EXHIBIT 10.1
CANADIAN UNDERWRITING AGREEMENT
July 17, 2002
Golden Star Resources Ltd.
00000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx
XXX, 00000-0000
ATTENTION: XX. XXXXX X. XXXXXXXX, PRESIDENT AND CHIEF EXECUTIVE OFFICER
Dear Sir:
Based upon and subject to the terms and conditions set out below,
Canaccord Capital Corporation (the "LEAD MANAGER") and BMO Xxxxxxx Xxxxx Inc.
(collectively, the "CANADIAN UNDERWRITERS" and, individually, a "CANADIAN
UNDERWRITER") hereby severally, and not jointly, in their respective percentages
set out in Section 16 hereof, offer to purchase from Golden Star Resources Ltd.
(the "CORPORATION"), and by its acceptance of the offer constituted by this
letter, the Corporation agrees to issue and sell to the Canadian Underwriters,
at the Time of Closing (as hereinafter defined), 14,000,000 units (collectively,
the "UNITS" and individually, a "UNIT") of the Corporation (the "OFFERED
SECURITIES"), each Unit consisting of one (1) common share (a "COMMON SHARE") of
the Corporation and one-half (1/2) common share purchase warrant, each whole
warrant exercisable at a price per Common Share of Cdn$2.28 until July 24, 2004
(each whole warrant, a "WARRANT"), at an offering price of Cdn$1.90 per Unit for
aggregate gross proceeds of Cdn$26,600,000. The offering of the Offered
Securities by the Corporation pursuant to this Agreement is hereinafter referred
to as the "OFFERING".
The Corporation hereby grants to the Canadian Underwriters (in
accordance with the percentages set forth in Section 16 hereof) a one-time
non-assignable option (the "CANADIAN UNDERWRITERS' OPTION") to purchase
severally, and not jointly, up to 2,100,000 additional Units (the "ADDITIONAL
UNITS") upon the terms and conditions set forth herein only for the purpose of
covering over-allotments made in connection with the sale of the Offered
Securities. The Canadian Underwriters' Option shall be exercisable, in whole or
in part, by the Lead Manager giving notice to the Corporation not later 30 days
following the Closing Date (as defined herein), any such notice to specify the
number of the Additional Units to be purchased and the closing date with respect
to such purchase (which closing date shall be no later than five full business
days after the written notice of election to purchase the Additional Units under
the Canadian Underwriters' Option is given.) Pursuant to such notice, the
Canadian Underwriters shall purchase and the Corporation shall issue and sell
the number of Additional Units indicated in such notice, in accordance with the
provisions of Section 11 hereof. In this Agreement, the Offered Securities, and
to the extent that the Canadian Underwriters' Option is exercised, the
Additional Units, are collectively called the "SECURITIES".
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This offer is conditional upon, among other things: the Corporation
having prepared and filed and obtained receipts for a preliminary short form
prospectus and a (final) short form prospectus in respect of the distribution of
the Securities, with and from the securities regulatory authorities in the
provinces of British Columbia, Alberta, Manitoba and Ontario, (the "QUALIFYING
PROVINCES"), pursuant to the Short Form Prospectus System (the "POP SYSTEM")
established under National Instrument 44-101 of the Canadian Securities
Administrators ("NI 44-101"), qualifying the distribution by the Corporation of
the Securities to purchasers resident in such provinces; a registration
statement on Form S-3 (File No. 333-91666) in respect of the Securities having
been filed with the Securities and Exchange Commission (the "SEC"); the
Registration Statement and any post-effective amendment thereto, having been
declared effective by the SEC in such form; no stop order suspending the
effectiveness of the Registration Statement having been issued and no proceeding
for that purpose having been initiated or threatened by the SEC; no order
preventing or suspending the use of any U.S. Preliminary Prospectus having been
issued by the SEC; and the U.S. Preliminary Prospectus, at the time of filing
thereof, conforming in all material respects to the requirements of the U.S.
Securities Act and the rules and regulations of the SEC thereunder, and not
containing an untrue statement of a material fact or omitting to state a
material fact required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
The Corporation shall pay to the Lead Manager, on behalf of the
Canadian Underwriters, a fee (the "UNDERWRITING FEE") at the Time of Closing
equal to Cdn$0.1045 per Offered Security sold pursuant to the terms of this
Canadian Underwriting Agreement (being 5.5% of the issue price per Offered
Security) in consideration of the services to be rendered by the Canadian
Underwriters in connection with the Offering. Such services shall include,
without limitation: (i) acting as financial advisors to the Corporation in the
preparation of documentation relating to the sale of the Securities; (ii)
forming and managing banking, selling and other groups for the sale of the
Securities; (iii) distributing the Securities to the public both directly and
through other registered dealers and brokers; (iv) assisting the Corporation in
connection with the preparation and finalization of the Preliminary Prospectus,
the Final Prospectus and the U.S. Registration Statement (each as hereinafter
defined) qualifying the distribution of, or registering, as the case may be, the
Securities; (v) performing administrative work in connection with these matters;
and (vi) all other services arising out of the agreement resulting from the
Corporation's acceptance of this offer.
To the extent the Canadian Underwriters' Option is exercised, the
Corporation shall pay to the Lead Manager, on behalf of the Canadian
Underwriters, a fee at the Over-Allotment Closing (as hereinafter defined) equal
to the Underwriting Fee for each Additional Unit sold under this Canadian
Underwriting Agreement.
In addition to the Underwriting Fee, in return for the Canadian
Underwriters' services, the Corporation will issue to the Canadian Underwriters
on the Closing Date 770,000 warrants (the "UNDERWRITERS' WARRANTS"). Each
Underwriters' Warrant will be exercisable into one Common Share. The
Underwriters' Warrants will be exercisable by the Underwriters at a price of
Cdn$2.28 per share for the period beginning one year following the Closing Date
and ending three years following the Closing Date.
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The Canadian Underwriters and the Corporation acknowledge that Schedule
A and Schedule B form a part of this Agreement.
The Canadian Underwriters and the Corporation acknowledge that an
offering of the Units is also being concurrently conducted in the United States
by the U.S. Agents, who are affiliates of the Canadian Underwriters, under the
terms of the U.S. Agreement and the terms of the Inter-Dealer Agreement, as well
as applicable U.S. Securities Laws.
The following, in addition to the above preamble, are the terms and
conditions of the agreement between the Corporation and the Canadian
Underwriters:
SECTION 1 DEFINITIONS AND INTERPRETATION
(1) In this Agreement:
"BUSINESS DAY" means any day other than a Saturday, Sunday or statutory
or civic holiday in the City of Xxxxxxx, Xxxxxxx, and the City of New
York, New York;
"CANADIAN SECURITIES LAWS" means, collectively, all applicable
securities laws of each of the Qualifying Provinces and the respective
rules and regulations under such laws, together with applicable
published policy statements, notices and orders of the securities
regulatory authorities in the Qualifying Provinces;
"CLOSING DATE" has the meaning ascribed thereto in Section 10(1)
hereof;
"CONTINUOUS DISCLOSURE MATERIALS" means all documents previously
published or filed by the Corporation with the securities regulatory
authority in each province of Canada and the Exchanges;
"EXCHANGES" means the Toronto Stock Exchange ("TSX") and the American
Stock Exchange ("AMEX");
"FINAL PROSPECTUS" means the Canadian (final) short form prospectus
dated the date hereof including any documents or information
incorporated therein by reference, prepared by the Corporation and
relating to the distribution of the Securities and the Offering;
"INTER-DEALER AGREEMENT" means that certain inter-dealer agreement,
dated the date hereof, between the Canadian Underwriters and the U.S.
Agents;
"MATERIAL RESOURCE PROPERTIES" has the meaning ascribed thereto in
Section 6(1)(k);
"MATERIAL SUBSIDIARIES" means the entities set out in Schedule A in
which the Corporation holds the types and percentages of securities or
other ownership interests therein set forth;
"MRRS DECISION DOCUMENT" means a decision document issued by the
applicable Canadian securities regulatory authority pursuant to
National Policy 43-201 and which evidences the receipts by the
applicable Canadian securities regulatory authorities in
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each of the Qualifying Provinces for the Preliminary Prospectus or the
Final Prospectus, as the case may be;
"PRELIMINARY PROSPECTUS" means the Canadian preliminary short form
prospectus dated June 13, 2002, as amended and restated as of July 1,
2002, including any documents or information incorporated therein by
reference, prepared by the Corporation and relating to the distribution
of the Securities and the Offering;
"PROSPECTUS AMENDMENT" means any amendment to the Preliminary
Prospectus or the Final Prospectus required to be prepared and filed by
the Corporation under applicable Canadian Securities Laws in connection
with the Offering;
"QUALIFYING AUTHORITIES" means each of the securities regulatory
authorities in each of the Qualifying Provinces;
"RESOURCE PROPERTIES" has the meaning ascribed thereto in Section
6(1)(k) hereof;
"STOCK OPTION PLANS" means the stock option plans of the Corporation as
approved by the shareholders of the Corporation, as constituted on the
date hereof;
"SUPPLEMENTARY MATERIAL" has the meaning ascribed thereto in Section
13(1)(a);
"TIME OF CLOSING" has the meaning ascribed thereto in Section 10(1)
hereof;
"UNITED STATES" means the United States of America, its territories and
possessions, any state of the United States, the District of Columbia,
and the areas subject to the jurisdiction of the United States of
America;
"U.S. AGENTS" means Canaccord Capital Corporation (USA) Inc. and BMO
Xxxxxxx Xxxxx Corp. together, and "U.S. Agent" means either one of
them;
"U.S. AGREEMENT" means that certain agency agreement, dated the date
hereof, between the U.S. Agents and the Corporation;
"U.S. EXCHANGE ACT" means the United States Securities Exchange Act of
1934, as amended;
"U.S. REGISTRATION STATEMENT" means the registration statement on Form
S-3 (File No. 333-91666) filed with the SEC, with respect to the
Securities, under the U.S. Securities Act, including the exhibits,
financial statements and schedules thereto, which Registration
Statement has been declared effective by the SEC and includes the U.S.
