitation on Subordinated Indebtedness
The Company shall not issue, assume, guarantee, incur or otherwise
become liable, directly or indirectly, for any indebtedness which is subordinate
or junior in right of payment to any Senior Indebtedness unless such
indebtedness constitutes Securities or is pari passu or expressly subordinated
in right of payment to any Securities.
ARTICLE 11
REDEMPTION OF SECURITIES
11.1 Applicability of Article
Securities of any series which are redeemable before their Stated
Maturity shall be redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 3.1 or 3.11 for Securities of any
series) in accordance with this Article.
11.2 Right of Redemption
The Securities may be redeemed in accordance with the provisions of
the forms of Securities set forth in Sections 2.2 and 2.3.
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11.3 Election to Redeem; Notice to Trustee
The election of the Company to redeem any Securities shall be
evidenced by a Board Resolution or in another manner specified as contemplated
by Section 3.1 or 3.11 for such Securities. In case of any redemption at the
election of the Company of less than all the Securities of any series of the
same tenor, the Company shall, at least 60 days prior to the Redemption Date
fixed by the Company (unless a shorter notice shall be satisfactory to the
Trustee), notify the Trustee of such Redemption Date and of the principal amount
of Securities of such series to be redeemed and, if applicable, of the tenor of
the Securities to be redeemed, which notice shall be irrevocable. In the case of
any redemption of Securities prior to the expiration of any restriction on such
redemption provided in the terms of such Securities or elsewhere in this
Indenture, the Company shall furnish the Trustee with an Officers' Certificate
evidencing compliance with such restriction and shall deliver to the Trustee
such documentation and records as shall enable the Trustee to select the
Securities to be redeemed pursuant to Section 11.4, if applicable.
11.4 Selection by Trustee of Securities to Be Redeemed
If less than all the Securities of any series are to be redeemed
(unless all of the Securities of such series and of a specified tenor are to be
redeemed), the particular Securities to be redeemed shall be selected not more
than 60 days prior to the Redemption Date by the Trustee, from the Outstanding
Securities of such series not previously called for redemption, by such method
as the Trustee shall deem fair and appropriate and which may provide for the
selection for redemption of portions (equal to the minimum authorized
denomination for Securities of that series or any integral multiple thereof) of
the principal amount of Securities of such series of a denomination larger than
the minimum authorized denomination for Securities of that series. Unless
otherwise provided in the terms of a particular series of Securities, the
portions of the principal of Securities so selected for partial redemption shall
be equal to the minimum authorized denomination of the Securities of such
series, or an integral multiple thereof, and the principal amount which remains
outstanding shall not be less than the minimum authorized denomination for
Securities of such series.
If any convertible or exchangeable Security selected for partial
redemption is converted in part before the termination of the conversion or
exchange right with respect to the portion of the Security so selected, the
converted or exchanged portion of such Security shall be deemed (so far as may
be) to be the portion selected for redemption.
Upon any redemption of fewer than all of the Securities of any given
series, the Company and the Trustee may treat as Outstanding any Securities
surrendered for conversion or exchange during the period of 15 days next
preceding the mailing of a notice of redemption, and need not treat as
Outstanding any Security authenticated and delivered during such period in
exchange for the unconverted portion of any Security converted in part during
such period.
The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
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For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has been or is to be
redeemed.
11.5 Notice of Redemption
Notice of redemption shall be given by first-class mail, postage
prepared, mailed not less than 30 nor more than 60 days prior to the Redemption
Date, unless a shorter period is specified in the Securities to be redeemed, to
each Holder of Securities to be redeemed, at his address appearing in the
Security Register.
Any notice that is mailed to the Holder of any Securities in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not such Holder receives the notice.
All notices of redemption shall state:
(a) the Redemption Date;
(b) the Redemption Price and the amount of accrued interest, if
any, to be paid;
(c) if less than all the Outstanding Securities of any series are
to be redeemed, the identification (and, in the case of
partial redemption of any Securities, the principal amounts)
of the particular Securities to be redeemed;
(d) in case any Security is to be redeemed in part only, the
notice which relates to such Security shall state that on and
after the Redemption Date, upon surrender of such Security,
the Holder of such Security will receive, without charge, a
new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed;
(e) that on the Redemption Date, the Redemption Price will become
due and payable upon each such Security to be redeemed and, if
applicable, that interest thereon will cease to accrue on and
after said date;
(f) in the case of any Securities that are convertible pursuant to
Article 14, the Conversion Price, the date on which the right
to convert the principal of the Securities to be redeemed will
terminate and the place or places where such Securities may be
surrendered for conversion;
(g) the place or places where such Securities are to be
surrendered for payment of the Redemption Price; and
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(h) that the redemption is for a sinking or purchase fund or other
analogous obligation, if such is the case.
Notice of redemption of Securities to be redeemed at the election of
the Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company and shall be irrevocable.
11.6 Deposit of Redemption Price
On or prior to any Redemption Date, the Company shall deposit with
the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 10.3) an amount
of money in same day funds (or New York Clearing House funds if such deposit is
made prior to the applicable Redemption Date) sufficient to pay the Redemption
Price of, and (except if the Redemption Date shall be an Interest Payment Date)
accrued interest on, all the Securities which are to be redeemed on that date.
11.7 Securities Payable on Redemption Date
Notice of redemption having been given as aforesaid, the Securities
so to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
such Security for redemption in accordance with said notice, such Security shall
be paid by the Company at the Redemption Price, together with accrued interest
to the Redemption Date; provided, however, that, unless otherwise specified as
contemplated by Section 3.1 or 3.11, installments of interest whose Stated
Maturity is on or prior to the Redemption Date will be payable to the Holders of
such Securities, or one or more Predecessor Securities, registered as such at
the close of business on the relevant record dates according to their terms and
the provisions of Section 3.7.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal and any premium shall, until
paid, bear interest from the Redemption Date at the rate prescribed therefor in
the Security and each Security shall remain convertible into Common Shares until
the principal of such Security shall have been paid or fully provided for.
11.8 Securities Redeemed in Part
Any Security which is to be redeemed only in part shall be
surrendered at a Place of Payment therefor (with, if the Company or the Trustee
so requires, due endorsement by, or a written instrument of transfer in form
satisfactory to the Company and the Trustee duly executed by, the Holder thereof
or his attorney duly authorized in writing), and the Company shall execute, and
the Trustee shall authenticate and deliver to the Holder of such Security
without service charge, a new Security or Securities of the same series and of
like tenor, of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered.
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ARTICLE 12
SINKING FUNDS
12.1 Applicability of Article
The provisions of this Article shall be applicable to any sinking
fund for the retirement of Securities of a series except as otherwise specified
as contemplated by Section 3.1 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the
terms of Securities of any series is herein referred to as a "mandatory sinking
fund payment", and any payment in excess of such minimum amount provided for by
the terms of Securities of any series is herein referred to as an "optional
sinking fund payment". If provided for by the terms of Securities of any series,
the cash amount of any sinking fund payment may be subject to reduction as
provided in Section 12.2. Each sinking fund payment shall be applied to the
redemption of Securities of any series as provided for by the terms of
Securities of such series.
12.2 Satisfaction of Sinking Fund Payments with Securities
The Company (a) may deliver Outstanding Securities of a series
(other than any previously called for redemption) and (b) may apply as a credit
Securities of a series which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through the application of
permitted optional sinking fund payments pursuant to the terms of such
Securities, in each case in satisfaction of all or any part of any sinking fund
payment with respect to the Securities of such series required to be made
pursuant to the terms of such Securities as provided for by the terms of such
Series; provided that such Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose by the Trustee at the
Redemption Price specified in such Securities for redemption through operation
of the sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
12.3 Redemption of Securities for Sinking Fund
Not less than 60 days prior to each sinking fund payment date for
any series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing sinking fund payment for
that series pursuant to the terms of that series, the portion thereof, if any,
which is to be satisfied by payment of cash and the portion thereof, if any,
which is to be satisfied by delivering the crediting Securities of that series
pursuant to Section 12.2 and will also deliver to the Trustee any Securities to
be so delivered. Not less than 30 days before each such sinking fund payment
date the Trustee shall select the Securities to be redeemed upon such sinking
fund payment date in the manner specified in Section 11.4 and cause notice of
the redemption thereof to be given in the name of and at the expense of the
Company in the manner provided in Section 11.5. Such notice having been duly
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given, the redemption of such Securities shall be made upon the terms and in the
manner stated in Sections 11.7 and 11.8.
ARTICLE 13
COVENANT DEFEASANCE
13.1 Company's Option to Effect Covenant Defeasance
The Company may elect, at its option by Board Resolution, at any
time, to have Section 13.2 applied to the Outstanding Securities of any series
designated pursuant to Section 3.1 as being defeasible pursuant to this Article
13 (hereinafter called a "Defeasible Series"), upon compliance with the
conditions set forth below in this Article 13.
13.2 Covenant Defeasance
Upon the exercise by the Company of the option provided in Section
13.1 to have this Section 13.2 applied to the Outstanding Securities of any
Defeasible Series, (a) the Company shall be released from its obligations under
Sections 10.5 through 10.8, inclusive, and under any other covenant to which the
Company is subject with respect to such series of Securities by virtue of
Section 3.1(t) and Article 8 and (b) the occurrence of any event specified in
Sections 5.1(d) (with respect to any of Section 10.5 through 10.8 inclusive and
any other covenant to which the Company is subject with respect to such series
of Securities by virtue of Section 3.1(t) and Article 8), 5.1(e) and 5.1(h)
shall be deemed not to be or result in an Event of Default, in each case with
respect to the Outstanding Securities of such series as provided in this Section
on and after the date the conditions set forth in Section 13.3 are satisfied
(hereinafter called "Covenant Defeasance"). For this purpose, such Covenant
Defeasance means that the Company may omit to comply with and shall have no
liability in respect of any term, condition or limitation set forth in any such
specified Section (to the extent so specified in the case of Section 5.1(d)),
whether directly or indirectly by reason of any reference elsewhere herein to
any such Section or by reason of any reference in any such Section to any other
provision herein or in any other document, but the remainder of this Indenture
and the Securities of such series shall be unaffected thereby; provided,
however, that notwithstanding the provisions of Article 15, in the event that
the Company deposits money or government obligations in compliance with this
Article 13, the money or government obligations so deposited will not be subject
to the subordination provisions of Article 15 and the indebtedness evidenced by
such Outstanding Securities of any Defeasible Series will not be subordinated in
right of payment to the holders of applicable Senior Indebtedness to the extent
of the money or government obligations so deposited.
13.3 Conditions to Covenant Defeasance
The following shall be the conditions to application of Section 13.2
to the Outstanding Securities of any Defeasible Series:
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(a) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee that satisfies
the requirements contemplated by Section 6.9 and agrees to
comply with the provisions of this Article 13 applicable to
it) and conveyed all right, title and interest to the Trustee
for the benefit of the Holders of the Securities of such
series, under the terms of an irrevocable trust agreement in
form and substance satisfactory to the Trustee, as trust funds
in trust for the purpose of making the following payments,
specifically pledged to the Trustee as security for, and
dedicated solely to, the benefit of the Holders of Outstanding
Securities of such series, (i) an amount in the currency in
which the Securities of such series are denominated and in
which payments of principal, premium (if any) and interest are
to be made, or (ii) the equivalent in Government Obligations
denominated in the currency in which the Securities of such
series are denominated and in which payments of principal,
premium (if any), or interest are to be made, issued by the
government that issued such currency, through the scheduled
payment of principal and interest in respect thereof in
accordance with their terms, not later than one day before the
due date of any payment, money in an amount, or (iii) a
combination thereof, in each case sufficient, in the opinion
of a nationally recognized firm of independent public
accountants or chartered accountants expressed in a written
certification thereof delivered to the Trustee, to pay and
discharge, without consideration of the reinvestment of such
interest and after payment of all federal, state, provincial
and local taxes or other charges and assessments in respect
thereof payable by the Trustee and which shall be applied by
the Trustee (or any such other qualifying trustee) to pay and
discharge each instalment of principal (including mandatory
sinking fund payments) of, and premium (not relating to
optional redemption), if any, and interest on, the Outstanding
Securities of such series on the dates such installments of
principal of, and premium (not relating to optional
redemption), if any, or interest are due up to the Stated
Maturity Date, or the Redemption Date, as the case may be
(provided that in the case of redemption, before such deposit,
the Company must give to the Trustee, in accordance with
Section 11.2, 11.3 hereof, a notice of its election to redeem
the Outstanding Securities at a future date in accordance with
Article 11, 16 hereof, which notice shall be irrevocable).
(b) In the case of an election under Section 13.2 with respect to
any series of Securities required to be registered under the
Securities Act, the Company shall have delivered to the
Trustee an Opinion of Counsel to the effect that the Holders
of the Outstanding Securities of such series will not
recognize income, gain or loss for United States Federal
income tax purposes as a result of the deposit and Covenant
Defeasance to be effected with respect to the Securities of
such series and will be subject to United States Federal
income tax on the same amount, in the same manner and at the
same
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times as would be the case if such deposit and Covenant
Defeasance were not to occur.
(c) The Company shall have delivered to the Trustee an Officers'
Certificate to the effect that the Securities of such series,
if then listed on any securities exchange, will not be
delisted as a result of such deposit.
(d) No Event of Default or event that (after notice of lapse of
time or both) would become an Event of Default shall have
occurred and be continuing at the time of such deposit or,
with regard to any Event of Default or any such event
specified in Sections 5.1(f) and 5.1(g), at any time on or
prior to the 123rd day after the date of such deposit (it
being understood that this condition shall not be deemed
satisfied until after such 123rd day).
(e) Such Covenant Defeasance shall not cause the Trustee to have a
conflicting interest within the meaning of Applicable
Legislation (assuming, in the case of the Trust Indenture Act,
that all Securities are in default within the meaning of such
Act).
(f) Such Covenant Defeasance shall not result in a breach or
violation of, or constitute a default under, any other
agreement or instrument to which the Company is a party or by
which it is bound.
(g) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all
conditions precedent with respect to such Covenant Defeasance
have been complied with.
(h) With respect to any series of Securities required to be
registered under the Securities Act, such Covenant Defeasance
shall not result in the trust arising from such deposit
constituting an investment company within the meaning of the
United States Investment Company Act of 1940, as amended,
unless such trust shall be qualified under such Act or exempt
from regulation thereunder.
13.4 Deposited Money and Government Obligations to be Held in Trust;
Other Miscellaneous Provisions
Subject to the provisions of the last paragraph of Section 10.3, all
money and Government Obligations (including the proceeds thereof) deposited with
the Trustee or other qualifying trustee (solely for purposes of this Section and
Section 13.5, the Trustee and any such other trustee are referred to
collectively as the "Trustee") pursuant to Section 13.3 in respect of the
Securities of any Defeasible Series shall be held in trust and applied by the
Trustee, in accordance with the provisions of the Securities of such series and
this Indenture, to the payment, either directly or through any such Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Holders of Securities of such series, of all sums due and to
become due thereon in respect of principal and any premium and interest,
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but money so held in trust need not be segregated from other funds except to the
extent required by law and shall not be subject to the claims of the holders of
Senior Indebtedness.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the Government Obligations
deposited pursuant to Section 13.3 or the principal and interest received in
respect thereof other than any such tax, fee or other charge that by law is for
the account of the Holders of Outstanding Securities.
Notwithstanding anything in this Article 13 to the contrary, the
Trustee shall deliver or pay to the Company from time to time upon Company
Request any money or Government Obligations held by it as provided in Section
13.3 with respect to Securities of any Defeasible Series that, in the opinion of
a nationally recognized firm of independent public accountants or chartered
accountants expressed in a written certification thereof delivered to the
Trustee, are in excess of the amount thereof that would then be required to be
deposited to effect an equivalent Covenant Defeasance with respect to the
Securities of such series.
13.5 Reinstatement
If the Trustee or the Paying Agent is unable to apply any money in
accordance with this Article 13 with respect to the Securities of any series by
reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Company's obligations under this Indenture and the Securities of such series
shall be revived and reinstated as though no deposit had occurred pursuant to
this Article 13 with respect to Securities of such series and monies so
deposited shall be returned to the Company.
ARTICLE 14
CONVERSION OF SECURITIES
14.1 Conversion Privilege and Conversion Price
The conversion of Securities of any series into Common Shares of the
Company shall be in accordance with the terms of such Securities and (except as
otherwise specified as contemplated by Section 3.1 for Securities of any series)
in accordance with this Article.
Subject to and upon compliance with the provisions of this Article,
at the option of the Holder thereof, any Security or any portion of the
principal amount thereof which is U.S. $1,000 or an integral multiple of U.S.
$1,000 (unless otherwise specified in a Board Resolution or supplemental
indenture with respect to the Securities of the relevant series), may be
converted at the principal amount thereof, or of such portion thereof, into
fully paid and non-assessable Common Shares (calculated as to each conversion to
the nearest 1/100 of a share) of the Company, at the Conversion Price,
determined as hereinafter provided, in effect at the time of conversion. Such
conversion right shall expire at the close of business on the date specified for
Securities of such series. In case a Security or portion thereof is called for
redemption, such
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conversion right in respect of the Security or portion so called shall expire at
the close of business on the Redemption Date, unless the Company defaults in
making the payment due upon redemption.
The price at which Common Shares shall be delivered upon conversion
(the "Conversion Price") shall initially be the price per Common Share at which
the Securities of the relevant series are convertible as set forth in any Board
Resolution with respect to such series (or any supplemental indenture with
respect thereto). The Conversion Price shall be adjusted in certain instances as
provided in Section 14.4.
14.2 Exercise of Conversion Privilege
In order to exercise the conversion privilege, the Holder of any
Security to be converted shall surrender such Security, duly endorsed or
assigned to the Company or in blank, at any office or agency of the Company
maintained for that purpose pursuant to Section 10.2, accompanied by written
notice to the Company (which shall be substantially in the form set forth in
Section 2.3) at such office or agency or, if applicable, by notice in accordance
with the procedures of the Depositary, that the Holder elects to convert such
Security or, if less than the entire principal amount thereof is to be
converted, the portion thereof to be converted. Securities surrendered for
conversion during the period from the close of business on any Regular Record
Date next preceding any Interest Payment Date to the opening of business on such
Interest Payment Date shall (except in the case of Securities or portions
thereof which have been called for redemption on a Redemption Date within such
period) be accompanied by payment in New York Clearing House funds or other
funds acceptable to the Company of an amount equal to the interest payable on
such Interest Payment Date on the principal amount of Securities being
surrendered for conversion; provided, however, that a Security surrendered for
conversion on an Interest Payment Date need not be accompanied by a payment and
interest on the principal amount of the Securities being converted will be paid
on such Interest Payment Date to the Holder of such Security on the immediately
preceding Record Date. Except as provided in the Securities and subject to the
last paragraph of Section 3.7, no payment or adjustment shall be made upon any
conversion on account of any interest accrued on the Securities surrendered for
conversion or on account of any dividends on the Common Shares issued upon
conversion.
Securities shall be deemed to have been converted immediately prior
to the close of business on the day of surrender of such Securities for
conversion in accordance with the foregoing provisions, and at such time the
rights of the Holders of such Securities as Holders shall cease, and the Person
or Persons entitled to receive the Common Shares issuable upon conversion shall
be treated for all purposes as the record holder or holders of such Common
Shares at such time. As promptly as practicable on or after the date of
conversion, the Company shall issue and shall deliver at such office or agency a
certificate or certificates for the number of full Common Shares issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 14.3.
All Securities converted in accordance with the provisions of this
Article 14 are, and shall be deemed to have been, transferred to or for the
account of the Company.
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In the case of any Security which is converted in part only, upon
such conversion, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder thereof, at the expense of the Company, a new Security
or Securities of authorized denominations in aggregate principal amount equal to
the unconverted portion of the principal amount of such Security.
14.3 Fractions of Shares
No fractional Common Shares or other such securities shall be issued
upon conversion of Securities. If more than one Security shall be surrendered
for conversion at one time by the same Holder, the number of full shares which
shall be issuable upon conversion thereof shall be computed on the basis of the
aggregate principal amount of the Securities (or specified portions thereof) so
surrendered. Instead of any fractional Common Share which would otherwise be
issuable upon conversion of any Security or Securities (or specified portions
thereof), the Company shall pay a cash adjustment in respect of such fraction in
an amount equal to the same fraction of the closing price per Common Share at
the close of business on the day prior to the day of conversion on the American
Stock Exchange or, if the Common Shares are not listed or admitted to trading on
such exchange, on the principal (as determined by the Company's Board of
Directors) U.S. national or Canadian securities exchange on which the Common
Shares are listed or admitted to trading or, if not listed or admitted to
trading on any U.S. national or Canadian securities exchange, on the National
Association of Securities Dealers Automated Quotations National Market System
or, if the Common Shares are not listed or admitted to trading on any U.S.
national or Canadian securities exchange or quoted on such National Market
System, the average of the closing bid and asked prices in the over-the-counter
market as furnished by any New York Stock Exchange member firm selected from
time to time by the Company for that purpose.
14.4 Adjustment of Conversion Price
The Conversion Price with respect to any Security which is
convertible into for Common Shares shall be subject to adjustment from time to
time as follows:
(a) If the Company shall pay or make a dividend or other
distribution on any class of equity capital of the Company
which is payable in Common Shares, the Conversion Price in
effect at the opening of business on the day following the
date fixed for the determination of shareholders entitled to
receive such dividend or other distribution shall be reduced
by multiplying such Conversion Price by a fraction of which
(i) the numerator shall be the number of Common Shares
outstanding at the close of business on the date fixed for
such determination and (ii) the denominator shall be the sum
of such number of shares referred to in the preceding clause
and the total number of shares constituting such dividend or
other distribution, such reduction to become effective
immediately after the opening of business on the day following
the date fixed for such determination.
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(b) If the Company shall issue rights or warrants to all holders
of its Common Shares entitling them to subscribe for or
purchase Common Shares at a price per share less than the
current market price per Common Share (determined as provided
in paragraph 14.4(h)) on the date fixed for the determination
of shareholders entitled to receive such rights or warrants,
the Conversion Price in effect at the opening of business on
the day following the date fixed for such determination shall
be reduced by multiplying such Conversion Price by a fraction
of which (i) the numerator shall be the number of Common
Shares outstanding at the close of business on the date fixed
for such determination plus the number of Common Shares which
the aggregate of the offering price of the total number of
Common Shares so offered for subscription or purchase would
purchase at such current market price and (ii) the denominator
shall be the number of Common Shares outstanding at the close
of business on the date fixed for such determination plus the
number of Common Shares so offered for subscription or
purchase, such reduction to become effective immediately after
the opening of business on the day following the date fixed
for such determination.
(c) If outstanding Common Shares shall be subdivided into a
greater number of Common Shares, the Conversion Price in
effect at the opening of business on the day following the day
upon which subdivision becomes effective shall be
proportionately reduced, and, conversely, in case outstanding
Common Shares shall be consolidated into a smaller number of
Common Shares, the Conversion Price in effect at the opening
of business on the day following the day upon which such
combination becomes effective shall be proportionately
increased, such reduction or increase, as the case may be, to
become effectively immediately after the opening of business
on the day following the day upon which such subdivision or
consolidation becomes effective.
(d) If the Company shall, by dividend or otherwise, at any time
distribute (other than periodic dividends declared or paid in
accordance with the Company's practice as established from
time to time) to all holders of its Common Shares cash
(excluding any cash that is distributed as part of a
distribution referred to in paragraph 14.4(f)) in an aggregate
amount that, together with (i) the aggregate amount of any
other distribution (other than periodic dividends declared or
paid in accordance with the Company's practice as established
from time to time) to all holders of its Common Shares made
exclusively in cash within the 12 months preceding the date of
payment of such distribution and in respect of which no
Conversion Price adjustment pursuant to this paragraph 14.4(d)
has been made and (ii) the aggregate of any cash plus the fair
market value (as determined by the Board of Directors of the
Company, whose determination shall be conclusive and described
in a Board Resolution) of consideration payable in respect of
any tender offer or other offer to purchase by the Company
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or any Subsidiary for all or any portion of the Company's
Common Shares concluded within the 12 months preceding the
date of payment of such distribution and in respect of which
no Conversion Price adjustment pursuant to paragraph 14.4(e)
has been made, exceeds 12.5% of the Company's Aggregate Market
Capitalization (determined as provided in paragraph 14.4(i)),
the Conversion Price shall be reduced so that the same shall
equal the price determined by multiplying the Conversion Price
in effect immediately prior to the effectiveness of the
Conversion Price reduction contemplated by this paragraph
14.4(d) by a fraction of which (i) the numerator shall be the
current market price per Common Share (determined as provided
in paragraph 14.4(h)) on such date less the amount of cash so
distributed applicable to one Common Share and (ii) the
denominator shall be such current market price per Common
Share, such reduction to become effective immediately prior to
the opening of business on the day following the date fixed
for the determination of shareholders entitled to receive such
cash dividend; provided, however, that no adjustment shall be
made with respect to any distribution of rights to purchase
securities of the Company if a Holder of Securities would
otherwise be entitled to receive such rights upon conversion
or exchange at any time of such Securities into Common Shares
or other such securities unless such rights are subsequently
redeemed by the Company, in which case such redemption shall
be treated for purposes of this Section as a dividend on the
Common Shares or other such securities. Such adjustment shall
become effective retroactively immediately after the record
date for the determination of shareholders or holders of other
such securities entitled to receive such distribution; and in
the event that such distribution is not so made, the
Conversion Price shall again be adjusted to the Conversion
Price which would then be in effect if such record date had
not been fixed.
(e) If an issuer bid, tender offer or other offer to purchase made
by the Company or any Subsidiary for all or any portion of the
Common Shares of the Company shall be consummated and such
issuer bid, tender offer or other offer to purchase shall
involve an aggregate consideration having a fair market value
(as determined by the Board of Directors of the Company, whose
determination shall be conclusive and described in a Board
Resolution) on the last time (the "Expiration Time") tenders
may be made pursuant to such bid or offer (as it may be
amended) or Common Shares may be deposited pursuant to such
other offer to purchase that, together with (i) the aggregate
of the cash plus the fair market value (as determined by the
Board of Directors of the Company, whose determination shall
be conclusive and described in a Board Resolution), as of the
Expiration Time, of consideration payable in respect of any
issuer bid, tender offer or other offer to purchase by the
Company or any Subsidiary for all or any portion of the Common
Shares of the Company consummated within the 12 months
preceding the Expiration Time and in
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respect of which no Conversion Price adjustment pursuant to
paragraph 14.4(d) or this paragraph 14.4(e) has been made and
(ii) the aggregate amount of any distributions (other than
periodic dividends declared or paid in accordance with the
Company's practice as established from time to time) to all
holders of the Common Shares of the Company made exclusively
in cash within the 12 months preceding the Expiration Time and
in respect of which no Conversion Price adjustment pursuant to
paragraph 14.4(d) or this paragraph 14.4(e) has been made,
exceeds 110% of the product of the current market price per
Common Share (determined as provided in paragraph 14.4(h)) on
the Expiration Time times the number of Common Shares
outstanding (including any tendered or deposited shares) on
the Expiration Time, the Conversion Price shall be reduced so
that the same shall equal the price determined by multiplying
the Conversion Price in effect immediately prior to the
Expiration Time by a fraction of which the numerator shall be
(i) the product of the current market price per Common Share
(determined as provided in paragraph 14.4(h)) on the
Expiration Time times the number of Common Shares outstanding
(including any tendered or deposited shares) on the Expiration
Time minus (ii) the fair market value (determined as
aforesaid) of the aggregate consideration payable to
shareholders based on the acceptance (up to any maximum
specified in the terms of the tender offer or other offer to
purchase) of all shares validly tendered or deposited and not
withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the
"Purchased Shares") and the denominator shall be the product
of (i) such current market price per share on the Expiration
Time times (ii) such number of outstanding shares on the
Expiration Time minus the number of Purchased Shares, such
reduction to become effective immediately prior to the opening
of business on the day following the Expiration Time.
(f) If the Company shall, by dividend or otherwise, distribute to
all holders of its Common Shares evidences of its indebtedness
or assets (including securities, but excluding any rights or
warrants referred to in paragraph 14.4(b), any cash dividends
referred to in paragraph 14.4(d) and any dividends or
distributions referred to in paragraph 14.4(a)), the
Conversion Price shall be adjusted so that the same shall
equal the price determined by multiplying the Conversion Price
in effect immediately prior to the close of business on the
date fixed for the determination of shareholders entitled to
receive such distribution by a fraction of which the numerator
shall be the current market price per Common Share (determined
as provided in paragraph 14.4(h)) on the date fixed for such
determination less the then fair market value (as determined
by the Board of Directors of the Company, whose determination
shall be conclusive and described in a Board Resolution) of
the portion of the assets or evidences of indebtedness so
distributed applicable to one Common Share and the denominator
shall be such current market price per Common Share, such
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adjustment to become effective immediately prior to the
opening of business on the day following the date fixed for
the determination of shareholders entitled to receive such
distribution. For the purposes of this paragraph 14.4(f), the
distribution of a security which is distributed not only to
the holders of the Common Shares on the date fixed for the
distribution of such security, but also is distributed with
each Common Share delivered to a Holder exercising the
conversion privilege subsequent to such distribution date,
shall not require an adjustment of the Conversion Price
pursuant to this paragraph 14.4(f); provided that on the date,
if any, on which a Holder exercising the conversion or
exchange privilege would no longer be entitled to receive such
security with a Common Share (other than as a result of the
termination of all such securities), a distribution of such
securities shall be deemed to have occurred and the Conversion
Price shall be adjusted as provided in this paragraph 14.4(f)
(and such day shall be deemed to be "the date fixed for the
determination of the shareholders entitled to receive such
distribution" and "the date fixed for such determination"
within the meaning of the immediately preceding sentence).
(g) The reclassification of Common Shares into securities
including securities other than Common Shares (other than any
reclassification upon a consolidation or merger to which
Section 14.11 applies) shall be deemed to involve (i) a
distribution of such securities other than Common Shares to
all holders of Common Shares (and the effective date of such
reclassification shall be deemed to be "the date fixed for the
determination of shareholders entitled to receive such
distribution" and "the date fixed for such determination"
within the meaning of paragraph 14.4(f)), and (ii) a
subdivision or consolidation, as the case may be, of the
number of Common Shares outstanding immediately prior to such
reclassification into the number of Common Shares outstanding
immediately thereafter (and the effective date of such
reclassification shall be deemed to be "the day upon which
such subdivision becomes effective" or "the day upon which
such combination becomes effective", as the case may be, and
"the day upon which such subdivision or combination becomes
effective" within the meaning of paragraph 14.4(c)).
(h) For the purpose of any computation under paragraphs 14.4(b),
14.4(d), 14.4(e) and 14.4(f), the current market price per
Common Share on any date shall be deemed to be the average of
the daily closing prices for the 20 trading days before, and
ending not later than, the earlier of the day in question and
the day before the "ex" date with respect to the issuance or
distribution requiring such computation. The closing price for
each day shall be the last reported sales price regular way
or, in case no such reported sale takes place on such day, the
average of the reported closing bid and asked prices regular
way, in either case on the American Stock Exchange or, if the
Common Shares are not listed or admitted to trading on such
exchange, on the principal (as determined by the Company's
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Board of Directors) U.S. national or Canadian securities
exchange on which the Common Shares are listed or admitted to
trading or, if not listed or admitted to trading on any U.S.
national or Canadian securities exchange, on the National
Association of Securities Dealers Automated Quotations
National Market System or, if the Common Shares are not listed
or admitted to trading on any U.S. national or Canadian
securities exchange or quoted on such National Market System,
the average of the closing bid and asked prices in the
over-the-counter market as furnished by any New York Stock
Exchange member firm selected from time to time by the Company
for that purpose. For purposes of this paragraph, the term "ex
date", when used with respect to any issuance or distribution,
means the first date on which the Common Shares trade regular
way on such exchange or in such market without the right to
receive such issuance or distribution.
(i) For purposes of any computation under paragraph 14.4(d), the
Aggregate Market Capitalization shall be deemed to be the
product of (i) the current market price (as determined in
paragraph 14.4(h) above) on the most recent date practically
obtainable prior to the record date for determining the
shareholders entitled to the distribution and (ii) the number
of Common Shares outstanding on such date.
(j) The Company may make such reductions in the Conversion Price,
in addition to those required by paragraphs 14.4(a) through
14.4(g), as it considers to be advisable in order that any
event treated for United States or Canadian federal income tax
purposes as a dividend of stock or stock rights shall not be
taxable to the recipients. The Company shall have the power to
resolve any ambiguity or correct any error in this paragraph
14.4(j) and its actions in so doing shall be final and
conclusive.
(k) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at
least one percent in such price; provided, however, that any
adjustments which by reason of this paragraph 14.4(k) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Article shall be made to the nearest cent or to the
nearest one-hundredth of a share, as the case may be.
(l) For the purpose of this Section, each Holder of Securities
shall be deemed to have failed to exercise any right to elect
the kind or amount of securities receivable upon the payment
of any such dividend, subdivision, consolidation or
reclassification (provided that if the kind or amount of
securities receivable upon such dividend, subdivision,
consolidation or reclassification is not the same for each
non-electing share, then the kind and amount of securities or
other property receivable upon such dividend, subdivision,
combination or reclassification for each non-electing share
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shall be deemed to be the kind and amount so receivable per
share by a plurality of the non-electing shares).
(m) No adjustment in the Conversion Price shall be made pursuant
to paragraphs (d), (e), (f) and (j) of this Section 14.4
without the prior written consent of the Toronto Stock
Exchange.
14.5 Notice of Adjustments of Conversion Price
Whenever the Conversion Price is adjusted as herein provided:
(a) the Company shall compute the adjusted Conversion Price in
accordance with Section 14.4 and shall prepare a certificate
signed by a responsible officer of the Company setting forth
the adjusted Conversion Price and showing in reasonable detail
the facts upon which such adjustment is based, and such
certificate shall forthwith be filed at the Corporate Trust
Office of the Trustee and at each office or agency maintained
for the purpose of conversion of Securities pursuant to
Section 10.2; and
(b) a notice stating the Conversion Price has been adjusted and
setting forth the adjusted Conversion Price shall forthwith be
required, and as soon as practicable after it is required,
such notice shall be mailed by the Company to all holders at
their last addresses as they shall appear in the Security
Register.
14.6 Notice of Certain Corporation Action
In case:
(a) the Company shall declare a dividend (or any other
distribution) on its Common Shares; or
(b) the Company shall authorize the granting to the holders of its
Common Shares of rights or warrants to subscribe for or
purchase any shares of equity capital of any class or of any
other rights; or
(c) the Company or any Subsidiary shall commence an issuer bid
(other than an issuer bid which is an exempt issuer bid within
the meaning of the Securities Act (Alberta), as amended),
tender offer or other offer to purchase any of its Common
Shares; or
(d) of any reclassification of the Common Shares of the Company
(other than a subdivision or consolidation of its outstanding
Common Shares), or of any consolidation or merger to which the
Company is a party and for which approval of any shareholders
of the Company is required, or of the sale or transfer of all
or substantially all of the assets of the Company; or
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(e) of the voluntary or involuntary dissolution, liquidation or
winding up of the Company,
then the Company shall cause to be filed at the Corporate Trust Office of the
Trustee and at each office or agency maintained for the purpose of conversion of
Securities pursuant to Section 10.2, and shall cause to be mailed to all Holders
at their last addresses as they shall appear in the Security Register, at least
20 days (or 10 days in any case specified in clause (a) or (b) above) prior to
the applicable record, effective or expiration date hereinafter specified, a
notice stating (i) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Shares of record to be
entitled to such dividend, distribution, rights or warrants are to be
determined, (ii) the date on which such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up is expected to become
effective, and the date as of which it is expected that holders of Common Shares
of record shall be entitled to exchange their Common Shares for securities, cash
or other property deliverable upon such reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding up, or (iii) the date on
which such tender offer or other offer to purchase commenced, the date on which
such tender offer or other offer to purchase is scheduled to expire unless
extended, the consideration offered and the other material terms thereof (or the
material terms of any amendment thereto). Neither the failure to give any such
notice nor any defect therein shall affect the legality or validity of any
action described in clauses (a) through (e) of this Section 14.6.
14.7 Company to Reserve Common Shares
The Company shall at all times reserve and keep available, free from
preemptive rights, out of its authorized but unissued Common Shares, for the
purpose of effecting the conversion of Securities, such number of its duly
authorized Common Shares then issuable upon the conversion of all Outstanding
Securities; provided that this Section shall not require the Company to make any
reservation of authorized but unissued Common Shares for so long as the
Company's authorized share capital includes an unlimited number of Common
Shares.
14.8 Taxes on Conversion
The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of Common Shares on conversion of Securities
pursuant hereto. The Company shall not, however, be required to pay any tax
which may be payable in respect of any transfer involved in the issue and
delivery of Common Shares in a name other than that of the Holder of the
Security or Securities to be converted, and no such issue or delivery shall be
made unless and until the Person requesting such issue has paid to the Company
the amount of any such tax, or has established to the satisfaction of the
Company that such tax has been paid.
14.9 Covenant as to Common Shares
The Company covenants that all Common Shares which may be issued
upon conversion of Securities will upon issue be fully paid and non-assessable
and, except as provided
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in Section 14.8, the Company will pay all taxes, liens and charges with respect
to the issue thereof.
14.10 Cancellation of Converted Securities
All Securities surrendered for conversion pursuant to Section 14.2
shall be delivered to the Company and shall be cancelled concurrently with such
conversion.
