Common use of Legended Certificates Clause in Contracts

Legended Certificates. a. Each certificate representing shares of Subject Securities now or hereafter owned by any Stockholder shall be endorsed with the following legend unless the applicable restrictions referenced below shall have lapsed by the terms of this Agreement (in which event the legend shall be modified or removed from such certificate as appropriate): "THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO TRANSFER AND VOTING RESTRICTIONS SET FORTH IN A STOCKHOLDERS AGREEMENT DATED AS OF MAY 4, 2001 BETWEEN THE ISSUER AND CERTAIN OF ITS STOCKHOLDERS. ANY TRANSFER OF THE SECURITIES IN VIOLATION OF SUCH STOCKHOLDERS AGREEMENT SHALL BE VOID. COPIES OF SUCH STOCKHOLDERS AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION." b. Each certificate representing shares of Subject Securities now or hereafter owned by any Stockholder shall be endorsed with the following legend: "THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT OF 1933"), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION; PROVIDED, HOWEVER, THATNEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF PURSUANT TO REGULATION S OF THE SECURITIES ACT OF 1933."

Legended Certificates. a. Each certificate (1) The certificates representing shares of Subject Securities now the Special Warrants (and the Underlying Shares, if issued before the Expiry Time) and all certificates issued in exchange therefor or hereafter owned by any Stockholder in substitution thereof prior to the Expiry Time, shall be endorsed with bear the following legend unless legends: “UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE <insert date that is four (4) months and one (1) day after Closing Date>.” And if prescribed under the applicable restrictions referenced below shall have lapsed by the terms of this Agreement (in which event the legend shall be modified or removed from such certificate as appropriate): "TSXV Corporate Finance Manual: “WITHOUT PRIOR WRITTEN APPROVAL OF THE SALETSX VENTURE EXCHANGE AND COMPLIANCE WITH ALL APPLICABLE SECURITIES LEGISLATION, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO TRANSFER AND VOTING RESTRICTIONS SET FORTH IN A STOCKHOLDERS AGREEMENT DATED AS OF MAY 4NOT BE SOLD, 2001 BETWEEN TRANSFERRED, HYPOTHECATED OR OTHERWISE TRADED ON OR THROUGH THE ISSUER AND CERTAIN OF ITS STOCKHOLDERS. ANY TRANSFER FACILITIES OF THE SECURITIES TSX VENTURE EXCHANGE OR OTHERWISE IN VIOLATION CANADA OR TO OR FOR THE BENEFIT OF SUCH STOCKHOLDERS AGREEMENT SHALL BE VOIDA CANADIAN RESIDENT UNTIL <insert date that is four (4) months and one (1) day after Closing Date>.” (a) The Special Warrants and the Underlying Shares have not been, and will not be, registered under the U.S. Securities Act or applicable state Securities Laws. COPIES OF SUCH STOCKHOLDERS AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION." b. Each Special Warrant Certificate, and each certificate representing shares the Underlying Shares, originally issued to or for the account or benefit of Subject Securities now a U.S. Person or hereafter owned by any Stockholder a person in the United States, and each Special Warrant Certificate, and each certificate representing the Underlying Shares, issued in exchange therefor or in substitution thereof shall be endorsed with bear the following legendadditional legend until such time as the legend is no longer required under applicable requirements of the U.S. Securities Act or applicable state Securities Laws: "THIS SECURITY HAS “THE SECURITIES REPRESENTED HEREBY [AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF] HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "“U.S. SECURITIES ACT OF 1933"ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN SECURITIES LAWS, AND MAY BE REOFFEREDOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED PLEDGED OR OTHERWISE DISPOSED TRANSFERRED ONLY (A) TO SANDSPRING RESOURCES LTD. (THE “CORPORATION”) (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH LOCAL LAWS AND REGULATIONS, (C) WITHIN THE UNITED STATES IN ACCORDANCE WITH (1) RULE 144A UNDER THE U.S. SECURITIES ACT, OR (2) RULE 144 UNDER THE U.S. SECURITIES ACT AND, IN EACH CASE, IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN ANOTHER TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAWS, PROVIDED THAT IN THE ABSENCE CASE OF TRANSFERS PURSUANT TO (C)(2) OR (D) ABOVE, A LEGAL OPINION SATISFACTORY TO THE CORPORATION MUST FIRST BE PROVIDED