Prospectus;
"U.S. SECURITIES ACT" means the United States Securities Act of 1933,
as amended;
"U.S. SECURITIES LAWS" means the applicable blue sky or securities
legislation in the United States, together with the U.S. Exchange Act
and the U.S. Securities Act and the rules and regulations of the SEC
and the applicable state securities regulators thereunder;
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"U.S. PRELIMINARY PROSPECTUS " means the preliminary prospectus
included in the U.S. Registration Statement;
"U.S. PROSPECTUS" means the prospectus dated July 17, 2002 included in
the U.S. Registration Statement; and
"WARRANT INDENTURE" means the warrant indenture to be entered into
between the Corporation and CIBC Mellon Trust Company, as warrant
agent, providing for the creation and issue of the Warrants.
(2) The division of this Agreement into sections, subsections, paragraphs
and other subdivisions and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of this Agreement. Unless something in the subject
matter or context is inconsistent therewith, references herein to
sections, subsections, paragraphs and other subdivisions are to
sections, subsections, paragraphs and other subdivisions of this
Agreement.
(3) Except as otherwise indicated, all amounts expressed herein in terms of
money refer to lawful currency of Canada and all payments to be made
hereunder shall be made in such currency.
SECTION 2 COMPLIANCE WITH SECURITIES LAWS
(1) As of the date of this Canadian Underwriting Agreement, the Corporation
will have prepared and filed the Preliminary Prospectus with the
Qualifying Authorities together with the required supporting documents,
will have addressed the comments made by such Qualifying Authorities,
in respect of the Preliminary Prospectus and any amendment thereto, and
shall have received an MRRS Decision Document in respect thereof. The
Corporation covenants and agrees with the Canadian Underwriters that as
soon as practicable, it will prepare (subject to review by the Canadian
Underwriters) and file with the Qualifying Authorities, the Final
Prospectus, together with the required supporting documents, and use
its reasonable best efforts to obtain the MRRS Decision Document from
such Qualifying Authorities in order to qualify the distribution of the
Securities.
(2) The representations and warranties made by the Corporation in Section 2
of the U.S. Agreement are incorporated herein by reference and shall
have the same effect as if made to the Canadian Underwriters under this
Canadian Underwriting Agreement.
SECTION 3 DUE DILIGENCE
Prior to the Time of Closing, and, if applicable, prior to the filing
of any Prospectus Amendment and prior to the filing of any Supplementary
Material, including on any intervening weekends, the Corporation shall allow the
Canadian Underwriters to participate fully in the preparation of such documents
and shall allow the Canadian Underwriters to conduct all due diligence that the
Canadian Underwriters may require to conduct in order to fulfil their
obligations as underwriters and in order to enable the Canadian Underwriters
responsibly to execute any certificate required to be executed by them,
provided, however, that this Section 3 is not intended to operate as a condition
of the Offering.
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SECTION 4 CONDITIONS OF THE OFFERING
The Canadian Underwriters' obligations under this Agreement are
conditional upon and subject to:
(1) the Canadian Underwriters receiving at the Time of Closing favourable
legal opinions dated the Closing Date, addressed to the Canadian
Underwriters and their counsel from Field Xxxxxxxx Perraton LLP,
Canadian counsel to the Corporation (who may rely, to the extent
appropriate in the circumstances, on the opinions of local counsel
acceptable to counsel to the Corporation and counsel to the Canadian
Underwriters as to the qualification of the Securities for sale to the
public and as to other matters governed by the laws of the Qualifying
Provinces other than the provinces in which they are qualified to
practice and may rely, to the extent appropriate in the circumstances,
as to matters of fact on certificates of officers, of public officials
and of Exchange officials or of the auditors or transfer agent of the
Corporation), to the effect set forth below:
(a) the Corporation having been amalgamated and existing under the
laws of Canada;
(b) the Corporation having the corporate capacity and power to own
and lease its properties and assets and to conduct its
business as described in the Final Prospectus and to execute
and deliver this agreement and to carry out the transactions
contemplated hereby;
(c) the authorized share capital of the Corporation being as
described in the Final Prospectus;
(d) all necessary corporate action having been taken by the
Corporation to authorize the execution and delivery of this
Agreement and the U.S. Agreement and the performance of its
obligations hereunder and thereunder and this Agreement and
the U.S. Agreement have been duly executed and delivered by
the Corporation and each agreement constitutes a legal, valid
and binding obligation of, and is enforceable against, the
Corporation in accordance with its terms (subject to
bankruptcy, insolvency or other laws affecting the rights of
creditors generally, general equitable principles including
the availability of equitable remedies and the qualification
that no opinion need be expressed as to rights to indemnity,
contribution and waiver of contribution) and the execution and
delivery by the Corporation of this Agreement and the U.S.
Agreement, the fulfilment of the terms hereof and thereof by
the Corporation, and the issue, sale and delivery on the
Closing Date of the Securities and the Underwriters' Warrants
to the Canadian Underwriters and the U.S. Agents as
contemplated herein and in the U.S. Agreement do not
constitute or result in a breach of or a default under, and do
not create a state of facts which, after notice or lapse of
time or both, will constitute or result in a breach of, and
will not conflict with, any of the terms, conditions or
provisions of the articles or by-laws of the Corporation;
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(e) all necessary corporate action having been taken by the
Corporation to authorize the execution and delivery of the
Warrant Indenture and the performance of the its obligations
thereunder and that the Warrant Indenture has been duly
executed and delivered by the Corporation and constitutes a
legal, valid and binding obligation of, and is enforceable
against, the Corporation in accordance with its terms (subject
to bankruptcy, insolvency or other laws affecting the rights
of creditors generally, general equitable principles including
the availability of equitable remedies and the qualification
that no opinion need be expressed as to rights to indemnity,
contribution and waiver of contribution);
(f) the issuance and sale of the Common Shares comprised in the
Securities, the creation, issuance and sale of the Warrants
comprised in the Securities, and the creation and issuance of
the Underwriters' Warrants have been authorized by all
necessary action on the part of the Corporation;
(g) all documents required to be filed by the Corporation and all
proceedings required to be taken by the Corporation under
applicable Canadian Securities Laws having been filed and
taken in order to qualify the distribution (or distribution to
the public, as the case may be) of the Securities in each of
the Qualifying Provinces through investment dealers or brokers
registered under the applicable laws thereof who have complied
with the relevant provisions thereof;
(h) all legal requirements will have been fulfilled by the
Corporation under applicable Canadian Securities Laws so that
the issuance of the Common Shares on exercise of Warrants and
the Underwriters' Warrants (the "UNDERLYING COMMON SHARES")
will be exempt from the prospectus requirements of the
applicable Canadian Securities Laws, and such Underlying
Common Shares will not be subject to any statutory hold
period, and no other documents will be required to be filed,
proceedings taken, or approvals, permits, consents or
authorizations obtained under the applicable Canadian
Securities Laws to permit the trading in the Qualifying
Provinces of the Underlying Common Shares, through registrants
registered under applicable Canadian Securities Laws or in
circumstances in which there is an exemption from the
registration requirements of such applicable laws, subject to
usual exceptions;
(i) the Securities and the Underlying Common Shares having been
conditionally approved for listing on the TSX subject only to
compliance with the documentary filing requirements of such
exchange;
(j) the attributes and characteristics of the Securities being
accurately summarized in all material respects under the
heading "Details of the Offering" in the Final Prospectus;
(k) the Common Shares and the Underlying Common Shares, when and
if issued by the Corporation, having been validly issued by
the Corporation and being fully-paid and non-assessable shares
in the capital of the Corporation;
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(l) the Securities being, at the Time of Closing, eligible for
investment pursuant to the statutes set forth under the
heading "Eligibility for Investment" in the Final Prospectus;
(m) as to certain Canadian federal income tax matters, as
described in the Final Prospectus under the heading
"Eligibility for Investment"; and
(n) during the course of the Corporation's preparation of the
Final Prospectus and its participation in conferences with
officers and other representatives of the Corporation, the
Corporation's independent public accountants, the U.S. Agents
and the Canadian Underwriters and their counsel, during which
the contents of the Final Prospectus were discussed, and while
it has not independently verified and is not passing upon the
accuracy, completeness or fairness of the statements made in
the Final Prospectus except as explicitly set forth in
paragraphs (l) and (m) hereof, no facts have come to its
attention that lead it to believe that the Final Prospectus
(other than the financial statements, financial and related
statistical data and supporting schedules as to which it makes
no statement), contained any untrue statement of a material
fact or omitted or omits to state any material fact required
to be stated therein or necessary to make the statements
therein not misleading; or that the Final Prospectus, as of
its date or as of the Closing Date, contains any untrue
statement of a material fact or omits to state any material
fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not
misleading.