14.11 Provisions in Case of Consolidation, Merger or Sale of Assets
In case of any consolidation of the Company with, or merger of the
Company into, any other corporation (other than a wholly-owned Subsidiary of the
Company), any merger of another corporation (other than a wholly-owned
Subsidiary of the Company) into the Company (other than a merger which does not
result in any reclassification, conversion, exchange or cancellation of
outstanding Common Shares of the Company) or any sale or transfer of all or
substantially all of the assets of the Company to any other corporation (other
than a wholly-owned Subsidiary of the Company) (treating the Company and each of
its Subsidiaries as a single consolidated entity and treating any sale by a
Subsidiary as a sale by the Company for such purpose), the corporation formed by
such consolidation or resulting from such merger or which acquires such assets,
as the case may be, shall execute and deliver to the Trustee a supplemental
indenture providing that the Holder of each Security then outstanding shall have
the right thereafter, during the period such Security shall be convertible as
specified in Section 14.1, to convert such Security only into the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by a holder of the number of Common
Shares of the Company into which such Security might have been converted
immediately prior to such consolidation, merger, sale or transfer, assuming such
holder of Common Shares of the Company (i) is not a Person with which the
Company consolidated or into which the Company merged or which merged into the
Company or to which such sale or transfer was made, as the case may be
("constituent Person"), or an Affiliate of a constituent Person and (ii) failed
to exercise his rights of election, if any, as to the kind or amount of
securities, cash and other property receivable upon such consolidation, merger,
sale or transfer (provided that if the kind or amount of securities, cash and
other property receivable upon such consolidation, merger, sale or transfer is
not the same for each Common Share of the Company held immediately prior to such
consolidation, merger, sale or transfer by others than a constituent Person or
an Affiliate thereof and in respect of which such rights of election shall not
have been exercised ("non-electing share"), then for the purpose of this Section
the kind and amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). Such supplemental indenture shall provide for adjustments
which, for events subsequent to the effective date of such supplemental
indenture, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Article. The Trustee shall not be under any
responsibility to determine the correctness of any provision contained in such
supplemental indenture relating to either the kind or amount of shares, other
securities, cash or property receivable by Holders upon the conversion of their
Securities after any such consolidation, merger, sale or transfer. The above
provisions of this Section shall similarly apply to successive consolidations,
mergers, sales or transfers.
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14.12 Responsibility of Trustee and Conversion Agent
Neither the Trustee nor any agent appointed to effect conversions
shall at any time be under any duty or responsibility to any Holder of
Securities to determine whether any facts exist which may require any adjustment
of the Conversion Price, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed, or herein or in
any supplemental indenture provided to be employed, in making the same. Neither
the Trustee nor any such conversion agent shall be accountable with respect to
the validity or value (or the kind or amount) of any Common Shares or of any
securities or property which may at any time be issued or delivered upon the
conversion of any Security; and neither the Trustee nor any such conversion
agent makes any representation with respect thereto. Neither the Trustee nor any
such conversion agent shall be responsible for any failure of the Company to
issue, transfer or deliver any Common Shares or stock certificates or other
securities or property or to make any cash payment upon the delivery of any
Security for the purpose of conversion or to comply with any of the covenants
contained in this Article.
ARTICLE 15
SUBORDINATION
15.1 Securities Subordinate to Senior Indebtedness
The Company covenants and agrees, and each Holder of Securities of
each series, by his acceptance thereof, likewise covenants and agrees, that the
indebtedness represented by the Securities of such series, including the
principal of (and premium, if any) and interest thereon, shall be subordinate
and subject in right of payment, to the extent and in the manner hereinafter set
forth, to the prior payment in full of all Senior Indebtedness of the Company
with respect thereto, whether outstanding on the date of original issuance of
Securities of such series or thereafter incurred; provided, however, that each
series of Securities designated as Senior Indebtedness shall in all respects
rank pari passu with all other series of Securities designated as Senior
Indebtedness; that each series of Securities designated as Senior Subordinated
Indebtedness shall in all respects rank pari passu with all other series of
Securities designated as Senior Subordinated Indebtedness; and that each series
of Securities designated as Subordinated Indebtedness shall in all respects rank
pari passu will all other series of Securities designated as Subordinated
Indebtedness.
15.2 Payment Over of Proceeds Upon Dissolution, Etc.
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relative to the Company or to its assets, or
(b) any liquidation, dissolution or other winding up of the Company, whether
voluntary or involuntary and whether or not involving insolvency or bankruptcy,
or (c) any assignment for the benefit of creditors or any other marshalling of
the assets and liabilities of the Company, then and in any such event specified
in (a), (b) or (c) above (each such event, if any, herein sometimes referred to
as a
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"Proceeding"), the holders of Senior Indebtedness shall be entitled to receive
payment in full of all amounts due or to become due on or in respect of all
Senior Indebtedness, or provision shall be made in money or money's worth before
the Holders of the Securities are entitled to receive any payment or
distribution of assets of the Company, of any kind or character, whether in
cash, property or securities, on account of principal of (or premium, if any) or
interest on the Securities or on account of any purchase or other acquisition of
Securities by the Company or any Subsidiary of the Company (all such payments,
distributions, purchases and acquisitions by the Company herein referred to,
individually and collectively, as a "Securities Payment"), and to that end the
holders of Senior Indebtedness shall be entitled to receive, for application to
the payment thereof, any Securities Payment which may be payable or deliverable
in respect of the Securities in any such Proceeding.
In the event that, notwithstanding the foregoing provisions of this
Section, the Trustee or the Holder of any Security shall have received any
Securities Payment before all Senior Indebtedness is paid in full or payment
thereof provided for, and if such fact shall, at or prior to the time of such
Securities Payment, have been made known to a Responsible Officer of the Trustee
or, as the case may be, such Holder, then and in such event such Securities
Payment shall be paid over or delivered forthwith to the trustee in bankruptcy,
receiver, liquidating trustee, custodian, assignee, agent or other Person making
payment or distribution of assets of the Company, for application to the payment
of all Senior Indebtedness remaining unpaid, to the extent necessary to pay all
Senior Indebtedness in full, after giving effect to any concurrent payment or
distribution to or for the holders of Senior Indebtedness.
For purposes of this Article only, the words "cash, property or
securities" shall not be deemed to include shares or other securities of the
Company provided for by a plan of reorganization or readjustment as reorganized
or readjusted, or securities of the Company or any other corporation which are
subordinated in right of payment to all then outstanding Senior Indebtedness to
substantially the same extent as, or to a greater extent than, the Securities
are so subordinated as provided in this Article. The consolidation of the
Company with, or the merger of the Company into, another corporation or the
liquidation or dissolution of the Company following the conveyance, transfer,
sale or lease of its properties and assets substantially as an entirety to
another corporation upon the terms and conditions set forth in Article 8 shall
not be deemed a Proceeding for the purposes of this Section if the corporation
formed by such consolidation or into which the Company is merged or the
corporation which acquires by conveyance, transfer, sale or lease such
properties and assets substantially as an entirety, as the case may be, shall,
as a part of such consolidation, merger, conveyance, transfer, sale or lease,
comply with the conditions set forth in Article 8.
15.3 Prior Payment to Senior Indebtedness upon Acceleration of Securities
In the event that any Securities are declared due and payable before
their Stated Maturity (an "Acceleration of Securities"), the holders of the
Senior Indebtedness outstanding at the time of such Acceleration of Securities
shall be entitled to receive payment in full of all amounts due or which become
due as a result of such Acceleration of Securities on or in respect of all such
Senior Indebtedness, or provision shall be made for such payment in money or
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money's worth, before the Holders of the Securities are entitled to receive any
Securities Payment.
In the event that, notwithstanding the foregoing, the Company shall
make any Securities Payment to the Trustee or any Holder prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such Securities Payment, have been made known to a Responsible Officer
of the Trustee or such Holder, as the case may be, then and in such event such
Securities Payment shall be paid over and delivered forthwith to the Company,
for application to the payment of all Senior Indebtedness remaining unpaid, to
the extent necessary to pay all Senior Indebtedness in full, after giving effect
to any concurrent payment or distribution to or for the holders of Senior
Indebtedness.
The provisions of this Section shall not apply to any Securities
Payment with respect to which Section 15.2 would be applicable.
15.4 No Payment When Senior Indebtedness in Default
(a) In the event and during the continuation of any default in the
payment of principal of (or premium, if any) or interest on or other monetary
obligation with respect to any Senior Indebtedness beyond any applicable grace
period with respect thereto or, with respect to any series of Securities
designated as Subordinated Indebtedness, in the event that any event of default
with respect to any Senior Indebtedness shall have occurred and be continuing
permitting the holders of such Senior Indebtedness (or a trustee or other
representative on behalf of the holders thereof) to declare such Senior
Indebtedness due and payable prior to the date on which it would otherwise have
become due and payable, unless and until such event of default shall have been
cured or waived or shall have ceased to exist and, if any such Senior
Indebtedness shall have been accelerated, such acceleration shall have been
rescinded or annulled, or (b) in the event any judicial proceeding shall be
pending with respect to any such default, then no Securities Payment shall be
made to the Trustee or any Holder in respect of the Securities.
(b) In addition and notwithstanding the foregoing, with respect to
any series of Securities designated as Senior Subordinated Indebtedness or
Subordinated Indebtedness, during the continuance of any event of default other
than the payment of principal of (or premium, if any) or interest on or other
monetary obligation with respect to any Senior Indebtedness, no payment may be
made by the Company upon or in respect of any series of Securities designated as
Senior Subordinated Indebtedness or Subordinated Indebtedness for a payment
blockage period ("Payment Blockage Period") commencing on the date the Company
shall have received a notice from a holder of Senior Indebtedness or a trustee
or other representative thereof and ending 179 days thereafter (unless such
event of default shall have been cured or waived or such Payment Blockage Period
shall have been terminated by written notice to the Company from such holder,
trustee or representative thereof). Notwithstanding anything to the contrary
herein, in no event shall any one Payment Blockage Period extend beyond 179
days. Notwithstanding anything to the contrary herein, Payment Blockage Periods
aggregating more than 179 days may not be commenced with respect to any series
of Securities designated as Senior Subordinated Indebtedness or Subordinated
Indebtedness during any period of 360 consecutive days.
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(c) In the event that, notwithstanding the foregoing, the Company
shall make any Securities Payment to the Trustee or any Holder prohibited by the
foregoing provisions of this Section, and if such fact shall, at or prior to the
time of such Securities Payment, have been made known to a Responsible Officer
of the Trustee or, as the case may be, such Holder then and in such event such
Securities Payment shall be paid over and delivered forthwith to the Company for
application to the payment of all Senior Indebtedness remaining unpaid, to the
extent necessary to pay all Senior Indebtedness in full, after giving effect to
any concurrent payment or distribution to or for the holders of Senior
Indebtedness.
(d) The provisions of this Section 15.4 shall not apply to any
Securities Payment with respect to which Section 15.2 would be applicable.
15.5 Payment Permitted If No Default
Nothing contained in this Article or elsewhere in this Indenture or
in any of the Securities shall prevent (a) the Company at any time except during
the pendency of any Proceeding referred to in Section 15.2 or under the
conditions described in Section 15.3 or 15.4, from making at any time Securities
Payments, or (b) the application by the Trustee of any money deposited with it
hereunder to Securities Payments or the retention of such Securities Payment by
the Holders, if, at the time of such application by the Trustee, it did not have
actual knowledge that such Securities Payment would have been prohibited by the
provisions of this Article.
15.6 Subrogation to Rights of Holders of Senior Indebtedness
Subject to the payment in full of all Senior Indebtedness, the
Holders of the Securities shall be subrogated to the rights of the holders of
such Senior Indebtedness to receive payments and distributions of cash, property
and securities applicable to the Senior Indebtedness until the principal of (and
premium, if any) and interest on the Securities shall be paid in full. For
purposes of such subrogation, no payments or distributions to the holder of the
Senior Indebtedness of any cash, property or securities to which the Holders of
the Securities or the Trustee would be entitled except for the provisions of
this Article, and no payments over pursuant to the provisions of this Article to
the holders of Senior Indebtedness by Holders of the Securities or the Trustee,
shall, as among the Company, creditors other than holders of Senior Indebtedness
and the Holders of the Securities, be deemed to be a payment or distribution by
the Company to or on account of the Senior Indebtedness.
15.7 Provisions Solely to Define Relative Rights and Subject to
Applicable Laws
The provisions of this Article are and are intended solely for the
purpose of defining the relative rights of the Holders of the Securities on the
one hand and the holders of Senior Indebtedness on the other hand and are
subject to all applicable laws, including, in the case of the bankruptcy or
insolvency of the Company, the potential application of Canadian legislation.
Nothing contained in this Article or elsewhere in this Indenture or in the
Securities is intended to or shall (a) impair, as among the Company, the
creditors of the Company, other than holders of Senior Indebtedness and the
Holders of the Securities, the obligation of the
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Company, which is absolute and unconditional, to pay to the Holders of the
Securities the principal of and interest on the Securities as and when the same
shall become due and payable in accordance with their terms; or (b) affect the
relative rights against the Company of the Holders of the Securities and
creditors of the Company, other than the holders of Senior Indebtedness; or (c)
prevent the Trustee or the Holder of any Security from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article of the holders of Senior Indebtedness
to receive cash, property and securities otherwise payable or deliverable to the
Trustee or such Holder.
15.8 Trustee to Effectuate Subordination
Each Holder of a Security, by his acceptance thereof, authorizes and
directs the Trustee on his behalf to take such action as may be necessary or
appropriate to effectuate the subordination provided in this Article and
appoints the Trustee his attorney-in-fact for any and all such purposes.
15.9 No Waiver of Subordination Provisions
No right of any present or future holder of any Senior Indebtedness
to enforce subordination as herein provided shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company,
or by any act or failure to act, in good faith, by any such holder, or by any
non-compliance by the Company with the terms, provisions and covenants of this
Indenture, regardless of any knowledge thereof any such holder may have or be
otherwise charged with.
Without in any way limiting the generality of the foregoing
paragraph, the holders of Senior Indebtedness may, at any time and from time to
time, without the consent of or notice to the Trustee or the Holders of the
Securities, without incurring responsibility to the Holders of the Securities
and without impairing or releasing the subordination provided in this Article or
the obligations hereunder of the Holders of the Securities to the holders of
Senior Indebtedness, do any one or more of the following: (i) change the manner,
place or terms of payment or the time of payment of, or renew or alter Senior
Indebtedness, or otherwise amend or supplement in any manner Senior Indebtedness
or any instrument evidencing the same or any agreement under which Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Senior Indebtedness; (iii)
release any Person liable in any manner for the collection of Senior
Indebtedness; and (iv) exercise or refrain from exercising any rights against
the Company or any other Person.
15.10 Notice to Trustee
The Company shall give prompt written notice to the Trustee of any
fact known to the Company which would prohibit the making of any payment to or
by the Trustee in respect of the Securities. Notwithstanding the provisions of
this Article or any other provision of this Indenture, the Trustee shall not be
charged with knowledge of the existence of any facts which would prohibit the
making of any payment to or by the Trustee in respect of the Securities, unless
and until the Trustee shall have received written notice thereof from the
Company or a
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holder of Senior Indebtedness or from any trustee therefor or representative
thereof, and prior to the receipt of any such written notice, the Trustee,
subject to the provisions of Section 6.1, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if the Trustee shall
not have received the notice provided for in this Section at least two Business
Days prior to the date upon which by the terms hereof any money may become
payable for any purpose (including, without limitation, the payment of the
principal of (and premium, if any) or interest on any Security), then, anything
herein contained to the contrary notwithstanding, the Trustee shall have full
power and authority to receive such money and to apply the same to the purpose
for which such money was received and shall not be affected by any notice to the
contrary which may be received by it within two Business Days prior to the date
such amounts may be payable.
Subject to the provisions of Section 6.1, the Trustee shall be
entitled to rely on the delivery to it of a written notice, and proof of
ownership acceptable to the Trustee, by a Person representing himself to be a
holder of Senior Indebtedness (or a trustee therefor or representative thereof)
to establish that such notice has been given by a holder of Senior Indebtedness
(or a trustee therefor or representative thereof). In the event that the Trustee
determines in good faith that further evidence is required with respect to the
right of any Person as a holder of Senior Indebtedness to participate in any
payment or distribution pursuant to this Article, the Trustee may request such
Person to furnish evidence to the reasonable satisfaction of the Trustee as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such Person
pending judicial determination as to the right of such Person to receive such
payment.
15.11 Reliance on Judicial Order or Certificate of Liquidating Agent
Upon any payment or distribution of assets of the Company referred
to in this Article, the Trustee, subject to the provisions of Section 6.1, and
the Holders of the Securities shall be entitled to rely upon any order or decree
entered by any court of competent jurisdiction in which such Proceeding is
pending, or a certificate of the trustee in bankruptcy, receiver, liquidating
trustee, custodian, assignee for the benefit of creditors, agent or other Person
making such payment or distribution, delivered to the Trustee or to the Holders
of Securities for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of the Senior
Indebtedness and other indebtedness of the Company, the amount thereof or
payable thereon, the amount or amounts paid or distributed thereon and all other
facts pertinent thereto or to this Article.
15.12 Trustee Not Fiduciary for Holders of Senior Indebtedness
The Trustee shall not be deemed to owe any fiduciary duty to the
holders of Senior Indebtedness and shall not be liable to any such holders if it
shall in good faith and absent gross negligence or willful misconduct,
mistakenly pays over or distributes to Holders of Securities or to the Company
or to any other Person cash, property or securities to which any holders of
Senior Indebtedness shall be entitled by virtue of this Article or otherwise.
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15.13 Rights of Trustee as Holder of Senior Indebtedness; Preservation of
Trustee's Rights
The Trustee in its individual capacity shall be entitled to all the
rights set forth in this Article with respect to any Senior Indebtedness which
may at any time be held by it, to the same extent as any other holder of Senior
Indebtedness, and nothing in this Indenture shall deprive the Trustee of any of
its rights as such holder.
Nothing in this Article shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.7.
15.14 Article Applicable to Paying Agents
In case at any time any Paying Agent other than the Trustee shall
have been appointed by the Company and be then acting hereunder, the term
"Trustee" as used in this Article shall in such case (unless the context
otherwise requires) be construed as extending to and including such Paying Agent
within its meaning as fully for all intents and purposes as if such Paying Agent
were named in this Article in addition to or in place of the Trustee; provided,
however, that Sections 15.10 and 15.13 shall not apply to the Company or any
Affiliate of the Company if it or such Affiliate acts as Paying Agent.
15.15 Subsidiaries
No payment, distribution of assets or other action may be taken by
any Subsidiary of the Company with respect to the Securities if the Company
would be prohibited by this Article 15 from taking such action.
15.16 Rescission
The provisions of this Article 15 shall continue to be effective or
be reinstated, as the case may be, if at any time any payment in respect of any
of the Senior Indebtedness is rescinded or must otherwise be returned by the
holder thereof upon the insolvency, bankruptcy or reorganization of the Company
or otherwise, all as though such payment had not been made.
15.17 Certain Conversions or Exchanges Deemed Payment
For purposes of this Article only, (a) the issuance and delivery of
junior securities upon conversion or exchange of Securities in accordance with
their terms shall not be deemed to constitute a Securities Payment, and (b) the
payment, issuance or delivery of cash, property or securities (other than junior
securities) upon conversion or exchange of a Security shall be deemed to
constitute a Securities Payment. For the purposes of this Section, the term
"junior securities" means (i) shares of any class of the Company and (ii) other
securities of the Company which are subordinated in right of payment to all
Senior Indebtedness which may be outstanding at the time of issuance or delivery
of such securities to substantially the same extent as, or to a greater extent
than, the Securities are so subordinated as provided in this Article. Nothing
contained in this Article or elsewhere in this Indenture or in the Securities is
intended to or shall
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impair, as among the Company, its creditors other than holders of Senior
Indebtedness and the Holders of the Securities, the right which is absolute and
unconditional, of the Holder of any Security to convert or exchange such
Security in accordance with its terms.
ARTICLE 16
SUBMISSION TO JURISDICTION
16.1 Agent for Service; Submission to Jurisdiction
By the execution and delivery of this Indenture, the Company (i)
acknowledges that it has irrevocably designated and appointed CT Corporation
System, 1633 Broadway, New York, New York 10019 as its authorized agent upon
which process may be served in any suit or proceeding arising out of or relating
to the Securities or this Indenture that may be instituted in any federal or New
York state court located in The City of New York, or brought by the Trustee
(whether in its individual capacity or in its capacity as Trustee hereunder),
and acknowledges that CT Corporation System has accepted such designation and
appointment, (ii) irrevocably submits to the non-exclusive jurisdiction of any
such court in any such suit or proceeding, and (iii) agrees that service of
process upon CT Corporation System and written notice of said service to the
Company (mailed or delivered to the Company, Attention: Corporate Secretary, at
its principal office at Suite 3000, 1660 Lincoln Street, Denver, Colorado 80264
as specified in Section 1.5 hereof), shall be deemed in every respect effective
service of process upon the Company in any such suit or proceeding. The Company
further agrees to take any and all action, including the execution and filing of
any and all such documents and instruments, as may be necessary to continue such
designation and appointment of CT Corporation System in full force and effect so
long as this Indenture shall be in full force and effect.
The Company irrevocably and unconditionally waives, to the fullest
extent permitted by law, any objection that it may now or hereafter have to the
laying of venue of any such action, suit or proceeding in any such court or any
appellate court with respect thereto. The Company irrevocably waives, to the
fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such action, suite or proceeding in any such court.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed, and their respective corporate seals to be hereunto affixed
and attested, all as of the day and year first above written.
GOLDEN STAR RESOURCES LTD.
By: /s/ Louis O. Peloquin
---------------------
Name: Louis O. Peloquin
Title: Vice President, General Counsel
and Secretary
/s/ Deborah Helmer
- ------------------
Name: Deborah Helmer
Title: Legal Assistant
IBJ WHITEHALL BANK & TRUST COMPANY,
AS TRUSTEE
By: /s/ Luis Perez
--------------
Name: Luis Perez
Title: Assistant Vice President
/s/ Paul Lanzon
- ---------------
Name: Paul Lanzon
Title: _____________________
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------------------------------------------------
GOLDEN STAR RESOURCES LTD.
Issuer
TO
IBJ WHITEHALL BANK & TRUST COMPANY
Trustee
------------------------
FIRST SUPPLEMENTAL
INDENTURE
Dated as of August 24, 1999
------------------------------------------------
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE ONE
DESIGNATION AND TERMS OF
THE CONVERTIBLE DEBENTURES.......................................2
SECTION 1.1 Designation and Principal Amount..................2
SECTION 1.2 Stated Maturity...................................2
SECTION 1.3 Form and Payment..................................2
SECTION 1.4 Interest..........................................2
ARTICLE TWO
CONVERSION.......................................................3
SECTION 2.1 Right to Convert..................................3
SECTION 2.2 Exercise of Conversion Privilege; Issuance of
Common Shares on Conversion; No Adjustment
for Interest or Dividends.........................3
SECTION 2.3 Cash Payments in lieu of Fractional Shares........5
SECTION 2.4 Taxes on Shares Issued............................5
SECTION 2.5 Compliance with Governmental
Requirements; Listing of Common Shares............5
SECTION 2.6 Conversion to Prescribed Securities...............6
ARTICLE THREE
MANDATORY REDEMPTION.............................................6
SECTION 3.1 Mandatory Redemption..............................6
SECTION 3.2 Notice............................................6
SECTION 3.3 Accrued Interest..................................7
SECTION 3.4 Payment of Mandatory Redemption Payment...........7
SECTION 3.5 Event of Default..................................7
ARTICLE FOUR
MISCELLANEOUS....................................................8
SECTION 4.1 Headings..........................................8
SECTION 4.2 Counterparts......................................8
SECTION 4.3 Conflict with Trust Indenture Act.................8
SECTION 4.4 Successors and Assigns............................8
SECTION 4.5 Separability Clause...............................8
SECTION 4.6 Governing Law.....................................8
i
<PAGE>
FIRST SUPPLEMENTAL INDENTURE, dated as of August 24, 1999, between
Golden Star Resources Ltd., a corporation duly incorporated and existing under
the laws of Canada, having its registered offices at 885 West Georgia Street,
19th floor, Vancouver, British Columbia V6C 3H4 (herein called the "Company"),
and IBJ Whitehall Bank & Trust Company, as Trustee under the Indenture referred
to below (herein called the "Trustee").
RECITALS OF THE COMPANY
WHEREAS, the Company has heretofore executed and delivered to the
Trustee a certain indenture, dated as of August 24, 1999 (the "Original
Indenture"), which provides for the issuance from time to time of its
convertible unsecured debentures, notes or other evidences of indebtedness, to
be issued in one or more series as provided therein. Capitalized terms used in
this First Supplemental Indenture and not otherwise defined herein shall have
the meanings assigned to them in the Original Indenture;
WHEREAS, Section 9.1 (g) of the Original Indenture provides that
without the written consent of any Holder, the Company, when authorized by a
resolution of its Board of Directors, and the Trustee may enter into an
indenture supplemental to the Original Indenture to establish the form or terms
of Securities of any series as permitted by the Original Indenture;
WHEREAS, the Company desires, by this first Supplemental Indenture,
to create a series of 7.50% subordinated convertible debentures to be issuable
under the Original Indenture and to be known as the Company's "7.50%
Subordinated Convertible Debentures due 2004" (herein called the "Convertible
Debentures"), and the terms and provisions thereof to be as hereinafter set
forth;
WHEREAS, the general forms of the Convertible Debentures and the
Trustee's certificate of authentication to be borne by the Convertible
Debentures are to be in the respective forms established pursuant to or set
forth in the Original Indenture, with such insertions, omissions and variations
as the Board of Directors of the Company may determine to be appropriate in
accordance with the provisions of this Supplemental Indenture; and
WHEREAS, all things necessary to make this First Supplemental
Indenture a valid agreement of the Company and the Trustee and a valid amendment
of and supplement to the Original Indenture have been done.
<PAGE>
2
NOW, THEREFORE, for and in consideration of the premises and the
purchase of the Convertible Debentures by the Holders thereof, it is mutually
covenanted and agreed, for the equal and proportionate benefit of all Holders of
the Convertible Debentures as follows:
ARTICLE ONE
DESIGNATION AND TERMS OF
THE CONVERTIBLE DEBENTURES
SECTION 1.1 Designation and Principal Amount. The series of
Securities created by this First Supplemental Indenture shall be known and
designated as the "7.50% Subordinated Convertible Debentures" of the Company
and, subject to Section 3.3 of the Original Indenture, shall be limited in
aggregate principal amount to U.S. $4,155,000.
SECTION 1.2 Stated Maturity. The Stated Maturity of the Convertible
Debentures is August 24, 2004.
SECTION 1.3 Form and Payment. The Convertible Debentures
shall initially be issued in definitive fully registered, non-global form,
without interest coupon.
SECTION 1.4 Interest. Interest on the Convertible Debentures will
accrue from August 24, 1999. The Convertible Debentures will bear interest at a
rate of 7.50% per annum, payable semi-annually on August 15 and February 15,
commencing on February 15, 2000, to Holders of record at the close of business
on the preceding August 1 and February 1 (whether or not a Business Day) (each,
a "Regular Record Date"), respectively, except (i) that the interest payment
upon redemption (unless the Redemption Date is an Interest Payment Date) will be
payable to the Person to whom principal is payable and (ii) as set forth in the
next succeeding sentence. In the case of any Convertible Debenture (or portion
thereof) which is converted into Common Shares of the Company during the period
from (but excluding) a Regular Record Date to (but excluding) the next
succeeding Interest Payment Date either (i) if such Convertible Debenture (or
portion thereof) has been called for redemption on a Redemption Date which
occurs during such period, the Company shall not be required to pay interest on
such Interest Payment Date in respect of any such Convertible Debenture (or
portion thereof) or (ii) if otherwise, any Convertible Debenture (or portion
thereof) submitted for conversion during such period shall be accompanied by
funds equal to the interest payable on such succeeding Interest Payment Date on
the aggregate principal amount so converted. Interest may, at the Company's
option, be paid in U.S. dollars either (i) by a dollar check drawn on a bank in
New York City mailed to the address of the Person entitled thereto as it appears
in the Security Register or (ii) by transfer to an account maintained by such
Person located in the United States. Interest will be computed on the basis of a
360-day year composed of twelve 30-day months.
<PAGE>
3
ARTICLE TWO
CONVERSION
SECTION 2.1 Right to Convert. Subject to and upon compliance with
the provisions of the Original Indenture, the Holder of any Convertible
Debenture shall have the right, at his or her option, at any time prior to the
close of business on August 24, 2004 (except that, with respect to any
Convertible Debenture or portion of a Convertible Debenture which shall be
called for redemption, such right shall terminate, except as provided in Section
2.2, at the close of business on the Business Day next preceding the date fixed
for redemption of such Convertible Debenture or portion of Convertible Debenture
unless the Company shall default in payment due upon redemption thereof) to
convert the principal amount at maturity of any such Convertible Debenture, or
any portion of such principal amount at maturity which is $1,000 or an integral
multiple thereof, into that number of fully paid and non-assessable shares of
Common Shares (as such shares shall then be constituted), at a conversion price
of $0.70 per Common Share (the "Conversion Price") (subject to adjustment as set
forth in Section 14.4 of the Original Indenture), by surrender of the
Convertible Debenture so to be converted in whole or in part in the manner
provided, together with any required funds, in Section 2.2. A Holder of
Convertible Debentures is not entitled to any rights of a holder of Common
Shares until such holder has converted his Convertible Debenture to Common
Shares, and only to the extent such Convertible Debentures are deemed to have
been converted to Common Shares under this Article 2.
SECTION 2.2 Exercise of Conversion Privilege; Issuance of Common
Shares on Conversion; No Adjustment for Interest or Dividends.
(a) In order to exercise the conversion privilege with respect
to any Convertible Debenture in definitive certificated form, the Holder of any
such Convertible Debenture to be converted in whole or in part shall surrender
such Convertible Debenture, duly endorsed, at the Corporate Trust Office of the
Trustee in the Borough of Manhattan, The City of New York, and shall give
written notice of conversion in the form provided on the Convertible Debentures
(or such other notice which is acceptable to the Company) to the Trustee at such
office. Such notice shall also state the name or names (with address or
addresses) in which the certificate or certificates for Common Shares which
shall be issuable on such conversion shall be issued, and shall be accompanied
by transfer taxes, if required pursuant to Section 2.4. Each such Convertible
Debenture surrendered for conversion shall, unless the shares issuable on
conversion are to be issued in the same name as the registration as such
Convertible Debenture, be duly endorsed by, or be accompanied by instruments of
transfer in form satisfactory to the Company duly executed by, the Holder or his
duly authorized attorney.
(b) As promptly as practicable after satisfaction of the
requirements for conversion set forth above, subject to compliance with any
<PAGE>
4
restrictions on transfer if shares issuable on conversion are to be issued in a
name other than that of the Holder (as if such transfer were a transfer of the
Convertible Debenture or Convertible Debentures (or portion thereof) so
converted), the Company shall issue and shall forward to the Corporate Trust
Office of the Trustee for delivery to such Holder, a certificate or certificates
for the number of full Common Shares issuable upon such conversion of such
Convertible Debenture or portion thereof in accordance with the provisions of
this Section 2 and a check or cash in respect of any fractional interest in
respect of a Common Share arising upon such conversion, as provided in Section
2.3. In case any Convertible Debenture of a denomination greater than $1,000
shall be surrendered for partial conversion, and subject to Section 3.2 of the
Original Indenture, the Company shall execute and the Trustee shall authenticate
and deliver to the Holder of the Convertible Debenture so surrendered, without
charge to him, a new Convertible Debenture or Convertible Debentures in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Convertible Debenture.
(c) Each conversion shall be deemed to have been effected as
to any such Convertible Debenture (or portion thereof) on the date on which the
requirements set forth above in this Section 2.2 have been satisfied as to such
Convertible Debenture (or portion thereof), and the person in whose name any
certificate or certificates for Common Shares shall be issuable upon such
conversion shall be deemed to have become on said date the Holder of record of
the Common Shares represented thereby; provided, however, that any such
surrender on any date when the stock transfer books of the Company shall be
closed shall constitute the person in whose name the certificates are to be
issued as the record Holder thereof for all purposes on the next succeeding day
on which such stock transfer books are open.
(d) Except as described in this Section 2.2, Holders of the
Convertible Debenture will not be entitled to any payment or adjustment on
account of accrued and unpaid interest upon conversion of the Convertible
Debentures. The Company's delivery of the fixed number of Common Shares into
which the Convertible Debentures are convertible will be deemed to satisfy the
Company's obligation to pay the principal amount at maturity of the Convertible
Debentures and all accrued interest that has not previously been (or is not
simultaneously being) paid. The Common Shares are treated as issued first in
payment of accrued interest and then in payment of principal.
(e) Any Convertible Debenture or portion thereof surrendered
for conversion during the period from the close of business on the Regular
Record Date for any Interest Payment Date to the close of business on the
Business Day next preceding the following Interest Payment Date shall (unless
such Convertible Debenture or portion thereof being converted shall have been
called for redemption during the period from the close of business on such
record date to the close of business on the Business Day next preceding the
following interest payment date) be accompanied by payment, in funds acceptable
to the Company and as set forth in the penultimate sentence of Section 1.4
above, of an amount equal to the interest otherwise payable on such Interest
Payment Date on the principal amount
<PAGE>
5
being converted; provided, however, that no such payment need be made if there
shall exist at the time of conversion a default in the payment of interest on
the Convertible Debentures. Except as provided above in this Section 2.2, no
payment or other adjustment shall be made for interest accrued on any
Convertible Debenture converted or for dividends on any shares issued upon the
conversion of such Convertible Debenture as provided in this Section 2.2.
SECTION 2.3 Cash Payments in lieu of Fractional Shares. No
fractional Common Shares or scrip representing fractional shares shall be issued
upon conversion of Convertible Debentures. If more than one Convertible
Debenture shall be surrendered for conversion at one time by the same Holder,
the number of full shares which shall be issuable upon conversion shall be
computed on the basis of the aggregate principal amount at maturity of the
Convertible Debentures (or specified portions thereof to the extent permitted
hereby) so surrendered. If any fractional share would be issuable upon the
conversion of any Convertible Debenture or Convertible Debentures, the Company
shall make an adjustment and payment therefor in cash at the current market
value thereof to the Holder of Convertible Debentures. The current market value
of a Common Share shall be the reported closing trading price per share of the
Common Shares on the American Stock Exchange at the close of business on the day
on which the Convertible Debentures (or specified portions thereof) are deemed
to have been converted.
SECTION 2.4 Taxes on Shares Issued. The issue of share certificates
on conversions of Convertible Debentures shall be made without charge to the
converting Holder of such Convertible Debentures for any tax in respect of the
issue thereof. The Company shall not, however, be required to pay any tax which
may be payable in respect of any transfer involved in the issue and delivery of
shares in any name other than that of the Holder of any Convertible Debenture
converted, and the Company shall not be required to issue or deliver any such
share certificate unless and until the person or persons requesting the issue
thereof shall have paid to the Company the amount of such tax or shall have
established to the satisfaction of the Company that such tax has been paid.
SECTION 2.5 Compliance with Governmental Requirements;
Listing of Common Shares.
(a) The Company covenants that if any Common Shares to be
provided for the purpose of conversion of Convertible Debentures hereunder
require registration with or approval of any governmental authority under any
federal, state or provincial law before such shares may be validly issued upon
conversion, the Company will in good faith and as expeditiously as possible
endeavor to secure such registration or approval, as the case may be.
(b) The Company further covenants that if at any time the
Common Shares shall be listed on the American Stock Exchange, the Nasdaq
National Market, or any other national securities exchange or automated
quotation system the Company will, if permitted by the rules of such exchange or
automated quotation
<PAGE>
6
system, list and keep listed, so long as the Common Shares shall be so listed on
such exchange or automated quotation system, all Common Shares issuable upon
conversion of the Convertible Debentures; provided, however, that if rules of
such exchange or automated quotation system permit the Company to defer the
listing of such Common Shares until the first conversion of the Convertible
Debentures into Common Shares in accordance with the provisions of the Original
Indenture, the Company covenants to list such Common Shares issuable upon
conversion of the Convertible Debentures in accordance with the requirements of
such exchange or automated quotation system at such time.
SECTION 2.6 Conversion to Prescribed Securities. Sections 8.1 and
14.11 of the Original Indenture are hereby modified as necessary so that only
"prescribed securities" (within the meaning of the Income Tax Act) may be issued
on conversion of Convertible Debentures in the circumstances contemplated in
such sections.
ARTICLE THREE
MANDATORY REDEMPTION
SECTION 3.1 Mandatory Redemption. In the event that the Company
shall have not completed its acquisition of a direct or indirect interest in
Bogoso Gold Limited, a Ghanaian company, by the earlier of (i) December 10, 1999
and (ii) the date on which such acquisition is terminated or abandoned (the
"Failure to Complete"), the Company shall be required to repurchase and the
Holder of this Security shall surrender for purchase by the Company on a pro
rata basis fifty (50%) percent of the aggregate principal amount of such
Holder's Convertible Debentures pursuant to the terms described in Section 3.2
below (the "Mandatory Redemption") at a purchase price in cash equal to the
aggregate principal amount thereof plus accrued and unpaid interest, if any, to
the date of purchase (the "Mandatory Redemption Payment").
SECTION 3.2 Notice. Within 5 Business Days following any Failure to
Complete date, the Company shall send, by first-class mail, postage prepaid, a
notice to the Trustee and to each Holder of Convertible Debentures at the
address appearing in the register maintained by the Security Registrar of the
Convertible Debentures stating:
(a) that the Mandatory Redemption is being made pursuant to
this Article 3 and that all Convertible Debentures tendered will be accepted for
payment;
(b) the purchase price, the aggregate principal amount of
Convertible Debentures that will be purchased by the Company and the purchase
date, which will be no later than 30 days from the date of the Failure to
Complete (the "Mandatory Redemption Payment Date");
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7
(c) that any Convertible Debenture not tendered will continue
to accrue interest;
(d) that, unless the Company defaults in the payment of the
Mandatory Redemption Payment, all Convertible Debentures subject to the
Mandatory Redemption will cease to accrue interest after the Mandatory
Redemption Payment Date;
(e) that Holders surrendering Convertible Debentures purchased
pursuant to an Mandatory Redemption Offer will be required to surrender
certificates representing the Convertible Debentures, with the form entitled
"Mandatory Redemption Form" on the reverse of the Convertible Debentures
completed, to the Paying Agent at the address specified in the notice prior to
the close of business on the third Business Day preceding the Mandatory
Redemption Payment Date;
(f) that Holders whose Convertible Debentures are being
purchased only in part will be issued new Convertible Debentures equal in
principal amount to the unpurchased portion of the Convertible Debentures
surrendered.
