WARRANT AGREEMENT
EXHIBIT
10.32
THIS
WARRANT AGREEMENT (the “Warrant
Agreement”)
is
entered into as of the 28 day of June 2006, by and between Wits Basin Precious
Minerals Inc., a Minnesota corporation (the “Company”),
and
American Stock Transfer & Trust Company, as Warrant Agent (the “Warrant
Agent”).
A.
In
connection with an offer to certain holders of the Company’s stock purchase
warrants, whereby for each two shares purchased, the holder received a new
three-year redeemable stock purchase warrant exercisable into one share of
common stock at $.50 per share, the Company is obligated to issue Class C
Redeemable Warrants (the “Warrants”)
evidencing the right to purchase an aggregate of up to 7,788,700 authorized
but
previously unissued shares of the Company’s $.01 par value common stock (the
“Common
Stock”).
B.
The
Company desires the Warrant Agent to act on behalf of the Company, and the
Warrant Agent desires so to act, in connection with the issuance, registration,
transfer, exchange and exercise of the Warrants.
NOW
THEREFORE, it is agreed as follows:
ARTICLE
I.
APPOINTMENT
OF WARRANT AGENT; ISSUANCE,
FORM
AND EXECUTION OF WARRANT CERTIFICATES
Section
1.1.
Appointment
of Warrant Agent.
The
Company hereby appoints the Warrant Agent to act as agent for the Company,
and
the Warrant Agent hereby accepts the agency established herein and agrees to
perform its agency duties in accordance with the terms and conditions of this
Warrant Agreement.
Section
1.2.
Warrant
Certificates.
The
Company shall execute and deliver to the Warrant Agent certificates which the
Company has authorized to represent the Warrants (“Warrant
Certificates”).
The
Warrant Certificates shall be substantially as set forth in Exhibit A
hereto
and may have such legends, summaries or endorsements printed, lithographed
or
engraved thereon as the Company may deem appropriate and as are not
in-consistent with the provisions of this Warrant Agreement, or as may be
required to comply with any law or with any rule or regulation relating to
listing of the Warrants on the Nasdaq Stock Market, including the Nasdaq Small
Cap Market System, or on any stock exchange or to conform to usage. The Warrant
Certificates shall be dated with the date of their issuance.
Section
1.3.
Execution
of Warrant Certificates.
The
Warrant Certificates shall be executed on behalf of the Company by a duly
authorized officer of the Company, either manually or by facsimile signature
printed thereon. The Warrant Certificates shall be countersigned by the Warrant
Agent and shall not be valid for any purpose unless so countersigned. Any
Warrant Certificate may be signed on behalf of the Company by the person who
at
the actual date of the signing of such Warrant Certificate shall have been
the
-proper officer of the Company, although at the date of issuance of such Warrant
Certificate any such person has ceased to be such officer of the
Company.
ARTICLE
II.
EXERCISE
OF WARRANTS
Section
2.1.
Exercise.
Any or
all of the Warrants represented by each Warrant Certificate may be exercised,
in
whole or in part, by the holder thereof on or before 5:00 p.m., Minneapolis
time, on April 28, 2009, unless extended by the Company, by surrender of the
Warrant Certificate with the Purchase Form, which is printed on the reverse
thereof (or a reasonable facsimile thereof) duly executed by such holder, to
the
Warrant Agent at its principal office in New York, NY, accompanied by payment
in
cash, or by certified or official bank check payable to the order of the
Company, in an amount equal to the product of the number of shares of Common
Stock issuable upon exercise of the Warrants represented by such Warrant
Certificate, as adjusted pursuant to the provisions of Article III hereof,
multiplied by the exercise price of Fifty Cents ($0.50), as adjusted pursuant
to
the provisions of Article III hereof (such price as so adjusted from time to
time being herein called the “Exercise
Price”),
and
such holder shall be entitled to receive such number of fully paid and
nonassessable shares of Common Stock, as so adjusted, at the time of such
exercise.
Section
2.2.
Time
of Exercise.
Each
exercise of Warrants shall be deemed to have been effective immediately prior
to
the close of business on the business day on which the Warrant Certificate
relating to such Warrants shall have been surrendered to the Warrant Agent
as
provided in Section 2.1, and at such time the person or persons in whose name
or
names any certificate or certificates for shares of Common Stock shall be
issuable upon such exercise as provided in Section 2.3, shall be deemed to
have
become the holder or holders of record thereof.