TO COMPUTERSHARE TRUST COMPANY OF CANADA TO THE EFFECT THAT SUCH REGISTRATION OR UNLESS SUCH TRANSACTION TRANSFER IS EXEMPT FROMFROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. IF THESE SECURITIES ARE SOLD AT ANY TIME THE CORPORATION IS A “FOREIGN ISSUER” AS DEFINED IN RULE 902 UNDER THE U.S. SECURITIES ACT, OR NOT SUBJECT TOA NEW CERTIFICATE, SUCH REGISTRATION; PROVIDEDBEARING NO LEGEND, HOWEVER, THATNEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN THE DELIVERY OF WHICH WILL CONSTITUTE “GOOD DELIVERY” MAY BE REOFFEREDOBTAINED FROM COMPUTERSHARE TRUST COMPANY OF CANADA UPON DELIVERY OF THIS CERTIFICATE AND A DULY EXECUTED DECLARATION, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED IN FORM SATISFACTORY TO THE CORPORATION AND COMPUTERSHARE TRUST COMPANY OF PURSUANT CANADA TO REGULATION S THE EFFECT THAT THE SALE OF THE SECURITIES IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND, IF SO REQUIRED BY THE CORPORATION OR COMPUTERSHARE TRUST COMPANY OF 1933CANADA, AN OPINION OF COUNSEL, TO THE EFFECT THAT THE SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT."”; provided that if the Special Warrants or the Underlying Shares are being sold outside the United States in compliance with Rule 904 of Regulation S at a time when the Company is a “foreign issuer” as defined in of Regulation S at the time of transfer, any such legend may be removed by providing a declaration to the Trustee to the effect set forth in Schedule “B” to this Indenture (or as the Company may prescribe from time to time); and, if requested by the Company or the Trustee, an opinion of counsel of recognized standing in form and substance satisfactory to the Company and the Trustee to the effect that such sale is being made in compliance with Rule 904 of Regulation S. (b) If a Special Warrant Certificate bearing the legend set forth in subsection 2.14(2)(a) hereof is tendered for transfer, and the Holder thereof has not obtained the prior written consent of the Company, the Trustee shall not register such transfer unless instructed by the Company to do so. The Holder must comply with the requirements of subsection 2.9 hereof and the Holder understands that if it (or any beneficial purchaser on whose behalf it is acting) decides to offer, sell, pledge or otherwise transfer any of the Special Warrants or Underlying Shares, they may be offered, sold, pledged or otherwise transferred only (i) to the Company, (ii) outside the United States in compliance with Rule 904 of Regulation S and in compliance with applicable local laws and regulations, (iii) pursuant to a registration statement that has been declared effective under the U.S. Securities Act and is available for resale of the Special Warrants or the Underlying Shares, as applicable, or (iv) any other exemption from registration under the U.S. Securities Act including Rule 144 or Rule 144A thereunder, if available, and in compliance with any applicable state securities laws. The Holder further understands and agrees that in the event of a transfer pursuant to the foregoing clause (ii) or (iv), the Company and the Trustee may require a legal opinion of counsel of recognized standing reasonably satisfactory to the Company and the Trustee that such transfer is exempt from registration under the U.S. Securities Act and applicable state securities laws. (c) If a Special Warrant Certificate not bearing the legend set forth in subsection 2.14(2)(a) hereof is tendered for transfer, the Trustee shall not register such transfer if it has reason to believe that the transferee is a U.S. Person, is in the United States or is acquiring the Special Warrants evidenced thereby for the account or benefit of a U.S. Person or a person in the United States, unless the Company has provided written instructions to the Trustee prior to such transfer to the effect that the Company believes such transfer would comply with the U.S. Securities Act or applicable state Securities Laws. (3) If the principal transfer office of the Trustee in the city where the Warrant Agency is situate is for any reason not available to act in connection with the exchange of Special Warrant Certificates or exercise of Special Warrants as contemplated by this Indenture, the Company and the Trustee shall arrange for another office in such city to act in connection with the exchange of Special Warrant Certificates and exercise of Special Warrants and shall give notice of the change of such office to the Holders.