SECTION 3.3 Accrued Interest. If the Mandatory Redemption Payment
Date is on or after an Regular Record Date and on or before the related Interest
Payment Date, any accrued and unpaid interest shall be paid to the Person in
whose name a Convertible Debenture is registered at the close of business on
such record date, and no additional interest shall be payable to Holders who
tender pursuant to the Mandatory Redemption.
SECTION 3.4 Payment of Mandatory Redemption Payment. On the
Mandatory Redemption Payment Date, the Company shall (1) accept for payment
Convertible Debentures or portions thereof properly tendered pursuant to the
Mandatory Redemption, (2) deposit with the Paying Agent an amount equal to the
Mandatory Redemption Payment in respect of all Convertible Debentures or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Convertible Debentures so accepted together with an Officers'
Certificate stating the aggregate principal amount of the Convertible Debentures
or portions thereof tendered to the Company. The Paying Agent shall promptly
mail to each Holder of Convertible Debentures so accepted the Mandatory
Redemption Payment for such Convertible Debentures, and the Company shall issue,
and the Trustee shall promptly authenticate and mail or deliver (or cause to be
transferred by book-entry) to each Holder, a new Convertible Debenture in
principal amount equal to any unpurchased portion of the Convertible Debentures
surrendered, if any; provided, that each such new Convertible Debenture shall be
in denominations of $1,000 and any integral thereof. Any Convertible Debenture
not so accepted shall be promptly mailed or delivered by the Company to the
Holder thereof.
<PAGE>
8
SECTION 3.5 Event of Default. Failure by the Company to comply with
the Mandatory Redemption provisions herein, including default by the Company in
the payment of the Mandatory Redemption Payment shall constitute an Event of
Default under Article 5 of the Original Indenture.
ARTICLE FOUR
MISCELLANEOUS
SECTION 4.1 Headings. The headings of the Articles and Sections of
this First Supplemental Indenture are inserted for convenience of reference and
shall not be deemed to be a part hereof.
SECTION 4.2 Counterparts. This First Supplemental Indenture may be
executed in any number of counterparts, each of which so executed shall be
deemed to be an original, but all such counterparts shall together constitute
but one and the same instrument.
SECTION 4.3 Conflict with Trust Indenture Act. If any provision
hereof limits, qualifies or conflicts with another provision hereof which is
required to be included in this First Supplemental Indenture by any of the
provisions of the Trust Indenture Act of 1939, such required provision shall
control.
SECTION 4.4 Successors and Assigns. All covenants and agreements in
this First Supplemental Indenture by the Company shall bind its successors and
assigns, whether so expressed or not.
SECTION 4.5 Separability Clause. In case any provision in this First
Supplemental Indenture shall be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
SECTION 4.6 Governing Law. The internal law of the State of New York
shall govern and be used to construe this First Supplemental Indenture.
<PAGE>
9
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first above
written.
GOLDEN STAR RESOURCES LTD.
By: /s/ Louis O. Peloquin
---------------------
Name: Louis O. Peloquin
Title: Vice President, General Counsel
and Secretary
Attest:
/s/ Deborah Helmer
- ------------------
Title: Legal Assistant
IBJ WHITEHALL BANK & TRUST COMPANY
as Trustee
By: /s/ Luis Perez
--------------
Name: Luis Perez
Title: Assistant Vice President
Attest:
/s/ Paul Lanzon
- ---------------
Title:
<PAGE>
10
STATE OF Colorado )
) ss.:
COUNTY OF Denver )
On the 23rd day of August, 1999, before me personally came Louis O.
Peloquin, to me known, who, being by me duly sworn, did depose and say that he
is VP and General Counsel of GOLDEN STAR RESOURCES LTD., one of the corporations
described in and which executed the foregoing instrument; that he knows the seal
of said corporation; that the seal affixed to said instrument is such corporate
seal; that it was so affixed by authority of the Board of Directors of said
corporation; and that he signed his name thereto by like authority.
/s/ Debra J. Helmer
- -------------------
Notary Public
[NOTARIAL SEAL]
My Commission Expires:
STATE OF New York )
) ss.:
COUNTY OF New York )
On the 24th day of August, 1999, before me personally came Luis Perez,
to me known, who, being by me duly sworn, did depose and say that he is
Assistant Vice President of IBJ WHITEHALL BANK & TRUST COMPANY, one of the
corporations described in and which executed the foregoing instrument; that he
knows the seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation; and that he signed his name thereto by like
authority.
/s/ Lenora Clunes
- -----------------
Notary Public
[NOTARIAL SEAL]
My Commission Expires:
[Form of Specimen of Subordinated Convertible Debenture of
Golden Star Resources Ltd.]
GOLDEN STAR RESOURCES LTD.
____% Convertible Subordinated Debentures Due 2004
CUSIP No. ____________
No. __ U.S. $___________
GOLDEN STAR RESOURCES LTD., a corporation duly incorporated and existing
under the laws of Canada (herein called the "Company," which term includes any
successor corporation under the Indenture hereinafter referred to), for value
received, hereby promises to pay to First Marathon Securities Limited, or
registered assigns, the principal sum of _____________________________ United
States Dollars on August __, 2004 and to pay interest thereon from August __,
1999 or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semi-annually on February 15 and August 15 in each
year, commencing February 15, 2000, at the rate of ____% per annum, until the
principal hereof is paid or made available for payment, from the dates such
amounts are due until they are paid or made available for payment. The interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in such Indenture, be paid to the Person in whose name
this Security (or one or more Predecessor Securities) is registered at the close
of business on the Regular Record Date for such interest, which shall be the
February 1 or August 1 (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Regular Record Date and may either be paid to the Person in whose name this
Security (or one or more Predecessor Securities) is registered at the close of
business on a Special Record Date for the payment of such Defaulted Interest to
be fixed by the Trustee, notice thereof shall be given to Holders of Securities
of this series not less than 10 days prior to such Special Record Date, or be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange on which the Securities of this series
may be listed, and upon such notice as may be required by such exchange, all as
more fully provided in said Indenture.
Payment of principal of (and premium, if any) and any such interest on
this Security will be made at the office or agency of the Company maintained for
that purpose in New York, New York, in such coin or currency of the United
States of America as at the time of payment is legal tender for payment of
public and private debts; provided, however, that at the option of the Company
payment of interest may be made by check mailed to the address of the Person
entitled thereto as such address shall appear in the Security Register.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
<PAGE>
2
Unless the certificate of authentication has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Security shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal.
Dated:
GOLDEN STAR RESOURCES LTD.
By:
Name:
Title:
Attest:
Trustee's Certificate of Authentication:
This is one of the Securities of the series designated therein referred to
in the within-mentioned Indenture.
IBJ WHITEHALL BANK & TRUST COMPANY,
As Trustee
By:
Authorized Officer
<PAGE>
3
The terms used in this Security which are defined in the Indenture shall
have the meanings assigned to them in the Indenture.
This Security is one of a duly authorized issue of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an Indenture, dated as of August __, 1999 (herein called the
"Indenture"), among the Company and IBJ Whitehall Bank & Trust Company, as
Trustee (herein called the "Trustee", which term includes any successor trustee
under the Indenture), to which Indenture and all indentures supplemental thereto
reference is hereby made for a statement of the respective rights, limitations
of rights, duties and immunities thereunder of the Company, the Trustee and the
Holders of the Securities and of the terms upon which the Securities are, and
are to be, authenticated and delivered. This Security is one of the series
designated on the face hereof, limited in aggregate amount to U.S. $__________.
Subject to and upon compliance with the provisions of the Indenture, the
Holder of this Security is entitled, at his option, at any time on or before the
close of business on August __, 2004, or in case this Security or a portion
hereof is called for redemption, then in respect of this Security or such
portion hereof until and including, but (unless the Company defaults in making
the payment due upon redemption) not after, the close of business on the 10th
calendar day before the Redemption Date, to convert this Security (or any
portion of the principal amount hereof which is U.S. $1,000 or an integral
multiple thereof), at the principal amount hereof, or of such portion, into
fully paid and non-assessable Common Shares (calculated as to each conversion to
the nearest 1/100 of a share) at an initial Conversion Price per Common Share
equal to U.S. $____ per each Common Share (or at the current adjusted Conversion
Price if an adjustment has been made as provided in the Indenture) by surrender
of this Security, duly endorsed or assigned to the Company or in blank, to the
Company at its office or agency in New York, New York, accompanied by written
notice to the Company that the Holder hereof elects to convert this Security, or
if less than the entire principal amount hereof is to be converted, the portion
hereof to be converted, and, in such case such surrender shall be made during
the period from the close of business on any Regular Record Date next preceding
any Interest Payment Date (unless this Security or the portion thereof being
converted has been called for redemption on a Redemption Date within such
period), also accompanied by payment in New York Clearing House or other funds
acceptable to the Company of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of this Security then being
converted. Subject to the aforesaid requirement for payment and, in the case of
a conversion after the Regular Record Date next preceding any Interest Payment
Date and on or before such Interest Payment Date, to the right of the Holder of
this Security (or any Predecessor Security) of record at such Regular Record
Date to receive an instalment of interest (with certain exceptions provided in
the Indenture), no payment or adjustment is to be made on conversion for
interest accrued hereon or for dividends on the Common Shares issued on
conversion. No fractions or shares or scrip representing fractions of
<PAGE>
4
shares will be issued on conversion, but instead of any fractional interest the
Company shall pay a cash adjustment as provided in the Indenture. The Conversion
Price is subject to adjustment as provided in the Indenture. In addition, the
Indenture provides that in case of certain consolidations or mergers to which
the Company is a party or the transfer of substantially all of the assets of the
Company, the Indenture shall be amended, without the consent of any Holders of
Securities, so that this Security, if then outstanding, will be convertible
thereafter, during the period this Security shall be convertible as specified
above, only into the kind and amount of securities, cash and other property
receivable upon the consolidation, merger or transfer by a holder of the number
of Common Shares into which this Security might have been converted immediately
prior to such consolidation, merger or transfer (assuming such holder of Common
Shares failed to exercise any rights of election and received per share the kind
and amount received per share by a plurality of non-electing shares); provided,
that such security or other property shall be a "prescribed security" within the
meaning of the Income Tax Act (Canada). Adjustments in the Conversion Price of
less than one percent of such price will not be required, but any adjustment
that would otherwise be required to be made will be carried forward and taken
into account in the computation of any subsequent adjustment.
The Securities of this series are subject to redemption upon not less than
30 days' notice by mail, at any time on or after August __, 2002, as a whole or
in part, at the election of the Company, at the following Redemption Prices
(expressed as percentages of the principal amount): if redeemed during the 12
month period beginning August __ of the years indicated,
Redemption
Year Price
2002............................................................ _______%
2003............................................................ _______%
2004............................................................ 100.000%
and thereafter at a Redemption Price equal to 100% of the principal amount,
together in the case of any such redemption with accrued interest to the
Redemption Date, but interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of such Securities, or
one or more Predecessor Securities, of record at the close of business on the
relevant record dates referred to on the face hereof, all as provided in the
Indenture.
The Securities shall be subject to redemption as a whole, but not in part,
at the option of the Company at any time at 100% of the principal amount
thereof, together with accrued interest thereon to the redemption date, in the
event that the Company has become or would become obligated to pay, on the next
date on which any amount would be payable with respect to the Securities, any
Additional Amounts as a result of a change in the laws (including any
regulations promulgated thereunder) of Canada (or any political subdivision or
taxing authority thereof or therein), or any change in
<PAGE>
5
any official position regarding the application or interpretation of such laws
or regulations, which change is announced or becomes effective after the date of
the issuance of the Securities; provided that the Company determines, in its
business judgment, that the obligation to pay such Additional Amounts cannot be
avoided by use of reasonable measures available to the Company (not including
substitution of the obligor under the Securities).
The Securities shall be subject to redemption, in whole or in part, at the
option of the Company on or after August __, 2002, at 100% of the principal
amount thereof, together with accrued interest thereon to the redemption date,
if the reported closing trading price on the American Stock Exchange, or such
other principle stock exchange on which the Company's Common Shares are then
traded, of the Common Shares as reported on the close of business for any 20 of
the 25 consecutive trading days immediately prior to the date notice of
redemption is given by the Company is at least 125% of the conversion price set
forth in any indenture supplemental to the Indenture.
In the event that the Company shall have not completed its acquisition of
a direct or indirect interest in Bogoso Gold Limited, a Ghanaian company, by the
earlier of (i) December 10, 1999 and (ii) the date on which such acquisition is
terminated or abandoned (the "Failure to Complete"), the Company shall be
required to repurchase and the Holder of this Security shall surrender for
purchase by the Company on a pro rata basis fifty (50%) percent of the aggregate
principal amount of such Holder's Securities pursuant to the terms described
below (the "Mandatory Redemption") at a purchase price in cash equal to the
aggregate principal amount thereof plus accrued and unpaid interest, if any, to
the date of purchase (the "Mandatory Redemption Payment").
Within 5 Business Days following any Failure to Complete date, the Company
shall send, by first-class mail, postage prepaid, a notice to the Trustee and to
each Holder of this Security at the address appearing in the register maintained
by the Security Registrar of the Securities stating:
(a) that the Mandatory Redemption is being made pursuant to the
terms of this Security and the Indenture and that all Securities tendered will
be accepted for payment;
(b) the purchase price, the aggregate principal amount of the
Securities that will be purchased by the Company and the purchase date, which
will be no later than 30 days from the date of the Failure to Complete (the
"Mandatory Redemption Payment Date");
(c) that any Security tendered will continue to accrue interest;
<PAGE>
6
(d) that, unless the Company defaults in the payment of the
Mandatory Redemption Payment, all Securities subject to the Mandatory Redemption
will cease to accrue interest after the Mandatory Redemption Payment Date;
(e) that Holders will be required to surrender certificates
representing such Securities, with the form entitled "Mandatory Redemption Form"
on the reverse of such Securities completed, to the Paying Agent at the address
specified in the notice prior to the close of business on the third Business Day
preceding the Mandatory Redemption Payment Date;
(f) that Holders will be issued new Securities equal in principal
amount to the unpurchased portion, if any, of the Securities surrendered.
If the Mandatory Redemption Payment Date is on or after an Regular Record
Date and on or before the related Interest Payment Date, any accrued and unpaid
interest shall be paid to the Person in whose name this Security is registered
at the close of business on such record date, and no additional interest shall
be payable to Holders who tender pursuant to the Mandatory Redemption.
On the Mandatory Redemption Payment Date, the Company shall (1) accept for
payment this Security or portions thereof properly tendered pursuant to the
Mandatory Redemption, (2) deposit with the Paying Agent an amount equal to the
Mandatory Redemption Payment in respect of this Security or portion thereof so
tendered and (3) deliver or cause to be delivered to the Trustee this Security
so accepted together with an Officers' Certificate stating the aggregate
principal amount of this Security or portion thereof tendered to the Company.
The Paying Agent shall promptly mail to each Holder of the Securities so
accepted the Mandatory Redemption Payment for such Security, and the Company
shall issue, and the Trustee shall promptly authenticate and mail or deliver (or
cause to be transferred by book-entry) to each Holder, a new Security in
principal amount equal to any unpurchased portion of the Security surrendered,
if any; provided, that each such new Security shall be in denominations of
$1,000 and any integral thereof.
The indebtedness evidenced by this Security is, to the extent provided in
the Indenture, (i) subordinate and subject in right of payment to the prior
payment in full of all Senior Indebtedness and (ii) pari passu with all other
Subordinated Indebtedness, and this Security is issued subject to the provisions
of the Indenture with respect thereto. Each Holder of this Security, by
accepting the same, (a) agrees to and shall be bound by such provisions, (b)
authorizes and directs the Trustee on his behalf to take action as may be
necessary or appropriate to effectuate the subordination so provided and (c)
appoints the Trustee his attorney-in-fact for any and all such purposes.
<PAGE>
7
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of each series to be
affected under the Indenture at any time by the Company and the Trustee with the
consent of the Holders of a majority in principal amount of the Securities at
the time Outstanding of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages in principal amount
of the Securities of each series at the time Outstanding, on behalf of the
Holders of Securities of such series, to waive compliance by the Company with
certain past provisions of the Indenture and certain defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder of
this Security shall be conclusive and binding upon such Holder and upon all
future Holders of this Security and of any Security issued upon the registration
of transfer hereof or in exchange herefor or in lieu hereof, whether or not
notation of such consent or waiver is made upon this Security.
As provided in and subject to the provisions of the Indenture, the Holder
of this Security shall not have the right to institute any proceeding with
respect to the Indenture or for the appointment of a receiver or trustee or for
any other remedy thereunder, unless such Holder shall have previously given the
Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of not less than 25% in principal amount
of the Securities of this series at the time Outstanding shall have made written
request to the Trustee to institute proceedings in respect of such Event of
Default as Trustee and offered the Trustee reasonable indemnity and the Trustee
shall not have received from the Holders of a majority in principal amount of
Securities of this series at the time Outstanding a direction inconsistent with
such request, and shall have failed to institute any such proceeding, for 60
days after receipt of such notice, request and offer of indemnity. The foregoing
shall not apply to any suit instituted by the Holder of this Security for the
enforcement of any payment of principal hereof or any premium or interest hereon
on or after the respective due dates expressed herein.
Subject to the rights of holders of Senior Indebtedness, as set forth in
the Indenture, no other reference herein to the Indenture and no other provision
of this Security or of the Indenture shall alter or impair the obligations of
the Company, which are unconditional, to pay the principal of and any premium
and interest on this Security at the times, place and rate, and in the coin and
currency, herein prescribed or to convert this Security as so provided in the
Indenture.
As provided in the Indenture and subject to certain limitations therein
set forth, the transfer of this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any
<PAGE>
8
place where the principal of and any premium and interest on this Security are
payable, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Security Registrar duly executed by,
the Holder hereof or his attorney duly authorized in writing, and thereupon one
or more new Securities of this series and of like tenor, of authorized
denominations and for the same aggregate principal amount, will be issued to the
designated transferee or transferees.
The Securities of this series are issuable only in registered form without
coupons in denominations of U.S. $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like aggregate principal amount
of Securities of this series and of like tenor of a different authorized
denomination, as requested by the Holder surrendering the same.
No service charge shall be made for any such registration of transfer or
exchange, but the Company may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee, may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security be overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
THE INDENTURE AND THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.
<PAGE>
9
FORM OF CONVERSION NOTICE
To: GOLDEN STAR RESOURCES LTD.
The undersigned owner of this Security hereby irrevocably exercises the
option to convert this Security, or the portion hereof (which is U.S. $1,000 or
an integral multiple thereof) below designated, into Common Shares of Golden
Star Resources Ltd., in accordance with the terms of the Indenture referred to
in this Security, and directs that the shares issuable and deliverable upon the
conversion, together with any check in payment for fractional shares and any
Securities, representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares are to be issued in the name of a person other than
the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto. Any amount required to be paid by the undersigned on account of
interest accompanies this Security.
Dated:
Fill in for registration of Common Shares and Securities if to be issued
otherwise than to the registered holder.
Name and Principal Amount to be converted (in an integral multiple of U.S.
$1,000, if less than all):
Address: U.S. $
(Please print name and address, including zip/postal code number)
Signature
SOCIAL SECURITY OR OTHER TAXPAYER IDENTIFYING NUMBER SIGNATURE
GUARANTEED
<PAGE>
10
MANDATORY REDEMPTION FORM
If you are surrendering this Security upon instruction of the
Company for purchase by the Company pursuant to the terms of this Security and
Article 3 of the First Supplemental Indenture, state the amount so surrendered
as instructed by the Company in its Mandatory Redemption notice to you:
$_______________
Date:_______________ Your Signature:___________________________________________
(Sign exactly as your name
appears on the Security)
Tax Identification No.:___________________________________
Signature Guarantee: _____________________
[Form of Specimen of Four-Year Warrant of Golden Star Resources Ltd.]
Certificate No. __ CUSIP No. ___________
Number of Shares __________
------------------------------------------------
GOLDEN STAR RESOURCES LTD.
WARRANT TO PURCHASE COMMON STOCK
------------------------------------------------
This certifies that, for good and valuable consideration, Golden
Star Resources Ltd., a corporation subsisting under the Canada Business
Corporations Act (the "Company"), grants to ________________________ or its
registered assigns (the "Warrantholder"), the right to subscribe for and
purchase from the Company ________ validly issued, fully paid and nonassessable
shares (the "Warrant Shares") of the Company's common shares (the "Common
Stock"), at the purchase price per share (the "Exercise Price") of U.S.$____
until August __, 2001 and U.S.$____ after August __, 2001, at any time and from
time to time, prior to 5:00 PM Eastern Time on August __, 2003 (the "Expiration
Date"), all subject to the terms, conditions and adjustments herein set forth.
<PAGE>
2
1. Duration and Exercise of Warrant; Limitation
on Exercise; Payment of Taxes.
1.1 Duration and Exercise of Warrant. Subject to the terms and
conditions set forth herein, the Warrant may be exercised, in whole or in part,
by the Warrantholder by:
(a) the surrender of this Warrant to the Company,
with a duly executed Exercise Form specifying the number of Warrant Shares to be
purchased, during normal business hours on any Business Day prior to the
Expiration Date; and
(b) the delivery of payment to the Company, for the
account of the Company, by cash or by certified or bank cashier's check, of the
Exercise Price for the number of Warrant Shares specified in the Exercise Form
in lawful money of the United States of America. The Company agrees that such
Warrant Shares shall be deemed to be issued to the Warrantholder as the record
holder of such Warrant Shares as of the close of business on the date on which
this Warrant shall have been surrendered and payment made for the Warrant Shares
as aforesaid.
1.2 Warrant Shares Certificate. A stock certificate or
certificates for the Warrant Shares specified in the Exercise Form shall be
delivered to the Warrantholder within three Business Days after receipt
(including facsimile receipt) of the Exercise Form and actual receipt of the
Warrant and payment of the Exercise Price. If this Warrant shall have been
exercised only in part, the Company shall, at the time of delivery of the stock
certificate or certificates, deliver to the Warrantholder a new Warrant
evidencing the rights to purchase the remaining Warrant Shares, which new
Warrant shall in all other respects be identical with this Warrant.
1.3 Payment of Taxes. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock transfer
or other issuance tax in respect thereto; provided, however, that the
Warrantholder shall be required to pay any and all taxes which may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than that of the then Warrantholder as reflected upon the books
of the Company.
1.4 Divisibility of Warrant; Transfer of Warrant.
(a) Subject to the provisions of this Section 1.4, this
Warrant may be divided into warrants of one thousand shares or multiples thereof
(except for any "stub amount"), upon surrender at the principal office of the
Company, without charge to any Warrantholder. Upon such division, the Warrants
may be transferred of record as the then Warrantholder may specify without
charge to
<PAGE>
3
such Warrantholder (other than any applicable transfer taxes). In addition, the
Warrantholder shall also have the right to transfer this Warrant in its entirety
to any person or entity.
(b) Upon surrender of this Warrant to the Company
with a duly executed Assignment Form and funds sufficient to pay any transfer
tax, the Company shall, without charge, execute and deliver a new Warrant or
Warrants of like tenor in the name of the assignee named in such Assignment
Form, and this Warrant shall promptly be canceled. The term "Warrant" as used in
this Agreement shall be deemed to include any Warrants issued in substitution or
exchange for this Warrant.
2. Issuance and Reservation of Shares; Approval Process.
2.1 The Company covenants and agrees as follows:
(a) all Warrant Shares which are issued upon the due
exercise of this Warrant will, upon issuance, be validly issued, fully paid, and
nonassessable, not subject to any preemptive rights, and free from all taxes,
liens, security interests, charges, and other encumbrances with respect to the
issue thereof, other than taxes with respect to any transfer occurring
contemporaneously with such issue; and
(b) during the period within which this Warrant may
be exercised, the Company will at all times have authorized and reserved, and
keep available free from preemptive rights, a sufficient number of shares of
Common Stock to provide for the exercise of the rights represented by this
Warrant.
2.2 The Company represents, warrants and covenants that the
Toronto Stock Exchange ("TSE") and the American Stock Exchange ("AMEX") have
approved the issuance of the Warrants, and the upon exercise of the Warrants,
the TSE and AMEX will have approved the listing of the Warrant Shares issuable
upon such exercise. The Company covenants and agrees to fulfill all the
requirements of the TSE and AMEX with respect to the Warrants and the Warrant
Shares.
3. Loss or Destruction of Warrant.
Subject to the terms and conditions hereof, upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss, theft or
destruction, of such bond or indemnification as the Company may reasonably
require, and, in the case of such mutilation, upon surrender and cancellation of
this Warrant, the Company promptly (but not later than in two Business Days)
will execute and deliver a new Warrant of like tenor.
<PAGE>
4
4. Ownership of Warrant.
The Company may deem and treat the person in whose name this Warrant
is registered as the holder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer.
5. Certain Adjustments.
5.1 The number of Warrant Shares purchasable upon the exercise
of this Warrant and the Exercise Price shall be subject to adjustment from time
to time as follows:
(a) Stock Dividends. If at any time after the date of
the issuance of this Warrant (i) the Company shall fix a record date for the
issuance of any stock dividend or distribution payable in shares of Common Stock
or securities or rights convertible or exchangeable into Common Stock or (ii)
the number of shares of Common Stock shall have been increased by a subdivision
or split-up of shares of Common Stock, then, on the record date fixed for the
determination of holders of Common Stock entitled to receive such dividend or
distribution (or on the dividend distribution date if no record date is set) or
immediately after the effective date of subdivision or split-up, as the case may
be, the number of shares to be delivered upon exercise of this Warrant will be
increased so that the Warrantholder will be entitled to receive the number of
shares of Common Stock that such Warrantholder would have owned (or been
entitled to receive in the case of convertible or exchangeable securities)
immediately following such action had this Warrant been exercised immediately
prior thereto, and the Exercise Price will be adjusted as provided below in
paragraph (g).
(b) Combination of Stock. If the number of shares of
Common Stock outstanding at any time after the date of the issuance of this
Warrant shall have been decreased by a combination of the outstanding shares of
Common Stock, then, immediately after the effective date of such combination,
the number of shares of Common Stock to be delivered upon exercise of this
Warrant will be decreased so that the Warrantholder thereafter will be entitled
to receive the number of shares of Common Stock that such Warrantholder would
have owned immediately following such action had this Warrant been exercised
immediately prior thereto, and the Exercise Price will be adjusted as provided
below in paragraph (g).
(c) Reorganization, etc. If any capital reorganization
of the Company, any reclassification of the Common Stock, any consolidation of
the Company with or merger of the Company with or into any other person, or any
sale or lease or other transfer of all or substantially all of the assets of the
Company to any other person, shall be effected in such a way that the holders of
Common Stock shall be entitled to receive stock, other securities or assets
(whether such stock, other
<PAGE>
5
securities or assets are issued or distributed by the Company or another person)
with respect to or in exchange for Common Stock, then, upon exercise of this
Warrant, the Warrantholder shall have the right to receive the kind and amount
of stock, other securities or assets receivable upon such reorganization,
reclassification, consolidation, merger or sale, lease or other transfer by a
holder of the number of shares of Common Stock that such Warrantholder would
have been entitled to receive upon exercise of this Warrant had this Warrant
been exercised immediately before such reorganization, reclassification,
consolidation, merger or sale, lease or other transfer.
(d) Distributions to All Holders of Common Stock.
If the Company shall, at any time after the date of issuance of this Warrant,
fix a record date to distribute (or distribute without a record date) to all
holders of its Common Stock, any shares of capital stock of the Company (other
than Common Stock) or evidences of its indebtedness or assets or rights or
warrants to subscribe for or purchase any of its securities or securities issued
in connection with a spin-off, then the Warrantholder shall be entitled to
receive, upon exercise of the Warrant, on a pro rata basis, that portion of such
distribution to which it would have been entitled had the Warrantholder
exercised its Warrant immediately prior to the date of such distribution. At the
time it fixes the record date for such distribution (or prior to any
distribution if no record date is fixed), the Company shall allocate sufficient
reserves to ensure the timely and full performance of the provisions of this
Section 5.1(d). The Company shall promptly (but in any case no later than five
Business Days prior to the record date of such distribution) mail by first
class, postage prepaid, to the Warrantholder, notice that such distribution will
take place.
(e) Fractional Shares. No fractional shares of
Common Stock or scrip shall be issued to any Warrantholder in connection with
the exercise of this Warrant. Instead of any fractional shares of Common Stock
that would otherwise be issuable to such Warrantholder, the Company will pay to
such Warrantholder a cash adjustment in respect of such fractional interest in
an amount equal to that fractional interest of the then current Fair Market
Value per share of Common Stock.
(f) Carryover. Notwithstanding any other provision
of this Section 5, no adjustment shall be made to the number of shares of Common
Stock to be delivered to the Warrantholder (or to the Exercise Price) if such
adjustment represents less than 1% of the number of shares to be so delivered
hereunder, but any lesser adjustment shall be carried forward and shall be made
at the time and together with the next subsequent adjustment which together with
any adjustments so carried forward shall amount to 1% or more of the number of
shares to be so delivered.
(g) Exercise Price Adjustment. Whenever the
number of Warrant Shares purchasable upon the exercise of this Warrant is
adjusted pursuant to Sections 5.1(a) and (b) herein, the Exercise Price payable
upon the
<PAGE>
6
exercise of this Warrant shall be adjusted by multiplying such Exercise Price
immedi ately prior to such adjustment by a fraction, of which the numerator
shall be the number of Warrant Shares purchasable upon the exercise of the
Warrant immediately prior to such adjustment, and of which the denominator shall
be the number of Warrant Shares purchasable immediately thereafter.
5.2 Rights Offering. In the event the Company shall effect an
offering of Common Stock pro rata among its stockholders, the Warrantholder
shall be entitled to elect to participate in each and every such offering as if
this Warrant had been exercised immediately prior to each such offering. The
Company shall, concurrently within the mailing to stockholders, mail by first
class, postage prepaid, to the Warrantholder, notice that such rights offering
will take place together with all documents and information relating to the
terms of the offering. The Company shall not be required to make any adjustment
with respect to the issuance of shares of Common Stock pursuant to a rights
offering in which the holder hereof has been entitled to elect to participate
under the provisions of this Section 5.2.
5.3 Notice of Adjustments. Whenever the number of Warrant
Shares or the Exercise Price of such Warrant Shares is to be adjusted, as herein
provided, the Company shall, at least 10 Business Days prior to such adjustment,
mail by first class, postage prepaid, to the Warrantholder, notice of such
adjustment or adjustments and a certificate of the Company setting forth the
number of Warrant Shares and the Exercise Price of such Warrant Shares after
such adjustment, a detailed statement of the facts requiring such adjustment,
and the computation by which such adjustment was made.
5.4 Notice of Extraordinary Corporate Events.
In case the Company after the date hereof shall propose to (i)
distribute any dividend (whether stock or cash or otherwise) to the holders of
shares of Common Stock or to make any other distribution to the holders of
shares of Common Stock, (ii) offer to the holders of shares of Common Stock
rights to subscribe for or purchase any additional shares of any class of stock
or any other rights or options, or (iii) effect any reclassification of the
Common Stock (other than a reclassification involving merely the subdivision or
combination of outstanding shares of Common Stock), any capital reorganization,
any amalgamation, arrangement or merger, any sale, transfer or other disposition
of all or substantially all of its property, assets and business, or the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall mail to each Warrantholder notice of such proposed action,
which notice shall specify the date on which (a) the books of the Company shall
close, or (b) a record shall be taken for determining the holders of Common
Stock entitled to receive such stock dividends or other distribution or such
rights or options, or (c) such reclassification, reorganization, amalgamation,
arrangement, merger, sale, transfer, other disposition, liquidation, dissolution
or winding up shall take place or commence, as the case may be, and the date, if
any, as of which it is expected that holders of record of Common Stock shall
<PAGE>
7
be entitled to receive securities or other property deliverable upon such
action. Such notice shall be mailed in the case of any action covered by clause
(i) or (ii) above at least ten days prior to the record date for determining
holders of Common Stock for purposes of receiving such payment or offer, or in
the case of any action covered by clause (iii) above at least 30 days prior to
the date upon which such action takes place and at least 20 days prior to any
record date to determine holders of Common Stock entitled to receive such
securities or other property.
5.5 Effect of Failure to Notify. Failure to file any
certificate or notice or to mail any notice, or any defect in any certificate or
notice, pursuant to Sections 5.3 and 5.4 shall not affect the necessity of the
adjustment to the Exercise Price, the calculation of the number of shares
purchasable upon exercise of this Warrant, or the legality or validity of any
transaction giving rise thereto, without prejudicing the Warrantholder's rights
to seek damages for such failure.
5.6 Other Dilutive Events. In case the Company after the date
of this Warrant shall take any action affecting the Common Shares, other than
action described in Section 5.1, which in the opinion of the board of directors
of the Company would materially affect the rights of the Warrantholder, the
Exercise Price and/or the number of Warrant Shares purchasable upon exercise of
the Warrant shall be adjusted in such manner, if any, and at such time, by
action of the directors, in their sole discretion, as they may determine to be
equitable in the circumstances, provided, however, that any such determination
shall be subject to the written consent of the TSE before it is effective.
Failure to take action by the directors so as to provide for an adjustment on or
prior to the effective date of any action by the Company affecting the Common
Shares shall be conclusive evidence that the board of directors of the Company
has determined that it is equitable to make no adjustment in the circumstances.
6. Amendments. Any provision of this Warrant may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and the Warrantholder. Any amendment or waiver effected in accordance
with this Section 6 shall be binding upon such Warrantholder and the Company.
7. Definitions.
As used herein, unless the context otherwise requires, the following
terms have the following respective meanings:
Assignment Form: an Assignment Form in the form annexed hereto as
Exhibit B.
Business Day: any day other than a Saturday, Sunday or a day on
which national banks are authorized by law to close in the City of New York,
State of New York.
<PAGE>
8
Common Stock: the meaning specified on the cover of this Warrant.
Company: the meaning specified on the cover of this Warrant.
Exercise Form: an Exercise Form in the form annexed hereto as
Exhibit A.
Exercise Price: the meaning specified on the cover of this Warrant.
Expiration Date: the meaning specified on the cover of this
Warrant.
Fair Market Value: Fair Market Value of a share of Common Stock
(including any Warrant Share) as of a particular date (the "Determination Date")
shall mean:
(i) If the Common Stock is listed on any U.S. national securities
exchange or the TSE, then the Fair Market Value shall be the average of the last
ten "daily sales prices" of the Common Stock on the principal U.S. national
securities exchange on which the Common Stock is listed or admitted for trading
(or, if not, the TSE) on the last ten Business Days prior to the Determination
Date, or if not listed or traded on any such exchanges, then the Fair Market
Value shall be the average of the last ten "daily sales prices" of the Common
Stock on the National Market (the "National Market") of the National Association
of Securities Dealers Automated Quotations System ("Nasdaq") on the last ten
Business Days prior to the Determination Date. The "daily sales price" shall be
the closing price of the Common Stock at the end of each day; or
(ii) If the Common Stock is not so listed or admitted to unlisted
trading privileges or if no such sale is made on at least nine of such days,
then the Fair Market Value shall be the fair value as reasonably determined in
good faith by an independent, nationally-recognized (U.S. or Canadian)
investment banking firm reasonably acceptable to the Warrantholder (whose
determination shall be conclusive but subject to the written consent of the TSE
before it is effective).
Warrantholder: the meaning specified on the cover of this Warrant.
Warrant Shares: the meaning specified on the cover of this Warrant.
8. Miscellaneous.
8.1 Entire Agreement. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to the
Warrants.
8.2 Binding Effects; Benefits. This Warrant shall inure to the
benefit of and shall be binding upon the Company and the Warrantholder and their
respective heirs, legal representatives, successors and assigns. Nothing in this
<PAGE>
9
Warrant, expressed or implied, is intended to or shall confer on any person
other than the Company and the Warrantholder, or their respective heirs, legal
representatives, successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Warrant.
8.3 Section and Other Headings. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or interpretation
of this Warrant.
8.4 Pronouns. All pronouns and any variations thereof refer to
the masculine, feminine or neuter, singular or plural, as the context may
require.
8.5 Notices. All notices and other communications required or
permitted to be given under this Warrant shall be in writing and shall be deemed
to have been duly given if delivered personally or sent by facsimile (with a
copy also sent by regular mail or overnight courier) or by recognized overnight
courier or by United States certified mail, postage prepaid, return receipt
requested, to the parties hereto at the following addresses or to such other
address as any party hereto shall hereafter specify by notice to the other party
hereto:
(a) if to the Company, addressed to:
Golden Star Resources Ltd.
1660 Lincoln Street, Suite 3000
Denver, Colorado 80264-3001
Facsimile: (303) 830-9094
Attention: General Counsel
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Facsimile: (212) 757-3990
Attention: Edwin S. Maynard
(b) if to the Warrantholder, addressed to he
Warrantholder at the address set forth on the
cover page of this Warrant
Except as otherwise provided herein, all such notices and communications shall
be deemed to have been received on the date of delivery thereof, if delivered
personally, or on the third Business Day after the mailing thereof.
<PAGE>
10
8.6 Separability. Any term or provision of this Warrant which
is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the terms and provisions of this Warrant or
affecting the validity or enforceability of any of the terms or provisions of
this Warrant in any other jurisdiction.
8.7 Governing Law. This Warrant shall be deemed to be a
contract made under the laws of New York and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to such
agreements made and to be performed entirely within such State.
8.8 No Rights or Liabilities as Stockholder. Nothing contained
in this Warrant shall be determined as conferring upon the Warrantholder any
rights as a stockholder of the Company or as imposing any liabilities on the
Warrantholder to purchase any securities whether such liabilities are asserted
by the Company or by creditors or stockholders of the Company or otherwise.
8.9 Submission to Jurisdiction.
(a) The Company irrevocably submits to the non-
exclusive jurisdiction of any federal or New York state court located in the
City of New York in any suit or proceeding arising out of or relating to the
Warrants or the Warrant Shares.
