THIRD AMENDING AGREEMENT
EXHIBIT
10.2
Third
amending agreement (the "Third
Amending Agreement") dated February 26, 2010 between RAB Special
Situations (Master) Fund Limited ("RAB") and Apollo Gold
Corporation ("Apollo").
RECITALS:
WHEREAS RAB and Apollo entered
into a subscription agreement (the "Subscription Agreement") dated
February 19, 2007 in which RAB subscribed for and purchased US$4,290,000
principal amount of unsecured convertible debentures (the "Debentures"). Each
US$1,000 principal amount of the Debentures was convertible, at the option of
the holder before the Debentures mature, into 2,000 common shares of Apollo and
such Debentures were accompanied by 2,000 common share purchase warrants (the
"Debenture
Warrants");
AND WHEREAS on February 23,
2007, Apollo issued to RAB debenture certificate number 2007-1 representing
US$4,290,000 principal amount of the Debentures and warrant certificate number
2007-01-01 representing 8,580,000 Debenture Warrants;
AND WHEREAS RAB and Apollo
entered into an amending agreement on February 16, 2009 (the "First Amending Agreement")
amending the terms of the Debentures and the Debenture Warrants;
AND WHEREAS pursuant to the
terms of the First Amending Agreement, the Debentures were amended, inter alia, by extending the
Maturity of the Debentures to February 23, 2010;
AND WHEREAS pursuant to the
terms of the First Amending Agreement, the Debenture Warrants were amended,
inter alia, by
extending the Expiry Date of the Debenture Warrants to March 5, 2010 and by
reducing the Exercise Price of the Debenture Warrants from US$0.50 to
US$0.25;
AND WHEREAS RAB and Apollo
entered into an amending agreement on February 23, 2010 (the "Second Amending Agreement")
amending the terms of the Debentures and the Debenture Warrants;
AND WHEREAS RAB and Apollo
wish to further amend and fully restate the Second Amending Agreement as
provided for in this Third Amending Agreement.
NOW THEREFORE in consideration
of the above and the mutual agreements contained in this Third Amending
Agreement (the receipt and adequacy of which are hereby acknowledged), the
parties agree as follows:
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Section
1.
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Defined
Terms
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Capitalized
terms used in this Third Amending Agreement that are not defined herein shall
have the meanings ascribed to such terms in the Debentures and the Debenture
Warrants.
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Section
2.
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Amendments
to the Debentures
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The
Debentures are hereby amended as follows:
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(a)
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The
definition of "Change of
Control of the Corporation" as set out in Section 1.1 of the
Debentures is hereby deleted and replaced with the
following:
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"Change of Control of the
Corporation" means (i) where any person, including a group acting jointly
or in concert, acquires or becomes the beneficial owner of, or a combination of
persons acting jointly or in concert acquire or become the beneficial owner of,
either directly or indirectly, more than fifty (50) percent of the voting
securities of the Corporation, whether through the acquisition of previously
issued and outstanding voting securities, or voting securities that have not
been previously issued, or any combination thereof, or any other transaction
having a similar effect and (ii) where such acquisition of the voting securities
of the Corporation is at an effective purchase price of US$0.50 or higher,
payable in cash and/or securities of the acquirer, with such effective purchase
price to be determined on the date such acquisition is first publicly
announced.
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(b)
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The
definition of "Maturity
Date" as set out in Section 1.1 of the Debentures is hereby deleted
and replaced with the following:
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"Maturity Date" means August
23, 2010.
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(c)
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The
definition of "Maturity
Date" as set out in Section 2.1(a) of the Debentures is hereby
amended so that February 23, 2010 now becomes August 23,
2010.
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(d)
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Section
3.1(b) of the Debentures is hereby deleted and replaced with the
following:
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3.1(b)
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1.5%
per month for the final 24 months prior to the Maturity Date (18% per
annum simple interest not compounded), in like money at the said place,
calculated and payable yearly in arrears (less any tax required by law to
be deducted) with the payment due on August 23,
2010.
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(e)
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Section
3.1(c) of the Debentures is hereby deleted and replaced with the
following:
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3.1(c)
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Within
three (3) business days of the date of the Third Amending Agreement, the
Corporation shall make a cash payment of US$772,200 to the Holder
representing all accrued and unpaid interest under the Debenture as of
February 23, 2010.