Section
2.3.
Issuance
of Shares of Common Stock; No Fractional Shares.
As soon
as practicable after the exercise of any Warrant, and in any event within ten
(10) days after receipt by the Warrant Agent of the notice of exercise under
Section 2.1, the Company at its expense (including the payment by it of any
applicable issue taxes) will cause to be issued in the name of and delivered
to
the holder thereof or as such holder (upon payment by such holder of any
applicable transfer taxes) may direct,
(a)
a
certificate or certificates for the number of fully paid and nonassessable
shares of Common Stock to which such holder shall be entitled upon such exercise
plus, in lieu of any fractional share to which such holder would otherwise
be
entitled, an amount in cash equal to such fraction multiplied by the then
current value of a share of Common Stock, such current value to be determined
as
follows:
(i)
if
the
Common Stock shall be listed or admitted to unlisted trading privileges on
any
single national securities exchange, then such current value shall be computed
on the basis of the last reported sale price of the Common Stock on such
exchange on the last business day prior to the date of the exercise of such
Warrant upon which a sale shall have been effected; or
(ii)
if
the
Common Stock shall not be so listed or admitted to unlisted trading privileges
and bid and asked prices therefor in the over-the-counter market shall be
reported by Nasdaq, including the SmallCap Market System, then such current
value shall be the last reported sale on the last business day prior to the
date
of the exercise of such Warrant, or, in the event the last reported sale is
unavailable, the average of the closing bid and asked prices on the last
business day prior to the date of the exercise of such Warrant as so reported;
or
(iii)
if
the Common Stock shall be listed or admitted to unlisted trading privileges
on
more than one national securities exchange or one or more national securities
exchanges and in the over-the-counter market, then such current value shall,
if
different as a result of calculation under the applicable method(s) described
above in this Section, be deemed to be the higher number calculated in
connection therewith; or
(iv)
if
the Common Stock shall not be so listed or admitted to unlisted trading
privileges and such bid and asked prices shall not be so reported, then such
current value shall be computed on the basis of the book value of Common Stock
as of the close of business on the last day of the month immediately preceding
the date upon which such Warrant was exercised, as determined by the
Company,
2
and
(b)
in
case such exercise includes only part of the Warrants represented by any Warrant
Certificate, a new Warrant Certificate or Warrant Certificates of like tenor,
calling in the aggregate on the face or faces thereof for the number of shares
of Common Stock equal (without giving effect to any adjustment therein) to
the
number of such shares called for on the face of such Warrant Certificate minus
the number of such shares designated by the holder for such exercise as provided
in Section 2.1. Warrants, represented by a properly assigned Warrant
Certificate, may be exercised by a new holder without first having a new Warrant
Certificate issued.
Section
2.4.
Extension
of Exercise Period; Change of Exercise Price.
The
Company may, upon notice given to the Warrant Agent, and without the consent
of
the holders of the Warrant Certificates, (i) reduce the Exercise Price during
all or any portion of the originally stated exercise period, or (ii) extend
the
period over which the Warrants are exercisable beyond April 28, 2009, and
increase the Exercise Price for any period the Warrant exercise period is
extended. In the case of the extension of the exercise period or a change in
the
Exercise Price, the Company must provide the Warrant Agent and the
Warrantholders of record notice of such extension of the exercise period,
specifying, as the case may be, the time to which such exercise period is
extended, or specifying the new Exercise Price and the periods for which such
new Exercise Price is in effect, a reasonable time prior to the date such
extension or new Exercise Price is to take effect, such reasonable time to
be
commercially reasonable and consistent with applicable securities laws and
regulations.
ARTICLE
III.
ANTIDILUTION
PROVISIONS
Section
3.1.
Adjustment
of Exercise Price.
(a) The
Exercise Price shall be subject to the following adjustments. In the event
that:
(i) any
dividends on any class of stock of the Company payable in Common Stock or
securities convertible into Common Stock shall be paid by the
Company;
(ii) the
Company shall subdivide its then outstanding shares of Common Stock into a
greater number of shares; or
(iii) the
Company shall combine outstanding shares of Common Stock, by reclassification
or
otherwise;
then,
in
any such event, the Exercise Price in effect immediately prior to such event
shall (until adjusted again pursuant hereto) be adjusted immediately after
such
event to a price (calculated to the nearest full cent) determined by dividing
(A) the number of shares of Common Stock outstanding immediately prior to such
event, multiplied by the then existing Exercise Price, by (B) the total number
of shares of Common Stock outstanding immediately after such event (including
the maximum number of shares of Common Stock issuable in respect of any
securities convertible into Common Stock), and the resulting quotient shall
be
the adjusted Exercise Price per share.