(b) To the extent that the Company has or hereafter
may acquire any immunity from jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, it hereby irrevocably waives such immunity in respect of its
obligations under the above-referenced documents, to the extent permitted by
law.
<PAGE>
11
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
GOLDEN STAR RESOURCES LTD.
By:
Name:
Title:
Dated: , 1999
<PAGE>
Exhibit A
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned hereby irrevocably (provided that the Warrant Shares
are timely delivered) elects to exercise the right, represented by this Warrant,
to purchase __________ of the Warrant Shares and herewith tenders payment for
such Warrant Shares to the order of Golden Star Resources Ltd. ("GSR") in the
amount of US$__________.
The undersigned will deliver the Warrant covering the Warrant Shares
being exercised hereunder to GSR in accordance with the terms of this Warrant.
The undersigned requests that a certificate for such Warrant Shares be
registered in the name of ________________ and that such certificates be
delivered to _____________ ________________ whose address is __________________.
Dated:____________________
Signature____________________________________
____________________________________
(Print Name)
____________________________________
(Street Address)
____________________________________
(City) (State) (Zip Code)
Signed in the Presence of:
__________________________
<PAGE>
Exhibit B
FORM OF ASSIGNMENT
(To be executed only upon transfer of this Warrant)
For value received, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto ______________________ the
right represented by such Warrant to purchase ________________ common shares of
Golden Star Resources Ltd. to which such Warrant relates and all other rights of
the Warrantholder under the within Warrant (to the extent of such shares), and
appoints ______________________ Attorney to make such transfer on the books of
Golden Star Resources Ltd. maintained for such purpose, with full power of
substitution in the premises.
Dated:____________________
Signature____________________________________
____________________________________
(Print Name)
____________________________________
(Street Address)
____________________________________
(City) (State) (Zip Code)
Signed in the Presence of:
__________________________
[Form of Specimen of Eighteen-Month Warrant of Golden Star Resources Ltd.]
Certificate No. __ CUSIP No. __________
Number of Shares _____
------------------------------------------------
GOLDEN STAR RESOURCES LTD.
WARRANT TO PURCHASE COMMON STOCK
------------------------------------------------
This certifies that, for good and valuable consideration, Golden
Star Resources Ltd., a corporation subsisting under the Canada Business
Corporations Act (the "Company"), grants to _________________ or its registered
assigns (the "Warrantholder"), the right to subscribe for and purchase from the
Company __________ validly issued, fully paid and nonassessable shares (the
"Warrant Shares") of the Company's common shares (the "Common Stock"), at the
purchase price per share of U.S.$____ (the "Exercise Price"), at any time and
from time to time, prior to 5:00 PM Eastern Time on February __, 2001 (the
"Expiration Date"), all subject to the terms, conditions and adjustments herein
set forth.
<PAGE>
2
1. Duration and Exercise of Warrant; Limitation
on Exercise; Payment of Taxes.
1.1 Duration and Exercise of Warrant. Subject to the terms and
conditions set forth herein, the Warrant may be exercised, in whole or in part,
by the Warrantholder by:
(a) the surrender of this Warrant to the Company,
with a duly executed Exercise Form specifying the number of Warrant Shares to be
purchased, during normal business hours on any Business Day prior to the
Expiration Date; and
(b) the delivery of payment to the Company, for the
account of the Company, by cash or by certified or bank cashier's check, of the
Exercise Price for the number of Warrant Shares specified in the Exercise Form
in lawful money of the United States of America. The Company agrees that such
Warrant Shares shall be deemed to be issued to the Warrantholder as the record
holder of such Warrant Shares as of the close of business on the date on which
this Warrant shall have been surrendered and payment made for the Warrant Shares
as aforesaid.
1.2 Warrant Shares Certificate. A stock certificate or
certificates for the Warrant Shares specified in the Exercise Form shall be
delivered to the Warrantholder within three Business Days after receipt
(including facsimile receipt) of the Exercise Form and actual receipt of the
Warrant and payment of the Exercise Price. If this Warrant shall have been
exercised only in part, the Company shall, at the time of delivery of the stock
certificate or certificates, deliver to the Warrantholder a new Warrant
evidencing the rights to purchase the remaining Warrant Shares, which new
Warrant shall in all other respects be identical with this Warrant.
1.3 Payment of Taxes. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock transfer
or other issuance tax in respect thereto; provided, however, that the
Warrantholder shall be required to pay any and all taxes which may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than that of the then Warrantholder as reflected upon the books
of the Company.
1.4 Divisibility of Warrant; Transfer of Warrant.
(a) Subject to the provisions of this Section 1.4, this
Warrant may be divided into warrants of one thousand shares or multiples thereof
(except for any "stub amount"), upon surrender at the principal office of the
Company, without charge to any Warrantholder. Upon such division, the Warrants
may be transferred of record as the then Warrantholder may specify without
charge to
<PAGE>
3
such Warrantholder (other than any applicable transfer taxes). In addition, the
Warrantholder shall also have the right to transfer this Warrant in its entirety
to any person or entity.
(b) Upon surrender of this Warrant to the Company
with a duly executed Assignment Form and funds sufficient to pay any transfer
tax, the Company shall, without charge, execute and deliver a new Warrant or
Warrants of like tenor in the name of the assignee named in such Assignment
Form, and this Warrant shall promptly be canceled. The term "Warrant" as used in
this Agreement shall be deemed to include any Warrants issued in substitution or
exchange for this Warrant.
2. Issuance and Reservation of Shares; Approval Process.
2.1 The Company covenants and agrees as follows:
(a) all Warrant Shares which are issued upon the due
exercise of this Warrant will, upon issuance, be validly issued, fully paid, and
nonassessable, not subject to any preemptive rights, and free from all taxes,
liens, security interests, charges, and other encumbrances with respect to the
issue thereof, other than taxes with respect to any transfer occurring
contemporaneously with such issue; and
(b) during the period within which this Warrant may
be exercised, the Company will at all times have authorized and reserved, and
keep available free from preemptive rights, a sufficient number of shares of
Common Stock to provide for the exercise of the rights represented by this
Warrant.
2.2 The Company represents, warrants and covenants that the
Toronto Stock Exchange ("TSE") and the American Stock Exchange ("AMEX") have
approved the issuance of the Warrants, and the upon exercise of the Warrants,
the TSE and AMEX will have approved the listing of the Warrant Shares issuable
upon such exercise. The Company covenants and agrees to fulfill all the
requirements of the TSE and AMEX with respect to the Warrants and the Warrant
Shares.
3. Loss or Destruction of Warrant.
Subject to the terms and conditions hereof, upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss, theft or
destruction, of such bond or indemnification as the Company may reasonably
require, and, in the case of such mutilation, upon surrender and cancellation of
this Warrant, the Company promptly (but not later than in two Business Days)
will execute and deliver a new Warrant of like tenor.
<PAGE>
4
4. Ownership of Warrant.
The Company may deem and treat the person in whose name this Warrant
is registered as the holder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer.
5. Certain Adjustments.
5.1 The number of Warrant Shares purchasable upon the exercise
of this Warrant and the Exercise Price shall be subject to adjustment from time
to time as follows:
(a) Stock Dividends. If at any time after the date of
the issuance of this Warrant (i) the Company shall fix a record date for the
issuance of any stock dividend or distribution payable in shares of Common Stock
or securities or rights convertible or exchangeable into Common Stock or (ii)
the number of shares of Common Stock shall have been increased by a subdivision
or split-up of shares of Common Stock, then, on the record date fixed for the
determination of holders of Common Stock entitled to receive such dividend or
distribution (or on the dividend distribution date if no record date is set) or
immediately after the effective date of subdivision or split-up, as the case may
be, the number of shares to be delivered upon exercise of this Warrant will be
increased so that the Warrantholder will be entitled to receive the number of
shares of Common Stock that such Warrantholder would have owned (or been
entitled to receive in the case of convertible or exchangeable securities)
immediately following such action had this Warrant been exercised immediately
prior thereto, and the Exercise Price will be adjusted as provided below in
paragraph (g).
(b) Combination of Stock. If the number of shares of
Common Stock outstanding at any time after the date of the issuance of this
Warrant shall have been decreased by a combination of the outstanding shares of
Common Stock, then, immediately after the effective date of such combination,
the number of shares of Common Stock to be delivered upon exercise of this
Warrant will be decreased so that the Warrantholder thereafter will be entitled
to receive the number of shares of Common Stock that such Warrantholder would
have owned immediately following such action had this Warrant been exercised
immediately prior thereto, and the Exercise Price will be adjusted as provided
below in paragraph (g).
(c) Reorganization, etc. If any capital reorganization
of the Company, any reclassification of the Common Stock, any consolidation of
the Company with or merger of the Company with or into any other person, or any
sale or lease or other transfer of all or substantially all of the assets of the
Company to any other person, shall be effected in such a way that the holders of
Common Stock shall be entitled to receive stock, other securities or assets
(whether such stock, other
<PAGE>
5
securities or assets are issued or distributed by the Company or another person)
with respect to or in exchange for Common Stock, then, upon exercise of this
Warrant, the Warrantholder shall have the right to receive the kind and amount
of stock, other securities or assets receivable upon such reorganization,
reclassification, consolidation, merger or sale, lease or other transfer by a
holder of the number of shares of Common Stock that such Warrantholder would
have been entitled to receive upon exercise of this Warrant had this Warrant
been exercised immediately before such reorganization, reclassification,
consolidation, merger or sale, lease or other transfer.
(d) Distributions to All Holders of Common Stock.
If the Company shall, at any time after the date of issuance of this Warrant,
fix a record date to distribute (or distribute without a record date) to all
holders of its Common Stock, any shares of capital stock of the Company (other
than Common Stock) or evidences of its indebtedness or assets or rights or
warrants to subscribe for or purchase any of its securities or securities issued
in connection with a spin-off, then the Warrantholder shall be entitled to
receive, upon exercise of the Warrant, on a pro rata basis, that portion of such
distribution to which it would have been entitled had the Warrantholder
exercised its Warrant immediately prior to the date of such distribution. At the
time it fixes the record date for such distribution (or prior to any
distribution if no record date is fixed), the Company shall allocate sufficient
reserves to ensure the timely and full performance of the provisions of this
Section 5.1(d). The Company shall promptly (but in any case no later than five
Business Days prior to the record date of such distribution) mail by first
class, postage prepaid, to the Warrantholder, notice that such distribution will
take place.
(e) Fractional Shares. No fractional shares of
Common Stock or scrip shall be issued to any Warrantholder in connection with
the exercise of this Warrant. Instead of any fractional shares of Common Stock
that would otherwise be issuable to such Warrantholder, the Company will pay to
such Warrantholder a cash adjustment in respect of such fractional interest in
an amount equal to that fractional interest of the then current Fair Market
Value per share of Common Stock.
(f) Carryover. Notwithstanding any other provision
of this Section 5, no adjustment shall be made to the number of shares of Common
Stock to be delivered to the Warrantholder (or to the Exercise Price) if such
adjustment represents less than 1% of the number of shares to be so delivered
hereunder, but any lesser adjustment shall be carried forward and shall be made
at the time and together with the next subsequent adjustment which together with
any adjustments so carried forward shall amount to 1% or more of the number of
shares to be so delivered.
(g) Exercise Price Adjustment. Whenever the
number of Warrant Shares purchasable upon the exercise of this Warrant is
adjusted pursuant to Sections 5.1(a) and (b) herein, the Exercise Price payable
upon the
<PAGE>
6
exercise of this Warrant shall be adjusted by multiplying such Exercise Price
immedi ately prior to such adjustment by a fraction, of which the numerator
shall be the number of Warrant Shares purchasable upon the exercise of the
Warrant immediately prior to such adjustment, and of which the denominator shall
be the number of Warrant Shares purchasable immediately thereafter.
5.2 Rights Offering. In the event the Company shall effect an
offering of Common Stock pro rata among its stockholders, the Warrantholder
shall be entitled to elect to participate in each and every such offering as if
this Warrant had been exercised immediately prior to each such offering. The
Company shall, concurrently with the mailing to its stockholders, mail by first
class, postage prepaid, to the Warrantholder, notice that such rights offering
will take place together with all documents and information relating to the
terms of the offering. The Company shall not be required to make any adjustment
with respect to the issuance of shares of Common Stock pursuant to a rights
offering in which the holder hereof has been entitled to elect to participate
under the provisions of this Section 5.2.
5.3 Notice of Adjustments. Whenever the number of Warrant
Shares or the Exercise Price of such Warrant Shares is to be adjusted, as herein
provided, the Company shall, at least 10 Business Days prior to such adjustment,
mail by first class, postage prepaid, to the Warrantholder, notice of such
adjustment or adjustments and a certificate of the Company setting forth the
number of Warrant Shares and the Exercise Price of such Warrant Shares after
such adjustment, a detailed statement of the facts requiring such adjustment,
and the computation by which such adjustment was made.
5.4 Notice of Extraordinary Corporate Events.
In case the Company after the date hereof shall propose to (i)
distribute any dividend (whether stock or cash or otherwise) to the holders of
shares of Common Stock or to make any other distribution to the holders of
shares of Common Stock, (ii) offer to the holders of shares of Common Stock
rights to subscribe for or purchase any additional shares of any class of stock
or any other rights or options, or (iii) effect any reclassification of the
Common Stock (other than a reclassification involving merely the subdivision or
combination of outstanding shares of Common Stock), any capital reorganization,
any amalgamation, arrangement or merger, any sale, transfer or other disposition
of all or substantially all of its property, assets and business, or the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall mail to each Warrantholder notice of such proposed action,
which notice shall specify the date on which (a) the books of the Company shall
close, or (b) a record shall be taken for determining the holders of Common
Stock entitled to receive such stock dividends or other distribution or such
rights or options, or (c) such reclassification, reorganization, amalgamation,
arrangement, merger, sale, transfer, other disposition, liquidation, dissolution
or winding up shall take place or commence, as the case may be, and the date, if
any, as of which it is expected that holders of record of Common Stock shall
<PAGE>
7
be entitled to receive securities or other property deliverable upon such
action. Such notice shall be mailed in the case of any action covered by clause
(i) or (ii) above at least ten days prior to the record date for determining
holders of Common Stock for purposes of receiving such payment or offer, or in
the case of any action covered by clause (iii) above at least 30 days prior to
the date upon which such action takes place and at least 20 days prior to any
record date to determine holders of Common Stock entitled to receive such
securities or other property.
5.5 Effect of Failure to Notify. Failure to file any
certificate or notice or to mail any notice, or any defect in any certificate or
notice, pursuant to Sections 5.3 and 5.4 shall not affect the necessity of the
adjustment to the Exercise Price, the calculation of the number of shares
purchasable upon exercise of this Warrant, or the legality or validity of any
transaction giving rise thereto, without prejudicing the Warrantholder's rights
to seek damages for such failure.
5.6 Other Dilutive Events. In case the Company after the date
of this Warrant shall take any action affecting the Common Shares, other than
action described in Section 5.1, which in the opinion of the board of directors
of the Company would materially affect the rights of the Warrantholder, the
Exercise Price and/or the number of Warrant Shares purchasable upon exercise of
the Warrant shall be adjusted in such manner, if any, and at such time, by
action of the directors, in their sole discretion, as they may determine to be
equitable in the circumstances, provided, however, that any such determination
shall be subject to the written consent of the TSE before it is effective.
Failure to take action by the directors so as to provide for an adjustment on or
prior to the effective date of any action by the Company affecting the Common
Shares shall be conclusive evidence that the board of directors of the Company
has determined that it is equitable to make no adjustment in the circumstances.
6. Amendments. Any provision of this Warrant may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and the Warrantholder. Any amendment or waiver effected in accordance
with this Section 6 shall be binding upon such Warrantholder and the Company.
7. Definitions.
As used herein, unless the context otherwise requires, the following
terms have the following respective meanings:
Assignment Form: an Assignment Form in the form annexed hereto as
Exhibit B.
Business Day: any day other than a Saturday, Sunday or a day on
which national banks are authorized by law to close in the City of New York,
State of New York.
<PAGE>
8
Common Stock: the meaning specified on the cover of this Warrant.
Company: the meaning specified on the cover of this Warrant.
Exercise Form: an Exercise Form in the form annexed hereto as
Exhibit A.
Exercise Price: the meaning specified on the cover of this Warrant.
Expiration Date: the meaning specified on the cover of this
Warrant.
Fair Market Value: Fair Market Value of a share of Common Stock
(including any Warrant Share) as of a particular date (the "Determination Date")
shall mean:
(i) If the Common Stock is listed on any U.S. national securities
exchange or the TSE, then the Fair Market Value shall be the average of the last
ten "daily sales prices" of the Common Stock on the principal U.S. national
securities exchange on which the Common Stock is listed or admitted for trading
(or, if not, the TSE) on the last ten Business Days prior to the Determination
Date, or if not listed or traded on any such exchanges, then the Fair Market
Value shall be the average of the last ten "daily sales prices" of the Common
Stock on the National Market (the "National Market") of the National Association
of Securities Dealers Automated Quotations System ("Nasdaq") on the last ten
Business Days prior to the Determination Date. The "daily sales price" shall be
the closing price of the Common Stock at the end of each day; or
(ii) If the Common Stock is not so listed or admitted to unlisted
trading privileges or if no such sale is made on at least nine of such days,
then the Fair Market Value shall be the fair value as reasonably determined in
good faith by an independent, nationally-recognized (U.S. or Canadian)
investment banking firm reasonably acceptable to the Warrantholder (whose
determination shall be conclusive but subject to the written consent of the TSE
before it is effective).
Warrantholder: the meaning specified on the cover of this Warrant.
Warrant Shares: the meaning specified on the cover of this Warrant.
8. Miscellaneous.
8.1 Entire Agreement. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to the
Warrants.
8.2 Binding Effects; Benefits. This Warrant shall inure to the
benefit of and shall be binding upon the Company and the Warrantholder and their
respective heirs, legal representatives, successors and assigns. Nothing in this
<PAGE>
9
Warrant, expressed or implied, is intended to or shall confer on any person
other than the Company and the Warrantholder, or their respective heirs, legal
representatives, successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Warrant.
8.3 Section and Other Headings. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or interpretation
of this Warrant.
8.4 Pronouns. All pronouns and any variations thereof refer to
the masculine, feminine or neuter, singular or plural, as the context may
require.
8.5 Notices. All notices and other communications required or
permitted to be given under this Warrant shall be in writing and shall be deemed
to have been duly given if delivered personally or sent by facsimile (with a
copy also sent by regular mail or overnight courier) or by recognized overnight
courier or by United States certified mail, postage prepaid, return receipt
requested, to the parties hereto at the following addresses or to such other
address as any party hereto shall hereafter specify by notice to the other party
hereto:
(a) if to the Company, addressed to:
Golden Star Resources Ltd.
1660 Lincoln Street, Suite 3000
Denver, Colorado 80264-3001
Facsimile: (303) 830-9094
Attention: General Counsel
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Facsimile: (212) 757-3990
Attention: Edwin S. Maynard
(b) if to the Warrantholder, addressed to the
Warrantholder at the addresses set forth on the
cover page of this Warrant
Except as otherwise provided herein, all such notices and communications shall
be deemed to have been received on the date of delivery thereof, if delivered
personally, or on the third Business Day after the mailing thereof.
<PAGE>
10
8.6 Separability. Any term or provision of this Warrant which
is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the terms and provisions of this Warrant or
affecting the validity or enforceability of any of the terms or provisions of
this Warrant in any other jurisdiction.
8.7 Governing Law. This Warrant shall be deemed to be a
contract made under the laws of New York and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to such
agreements made and to be performed entirely within such State.
8.8 No Rights or Liabilities as Stockholder. Nothing contained
in this Warrant shall be determined as conferring upon the Warrantholder any
rights as a stockholder of the Company or as imposing any liabilities on the
Warrantholder to purchase any securities whether such liabilities are asserted
by the Company or by creditors or stockholders of the Company or otherwise.
8.9 Submission to Jurisdiction.
(a) The Company irrevocably submits to the non-
exclusive jurisdiction of any federal or New York state court located in the
City of New York in any suit or proceeding arising out of or relating to the
Warrants or the Warrant Shares.
(b) To the extent that the Company has or hereafter
may acquire any immunity from jurisdiction of any court or from any legal
process (whether through service of notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, it hereby irrevocably waives such immunity in respect of its
obligations under the above-referenced documents, to the extent permitted by
law.
<PAGE>
11
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
GOLDEN STAR RESOURCES LTD.
By:
Name:
Title:
Dated: , 1999
<PAGE>
Exhibit A
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned hereby irrevocably (provided that the Warrant Shares
are timely delivered) elects to exercise the right, represented by this Warrant,
to purchase __________ of the Warrant Shares and herewith tenders payment for
such Warrant Shares to the order of Golden Star Resources Ltd. ("GSR") in the
amount of US$__________.
The undersigned will deliver the Warrant covering the Warrant Shares
being exercised hereunder to GSR in accordance with the terms of this Warrant.
The undersigned requests that a certificate for such Warrant Shares be
registered in the name of ________________ and that such certificates be
delivered to _____________ ________________ whose address is __________________.
Dated:____________________
Signature____________________________________
____________________________________
(Print Name)
____________________________________
(Street Address)
____________________________________
(City) (State) (Zip Code)
Signed in the Presence of:
__________________________
<PAGE>
Exhibit B
FORM OF ASSIGNMENT
(To be executed only upon transfer of this Warrant)
For value received, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto ______________________ the
right represented by such Warrant to purchase ________________ common shares of
Golden Star Resources Ltd. to which such Warrant relates and all other rights of
the Warrantholder under the within Warrant (to the extent of such shares), and
appoints ______________________ Attorney to make such transfer on the books of
Golden Star Resources Ltd. maintained for such purpose, with full power of
substitution in the premises.
Dated:____________________
Signature____________________________________
____________________________________
(Print Name)
____________________________________
(Street Address)
____________________________________
(City) (State) (Zip Code)
Signed in the Presence of:
__________________________
[Form of Specimen of Broker Warrant of Golden Star Resources Ltd.]
Certificate No. __
Number of Shares _______
THIS BROKER WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE SECURITIES LAWS AND NEITHER THE
BROKER WARRANTS NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED,
PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM REGISTRATION UNDER
SUCH ACT AND SUCH LAWS.
------------------------------------------------
GOLDEN STAR RESOURCES LTD.
BROKER WARRANT TO PURCHASE COMMON STOCK
------------------------------------------------
This certifies that Golden Star Resources Ltd., a corporation
subsisting under the Canada Business Corporations Act (the "Company"), grants to
__________, or its registered assigns (the "Warrantholder"), the right to
subscribe for and purchase from the Company ______ validly issued, fully paid
and nonassessable shares (the "Warrant Shares") of the Company's common shares
(the "Common Stock"), at the purchase price per share of $___ (the "Exercise
Price"), at any time and from time to time, prior to 5:00 PM Eastern Time on
August __, 2000 (the "Expiration Date"), all subject to the terms, conditions
and adjustments herein set forth.
<PAGE>
2
1. Duration and Exercise of Warrant; Limitation
on Exercise; Payment of Taxes.
1.1 Duration and Exercise of Warrant. Subject to the terms and
conditions set forth herein, the Warrant may be exercised, in whole or in part,
by the Warrantholder by:
(a) the surrender of this Warrant to the Company,
with a duly executed Exercise Form specifying the number of Warrant Shares to be
purchased, during normal business hours on any Business Day prior to the
Expiration Date; and
(b) the delivery of payment to the Company, for the
account of the Company, by cash or by certified or bank cashier's check, of the
Exercise Price for the number of Warrant Shares specified in the Exercise Form
in lawful money of the United States of America. The Company agrees that such
Warrant Shares shall be deemed to be issued to the Warrantholder as the record
holder of such Warrant Shares as of the close of business on the date on which
this Warrant shall have been surrendered and payment made for the Warrant Shares
as aforesaid.
1.2 Warrant Shares Certificate. A stock certificate or
certificates for the Warrant Shares specified in the Exercise Form shall be
delivered to the Warrantholder within three Business Days after receipt
(including facsimile receipt) of the Exercise Form and actual receipt of the
Warrant and payment of the Exercise Price, together with receipt of payment of
the purchase price if the Conversion Right is not exercised. If this Warrant
shall have been exercised only in part, the Company shall, at the time of
delivery of the stock certificate or certificates, deliver to the Warrantholder
a new Warrant evidencing the rights to purchase the remaining Warrant Shares,
which new Warrant shall in all other respects be identical with this Warrant.
1.3 Payment of Taxes. The issuance of certificates for Warrant
Shares shall be made without charge to the Warrantholder for any stock transfer
or other issuance tax in respect thereto; provided, however, that the
Warrantholder shall be required to pay any and all taxes which may be payable in
respect of any transfer involved in the issuance and delivery of any certificate
in a name other than that of the then Warrantholder as reflected upon the books
of the Company.
1.4 Divisibility of Warrant; Transfer of Warrant.
(a) Subject to the provisions of this Section 1.4, this
Warrant may be divided into warrants of one thousand shares or multiples thereof
(except for any "stub amount"), upon surrender at the principal office of the
Company, without charge to any Warrantholder. Upon such division, the Warrants
may be transferred of record as the then Warrantholder may specify without
charge to such Warrantholder (other than any applicable transfer taxes). In
addition, subject to
<PAGE>
3
the provisions of Section 2, the Warrantholder shall also have the right to
transfer this Warrant in its entirety to any person or entity.
(b) Upon surrender of this Warrant to the Company
with a duly executed Assignment Form and funds sufficient to pay any transfer
tax, the Company shall, without charge, execute and deliver a new Warrant or
Warrants of like tenor in the name of the assignee named in such Assignment
Form, and this Warrant shall promptly be canceled. Each Warrantholder agrees
that prior to any proposed transfer of this Warrant, such Warrantholder shall
give written notice to the Company of such Warrantholder's intention to effect
such transfer. Each such notice shall describe the manner and circumstances of
the proposed transfer in sufficient detail, and, if requested by the Company,
shall be accompanied by a written opinion of legal counsel, which opinion shall
be addressed to the Company and be reasonably satisfactory in form and substance
to the Company's counsel, to the effect that the proposed transfer of this
Warrant may be effected without registration under the Securities Act. The
Warrantholder shall not be entitled to transfer this Warrant, or any part
thereof, if such legal opinion is not reasonably acceptable to the Company. The
term "Warrant" as used in this Agreement shall be deemed to include any Warrants
issued in substitution or exchange for this Warrant.
2. Restrictions on Transfer;
Restrictive Legends.
2.1 Restrictive Legends. Except as otherwise permitted by this
Section 2.1, each Warrant shall (and each Warrant issued upon direct or indirect
transfer or in substitution for any Warrant pursuant to Section 1.5 or Section 4
shall) be stamped or otherwise imprinted with a legend in substantially the
following form:
THIS BROKER WARRANT AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF
THIS WARRANT HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND NEITHER THE
SECURITIES NOR ANY INTEREST THEREIN MAY BE OFFERED, SOLD,
TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN
EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND SUCH LAWS.
<PAGE>
4
Except as otherwise permitted by this Section 2.1, each stock certificate for
Warrant Shares issued upon the exercise of any Warrant and each stock
certificate issued upon the direct or indirect transfer of any such Warrant
Shares shall be stamped or otherwise imprinted with a legend in substantially
the following form:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"),
OR ANY STATE SECURITIES LAWS AND NEITHER THE SECURITIES NOR ANY
INTEREST THEREIN MAY BE OFFERED, SOLD, TRANSFERRED, PLEDGED OR
OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT OR SUCH LAWS OR AN EXEMPTION FROM
REGISTRATION UNDER SUCH ACT AND SUCH LAWS. DELIVERY OF THIS
CERTIFICATE MAY NOT CONSTITUTE "GOOD DELIVERY" IN SETTLEMENT OF
TRANSACTIONS ON THE TORONTO STOCK EXCHANGE. A NEW CERTIFICATE,
WITHOUT THIS LEGEND, DELIVERY OF WHICH WILL CONSTITUTE "GOOD
DELIVERY" MAY BE OBTAINED FROM THE COMPANY'S TRANSFER AGENT UPON
DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A
FORM REASONABLY SATISFACTORY TO THE COMPANY'S TRANSFER AGENT AND THE
COMPANY, TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED
HEREBY IS BEING MADE IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE
STATE SECURITIES LAWS.
Notwithstanding the foregoing, the Warrantholder may require
the Company to issue a stock certificate for Warrant Shares without a legend, if
either (i) such Warrant Shares have been registered for resale under the
Securities Act and sold pursuant to such registration or (ii) the Warrantholder
has delivered to the Company an opinion of legal counsel, which opinion shall be
addressed to the Company and be reasonably satisfactory in form and substance to
the Company's counsel, to the effect that such registration is not required with
respect to the public offering and sale of such Warrant Shares pursuant to Rule
144(k) or otherwise.
<PAGE>
5
2.2 Restrictions on Transfer; Registration Rights.
(a) No Warrant may be exercised and no Warrant or
Warrant Share may be sold, transferred or otherwise disposed of (any such sale,
transfer or other disposition, a "sale"), except in compliance with this Section
2.
(b) A Warrantholder may exercise this Warrant if it
is an "accredited investor" or a "qualified institutional buyer," as defined in
Regulation D and Rule 144A under the Securities Act, respectively, and a
Warrantholder may sell this Warrant or any Warrant Shares to a transferee that
is an "accredited investor" or a "qualified institutional buyer," as such terms
are defined in such Regulation and such Rule, respectively, provided that each
of the following conditions is satisfied:
(i) with respect to any "accredited investor" that
is not an institution, such transferee provides certification
establishing to the reasonable satisfaction of the Company that it
is an "accredited investor";
(ii) such transferee represents that it is
acquiring the Warrant and/or Warrant Shares for its own account and
not with a view to, or for offer or sale in connection with, any
distribution thereof within the meaning of the Securities Act that
would be in violation of the securities laws of the United States or
any applicable state thereof, but subject, nevertheless, to the
disposition of its property being at all times within its control;
and
(iii) such transferee agrees to be bound by the
provisions of this Section 2 with respect to any Warrants and
Warrant Shares held by it.
(c) The provisions of this Section 2.2 shall not apply
to any public sale of Warrant Shares in a transaction that is registered under
the Securities Act or exempt from such registration under Rule 144.
(d) The Warrantholder shall have certain rights
pursuant to a registration rights agreement, dated as of August 24, 1999,
between the Company and the Warrantholder.
3. Issuance and Reservation of Shares; Approval Process.
3.1 The Company covenants and agrees as follows:
(a) all Warrant Shares which are issued upon the due
exercise of this Warrant will, upon issuance, be validly issued, fully paid, and
nonassessable, not subject to any preemptive rights, and free from all taxes,
liens, security interests, charges, and other encumbrances with respect to the
issue thereof,
<PAGE>
6
other than taxes with respect to any transfer occurring contemporaneously with
such issue; and
(b) during the period within which this Warrant may
be exercised, the Company will at all times have authorized and reserved, and
keep available free from preemptive rights, a sufficient number of shares of
Common Stock to provide for the exercise of the rights represented by this
Warrant.
3.2 The Company represents and warrants that the Toronto Stock
Exchange ("TSE") has either approved or waived the approval process for the
issuance of the Warrants and the listing of the Warrant Shares issuable upon the
exercise of the Warrants, subject to the delivery to the TSE of a notice of
issuance of the American Stock Exchange with respect to the Warrant Shares (the
"Notice") and the payment of listing fees as required by the TSE. The Company
covenants and agrees to fulfill all the requirements of the TSE with respect to
the Warrants and the Warrant Shares, including, without limitation, the prompt
delivery to the TSE of the Notice, except to the extent waived by the TSE.
4. Loss or Destruction of Warrant.
Subject to the terms and conditions hereof, upon receipt by the
Company of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Warrant and, in the case of loss, theft or
destruction, of such bond or indemnification as the Company may reasonably
require, and, in the case of such mutilation, upon surrender and cancellation of
this Warrant, the Company promptly (but not later than in two Business Days)
will execute and deliver a new Warrant of like tenor.
5. Ownership of Warrant.
The Company may deem and treat the person in whose name this Warrant
is registered as the holder and owner hereof (notwithstanding any notations of
ownership or writing hereon made by anyone other than the Company) for all
purposes and shall not be affected by any notice to the contrary, until
presentation of this Warrant for registration of transfer.
6. Certain Adjustments.
6.1 The number of Warrant Shares purchasable upon the exercise
of this Warrant and the Exercise Price shall be subject to adjustment from time
to time as follows:
(a) Stock Dividends. If at any time after the date of
the issuance of this Warrant (i) the Company shall fix a record date for the
issuance of any stock dividend or distribution payable in shares of Common Stock
or securities or rights convertible or exchangeable into Common Stock or (ii)
the number of shares
<PAGE>
7
of Common Stock shall have been increased by a subdivision or split-up of shares
of Common Stock, then, on the record date fixed for the determination of holders
of Common Stock entitled to receive such dividend or distribution (or on the
dividend distribution date if no record date is set) or immediately after the
effective date of subdivision or split-up, as the case may be, the number of
shares to be delivered upon exercise of this Warrant will be increased so that
the Warrantholder will be entitled to receive the number of shares of Common
Stock that such Warrantholder would have owned (or been entitled to receive in
the case of convertible or exchangeable securities) immediately following such
action had this Warrant been exercised immediately prior thereto, and the
Exercise Price will be adjusted as provided below in paragraph (g).
(b) Combination of Stock. If the number of shares of
Common Stock outstanding at any time after the date of the issuance of this
Warrant shall have been decreased by a combination of the outstanding shares of
Common Stock, then, immediately after the effective date of such combination,
the number of shares of Common Stock to be delivered upon exercise of this
Warrant will be decreased so that the Warrantholder thereafter will be entitled
to receive the number of shares of Common Stock that such Warrantholder would
have owned immediately following such action had this Warrant been exercised
immediately prior thereto, and the Exercise Price will be adjusted as provided
below in paragraph (g).
(c) Reorganization, etc. If any capital reorganization
of the Company, any reclassification of the Common Stock, any consolidation of
the Company with or merger of the Company with or into any other person, or any
sale or lease or other transfer of all or substantially all of the assets of the
Company to any other person, shall be effected in such a way that the holders of
Common Stock shall be entitled to receive stock, other securities or assets
(whether such stock, other securities or assets are issued or distributed by the
Company or another person) with respect to or in exchange for Common Stock,
then, upon exercise of this Warrant, the Warrantholder shall have the right to
receive the kind and amount of stock, other securities or assets receivable upon
such reorganization, reclassification, consolidation, merger or sale, lease or
other transfer by a holder of the number of shares of Common Stock that such
Warrantholder would have been entitled to receive upon exercise of this Warrant
had this Warrant been exercised immediately before such reorganization,
reclassification, consolidation, merger or sale, lease or other transfer.
(d) Distributions to All Holders of Common Stock.
If the Company shall, at any time after the date of issuance of this Warrant,
fix a record date to distribute (or distribute without a record date) to all
holders of its Common Stock, any shares of capital stock of the Company (other
than Common Stock) or evidences of its indebtedness or assets or rights or
warrants to subscribe for or purchase any of its securities or securities issued
in connection with a spin-off, then the Warrantholder shall be entitled to
receive, upon exercise of the Warrant, on a pro rata basis, that portion of such
distribution to which it would have been entitled
<PAGE>
8
had the Warrantholder exercised its Warrant immediately prior to the date of
such distribution. At the time it fixes the record date for such distribution
(or prior to any distribution if no record date is fixed), the Company shall
allocate sufficient reserves to ensure the timely and full performance of the
provisions of this Section 6.1(d). The Company shall promptly (but in any case
no later than five Business Days prior to the record date of such distribution)
mail by first class, postage prepaid, to the Warrantholder, notice that such
distribution will take place.
(e) Fractional Shares. No fractional shares of
Common Stock or scrip shall be issued to any Warrantholder in connection with
the exercise of this Warrant. Instead of any fractional shares of Common Stock
that would otherwise be issuable to such Warrantholder, the Company will pay to
such Warrantholder a cash adjustment in respect of such fractional interest in
an amount equal to that fractional interest of the then current Fair Market
Value per share of Common Stock.
(f) Carryover. Notwithstanding any other provision
of this Section 6, no adjustment shall be made to the number of shares of Common
Stock to be delivered to the Warrantholder (or to the Exercise Price) if such
adjustment represents less than 1% of the number of shares to be so delivered
hereunder, but any lesser adjustment shall be carried forward and shall be made
at the time and together with the next subsequent adjustment which together with
any adjustments so carried forward shall amount to 1% or more of the number of
shares to be so delivered.
(g) Exercise Price Adjustment. Whenever the
number of Warrant Shares purchasable upon the exercise of this Warrant is
adjusted pursuant to Sections 6.1(a) and (b) herein, the Exercise Price payable
upon the exercise of this Warrant shall be adjusted by multiplying such Exercise
Price immedi ately prior to such adjustment by a fraction, of which the
numerator shall be the number of Warrant Shares purchasable upon the exercise of
the Warrant immediately prior to such adjustment, and of which the denominator
shall be the number of Warrant Shares purchasable immediately thereafter.
6.2 Rights Offering. In the event the Company shall effect an
offering of Common Stock pro rata among its stockholders, the Warrantholder
shall be entitled to elect to participate in each and every such offering as if
this Warrant had been exercised immediately prior to each such offering. The
Company shall, concurrently with the mailing to stockholders, mail by first
class, postage prepaid, to the Warrantholder, notice that such rights offering
will take place together with all documents and information relating to the
terms of the offering. The Company shall not be required to make any adjustment
with respect to the issuance of shares of Common Stock pursuant to a rights
offering in which the holder hereof has been entitled to elect to participate
under the provisions of this Section 6.2.
<PAGE>
9
6.3 Notice of Adjustments. Whenever the number of Warrant
Shares or the Exercise Price of such Warrant Shares is to be adjusted, as herein
provided, the Company shall, at least 10 Business Days prior to such adjustment,
mail by first class, postage prepaid, to the Warrantholder, notice of such
adjustment or adjustments and a certificate of the Company setting forth the
number of Warrant Shares and the Exercise Price of such Warrant Shares after
such adjustment, a detailed statement of the facts requiring such adjustment,
and the computation by which such adjustment was made.