and Stoel Rives LLP, the Corporation's U.S. counsel as to those matters
set forth in Schedule B to the U.S. Agreement, in each case addressed
to the Canadian Underwriters and their counsel, dated the Closing Date,
and in form and substance satisfactory to the Canadian Underwriters and
their counsel;
(2) the Canadian Underwriters having received the comfort letter referred
to in Section 9(1)(a);
(3) the Canadian Underwriters having received a comfort letter, dated the
Closing Date, in form and substance satisfactory to the Canadian
Underwriters, acting reasonably, bringing forward to a date not more
than two business days prior to the Closing Date the information
contained in the comfort letter referred to in Section 9(1)(a);
(4) the Canadian Underwriters receiving at the Time of Closing a legal
opinion (or opinions) dated the Closing Date, in form and substance
satisfactory to the Canadian Underwriters and their counsel, addressed
to the Canadian Underwriters and their counsel, from local counsel to
the Corporation, as to mining title matters with respect to each of the
Material Resource Properties (as hereinafter defined);
(5) the Canadian Underwriters receiving at the Time of Closing a legal
opinion (or opinions) dated the Closing Date, in form and substance
satisfactory to the Canadian Underwriters and their counsel, addressed
to the Canadian Underwriters and their counsel, from local counsel to
the Corporation, stating that each of Caystar Holdings, Bogoso
Holdings, Bogoso Gold Limited and Wasford Holdings has been duly
created
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and is validly existing under the laws of the jurisdiction in which it
was incorporated, amalgamated or continued, and that the Corporation or
a Material Subsidiary owns all of the issued and outstanding share
capital of such corporations, except as set out in Schedule A, in each
case addressed to the Canadian Underwriters and their counsel, dated
the Closing Date, and in form and substance satisfactory to the
Canadian Underwriters and their counsel;
(6) at the Time of Closing, there having been no material adverse change in
the business, affairs, operations, assets, liabilities or financial
condition of the Corporation on a consolidated basis since the date
hereof;
(7) at the Time of Closing, CIBC Mellon Trust Company, at is principal
office in Vancouver, having been duly appointed as the transfer agent
and registrar for the Common Shares and warrant trustee for the
Warrants, and the Warrant Indenture having been executed by the
Corporation and CIBC Mellon Trust Company;
(8) the U.S. Agreement having been executed by the Corporation and the U.S.
Agents, and none of the U.S. Agents shall have relied upon any rights
of termination in the U.S. Agreement to terminate the offering of the
Securities in the United States, and all conditions to the U.S. Agents'
obligations thereunder having been satisfied or waived by the U.S.
Agents;
(9) the U.S. Registration Statement being declared effective by the SEC;
(10) the Corporation delivering a certificate signed on behalf of the
Corporation by the Chief Executive Officer of the Corporation and the
Chief Financial Officer of the Corporation, addressed to the Canadian
Underwriters and dated the Closing Date, in a form satisfactory to the
Canadian Underwriters and their counsel, certifying for and on behalf
of the Corporation and not in their personal capacities that, to the
actual knowledge of the persons signing such certificate, after having
made due inquiry:
(a) the Corporation has complied in all respects with all
covenants and satisfied all terms and conditions of this
Agreement on its part to be complied with and satisfied at or
prior to the Time of Closing on the Closing Date;
(b) no order, ruling or determination having the effect of ceasing
or suspending trading in any securities of the Corporation or
prohibiting the sale of the Securities or any of the
Corporation's issued securities has been issued and no
proceeding for such purpose is pending or, to the knowledge of
such officers, threatened;
(c) the Corporation is a "reporting issuer" or its equivalent
under the securities laws of each of the Qualifying Provinces
and eligible to use the POP System and no material change
relating to the Corporation on a consolidated basis has
occurred since the date hereof with respect to which the
requisite material change report has not been filed and no
such disclosure has been made on a confidential basis that
remains subject to confidentiality; and
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(d) all of the representations and warranties made by the
Corporation in this Agreement are true and correct as of the
Time of Closing with the same force and effect as if made at
and as of the Time of Closing after giving effect to the
transactions contemplated hereby;
(11) the National Association of Securities Dealers, Inc. ("NASD") has
confirmed that it has not raised any objection with respect to the
fairness and reasonableness of the underwriting terms and arrangements
related to the Offering; and
(12) the Canadian Underwriters receiving at the Time of Closing such further
certificates, opinions of counsel and other documentation from the
Corporation as are consistent with the transactions contemplated
herein.
SECTION 5 COVENANTS OF THE CANADIAN UNDERWRITERS
(1) The Canadian Underwriters:
(a) shall offer or arrange the offer of the Securities for sale to
the public, directly and through other investment dealers and
brokers (the Canadian Underwriters, together with such other
investment dealers and brokers, are referred to herein as the
"SELLING FIRMS"), only as permitted by and in compliance with
all relevant laws and regulatory requirements of applicable
Canadian Securities Laws, upon the terms and conditions set
forth in the Final Prospectus and in this Agreement and will
require each Selling Firm to so agree;
(b) shall not solicit offers to purchase or sell the Securities so
as to require registration thereof or the filing of a
prospectus or similar document with respect thereto under the
laws of any jurisdiction other than the Qualifying Provinces,
and will require each Selling Firm to agree with the Canadian
Underwriters not to so solicit or sell. In this connection,
the Canadian Underwriters agree that they will not offer or
sell any of the Securities constituting a part of their
allotment within the United States except, if applicable,
through the U.S. Agents on the terms and conditions set forth
in the U.S. Agreement and the Inter-Dealer Agreement and in
compliance with U.S. Securities Law. For the purposes of this
Section 5(1)(b), the Canadian Underwriters shall be entitled
to assume that the Securities are qualified for distribution
in any Qualifying Province where a receipt or similar document
for the Final Prospectus shall have been obtained from the
applicable Canadian securities regulatory authority following
the filing of the Final Prospectus;
(c) agree that if they offer to sell or sell any Securities in
jurisdictions other than the Qualifying Provinces (which may
include Europe), such offers and sales shall be effected in
accordance and compliance with the applicable laws of such
jurisdictions and shall be effected in such manner so as not
to: (i) require registration of the Securities, or the filing
of a prospectus or other document with respect thereto; or
(ii) subject the Corporation to any continuous disclosure or
similar reporting requirements under the laws of any
jurisdiction outside the provinces of Canada or the United
States;
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(d) shall use all reasonable efforts to complete and to cause the
other Selling Firms to complete the distribution of the
Securities as soon as practicable;
(e) shall notify the Corporation when, in their opinion, the
Canadian Underwriters and the other Selling Firms have ceased
distribution of the Securities and shall provide a breakdown
of the number of Securities distributed in each of the
Qualifying Provinces; and
(f) shall comply with any applicable laws with respect to the use
of "green sheets" and other marketing materials during the
"waiting period" (as defined under applicable Canadian
Securities Laws).
(2) Notwithstanding the foregoing, no Canadian Underwriter shall be liable
to the Corporation with respect to any other Canadian Underwriter under
this Section 5.
SECTION 6 REPRESENTATIONS AND WARRANTIES OF THE CORPORATION
(1) The Corporation hereby represents and warrants to the Canadian
Underwriters, intending that the same may be relied upon by the
Canadian Underwriters, that:
(a) each of the Corporation and the Material Subsidiaries has been
duly incorporated, continued or amalgamated and organized and
is validly existing under the laws of its jurisdiction of
incorporation, continuance or amalgamation, has all requisite
corporate power and authority to carry on its business as now
conducted and as contemplated by the Final Prospectus, and to
own, lease and operate its properties and assets, and the
Corporation has all requisite power and authority to carry out
its obligations under this Agreement;
(b) the only major operating subsidiaries of the Corporation are
listed in Schedule A;
(c) the Corporation or one of its Material Subsidiaries owns the
issued and outstanding shares of each of the Material
Subsidiaries as set out in Schedule A, in each case free and
clear of any pledge, lien, security interest, charge, claim or
encumbrance;
(d) upon completion of the Wassa Transactions (as defined below),
Wasford Holdings will own 90% of the issued and outstanding
shares of Wexford Goldfields Limited, free and clear of any
pledge, lien, security interest, charge, claim or encumbrance,
other than as is held for the benefit of Bayerische Hypo-und
Vereinsbank AG, Dresdner Bank AG, Fortis Bank (Nederland)
N.V., and Standard Bank London Limited (the "SECURED BANKS"),
which banks are providing funding in respect of the
acquisition;
(e) the Corporation is a reporting issuer or the equivalent in
each of the provinces of Canada and the Corporation is not in
default of any of the requirements of the securities laws of
such jurisdictions;
(f) the Corporation was and is eligible to use the POP System and
at the respective times of filing, each of the Preliminary
Prospectus and the Final Prospectus
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together with any Prospectus Amendment and any Supplementary
Material have and will comply with the requirements of the
applicable Canadian Securities Laws pursuant to which they
have been filed, have and will provide full, true and plain
disclosure of all material facts (as defined in the Securities
Act (Ontario)) relating to the Corporation on a consolidated
basis and to the Securities and will not contain any
misrepresentation (as defined in the Securities Act
(Ontario)), provided that the foregoing shall not apply with
respect to statements contained in such documents relating
solely to the Canadian Underwriters;
(g) no order, ruling or determination having the effect of
ceasing, suspending or restricting trading in any securities
of the Corporation or the sale of the Common Shares or
Warrants comprised in the Securities has been issued and no
proceedings, investigations or inquiries for such purpose are
pending or, to the Corporation's knowledge, threatened;
(h) the Corporation's Common Shares are posted and listed for
trading on the Exchanges and the Corporation is not in default
in any material respect of any of the listing requirements of
the Exchanges;
(i) other than options under the Corporation's Stock Option Plans,
the Corporation is not a party to and has not entered into any
agreement, warrant, option, right or privilege reasonably
capable of becoming an agreement, for the purchase,
subscription or issuance of any Common Shares or securities
convertible into or exchangeable for Common Shares other than