(b) No
adjustment of the Exercise Price shall be made if the amount of such adjustments
shall be less than one cent per share, but in such case any adjustment that
would otherwise be required to be made shall be carried forward and shall be
made at the time and together with the next subsequent adjustment which,
together with any adjustment or adjustments so carried forward, shall amount
to
not less than one cent per share.
3
Section
3.2.
Adjustment
of Number of Shares Purchasable on Exercise of Warrants.
Upon
each adjustment of the Exercise Price pursuant to Section 3.1, the registered
holder of each Warrant shall thereafter (until another such adjustment) be
entitled to purchase at the adjusted Exercise Price the number of shares,
calculated to the nearest full share, obtained by multiplying the number of
shares specified in such Warrant (as adjusted as a result of all adjustments
in
the Exercise Price in effect prior to such adjustment) by the Exercise Price
in
effect prior to such adjustment and dividing the product so obtained by the
adjusted Exercise Price.
Section
3.3.
Notice
as to Adjustment.
Upon
any adjustment of the Exercise Price and an increase or decrease in the number
of shares of Common Stock purchasable upon the exercise of the Warrants, then,
and in each such case, the Company shall within twenty (20) days after the
effective date of such adjustment give written notice thereof, by first class
mail, postage prepaid, addressed to each registered Warrantholder at the address
of such Warrantholder as shown on the books of the Company, and also to the
Warrant Agent, which notice shall state the adjusted Exercise Price and the
increased or decreased number of shares purchasable upon the exercise of the
Warrants, setting forth in reasonable detail the method of calculation and
the
facts upon which such calculation is based.
Section
3.4.
Effect
of Reorganization, Reclassification, Merger, Etc.
If at
any time while any Warrant is outstanding there should be any capital
reorganization or re-classification of the capital stock of the Company (other
than the issue of any shares of Common Stock in subdivision of outstanding
shares of Common Stock by reclassification or otherwise and other than a
combination of shares provided for in Section 3.1 hereof) or any consolidation
or merger of the Company with another corporation or any sale, conveyance,
lease
or other transfer by the Company of all or substantially all of its assets
to
any other corporation, the holder of any Warrant shall, during the remainder
of
the period such Warrant is exercisable, be entitled to receive, upon payment
of
the Exercise Price, the number of shares of stock or other securities or
property of the Company, or of the successor corporation resulting from such
consolidation or merger, or of the corporation to which the assets of the
Company has been sold, conveyed, leased or otherwise transferred, as the case
may be, to which the Common Stock (and any other securities and property) of
the
Company, deliverable upon the exercise of such Warrant, would have been entitled
upon such capital reorganization, reclassification of capital stock,
consolidation, merger, sale, conveyance, lease or other transfer if such Warrant
had been exercised immediately prior to such capital reorganization,
reclassification of capital stock, consolidation, merger, sale, conveyance,
lease or other transfer; and, in any such case, appropriate adjustment (as
deter-mined by the Board of Directors of the Company) shall be made in the
application of the provisions set forth in this Warrant Agreement with respect
to the rights and interests thereafter of the Warrantholders to the end that
the
provisions set forth in this Warrant Agreement (including the adjustment of
the
Exercise Price and the number of shares issuable upon the exercise of the
Warrants) shall thereafter be applicable, as near as may be reasonably
practicable, in relation to any shares or other property thereafter deliverable
upon the exercise of the Warrants as if the Warrants had been exercised
immediately prior to such capital reorganization, reclassification of capital
stock, such consolidation, merger, sale, conveyance, lease or other transfer
and
the Warrantholders had carried out the terms of the exchange as provided for
by
such capital reorganization, reclassification, consolidation or merger. The
Company shall not effect any such capital reorganization, consolidation, merger
or transfer unless, upon or prior to the consummation thereof, the successor
corporation or the corporation to which the property of the Company has been
sold, conveyed, leased or otherwise transferred shall assume by written
instrument the obligation to deliver to the holder of each Warrant such shares
of stock, securities, cash or property as in accordance with the foregoing
provisions such holder shall be entitled to purchase.
Section
3.5.
Prior
Notice as to Certain Events.