6.4 Notice of Extraordinary Corporate Events. In case the
Company after the date hereof shall propose to (i) distribute any dividend
(whether stock or cash or otherwise) to the holders of shares of Common Stock or
to make any other distribution to the holders of shares of Common Stock, (ii)
offer to the holders of shares of Common Stock rights to subscribe for or
purchase any additional shares of any class of stock or any other rights or
options, or (iii) effect any reclassification of the Common Stock (other than a
reclassification involving merely the subdivision or combination of outstanding
shares of Common Stock), any capital reorganization, any amalgamation,
arrangement or merger, any sale, transfer or other disposition of all or
substantially all of its property, assets and business, or the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall mail to each Warrantholder notice of such proposed action, which notice
shall specify the date on which (a) the books of the Company shall close, or (b)
a record shall be taken for determining the holders of Common Stock entitled to
receive such stock dividends or other distribution or such rights or options, or
(c) such reclassification, reorganization, amalgamation, arrangement, merger,
sale, transfer, other disposition, liquidation, dissolution or winding up shall
take place or commence, as the case may be, and the date, if any, as of which it
is expected that holders of record of Common Stock shall be entitled to receive
securities or other property deliverable upon such action. Such notice shall be
mailed in the case of any action covered by clause (i) or (ii) above at least
ten days prior to the record date for determining holders of Common Stock for
purposes of receiving such payment or offer, or in the case of any action
covered by clause (iii) above at least 30 days prior to the date upon which such
action takes place and at least 20 days prior to any record date to determine
holders of Common Stock entitled to receive such securities or other property.
6.5 Effect of Failure to Notify. Failure to file any
certificate or notice or to mail any notice, or any defect in any certificate or
notice, pursuant to Sections 6.3 and 6.4 shall not affect the necessity of the
adjustment to the Exercise Price, the calculation of the number of shares
purchasable upon exercise of this Warrant, or the legality or validity of any
transaction giving rise thereto, without prejudicing the Warrantholder's rights
to seek damages for such failure.
6.6 Other Dilutive Events. In case the Company after the date
of this Warrant shall take any action affecting the Common Shares, other than
action described in Section 6.1, which in the opinion of the board of directors
of the Company
<PAGE>
10
would materially affect the rights of the Warrantholder, the Exercise Price
and/or the number of Warrant Shares purchasable upon exercise of the Warrant
shall be adjusted in such manner, if any, and at such time, by action of the
directors, in their sole discretion, as they may determine to be equitable in
the circumstances, provided, however, that any such determination shall be
subject to the written consent of the TSE before it is effective. Failure to
take action by the directors so as to provide for an adjustment on or prior to
the effective date of any action by the Company affecting the Common Shares
shall be conclusive evidence that the board of directors of the Company has
determined that it is equitable to make no adjustment in the circumstances.
7. Amendments. Any provision of this Warrant may be amended and the
observance thereof may be waived (either generally or in a particular instance
and either retroactively or prospectively), only with the written consent of the
Company and the Warrantholder. Any amendment or waiver effected in accordance
with this Section 7 shall be binding upon such Warrantholder and the Company.
8. Definitions.
As used herein, unless the context otherwise requires, the following
terms have the following respective meanings:
Assignment Form: an Assignment Form in the form annexed hereto as
Exhibit B.
Business Day: any day other than a Saturday, Sunday or a day on
which national banks are authorized by law to close in the City of New York,
State of New York.
Common Stock: the meaning specified on the cover of this Warrant.
Company: the meaning specified on the cover of this Warrant.
Exercise Form: an Exercise Form in the form annexed hereto as
Exhibit A.
Exercise Price: the meaning specified on the cover of this Warrant.
Expiration Date: the meaning specified on the cover of this
Warrant.
Fair Market Value: Fair Market Value of a share of Common Stock
(including any Warrant Share) as of a particular date (the "Determination Date")
shall mean:
(i) If the Common Stock is listed on any U.S. national securities
exchange or the TSE, then the Fair Market Value shall be the average of the last
ten "daily sales prices" of the Common Stock on the principal U.S. national
securities
<PAGE>
11
exchange on which the Common Stock is listed or admitted for trading (or, if
not, the TSE) on the last ten Business Days prior to the Determination Date, or
if not listed or traded on any such exchanges, then the Fair Market Value shall
be the average of the last ten "daily sales prices" of the Common Stock on the
National Market (the "National Market") of the National Association of
Securities Dealers Automated Quotations System ("Nasdaq") on the last ten
Business Days prior to the Determination Date. The "daily sales price" shall be
the closing price of the Common Stock at the end of each day; or
(ii) If the Common Stock is not so listed or admitted to unlisted
trading privileges or if no such sale is made on at least nine of such days,
then the Fair Market Value shall be the fair value as reasonably determined in
good faith by an independent, nationally-recognized (U.S. or Canadian)
investment banking firm reasonably acceptable to the Warrantholder (whose
determination shall be conclusive but subject to the written consent of the TSE
before it is effective).
Securities Act: the meaning specified on the cover of this Warrant,
or any similar U.S. Federal statute, and the rules and regulations of the
Commission thereunder, all as the same shall be in effect at the time. Reference
to a particular section of the Securities Act, shall include a reference to the
comparable section, if any, of any such similar Federal statute.
Warrantholder: the meaning specified on the cover of this Warrant.
Warrant Shares: the meaning specified on the cover of this Warrant.
9. Miscellaneous.
9.1 Entire Agreement. This Warrant constitutes the entire
agreement between the Company and the Warrantholder with respect to the
Warrants.
9.2 Binding Effects; Benefits. This Warrant shall inure to the
benefit of and shall be binding upon the Company and the Warrantholder and their
respective heirs, legal representatives, successors and assigns. Nothing in this
Warrant, expressed or implied, is intended to or shall confer on any person
other than the Company and the Warrantholder, or their respective heirs, legal
representatives, successors or assigns, any rights, remedies, obligations or
liabilities under or by reason of this Warrant.
9.3 Section and Other Headings. The section and other headings
contained in this Warrant are for reference purposes only and shall not be
deemed to be a part of this Warrant or to affect the meaning or interpretation
of this Warrant.
9.4 Pronouns. All pronouns and any variations thereof refer to
the masculine, feminine or neuter, singular or plural, as the context may
require.
<PAGE>
12
9.5 Notices. All notices and other communications required or
permitted to be given under this Warrant shall be in writing and shall be deemed
to have been duly given if delivered personally or sent by facsimile (with a
copy also sent by regular mail or overnight courier) or by recognized overnight
courier or by United States certified mail, postage prepaid, return receipt
requested, to the parties hereto at the following addresses or to such other
address as any party hereto shall hereafter specify by notice to the other party
hereto:
(a) if to the Company, addressed to:
Golden Star Resources Ltd.
1660 Lincoln Street, Suite 3000
Denver, Colorado 80264-3001
Facsimile:(303) 830-9094
Attention:General Counsel
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019
Facsimile: (212) 757-3990
Attention: Edwin S. Maynard
(b) if to the Warrantholder, addressed to:
TD Securities Inc.
55 Kings Street West, 8th floor
Toronto Dominion Bank Tower
Toronto-Dominion Centre
Toronto, Ontario M5K 1A2
Attention: Greg McKnight
with a copy to:
Shearman & Sterling
Commerce Court West
199 Bay Street, Suite 4405
P.O. Box 247
Toronto, Ontario M5L 1E8
Attention: Brice T. Voran
Except as otherwise provided herein, all such notices and communications shall
be deemed to have been received on the date of delivery thereof, if delivered
personally, or on the third Business Day after the mailing thereof.
<PAGE>
13
9.6 Separability. Any term or provision of this Warrant which
is invalid or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the terms and provisions of this Warrant or
affecting the validity or enforceability of any of the terms or provisions of
this Warrant in any other jurisdiction.
9.7 Governing Law. This Warrant shall be deemed to be a
contract made under the laws of New York and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to such
agreements made and to be performed entirely within such State.
9.8 No Rights or Liabilities as Stockholder. Nothing contained
in this Warrant shall be determined as conferring upon the Warrantholder any
rights as a stockholder of the Company or as imposing any liabilities on the
Warrantholder to purchase any securities whether such liabilities are asserted
by the Company or by creditors or stockholders of the Company or otherwise.
<PAGE>
14
IN WITNESS WHEREOF, the Company has caused this Warrant to be signed
by its duly authorized officer.
GOLDEN STAR RESOURCES LTD.
By:
Name:
Title:
Dated: , 1999
<PAGE>
Exhibit A
EXERCISE FORM
(To be executed upon exercise of this Warrant)
The undersigned hereby irrevocably (provided that the Warrant Shares
are timely delivered) elects to exercise the right, represented by this Warrant,
to purchase __________ of the Warrant Shares and herewith tenders payment for
such Warrant Shares to the order of Golden Star Resources Ltd. ("GSR") in the
amount of $----------.
The undersigned represents and warrants that it is an "accredited
institutional investor" as defined in Rule 501(a)(1), (2), (3) and (7) of
Regulation D under the Securities Act of 1933, as amended.
The undersigned will deliver the Warrant covering the Warrant Shares
being exercised hereunder to GSR in accordance with the terms of this Warrant.
The undersigned requests that a certificate for such Warrant Shares be
registered in the name of ________________ and that such certificates be
delivered to _____________ ________________ whose address is __________________.
Dated:____________________
Signature____________________________________
____________________________________
(Print Name)
____________________________________
(Street Address)
____________________________________
(City) (State) (Zip Code)
Signed in the Presence of:
__________________________
<PAGE>
Exhibit B
FORM OF ASSIGNMENT
(To be executed only upon transfer of this Warrant)
For value received, the undersigned registered holder of the within
Warrant hereby sells, assigns and transfers unto ______________________ the
right represented by such Warrant to purchase ________________ common shares of
Golden Star Resources Ltd. to which such Warrant relates and all other rights of
the Warrantholder under the within Warrant (to the extent of such shares), and
appoints ______________________ Attorney to make such transfer on the books of
Golden Star Resources Ltd. maintained for such purpose, with full power of
substitution in the premises.
Dated:____________________
Signature____________________________________
____________________________________
(Print Name)
____________________________________
(Street Address)
____________________________________
(City) (State) (Zip Code)
Signed in the Presence of:
__________________________
Exhibit 5.1
[Letterhead of Koffman Kalef]
August 24, 1999
Golden Star Resources Ltd.
1660 Lincoln Street, Suite 3000
Denver, Colorado
U.S.A. 80264
Dear Sirs/Mesdames:
Re: Golden Star Resources Ltd.
Registration Statement on Form S-3 -- Registration No. 333-33237
Prospectus Supplement dated August 16, 1999 (to Prospectus dated
October 2, 1997) filed pursuant to Rule 424(b)(3)
We have acted as Canadian counsel to Golden Star Resources Ltd. (the "Company"),
a Canadian corporation, in connection with the above-captioned registration
statement, prospectus and prospectus supplement (the "Prospectus Supplement"),
filed by the Company with the United States Securities and Exchange Commission
under the United States Securities Act of 1933, as amended (the "1933 Act"), and
have been requested to furnish our opinion as to certain matters relating to the
corporate status of the Company, the validity of the common shares of the
Company ("Shares") covered by the Prospectus Supplement and certain Canadian
income tax matters. The Prospectus Supplement relates to a U.S. $7,616,500
offering of securities comprised of (a) U.S.$4,155,000 principal amount of 7.50%
Subordinated Convertible Debentures due 2004 (the "Debentures") plus 831,000
warrants ("Four-Year Warrants"), and (b) up to 6,923,000 Units, each Unit
consisting of one Share of the Company and one-half of a warrant (each whole
warrant, an "Eighteen-Month Warrant").
In giving this opinion, we have participated in the preparation of or have
examined originals or copies certified to our satisfaction of the following:
1. certified copies dated August 24, 1999 of resolutions passed by the
board of directors of the Company as of August 11 and 20, 1999;
2. the said registration statement;
3. the said prospectus and Prospectus Supplement;
4. the indenture governing the Debentures (the "Indenture");
5. the Four-Year Month Warrants;
6. the Eighteen-Month Warrants; and
7. a certificate of incumbency of the Company dated August 24, 1999.
<PAGE>
2
We are qualified to practice law only in the Province of British Columbia and
our opinions herein are restricted to the laws of the Province of British
Columbia and the federal laws of Canada applicable therein in effect as of the
date hereof.
We have examined such statutes and documents, made such investigations and
considered such matters of law as we have considered relevant to the opinions
expressed herein. In such examinations we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals and
the conformity to authentic original documents of all documents submitted to us
as certified, conformed or photostatic copies or facsimiles thereof.
For the purpose of the opinion in paragraph 1 hereof, we have relied upon a
certificate dated August 24, 1999 issued by the Director of Corporations under
the Canada Business Corporations Act and have assumed no change in the status of
the Company since the date thereof.
On the basis of the foregoing and subject to the qualifications herein
expressed, we are of the opinion that:
1. The Company is a valid and subsisting corporation under the Canada
Business Corporations Act.
2. The Shares issued as part of the Units have been validly issued as
fully paid and nonassessable.
3. The statements in the Prospectus Supplement under the caption "Certain
Canadian Federal Income Tax Considerations", insofar as such statements
constitute summaries of the legal matters referred to therein, are
accurate in all material respects and fairly summarize the matters
referred to therein.
We hereby consent to the use of this opinion as an exhibit to the said
registration statement and to the use of our name under the caption "Legal
Matters" contained in the Prospectus Supplement. In giving this consent, we do
not thereby admit that we come within the category of persons whose consent is
required by the 1993 Act or the Rules made thereunder.
Yours truly,
/s/ KOFFMAN KALEF
- -----------------
KOFFMAN KALEF
[Letterhead of Paul, Weiss, Rifkind, Wharton & Garrison]
August 24, 1999
TD Securities (USA) Inc.
31 West 57th Street
New York, New York 10019-6101
Ladies and Gentlemen:
We have acted as U.S. counsel to Golden Star Resources Ltd., a
Canadian corporation (the "Company"), in connection with the offering and sale
of $4,155,000 aggregate principal amount of 7.50% subordinate convertible
debentures due 2004 of the Company (the "Debentures"), together with 831,000
four-year warrants (the "Four-Year Warrants") of the Company, and 6,923,000
equity units (the "Units") consisting of 6,923,000 shares of the Company's
common shares (the "Shares") and 3,461,500 common share purchase warrants (the
"Warrants," and, together with the Debentures, the Four-Year Warrants and the
Shares, the "Securities"). The Securities are being sold under the Agency
Agreement (the
<PAGE>
2
"Agency Agreement"), dated August 16, 1999, by and between TD Securities (USA)
Inc. (the "Agent") and the Company. This opinion is being furnished at the
request of the Company as contemplated by Section 6.6 of the Agency Agreement.
Capitalized terms used and not otherwise defined in this letter have the
meanings given those terms in the Agency Agreement.
The Company has filed with the Securities and Exchange Commission
(the "SEC") a registration statement on Form S-3 (File No. 333-33237) under the
Securities Act of 1933, as amended (the "1933 Act"). The registration statement
was filed on August 8, 1997, was amended on October 2, 1997, and, we are advised
orally by the Commission, was declared effective by the Commission on October 2,
1997. Forms of preliminary prospectus supplements (together with the prospectus
(the "Base Prospectus") included in the registration statement), dated June 29,
1999, and August 10, 1999, respectively, were filed with the Commission on July
1, 1999 and August 12, 1999, respectively, under subparagraph 5 of Rule 424(b)
of the 1933 Act. A form of final prospectus supplement (including the Base
Prospectus), dated August 16, 1999, was filed with the Commission on August 23,
1999, under subparagraph 3 of Rule 424(b) of the 1933 Act. The registration
statement as amended and revised at the time it was declared effective,
including any documents incorporated by reference in it, is referred to in this
letter as the "Registration Statement." The final prospectus supplement
(including the Base Prospectus) relating to the offering of the Securities by
the Company in the form filed on behalf of the
<PAGE>
3
Company with the SEC under subparagraph 3 of Rule 424(b), including any
documents incorporated by reference in it, is referred to in this letter as the
"Prospectus Supplement."
In connection with this opinion, we have examined originals, or
copies certified or otherwise identified to our satisfaction, of the following
documents (collectively, the "Documents"):
1. the Registration Statement;
2. the Prospectus Supplement;
3. the Agency Agreement;
4. the Indenture;
5. the Supplemental Indenture, dated as of August 24, 1999, by
and between the Company and the Trustee;
6. a specimen form of the Debentures;
7. a specimen form of the Four-Year Warrants;
8. a specimen form of the Broker Warrants;
9. a specimen form of the certificate representing the Shares;
and
10. a specimen form of the Warrants.
In addition, we have examined: (i) corporate records of the Company
as we have considered appropriate, including a copy of the certificate of
incorporation, as amended, and by-laws, as amended, of the Company certified by
the Company as in effect on the date of this letter (collectively, the "Charter
<PAGE>
4
Documents") and copies of resolutions of the board of directors of the Company
certified by the Company and relating to the issuance of the Securities; and
(ii) other certificates, agreements and documents as we deemed relevant and
necessary as a basis for our opinions. We have also relied (without independent
investigation) upon the factual matters contained in the representations and
warranties of the Company made in the Agency Agreement and upon certificates of
public officials and officers of the Company.
In our examination of the documents referred to above, we have
assumed, without independent investigation, the genuineness of all signatures,
the legal capacity of all individuals who have executed any of the documents
reviewed by us, the authenticity of all documents submitted to us as originals,
the conformity to the originals of all documents submitted to us as certified,
photostatic, reproduced or conformed copies of valid existing agreements or
other documents, the authenticity of the latter documents and that the
statements regarding matters of fact in the certificates, records, agreements,
instruments and documents that we have examined are accurate and complete. We
have also assumed, without independent investigation, that (i) the Company is
validly existing and in good standing under the laws of its jurisdiction of
organization, and (ii) the execution, delivery and performance of the Agency
Agreement has been duly authorized by all necessary corporate action and do not
violate the Charter Documents or the Company's other organizational documents or
the laws of its jurisdiction of organization.
<PAGE>
5
Where statements are made "to our knowledge" or words of similar
import, they refer only to the actual knowledge of the lawyers in our firm
engaged in the representation of the Company in connection with the transactions
contemplated by the Agency Agreement and without any independent verification.
Based upon the above, and subject to the stated assumptions,
exceptions and qualifications, we are of the opinion that:
1. Under any provision of law or regulation of the State of New York
or the United States applicable to the Company (in each case which are normally
applicable to the transactions that are contemplated by the Agency Agreement),
no consent, approval, authorization or order of, or filing with, any
governmental agency or body or any court is required for the completion of the
transactions contemplated by the Agency Agreement in connection with the
issuance or sale of the Securities by the Company, or in connection with the due
authorization, execution and delivery of the Agency Agreement, the Debentures,
the Warrants, the Four-Year Warrants, the Broker Warrants or the Indenture,
except as have been obtained and made under the 1933 Act and as may be required
under state securities laws.
2. Assuming that the statements made in the Registration Statement
and the Prospectus Supplement are complete and correct, (i) the Registration
Statement and any amendments to it have become and are effective, and (ii) the
Registration Statement and the Prospectus Supplement, as of their respective
effective
<PAGE>
6
or issue dates, appear on their face to be appropriately responsive in all
material respects to the requirements of the 1933 Act and the rules and
regulations of the SEC under the 1933 Act (except that we express no opinion as
to financial statements, financial statement schedules and other financial and
statistical data).
3. The sales of Debentures, the Warrants, the Four-Year Warrants and
the Shares are registered under the 1933 Act. To our knowledge, no stop order
suspending the effectiveness of the Registration Statement has been issued and
no proceedings for that purpose have been instituted or threatened.
4. Assuming that (A) the Company has all requisite corporate power
and authority to execute, deliver and perform its obligations under the
Indenture, (B) the Indenture has been duly authorized by the Company, (C) the
Indenture constitutes a legal, valid and binding agreement under the laws of
Canada, and (D) the Indenture has been duly authorized, executed and delivered
by the Trustee, to the extent that New York law is applicable, (i) the Indenture
has been executed and delivered by the Company, and (ii) the Indenture
constitutes a valid and binding agreement of the Company, enforceable against
the Company in accordance with its terms.
5. The Debentures are in the form contemplated by the Indenture.
Assuming that (A) the Company has all requisite corporate power and authority to
execute, deliver and perform its obligations under the Debentures, (B) the
Debentures have been duly authorized by the Company and would constitute a
legal, valid and
<PAGE>
7
binding agreement under the laws of Canada, and (C) the Debentures have been
duly authenticated by the Trustee in the manner described in its certificate
delivered to the Agent today (which fact we need not determine and have not
determined, by an inspection of the Debentures), to the extent that New York law
is applicable, (i) the Debentures have been executed and delivered by the
Company and (ii) the Debentures constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms.
6. Assuming that (A) the Company has all requisite corporate power
and authority to execute, deliver and perform its obligations under the Warrants
and (B) the Warrants have been duly authorized by the Company and would
constitute a legal, valid and binding agreement under the laws of Canada, to the
extent that New York law is applicable, (i) the Warrants have been duly executed
and delivered by the Company and (ii) the Warrants constitute valid and binding
obligations of the Company, enforceable against the Company in accordance with
their terms.
7. Assuming that (A) the Company has all requisite corporate power
and authority to execute, deliver and perform its obligations under the Broker
Warrants and (B) the Broker Warrants have been duly authorized by the Company
and would constitute a legal, valid and binding agreement under the laws of
Canada, to the extent that New York law is applicable, (i) the Broker Warrants
have been duly executed and delivered by the Company and (ii) the Broker
Warrants constitute valid
<PAGE>
8
and binding obligations of the Company, enforceable against the Company in
accordance with their terms.
8. Assuming that (A) the Company has all requisite corporate power
and authority to execute, deliver and perform its obligations under the
Four-Year Warrants and (B) the Four-Year Warrants have been duly authorized by
the Company and would constitute a legal, valid and binding agreement under the
laws of Canada, to the extent that New York law is applicable, (i) the Four-Year
Warrants have been duly executed and delivered by the Company and (ii) the
Four-Year Warrants constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms.
9. Assuming that (A) the Company has all requisite corporate power
and authority to execute, deliver and perform its obligations under the Escrow
Agreement and (B) the Escrow Agreement has been duly authorized by the Company
and would constitute a legal, valid and binding agreement under the laws of
Canada, to the extent that New York law is applicable, (i) the Escrow Agreement
has been duly executed and delivered by the Company and (ii) the Escrow
Agreement constitutes a valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms.
10. The Warrants, the Four-Year Warrants, the Broker Warrants and
the Indenture conform in all material respects to their descriptions in the
Prospectus Supplement, and the Debentures comply with the provisions of the
Indenture.
<PAGE>
9
11. The description in the Prospectus Supplement (A) under the
captions "Use of Proceeds--Escrow Arrangements," "Certain United States Federal
Income Tax Considerations," "Description of the Convertible Debentures,"
"Description of the Common Shares" and "Description of the Warrants," and (B) in
the Registration Statement in Item 14 and Item 15, in each case insofar as these
statements constitute summaries of the legal matters, documents or proceedings
governed by New York law and referred to in those documents, fairly present the
information called for with respect to these legal matters, documents and
proceedings in all material respects and fairly summarize the matters referred
to in those documents in all material respects.
12. The Company has all necessary corporate power and authority to
execute, deliver and perform its obligations under the Agency Agreement and, to
the extent that New York law is applicable, the Agency Agreement has been duly
executed and delivered by the Company.
13. The Company is not, and upon the issuance and sale of the
Securities and the Broker Warrants as contemplated in the Agency Agreement and
the application of the net proceeds from that issuance and sale as described
under "Use of Proceeds" in the Prospectus Supplement will not be, an "investment
company" or an entity "controlled" by an "investment company," as those terms
are defined in the 1940 Act.
14. The Indenture has been duly qualified under the 1939 Act.
<PAGE>
10
We have been advised orally by the staff of the Commission that no
stop order suspending the effectiveness of the Registration Statement has been
issued.
With respect to the opinions expressed in paragraphs 4 through 9
above, the enforceability of the Documents may be subject to: (i) bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
conveyances or transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally; and (ii) general principles of
equity (regardless of whether enforcement is considered in a proceeding in
equity or at law).
The opinions expressed above are limited to the laws of the State of
New York and the federal laws of the United States of America. Our opinions are
rendered only with respect to the laws, and the rules, regulations and orders
under those laws, that are currently in effect.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Matters" in the Prospectus Supplement. In giving this consent, we do not admit
that we are in the category of persons whose consent is required under Section 7
of the 1933 Act.
Very truly yours,
/s/ Paul, Weiss, Rifkind, Wharton & Garrison
--------------------------------------------
PAUL, WEISS, RIFKIND, WHARTON & GARRISON
SUBORDINATED CONVERTIBLE DEBENTURES DUE 2004
FOUR-YEAR WARRANTS TO PURCHASE COMMON SHARES
UNITS REPRESENTING COMMON SHARES AND WARRANTS
TO PURCHASE COMMON SHARES
GOLDEN STAR RESOURCES LTD.
AGENCY AGREEMENT
August 16, 1999
TD Securities (USA) Inc.
31 West 57th Street
New York, New York
10019-6101
U.S.A.
Ladies and Gentlemen:
Golden Star Resources Ltd. (the "Company") proposes to issue and
sell to selected institutional investors (collectively, the "Investors") in a
public offering (the "Offering") up to $10,000,000 aggregate amount of
Securities (as defined below) consisting of 7.50% subordinated convertible
debentures of the Company at par (the "Firm Debentures") or equity units (the
"Firm Units") at $0.50, or both, and, at the election (the "Over-Allotment
Option") of the Agent (as defined below), a total of up to an additional
$2,000,000 aggregate amount of Securities consisting of 7.50% subordinated
convertible debentures of the Company (the "Optional Debentures") or equity
units (the "Optional Units") of the Company, or both (the Firm Debentures and
the Optional Debentures being herein collectively called the "Debentures", and
the Firm Units and the Optional Units being herein collectively called the
"Units"). Each $1,000 principal amount of Debentures entitles the holder to
warrants (the "Four-Year Warrants") exercisable for 200 of the Company's common
shares ("Shares") at a price of $1.50 per Share until August 24, 2001 and $1.75
per Share for the remaining two years until August 24, 2003. Each Unit consists
of one Share and one-half of one Share purchase warrant (the "Warrants"). Each
whole Warrant entitles the holder thereof upon exercise to one Share at a price
of $0.70 per Share until February 24, 2001. The Debentures, the Shares, the
Warrants and the Four-Year Warrants are together referred to herein as the
<PAGE>
"Securities". The Company desires to engage you as its placement agent (the
"Agent") in connection with the Offering.
The Debentures are to be issued pursuant to a supplemental indenture
to be dated the Closing Date (as defined below) (the "Indenture") between the
Company and IBJ Whitehall Bank and Trust Company, as Trustee (the "Trustee").
The Company will cause the Trustee to prepare and file with the United States
Securities and Exchange Commission (the "SEC") a Statement of Eligibility under
the Trust Indenture Act of 1939, as amended (the "1939 Act"), on Form T-1 (the
"Form T-1"). The Warrants will be issued directly to Investors through the
Agent. The Broker Warrants (as defined below) will be issued directly to the
Agent.
The closing of the Offering will occur on August 24, 1999 (the
"Closing Date").
The Over-Allotment Option may be exercised by the Agent only by
written notice from the Agent to the Company, given within a period of two (2)
calendar days after the date of this Agreement, setting forth the aggregate
number of Optional Debentures or Optional Units, or both to be issued and sold
on the Closing Date.
The parties agree that no Securities will be offered to any resident
of Ontario or any other province of Canada.
The Agent agrees that it will notify the Investors that the
Securities may not be resold through the facilities of the Toronto Stock
Exchange or elsewhere in Canada for a period of 90 days from the Closing Date.
The Company hereby confirms its agreements with the Agent as
follows:
1. Agreement To Act As Placement Agent.
1.1 Placement Fee. On the basis of the representations,
warranties and agreements of the Company herein contained and subject to
all the terms and conditions of this Agreement, the Agent agrees to act as
the Company's exclusive Agent, on a best efforts basis, in connection with
the issuance and sale by the Company of the Securities. The Company shall
pay to the Agent in the aggregate 2.75% (the "Agent's Fee") of the gross
proceeds received by the Company from the sale of the Securities in the
Offering upon Closing, and an additional 2.75% of the gross proceeds
received by the Company from the sale of the Securities upon completion of
the acquisition of the Bogoso Gold Mine (as described in the Prospectus)
(the "Bogoso Acquisition") by December 10, 1999 (the "Bogoso Acquisition
Date").
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1.2 Broker Warrants. The Company shall issue to the Agent
50,000 broker warrants (the "Broker Warrants") for each $1 million of
gross proceeds received by the Company from the sale of the Securities in
the Offering on the Closing Date, each of which Broker Warrants is
exercisable by the Agent for 12 months from the Closing Date at a price of
$0.70 per Broker Warrant. In addition, upon completion of the Bogoso
Acquisition, the Company shall issue to the Agent a further 50,000 Broker
Warrants for each $1 million of gross proceeds received by the Company
from the sale of the Securities in the Offering each of which Broker
Warrant is exercisable by the Agent for 12 months from the Closing Date at
a price of Cdn.$0.70 per Broker Warrant. Each Broker Warrant entitles the
Agent to obtain one Share upon exercise of the Broker Warrant.
2. Delivery and Payment. On or prior to the Closing Date, the
Company, the Agent and IBJ Whitehall Bank and Trust Company, as escrow agent
(the "Escrow Agent") shall enter into an escrow agreement in customary form
mutually acceptable to the Company, the Agent, and the Escrow Agent (the "Escrow
Agreement"), pursuant to which an escrow account will be established, at the
Company's expense, for the benefit of the Investors (the "Escrow Account"). The
Agent will deposit or cause to be deposited on behalf of the Investors into the
Escrow Account an amount (the "Escrow Amount") at the Closing Date, representing
50% of the gross proceeds of the Offering, and the Company will deposit the
Securities into the Escrow Account. The Escrow Agent shall hold (a) the Escrow
Amount and all interest and other amounts earned thereon (collectively, the
"Escrow Funds") and (b) the Securities, in escrow pursuant to the Escrow
Agreement, in the Escrow Account. The Escrow Agreement will provide that in the
event the Bogoso Acquisition is completed on or before the Bogoso Acquisition
Date, the Escrow Agent, upon prompt notice from the Company and the Agent, will,
immediately before completion of the Acquisition (a) arrange to release the
Escrow Funds from the Escrow Account to the Company by way of wire transfer of
immediately available funds, to an account to be specified by the Company and
(b) arrange to release from the Escrow Account to each of the Investors the
amount of Debentures, Four- Year Warrants and Units purchased by each respective
Investor, and to deliver or cause to be delivered such Debentures, Four-Year
Warrants and Units to each respective Investor.
In the event that the Bogoso Acquisition is not completed on or
before the Bogoso Acquisition Date, each Investor will receive its portion of
funds placed in the Escrow Account attributable to Units, together with interest
from the Closing Date, and the Investor's proportionate interest in 50% of the
Units in the Escrow Account. The portion of the Escrow Amount derived from the
sale of the Debentures will be delivered to the Company and the Company will
deliver to each Investor that Investor's proportionate share of the Debentures
and that Investor's proportionate interest in 50% of the Four-Year Warrants in
the Escrow Account. The Company will then be required to repurchase 50% of the
principal amount of the Debentures (on a pro rata basis) pursuant to a special
mandatory redemption of a purchase price equal to the principal amount being
repurchased, plus accrued and unpaid interest. Each
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Investor's remaining proportionate interest in the remaining Units and Four-Year
Warrants will then be returned to the Company for cancellation.
3. Representations and Warranties of the Company. The Company hereby
represents and warrants to the Agent as follows:
3.1 Registration Statement and Prospectus. The Company has
filed with the SEC a registration statement on Form S-3 (file number
333-33237), which has become effective, for the registration under the
Securities Act of 1933, as amended (the "1933 Act"), of the Securities.
Such registration statement, as amended at the date of this Agreement,
meets the requirements set forth in Rule 415(a)(1) of the SEC under the
1933 Act and complies in all other material respects with Rule 415(a)(1)
of the SEC. The Company proposes to file with the SEC pursuant Rule
424(b)(5) of the SEC under the 1933 Act a supplement to the form of
prospectus included in such registration statement relating to the
Securities and the plan of distribution thereof and has previously advised
the Agent of all further information (financial and other) with respect to
the Company to be set forth therein. The Company will not file any other
amendment of such registration statement or such prospectus or any
supplement to such prospectus on or after the date of this Agreement and
prior to the Closing Date, except with your approval (such registration
statement, including financial statements and exhibits, as amended at the
date of this Agreement, is hereinafter called the "Registration
Statement"; such prospectus in the form in which it appears in the
Registration Statement is hereinafter called the "Basic Prospectus", and
such supplement to the Basic Prospectus, in the form in which it shall be
filed with the SEC pursuant to Rule 424(b)(5) of the SEC under the 1933
Act (including the Basic Prospectus as so supplemented), is hereinafter
called the "Prospectus". Any preliminary form of the Prospectus which has
heretofore been filed pursuant to Rule 424(b)(5) of the SEC under the 1933
Act is hereinafter called a "Preliminary Prospectus". Any reference herein
to the Registration Statement, the Basic Prospectus, any Preliminary
Prospectus or the Prospectus shall be deemed to include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the 1933 Act or the Securities Exchange Act of 1934 (the
"1934 Act") on or before the date of this Agreement or the issue date of
the Basic Prospectus, any Preliminary Prospectus or the Prospectus, as the
case may be; and any reference herein to the terms "amend", "amendment" or
"supplement" with respect to the Registration Statement, the Basic
Prospectus, any Preliminary Prospectus or the Prospectus shall be deemed
to include the filing or any document under the 1933 Act or the 1934 Act
after the date of this Agreement, or the issue date of the Basic
Prospectus, any Preliminary Prospectus or the Prospectus, as the case may
be, and deemed to be incorporated therein by reference).
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3.2 As at the date hereof, (i) the authorized capital of the
Company consists of an unlimited number of common shares and preferred
shares and (ii) the issued capital of the Company consists solely of
29,638,231 common shares.
3.3 The Company (i) has been duly amalgamated and is validly
existing and in good standing under the laws of Canada; (ii) has all
requisite corporate power and authority to carry on its business as now
conducted and as described in the Registration Statement and the
Prospectus and to own, lease and operate its properties and assets; and
(iii) has all required corporate power and authority to create, issue and
sell the Securities, to enter into this Agreement and to carry out the
provisions of this Agreement.
3.4 Guyanor Ressources S.A. (the "Subsidiary") is a
"significant subsidiary" of the Company (as such term is defined in Rule
1-02 of Regulation S-X), the securities of which Subsidiary the Company
holds free and clear of all mortgages, liens, charges, pledges, security
interests, encumbrances, claims and demands whatsoever.
3.5 The Subsidiary (i) has been duly incorporated and
organized and is validly existing under the laws of its jurisdiction of
incorporation and (ii) has all requisite corporate power and authority to
carry on its business as now conducted (including its exploration and/or
mining activities) and to own, lease and operate its properties and
assets.
3.6 Each of the Company and the Subsidiary is conducting its
business in material compliance with all applicable laws, rules and
regulations of each jurisdiction in which its business is carried on and
is duly licensed, registered or qualified in all jurisdictions in which it
owns, leases or operates its property or carries on business to enable its
business to be carried on as now conducted and its property and assets to
be owned, leased and operated and all such licenses, registrations and
qualifications are and will at the Closing Date be valid, subsisting and
in good standing, except in respect of matters which do not and will not
result in any material adverse change to the business, business prospects
or condition (financial or otherwise) of the Company and its subsidiaries,
on a consolidated basis, and except for the failure to be so qualified or
the absence of any such license, registration or qualification which does
not and will not have a material adverse affect on the assets or
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company and its subsidiaries, on a
consolidated basis.
3.7 Except as disclosed in the Prospectus and the warrants
issued or issuable to Elliott Associates L.P. ("Elliott") pursuant to the
credit facility dated May 5, 1999 between the Company and Elliott (the
"Elliott Warrants"), no person has any agreement or option or right or
privilege capable of becoming an agreement for the
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purchase, subscription or issuance of any unissued shares, securities or
warrants of the Company or any of the Subsidiaries.
3.8 The financial statements included or incorporated by
reference in the Registration Statement and the Prospectus, together with
the related schedules and notes, present fairly the financial position of
the Company and its consolidated subsidiaries at the dates indicated and
the statement of operations, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries for the periods specified; said
financial statements have been prepared in conformity with Canadian
generally accepted accounting principles ("Canadian GAAP") (or, in the
case of Bogoso Gold Limited, in conformity with accounting principles
generally accepted and in compliance with the Ghana Company Code 1963 (Act
179)) applied on a consistent basis throughout the periods involved. The
reconciliation of such financial statements to United States generally
accepted accounting principles ("U.S. GAAP"), as set forth in Note 15 to
such financial statements (or, in the case of the financial statements of
Bogoso Gold Limited, as set forth in Note 22 to such financial
statements), conforms to the requirements of Item 18 of Form 20-F under
the 1934 Act. The supporting schedules, if any, included or incorporated
by reference in the Registration Statement present fairly in accordance
with Canadian GAAP the information required to be stated therein.
3.9 The pro forma financial statements and the related notes
thereto included or incorporated by reference in the Registration
Statement and the Prospectus present fairly the information shown therein,
have been prepared in accordance with the SEC's rules and guidelines with
respect to pro forma financial statements and have been properly compiled
on the bases described therein, and the assumptions used in the
preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions and circumstances referred
to therein.