as set out in Schedule B;
(j) as at the date hereof, the authorized share capital of the
Corporation consists of an unlimited number of Common Shares
and an unlimited number of First Preferred shares, of which
67,000,703 Common Shares and no First Preferred shares are
issued and outstanding;
(k) the Corporation and each of the Material Subsidiaries have
conducted and are conducting their respective businesses in
compliance with all applicable laws, rules, regulations,
tariffs, orders and directives, including without limitation,
all laws, regulations and statutes relating to mining and to
mining claims, concessions or leases, and environmental,
health and safety laws, rules, regulations, or policies or
other lawful requirements of any governmental or regulatory
bodies having jurisdiction over the Corporation and the
Material Subsidiaries in each jurisdiction in which the
Corporation or the Material Subsidiaries carries on their
respective businesses, other than those in respect of which
the failure to comply would not individually or in the
aggregate be material and each of the Corporation and the
Material Subsidiaries holds all certificates, authorities,
permits, licenses, registrations and qualifications
(collectively, the "AUTHORITIES") in all jurisdictions in
which each carries on its business and which are material for
and necessary or desirable to carry on their respective
businesses as now conducted and to the best of the
Corporation's knowledge, information and belief all the
Authorities are valid and existing and in good standing and
none of the Authorities contain any burdensome term,
- 13 -
provision, condition or limitation which has or is likely to
have any material adverse effect on the business of the
Corporation and the Material Subsidiaries (taken as a whole)
as now conducted or as proposed to be conducted, and neither
the Corporation nor any of the Material Subsidiaries has
received any notice of proceedings relating to the revocation
or modification of any of the Authorities which, singly or in
the aggregate, if the subject of an unfavourable decision,
ruling or finding, would materially adversely affect the
business, operations, financial condition, or income of the
Corporation or the Material Subsidiaries (taken as a whole) or
any notice of the revocation or cancellation of, or any
intention to revoke or cancel, any of the mining claims,
concessions or leases comprising:
(i) the Bogoso property;
(ii) the Prestea property;
(iii) the Xxxx Xxxxxx property;
(iv) the Yaou and Dorlin properties; and
(v) the St. Elie property;
(each as described in the Form 10-K of the Corporation dated
March 25, 2002, collectively referred to herein as the
"RESOURCE PROPERTIES", and the Bogoso property and the Prestea
property collectively being referred to herein as the "
MATERIAL RESOURCE PROPERTIES");
(l) neither the Corporation nor any of the Material Subsidiaries
has received any notice of the revocation or cancellation of,
or any intention to revoke or cancel, any of the material
mining claims, concessions or leases comprising the Wassa
property;
(m) the Corporation and each of its Material Subsidiaries have
good and marketable title to all assets owned by them free and
clear of all liens, charges and encumbrances, other than as
will be held for the benefit of the Secured Banks, which banks
are providing funding in respect of the acquisition of Wexford
Goldfields Limited, upon completion of such acquisition and
other than such liens, charges and encumbrances that are not
individually or in the aggregate material to the Corporation
or the Material Subsidiaries;
(n) all interests in the Resource Properties are owned, leased or
held by the Corporation or its Material Subsidiaries as owner
or lessee thereof, are so owned with good and marketable title
or are so leased with good and valid title, are in good
standing, are valid and enforceable, are free and clear of any
liens, charges or encumbrances and no royalty is payable in
respect of any of them, except as set out in the Final
Prospectus or the Continuous Disclosure Materials or as are
not individually or in the aggregate material to the
Corporation or Material Subsidiaries, or other than as would
not have a material effect on the value of
- 14 -
such interests; no other material property rights are
necessary for the conduct or intended conduct of the
Corporation's or the Material Subsidiaries' business and there
are no restrictions on the ability of the Corporation or the
Material Subsidiaries to use, transfer or otherwise exploit
any such property rights, except as set out in the Final
Prospectus or the Continuous Disclosure Materials;
(o) the Corporation is in the process of acquiring, through its
wholly-owned subsidiary Wasford Holdings, 90% of the equity of
Wexford Goldfields Limited, which is in the process of
acquiring all interests in the Wassa gold property in Ghana
(the "WASSA TRANSACTIONS"). The Wassa property and the current
terms of the Wassa Transaction are as described in the
Preliminary Prospectus and the Final Prospectus. It is
expected that the Wassa Transactions will close by September
1, 2002. The Corporation knows of no fact, event, occurrence,
announcement or any other thing that would, or might
reasonably be expected to, materially increase the costs of
the closing of the Wassa Transactions, or materially delay the
closing of the Wassa Transactions;
(p) (A) the Corporation and its Material Subsidiaries are in
compliance with all material terms and provisions of all
contracts, agreements, indentures, leases, instruments and
licences material to the conduct of its business and (B) all
such contracts, agreements, indentures, leases, policies,
instruments and licences are valid and binding in accordance
with their terms and in full force and effect;
(q) to the best of the Corporation's knowledge, information and
belief none of the real property (and the buildings
constructed thereon) in which the Corporation or any of the
Material Subsidiaries has a direct or indirect interest,
whether leasehold or fee simple or otherwise (the "REAL
PROPERTY"), or upon or within which it has operations, is
subject to any judicial or administrative proceeding alleging
the violation of any federal, provincial, state or municipal
environmental, health or safety statute or regulation,
domestic or foreign, or is subject to any investigation
concerning whether any remedial action is needed to respond to
a release of any Hazardous Material (as defined below) into
the environment. Neither the Corporation nor any Material
Subsidiary nor, to the Corporation's knowledge, any occupier
of the Real Property, has filed any notice under any federal,
provincial, state or municipal law, domestic or foreign,
indicating past or present treatment, storage or disposal of a
Hazardous Material. Except in compliance with applicable
environmental laws, none of the Real Property has at any time
been used by the Corporation or a Material Subsidiary or, to
the best of the Corporation's knowledge, information and
belief by any other occupier, as a waste storage or waste
disposal site. The Corporation, on a consolidated basis, has
no contingent liability of which it has knowledge in
connection with any release of any Hazardous Material on or
into the environment from any of the Real Property or
operations thereon. Neither the Corporation nor any Material
Subsidiary nor, to the best of the Corporation's knowledge,
any occupier of the Real Property, generates, transports,
treats, processes, stores or disposes of any waste on any of
the Real Property in contravention of applicable federal,
provincial, state or municipal laws or
- 15 -
regulations enacted for the protection of the natural
environment (including, without limitation, ambient air,
surface water, ground water, land surface or subsurface
strata) or human health or wildlife. To the Corporation's
knowledge, no underground storage tanks or surface
impoundments containing a petroleum product or Hazardous
Material are located on any of the Real Property in
contravention of applicable federal, provincial, state or
municipal laws or regulations, domestic or foreign, enacted
for the protection of the natural environment (including,
without limitation, ambient air, surface water, ground water,
land surface or subsurface strata), human health or wildlife.
For the purposes of this Section 6(1)(q), "HAZARDOUS MATERIAL"
means any contaminant, chemical, pollutant, subject waste,
hazardous waste, deleterious substance, industrial waste,
toxic matter or any other substance that when released into
the natural environment (including, without limitation,
ambient air, surface water, ground water, land surface or
subsurface strata) is likely to cause, at some immediate or
future time, harm or degradation to the natural environment
(including, without limitation, ambient air, surface water,
ground water, land surface or subsurface strata) or risk to
human health and, without restricting the generality of the
foregoing, includes any contaminant, chemical, pollutant,
subject waste, deleterious substance, industrial waste, toxic
matter or hazardous waste as defined by applicable federal,
provincial, state or municipal laws or regulations enacted for
the protection of the natural environment (including, without
limitation, ambient air, surface water, ground water, land
surface or subsurface strata), or human health or wildlife;
(r) except as disclosed in the Final Prospectus or the Continuous
Disclosure Materials, the Corporation and each of its Material
Subsidiaries maintain appropriate insurance against loss of,
or damage to, their assets for all insurable risks on a
repair, reinstatement or replacement cost basis, and all of
the policies in respect of such insurance coverage are in good
standing in all respects and not in default;
(s) the consolidated audited financial statements of the
Corporation for its fiscal years ended December 31, 1999,
December 31, 2000 and December 31, 2001 and the unaudited
interim financial statements of the Corporation for the
quarter ended March 31, 2002 (collectively the "CORPORATION'S
FINANCIAL STATEMENTS"), copies of which are incorporated by
reference in the Preliminary Prospectus and the Final
Prospectus, including any reconciliation of financial
statements prepared in accordance with generally accepted
accounting principles in Canada with generally accepted
accounting principles in the United States, are true and
correct in every material respect and present fairly and
accurately the financial position and results of the
operations of the Corporation on a consolidated basis for the
periods then ended and the Corporation's Financial Statements
have been prepared in accordance with generally accepted
accounting principles in Canada applied on a consistent basis,
and comply as to form in all material respects with the
applicable accounting requirements of the U.S. Securities Act
and the U.S. Exchange Act, as applicable, and the related
published rules and regulations thereunder;
- 16 -
(t) the execution and delivery of and the performance by the
Corporation of this Agreement and the U.S. Agreement and the
consummation of the transactions contemplated hereby and
thereby, including the issuance and sale of the Common Shares
comprised in the Securities, the creation, issuance and sale
of the Warrants comprised in the Securities, and the creation
and issuance of the Underwriters' Warrants have been
authorized by all necessary action on the part of the
Corporation;
(u) this Agreement and the U.S. Agreement have been duly executed
and delivered by the Corporation and each such agreement is a
legal, valid and binding obligation of, and is enforceable
against, the Corporation in accordance with its terms (subject
to bankruptcy, insolvency or other laws affecting the rights
of creditors generally, the availability of equitable remedies