Legended Certificates. a. Each certificate representing shares of (1) The Warrants and the Subject Securities now issuable upon exercise of the Warrants have not been, and will not be, registered under the U.S. Securities Act or hereafter owned applicable state securities laws. Until such time as the same is no longer required under applicable requirements of the U.S. Securities Act or applicable State securities laws, certificates representing the Subject Securities, issued to or held by any Stockholder a U.S. Person or a person in the United States, as well as all certificates issued in exchange or substitution for such certificates shall be endorsed with the following legend unless the applicable restrictions referenced below shall have lapsed by the terms of this Agreement (in which event the legend shall be modified or removed from such certificate as appropriate): "THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO TRANSFER AND VOTING RESTRICTIONS SET FORTH IN A STOCKHOLDERS AGREEMENT DATED AS OF MAY 4, 2001 BETWEEN THE ISSUER AND CERTAIN OF ITS STOCKHOLDERS. ANY TRANSFER OF THE SECURITIES IN VIOLATION OF SUCH STOCKHOLDERS AGREEMENT SHALL BE VOID. COPIES OF SUCH STOCKHOLDERS AGREEMENT MAY BE OBTAINED UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION." b. Each certificate representing shares of Subject Securities now or hereafter owned by any Stockholder shall be endorsed with bear the following legend: "THIS SECURITY HAS “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "“U.S. SECURITIES ACT”) OR ANY U.S. STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF PEAK GOLD LTD.(THE “COMPANY”) THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY (B) INSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 144A UNDER THE U.S. SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER AFTER PROVIDING A LEGAL OPINION IN A FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY, OR (E) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION AFTER PROVIDING A LEGAL OPINION IN A FORM AND SUBSTANCE SATISFACTORY TO THE COMPANY. DELIVERY OF 1933"THIS CERTIFICATE MAY NOT CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA OR ELSEWHERE. IF, AT ANY TIME THE COMPANY IS A “FOREIGN ISSUER” AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT, THESE SECURITIES ARE BEING SOLD IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT, A NEW CERTIFICATE BEARING NO 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 SATISFACTORY TO THE COMPANY'S TRANSFER AGENT AND THE COMPANY (AND IF REQUIRED BY THE TRANSFER AGENT, A LEGAL OPINION), OR TO THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN EFFECT THAT THE ABSENCE OF SUCH REGISTRATION OR UNLESS SUCH TRANSACTION IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION; PROVIDED, HOWEVER, THATNEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF PURSUANT TO REGULATION S SALE OF THE SECURITIES ACT REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT.”; provided, that if, at the time the Company is a “foreign issuer” as defined in Regulation S, such securities are being sold in compliance with the requirements of Rule 904 of Regulation S, as referred to above, and in compliance with local laws and regulations, then unless the transfer agent requires an opinion, the legend may be removed by providing a declaration to the Company's transfer agent for such securities in following form (or as the Company may prescribe from time to time): “The undersigned (a) acknowledges that the sale of the securities of Peak Gold Ltd. (the “Company”) to which this declaration relates is being made in reliance on Rule 904 of Regulation S under the United States Securities Act of 1933, as amended (the “U.S. Securities Act”) and (b) certifies that (1) the undersigned is not an “affiliate” (as that term is defined in Rule 405 under the U.S. Securities Act) of the Company, (2) the offer of such securities was not made to a person in the United States and either (A) at the time the buy order was originated, the buyer was outside the United States, or the seller and any person acting on its behalf reasonably believed that the buyer was outside the United States, or (B) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither the seller nor any person acting on its behalf knows that the transaction has been prearranged with a buyer in the United States, (3) neither the seller nor any affiliate of the seller nor any person acting on any of their behalf has engaged or will engage in any directed selling efforts in the United States in connection with the offer and sale of such securities, (4) the sale is bona fide and not for the purpose of “washing off” the resale restrictions imposed because the securities are “restricted securities” (as such term is defined in Rule 144(a)(3) under the U.S. Securities Act), (5) the seller does not intend to replace such securities with fungible unrestricted securities, and (6) the contemplated sale is not a transaction, or part of a series of transactions, which, although in technical compliance with Regulation S under the U.S. Securities Act, is part of a plan or scheme to evade the registration provisions of the U.S. Securities Act. Terms used herein have the meanings given to them by Regulation S under the U.S. Securities Act."” provided further, that if any of such securities are being sold pursuant to Rule 144 of the U.S. Securities Act, the legend may be removed by delivery to the Company's transfer agent of an opinion of counsel of recognized standing in form and substance satisfactory to the Company, to the effect that the legend is no longer required under applicable requirements of the U.S. Securities Act.