In case
at any time:
(a)
The
Company shall pay any dividend upon its Common Stock payable in stock or make
any distribution (other than cash dividends) to the holders of its Common Stock;
or
4
(b)
The
Company shall offer for subscription pro rata to the holders of its Common
Stock
any additional shares of stock of any class or any other rights; or
(c)
There
shall be any capital reorganization or reclassification of the capital stock
of
the Company, or consolidation or merger of the Company with, or sale,
conveyance, lease or other transfer of all or substantially all of its assets
to, another corporation; or
(d)
There
shall be a voluntary or involuntary dissolution, liquidation or winding up
of
the Company;
then
in
any one or more of such cases, the Company shall give prior written notice,
by
first class mail, postage prepaid, addressed to each registered Warrantholder
at
the address of such Warrantholder as shown on the books of the Company, of
the
date on which (i) the books of the Company shall close or a record shall be
taken for such stock dividend, distribution or subscription rights or (ii)
such
reorganization, reclassification, consolidation, merger, sale, dissolution,
liquidation or winding up shall take place, as the case may be. Such notice
shall also specify the date as of which the holders of the Common Stock of
record shall participate in such dividend, distribution or subscription rights
or shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reorganization, reclassification, consolidation,
merger, sale, dissolution, liquidation, or winding up, as the case may be.
Such
written notice shall be given at least twenty (20) days prior to the action
in
question and not less than twenty (20) days prior to the record date or the
date
on which the Company's transfer books are closed in respect
thereto.
Section
3.6.
Certain
Obligations of the Company.
The
Company will not, by amendment of its articles of incorporation or through
any
reorganization, transfer of assets, consolidation, merger, dissolution, issue
or
sale of securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms of this Warrant Agreement or
the
Warrant Certificate, but will at all times in good faith assist in the carrying
out of all such terms. Without limiting the generality of the foregoing, the
Company (a) will take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue fully paid and
nonassessable shares of such stock upon the exercise of all Warrants from time
to time outstanding, and (b) will not (i) transfer all or substantially all
of
its properties and assets to any other person or entity, or (ii) consolidate
with or merge into any other entity where the Company is not the continuing
or
surviving entity, or (iii) permit any other entity to consolidate with or merge
into the Company where the Company is the continuing or surviving entity but,
in
connection with such consolidation or merger, the Common Stock then issuable
upon the exercise of the Warrants shall be changed into or exchanged for shares
or other securities or property of any other entity unless, in any such case,
the other entity acquiring such properties and assets, continuing or surviving
after such consolidation or merger or issuing or distributing such shares or
other securities or property, as the case may be, shall expressly assume in
writing and be bound by all the terms of this Warrant Agreement and the Warrant
Certificates.
Section
3.7.
Reservation
and Listing of Common Stock.
The
Company will at all times reserve and keep available, solely for issuance and
delivery upon the exercise of the Warrants, all shares of Common Stock from
time
to time issuable upon such exercise. All such shares shall be authorized and,
when issued upon such exercise, shall be validly issued, fully paid and
nonassessable with no liability on the part of the holder thereof. The Company,
at its expense, will list on each national securities exchange on which any
Common Stock may at any time be listed, subject to official notice of issuance,
and will maintain such listing of, the shares of Common Stock from time to
time
issuable upon the exercise of the Warrants.
Section
3.8.
Registration
or Exemption for Common Stock.
The
Company will use its best efforts (a) at all times the Warrants are exercisable
to maintain an effective registration statement under the Securities Act
covering Common Stock issuable upon exercise of the Warrants, (b) from time
to
time to amend or supplement the prospectus contained in such registration
statement to the extent necessary in order to comply with applicable law, (c)
to
qualify for exemption from the registration requirements of the Act the Common
Stock issuable upon exercise of the Warrants, and (d) to maintain exemptions
or
qualifications, in those jurisdictions in which the original registration
statement relating to the Warrants was initially qualified, to permit the
exercise of the Warrants and the issuance of the Common Stock pursuant to such
exercise. The Warrant Agent shall have no responsibility for the maintenance
of
such exemptions or qualifications or for liabilities arising from the exercise
or attempted exercise of Warrants in jurisdictions where exemptions or
qualifications have not been maintained or are otherwise
unavailable.
5
ARTICLE
IV.
REDEMPTION
OF WARRANTS
Section
4.1.
Redemption
Price.