and the qualification that rights to indemnity and waiver of
contribution may be contrary to public policy);
(v) the Final Prospectus complies fully, in all respects, with the
requirements of Canadian Securities Laws; for greater
certainty, the documents incorporated by reference therein, at
the time they were filed, complied in all respects of Canadian
Securities Laws;
(w) except as included or incorporated by reference therein, there
are no financial statements or other documents required to be
included in the Preliminary Prospectus or Final Prospectus as
a result of a "significant acquisition" or "significant
disposition", each as described in NI 44-101;
(x) except as disclosed in the Final Prospectus or the Continuous
Disclosure Materials, since March 31, 2002: (A) there has been
no material change in the business, affairs, operations,
assets, liabilities or financial condition of the Corporation
on a consolidated basis; (B) no material change reports or
other documents have been filed on a confidential basis with
the Qualifying Authorities; (C) there has been no transaction
entered into by the Corporation and not disclosed in the
Continuous Disclosure Materials which is material to the
Corporation; (D) the Corporation and its Material
Subsidiaries, on a consolidated basis, have not incurred any
material liability or obligation, indirect, direct or
contingent, not in the ordinary course of business, nor
entered into any material transaction or agreement not in the
ordinary course of business; and (E) there has been no
dividend or distribution of any kind declared, paid or made by
the Corporation or, except for dividends paid to the
Corporation or its Material Subsidiaries, any of its Material
Subsidiaries, on any class of capital stock or repurchase or
redemption by the Corporation or any of its Material
Subsidiaries of any class of capital stock;
(y) the directors and officers of the Corporation and their
compensation arrangements with the Corporation, whether as
directors, officers or employees of the Corporation, are as
disclosed in the Preliminary Prospectus and Final Prospectus
or in the Continuous Disclosure Materials if required to be so
disclosed;
- 17 -
(z) all of the material contracts and agreements of the
Corporation and of its Material Subsidiaries not made in the
ordinary course of business (collectively the "MATERIAL
CONTRACTS") have been disclosed in the Continuous Disclosure
Materials;
(aa) all tax returns, reports, elections, remittances and payments
of the Corporation and of its Material Subsidiaries required
by law to have been filed or made in any applicable
jurisdiction, have been filed (or are in the process of being
prepared for filing, which delayed filing will not have an
adverse effect on the Corporation or any of its Material
Subsidiaries) or made (as the case may be), other than for
taxes being contested in good faith, or with respect to which
the failure to file or make would not have a material adverse
effect, either individually or in the aggregate, to the
Corporation and the Material Subsidiaries and, to the
knowledge of the Corporation, are substantially true, complete
and correct and all taxes of the Corporation and of its
Material Subsidiaries, in respect of which payment or accrual
is required under applicable law, other than taxes being
contested in good faith, have been so paid or accrued in the
Corporation's Financial Statements;
(bb) the Common Shares and Warrants comprised in the Securities are
not "foreign property" for purposes of the Income Tax Act
(Canada);
(cc) there is no material action, suit, proceeding, investigation
or judgment pending, or to the Corporation's knowledge
threatened or outstanding against or affecting the Corporation
or any Material Subsidiary (or their respective officers and
directors) at law or in equity or before or by any federal,
provincial, state, municipal or other governmental department,
commission, board or agency, domestic or foreign, which in any
way materially adversely affects or may materially adversely
affect the business, operations or condition of the
Corporation or any Material Subsidiary (financial or
otherwise) or its property or assets or which questions or may
question the validity of the creation, issuance or sale, of
the Securities or any action taken or to be taken by the
Corporation or any Material Subsidiary pursuant to or in
connection with this Agreement or any other material contract
to which the Corporation or any Material Subsidiary is a
party, as the case may be;
(dd) except as have been made or obtained prior to Closing, under
the laws of the Qualifying Provinces and the United States, no
consent, approval, authorization, order, filing, registration
or qualification of or with any court, governmental agency or
body or regulatory authority is required for the creation,
issue, sale and delivery (as the case may be) of the
Securities or the Underwriters' Warrants or the consummation
by the Corporation of the transactions contemplated in this
Agreement and the U.S. Agreement;
(ee) all necessary corporate action has been taken or will have
been taken prior to the Time of Closing by the Corporation so
as to validly issue and sell the Common Shares comprised in
the Securities, to validly create and issue the Underwriters'
Warrants to the Canadian Underwriters and to validly create,
issue and sell the
- 18 -
Warrants comprised in the Securities to the Canadian
Underwriters and upon receipt by the Corporation of the
purchase price as consideration for the issue of the
Securities, the Common Shares comprised in the Securities will
be validly issued and outstanding as fully paid and
non-assessable shares of the Corporation;
(ff) the attributes of the Securities conform in all material
respects with the description thereof contained in the Final
Prospectus;
(gg) there are no material business relationships or related party
transactions within the meaning of Ontario Securities
Commission Rule 61-501 involving the Corporation or any of its
Material Subsidiaries or any other person except as described
in the Final Prospectus or the Continuous Disclosure
Materials;
(hh) (i) neither the Corporation nor any of its Material
Subsidiaries nor any employee or agent of the Corporation or
any Material Subsidiary, has made any unlawful contribution or
other payment to any official of, or candidate for, any
federal, state, provincial or foreign office, or failed to
disclose fully any contribution, in violation of any law, or
(ii) made any payment to any foreign, United States or state
governmental officer or official, or other person charged with
similar public or quasi-public duties, other than payments
required or permitted by the laws of the United States;
(ii) the Corporation and each of its Material Subsidiaries
maintains a system of internal accounting controls sufficient
to provide reasonable assurance that (i) transactions are
executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with
generally accepted accounting principles in Canada and to
maintain asset accountability; (iii) access to assets is
permitted only in accordance with management's general or
specific authorization; and (iv) the recorded accountability
for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any
differences;
(jj) neither the Corporation nor any of the Corporation's officers,
directors or affiliates has taken, and at the Closing Date
will have taken, directly or indirectly, any action which has
constituted, or might reasonably be expected to constitute,
the stabilization or manipulation of the price of sale or
resale of the Securities;
(kk) the Corporation has timely and properly filed (i) with the SEC
all reports and other documents required to have been filed by
it with the SEC pursuant to the U.S. Securities Act and the
rules and regulations, and (b) all reports or other documents
required to have been filed by it with the securities
commission or similar regulatory body of each province in
Canada, the Toronto Stock Exchange or any other applicable
Canadian governmental authorities. True and complete copies of
all such reports and other documents have been delivered to
the Canadian Underwriters;
- 19 -
(ll) neither the Corporation nor any Material Subsidiary (x) was a
personal holding company within the meaning of Section 542 of
the Internal Revenue Code of 1986, as amended (the "CODE") (a
"PHC"), a foreign personal holding company with the meaning of
Section 542 of the Code (an "FPHC"), or a controlled foreign
corporation with the meaning of Section 957 of the Code (a
"CFC") for its taxable year ended December 31, 1995 or for any
previous taxable year, or (y) expects that it will constitute
a PHC, a FPHC or a CFC for its current taxable year ending
December 31, 2001;
(mm) the Corporation (x) was not a passive foreign investment
company (a "PFIC") within the meaning of section 1296 of the
Code for its taxable year ended December 31, 2001 or for any
previous taxable year and (y) expects that it will not
constitute a PFIC for its current taxable year ending December
31, 2002;
(nn) CIBC Mellon Trust Company, at its principal office in
Vancouver, has been duly appointed as the transfer agent and
registrar for the Common Shares and;
(oo) the form of the certificate representing the Warrants have
been duly approved by the Corporation and comply with the
provisions of the Canada Business Corporations Act and of the
TSX; and
(pp) the Preliminary Prospectus and Final Prospectus, including any
and all amendments thereto, contain and will contain no untrue
statement of a material fact and do not and will not omit to
state a material fact that is required to be stated or that is
necessary to make the statements therein not misleading in
light of the circumstances in which they are made.
(2) The representations and warranties made by the Corporation to the U.S.
Agents in the U.S. Agreement are hereby incorporated by reference, and
shall have the same effect as though they were made to the Canadian
Underwriters under this Agreement.
SECTION 7 REPRESENTATIONS AND WARRANTIES OF THE CANADIAN UNDERWRITERS
(1) Each Canadian Underwriters hereby severally, and not jointly,
represents and warrants that:
(a) it is, and will remain so, until the completion of the
Offering, appropriately registered under applicable Canadian
Securities Laws so as to permit it to lawfully fulfil its
obligations hereunder and it is, and will remain so, until the
completion of the Offering, a member in good standing of the
TSX; and
(b) it has good and sufficient right and authority to enter into
this Agreement and complete its transactions contemplated
under this Agreement on the terms and conditions set forth
herein.
SECTION 8 COVENANTS OF THE CORPORATION
(1) The Corporation covenants with the Canadian Underwriters that:
- 20 -
(a) the Corporation will comply with Section 57 of the Securities
Act (Ontario) and with the comparable provisions of the other
relevant Canadian Securities Laws, and, after the date hereof
and prior to the completion of the distribution of the
Securities, the Corporation will promptly advise the Canadian
Underwriters in writing of the full particulars of any
material change, (as defined in the Securities Act (Ontario)),
in the business, affairs, operations, assets, liabilities or
financial condition of the Corporation, on a consolidated
basis, or of any change in any material fact (as defined in
the Securities Act (Ontario)) contained or referred to in the
Preliminary Prospectus, the Final Prospectus, the U.S.
Prospectus, or any Prospectus Amendment or Supplementary
Material which is, or may be, of such a nature as to render
any statement contained in the Preliminary Prospectus or the
Final Prospectus untrue, false or misleading, result in a
misrepresentation (as defined in the Securities Act
(Ontario)), or result in any of such documents not complying
with the laws of any Qualifying Province or the United States.