Legended Certificates. a. (1) The Warrants and the Subject Securities issuable upon exercise of the Warrants have not been, and will not be, registered under the U.S. Securities Act or applicable state securities laws. Each Warrant Certificate, and each certificate representing shares the Subject Securities, originally issued to or for the account or benefit of a U.S. Person or a person in the United States, and each Warrant Certificate, and each certificate representing the Subject Securities now Securities, issued in exchange therefor or hereafter owned by any Stockholder in substitution thereof shall be endorsed with bear the following additional legend unless the applicable restrictions referenced below shall have lapsed by the terms of this Agreement (in which event until such time as the legend shall be modified is no longer required under applicable requirements of the U.S. Securities Act or removed from such certificate as appropriate): "THE SALE, PLEDGE, HYPOTHECATION OR TRANSFER OF applicable state Securities Laws: ìTHE SECURITIES REPRESENTED HEREBY [AND THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO TRANSFER AND VOTING RESTRICTIONS SET FORTH IN A STOCKHOLDERS AGREEMENT DATED AS OF MAY 4, 2001 BETWEEN THE ISSUER AND CERTAIN OF ITS STOCKHOLDERS. ANY TRANSFER OF THE SECURITIES IN VIOLATION OF SUCH STOCKHOLDERS AGREEMENT SHALL BE VOID. COPIES OF SUCH STOCKHOLDERS AGREEMENT MAY BE OBTAINED ISSUABLE UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION." b. Each certificate representing shares of Subject Securities now or hereafter owned by any Stockholder shall be endorsed with the following legend: "THIS SECURITY HAS EXERCISE HEREOF] HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ìU.S. SECURITIES ACT OF 1933"ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN SECURITIES LAWS, AND MAY BE REOFFEREDOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED PLEDGED OR OTHERWISE DISPOSED TRANSFERRED ONLY (A) TO AVALON RARE METALS INC. (THE ìCORPORATION”) (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE U.S. SECURITIES ACT AND IS AVAILABLE FOR RESALE OF THE SECURITIES, (D) IN COMPLIANCE WITH ANY OTHER EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT, INCLUDING RULE 144 OR 144A THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS. THE HOLDER FURTHER UNDERSTANDS AND AGREES THAT IN THE ABSENCE EVENT OF A TRANSFER PURSUANT TO THE FOREGOING CLAUSE (B) OR (D), THE CORPORATION MAY REQUIRE A LEGAL OPINION OF COUNSEL OF RECOGNIZED STANDING REASONABLY SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION OR UNLESS SUCH TRANSACTION TRANSFER IS EXEMPT FROMFROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THE PRESENCE OF THIS LEGEND MAY IMPAIR THE ABILITY OF THE HOLDER HEREOF TO EFFECT ìGOOD DELIVERY” OF THE SECURITIES REPRESENTED HEREBY ON A CANADIAN STOCK EXCHANGE. A CERTIFICATE WITHOUT A LEGEND MAY BE OBTAINED FROM THE REGISTRAR AND TRANSFER AGENT OF THE CORPORATION IN CONNECTION WITH A SALE OF THE SECURITIES REPRESENTED HEREBY AT A TIME WHEN THE CORPORATION IS A ìFOREIGN ISSUER”, AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT, UPON DELIVERY OF THIS CERTIFICATE, AN EXECUTED DECLARATION AND, IF REQUESTED BY THE CORPORATION OR THE TRANSFER AGENT FOR THE CORPORATION, AN OPINION OF COUNSEL OF RECOGNIZED STANDING, EACH IN FORM SATISFACTORY TO THE TRANSFER AGENT OF THE CORPORATION AND THE CORPORATION, TO THE EFFECT THAT SUCH SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT.”; provided, that if the securities are being sold outside the United States in compliance with the requirements of Rule 904 of Regulation S at a time when the Company is a ìforeign issuer”, as defined in Regulation S at the time of