The
Warrants may be redeemed at the option of the Company, at any time following
a
period of 14 consecutive trading days where the per share average closing bid
price of the Common Stock exceeds or exceeds One Dollar ($1.00), on notice
as
set forth in Section 4.2, and at a redemption price equal to $.01 per Warrant;
provided, however, that the Warrants may not be redeemed by the Company unless
the Common Stock issuable upon exercise of the Warrants has been registered
with
the Securities and Exchange Commission or are otherwise freely tradable. For
purposes of this Section, the closing bid price of the Common Stock shall be
determined by the closing bid price as reported by the National Association
of
Securities Dealers’ Over-the-Counter Bulletin Board (the “OTCBB”)
so
long as the Common Stock is quoted on the OTCBB and, if the Common Stock is
listed on a national securities exchange, shall be determined by the last
reported sale price on the primary exchange on which the Common Stock is
traded.
Section
4.2.
Notice
of Redemption.
In the
case of any redemption of Warrants, the Company or, at its request, the Warrant
Agent in the name of and at the expense of the Company shall give notice of
such
redemption to the holders of the Warrants to be redeemed as hereinafter provided
in this Section 4.2. Notice of redemption to the holders of Warrants shall
be
given by mailing by first-class mail a notice of such redemption not less than
thirty (30) days prior to the date fixed for redemption. Any notice which is
given in the manner herein provided shall be conclusively presumed to have
been
duly given, whether or not the holder receives the notice. In any case, failure
duly to give such notice, or any defect in such notice, to the holder of any
Warrant Certificate shall not affect the validity of the proceedings for the
redemption of Warrants represented by any other Warrant Certificate. Each such
notice shall specify the date fixed for redemption, the place of redemption
and
the redemption price of $.01 at which each Warrant is to be redeemed, and shall
state that payment of the redemption price of the Warrants will be made on
surrender of the Warrants at such place of redemption, and that if not exercised
by the close of business on the date fixed for redemption, the exercise rights
of the Warrants identified for redemption shall expire unless extended by the
Company. Such notice shall also state the current Exercise Price and the date
on
which the right to exercise the Warrants will expire unless extended by the
Company.
Section
4.3.
Payment
of Warrants on Redemption; Deposit of Redemption Price.
If
notice of redemption shall have been given as provided in Section 4.2, the
redemption price of $.01 per Warrant shall, unless the Warrant is theretofore
exercised pursuant to the terms hereof, become due and payable on the date
and
at the place stated in such notice. On and after such date of redemption,
provided that cash sufficient for the redemption thereof shall then be deposited
by the Company with the Warrant Agent for that purpose, the exercise rights
of
the Warrants identified for redemption shall expire. On presentation and
surrender of Warrant Certificates at such place of payment in such notice
specified, the Warrants identified for redemption shall be paid and redeemed
at
the redemption price of $.01 per Warrant. Prior to the date fixed for
redemption, the Company shall deposit with the Warrant Agent an amount of money
sufficient to pay the redemption price of all the Warrants identified for
redemption. Any monies which shall have been deposited with the Warrant Agent
for redemption of Warrants and which are not required for that purpose by reason
of exercise of Warrants shall be repaid to the Company upon delivery to the
Warrant Agent of evidence satisfactory to it of such exercise.
6
ARTICLE
V.
CERTAIN
OTHER PROVISIONS RELATING TO
RIGHTS
OF HOLDERS OF WARRANT CERTIFICATES
Section
5.1.
No
Rights of Shareholders.
The
Warrant Certificates shall be issued in registered form only. No Warrant
Certificate shall entitle the holder thereof to any of the rights of a holder
of
shares of Common Stock of the Company, including, without limitation, the right
to vote, to receive dividends and other distributions, or to receive any notice
of, or to attend, meetings of holders of Common Stock or any other proceedings
of the Company.
Section
5.2.
Loss,
Theft, Destruction or Mutilation of Warrant Certificates.
Upon
receipt by the Warrant Agent of evidence reasonably satisfactory to the Warrant
Agent of the loss, theft, destruction or mutilation of any Warrant Certificate,
and (a) in the case of any such loss, theft, or destruction, upon delivery
to
the Warrant Agent of an indemnity bond in form and amount, and issued by a
bonding company, reasonably satisfactory to the Company, or (b) in the case
of
any such mutilation, upon surrender to and cancellation by the Warrant Agent
of
such Warrant Certificate, the Company at its expense will execute and cause
the
Warrant Agent to countersign and deliver, in lieu thereof, a new Warrant
Certificate of like tenor.