The Corporation will promptly prepare and file with the
securities authorities in the Qualifying Provinces or the
United States any amendment or supplement to the Preliminary
Prospectus or the Final Prospectus or the U.S. Prospectus,
which in the opinion of the Canadian Underwriters and the
Corporation, each acting reasonably, may be necessary or
advisable to correct such untrue or misleading statement or
omission. The Corporation shall in good faith discuss with the
Canadian Underwriters any change in circumstances (actual,
anticipated, contemplated or threatened) which is of such a
nature that there may be a reasonable doubt as to whether
written notice need be given to the Canadian Underwriters
under the provisions of this Section 8(1)(a);
(b) the Corporation will deliver without charge to the Canadian
Underwriters, as soon as practicable, and in any event no
later than July 18, 2002 in the case of the Final Prospectus
and the U.S. Prospectus, and thereafter from time to time
during the distribution of the Securities, in such cities as
the Canadian Underwriters shall notify the Corporation, as
many commercial copies of each of the Preliminary Prospectus,
the Final Prospectus and the U.S. Prospectus, respectively,
(and in the event of any Prospectus Amendment, such Prospectus
Amendment) as the Canadian Underwriters may reasonably request
for the purposes contemplated by Canadian Securities Laws and
U.S. Securities Laws and such delivery shall constitute
consent by the Corporation to the use by the Canadian
Underwriters, the U.S. Agents and the Selling Firms of such
documents in connection with the Offering in all Qualifying
Provinces and the United States, subject to the provisions of
applicable Canadian Securities Laws and U.S. Securities Laws.
The Corporation shall similarly cause to be delivered
commercial copies of the Supplementary Material in such
quantities as the Canadian Underwriters may reasonably
request;
(c) the Corporation shall use its best efforts to arrange that the
Common Shares comprised in the Securities are listed and
posted for trading on the TSX and the AMEX on the Closing
Date, and that the Warrants comprised in the Securities are
listed and posted for trading on the TSX on the Closing Date,
subject only to the documentary filing requirements of each
such exchange;
- 21 -
(d) it will not: (i) offer, pledge, sell, contract to sell any
option or contract to purchase, purchase any option or
contract to sell, grant any option, right or warrant to
purchase, or otherwise lend, transfer or dispose of, directly
or indirectly, any Common Shares or securities convertible
into or exercisable or exchangeable for Common Shares; or (ii)
enter into any swap or other arrangement that transfers, in
whole or in part, any of the economic consequences of
ownership of Common Shares or such other securities, whether
any such transaction described in clause (i) or (ii) above is
to be settled by delivery of Common Shares or such other
securities, in cash or otherwise (other than the Securities
and other than in connection with the grant or exercise of
options, issuances under the Corporation's existing Stock
Option Plans or employee share purchase plan or any other
existing rights of conversion or securities issued as
consideration for an acquisition of assets or shares), for a
period ending 90 days after the closing of the Offering
without the prior written consent of the Lead Manager, such
consent not to be unreasonably withheld;
(e) it will apply the net proceeds from the sale of the Securities
as set forth under "Use of Proceeds" in the Final Prospectus;
and
(f) it will use its reasonable best efforts to make all necessary
arrangements with the Alternative Investment Market of the
London Stock Exchange in order that the Common Shares are
listed on that exchange within 6 months of the Closing Date.
SECTION 9 ADDITIONAL DOCUMENTS UPON FILING OF FINAL PROSPECTUS
(1) The Canadian Underwriters' obligations under this Agreement are
conditional upon the receipt by the Canadian Underwriters, concurrently
with the filing of the Final Prospectus, of:
(a) a "long-form" comfort letter dated the date of Final
Prospectus from the auditors of the Corporation, addressed to
the Canadian Underwriters, in form and substance reasonably
satisfactory to the Canadian Underwriters, relating to the
verification of the financial information and accounting data
and other numerical data of a financial nature contained in
the Final Prospectus and matters involving changes or
developments since the respective dates as of which specified
financial information is given in the Final Prospectus to a
date not more than two business days prior to the date of such
letter. Such letter shall further state that such auditors are
independent with respect to the Corporation within the meaning
of applicable Canadian Securities Laws, and that in their
opinion the audited financial statements of the Corporation
included in the Final Prospectus comply as to form in all
material respects with the applicable accounting requirements
of applicable Canadian Securities Laws;
(b) a copy of the Final Prospectus signed and certified as
required by Canadian Securities Laws; and
- 22 -
(c) a copy of any other document required to be filed by the
Corporation with the Qualifying Authorities under Canadian
Securities Laws of each of the Qualifying Provinces.
(2) The comfort letter referred to in Section 9(1)(a) shall be in addition
to any comfort letters required by the terms of the U.S. Agreement to
be delivered to the U.S. Agents.
(3) Similar documents and comfort letters shall be delivered to the
Canadian Underwriters with respect to any Prospectus Amendment
(provided, in the case of comfort letters, that the Prospectus
Amendment contains financial, accounting or other numerical data of a
financial nature), or as required by the terms of the U.S. Agreement to
be delivered to the U.S. Agents.
SECTION 10 CLOSING
(1) The Offering will be completed at the offices of Stikeman Elliott in
Toronto at 8:00 a.m. (Toronto time) on July 24, 2002 (the "TIME OF
CLOSING" and the "CLOSING DATE", respectively) or at such other time
and/or on such other date as the Canadian Underwriters and the
Corporation may agree upon, but in any event no later than August 7,
2002.
(2) At the Time of Closing, subject to the terms and conditions contained
in this Agreement, the Corporation shall deliver to the Canadian
Underwriters a certificate or certificates representing the Offered
Securities against payment of the purchase price by certified cheque,
bank draft or wire transfer, dated the Closing Date, payable to the
Corporation. The Corporation will, at the Time of Closing and upon such
payment of the purchase price to the Corporation, make payment in full
of the Underwriting Fee.
SECTION 11 CLOSING OF CANADIAN UNDERWRITERS' OPTION
(1) The purchase and sale of the Additional Units shall be completed at
such time and place as the Canadian Underwriters and the Corporation
may agree, but in no event shall such closing occur later than five (5)
full business days after written notice of election to purchase
Additional Units under the Canadian Underwriters' Option is given in
the manner contemplated by the second paragraph of this Agreement (the
"OVER-ALLOTMENT CLOSING").
(2) At the Over-Allotment Closing, subject to the terms and conditions
contained in this Agreement, the Corporation shall deliver to the
Canadian Underwriters a certificate or certificates representing the
Additional Units against payment of the purchase price by certified
cheque, bank draft or wire transfer, dated the date of the
Over-Allotment Closing, payable to the Corporation. The Corporation
will, at the time of the Over-Allotment Closing and upon such payment
of the purchase price to the Corporation, make payment in full of the
Underwriting Fee in respect of the Additional Units.
SECTION 12 TERMINATION RIGHTS
(1) All terms and conditions set out herein shall be construed as
conditions and any breach or failure by the Corporation to comply with
any such conditions in favour of the Canadian Underwriters shall
entitle the Canadian Underwriters to terminate their
- 23 -
obligation to purchase the Securities by written notice to that effect
given to the Corporation prior to the Time of Closing on the Closing
Date. The Corporation shall use its reasonable best efforts to cause
all conditions in this Agreement to be satisfied. It is understood that
the Canadian Underwriters may waive in whole or in part, or extend the
time for compliance with, any of such terms and conditions without
prejudice to their rights in respect of any subsequent breach or
non-compliance, provided that to be binding on the Canadian
Underwriters, any such waiver or extension must be in writing.
(2) In addition to any other remedies that may be available to the Canadian
Underwriters, the Canadian Underwriters shall each be entitled, at
their option, to terminate and cancel, without any liability on the
Canadian Underwriters' part, their obligations under this Agreement to
purchase the Securities, by giving written notice to the Corporation at
any time at or prior to the Time of Closing on the Closing Date:
(a) if there should occur any suspension or limitation of trading
in securities generally on the TSX or AMEX, or if a general
moratorium on commercial banking activities in Toronto or New
York should be declared by the relevant authorities, or if, in
relation to the Corporation, any inquiry, investigation or
other proceeding (whether formal or informal) is commenced,
threatened or announced or any order or ruling is issued by
any officer of such exchange or market, or by the SEC, or any
other regulatory authority in Canada or the United States, or
if any law or regulation under or pursuant to any statute of
Canada or of any province thereof or of the United States or
any state or territory thereof is promulgated or changed
which, in the reasonable opinion of the Canadian Underwriters
(or any of them) operates to prevent or materially restrict
trading the Common Shares or the distribution of the
Securities or could reasonably be expected to have a
significant adverse effect on the market price of the Common
Shares or the Securities;
(b) if, after the date hereof and prior to the Time of Closing,
the state of financial markets in Canada or the United States
is such that, in the reasonable opinion of the Canadian
Underwriters (or either of them), the Securities cannot be
marketed profitably, either Canadian Underwriter shall be
entitled, at its option, to terminate its obligations under
this Agreement by notice to that effect given to the
Corporation at or prior to the Time of Closing;
(c) if any inquiry, investigation or other proceeding is commenced
or any other order is issued under or pursuant to any statute
of Canada or any province thereof (other than an inquiry,
investigation or other proceeding order based solely upon the
activities or alleged activities of any Canadian Underwriter
or Selling Firm) or the United States of America or any
division thereof or there is any change of law or the
interpretation or administration thereof by a securities
regulator or other public authority, which in the reasonable
opinion of the Canadian Underwriters, operates to prevent or
materially restrict the trading of the Common Shares or the
distribution of the Securities;
- 24 -
(d) if there shall occur any material change in the business,
affairs, operations, assets, liabilities or financial
condition of the Corporation on a consolidated basis or other
change in a material fact relating to the Corporation on a
consolidated basis which in the Canadian Underwriters'
reasonable opinion would be expected to have a significant
adverse effect on the market price or value of any of the
Securities or the Common Shares; or
(e) if there should develop, occur or come into effect or
existence any event, action, state, condition or major
financial occurrence of national or international consequence,
including without limiting the generality of the foregoing,
any military conflict, civil insurrection, or any terrorist
action, including without limitation, military insurrection
(whether or not in connection with such conflict or
insurrection), or any law or regulation, which, in the
Canadian Underwriters' reasonable opinion, seriously adversely
affects or involves, or will seriously adversely affect or
involve, the Canadian or United States financial markets or
the business, operations or affairs of the Corporation on a
consolidated basis and/or prevents or materially restricts the
trading of the Common Shares or the distribution of the
Securities.