3.10 There is no action, proceeding or investigation (whether
or not purportedly by or on behalf of the Company or any of its
subsidiaries) pending or, to the knowledge of the Company and its
respective directors and officers, threatened against or affecting the
Company (including any of its predecessor companies) or any of its
subsidiaries at law or in equity (whether in any court, arbitration or
similar tribunal) or before or by any United States or Canadian federal,
provincial, state, municipal or other governmental department, commission,
board or agency, domestic or foreign, which is required to be disclosed in
the Registration Statement, which in any way materially adversely affects
the Company and its subsidiaries, on a consolidated basis, or the
condition (financial or otherwise) of the Company and its subsidiaries, on
a consolidated basis, or which might reasonably be expected to materially
and adversely affect the properties or assets thereof or the consummation
of the transactions contemplated in this Agreement.
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3.11 Neither the Company nor any of its subsidiaries is in
violation of its charter or by-laws or in default in the performance or
observance of any obligation, agreement, covenant or condition contained
in any contract, indenture, mortgage, deed of trust, loan or credit
agreement, note, lease or other agreement or instrument to which the
Company or any subsidiaries is a party or by which it or any of them may
be bound, or to which any of the property or assets of the Company or any
subsidiary is subject (collectively, "Agreements and Instruments") except
for such defaults that would not materially adversely affect the Company
and its subsidiaries, on a consolidated basis, or the condition (financial
or otherwise) of the Company and its subsidiaries, on a consolidated
basis; and the execution and delivery of this Agreement by the Company,
the performance and compliance with the terms of this Agreement, the
Indenture and the Securities and the consummation of the transactions
contemplated herein and in the Registration Statement (including the
issuance and sale of the Securities and the use of the proceeds from the
sale of the Securities as described in the Prospectus under the caption
"Use of Proceeds" and the issuance of the Shares to be issued as part of
the Units, the issuance of the Shares issuable upon conversion of the
Debentures, the issuance of the Shares issuable upon the exercise of the
Warrants, the issuance of the Shares issuable upon exercise of the
Four-Year Warrants and the issuance and sale of the Shares issuable upon
the exercise of the Broker Warrants) and compliance by the Company with
its obligations hereunder and under the Debentures, the Warrants, the
Four-Year Warrants, the Broker Warrants and the Indenture and the
Securities have been duly authorized by all necessary corporate action and
do not and will not, whether with or without the giving of notice or
passage of time or both, conflict with or constitute a breach of, or
default or Repayment Event (as defined below) under, or result in the
creation or imposition of any lien, charge or encumbrance upon any
property or assets of the Company of any subsidiary pursuant to, the
Agreements and Instruments (except for such conflicts, breaches or
defaults or liens, charges or encumbrances that would not materially
adversely affect the Company and its subsidiaries, on a consolidated
basis, or the condition (financial or otherwise) of the Company and its
subsidiaries, on a consolidated basis), nor will such action result in a
violation of the provisions of the charter or by-law of the Company or any
subsidiary or any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Company or any
subsidiary or any of their assets, properties or operations. As used
herein, a "Repayment Event" means any event or condition which gives the
holder of any note, debenture or other evidence of indebtedness (or any
person acting on such person's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Company or any subsidiary.
3.12 PricewaterhouseCoopers LLP, the auditors of the Company
who audited the financial statements of the Company are independent public
accountants as required by 1933 Act.
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3.13 The Company and the Subsidiaries have filed all United
States federal, state and local, and Canadian federal, provincial, and
local and foreign tax returns that are required to be filed or have
requested extensions thereof (except in any case in which the failure so
to file would not have a material adverse effect on the assets and
properties, business, results of operations, prospects or condition
(financial or otherwise) of the Company and its subsidiaries, on a
consolidated basis, and have paid all taxes required to be paid by them
and any other assessment, fine or penalty levied against them, to the
extent that any of the foregoing is due and payable, except for any such
assessment, fine or penalty that is currently being contested in good
faith.
3.14 Neither the United States Internal Revenue Service,
Revenue Canada, Customs, Taxation and Excise, nor any other taxation
authority has asserted or, to the best of the Company's knowledge,
threatened to assert any reassessment, claim or liability for taxes due or
to become due in connection with any review or examination of the tax
returns of the Company or any of its subsidiaries filed for any year which
would have a material adverse effect on the assets or properties,
business, results of operations, prospects or condition (financial or
otherwise) of the Company and its subsidiaries, on a consolidated basis.
3.15 The Debentures will be in the form contemplated by, and
entitled to the benefits of, the Indenture.
3.16 The attributes of the Shares, the Debentures, the
Four-Year Warrants, the Warrants, the Broker Warrants and the Indenture
will conform in all material respects with their descriptions thereof in
the Prospectus; the Shares to be issued as part of the Units, the Shares
to be issued upon conversion of the Debentures, and the Shares to be
issued upon exercise of each of the Warrants, the Four-Year Warrants and
the Broker Warrants, and all other shares of capital stock of the Company
have been duly authorized for issuance and sale by the Agent pursuant to
this Agreement and (in the case of the Debentures) the Indenture.
3.17 Upon issuance and delivery by the Company pursuant to
this Agreement and (in the case of the Debentures) the Indenture against
payment of the consideration set forth herein, each of the Shares to be
issued as part of the Units, and the Debentures, the Warrants, the
Four-Year Warrants and the Broker Warrants will be validly issued, fully
paid and non-assessable, and will be enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law);
the securityholders of the Company have no pre-emptive rights with respect
to any of the Securities.
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3.18 Upon issuance and delivery of the Debentures in
accordance with this Agreement and the Indenture, the Debentures will be
convertible at the option of the holder thereof for Shares in accordance
with the terms of the Debentures and the Indenture. The Shares issuable
upon conversion of the Debentures have been duly authorized and reserved
for issuance upon such conversion by all necessary corporate action and
such Shares, when issued upon such conversion, will be validly issued and
will be fully paid and non-assessable; no holder of such Shares will be
subject to personal liability by reason of being such a holder; and the
issuance of such Shares upon such conversion will not be subject to the
preemptive or other similar rights of any securityholder of the Company.
3.19 Upon issuance and delivery by the Company of the Warrants
in accordance with this Agreement, the Warrants will, subject to certain
conditions, be exercisable at the option of the holder thereof for Shares
in accordance with the terms of the Warrants. The Shares issuable upon
exercise of the Warrants have been duly authorized and reserved for
issuance upon such issuance by all necessary corporate action and such
Shares, when issued upon such exercise, will be validly issued and will be
fully paid and non-assessable; no holder of such Shares will be subject to
personal liability by reason of being such a holder; and the issuance of
such Shares upon such exercise will not be subject to the preemptive or
other similar rights of any securityholder of the Company.
3.20 Upon issuance and delivery of the Broker Warrants by the
Company in accordance with this Agreement, the Broker Warrants will,
subject to certain conditions, be exercisable at the option of the holder
thereof for Shares in accordance with the terms of the Broker Warrants.
The Shares issuable upon exercise of the Broker Warrants have been duly
authorized and reserved for issuance upon such exercise by all necessary
corporate action and such Shares, when issued upon such exercise, will be
validly issued and will be fully paid and non-assessable; no holder of
such Shares will be subject to personal liability by reason of being such
a holder; and the issuance of such Shares upon such exercise will not be
subject to the preemptive or other similar rights of any securityholder of
the Company.
3.21 Upon issuance and delivery of the Four-Year Warrants by
the Company in accordance with this Agreement, the Four-Year Warrants
will, subject to certain conditions, be exercisable at the option of the
holder thereof for Shares in accordance with the terms of the Four-Year
Warrants. The Shares issuable upon exercise of the Four-Year Warrants have
been duly authorized and reserved for issuance upon such exercise by all
necessary corporate action and such Shares, when issued upon such
exercise, will be validly issued and will be fully paid and
non-assessable; no holder of such Shares will be subject to personal
liability by reason of being such a holder; and the issuance of such
Shares upon such exercise will not be subject to the preemptive or other
similar rights of any securityholder of the Company.
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3.22 Other than the Agent, there is no person acting or
purporting to act at the request of the Company who is entitled to any
brokerage or agency fee payable by the Company in connection with the
transactions contemplated herein.
3.23 No consent, approval, authorization, or order of, or
filing with, any governmental agency or body having jurisdiction over the
Company or any court having jurisdiction over the Company is required to
be obtained or made by the Company for the consummation of the
transactions contemplated by this Agreement in connection with the sale of
the Securities, except such as have been obtained and made, or shall have
been obtained and made by the Closing Date, under the 1933 Act and the
Canada Business Corporations Act and such as may be required under state
or foreign securities laws.
3.24 There are no contracts or documents which are required to
be described in the Registration Statement, the Prospectus or the
documents incorporated by reference therein or to be filed as exhibits
thereto which have not been so described and filed as required.
3.25 The Company is not and, after giving effect to the
Offering, will not be an "investment company" as defined in the Investment
Company Act of 1940 (the "1940 Act").
3.26 As of the date the Registration Statement became
effective, the Company was eligible to register the Securities on Form S-3
under the 1933 Act pursuant to the standards for such Form prior to
October 21, 1992.
3.27 Except as disclosed in the Registration Statement and the
Prospectus, and except as would not, singly or in the aggregate, result in
a material adverse affect for the Company and its subsidiaries, on a
consolidated basis, or the condition (financial or otherwise) of the
Company and its subsidiaries, on a consolidated basis, (i) neither the
Company nor, to the Company's knowledge, information and belief after due
inquiry, Bogoso Gold Limited is in violation of any statute, law, rule,
regulation, ordinance, code, policy or rule of common law or any judicial
or administrative interpretation thereof in any jurisdiction in which the
Company, any of its subsidiaries or, to the Company's knowledge,
information and belief after due inquiry, Bogoso Gold Limited operate,
including any judicial or administrative order, consent, decree or
judgment, relating to pollution or protection of human health, the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations relating to the release or
threatened release of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum or petroleum products
(collectively, "Hazardous Materials") or to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or
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handling of Hazardous Materials (collectively, "Environmental Laws"), (ii)
the Company, its subsidiaries and, to the Company's knowledge, information
and belief after due inquiry, Bogoso Gold Limited have all permits,
authorizations and approvals required under any applicable Environmental
Laws and are each in compliance with their requirements, (iii) there are
no pending or, to its knowledge, threatened administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices
of noncompliance or violation, investigations or proceedings relating to
any Environmental Law against the Company, its subsidiaries or to the
Company's knowledge, information and belief after due inquiry, Bogoso Gold
Limited and (iv) there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean-up or
remediation, or an action, suit or proceeding by any private party or
governmental body or agency, against or affecting the Company, its
subsidiaries or to the Company's knowledge, information and belief after
due inquiry, Bogoso Gold Limited relating to Hazardous Materials or any
Environmental Laws.
3.28 To the Company's knowledge, information and belief, after
due inquiry, there are no expropriations or similar proceedings or any
material challenges to title or ownership, actual or threatened, of which
Bogoso Gold Limited has received notice against the mining claims and
mining rights contemplated in the Prospectus.
3.29 Except as has been provided to the Agent, the Company is
not aware of any environmental audit, evaluation, assessment, study or
test relating to any property in which the Company and its subsidiaries
have a direct or indirect interest.
3.30 The Company has filed a report on Form 12b-25 under the
United States Securities Exchange Act of 1934, as amended, (the "1934
Act") with respect to its quarterly report on Form 10-Q for the period
ended June 30, 1999.
4. Covenants of the Company. The Company covenants and agrees as
follows:
4.1 The Company will cause the Prospectus to be filed with, or
mailed for filing by first class certified or registered mail, to the SEC
pursuant to Rule 424(b)(5) of the SEC under the 1933 Act and, if so mailed
for filing, will cause the Prospectus to be filed with the SEC pursuant to
the Rule 424(b)(5) of the SEC. The Company agrees promptly to advise the
Agent in writing (i) when the Prospectus shall have been filed with, or
mailed for filing to, the SEC pursuant to Rule 424(b)(5) of the SEC under
the 1933 Act, (ii) of any request by the SEC for any amendment of the
Registration Statement or amendment of or supplement to the Prospectus or
for additional information and (iii) of any issuance by the SEC of any
stop order suspending the effectiveness of the Registration Statement or
of the initiation of any proceedings for that purpose. The Company will
use every reasonable effort to prevent
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the issuance of a stop order and, if any such order shall, at any time, be
issued, to obtain the withdrawal thereof at the earliest possible moment.
4.2 When the Prospectus is filed with, or mailed for filing
to, the SEC pursuant to Rule 424(b)(5) of the SEC under the 1933 Act, and
at all times subsequent thereto up to and including the Closing Date, the
Registration Statement will comply in all material respects with the
provisions of the 1933 Act and the rules and regulations of the SEC
thereunder and will not contain any untrue statement of a material fact
and will not omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading; and when the
Prospectus is filed with, or mailed for filing to, the SEC pursuant to
Rule 424(b)(5) of the SEC under the 1933 Act, and at all times subsequent
thereto up to and including the Closing Date, the Prospectus (and the
Prospectus as amended or supplemented, if the Company shall have filed
with, or mailed for filing to, the SEC any amendment thereto or supplement
thereto) and any documents incorporated therein by reference at the time
of filing will comply in all material respects with the provisions of the
1933 Act and the rules and regulations of the SEC thereunder and will not
contain any untrue statement of a material fact and will not omit to state
any material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading.
4.3 The Company agrees not to issue or sell any Shares or
financial instruments convertible or exchangeable into Shares, other than
pursuant to this Agreement, previously issued warrants, and incentive
stock options, until 180 days after the Closing Date, without the prior
consent of the Agent, which consent may not be unreasonably withheld or
delayed.
4.4 The Company will use its reasonable best efforts to obtain
the necessary regulatory consents from the American Stock Exchange and the
Toronto Stock Exchange for the listing of the Common Shares on such
conditions as are acceptable to the Agent and the Company, acting
reasonably.
4.5 The Company will use its reasonable best efforts to
arrange for the listing of the Debentures on a stock exchange in Canada
upon their issue or as soon as thereafter practical.
4.6 The Company shall make generally available to its
securityholders and to the Agent as soon as practicable, an earnings
statement (which need not be audited) of the Company, covering the
12-month period beginning at the end of the fiscal quarter of the Company
during which the "effective date" (as defined in Rule 158 under the 1933
Act) occurs, which shall satisfy the provisions of Section 11(a) of the
Securities Act. The Company may satisfy this requirement by complying with
Rule 158 under the 1933 Act.
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4.7 The Company shall furnish to the Agent and counsel for the
Agent, without charge, three signed copies of the Registration Statement
(including all exhibits thereto and amendments thereof) and to the Agent a
copy of the Registration Statement (without exhibits thereto) and so long
as delivery of a prospectus by the Agent or dealer may be required by the
1933 Act or the promulgated under the 1934 Act, as many copies of any
preliminary prospectus and the Prospectus and any amendments thereof and
supplements thereto as the Agent may reasonably request.
4.8 The Company shall file or cause to be filed its quarterly
report on Form 10-Q for the period ended June 30, 1999 within the time
period prescribed by Form 12b-25 under the 1934 Act.
5. Conditions of the Investors' Obligations. The following are
conditions of the Investors' obligations to close the purchase of the Securities
from the Company as contemplated hereby and of the Agent to perform its
obligations hereunder, which conditions the Company covenants to exercise its
best efforts to have fulfilled at or prior to the Closing Date, which conditions
may be waived in writing in whole or in part by the Agent on its own behalf and
on behalf of the Investors:
5.1 The Company shall have made and/or obtained the necessary
filings, approvals, consents and acceptances to or from, as the case may
be, the Toronto Stock Exchange required to be made or obtained by the
Company in connection with the Offering, on terms which are acceptable to
the Company and the Agent, acting reasonably, prior to the Closing Date,
it being understood that the Agent will do all that is reasonably required
to assist the Company to fulfil this condition.
5.2 The Shares shall have been conditionally accepted for
listing by the American Stock Exchange, subject to official notice of
issuance, and the Toronto Stock Exchange, subject to the usual conditions,
and will, as soon as possible following their issue and the satisfaction
of such conditions, be posted for trading on the American Stock Exchange
and the Toronto Stock Exchange.
5.3 No stop order suspending the effectiveness of the
Registration Statement shall have been issued under the 1933 Act or
proceedings therefor initiated or threatened by the SEC, and any request
on the part of the SEC for additional information shall have been complied
with to the reasonable satisfaction of counsel to the Agent.
5.4 The Company's board of directors shall have authorized and
approved this Agreement, the Indenture and other agreements pursuant to
which the Securities are to be issued, the issuance of the Securities and
all matters relating to the foregoing.
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5.5 The Company shall deliver a certificate of the Company
under its corporate seal and signed on behalf of the Company by such
senior officers and/or directors of the Company as may be acceptable to
the Agent, acting reasonably, addressed to the Agent and dated the date of
the Closing Date, in form and content satisfactory to the Agent's counsel,
acting reasonably, certifying that:
(i) To the knowledge of such officers, no order ceasing or
suspending trading in any securities of the Company or
prohibiting the sale of the Securities or any of the
Company's issued securities has been issued and no
proceedings for such purpose are pending or threatened.
(ii) To the knowledge of such officers, there has been no
adverse material change (actual, proposed or
prospective, whether financial or otherwise) in the
business, affairs, operations, assets, liabilities
(contingent or otherwise) or capital of the Company and
its subsidiaries, on a consolidated basis, which has not
been generally disclosed.
(iii) The representations and warranties of the Company
contained in this Agreement are true and correct at the
Closing Date, with the same force and effect as if made
by the Company as at the Closing Date after giving
effect to the transactions contemplated hereby.
(iv) The Company has complied with all the covenants and
satisfied all the terms and conditions of this Agreement
on its part to be complied with or satisfied at or prior
to the Closing Date.
5.6 The Agent shall have received an opinion, dated the
Closing Date, of Paul, Weiss, Rifkind, Wharton & Garrison, United States
counsel for the Company, to the effect that:
(i) Under any provision of law or regulation of the State of
New York or the United States applicable to the Company (in
each case which are normally applicable to the transactions
that are contemplated by this Agreement), no consent,
approval, authorization or order of, or filing with, any
governmental agency or body or any court is required for the
consummation of the transactions contemplated by this
Agreement in connection with the issuance or sale of the
Securities by the Company, or in connection with the due
authorization, execution and delivery of this Agreement, the
Debentures, the Warrants, the Four-Year Warrants, the Broker
Warrants or the Indenture, except such as have been obtained
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and made under the 1933 Act and such as may be required under
state securities laws.
(ii) The Registration Statement and any amendments thereof
have become and are effective and the Registration Statement,
the Prospectus, as of their respective effective or issue
dates, appear on their face to be appropriately responsive in
all material respects to the requirements of the 1933 Act, and
the rules and regulations of the SEC thereunder (except that
no opinion need be expressed as to financial statements,
financial statement schedules and other financial and
statistical data).
(iii) The Debentures, the Warrants, the Four-Year Warrants and
the Shares are registered under the 1933 Act. To the knowledge
of such counsel, no stop order suspending the effectiveness of
the Registration Statement has been issued and no proceedings
for that purpose have been instituted or threatened.
(iv) Assuming that (A) the Company has all requisite corporate
power and authority to execute, deliver and perform its
obligations under the Indenture, (B) the Indenture has been
duly authorized by the Company, (C) the Indenture constitutes
a legal, valid and binding agreement under the laws of Canada,
and (D) the Indenture has been duly authorized, executed and
delivered by the Trustee, to the extent that New York law is
applicable (i) the Indenture has been delivered and executed
by the Company, and (ii) the Indenture constitutes a valid and
binding agreement of the Company, enforceable against the
Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles
of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
(v) The Debentures are in the form contemplated by the
Indenture. Assuming that (A) the Company has all requisite
corporate power and authority to execute, deliver and perform
its obligations under the Debentures, (B) the Debentures have
been duly authorized by the Company and would constitute a
legal, valid and binding agreement under the laws of Canada,
and (C) the Debentures have been duly authenticated by the
Trustee in the manner described in its certificate delivered
to the Agent today (which fact such counsel need not determine
and have not determined, by an inspection of the Debentures),
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(i) to the extent that New York law is applicable the
Debentures have been executed and delivered by the Company and
(ii) the Debentures constitute valid and binding obligations
of the Company, enforceable against the Company in accordance
with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law).
(vi) Assuming that (A) the Company has all requisite corporate
power and authority to execute, deliver and perform its
obligations under the Warrants and (B) the Warrants have been
duly authorized by the Company and would constitute a legal,
valid and binding agreement under the laws of Canada, to the
extent that New York law is applicable (i) the Warrants have
been duly executed and delivered by the Company and (ii) the
Warrants constitute valid and binding obligations of the
Company, enforceable against the Company in accordance with
their terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at
law).
(vii) Assuming that (A) the Company has all requisite
corporate power and authority to execute, deliver and perform
its obligations under the Broker Warrants and (B) the Broker
Warrants have been duly authorized by the Company and would
constitute a legal, valid and binding agreement under the laws
of Canada, to the extent that New York law is applicable (i)
the Broker Warrants have been duly executed and delivered by
the Company and (ii) the Broker Warrants constitute valid and
binding obligations of the Company, enforceable against the
Company in accordance with their terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles
of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
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(viii)Assuming that (A) the Company has all requisite
corporate power and authority to execute, deliver and perform
its obligations under the Four-Year Warrants and (B) the
Four-Year Warrants have been duly authorized by the Company
and would constitute a legal, valid and binding agreement
under the laws of Canada, to the extent that New York law is
applicable (i) the Four-Year Warrants have been duly executed
and delivered by the Company and (ii) the Four-Year Warrants
constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their
terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all
laws relating to fraudulent transfers), reorganization,
moratorium or similar laws affecting enforcement of creditors'
rights generally and except as enforcement thereof is subject
to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at
law).
(ix) The Warrants, the Four-Year Warrants, the Broker Warrants
and the Indenture conform in all material respects to the
descriptions thereof contained in the Prospectus, and the
Debentures comply with the provisions of the Indenture.
(x) The description in the Prospectus (A) under the captions
"Use of Proceeds--Escrow Arrangements", "Certain United States
Federal Income Tax Considerations," and "Description of
Securities" and (B) in the Registration Statement in Item 14
and Item 15, in each case insofar as such statements
constitute summaries of the legal matters, documents or
proceedings governed by New York law and referred to therein,
fairly present the information called for with respect to such
legal matters, documents and proceedings and fairly summarize
the matters referred to therein.
(xi) (A) the Company has all requisite power and authority to
execute, deliver and perform its obligations under this
Agreement and (B) assuming authorization under Canadian law,
to the extent that New York law is applicable this Agreement
has been duly executed and delivered by the Company.
(xii) The Company is not, and upon the issuance and sale of
the Securities and the Broker Warrants as herein contemplated
and the application of the net proceeds therefrom as described
under "Use of Proceeds" in the Prospectus will not be, an
"investment company" or an entity "controlled" by an
"investment company", as such terms are defined in the 1940
Act.
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(xiii)The Indenture has been duly qualified under the 1939
Act.
(xiv) Assuming that (A) the Company has all requisite
corporate power and authority to execute, deliver and perform
its obligations under the Escrow Agreement and (B) the Escrow
Agreement has been duly authorized by the Company and would
constitute a legal, valid and binding agreement under the laws
of Canada, to the extent that New York law is applicable (i)
the Escrow Agreement has been duly executed and delivered by
the Company and (ii) the Escrow Agreement constitutes a valid
and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and
except as enforcement thereof is subject to general principles
of equity (regardless of whether enforcement is considered in
a proceeding in equity or at law).
(xv) The Shares to be issued as part of the Units, the Shares
to be issued upon conversion of the Debentures, the Shares to
be issued upon exercise of the Warrants, the Shares to be
issued upon the exercise of the Four-Year Warrants and the
Shares to be issued upon exercise of the Broker Warrants have
been duly approved for listing on the American Stock Exchange,
subject to satisfaction of such conditions required by such
stock exchange.
In rendering such opinion, in the event that no written order has
been issued by the SEC, such counsel may state that they relied
solely on the oral advice of the Staff of the SEC to the effect that
there are no stop orders suspending the effectiveness of the
Registration Statement. For purposes of paragraph (ii) hereof, such
counsel may assume that the statements made in the Registration
Statement and the Prospectus are complete and correct. Such counsel
may state that their opinion is limited to matters governed by the
laws of the State of New York and the federal law of the United
States.
5.7 The Agent shall have received an opinion, dated the
Closing Date, of Koffman Kalef, Canadian counsel for the Company, to the
effect that:
(i) The Company has been duly amalgamated and is a valid and
subsisting corporation under the laws of Canada.
(ii) The Company has all requisite corporate power and
corporate capacity to own, lease and operate its properties
and to conduct its
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business as described in the Registration Statement and the
Prospectus and to enter into and perform its obligations under
this Agreement.
(iii) The authorized, issued and outstanding share capital of
the Company is as set forth in the Registration Statement and
the Prospectus; the shares of issued and outstanding capital
of the Company have been duly authorized and validly issued as
fully paid and non-assessable; and none of the outstanding
shares in the capital of the Company was issued in violation
of the preemptive or other similar rights of any
securityholder of the Company.
(iv) To the extent governed by Canadian law, this Agreement
has been duly authorized, executed and delivered by the
Company.
(v) The Company has all requisite corporate power and
corporate capacity to execute, deliver and perform its
obligations under the Indenture and, to the extent governed by
Canadian law, the Indenture has been duly authorized, executed
and delivered by the Company.
(vi) The Company has all requisite corporate power and
corporate capacity to execute, deliver and perform its
obligations under the Debentures; to the extent governed by
Canadian law, the Debentures have been duly authorized,
executed and delivered by the Company.
(vii) The form and terms of the Debentures have been duly
authorized, approved and adopted by the Company and comply
with any applicable requirements of the constating documents
and by-laws of the Company and with the requirements of the
Canada Business Corporations Act.
(viii)Upon issuance and delivery of the Debentures in
accordance with this Agreement and the Indenture, the
Debentures will be convertible at the option of the holder
thereof for Shares in accordance with the terms of the
Debentures and the Indenture; the Shares issuable upon
conversion of the Debentures have been duly authorized and
reserved for issuance upon such conversion by all necessary
corporate action; such Shares, when issued upon such
conversion, will be validly issued as fully paid and
non-assessable and no holder of such Shares is or will be
subject to personal liability by reason of being such a
holder.
(ix) The Company has all requisite corporate power and
corporate capacity to execute, deliver and perform its
obligations under the Warrants; to the extent governed by
Canadian law, the Warrants have been duly authorized, executed
and delivered by the Company.
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(x) The Company has all requisite corporate power and
corporate capacity to execute, deliver and perform its
obligations under the Four- Year Warrants; to the extent
governed by Canadian law, the Four-Year Warrants have been
duly authorized, executed and delivered by the Company.
(xi) The form and terms of the Warrants have been duly
authorized, approved and adopted by the Company and comply
with any applicable requirements of the constating documents
and by-laws of the Company and with the requirements of the
Canada Business Corporations Act;
(xii) The form and terms of the Four-Year Warrants have been
duly authorized, approved and adopted by the Company and
comply with any applicable requirements of the constating
documents and by-laws of the Company and with the requirements
of the Canada Business Corporations Act;
(xiii)Upon issuance and delivery of the Warrants in accordance
with this Agreement and the terms of the Warrants, the
Warrants may be exercised at the option of the holder thereof
for Shares in accordance with the terms of the Warrants; the
Shares issuable upon exercise of the Warrants have been duly
authorized and reserved for issuance upon such exercise by all
necessary corporate action; such Shares, when issued upon such
exercise, will be validly issued as fully paid and
non-assessable and no holder of such Shares is or will be
subject to personal liability by reason of being such a
holder.
(xiv) Upon issuance and delivery of the Four-Year Warrants in
accordance with this Agreement and the terms of the Four-Year
Warrants, the Four-Year Warrants may be exercised at the
option of the holder thereof for Shares in accordance with the
terms of the Four-Year Warrants; the Shares issuable upon
exercise of the Four-Year Warrants have been duly authorized
and reserved for issuance upon such exercise by all necessary
corporate action; such Shares, when issued upon such exercise,
will be validly issued as fully paid and non-assessable and no
holder of such Shares is or will be subject to personal
liability by reason of being such a holder.
(xv) The Company has all requisite corporate power and
corporate capacity to execute, deliver and perform its
obligations under the Broker Warrants; to the extent governed
by Canadian law, the Broker Warrants have been duly
authorized, executed and delivered by the Company.
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<PAGE>
(xvi) The form and terms of the Broker Warrants have been duly
authorized, approved and adopted by the Company and comply
with any applicable requirements of the constating documents
and by-laws of the Company and with the requirements of the
Canada Business Corporations Act.
(xvii)Upon issuance and delivery of the Broker Warrants in
accordance with this Agreement and the terms of the Broker
Warrants, the Broker Warrants may be exercised at the option
of the holder thereof for Shares in accordance with the terms
of the Broker Warrants; the Shares issuable upon exercise of
the Broker Warrants have been duly authorized and reserved for
issuance upon such exercise by all necessary corporate action;
such Shares, when issued upon such exercise, will be validly
issued as fully paid and non-assessable and no holder of such
Shares is or will be subject to personal liability by reason
of being such a holder.
(xviii)The Shares to be issued as part of the Units have been
duly authorized and, when issued and delivered pursuant to
this Agreement, will be duly and validly issued as fully paid.
(xix) The Shares to be issued as part of the Units, the Shares
to be issued upon conversion of the Debentures, the Shares to
be issued upon exercise of the Warrants, the Shares to be
issued upon the exercise of the Four-Year Warrants and the
Shares to be issued upon exercise of the Broker Warrants have
been duly approved for listing on the Toronto Stock Exchange,
subject to satisfaction of such conditions required by such
stock exchange.
(xx) None of the issuance of the Shares to be issued as part
of the Units, the issuance of Shares issuable upon conversion
of the Debentures, the issuance of Shares issuable upon
exercise of the Warrants, the issuance of Shares issuable upon
exercise of the Four-Year Warrants or the issuance of Shares
issuable upon exercise of the Broker Warrants is subject to
the preemptive or other similar rights of any securityholder
of the Company; except as such rights are granted pursuant to
the Elliott Warrants and except as disclosed in the
Registration Statement and the Prospectus, there is no
outstanding subscription, option, warrant or other right
calling for the issuance of any share in the capital of the
Company or any security convertible into, exercisable for or
exchangeable for any Shares, of which counsel is aware.
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(xxi) The statements (A) in the Prospectus under the caption
"Certain Canadian Federal Income Tax Considerations" and (B)
in the Registration Statement in Item 15, in each case insofar
as such statements constitute summaries of the legal matters,
documents or proceedings referred to therein, are accurate in
all material respects and fairly summarize the matters
referred to therein.
(xxii)The Indenture has been exempted by the Director,
Industry Canada from the application of Part VIII of the
Canada Business Corporations Act and no registration, filing
or recording of the Indenture under the laws of Canada or the
Province of British Columbia is necessary in order to preserve
or protect the validity or enforceability of the Indenture or
the Debentures issued thereunder.
(xxiii)To the best of such counsel's knowledge, no order
having the effect of ceasing or suspending the distribution of
the Securities has been issued by any securities commission or
securities regulatory authority in Canada and no proceedings
for that purpose have been instituted or are pending or
contemplated.
(xxiv)The Company has all requisite corporate power to
execute, deliver and perform its obligations under the Escrow
Agreement and, to the extent governed by Canadian law, the
Escrow Agreement has been duly authorized, executed and
delivered by the Company.
5.8 At the time of the execution of this Agreement and on the
Closing Date, the Agent shall have received from PricewaterhouseCoopers
LLP one or more letters dated such date, in form and substance
satisfactory to the Agent containing statements and information of the
type ordinarily included in accountant's "comfort letters" to underwriters
with respect to the financial statements and certain financial information
contained in the Registration Statement and the Prospectus.
6. Indemnification.
6.1 Indemnification of Agent. The Company agrees to indemnify
and hold harmless the Agent and each person, if any, who controls the
Agent within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any
untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement
(or any amendment thereto) or the omission or alleged
omission therefrom of a material fact
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required to be stated therein or necessary to make the
statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a
material fact included in the Preliminary Prospectus
(and not corrected in the Prospectus) or the Prospectus
(or any amendment or supplement thereto), or the
omission or alleged omission therefrom of a material
fact necessary in order to make the statements therein,
in the light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation,
or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or
omission; provided that (subject to Section 7.4 below)
any such settlement is effected with the written consent
of the Company; and
(iii) against any and all expense whatsoever, as incurred
(including the fees and disbursements of counsel chosen
by the Agent), reasonably incurred in investigating,
preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim
whatsoever based upon any such untrue statement or
omission, or any such alleged untrue statement or
omission, to the extent that any such expense is not
paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any
loss, liability, claim, damage or expense to the extent arising out of any
untrue statement or omission or alleged untrue statement or omission made
in reliance upon and in conformity with written information furnished to
the Company by the Agent expressly for use in the Registration Statement
(or any amendment thereto) or the Preliminary Prospectus or the Prospectus
(or any amendment or supplement thereto).
6.2. Indemnification of Company, Directors and Officers. The
Agent agrees to indemnify and hold harmless the Company, its directors,
each of its officers who signed the Registration Statement or the
Prospectus, and each person, if any, who controls the Company within the
meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act
against any and all loss, liability, claim, damage and expense described
in the indemnity contained in Section 7.1 above, as incurred, but only
with respect to untrue statements or omissions, or alleged untrue
statements or
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omissions, made in the Registration Statement (or any amendment thereto)
or the Preliminary Prospectus or the Prospectus (or any amendment or
supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Agent expressly for use in the
Registration Statement (or any amendment thereto) or such Preliminary
Prospectus or Prospectus (or any amendment or supplement thereto).
6.3. Actions against Parties; Notification. Each indemnified
party shall give notice as promptly as reasonably practicable to each
indemnifying party of any action commenced against it in respect of which
indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any
liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability
which it may have otherwise than on account of this indemnity agreement.
In the case of parties indemnified pursuant to Section 7.1 above, counsel
to the indemnified parties shall be selected by the Agent, and, in the
case of parties indemnified pursuant to Section 7.2 above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying
party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall
not (except with the consent of the indemnified party) also be counsel to
the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any
local counsel) separate from their own counsel for all indemnified parties
in connection with any one action or separate but similar or related
actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any litigation, or
any investigation or proceeding by any governmental agency or body,
commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 7 or
Section 8 hereof (whether or not the indemnified parties are actual or
potential parties thereto), unless such settlement, compromise or consent
(i) includes an unconditional release of each indemnified party from all
liability arising out of such litigation, investigation, proceeding or
claim and (ii) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified
party.
6.4. Settlement without Consent if Failure to Reimburse. If at
any time an indemnified party shall have requested an indemnifying party
to reimburse the indemnified party for fees and expenses of counsel, such
indemnifying party agrees that it shall be liable for any settlement of
the nature contemplated by Section 7.1(ii) effected without its written
consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into
and (iii) such indemnifying party shall
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not have reimbursed such indemnified party in accordance with such request
prior to the date of such settlement.
7. Contribution. If the indemnification provided for in Section 7
hereof is for any reason unavailable to or insufficient to hold harmless an
indemnified party in respect of any losses, liabilities, claims, damages or
expenses referred to therein, then each indemnifying party shall contribute to
the aggregate amount of such losses, liabilities, claims, damages and expenses
incurred by such indemnified party, as incurred, (i) in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and the Agent on the other hand from the offering of the Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Agent on the other hand
in connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand
and the Agent on the other hand in connection with the offering of the
Securities pursuant to this Agreement shall be deemed to be in the same
respective proportions as the total net proceeds from the offering of the
Securities pursuant to this Agreement (before deducting expenses) received by
the Company and the total fees received by the Agent bear to the aggregate
initial public offering price of the Securities as set forth on such cover.
The relative fault of the Company on the one hand and the
Agent on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Agent and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Agent agree that it would not be just and
equitable if contribution pursuant to this Section were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
Notwithstanding the provisions of this Section, the Agent
shall not be required to contribute any amount in excess of the amount by which
the total price at which
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<PAGE>
the Securities placed by it and distributed to the public were offered to the
public exceeds the amount of any damages which the Agent would have otherwise
been required to pay by reason of any such untrue or alleged untrue statement or
omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
For purposes of this Section, each person, if any, who
controls the Agent within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Agent, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company.
8. Termination of Agreement.
8.1 The Agent may terminate this Agreement, by notice to the
Company, at any time at or prior to Closing Date (i) if there has been,
since the time of execution of this Agreement or since the respective
dates as of which information is given in the Prospectus, any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company and its
subsidiaries considered as one enterprise, whether or not arising in the
ordinary course of business, or (ii) if there has occurred any material
adverse change in the financial markets in the United States or the
international financial markets, any outbreak of hostilities or escalation
thereof or other calamity or crisis or any change or development involving
a prospective change in national or international political, financial or
economic conditions, in each case the effect of which is such as to make
it, in the judgment of the Agent, impracticable to market the Securities
or to enforce contracts for the sale of the Securities, or (iii) if
trading in any securities of the Company has been suspended or materially
limited by the SEC, the American Stock Exchange or the Toronto Stock
Exchange, or if trading generally on the American Stock Exchange, the New
York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been
fixed, or maximum ranges for prices have been required, by any of said
exchanges or by such system or by order of the SEC, the NASD or any other
governmental authority, or (iv) if a banking moratorium has been declared
by either Federal or New York authorities.
8.2 If this Agreement is terminated pursuant to this Section,
such termination shall be without liability of any party to any other
party except as provided in Section 11 hereof, and provided further that
Sections 4, 7 and 8 shall survive such termination and remain in full
force and effect.
26
<PAGE>
9. Closing. The Offering will be completed on the Closing Date at
the offices of the Company's counsel in the City of New York or such other
place, date or time as may be mutually agreed to; provided that if the Company
has not been able to comply with any of the covenants or conditions set out
herein required to be complied with by the Closing Date or such other date and
time as may be mutually agreed to, the respective obligations of the parties
will terminate without further liability or obligation except for payment of
expenses, indemnity and contribution provided for in this Agreement.
9.1 At the Closing Date, the Company shall deliver to the
Agent:
(i) the requisite legal opinions, certificates and
undertakings as contemplated above;
(ii) the Broker Warrants; and
(iii) such further documentation as may be contemplated herein
or as counsel to the Agent or the applicable regulatory
authorities may reasonably require.