Section
5.3.
Transfer
Agent; Cancellation of Warrant Certificates; Unexercised
Warrants.
The
Company will keep a copy of this Agreement on file with the Transfer Agent.
The
Warrant Agent, and any successor thereto, is hereby irrevocably authorized
to
requisition from time to time from the Transfer Agent certificates for shares
of
Common Stock required for exercise of Warrants. The Company will supply the
Transfer Agent with duly executed cer-tificates for shares of Common Stock
for
such purpose and will make available any cash required in settlement of
fractional share interests. All Warrant Certificates surrendered upon the
exercise or redemption of Warrants shall be cancelled by the Warrant Agent
and
shall thereafter be delivered to the Company; such cancelled Warrant
Certificates, with the Purchase Form on the reverse thereof duly filled in
and
signed, shall constitute conclusive evidence as between the parties hereto
of
the numbers of shares of Common Stock which shall have been issued upon
exercises of Warrants. Promptly after the last day on which the Warrants are
exercisable (set forth in Section 2.1 above), the Warrant Agent shall certify
to
the Company the aggregate number of Warrants then outstanding and unexercised.
No shares of Common Stock shall be subject to reservation with respect to
Warrants not exercised prior to the time and date identified in Section 2.1
above as the last time and date at which Warrants may be exercised.
ARTICLE
VI.
TRANSFER
AND EXCHANGE OF WARRANT CERTIFICATES
Section
6.1.
Warrant
Register; Transfer or Exchange of Warrant Certificates.
The
Warrant Agent shall cause to be kept at the principal office of the Warrant
Agent a register (the “Warrant
Register”)
in
which, subject to such reasonable regulations as the Company may prescribe,
provisions shall be made for the registration of transfers and exchanges of
Warrant Certificates. Upon surrender for transfer or exchange of any Warrant
Certificates, properly endorsed, to the Warrant Agent, the Warrant Agent at
the
Company's expense will issue and deliver to or upon the order of the holder
thereof a new Warrant Certificate or Warrant Certificates of like tenor, in
the
name of such holder or as such holder (upon payment by such holder of any
applicable transfer taxes) may direct, calling in the aggregate on the face
or
faces thereof for the number of shares of Common Stock called for on the face
of
the Warrant Certificate so surrendered.
Section
6.2.
Identity
of Warrantholders.
Until a
Warrant Certificate is transferred in the Warrant Register, the Company and
the
Warrant Agent may treat the person in whose name the Warrant Certificate is
registered as the absolute owner thereof and of the Warrants represented thereby
for all purposes, notwithstanding any notice to the contrary, except that,
if
and when any Warrant Certificate is properly assigned in blank, the Company
and
the Warrant Agent may (but shall not be obligated to) treat the bearer thereof
as the absolute owner of the Warrant Certificate and of the Warrants represented
thereby for all purposes, notwithstanding any notice to the
contrary.
7
ARTICLE
VII.
CONCERNING
THE WARRANT AGENT
Section
7. 1.
Taxes.
The
Company will, from time to time, promptly pay to the Warrant Agent, or make
provision satisfactory to the Warrant Agent for the payment of, all taxes and
charges that may be imposed by the United States or any State upon the Company
or the Warrant Agent upon the transfer or delivery of shares of Common Stock
upon the exercise of Warrants, but the Company shall not be obligated to pay
any
tax imposed in connection with any transfer involved in the delivery of a
certificate for shares of Common Stock in any name other than that of the
registered holder of the Warrant Certificate surrendered in connection with
the
purchase thereof.
Section
7.2.
Replacement
of Warrant Agent in Certain Circumstances.