(3) The Canadian Underwriters shall make reasonable best efforts to give
notice to the Corporation (in writing or by other means) of the
occurrence of any of the events referred to in Section 12(2) provided
that neither the giving nor the failure to give such notice shall in
any way affect the entitlement of the Canadian Underwriters to exercise
this right at any time prior to or at the Time of Closing.
(4) The rights of termination contained in this Section 12 as may be
exercised by the Canadian Underwriters are in addition to any other
rights or remedies the Canadian Underwriters may have in respect of any
default, act or failure to act or non-compliance by the Corporation in
respect of any of the matters contemplated by this Agreement.
(5) If the obligations of the Canadian Underwriters are terminated under
this Agreement pursuant to these termination rights, the Corporation's
liabilities to the Canadian Underwriters shall be limited to the
Corporation's obligations under Section 13, Section 14 and Section 15.
SECTION 13 INDEMNITY
(1) The Corporation covenants and agrees to protect, indemnify, and save
harmless, each of the Canadian Underwriters, and their respective
directors, officers, employees and agents (individually, an
"INDEMNIFIED Party" and collectively, the "INDEMNIFIED PARTIES"),
against all losses, claims, damages, liabilities, reasonable costs or
expenses (but not including loss of profit related to the sale of the
Securities in the Offering) caused or incurred by reason of:
(a) any statement, other than a statement relating solely to the
Canadian Underwriters, contained in the Preliminary
Prospectus, the Final Prospectus, or in any Prospectus
Amendment, or in any supplemental or additional or ancillary
material, information, evidence, return, report, application,
statement or
- 25 -
document (collectively, the "SUPPLEMENTARY MATERIAL") that has
been filed by or on behalf of the Corporation in connection
with the Offering under the relevant securities laws of any of
the Qualifying Provinces which at the time and in the light of
the circumstances under which it was made contains or is
alleged to contain a misrepresentation (as such term is
defined in the Securities Act (Ontario));
(b) the omission or alleged omission to state in the Preliminary
Prospectus, the Final Prospectus, any Prospectus Amendment or
in any Supplementary Material or any certificate of the
Corporation delivered hereunder or pursuant hereto any
material fact (as defined in the Securities Act (Ontario))
(other than a material fact relating solely to the Canadian
Underwriters) required to be stated therein or necessary to
make any statement therein not misleading in light of the
circumstances under which it was made;
(c) any order made or inquiry, investigation or proceeding
commenced or threatened by any securities commission or other
competent authority based upon any untrue statement or
omission or alleged untrue statement or omission in the
Preliminary Prospectus, the Final Prospectus, or Prospectus
Amendment, or any Supplementary Material, other than a
statement relating solely to the Canadian Underwriters, which
prevents or restricts the trading in any of the Common Shares
or the distribution or distribution to the public, as the case
may be, of any of the Securities in any of the Qualifying
Provinces;
(d) the Corporation not complying with any requirement of any
applicable Canadian Securities Laws; or
(e) any breach of a representation or warranty of the Corporation
contained herein or the failure of the Corporation to comply
with any of its obligations hereunder.
(2) To the extent that any Indemnified Party is not a party to this
Agreement, the Canadian Underwriters shall obtain and hold the right
and benefit of the above-noted indemnity in trust for and on behalf of
such Indemnified Party.
(3) If any matter or thing contemplated by this Section 13 shall be
asserted against any Indemnified Party in respect of which
indemnification is or might reasonably be considered to be provided,
such Indemnified Party will notify the Corporation as soon as possible
of the nature of such claim (provided that omission to so notify the
Corporation will not relieve the Corporation of any liability which it
may otherwise have to the Indemnified Party hereunder, except to the
extent the Corporation is materially prejudiced by such omission) and
the Corporation shall be entitled (but not required) to assume the
defence of any suit brought to enforce such claim; provided, however,
that the defence shall be through legal counsel reasonably acceptable
to such Indemnified Party and that no settlement may be made by the
Corporation or such Indemnified Party without the prior written consent
of the other, such consent not to be unreasonably withheld.
- 26 -
(4) In any such claim, such Indemnified Party shall have the right to
retain other legal counsel to act on such Indemnified Party's behalf,
provided that the fees and disbursements of such other legal counsel
shall be paid by such Indemnified Party, unless: (i) the Corporation
and such Indemnified Party mutually agree to retain other legal
counsel; or (ii) the representation of the Corporation and such
Indemnified Party by the same legal counsel would be inappropriate due
to actual or potential differing interests, in which event such fees
and disbursements shall be paid by the Corporation to the extent that
they have been reasonably incurred, provided that in no circumstances
will the Corporation be required to pay the fees and expenses of more
than one set of legal counsel for all Indemnified Parties.
(5) The rights of indemnity contained in this Section 13 shall not enure to
the benefit of any Indemnified Party if the Canadian Underwriters were
provided with a copy of any amendment or supplement to the Final
Prospectus which corrects any untrue statement or omission or alleged
omission which is the basis of a claim by a party against such
Indemnified Party and which is required, under Canadian Securities
Laws, to be delivered to such party by the Canadian Underwriters or the
Selling Firms.
SECTION 14 CONTRIBUTION
In the event that the indemnity provided for in Section 13 hereof is
declared by a court of competent jurisdiction to be illegal or unenforceable as
being contrary to public policy or for any other reason, the Canadian
Underwriters and the Corporation shall contribute to the aggregate of all
losses, claims, costs, damages, expenses or liabilities of the nature provided
for above such that each Canadian Underwriter shall be responsible for that
portion represented by the percentage that the portion of the Underwriting Fee
payable by the Corporation to such Canadian Underwriter bears to the gross
proceeds realized by the Corporation from the Offering, whether or not the
Canadian Underwriters have been sued together or separately, and the Corporation
shall be responsible for the balance, provided that, in no event, shall an
Underwriter be responsible for any amount in excess of the portion of the
Underwriting Fee actually received by such Canadian Underwriter. In the event
that the Corporation may be held to be entitled to contribution from the
Canadian Underwriters under the provisions of any statute or law, the
Corporation shall be limited to contribution in an amount not exceeding the
lesser of: (a) the portion of the full amount of losses, claims, costs, damages,
expenses, liabilities, giving rise to such contribution for which such Canadian
Underwriter is responsible; and (b) the amount of the Underwriting Fee actually
received by any Canadian Underwriter. Notwithstanding the foregoing, a person
guilty of fraud, fraudulent misrepresentation or gross negligence shall not be
entitled to contribution from any other party. Any party entitled to
contribution will, promptly after receiving notice of commencement of any claim,
action, suit or proceeding against such party in respect of which a claim for
contribution may be made against another party or parties under this section,
notify such party or parties from whom contribution may be sought, but the
omission to so notify such party shall not relieve the party from whom
contribution may be sought from any obligation it may have otherwise under this
section, except to the extent that the party from whom contribution may be
sought is materially prejudiced by such omission. The right to contribution
provided herein shall be in addition and not in derogation of any other right to
contribution which the Canadian Underwriters may have by statute or otherwise by
law.
- 27 -
SECTION 15 EXPENSES
Whether or not the transactions provided for herein (including the
Offering) are completed, the Corporation shall pay all costs, fees and expenses
of or incidental to the performance of its obligations under this Agreement
including, without limitation: (i) the costs of the Corporation's professional
advisors (including, without limitation, the Corporation's auditors, counsel and
local counsel, including U.S. counsel) and (ii) the cost of printing the
Preliminary Prospectus, the Final Prospectus, any Prospectus Amendment, the U.S.
forms of such prospectuses and any amendments or supplements thereto,
Supplementary Material and certificates for the Securities. The fees and
disbursements of any counsel (whether Canadian or U.S.) to the Canadian
Underwriters and the U.S. Agents up to an aggregate amount of Cdn$235,000 and
out-of-pocket expenses of the Canadian Underwriters shall be borne by the
Corporation; provided that, notwithstanding the foregoing, in the event that the
sale and purchase of the Securities is not completed in accordance with the
terms hereof (other than as a result of a breach by the Canadian Underwriters of
any of its obligations hereunder), the Corporation shall assume and pay, in
addition to the out-of pocket expenses of the Canadian Underwriters and any
other expenses required to be paid by it hereunder, all fees and disbursements
of counsel (whether Canadian or U.S.) to the Canadian Underwriters or the U.S.
Agents.
SECTION 16 LIABILITY OF CANADIAN UNDERWRITERS
(1) The obligation of the Canadian Underwriters to purchase the Offered
Securities in connection with the Offering at the Time of Closing on
the Closing Date shall be several and not joint or joint and several
and shall be as to the following percentages of the Offered Securities
to be purchased at that time:
Canaccord Capital Corporation 50%
BMO Xxxxxxx Xxxxx Inc. 50%
-----
100%
(2) No Canadian Underwriter shall be obligated to take up and pay for any
of the Offered Securities unless the other Canadian Underwriter
simultaneously takes up and pays for the percentage of the Offered
Securities set out above opposite their name.