sale, the legends set forth above may be removed by providing an executed declaration to the registrar and transfer agent of the Company, in substantially the forms set forth as Schedule ìB” hereto (or in such other forms as the Company may prescribe from time to time) and, if requested by the Company or the transfer agent, an opinion of counsel of recognized standing in form and substance satisfactory to the Company and the transfer agent to the effect that such sale is being made in compliance with Rule 904 of Regulation S. (2) Each Warrant Certificate originally issued to every Purchaser, as well as all certificates issued in exchange for or in substitution of the Warrant Certificates, prior to the earlier of (a) the third Business Day after the Qualification Date, and (b) January 18, 2010, shall bear the following legends: ìUNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT SUBJECT TOTRADE THE SECURITY BEFORE JANUARY 18, SUCH REGISTRATION; PROVIDED2010. THE SECURITIES REPRESENTED BY OR UNDERLYING THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE, HOWEVER, THATNEITHER THIS SECURITY NOR THE SAID SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFEREDCERTIFICATE REPRESENTING SUCH SECURITIES IS NOT ìGOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON THE TORONTO STOCK EXCHANGE.”; provided that if, SOLDat any time, ASSIGNEDin the opinion of counsel to the Company, TRANSFERREDsuch legends are no longer necessary or advisable under applicable Securities Laws, PLEDGEDor the holder of any such legended certificate, ENCUMBERED OR OTHERWISE DISPOSED OF PURSUANT TO REGULATION S OF THE SECURITIES ACT OF 1933at the holderís expense, provides the Company and Warrant Agent with evidence satisfactory in form and substance to the Company and Warrant Agent (which may include an opinion of counsel satisfactory to the Company and Warrant Agent) to the effect that such legend is not required, such legended certificate may thereafter be surrendered to the Company in exchange for a certificate which does not bear such legends."

Legended Certificates. a. Each certificate (1) The certificates representing shares of Subject Securities now the Special Warrants (and the Underlying Securities, if issued before the Expiry Time) and all certificates issued in exchange therefor or hereafter owned by any Stockholder in substitution thereof prior to the Expiry Time, shall be endorsed with bear the following legend unless the applicable restrictions referenced below shall have lapsed by the terms of this Agreement (in which event the legend shall be modified or removed from such certificate as appropriate): "legends: “UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE SALEHOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE JANUARY 18, PLEDGE, HYPOTHECATION OR TRANSFER OF 2010. THE SECURITIES REPRESENTED BY OR UNDERLYING THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE, HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES OF SUCH EXCHANGE SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS SUBJECT TO TRANSFER AND VOTING RESTRICTIONS SET FORTH NOT “GOOD DELIVERY” IN A STOCKHOLDERS AGREEMENT DATED AS SETTLEMENT OF MAY 4TRANSACTIONS ON THE TORONTO STOCK EXCHANGE.” (2) (a) The Special Warrants and the Underlying Securities have not been, 2001 BETWEEN THE ISSUER AND CERTAIN OF ITS STOCKHOLDERSand will not be, registered under the U.S. Securities Act or applicable state Securities Laws. ANY TRANSFER OF Each Special Warrant Certificate, and each certificate representing the Underlying Securities, originally issued to or for the account or benefit of a U.S. Person or a person in the United States, and each Special Warrant Certificate, and each