(a) The
Warrant Agent may resign its duties and be discharged from all further duties
and liabilities hereunder after giving thirty (30) days’ notice in writing to
the Company, except that such shorter notice may be given as the Company shall,
in writing, accept as sufficient. The Company may discharge the Warrant Agent
at
any time with or without reason, effective upon thirty (30) days written notice
to the Warrant Agent or such shorter period as the Warrant Agent shall, in
writing, accept as sufficient. If the office of Warrant Agent becomes vacant
by
resignation, discharge, incapacity to act or otherwise, the Company shall
appoint in writing a new Warrant Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after it has been notified
in
writing of such resignation or incapacity by the resigning or incapacitated
Warrant Agent or by the holder of a Warrant Certificate, then the holder of
any
Warrant Certificate may apply to any court of competent jurisdiction for the
appointment of a new Warrant Agent. Any new Warrant Agent, whether appointed
by
the Company or by such a court, shall be a corporation organized, doing business
and in good standing under the laws of the United States or of the State of
Minnesota, and which is authorized under such laws to exercise corporate trust
powers and is subject to supervision or examination by Federal or State
authority. Any new Warrant Agent appointed hereunder shall execute, acknowledge
and deliver to the Company an instrument accepting such appointment hereunder
and thereupon such new Warrant Agent without any further act or deed shall
become vested with all the rights, powers, duties and responsibilities of the
Warrant Agent hereunder with like effect as if it had been named as the Warrant
Agent; but if for any reason it becomes necessary or expedient to have the
former Warrant Agent execute and deliver any further assurance, conveyance,
act
or deed, the same shall be done and shall be legally and validly executed and
delivered by the former Warrant Agent. Not later than the effective date of
any
such appointment the Company shall file notice thereof with the former Warrant
Agent. The Company shall promptly give notice of any such appointment to the
holders of the Warrant Certificates by mail to their addresses as shown in
the
Warrant Register. Failure to file or give such notice, or any defect therein,
shall not affect the legality or validity of the appointment of the successor
Warrant Agent.
(b) Any
company into which the Warrant Agent or any new Warrant Agent may be merged
or
converted or with which it may be consolidated or any company resulting from
any
merger, conversion or consolidation to which the Warrant Agent shall be a party
shall be the successor Warrant Agent under this Warrant Agreement without any
further act; provided that if such company would not be eligible for appointment
as a successor Warrant Agent under the provisions of paragraph (a) of this
Section 7.2 the Company shall forthwith appoint a new Warrant Agent in
accordance with such provisions. Any such successor Warrant Agent may adopt
the
prior countersignature of any predecessor Warrant Agent and deliver Warrant
Certificates countersigned and not delivered by such predecessor Warrant Agent
or may countersign Warrant Certificates either in the name of any predecessor
Warrant Agent or the name of the successor Warrant Agent.
8
Section
7.3.
Remuneration
of Warrant Agent.
The
Company will pay the Warrant Agent reasonable remuneration for its services
as
Warrant Agent hereunder and will reimburse the Warrant Agent upon demand for
all
expenditures that the Warrant Agent may reasonably incur in the execution of
its
duties hereunder.
Section
7.4.
Further
Assurances.
The
Company will perform, exercise, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such further and other
acts,
instruments and assurances as may reasonably be required by the Warrant Agent
for the carrying out or performing by the Warrant Agent of the provisions of
this Warrant Agreement.
Section
7.5.
Limitations
on Liabilities of the Warrant Agent.
(a) The
Warrant Agent may consult with legal counsel (who may be legal counsel for
the
Company), and the opinion of such counsel shall be full and complete
authorization and protection of the Warrant Agent as to any action taken or
omitted by it in good faith and in accordance with such
opinion.
(b) Whenever,
in the performance of its duties under this Warrant Agreement, the Warrant
Agent
shall deem it necessary or desirable that any matter be proved or established,
or that any instructions with respect to the performance of its duties hereunder
be given, by the Company prior to taking or suffering any action hereunder,
such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established, or such
instructions may be given, by a certificate or instrument signed by an officer
of the Company and delivered to the Warrant Agent; and such certificate or
instrument shall be full authorization to the Warrant Agent for any action
taken
or suffered in good faith by it under the provisions of this Warrant Agreement
in reliance upon such certificate or instrument; but in its discretion the
Warrant Agent may in lieu thereof accept other evidence of such matter or may
require such further or additional evi-dence as it may deem
reasonable.
(c) The
Warrant Agent shall be liable hereunder only for its own negligence or willful
misconduct. The Warrant Agent shall act hereunder solely as agent, and its
duties shall be determined solely by the provisions hereof. The Company agrees
to indemnify the Warrant Agent and save it harmless against any and all
liabilities, including judgments, costs and counsel fees, for anything done
or
omitted by the Warrant Agent in the execution of this Warrant Agreement except
as a result of the Warrant Agent's negligence or willful
misconduct.
(d) The
Warrant Agent shall not be liable for or by reason of any of the statements
of
fact or recitals contained in this Warrant Agreement or in the Warrant
Certificates (except its countersignature thereof) or be required to verify
the
same, but all such statements and recitals are and shall be deemed to have
been
made by the Company only.