9.2 At the Closing Date, the Company shall deliver to the
Escrow Agent certificates duly registered as the Investors may direct
representing the Securities being purchased at the closing.
9.3 At the Closing Date, the Agent shall deliver the Escrow
Amount to the Escrow Agent.
9.4 At the Closing Date, the Agent shall deliver to the
Company a certified check in an amount equal to the amount by which 50% of
the gross proceeds of the Offering exceeds the sum of (x) the Agent's Fee
and (y) the Agent's reasonable estimate of the expenses payable by the
Company to the Agent pursuant to Section 11 below.
9.5 All terms and conditions of this Agreement shall be
construed as conditions and any breach or failure to comply with any such
terms and conditions shall entitle the Agent to terminate its obligations
under this Agreement by written notice to that effect given to the Company
prior to the Closing Date. It is understood that the Agent may waive in
whole or in part, or extend the time for compliance with, any of such
terms and conditions on behalf of itself and the Investors without
prejudice to its rights in respect of any such terms and conditions or any
other subsequent breach or non-compliance, provided that to be binding on
the Agent and the Investors, any such waiver or extension must be in
writing.
27
<PAGE>
10. Expenses. All expenses reasonably incurred from time to time in
connection with the Offering (including 50% of the reasonable fees and
disbursements of the Agent's counsel, and all of the Agent's reasonable
out-of-pocket expenses) of or incidental to the sale, issue or distribution of
the Securities, the qualification for distribution of the Securities and to all
matters in connection with the transactions herein set forth shall be borne by
the Company (whether or not the Offering is completed). The Company covenants
and agrees to fully reimburse the Agent from time to time for all such expenses
immediately upon the receipt of one or more invoices.
11. General Contract Provisions. Any notice or other communication
to be given hereunder shall be in writing and shall be given by delivery or by
telecopier, as follows:
if to the Company:
Suite 3000
1660 Lincoln Street
Denver, Colorado 80264
Attention: Mr. Jim Askew
Telecopier: (303) 894-4613
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Edwin S. Maynard, Esq.
Telecopier: (212) 757-3990
with a copy to:
Koffman, Kalef
Barristers and Solicitors
885 West Georgia Street, 19th Floor
Vancouver, British Columbia, V6C 3H4
Attention: Bernard Poznanski, Esq.
Telecopier: (604) 891-3788
or if to the Agent:
28
<PAGE>
TD Securities (USA) Inc.
c/o TD Securities Inc.
55 King Street West, 8th Floor
Toronto Dominion Bank Tower
Toronto-Dominion Centre
Toronto, Ontario M5K 1A2
Attention: Greg McKnight
Telecopier: (416) 983-3176
with a copy to:
Shearman & Sterling
Commerce Court West
Suite 4405, 199 Bay Street
P.O. Box 247
Toronto, Ontario M5L 1E8
Attention: Brice T. Voran, Esq.
Telecopier: (416) 360-2958
and, if so given, shall be deemed to have been given and received upon receipt
by the addressee or a responsible officer of the addressee if delivered, or four
hours after being telecopied and receipt confirmed during normal business hours
at the location of the recipient, as the case may be. Any party may, at any
time, give notice in writing to the others in the manner provided for above of
any change of address or telecopier number.
This Agreement and the other documents herein referred to constitute
the entire Agreement between the Agent and the Company relating to the subject
matter hereof and supersede all prior agreements between the Agent and the
Company with respect to their respective rights and obligations in respect of
the Offering.
This Agreement may be executed by telecopier and in one or more
counterparts which, together, shall constitute an original copy hereof as of the
date first noted above.
12. Applicable Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York without regard
to principles of conflicts of laws.
13. Currency. Unless otherwise stated, all sums of money referred to
in this Agreement are expressed in United States dollars.
29
<PAGE>
The Company hereby submits to the nonexclusive jurisdiction of the
Federal and State courts in the Borough of Manhattan in the City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
30
<PAGE>
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
Please confirm that the foregoing correctly sets forth the agreement
among us.
Yours very truly,
GOLDEN STAR RESOURCES LTD.
Per: /s/ Louis O. Peloquin
---------------------
Authorized Signing Officer
TD SECURITIES (USA) INC.
Per: /s/ Mario da Ponte
------------------
Authorized Signing Officer
31
Registration Rights Agreement
Dated as of August 24, 1999
among
Golden Star Resources Ltd.
and
TD Securities (USA) Inc.
<PAGE>
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (the "Agreement") is made and entered
into on August 24, 1999 among GOLDEN STAR RESOURCES LTD., a Canadian corporation
(the "Company"), and TD SECURITIES (USA) INC. (the "Agent").
WHEREAS, pursuant to an agency agreement dated August 16, 1999 between the
Company and the Agent (the "Agency Agreement"), the Company has issued and sold
$ 4,155,000 aggregate principal amount of subordinate convertible debentures of
the Company and 6,923,000 equity units (the "Units") consisting of the Company's
common shares (the "Common Shares") and warrants (the "Warrants") to selected
institutional investors. Each Unit consists of one Common Share and one-half
Warrant. Each whole Warrant entitles the holder thereof upon exercise to one
Common Share. Certain terms used herein but not defined herein shall have the
meanings ascribed to them in the Agency Agreement;
WHEREAS, as an inducement to the Agent, the Company has agreed that on the
Closing Date (as defined in the Agency Agreement) it will issue to the Agent
380,825 Broker Warrants (as defined below) exercisable by the Agent for 12
months from the Closing Date at a price of $0.70 per Common Share, and has
agreed further that upon completion of the Bogoso Acquisition (as defined
below), the Company shall issue to the Agent a further 380,825 Broker Warrants
exercisable by the Agent for 12 months from the Closing Date at a price of $0.70
per Common Share; and
WHEREAS, the Broker Warrants provide that the Agent shall have certain
registration rights pursuant to this Agreement.
NOW, THEREFORE, in consideration of the foregoing, the parties hereto agree as
follows:
1. Definitions. As used in this Agreement, the following capitalized
defined terms shall have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended from
time to time, and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder.
"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time, and the rules and regulations of the Securities
and Exchange Commission promulgated thereunder.
<PAGE>
2
"Affiliate" of a Person shall mean a Person who controls, is
controlled by or is under common control with such Person or, the spouse
or children (or a trust exclusively for the benefit of a spouse and/or
children) of such person or, in the case of a Holder which is a
partnership, its partners.
"Agency Agreement" shall have the meaning set forth in the preamble
of this Agreement.
"Agent" shall have the meaning set forth in the preamble of this
Agreement.
"Bogoso Acquisition" shall mean the purchase by the Company of a
direct or indirect 100% interest in the common shares and indebtedness of
Bogoso Gold Limited, a Ghanaian company.
"Bogoso Acquisition Date" shall mean the date of the completion of
the Bogoso Acqusition.
"Broker Warrants" shall mean collectively the 380,825 Broker
Warrants to be issued to the Agent on the Closing Date (the "Tranche 1
Broker Warrants") and the 380,825 Broker Warrants to be issued to the
Agent on the closing of the Bogoso Acquisition (the "Tranche 2 Broker
Warrants"). Each Broker Warrant is convertible into Common Shares of the
Company at an exercise price of $0.70 per Common Share.
"Closing Date" shall mean the Closing Date as defined in the Agency
Agreement.
"Common Shares" shall have the meaning set forth in the preamble of
this Agreement.
"Company" shall have the meaning set forth in the preamble of this
Agreement and also includes the Company's successors.
"Elliott Registration Rights Agreement" shall mean the registration
rights agreement entered into as of June 9, 1999 between the Company and
Elliott Associates, L.P. and Westgate International, L.P. relating to the
issuance to Elliott Associates, L.P. and Westgate International, L.P. of
warrants to purchase Common Shares.
"Elliott Registration Rights Piggyback" shall have the meaning set
forth in Section 2 of this Agreement.
<PAGE>
3
"Person" shall mean an individual, partnership, corporation, limited
liability company, trust or unincorporated organization, or a government
or agency or political subdivision thereof.
"Prospectus" shall mean the prospectus included in a Registration
Statement or a Shelf Registration Statement, as the case may be, including
any preliminary prospectus, and any such prospectus as amended or
supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by
all other amendments and supplements to a prospectus, including
post-effective amendments, and in each case including all material
incorporated by reference therein.
"Registrable Securities" shall mean the Common Shares issuable or
issued to the Agent or its permitted transferee or designee upon exercise
of the Broker Warrants, or upon any stock split, stock dividend,
recapitalization or similar event with respect to such Common Shares. For
clarification purposes, "Registrable Securities" includes without
limitation the Common Shares to be issued upon exercise of the 380,825
Broker Warrants to be issued to the Agent on the Closing Date and 380,825
Broker Warrants to be issued to the Agent on the Bogoso Acquisition Date.
"Registration Expenses" shall mean all expenses to be incurred by
the Company in connection with the Agent's registration rights under this
Agreement, including, without limitation, all registration and filing
fees, printing expenses, fees and disbursements of counsel for the
Company, blue sky fees and expenses, reasonable fees and disbursements of
counsel to the Agent (using one United States counsel and, to the extent
necessary, one Canadian counsel, each selected by the Agent) for a
reasonable and customary "due diligence" examination of the Company and
review of the Shelf Registration Statement and related documents, and the
expense of any special audits incident to or required by any such
registration (but excluding the compensation of regular employees of the
Company which shall be paid in any event by the Company).
"Registration Rights Piggyback" shall have the meaning set forth in
Section 3 of this Agreement.
"Registration Statement" shall have the meaning set forth in Section
6 of this Agreement.
"Rule 144" shall mean Rule 144 promulgated under the 1933 Act, or
any successor rule to similar effect.
<PAGE>
4
"Rule 144A" shall mean Rule 144A promulgated under the 1933 Act, or
any successor rule to similar effect.
"SEC" shall mean the Securities and Exchange Commission.
"Shelf Registration" shall have the meaning set forth in Section 8
of this Agreement.
"Shelf Registration Statement" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 8 of this
Agreement which covers all of the Registrable Securities on an appropriate
form under Rule 415 under the 1933 Act, or any similar rule that may be
adopted by the SEC, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Units" shall have the meaning set forth in the preamble to this
Agreement.
"Warrants" shall have the meaning set forth in the preamble to this
Agreement.
2. Piggyback Registration Rights Relating to Elliott Registration
Rights Agreement. If the Company proposes to file a registration statement with
the SEC pursuant to the provisions of the Elliott Registration Rights Agreement,
the Company shall give written notice thereof to the Agent at least 21 days
prior to the initial filing of such registration statement with the SEC. The
Agent shall then have the right, promptly after delivery of the Company's
notice, to request in writing that the Company include all or a portion of the
Agent's Registrable Securities (including, for clarification purposes,
Registrable Securities issuable upon exercise of the Tranche 1 Broker Warrants
and/or, if issued, the Tranche 2 Broker Warrants) in such registration
statement. The Company shall include in the registration all of the Registrable
Securities that the Agent has requested be included. Such event is referred to
herein as the "Elliott Registration Rights Piggyback".
3. Piggyback Registration Rights. If the Company proposes to file a
registration statement with the SEC relating to a registration of any of the
Company's Common Shares and for any reason the Elliott Registration Rights
Piggyback is unavailable to the Agent, the Company shall give written notice
thereof to the Agent at least 30 days prior to the initial filing of such
registration statement with the SEC. The Agent shall have the right, promptly
after delivery of the Company's notice, to request in writing that the Company
include all or a portion of the Registrable Securities (including, for
clarification purposes, Registrable Securities issuable upon exercise of either
the Tranche 1 Broker Warrants or, if issued, the Tranche 2 Broker Warrants) in
such registration statement. The Company shall
<PAGE>
5
include in the registration all of the Registrable Securities that the Agent has
requested be included. Such event is referred to herein as the "Registration
Rights Piggyback".
4. Restrictive Legend. Each certificate representing the Broker
Warrants or Registrable Securities shall, except as otherwise provided in this
Section 4 or in Section 5, be stamped or otherwise imprinted with a legend
substantially in the following form:
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933 OR ANY STATE SECURITIES LAWS AND NEITHER THIS SECURITY OR ANY
INTEREST THEREIN MAY BE TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS
IT HAS BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR STATE
SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT AND
SUCH LAWS IS AVAILABLE."
A certificate shall not bear such legend if in the opinion of counsel
satisfactory to the Company (it being agreed that Paul, Weiss, Rifkind, Wharton
& Garrison shall be satisfactory) the securities being sold thereby may be
publicly sold without registration under Rule 144 or otherwise.
5. Notice of Proposed Transfer. Prior to any proposed transfer of
any Broker Warrant or Registrable Securities (other than under the circumstances
described in Sections 6, 7 or 8), the Agent shall given written notice to the
Company of its intention to effect such transfer. Each such notice shall
describe the manner of the proposed transfer and, if requested by the Company
(at the Company's expense), shall be accompanied by an opinion of counsel
satisfactory to the Company (it being agreed that Paul, Weiss, Rifkind, Wharton
& Garrison shall be satisfactory) to the effect that the proposed transfer may
be effected without registration under the 1933 Act, whereupon the holder of
such Warrant or Shares shall be entitled to transfer such Warrant or Shares in
accordance with the terms of its notice; provided, however, that no such opinion
of counsel shall be required for a transfer to one or more partners of the
transferor (in the case of a transferor that is a partnership) or to an
Affiliated corporation (in the case of a transferor that is a corporation). Each
certificate for the Broker Warrants or Registrable Securities transferred as
above provided shall bear the legend set forth in Section 4, except that such
certificate shall not bear such legend if (i) such transfer is in accordance
with the provisions of Rule 144 (or any other rule permitting public sale
without registration under the 1933 Act) or (ii) the opinion of counsel referred
to above is to the further effect that the transferee and any subsequent
transferee (other than an Affiliate of the Company) would be entitled to
transfer such securities in a public sale without registration under the 1933
Act. The restrictions provided for in this Section 5 shall not apply to
securities
<PAGE>
6
which are not required to bear the legend prescribed by Section 4 in accordance
with the provisions of that Section.
6. Request for Registration. This Section 6 shall apply if
registration rights are unavailable to the Agent under Section 2 or Section 3 of
this Agreement for any reason.
(a) Promptly after the Agent is informed of the unavailability of
both the Elliott Registration Rights Piggyback and the Registration Rights
Piggyback, the Agent may request in a written notice that the Company file
a registration statement under the 1933 Act (or a similar document
pursuant to any other statute then in effect corresponding to the 1933
Act) covering the registration of any or all Registrable Securities held
by the Agent in the manner and for the number of Registrable Securities
specified in such notice (a "Registration Statement"). Following receipt
of any notice under this Section 6, and subject to Section 6(b), the
Company shall use its reasonable best efforts to cause to be registered
under the 1933 Act all Registrable Securities that the Agent has, within
thirty (30) days after the Company has received such notice, requested be
registered in accordance with the manner of disposition specified in such
notice by the Agent.
(b) If the Agent intends to have the Registrable Securities
distributed by means of an underwritten offering, the right of the Agent
to include its Registrable Securities in such registration shall be
conditioned upon the Agent's participation in such underwritten offering
and the inclusion of the Agent's Registrable Securities in the
underwritten offering to the extent provided below. If the Agent proposes
to distribute Registrable Securities through such underwritten offering,
it shall enter into an underwriting agreement in customary form with the
underwriter or underwriters. Such underwriter or underwriters shall be
selected by the Agent and shall be approved by the Company, which approval
shall not be unreasonably withheld, provided, (i) that all of the
representations and warranties by, and the other agreements on the part
of, the Company to and for the benefit of such underwriters shall also be
made to and for the benefit of the Agent, (ii) that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement shall be conditions precedent to the obligations of
the Agent, and (iii) that the Agent shall not be required to make any
representations or warranties to or agreements with the Company or the
underwriters other than representations, warranties or agreements
regarding the Agent, the Registrable Securities of the Agent and intended
method of distribution and any other representations required by law or
reasonably required by the underwriters. If the Agent disapproves of the
terms of the underwriting, the Agent may elect to withdraw all its
Registrable Securities by written notice to the Company and the managing
underwriter. The securities so withdrawn shall also be withdrawn from
registration.
<PAGE>
7
(c) Notwithstanding any provision of this Agreement to the contrary,
the Company shall not be required to effect a registration pursuant to
this Section 6 during the period starting with the date of filing by the
Company of, and ending on a date one hundred twenty (120) days following
the effective date of, a Registration Statement pertaining to a public
offering of securities for the account of the Company or on behalf of the
selling stockholders under any other registration rights agreement which
the holders have been entitled to join pursuant to Section 7; provided,
that the Company shall actively employ in good faith all reasonable
efforts to cause such Registration Statement to become effective as soon
as is practicable.
(d) The Company shall not be obligated to effect and pay for more
than one (1) registrations pursuant to this Section 6; provided, that a
registration requested pursuant to this Section 6 shall not be deemed to
have been effected for purposes of this Section 6(d) unless (i) it has
been declared effective by the SEC, (ii) it has remained effective for the
period set forth in Section 12(a), (iii) the Agent has not withdrawn
sufficient shares from such registration such that the remaining holders
requesting registration would not have been able to request registration
under the provisions of Section 6 and (iv) the offering of Registrable
Securities pursuant to such registration is not subject to any stop order,
injunction or other order or requirement of the SEC (other than any such
stop order, injunction, or other requirement of the SEC prompted by any
act or omission of the Agent).
7. Incidental Registration. If at any time the Company determines
that it shall file a Registration Statement under the 1933 Act (other than a
registration statement on a Form S-4 or S-8 or filed in connection with an
exchange offer or an offering of securities solely to the Company's existing
stockholders) on any form that would also permit the registration of the
Registrable Securities and such filing is to be on its behalf and/or on behalf
of selling holders of its securities for the general registration of its common
shares to be sold for cash, the Company shall each such time promptly give the
Agent written notice of such determination setting forth the date on which the
Company proposes to file such registration statement, which date shall be no
earlier than forty-five (45) days from the date of such notice, and advising the
Agent of its right to have Registrable Securities included in such registration,
provided that the Company shall not be required under this Section 7 to include
Registrable Securities in such underwritten offering unless the Agent accepts
the terms of the underwriting of such offering that have been reasonably agreed
upon between the Company and the underwriters selected by the Company. Upon the
written request of the Agent received by the Company no later than thirty (30)
days after the date of the Company's notice, the Company shall use its
reasonable best efforts to cause to be registered under the 1933 Act all of the
Registrable Securities that the Agent has so requested to be registered.
<PAGE>
8
8. Shelf Registration. This Section 8 shall apply if registration
rights are unavailable to the Agent under Section 2 or Section 3 of this
Agreement for any reason. As promptly as practicable after the Agent is informed
of the unavailability of both the Elliott Registration Rights Piggyback and the
Registration Rights Piggyback, upon written request of the Agent given within 15
days of it being so informed, the Company shall file with the SEC a Shelf
Registration Statement pursuant to Rule 415 under the 1933 Act on Form S-3 (the
"Shelf Registration") relating to the offer and sale of the Registrable
Securities by the Company from time to time in accordance with the methods of
distribution to be decided by the Company and the Agent and set forth in such
Shelf Registration Statement, and use its reasonable best efforts to cause such
Shelf Registration Statement to be declared effective by the SEC within 210 days
after the Closing Date.
The Company further agrees, if necessary, to supplement or amend the
Shelf Registration Statement if reasonably requested by the Agent with respect
to information relating to the Company and otherwise as required by Section
12(b) below, to use reasonable efforts to cause any such amendment to become
effective and such Shelf Registration Statement to become usable as soon as
thereafter practicable and to furnish to the Agent copies of any such supplement
or amendment promptly after its being used or filed with the SEC.
9. Expenses of Registration. All expenses incurred in connection
with each registration pursuant to Section 2, Section 3, Section 6, Section 7
and Section 8 of this Agreement, excluding underwriters' discounts and
commissions, but including without limitation all registration, filing and
qualification fees, word processing, duplicating, printers' and accounting fees
(including the expenses of any special audits or "cold comfort" letters required
by or incident to such performance and compliance), fees of the National
Association of Securities Dealers, Inc. or listing fees, messenger and delivery
expenses, all fees and expenses of complying with state securities or blue sky
laws, fees and disbursements of counsel for the Company, and the fees and
disbursements of one counsel for the Agent, shall be paid by the Company;
provided, however, that if a registration request pursuant to Section 6 of this
Agreement is subsequently withdrawn at the request of the Agent, the Agent shall
bear such expenses unless such Agent shall forfeit its right to one requested
registration pursuant to Section 6 of this Agreement and provided, further, that
if a registration request pursuant to Section 8 of this Agreement is
subsequently withdrawn at the request of the Agent, the Company shall not be
required to pay any expenses of such registration proceeding, and the Agent
shall bear such expenses. The Agent shall bear and pay the underwriting
commissions and discounts applicable to securities offered for their account in
connection with any registrations, filings and qualifications made pursuant to
this Agreement.
10. Effective Registration Statement. The Company will be deemed not
to have used their reasonable best efforts to cause the Registration Statement,
or Shelf Registration Statement, as the case may be, to become, or to remain,
effective during the
<PAGE>
9
requisite period if it voluntarily takes any action that would result in the
Registration Statement, or Shelf Registration Statement, as the case may be, not
being declared effective or in the Agent not being able to exchange or offer and
sell such Registrable Securities during that period unless (i) such action is
required by applicable law or (ii) such action is taken by the Company in good
faith and for valid business reasons (not including avoidance of the Company's
obligations hereunder), including the acquisition or divestiture of assets, so
long as the Company promptly complies with the requirements of Section 12(f)
hereof, if applicable.
11. Specific Enforcement. Without limiting the remedies available to
the Agent, the Company acknowledges that any failure by it to comply with its
obligations under Sections 2, 3, 6 and 7 hereof may result in material
irreparable injury to the Agent for which there is no adequate remedy at law,
that it will not be possible to measure damages for such and that, in the event
of any such failure, the Agent may obtain such relief as may be required to
specifically enforce the Company's obligations under Sections 2, 3, 6 and 7
hereof.
12. Obligations of the Company. Whenever required under Section 6 or
Section 8 to use its reasonable best efforts to effect the registration of any
Registrable Securities, the Company shall, subject to the provisions of such
sections, as expeditiously as possible:
(a) Prepare and file with the SEC a Registration Statement, or Shelf
Registration Statement, as the case may be, with respect to such
Registrable Securities and use its reasonable best efforts to cause such
Registration Statement, or Shelf Registration Statement, as the case may
be, to become and remain effective for the period of the distribution
contemplated thereby determined as provided hereafter.
(b) Prepare and file with the SEC such amendments and supplements to
such Registration Statement, or Shelf Registration Statement, as the case
may be, and the prospectus used in connection therewith as may be
necessary to comply with the provisions of the 1933 Act with respect to
the disposition of all Registrable Securities covered by such registration
statement, or Shelf Registration Statement, as the case may be.
(c) Furnish to the Agent such numbers of copies of the Registration
Statement, or Shelf Registration Statement, as the case may be, and the
prospectus included therein (including each preliminary prospectus and any
amendments or supplements thereto) in conformity with the requirements of
the 1933 Act and such other documents and information as they may
reasonably request.
(d) Use its reasonable best efforts to register or qualify the
Registrable Securities covered by such Registration Statement, or Shelf
Registration Statement, as
<PAGE>
10
the case may be, under such other securities or blue sky laws of such
jurisdiction within the United States as shall be reasonably appropriate
for the distribution of the Registrable Securities covered by the
Registration Statement, or Shelf Registration Statement, as the case may
be; provided, however, that the Company shall not be required in
connection therewith or as a condition thereto to qualify to do business
in or to file a general consent to service of process in any jurisdiction,
or subject itself to taxation in any such jurisdiction, or subject itself
to taxation in any such jurisdiction wherein it would not but for the
requirements of this paragraph (d) be obligated to do so; and provided,
further, that the Company shall not be required to qualify such
Registrable Securities in any jurisdiction in which the securities
regulatory authority requires that the Agent submit any of its Registrable
Securities to the terms, provisions and restrictions of any escrow, lockup
or similar agreement(s) for consent to sell Registrable Securities in such
jurisdiction unless the Agent agrees to do so.
(e) Promptly notify the Agent, at any time when a prospectus is
required to be delivered under the 1933 Act, of the happening of any event
as a result of which the prospectus included in such Registration
Statement, or Shelf Registration Statement, as the case may be, as then in
effect, includes an untrue statement of a material fact or omits to state
any material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances under
which they were made, and at the request of the Agent promptly prepare and
furnish to the Agent a reasonable number of copies of a supplement to or
an amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were
made.
(f) Furnish, at the request of the Agent requesting registration of
Registrable Securities pursuant to Section 6 or Section 8, if the method
of distribution is by means of an underwriting, on the date that the
shares of Registrable Securities are delivered to the underwriters for
sale pursuant to such registration, or if such Registrable Securities are
not being sold through underwriters, on the date that the registration
statement with respect to such shares of Registrable Securities becomes
effective, (1) a signed opinion, dated such date, of the independent legal
counsel representing the Company for the purpose of such registration,
addressed to the underwriters, if any, and if such Registrable Securities
are not being sold through underwriters, then to the Agent, as to such
matters as such underwriters or the Agent, as the case may be, may
reasonably request and as would be customary in such a transaction; and
(2) if such sale is pursuant to an underwritten offering, letters dated
such date and the date the offering is priced from the independent
certified public accountants of the Company, addressed to the
underwriters, if any and, if such
<PAGE>
11
accountants refuse to deliver such letters to the Agent, then to the
Company (i) stating that they are independent certified public accountants
within the meaning of the 1933 Act and that, in the opinion of such
accountants, the financial statements and other financial data of the
Company included in the registration statement or the prospectus, or any
amendment or supplement thereto, comply as to form in all material
respects with the applicable accounting requirements of the 1933 Act and
(ii) covering such other financial matters (including information as to
the period ending not more than five (5) business days prior to the date
of such letters) with respect to the registration in respect of which such
letter is being given as such underwriters or the Agent, as the case may
be, may reasonably request and as would be customary in such a
transaction.
(g) Enter into customary agreements (including if the method of
distribution is by means of an underwriting, an underwriting agreement in
customary form) and take such other actions as are reasonably required in
order to expedite or facilitate the disposition of the Registrable
Securities to be so included in the registration statement.
(h) Otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the SEC, and make available to its
security holders, as soon as reasonably practicable, but not later than
eighteen (18) months after the effective date of the registration
statement, an earnings statement covering the period of at least twelve
(12) months beginning with the first full month after the effective date
of such registration statement, which earnings statements shall satisfy
the provisions of Section 11(a) of the 1933 Act.
For purposes of Sections 12(a) and 12(b), the period of distribution of
Registrable Securities in a firm commitment underwritten public offering shall
be deemed to extend until each underwriter has completed the distribution of all
securities purchased by it, and the period of distribution of Registrable
Securities in any other registration shall be deemed to extend until the earlier
of the sale of all Registrable Securities covered thereby and 150 days after the
effective date thereof.
13. Underwriting Requirements. In connection with any underwritten
offering, the Company shall not be required under Section 7 to include
Registrable Securities in such underwritten offering unless the Agent accepts
the terms of the underwriting of such offering that have been reasonably agreed
upon between the Company and the underwriters selected by the Company.
14. Indemnification and Contribution. (a) The Company shall
indemnify and hold harmless the Agent, its respective affiliates, and its
respective directors, officers, employees and agents, and each Person, if any,
who controls any of such parties within the meaning of Section 15 of the 1933
Act or Section 20 of the 1934 Act as follows:
<PAGE>
12
(i) Against any and all losses, liabilities, claims, damages and
expenses whatsoever, as incurred, arising out of any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement or Shelf Registration Statement, as the case may be (or any
amendment thereto) pursuant to which Registrable Securities were
registered under the 1933 Act, including all documents incorporated
therein by reference, or the omission or alleged omission therefrom of a
material fact required to be stated therein or necessary to make the
statements therein not misleading or arising out of any untrue statement
or alleged untrue statement of a material fact contained in any Prospectus
(or any amendment or supplement thereto) or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading.
(ii) Against any and all losses, liabilities, claims, damages and
expenses whatsoever, as incurred, to the extent of the aggregate amount
paid in settlement of any litigation, or investigation or proceeding by
any governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject to Section
14(d) below) any such settlement is effected with the written consent of
the Company.
(iii) Against any and all expenses whatsoever, as incurred
(including reasonable fees and disbursements of counsel chosen by an
indemnified party), reasonably incurred in investigating, preparing or
defending against any litigation, or investigation or proceeding by any
court or governmental agency or body, commenced or threatened, or any
claim whatsoever based upon any such untrue statement or omission, or any
such alleged untrue statement or omission, to the extent that any such
expense is not paid under subparagraph (i) or (ii) of this Section 14(a).
provided, however, that (i) this indemnity shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Agent, expressly for use in the Registration Statement, or Shelf Registration
Statement, as the case may be (or any amendment thereto) or any preliminary
prospectus or the Prospectus (or any amendment or supplement thereto) and (ii)
the Company shall not be liable to any indemnified party under this indemnity
agreement with respect to the Registration Statement, or Shelf Registration
Statement, as the case may be, or Prospectus to the extent that any such loss,
claim, damage, liability or expense of such indemnified party results solely
from an untrue statement of a material fact contained in, or the omission of a
material fact from, the Registration Statement, or Shelf Registration Statement,
as the case may be, or Prospectus which untrue statement or omission was
corrected in an
<PAGE>
13
amended or supplemented Registration Statement, or Shelf Registration Statement,
as the case may be or Prospectus, if the person alleging such loss, claim,
damage, liability or expense was not sent or given, at or prior to the written
confirmation of such sale, a copy of the amended or supplemented Registration
Statement, or Shelf Registration Statement, as the case may be, or Prospectus if
the Company had previously furnished copies thereof to such indemnified party
and if delivery of a prospectus is required by the 1933 Act and was not so made.
This indemnity agreement will be in addition to any liability which the Company
may otherwise have.
(b) In connection with any Registration Statement or Shelf
Registration Statement (or amendments thereto) in which the Agent is
participating, the Agent shall promptly furnish to the Company in writing such
information with respect to the Agent as the Company may reasonably request or
as may be required by law for use in connection with any such Registration
Statement or Shelf Registration Statement and all information required to be
disclosed in order to make any information with respect to the Agent previously
furnished to the Company by the Agent not materially misleading or necessary to
cause such Registration Statement or Shelf Registration Statement not to omit a
material fact with respect to the Agent necessary in order to make the
statements therein not misleading. The Agent agrees to indemnify and hold
harmless the Company, its respective affiliates and its respective directors,
officers (including each officer of the Company who signed the Registration
Statement, or Shelf Registration Statement, as the case may be), agents,
representatives, employees and each Person, if any, who controls the Company
within the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act,
against any and all losses, liabilities, claims, damages and expenses described
in the indemnity contained in Section 14(a) hereof, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in the Registration Statement, or Shelf Registration Statement,
as the case may be, (or any amendment thereto) or the Prospectus (or any
amendment or supplement thereto) in reliance upon and in conformity with written
information furnished to the Company by the Agent, as the case may be, expressly
for use in the Registration Statement, or Shelf Registration Statement, as the
case may be (or any amendment thereto), or the Prospectus (or any amendment or
supplement thereto); provided, however, that the Agent shall not be liable for
any claims hereunder in excess of the amount of net proceeds received by the
Agent from the sale of Registrable Securities pursuant to such Registration
Statement, or Shelf Registration Statement, as the case may be.
(c) Each indemnified party shall give notice in writing as promptly
as reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure to
so notify an indemnifying party shall not relieve such indemnifying party from
any liability hereunder to the extent it is not materially prejudiced as a
result thereof and in any event shall not relieve it from any liability which it
may have otherwise than on account of this indemnity agreement. An
<PAGE>
14
indemnifying party may participate at its own expense in the defense of any such
action; provided, however, that counsel to the indemnifying party shall not
(except with the consent of any indemnified party) also be counsel to the
indemnified party. In no event shall the indemnifying parties be liable for fees
and expenses of more than one counsel, in addition to any local counsel, for all
indemnified parties in connection with any one action or separate but similar or
related actions in the same jurisdiction arising out of the same general
allegations or circumstances. No indemnifying party shall, without the prior
written consent of any indemnified party, settle or compromise or consent to the
entry of any judgment with respect to any litigation, or any investigation or
proceeding by any governmental agency or body, commenced or threatened, or any
claim whatsoever in respect of which indemnification or contribution could be
sought under this Section 14 (whether or not the indemnified parties are actual
or potential parties thereof), unless such settlement, compromise or consent (i)
includes an unconditional release of each indemnified party from all liability
arising out of such litigation, investigation, proceeding or claim and (ii) does
not include a statement as to or an admission of fault, culpability or a failure
to act by or on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 14(a)(ii) hereof effected
without its written consent if (i) such settlement is entered into more than 45
days after receipt by such indemnifying party of the aforesaid request, (ii)
such indemnifying party shall have received notice of the terms of such
settlement at least 30 days prior to such settlement being entered into and
(iii) such indemnifying party shall not have reimbursed such indemnified party
in accordance with such request prior to the date of such settlement.
(e) If the indemnification provided for in any of the indemnity
provisions set forth in this Section 14 is for any reason unavailable to or
insufficient to hold harmless an indemnified party in respect of any losses,
liabilities, claims, damages or expenses referred to therein, then each
indemnifying party shall contribute to the aggregate amount of such losses,
liabilities, claims, damages and expenses incurred by such indemnified party, as
incurred, (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Agent, from the offering of the
Registrable Securities included in such offering or (ii) if the allocation
provided by clause (i) is not permitted by applicable law, in such proportion as
is appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company and the Agent, in
connection with the statements or omissions which resulted in such losses,
liabilities, claims, damages or expenses, as well as any other relevant
equitable considerations. The relative fault of the Company and Agent shall be
determined by reference to, among other things, whether any such untrue or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact relates to information supplied by the Company or the
Agent and the parties' relative intent, knowledge,
<PAGE>
15
access to information and opportunity to correct or prevent such statement or
omission. The Company and the Agent agree that it would not be just and
equitable if contribution pursuant to this Section 14 were determined by pro
rata allocation or by another method of allocation which does not take account
of the equitable considerations referred to above in this Section 14. The
aggregate amount of losses, liabilities, claims, damages and expenses incurred
by an indemnified party and referred to above in this Section 14 shall be deemed
to include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. For purposes of this Section 14, each person, if any, who
controls the Agent within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act shall have the same rights to contribution as the Agent, and
each director of the Company and each officer of the Company who signed the
Registration Statement or Shelf Registration Statement, as the case may be, and
each person, if any, who controls the Company within the meaning of Section 15
of the 1933 Act or Section 20 of the 1934 Act shall have the same rights to
contribution as the Company. The parties hereto agree that any underwriting
discount or commission or reimbursement of fees paid to the Agent pursuant to
the Agency Agreement shall not be deemed to be a benefit received by the Agent
in connection with the offering of the Registrable Securities in such offering.
15. Miscellaneous. (a) Rule 144. For so long as the Company is
subject to the reporting requirements of Section 13 or 15 of the 1934 Act, the
Company covenants that it will file the reports required to be filed by it under
Section 13(a) or 15(d) of the 1934 Act and the rules and regulations adopted by
the SEC thereunder, that if they cease to be so required to file such reports,
they will upon the reasonable request of the Agent (i) make publicly available
such information as is necessary to permit sales pursuant to Rule 144 under the
1933 Act, (ii) deliver such information to a prospective purchaser as is
necessary to permit sales pursuant to Rule 144A under the 1933 Act and (iii)
take such further action that is reasonable in the circumstances, in each case,
to the extent required from time to time to enable the Agent to sell its
Registrable Securities without registration under the 1933 Act within the
limitation of the exemptions provided by (x) Rule 144 under the 1933 Act, as
such Rule may be amended from time to time or (y) any similar rules or
regulations hereafter adopted by the SEC. Upon the reasonable request of the
Agent, the Company will deliver to the Agent a written statement as to whether
they have complied with such requirements.
(b) No Inconsistent Agreements. The Company has not, as of the date
hereof, entered into nor will the Company on or after the date of this Agreement
enter into any agreement which is inconsistent with the rights granted to the
Agent in this Agreement or
<PAGE>
16
otherwise conflicts with the provisions hereof. The rights granted to the Agent
hereunder do not in any way conflict with and are not inconsistent with the
rights granted to the holders of the Company's other issued and outstanding
securities under any such agreements.
(c) Amendments and Waivers. The provisions of this Agreement,
including the provisions of this sentence, may not be amended, modified or
supplemented, and waivers or consents to departures from the provisions hereof
may not be given unless the Company has obtained the written consent of Agent,
which written consent may not be unreasonably withheld; provided, however, that
no amendment, modification, supplement or waiver or consent to any departure
from the provisions of Section 9 hereof shall be effective as against the Agent
unless consented to in writing by the Agent.
(d) Notices. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand-delivery, registered
first-class mail, telex, telecopier, or any courier guaranteeing overnight
delivery:
1. If to the Agent, as follows:
TD Securities (USA) Inc.
c/o TD Securities Inc.
55 King Street West, 8th floor
Toronto Dominion Bank Tower
Toronto - Dominion Centre
Toronto, Ontario M5K 1A2
Attention: Greg McKnight;
Facsimile: (416) 983-3176
with a copy to:
Shearman & Sterling
Commerce Court West
199 Bay Street, Suite 4405
Toronto, Ontario M5L 1E8
Attention: Brice T. Voran;
Facsimile: (416) 360-8484
2. If to the Company, as follows:
Golden Star Resources Ltd.
Suite 3000, 1660 Lincoln Street
Denver, Colorado, 80264
<PAGE>
17
Attention: General Counsel
Facsimile: (303) 830-9094
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Edward S. Maynard, Esq.
Facsimile: (212) 757-3990
All such notices and communications shall be deemed to have been
duly given: at the time delivered by hand, if personally delivered; five
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged, if telecopied; and on the next business day, if
timely delivered to an air courier guaranteeing overnight delivery.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees of each
of the parties hereto.