(3) If one of the Canadian Underwriters fails to purchase its applicable
percentage of the aggregate amount of the Offered Securities at the
Closing Time, for any reason, the other Canadian Underwriter shall be
relieved of its obligations hereunder provided that such other Canadian
Underwriter shall have the right, but shall not be obligated, to
purchase, all but not less than all, of the Offered Securities which
would otherwise have been purchased by the Canadian Underwriter which
failed to purchase. If, with respect to the Offered Securities, any
non-defaulting Canadian Underwriter elects not to exercise such right
so as to assume the entire obligation of the defaulting Underwriter or
Canadian Underwriters (the Offered Securities in respect of which the
defaulting Underwriter(s) fail to purchase and the non-defaulting
Canadian Underwriter does not elect to purchase, being hereinafter
called the "DEFAULT SHARES"), then the Corporation shall have the right
to either (i) proceed with the sale of the Offered Securities (less the
Default Shares) to the non-defaulting Canadian Underwriter in which
case the Closing
- 28 -
Date may be postponed for 72 hours by notice to the Corporation or (ii)
terminate its obligations hereunder without liability to the
non-defaulting Canadian Underwriters except under Section 13, Section
14 and Section 15 hereof. Nothing in this Section 16 shall oblige the
Corporation to sell to any of the Canadian Underwriters less than all
of the Offered Securities or shall relieve any of the Canadian
Underwriters in default hereunder from liability to the Corporation.
(4) Notwithstanding the foregoing, the Canadian Underwriters shall have the
right, but not the obligation, to sell to the U.S. Agents, any Offered
Securities pursuant to the Inter-Dealer Agreement, and subject to the
terms and conditions set out therein.
(5) Any Offered Securities that are sold by the U.S. Agents pursuant to the
U.S. Agreement will reduce the obligation of the Canadian Underwriters
to purchase the Offered Securities hereunder by an equal amount.
SECTION 17 ACTION BY CANADIAN UNDERWRITERS
All steps which must or may be taken by the Canadian Underwriters in
connection with this Agreement, with the exception of the matters relating to
termination contemplated by Section 12 hereof, may be taken by the Lead Manager
on behalf of itself and the other Canadian Underwriters and the acceptance of
this offer by the Corporation shall constitute the Corporation's authority for
accepting notification of any such steps from, and for delivering the definitive
documents constituting the Securities to or to the order of the Lead Manager.
SECTION 18 COMPLIANCE WITH U.S. SECURITIES LAWS; CONCURRENT OFFERING
(1) The Corporation and the Canadian Underwriters agree that each will
comply with U.S. Securities Laws in connection with this Agreement and
the Offering. Each acknowledges that the Securities will be registered
under the U.S. Securities Act and that the Preliminary Prospectus and
the Final Prospectus must be, or have been, filed with SEC.
(2) It is understood and agreed to by all parties that the Corporation is
concurrently entering into the US Agreement providing for the sale by
the Corporation of 6,916,000 Units in the United States, through
arrangements with the U.S. Agents. Anything herein or therein to the
contrary notwithstanding, the respective closings under this Agreement
and the U.S. Agreement are hereby expressly made conditional on one
another. Two forms of prospectus are to be used in connection with the
offering and sale of the Securities contemplated by the foregoing, one
relating to the Securities hereunder and the other related to the
Securities sold through the U.S. Agents. The latter form of prospectus
will be identical to the former except that certain additional pages
will be included in the Preliminary Prospectus and the Final
Prospectus, and amendments thereto, that relate to Canadian Securities
Laws or Canadian market conventions.
SECTION 19 GOVERNING LAW; TIME OF ESSENCE
This Agreement shall be governed by and construed in accordance with
the laws of the Province of Ontario and the federal laws of Canada applicable
therein and time shall be of the essence hereof.
- 29 -
SECTION 20 SURVIVAL OF WARRANTIES, REPRESENTATIONS, COVENANTS AND AGREEMENTS
All warranties, representations, covenants and agreements of the
Corporation and the Canadian Underwriters herein contained or contained in
documents submitted or required to be submitted pursuant to this Agreement shall
survive the purchase by the Canadian Underwriters of the Securities and shall
continue in full force and effect, regardless of the closing of the sale of the
Securities and regardless of any investigation which may be carried on by the
Canadian Underwriters, or on their behalf, for a period of two years following
the Closing Date. Without limitation of the foregoing, the provisions contained
in this Agreement in any way related to the indemnification or the contribution
obligations herein shall survive and continue in full force and effect,
indefinitely.
SECTION 21 PRESS RELEASES
The Corporation shall provide the Canadian Underwriters and their
counsel with a copy of all press releases to be issued by the Corporation
concerning the Offering contemplated hereby prior to the issuance thereof, and
shall give the Canadian Underwriters and their counsel a reasonable opportunity
to provide comments on any press release.
SECTION 22 NOTICES
All notices or other communications by the terms hereof required or
permitted to be given by one party to another shall be given in writing by
personal delivery or by facsimile delivered or facsimile to such other party as
follows:
(a) to the Corporation at:
Golden Star Resources Ltd.
00000 Xxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx
XXX, 00000-0000
Attention: Xxxxx Xxxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Field Xxxxxxxx Perraton LLP
0000, 000-0xx Xxxxxx X.X.
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx Xxxx
Facsimile No.: (000) 000-0000
- 30 -
and to:
Stoel Rives LLP
000 X.X. 0xx Xxxxxx
Xxxxxxxx, Xxxxxx
X.X.X. 00000-0000
Attention: Xxxx Xxxxx
Facsimile No.: (000) 000-0000
(b) to the Canadian Underwriters at:
Canaccord Capital Corporation
000 Xxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx
Attention: Xxxxx Xxxxxxx
Facsimile No.: (000) 000-0000
and
(c) BMO Xxxxxxx Xxxxx Inc.
0 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxxxxx Xxxxxxxxx
Facsimile No.: (000) 000-0000
with a copy to:
Stikeman Elliott
0000 Xxxxxxxx Xxxxx Xxxx
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
X0X 0X0
Attention: Xxx X. Xxxxxxxxx
Facsimile No.: (000) 000-0000
and to:
Xxxxxx & Whitney LLP
BCE Place
000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx
Xxxxxx X0X 0X0
Attention: Xxxxxxxxxxx Xxxxx Facsimile
No.: (000) 000-0000
- 31 -
or at such other address or facsimile number as may be given by either of them
to the other in writing from time to time and such notices or other
communications shall be deemed to have been received when delivered or, if
facsimile, on the next business day after such notice or other communication has
been facsimile (with receipt confirmed).
SECTION 23 JUDGMENT CURRENCY
In respect of any judgment or order given or made for any amount due hereunder
that is expressed and paid in a currency (the "JUDGMENT CURRENCY") other than
Canadian dollars, the Corporation shall indemnify each Canadian Underwriter
against any loss incurred by such Canadian Underwriter as a result of any
variation as between (i) the rate of exchange at which the Canadian dollar
amount is converted into the judgment currency for the purpose of such judgment
or order and (ii) the rate of exchange at which a Canadian Underwriter is able
to purchase Canadian dollars with the amount of the judgment currency actually
received by such Canadian Underwriter. The term "rate of exchange" shall include
any premiums and costs of exchange payable in connection with the purchase of or
conversion into Canadian dollars.
SECTION 24 COUNTERPART SIGNATURE
This Agreement may be executed in one or more counterparts (including
counterparts by facsimile) which, together, shall constitute an original copy
hereof as of the date first noted above.
SECTION 25 ENTIRE AGREEMENT
This Agreement constitutes the entire agreement between the Canadian
Underwriters and the Corporation relating to the subject matter hereof and
supersedes all prior agreements between the Canadian Underwriters and the
Corporation.
(THE REMAINDER OF THIS PAGE HAS BEEN LEFT BLANK INTENTIONALLY)
SECTION 26 ACCEPTANCE
If this offer accurately reflects the terms of the transaction which we
are to enter into and if such terms are agreed to by the Corporation, please
communicate your acceptance by executing where indicated below and returning by
facsimile one copy and returning by courier one originally executed copy to
Canaccord Capital Corporation (Attention: Xxxxx Xxxxxxx).
Yours very truly,
CANACCORD CAPITAL CORPORATION
By: /s/ "XXXXX XXXXXXX"
-------------------------------------
"Xxxxx Xxxxxxx"
Authorized Signing Officer
BMO XXXXXXX XXXXX INC.
By: /s/ "XXXXXX XXXXXXXXX"
-------------------------------------
"Xxxxxx Xxxxxxxxx"
Authorized Signing Officer
The foregoing accurately reflects the terms of the transaction that we
are to enter into and such terms are agreed to.
ACCEPTED at Littleton, Colorado as of this 17th day of July, 2002.
GOLDEN STAR RESOURCES LTD.
By: /s/ "XXXXX X. XXXXXX"
-----------------------------------
"Xxxxx X. Xxxxxx"
Authorized Signing Officer
SCHEDULE A
MATERIAL SUBSIDIARIES
NAME TYPE OF OWNERSHIP PERCENTAGE
---- ----------------- ----------
Caystar Holdings (Cayman Shares 100%
Islands)
Bogoso Holdings (Ghana) Shares 100%
Bogoso Gold Limited Shares 90%
(Ghana)
Guyanor Resources S.A. Shares 73%
(France)
Societe de Traveux Publics et Shares 100%
de Mines Auriferes en
Guyane S.A.R.L. (France)
Societe des Mines de Yaou & Shares 100%
Dorlin [S.A.R.L.] (France)
Societe de Mines de Saint- Shares 100%
Elie S.A.R.L. (France)
Pan African Resources Shares 99.9%
Corporation (Yukon
Territory)
Pan African Resources Shares 100%
Corporation (Barbados)
PARC Cote d'Ivoire S.A. Shares 100%
(Ivory Coast)
Wasford Holdings (Cayman Shares 100%
Islands)
SCHEDULE B
CONVERTIBLE SECURITIES
NUMBER OF
COMMON SHARES
SECURITY EXERCISABLE INTO EXERCISE OR CONVERSION PRICE
-------- ---------------- ----------------------------
Options 4,550,944 (Cdn$0.60 to Cdn$1.80)
Warrants 6,602,333 ($0.70 to $1.75)
Debentures 1,804,286 ($0.70)
TOTAL 12,957,563