certificate representing the Underlying Securities, issued in exchange therefor or in substitution thereof shall bear the following additional legend until such time as the legend is no longer required under applicable requirements of the U.S. Securities Act or applicable state Securities Laws: “THE SECURITIES IN VIOLATION OF SUCH STOCKHOLDERS AGREEMENT SHALL BE VOID. COPIES OF SUCH STOCKHOLDERS AGREEMENT MAY BE OBTAINED REPRESENTED HEREBY [AND THE SECURITIES ISSUABLE UPON WRITTEN REQUEST TO THE SECRETARY OF THE CORPORATION." b. Each certificate representing shares of Subject Securities now or hereafter owned by any Stockholder shall be endorsed with the following legend: "THIS SECURITY HAS EXERCISE HEREOF] HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "“U.S. SECURITIES ACT OF 1933"ACT”), OR THE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION. NEITHER THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN SECURITIES LAWS, AND MAY BE REOFFEREDOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED PLEDGED OR OTHERWISE DISPOSED TRANSFERRED ONLY (A) TO AVALON RARE METALS INC. (THE "CORPORATION") (B) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT AND IN COMPLIANCE WITH LOCAL LAWS AND REGULATIONS, (C) PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE U.S. SECURITIES ACT AND IS AVAILABLE FOR RESALE OF THE SECURITIES, (D) IN COMPLIANCE WITH ANY OTHER EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES ACT, INCLUDING RULE 144 OR 144A THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS. THE HOLDER FURTHER UNDERSTANDS AND AGREES THAT IN THE ABSENCE EVENT OF A TRANSFER PURSUANT TO THE FOREGOING CLAUSE (B) OR (D), THE CORPORATION AND TRUSTEE MAY REQUIRE A LEGAL OPINION OF COUNSEL OF RECOGNIZED STANDING REASONABLY SATISFACTORY TO THE CORPORATION AND TRUSTEE THAT SUCH REGISTRATION OR UNLESS SUCH TRANSACTION TRANSFER IS EXEMPT FROM, OR NOT SUBJECT TO, SUCH REGISTRATION; PROVIDED, HOWEVER, THATNEITHER FROM REGISTRATION UNDER THE U.S. SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS. THE PRESENCE OF THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN LEGEND MAY BE REOFFERED, SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED IMPAIR THE ABILITY OF PURSUANT THE HOLDER HEREOF TO REGULATION S EFFECT “GOOD DELIVERY” OF THE SECURITIES ACT REPRESENTED HEREBY ON A CANADIAN STOCK EXCHANGE. A CERTIFICATE WITHOUT A LEGEND MAY BE OBTAINED FROM THE REGISTRAR AND TRANSFER AGENT OF 1933THE CORPORATION IN CONNECTION WITH A SALE OF THE SECURITIES REPRESENTED HEREBY AT A TIME WHEN THE CORPORATION IS A “FOREIGN ISSUER”, AS DEFINED IN REGULATION S UNDER THE U.S. SECURITIES ACT, UPON DELIVERY OF THIS CERTIFICATE, AN EXECUTED DECLARATION AND, IF REQUESTED BY THE CORPORATION OR THE TRANSFER AGENT FOR THE CORPORATION, AN OPINION OF COUNSEL OF RECOGNIZED STANDING, EACH IN FORM SATISFACTORY TO THE TRANSFER AGENT OF THE CORPORATION AND THE CORPORATION, TO THE EFFECT THAT SUCH SALE OF THE SECURITIES REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES ACT."”; provided that if the Special Warrants or the Underlying Securities are being sold outside the United States in compliance with Rule 904 of Regulation S at a time when the Company is a “foreign issuer” as defined in of Regulation S at the time of transfer, any such legend may be removed by providing a declaration to the Trustee to the effect set forth in Schedule “B” to this Indenture (or as the Company may prescribe from time to time); and, if requested by the Company or the Trustee, an opinion of counsel of recognized standing in form and substance satisfactory to the Company and the Trustee to the effect that such sale is being made in compliance with Rule 904 of Regulation S.