(f) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(g) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AS APPLIED TO CONTRACTS
MADE AND WHOLLY PERFORMED WHOLLY WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAW. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO
THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR
PROCEEDING ARISING OUR OF OR RELATING TO THIS AGREEMENT.
(i) Severability. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby.
<PAGE>
18
IN WITNESS WHEREOF, the parties have executed this Agreement as of
the date first written above.
GOLDEN STAR RESOURCES LTD.
By: /s/ Louis O. Peloquin
---------------------
Name: Louis O. Peloquin
Title: Vice President, General Counsel
and Secretary
Confirmed and accepted as of
the date first above
written:
TD SECURITIES (USA) INC.
By: /s/ Mario da Ponte
------------------
Name: Mario da Ponte
Title: Vice President and Director
Exhibit 10.3
ESCROW AGREEMENT
ESCROW AGREEMENT dated as of August 24, 1999 (this "Agreement")
AMONG:
GOLDEN STAR RESOURCES LTD. ("Golden Star"), a Canadian corporation
AND
TD SECURITIES (USA) INC. (the "Agent")
AND
INTERNATIONAL FINANCE CORPORATION ("IFC"), as representative of the
sellers named in Schedule B attached hereto (the "Sellers")
AND
IBJ WHITEHALL BANK & TRUST COMPANY (the "Escrow Agent")
WHEREAS:
A. Golden Star and the Agent entered into an Agency Agreement dated August
16, 1999 (the "Agency Agreement"; terms defined in the Agency Agreement
and not otherwise defined herein having the meanings ascribed to them
in the Agency Agreement), pursuant to which the Agent agreed to act as
Golden Star's exclusive Agent, on a best efforts basis, in connection
with the issuance and sale by Golden Star of the Securities (the
"Offering");
B. The gross proceeds of the Offering to Golden Star are U.S.$7,616,500
(the "Gross Proceeds"), such Gross Proceeds representing the sum of the
proportionate amounts paid by separate investors purchasing the
Securities (each an "Investor" and collectively the "Investors");
C. It is contemplated under the Agency Agreement that the Agent will, on
the Closing Date of the Offering (being the date hereof), deposit or
cause to be deposited on behalf of the Investors into escrow 50% of the
Gross Proceeds in cash, being the sum of U.S.$3,808,250 (the "Agency
Escrow Amount");
D. It is also contemplated under the Agency Agreement that Golden Star
will, upon completion of the Bogoso Acquisition, pay to the Agent the
sum of U.S.$209,453.75 in respect of the balance of the fees payable to
the Agent in connection with the Offering;
E. It is contemplated by Golden Star, the Agent and IFC that, in respect
of the completion of the Bogoso Acquisition, Golden Star is to pay to
the Sellers of the Bogoso Gold Mine that is the
<PAGE>
subject of the Bogoso Acquisition the Agency Escrow Amount, together
with a further sum of U.S.$691,750 (the "Bogoso Acquisition Balance"),
so that the Sellers will receive the aggregate sum of U.S.$4,500,000
upon completion of the Bogoso Acquisition;
F. In order to address the interests of the various parties referred to in
Recitals C, D and E above, on the Closing Date, the Agent will deposit
or cause to be deposited into escrow on behalf of the Investors the
Agency Escrow Amount, and Golden Star will deposit or cause to be
deposited into escrow the sum of U.S.$901,203.75 (being the aggregate
amount of the Agent's Fee and the Bogoso Acquisition Balance), so that
a total of U.S.$4,709,453.75 (the "Escrow Amount") shall have been
deposited into escrow, which Escrow Amount is to be held and disbursed
by the Escrow Agent in accordance with the terms of this Agreement;
G. It is also contemplated under the Agency Agreement that Golden Star
will, on the Closing Date, deposit or cause to be deposited into escrow
all of the Securities sold pursuant to the Offering, which consist of
U.S.$4,155,000 principal amount of Debentures, 831,000 Four-Year
Warrants, 6,923,000 Shares, and 3,461,500 Warrants (collectively, the
"Escrow Securities") and which Escrow Securities are to be held and
disbursed by the Escrow Agent in accordance with the terms of this
Agreement;
H. A copy of the Agency Agreement has been delivered to the Escrow Agent,
and the Escrow Agent is willing to act as the Escrow Agent hereunder;
and
I. The Escrow Agent will hold (i) the Escrow Amount and (ii) the Escrow
Securities in Account No. ES-404 at IBJ Whitehall Bank & Trust Company,
New York, New York, ABA No. 026007825, Attention: A. Justiniano,
Corporate Trust Department, Reference: Golden Star Resources Escrow
Account (the "Escrow Account").
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
contained herein and in the Agency Agreement, and intending to be legally bound
hereby, the parties hereby agree as follows:
1. Appointment and Agreement of Escrow Agent.
Golden Star, the Agent and IFC hereby appoint the Escrow Agent to serve
as, and the Escrow Agent hereby agrees to act as, escrow agent upon the
terms and conditions of this Agreement.
2. Purpose of the Escrow Account.
Golden Star and the Agent hereby represent to the Escrow Agent that the
Escrow Amount and the Escrow Securities are being deposited with the
Escrow Agent and are to be held by the Escrow Agent in the Escrow
Account for the purpose of securing the completion by Golden Star of
the Bogoso Acquisition.
3. Establishment of the Escrow Account.
(a) Pursuant to Section 2 of the Agency Agreement, on the date
hereof, the Agent shall deliver to the Escrow Agent the Agency
Escrow Amount and Golden Star shall deliver to the Escrow
Agent the issued certificates for the Escrow Securities
evidencing the names of the registered holders of the Escrow
Securities and, for each type of Escrow Securities, the
respective amounts of such Escrow Securities held by
2
<PAGE>
each Investor. In addition, on the date hereof, Golden Star
shall deliver to the Escrow Agent the sum of U.S.$901,203.75
which, together with the Agency Escrow Amount, constitute the
Escrow Amount.
(b) The Escrow Agent shall hold (i) the Escrow Amount and all
interest and other amounts earned thereon (collectively, the
"Escrow Funds") and (ii) the Escrow Securities, in escrow
pursuant to this Agreement, in the Escrow Account.
(c) Each of the Agent and Golden Star confirms to the Escrow Agent
and to each other that the Escrow Funds and the Escrow
Securities are free and clear of all encumbrances except as
may be created by this Agreement and the Agency Agreement.
4. Release of Escrow Funds and Escrow Securities from the Escrow Account.
(a) In the event that the Bogoso Acquisition is to be completed on
or before December 10, 1999:
(i) U.S.$4,500,000 of the Escrow Funds are to be released
to IFC at the closing of the Bogoso Acquisition (the
"Bogoso Acquisition Closing Time") and, for this
purpose, Golden Star, the Agent and IFC shall give to
the Escrow Agent joint written notice executed by
Golden Star, the Agent and IFC of the Bogoso
Acquisition Closing Time. The said notice shall be
given by Golden Star, the Agent and IFC to the Escrow
Agent no earlier than 4:00 p.m. (New York time) on
the second "Business Day" (meaning herein a business
day in the City of New York) preceding the day of the
closing of the Bogoso Acquisition and no later than
10:00 a.m. (New York time) on the Business Day
immediately preceding the day of the closing of the
Bogoso Acquisition. Such notice shall be given by
telecopier and the party telecopying the notice
(whether Golden Star, the Agent or IFC) shall,
immediately following the completion of the telecopy
transmission, telephone the Escrow Agent at the
telephone number set out in Section 10 hereof to
obtain verbal confirmation of the Escrow Agent's
receipt of the notice. Upon the Escrow Agent's
receipt of such notice, the Escrow Agent shall
promptly arrange for the release of U.S.$4,500,000 of
the Escrow Funds from the Escrow Account and arrange
to deliver or cause to be delivered to IFC, by the
Bogoso Acquisition Closing Time, such U.S.$4,500,000
of the Escrow Funds by way of wire transfer of
immediately available funds to such account as shall
be specified by IFC in the said notice to the Escrow
Agent,
(ii) upon completion of the Bogoso Acquisition, Golden
Star and the Agent shall promptly give to the Escrow
Agent joint written notice executed by Golden Star
and the Agent of the completion of the Bogoso
Acquisition and, upon the Escrow Agent's receipt of
such notice, the Escrow Agent shall in the following
order:
(A) immediately arrange for the release of
U.S.$209,453.75 of the Escrow Funds from the
Escrow Account and arrange to deliver or
cause to be delivered to the Agent such
U.S.$209,453.75 of the Escrow Funds by way
of wire transfer of immediately available
funds to such account as
3
<PAGE>
shall be specified by the Agent in the said
notice to the Escrow Agent, and
(B) immediately arrange for the release of the
balance, if any, of the Escrow Funds from
the Escrow Account and arrange to deliver or
cause to be delivered to Golden Star such
remaining balance of the Escrow Funds by way
of wire transfer of immediately available
funds to such account as shall be specified
by Golden Star in the said notice to the
Escrow Agent, and
(iii) upon the completion of the Bogoso Acquisition, Golden
Star and the Agent shall promptly give to the Escrow
Agent joint written notice executed by Golden Star
and the Agent of the completion of the Bogoso
Acquisition and, upon the Escrow Agent's receipt of
such notice, the Escrow Agent shall immediately
arrange to release from the Escrow Account to each
Investor the certificates for the Escrow Securities
registered in the name of such Investor and, subject
to being provided with the address of record for such
Investor if not already appearing on a particular
certificate for the Escrow Securities held by such
Investor, arrange to deliver or cause to be delivered
such certificates for the Escrow Securities to such
Investor.
(b) In the event that the Bogoso Acquisition is not completed by
the earlier of December 10, 1999 and the date on which the
Bogoso Acquisition is terminated or abandoned (the "Failure to
Complete"), Golden Star, the Agent and IFC shall, by 4:30 p.m.
(New York time) on the next Business Day following the Failure
to Complete date, give to the Escrow Agent joint written
notice executed by Golden Star, the Agent and IFC of such
Failure to Complete and Golden Star shall promptly send
written notice of such Failure to Complete to each Investor
(the manner and procedure for giving such notice to each
Investor shall be as provided for in the Supplemental
Indenture dated as of the date hereof (the "Supplemental
Indenture") between Golden Star and IBJ Whitehall Bank & Trust
Company, as trustee). Within three Business Days after the
Escrow Agent's receipt of the notice to it, the Escrow Agent
shall:
(i) arrange to release from the Escrow Account and,
subject to being provided with addresses and/or
wiring instructions for bank accounts of each of the
Investors, as applicable, arrange to deliver or cause
to be delivered to each of the Investors:
A. the Investor's pro rata portion of the
Agency Escrow Amount attributable to the
number of Units purchased by such Investor,
together with accrued interest in respect of
such amount less any Canadian withholding
taxes,
B. certificates for 50% of the total number of
Shares and 50% of the total number of
Warrants registered in the name of the
Investor,
C. certificates for 50% of the total number of
Four-Year Warrants registered in the name of
the Investor, and
4
<PAGE>
D. certificates for 100% of the total principal
amount of the Debentures registered in the
name of the Investor, and
(ii) arrange to release from the Escrow Account and
deliver to Golden Star:
(A) the certificates for the remaining 50% of
the total number of Shares and the remaining
50% of the total number of Warrants held in
the Escrow Account,
(B) the certificates for the remaining 50% of
the total number of the Four-Year Warrants
held in the Escrow Account,
(C) the portion of the Agency Escrow Amount
derived from the sale of Debentures (and
Four-Year Warrants), together with all
interest earned on such portion of the
Agency Escrow Amount, by way of wire
transfer of immediately available funds to
such account as shall be specified by Golden
Star in the notice to the Escrow Agent, and
(D) all remaining funds in the Escrow Account by
way of wire transfer of immediately
available funds to such account as shall be
specified by Golden Star in the notice to
the Escrow Agent.
(c) In the event of a Failure to Complete and following the Escrow
Agent's satisfaction of the requirements set out in Section
4(b) above, Golden Star shall:
(i) promptly cancel the certificates for the Shares,
Warrants and Four-Year Warrants returned to Golden
Star and the securities represented thereby, and
(ii) as soon as possible but in any event within 30 days
of the Failure to Complete date, repurchase from each
Investor on a pro rata basis 50% of the principal
amount of the Debentures outstanding, in accordance
with the special mandatory right of redemption set
out in the Debentures and the Supplemental Indenture
in the event of such Failure to Complete, at a
purchase price equal to the principal amount of such
Debentures plus all accrued and unpaid interest
thereon.
5. Maintenance of the Escrow Account; Termination of the Escrow Account.
(a) The Escrow Agent shall continue to maintain the Escrow
Account, until the earlier of (i) the time at which there
shall be no Escrow Securities and no Escrow Funds in the
Escrow Account and (ii) the termination of this Agreement.
(b) Notwithstanding any other provision of this Agreement to the
contrary, at any time prior to the termination of the Escrow
Account, the Escrow Agent shall, if so instructed in a joint
writing signed by Golden Star, the Agent and IFC, release from
the Escrow Account, as instructed, to (i) Golden Star, the
Agent or IFC, as directed in such writing, the amount of the
Escrow Funds in cash so instructed (and if such cash is not
available, shall liquidate such investments in respect of the
Escrow Funds
5
<PAGE>
as are necessary to make such payment) and/or (ii) any
Investors, as directed in such writing, certificates for the
Escrow Securities so instructed.
6. Investment of Escrow Funds.
The Escrow Agent shall invest and reinvest moneys on deposit in the
Escrow Account in short-term United States treasury obligations, unless
joint written notice to the contrary executed by Golden Star and the
Agent is given to the Escrow Agent. Such United States treasury
obligations shall initially have a maturity date that is on or about,
but no later than, September 3, 1999. If the Escrow Agent shall not
have received the notice referred to in Section 4(a)(i) hereof by 10:00
a.m. (New York time) on September 3, 1999, the successive terms of the
investments shall be such that the investments may be liquidated on
eight hours' notice, unless joint written notice to the contrary
executed by Golden Star and the Agent is given to the Escrow Agent.
Notwithstanding the foregoing provisions of this Section 6, if
necessary to satisfy any required or permitted distributions under this
Agreement, the Escrow Agent may sell or liquidate, in its sole
discretion, any one or more investments made with respect to the moneys
on deposit in the Escrow Account prior to maturity and the Escrow Agent
shall not be liable to Golden Star, the Agent, IFC or the Investors for
any loss or penalties resulting from or relating to such sale or
liquidation.
7. Assignment of Rights to the Securities or Escrow Funds; Assignment of
Obligations; Successors.
This Agreement may not be assigned by operation of law or otherwise
without the express written consent of the other parties hereto (which
consent may be granted or withheld in the sole discretion of such other
parties); provided, however, that the Agent may assign this Agreement
to an affiliate of the Agent without the consent of the other parties.
This Agreement shall be binding upon and inure solely to the benefit of
the parties hereto and their permitted assigns.
8. Escrow Agent.
(a) Except as expressly contemplated by this Agreement or by joint
written instructions executed by the Agent, Golden Star and
IFC, the Escrow Agent shall not sell, transfer or otherwise
dispose of in any manner all or any portion of the Escrow
Securities or the Escrow Funds, except pursuant to an order of
a court of competent jurisdiction.
(b) The duties and obligations of the Escrow Agent shall be
determined solely by this Agreement, and the Escrow Agent
shall not be liable except for the performance of such duties
and obligations as are specifically set forth in this
Agreement.(c)In the performance of its duties hereunder, the
Escrow Agent shall be entitled to rely upon any document,
instrument or signature believed by it in good faith to be
genuine and signed by any party hereto or an authorized
officer or agent thereof, and shall not be required to
investigate the truth or accuracy of any statement contained
in any such document or instrument. The Escrow Agent may
assume that any person purporting to give any notice in
accordance with the provisions of this Agreement has been duly
authorized to do so.
(c) The Escrow Agent shall not be liable for any error of
judgment, or any action taken, suffered or omitted to be
taken, hereunder except in the case of its gross negligence,
6
<PAGE>
bad faith or willful misconduct. The Escrow Agent may consult
with counsel of its own choice and shall have full and
complete authorization and protection for any action taken or
suffered by it hereunder in good faith and in accordance with
the opinion of such counsel.
(d) The Escrow Agent shall have no duty as to the collection or
protection of the Escrow Account, the Escrow Securities, the
Escrow Funds or income thereon, nor as to the preservation of
any rights pertaining thereto, beyond the safe custody of any
such funds actually in its possession.
(e) As compensation for its services to be rendered under this
Agreement, for each year or any portion thereof, the Escrow
Agent shall receive a fee in the amount specified in Schedule
A to this Agreement and shall be reimbursed upon request for
all expenses, disbursements and advances, including reasonable
fees of outside counsel (using one United States counsel and,
to the extent necessary, one Canadian counsel), if any,
incurred or made by it in connection with the preparation of
this Agreement and the carrying out of its duties under this
Agreement. All such fees and expenses shall be the
responsibility of Golden Star.
(f) Golden Star shall reimburse and indemnify the Escrow Agent
for, and hold it harmless against, any loss, liability or
expense (including, without limitation, reasonable attorneys'
fees) incurred without gross negligence, bad faith or wilful
misconduct on the part of the Escrow Agent arising out of, or
in connection with the acceptance of, or the performance of,
its duties and obligations under this Agreement. The
obligations pursuant to this Section 8(g) shall survive
termination of this Agreement and remain in full force and
effect.
(g) The Escrow Agent may at any time resign by giving 20 Business
Days' prior written notice of resignation to Golden Star, the
Agent and IFC. Golden Star, the Agent and IFC may at any time
jointly remove the Escrow Agent by giving 10 Business Days'
written notice signed by each of them to the Escrow Agent. If
the Escrow Agent shall resign or be removed, a successor
Escrow Agent (which shall be a bank or trust company having an
office in the Borough of Manhattan in the City of New York and
which shall be acceptable to Golden Star, the Agent and IFC,
acting reasonably) shall be appointed by written instrument
executed by Golden Star, the Agent and IFC and delivered to
the Escrow Agent and to such successor Escrow Agent and,
thereupon, the resignation or removal of the predecessor
Escrow Agent shall become effective and such successor Escrow
Agent, without any further act, deed or conveyance, shall
become vested with all right, title and interest to all cash
and property held hereunder of such predecessor Escrow Agent,
and such predecessor Escrow Agent shall, on the written
request of Golden Star, the Agent, IFC or the successor Escrow
Agent, execute and deliver to such successor Escrow Agent all
the right, title and interest hereunder in and to the Escrow
Account of such predecessor Escrow Agent and all other rights
hereunder of such predecessor Escrow Agent. If no successor
Escrow Agent shall have been appointed within 10 Business Days
of a notice of resignation by the Escrow Agent, the Escrow
Agent's sole responsibility shall thereafter be to hold the
Escrow Securities and the Escrow Funds until the earliest of
its receipt of designation of a successor Escrow Agent, a
joint written instruction by Golden Star, the Agent and IFC,
and termination of this Agreement in accordance with its
terms.
7
<PAGE>
9. Termination.
This Escrow Agreement shall terminate on the date on which (a) there
are no Escrow Securities remaining in the Escrow Account, and (b) there
are no Escrow Funds remaining in the Escrow Account.
10. Notices.
All notices, requests, claims, demands and other communications
hereunder shall be in writing and shall be given or made by delivery
(except notices delivered pursuant to Section 4(a)(i) hereof) or by
telecopier, to the respective parties at the following addresses (or at
such other address for a party as shall be specified in a notice given
in accordance with this Section 10):
(a) if to Golden Star:
1660 Lincoln Street, Suite 3000
Denver, Colorado, U.S.A 80264
Telecopier: (303) 830-9094
Telephone: (303) 894-4613 or (303)830-9000
Attention: President
with a copy to:
Paul, Weiss, Rifkind, Wharton & Garrison
1285 Avenue of the Americas
New York, New York, U.S.A. 10019-6064
Telecopier: (212)757-3990
Telephone: (212)373-3024
Attention: Mr. Edwin S. Maynard
with a copy to:
Koffman Kalef
19th Floor, 885 West Georgia Street
Vancouver, British Columbia, Canada V6C 3H4
Telecopier: (604)891-3788
Telephone: (604)891-3606
Attention: Mr. Bernard G. Poznanski
(b) if to the Agent:
TD Securities (USA) Inc.
c/o TD Securities Inc.
55 King Street West, 8th Floor
Toronto Dominion Bank Tower
Toronto-Dominion Centre
Toronto, Ontario, Canada M5K 1A2
Telecopier: (416)983-3176
Telephone: (416)308-4135
Attention: Mr. Greg McKnight
8
<PAGE>
with a copy to:
Shearman & Sterling
Commerce Court West
Suite 4405, 199 Bay Street
P.O. Box 247
Toronto, Ontario, Canada M5L 1E8
Telecopier: (416)360-2958
Telephone: (416)360-2958
Attention: Mr. Brice T. Voran
(c) if to IFC:
International Finance Corporation
2121 Pennsylvania Avenue N.W.
Washington, D.C., U.S.A. 20433
Telecopier: (202)974-4342
Telephone: (202)473-5290
Attention: Mr. David Harris
(d) if to the Escrow Agent:
IBJ Whitehall Bank & Trust Company
Corporate Finance Department
One State Street
New York, New York, U.S.A. 10004
Telecopier: (212)858-2952
Telephone: (212)858-2815
Attention: Mr. Luis Perez
11. Governing Law.
This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New York applicable to contracts executed and
to be performed entirely within that State.
12. Amendments.
This Agreement may not be amended or modified except (a) by an
instrument in writing signed by, or on behalf of, Golden Star, the
Agent, IFC and the Escrow Agent or (b) by a waiver in accordance with
Section 13 of this Agreement.
13. Waiver.
Any party hereto may (a) extend the time for the performance of any
obligation or other act of any other party hereto, or (b) waive
compliance with any agreement or condition contained herein. Any such
extension or waiver shall be valid only if set forth in an instrument
in writing signed by the party or parties to be bound thereby. Any
waiver of any term or condition shall not be construed as a waiver of
any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition, of this
Agreement. The failure of any party to assert any of its rights
hereunder shall not constitute a waiver of any of such rights.
9
<PAGE>
14. Severability.
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any rule of law or public policy, all
other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic and legal
substance of the transactions contemplated by this Agreement is not
affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or
incapable of being enforced, the parties hereto shall negotiate in good
faith to modify this Agreement so as to effect the original intent of
the parties as closely as possible in a mutually acceptable manner in
order that the transactions contemplated by this Agreement be
consummated as originally contemplated to the fullest extent possible.
15. Entire Agreement.
This Agreement and the Agency Agreement constitute the entire agreement
of the parties hereto with respect to the subject matter hereof and
supersede all prior agreements and undertakings, both written and oral,
among Golden Star, the Agent, IFC and the Escrow Agent with respect to
the subject matter hereof.
16. No Third Party Beneficiaries.
This Agreement is for the sole benefit of the parties hereto and their
permitted assigns and nothing herein, express or implied, is intended
to or shall confer upon any other person or entity any legal or
equitable right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement.
17. Submission to Jurisdiction.
Each of the parties hereto hereby submits to the nonexclusive
jurisdiction of the Federal courts in the southern district of the
State of New York in any suit or proceeding arising out of or relating
to this Agreement or the transactions contemplated hereby. The
submission by IFC to the jurisdiction of such courts does not
constitute a waiver by it of the immunities and privileges granted to
it under any international instrument or applicable law.
10
<PAGE>
18. Headings.
The descriptive headings contained in this Agreement are included for
convenience of reference only and shall not affect in any way the
meaning or interpretation of this Agreement.
19. Counterparts.
This Agreement may be executed by telecopier and in one or more
counterparts, and by different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original but all
of which when taken together shall constitute one and the same
agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly
authorized.
GOLDEN STAR RESOURCES LTD.
By: /s/ Louis O. Peloquin
-------------------------
Name: Louis O. Peloquin
Title: Vice President, General Counsel
and Secretary
TD SECURITIES (USA) INC.
By: /s/ Mario da Ponte
----------------------
Name: Mario da Ponte
Title: Vice President and Director
INTERNATIONAL FINANCE CORPORATION
By: /s/ Douglass Craig
----------------------
Name: Douglass Craig
Title: Acting Manager
IBJ WHITEHALL BANK & TRUST COMPANY
By: /s/ Luis Perez
------------------
Name: Luis Perez
Title: Assistant Vice President
<PAGE>
SCHEDULE A
[Escrow Agent Fees]
<PAGE>
SCHEDULE B
List of Sellers
Bank Austria AG
Bank Austria Cayman Islands Ltd.
Banque Internationale a Luxembourg
CLIFAP
Credit Lyonnais
DEG-Deutsche Investitions und Entwicklungsgesellschaft mbH
DB (Belgium) Finance N.V.
Ecobank Transnational Incorporated
International Finance Corporation
Societe Generale
The Sumitomo Bank, Limited
Exhibit 12.1
Statement Regarding Computation of Ratios
The Company has not had earnings as described in Item 503 of Regulation
S-K for any of the last five years. As such, the Company has had a deficiency in
the ratio of earnings to fixed charges as follows:
Ratio of Earnings
to Fixed Charges
Deficiency
------------------
June 30, 1999 $ 12,000
1998 $ 36,000
1997 $ 22,000
1996 $ 189,000
1995 $ 8,000
1994 $ --
Exhibit 23.1
[Letterhead of PricewaterhouseCoopers LLP]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Supplement to the
Prospectus which is part of the Registration Statement on Form S-3 (No.
333-33237) dated October 2, 1997 of Golden Star Resources Ltd. of our report
dated March 31, 1999, relating to the financial statements of Golden Star
Resources Ltd., which are incorporated by reference in this Supplement. We also
consent to the reference to us under the heading "Experts" in such Supplement.
/s/ PricewaterhouseCoopers LLP
- ------------------------------
PricewaterhouseCoopers LLP
Chartered Accountants
Calgary, Canada
August 23, 1999
Exhibit 23.2
[Letterhead of PricewaterhouseCoopers]
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the use in the Supplement to the Prospectus which is a part
of the Registration Statement on Form S-3 (No. 333-33237) dated October 2, 1997
of Golden Star Resources Ltd. of our report dated September 11, 1998, relating
to the financial statements of Bogoso Gold Limited (formerly Billiton Bogosu
Gold Limited), which are included in this Supplement. We also consent to the
reference to us under the heading "Experts" in such Supplement.
/s/ PricewaterhouseCoopers
- --------------------------
PricewaterhouseCoopers
Chartered Accountants
Accra, Ghana
August 23, 1999
Exhibit 23.3
[Letterhead of SRK Consulting Engineers and Scientists]
August 16, 1999
Securities and Exchange Commission
450 - 5th Street N.W.
Washington, D.C. 20549
Dear Sirs:
Re: Prospectus Supplement, dated August 16, 1999, to the
Prospectus (the "Prospectus Supplement") included in the
Registration Statement on Form S-3 of Golden Star
Resources Ltd., dated August 8, 1997, as amended
The Prospectus Supplement contains a reference to SRK Consulting ("SRK") and to
certain reports prepared by SRK as at June 1, 1999 with respect to the
properties of Bogoso Gold Limited (the "Report").
We hereby consent to the use of our name, and the reference to our report, in
the Prospectus Supplement, which is a part of the Registration Statement.
Sincerely,
/s/ Allan McCracken
- -------------------
Allan McCracken
Managing Director
Exhibit 23.4
[Letterhead of Associated Mining Consultants Ltd.]
August 16, 1999
Securities and Exchange Commission
450 - 5th Street N.W.
Washington, D.C. 20549
Dear Sirs:
Re: Prospectus Supplement, dated August 16, 1999, to the
Prospectus (the "Prospectus Supplement") included in the
Registration Statement on Form S-3 of Golden Star
Resources Ltd., dated August 8, 1997, as amended
The Prospectus Supplement contains a reference to Associated Mining Consultants
Ltd. (AMCL) as experts in mining, geology and ore reserve and mineralized
material determinations and to the report prepared by AMCL dated June 30, 1999,
entitled "Bogoso Gold Limited, Ghana - Independent Engineering Report," with
respect to the production, grade and mine life of the mineral properties owned
by Bogoso Gold Limited (the "Report") and to which an Addendum was added dated
August 10, 1999.
We hereby consent to the use of our name, to the reference to our firm as
experts in mining, geology and ore reserve and mineralized material
determinations and to the reference to our Report and Addendum, in each case in
the Prospect Supplement, which is a part of the Registration Statement.
Yours sincerely,
ASSOCIATED MINING CONSULTANTS
/s/ Alan L. Craven
- ------------------
Alan L. Craven, P.Eng.
Vice-President and General Manager
Exhibit 23.5
August 16, 1999
Securities and Exchange Commission
450 - 5th Street N.W.
Washington, D.C. 20549
Dear Sirs:
Re: Prospectus Supplement, dated August 16, 1999, to the
Prospectus (the "Prospectus Supplement") included in the
Registration Statement on Form S-3 of Golden Star
Resources Ltd., dated August 8, 1997, as amended
The Prospectus Supplement contains a reference to John Danio PE as an
independent mining consultant and to the report referred to as "Scoping Study"
prepared by myself and Herbert Osborne, an independent metalllurgical
consultant, with respect to the potential development of a 5,000 tonne per day
heap leach operation at the Gross Rosebel project in Suriname.
I hereby consent to the use of my name and to the reference to the Scoping
Study, in each case in the Prospectus Supplement, which is a part of the
Registration Statement.
Sincerely,
/s/ John R. Danio
- -----------------
John R. Danio PE
Exhibit 23.6
August 16, 1999
Securities and Exchange Commission
450 - 5th Street N.W.
Washington, D.C. 20549
Dear Sirs:
Re: Prospectus Supplement, dated August 16, 1999, to the
Prospectus (the "Prospectus Supplement") included in the
Registration Statement on Form S-3 of Golden Star
Resources Ltd., dated August 8, 1997, as amended
The Prospectus Supplement contains a reference to Herbert Osborne as independent
metallurgical consultant and to the report referred to as "Scoping Study"
prepared by myself and John Danio PE, an independent mining consultant, with
respect to the potential development of a 5,000 tonne per day heap leach
operation at the Gross Rosebel project in Suriname.
I hereby consent to the use of my name and to the reference to the Scoping
Study, in each case in the Prospectus Supplement, which is a part of the
Registration Statement.
Sincerely,
/s/ Herbert C. Osborne
- ----------------------
Herbert C. Osborne
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2)
IBJ WHITEHALL BANK & TRUST COMPANY
(Exact name of trustee as specified in its charter)
New York 13-6022258
(Jurisdiction of incorporation (I.R.S. employer
or organization if not a U.S. national bank) identification No.)
One State Street, New York, New York 10004
(Address of principal executive offices) (Zip code)
LUIS PEREZ, ASSISTANT VICE PRESIDENT
IBJ WHITEHALL BANK & TRUST COMPANY
One State Street
New York, New York 10004
(212) 858-2000
(Name, address and telephone number of agent for service)
Golden Star Resources Ltd.
(Exact name of Registrant as specified in its charter)
Canada Not Required
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
885 West Georgia Street
Vancouver, British Columbia V6C 3H4
(Address of principal executive offices) (Zip code)
Convertible Debt Securities
---------------------------
(Title of indenture securities)
<PAGE>
Item 1. General information
Furnish the following information as to the trustee:
(a) Name and address of each examining
or supervising authority to which it is
subject.
New York State Banking
Department
Two Rector Street
New York, New York
Federal Deposit Insurance
Corporation
Washington, D.C.
Federal Reserve Bank of New
York
Second District,
33 Liberty Street
New York, New York
(b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
The obligor is not an affiliate of the trustee.
Item 13. Defaults by the Obligor.
(a) State whether there is or has been a default with respect to
the securities under this indenture. Explain the nature of any
such default.
None
<PAGE>
(b) If the trustee is a trustee under another
indenture under which any other
securities, or certificates of interest
or participation in any other securities,
of the obligors are outstanding, or is
trustee for more than one outstanding
series of securities under the indenture,
state whether there has been a default
under any such indenture or series,
identify the indenture or series
affected, and explain the nature of any
such default.
None
Item 16. List of exhibits.
List below all exhibits filed as part of this statement of
eligibility.
*1. A copy of the Charter of IBJ Whitehall Bank & Trust Company as
amended to date. (See Exhibit 1A to Form T-1, Securities and
Exchange Commission File No 22-18460 and Exhibit 25.1 to Form
T-1, Securities and Exchange Commission File No. 333-46849).
*2. A copy of the Certificate of Authority of the trustee to
Commence Business (Included in Exhibit 1 above).
*3. A copy of the Authorization of the trustee to exercise
corporate trust powers, as amended to date (See Exhibit 4 to
Form T-1, Securities and Exchange Commission File No.
22-19146).
*4. A copy of the existing By-Laws of the trustee, as amended to
date (See Exhibit 25.1 to Form T-1, Securities and Exchange
Commission File No. 333-46849).
5. Not Applicable
6. The consent of United States institutional trustee required by
Section 321(b) of the Act.
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
* The Exhibits thus designated are incorporated herein by reference as
exhibits hereto. Following the description of such Exhibits is a
reference to the copy of the Exhibit heretofore filed with the Securities
and Exchange Commission, to which there have been no amendments or
changes.
<PAGE>
NOTE
In answering any item in this Statement of Eligibility which relates to
matters peculiarly within the knowledge of the obligor and its directors
or officers, the trustee has relied upon information furnished to it by
the obligor.
Inasmuch as this Form T-1 is filed prior to the ascertainment by the
trustee of all facts on which to base responsive answers to Item 2, the
answer to said Item is based on incomplete information.
Item 2, may, however, be considered as correct unless amended by an
amendment to this Form T-1.
Pursuant to General Instruction B, the trustee has responded to Items 1, 2
and 16 of this form since to the best knowledge of the trustee as
indicated in Item 13, the obligor is not in default under any indenture
under which the applicant is trustee.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
trustee, IBJ Whitehall Bank & Trust Company, a corporation organized and
existing under the laws of the State of New York, has duly caused this statement
of eligibility & qualification to be signed on its behalf by the undersigned,
thereunto duly authorized, all in the City of New York, and State of New York,
on the 10th day of August, 1999.
IBJ WHITEHALL BANK & TRUST COMPANY
By: /s/ Luis Perez
------------------
Luis Perez
Assistant Vice President
<PAGE>
Exhibit 6
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act
of 1939, as amended, in connection with the issuance Golden Star Resources Ltd.,
of its Convertible Debt Securities, we hereby consent that reports of
examinations by Federal, State, Territorial, or District authorities may be
furnished by such authorities to the Securities and Exchange Commission upon
request therefor.
IBJ WHITEHALL BANK & TRUST COMPANY
By: /s/ Luis Perez
------------------
Luis Perez
Assistant Vice President
Dated: August 10, 1999
<PAGE>
EXHIBIT 7
CONSOLIDATED REPORT OF CONDITION OF
IBJ WHITEHALL BANK & TRUST COMPANY
of New York, New York
And Foreign and Domestic Subsidiaries
Report as of March 31, 1999
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
------------
ASSETS
------
<S> <C>
1. Cash and balance due from depository institutions:
a. Non-interest-bearing balances and currency and coin.....................$ 21,794
b. Interest-bearing balances...............................................$ 24,039
2. Securities:
a. Held-to-maturity securities.............................................$ -0-
b. Available-for-sale securities...........................................$ 192,664
3. Federal funds sold and securities purchased under agreements to resell in
domestic offices of the bank and of its Edge and Agreement subsidiaries and
in IBFs
Federal Funds sold and Securities purchased under agreements to resell.....$ 90,207
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income....................$ 2,045,440
b. LESS: Allowance for loan and lease losses...................$ 64,777
c. LESS: Allocated transfer risk reserve.......................$ -0-
d. Loans and leases, net of unearned income, allowance, and reserve........$1,980,663
5. Trading assets held in trading accounts....................................$ 783
6. Premises and fixed assets (including capitalized leases)...................$ 6,188
7. Other real estate owned....................................................$ -0-
8. Investments in unconsolidated subsidiaries and associated companies........$ -0-
9. Customers' liability to this bank on acceptances outstanding...............$ 615
10. Intangible assets.........................................................$ 12,786
11. Other assets..............................................................$ 61,758
12. TOTAL ASSETS..............................................................$2,391,497
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LIABILITIES
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13. Deposits:
a. In domestic offices....................................................$ 722,967
(1) Noninterest-bearing .....................................$ 155,445
(2) Interest-bearing.........................................$ 567,522
b. In foreign offices, Edge and Agreement subsidiaries, and IBFs..........$1,111,757
(1) Noninterest-bearing .....................................$ 14,819
(2) Interest-bearing.........................................$1,096,938
14. Federal funds purchased and securities sold under agreements to repurchase
in domestic offices of the bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal Funds purchased and Securities sold under agreements to
repurchase................................................................$ 105,000
15. a. Demand notes issued to the U.S. Treasury...............................$ 3,000
b. Trading Liabilities....................................................$ 468
16. Other borrowed money:
a. With a remaining maturity of one year or less..........................$ 25,002
b. With a remaining maturity of more than one year........................$ 1,375
c. With a remaining maturity of more than three years.....................$ 3,550
17. Not applicable.
18. Bank's liability on acceptances executed and outstanding..................$ 615
19. Subordinated notes and debentures.........................................$ 100,000
20. Other liabilities.........................................................$ 68,528
21. TOTAL LIABILITIES.........................................................$2,142,262
22. Limited-life preferred stock and related surplus..........................$ N/A
EQUITY CAPITAL
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23. Perpetual preferred stock and related surplus.............................$ -0-
24. Common stock..............................................................$ 28,958
25. Surplus (exclude all surplus related to preferred stock)..................$ 210,319
26. a. Undivided profits and capital reserves.................................$ 9,707
b. Net unrealized gains (losses) on available-for-sale securities.........$ 251
c. Accumulated net gains (losses) on cash flow hedges.....................$ -0-
27. Cumulative foreign currency translation adjustments.......................$ -0-
28. TOTAL EQUITY CAPITAL......................................................$ 249,235
29. TOTAL LIABILITIES AND EQUITY CAPITAL......................................$2,391,497
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