(e) The
Warrant Agent shall not be under any responsibility in respect to the validity
or execution of any Warrant Certificate (except its countersignature thereof);
nor shall it be responsible for any breach by the Company of any covenant or
condition contained in this Warrant Agreement or in any Warrant Certificate;
nor
shall it be responsible for the making of any adjustment in the Exercise Price,
or number of shares issuable upon exercise of the Warrant Certificates or
responsible for the manner, method or amount of any such adjustment or the
facts
that would require any such adjustment; nor shall it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued pursuant to this Warrant
Agreement or any Warrant Certificate or as to whether any shares of Common
Stock
or other securities are or will be validly authorized and issued and fully
paid
and nonassessable.
9
Section
7.6.
Amendment
and Modification.
The
Warrant Agent may, without the consent or concurrence of the holders of the
Warrant Certificates, by supplemental agreement or otherwise, join with the
Company in making any changes or corrections in this Warrant Agreement that
they
shall have been advised by counsel (a) are required to cure any ambiguity or
to
correct any defective or inconsistent provision or clerical omission or mistake
or manifest error herein contained, (b) add to the obligations of the Company
in
this Warrant Agreement further obligations thereafter to be observed by it,
or
surrender any right or power reserved to or conferred upon the Company in this
Warrant Agreement, or (c) do not or will not adversely affect, alter or change
the rights, privileges or immunities of the holders of Warrant Certificates
not
provided for under this Warrant Agreement; provided, however, that any term
of
this Warrant Agreement or any Warrant Certificate may be changed, waived,
discharged or terminated by an instrument in writing signed by each party
against which enforcement of such change, waiver, discharge or termination
is
sought, or by which the same is to be performed or
observed.
ARTICLE
VIII.
OTHER
MATTERS
Section
8.1.
Successors
and Assigns.
All the
covenants and provisions of this Warrant Agreement by or for the benefit of
the
Company or the Warrant Agent shall bind and inure to the benefit of their
respective successors and assigns.
Section
8.2.
Notices.
Any
notice or demand authorized by this Warrant Agreement to be given or made by
the
Warrant Agent or by the holder of any Warrant Certificate to or on the Company
shall be sufficiently given or made if sent by first class or registered mail,
postage prepaid, addressed (until another address is filed in writing by the
Company with the Warrant Agent) as follows:
000
XXX
Xxxxxx
00
Xxxxx
0xx
Xxxxxx
Xxxxxxxxxxx,
XX 00000-0000
Any
notice or demand authorized by this Warrant Agreement to be given or made by
the
holder of any Warrant Certificate or by the Company to or on the Warrant Agent
shall be sufficiently given or made if sent by first class or registered mail,
postage prepaid, addressed (until another address is filed in writing by the
Warrant Agent with the Company) as follows:
American
Stock Transfer & Trust Company
00
Xxxxxx
Xxxx
Xxx
Xxxx,
XX 00000
Section
8.3.
Governing
Law.
This
Warrant Agreement and the Warrant Certificates are being delivered in the State
of Minnesota and shall be construed and enforced in accordance with and governed
by the laws of such State.
10
Section
8.4.
No
Benefits Conferred.
Nothing
in this Warrant Agreement expressed and nothing that may be implied from any
of
the provisions hereof is intended, or shall be construed, to confer upon, or
give to, any person or corporation other than the Company, the Warrant Agent,
and the holders of the Warrant Certificates, any right, remedy or claim under
or
by reason of this Agreement or of any covenant, condition, stipulation, promise
or agreement herein; and all covenants, conditions, stipulations, promises
and
agreements in this Warrant Agreement contained shall be for the sole and
exclusive benefit of the Company, the Warrant Agent, their respective successors
and the holders of the Warrant Certificates.
Section
8.5.
Headings.
The
descriptive headings used in this Warrant Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of
the
provisions hereof.
IN
WITNESS WHEREOF, this Warrant Agreement has been duly executed by the parties
hereto as of the day and year first above written.
| WITS BASIN PRECIOUS MINERALS INC. | ||
| |
|
|
| By | /s/ X. Xxxxx White | |
|
Its Chief Executive Officer |
||
| AMERICAN STOCK TRANSFER & TRUST COMPANY | ||
| |
|
|
| By | /s/ Xxxx Xxxxxx | |
|
Its Vice President |
||
11