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(f)
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Section
5.1 of the Debentures is hereby deleted and replaced with the
following:
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5.1
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The
Holder may, at its election, upon surrender (either in person, by mail
(postage `prepaid) or other means of delivery) of this Debenture along
with a completed a notice of conversion (the "Conversion Notice") in
the form attached hereto as Schedule "A" at the principal
office of the Corporation in the city of Greenwood Village, Colorado at
any time prior to the close of business on August 23, 2010, convert the
Principal Sum, in whole or in part, into fully paid and non-assessable
Common Shares, as presently constituted (without adjustment for dividends
on Common Shares issuable upon conversion). The Debenture may
be converted on or prior to the Maturity Date, or in the event that the
Principal Sum is not repaid on the Maturity Date, at any time until such
date that the Principal Sum is repaid, at a conversion price of US$0.50
per Common Share (as adjusted for share splits, share consolidations and
other similar events) (the "Conversion Price"),
being a rate of 2,000 Common Shares per US$1,000 principal amount of
Debentures. If the Holder elects to convert the Principal Sum,
or any portion thereof, the Holder may also, at its election, concurrently
convert any accrued but unpaid interest at that time outstanding in
respect of such Principal Sum into Common Shares at the Conversion
Price. The endorsement of the Conversion Notice by the Holder
and the surrender of the Debenture shall be deemed to constitute a
contract between the Holder and the Corporation whereby (i) the Holder
subscribes for the number of Common Shares which he shall be entitled to
receive upon such conversion, (ii) the Holder releases the Corporation
from all liability thereon or from all liability with respect to the
portion of the principal amount and corresponding accrued interest, if
applicable, thereof to be converted, as the case may be, and (iii) the
Corporation agrees that the surrender of the Debenture for conversion
constitutes full payment of the subscription price for the Common Shares
issuable on such conversion and to the extent
thereof.
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As
promptly as possible after receipt of the Conversion Notice and the Debenture
but subject to Section 5.3 hereto, the Corporation shall issue or cause to be
issued and deliver or cause to be delivered to the Holder a certificate or
certificates in the name or names of the person or persons specified in the
Conversion Notice for the number of Common Shares deliverable upon the
conversion of the Debenture. Upon completion of the conversion transaction, the
rights of the Holder to receive, in respect of the amount hereof so converted,
the Principal Sum and interest thereon, shall cease and the Holder or the other
person or persons in whose name or names any certificate or certificates for
Common Shares shall be deliverable upon such conversion shall be deemed to have
become on such date the holder or holders of record of such Common Shares
represented thereby.
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Any part,
being $1,000 or an integral multiple thereof, of a Debenture of a denomination
in excess of $1,000 may be converted as provided herein and all references
herein to the conversion of the Debenture shall be deemed to include
conversion of such parts. If the Holder converts only part of the
Principal Sum, upon the exercise of his right of conversion, the Holder shall
surrender such Debenture to the Corporation, and the Corporation shall cancel
the same and shall, without charge, forthwith certify and deliver to the Holder
a new Debenture or Debentures in an aggregate principal amount equal to the
unconverted part of the Principal Sum of the Debenture so
surrendered.
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(g)
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Section
5.2 of the Debentures is hereby deleted and replaced with the
following:
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5.2
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Subject
to the restrictions set forth in Section 5.3 hereto, the Corporation shall
have the right to force the Holder to convert the Principal Sum into
Common Shares (a "Forced
Conversion") under the terms described in Section 5.1
if:
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(a)
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at
any time after September 24, 2007, but prior to the Maturity Date, in the
event that the 20 day weighted average trading price of the Common Shares
on the AMEX (or if the Common Shares are not listed on the AMEX, the TSX,
or if the Common Shares are not listed on the TSX, any other exchange on
which the Common Shares are then listed) equals or exceeds US$0.90 per
share (as adjusted for share splits, share consolidations and other
similar events); or
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(b)
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there
is a Change of Control of the
Corporation.
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In order
to initiate a Forced Conversion, the Corporation must provide the Holder with
written notice (the "Forced
Conversion Notice") 60 days prior to the effective date (the "Forced Conversion Date") of
the Forced Conversion.
In the
event of a Forced Conversion, the Corporation will be required to pay any
interest that would have accrued from the Forced Conversion Date to the Maturity
Date, notwithstanding any early repayment of such interest.
Notwithstanding
the foregoing, the Corporation may not implement a Forced Conversion unless the
Common Shares issuable upon conversion may be freely resold by the Holder, as a
selling shareholder and not as an underwriter, under an effective registration
statement filed with the Securities and Exchange Commission and legal counsel to
the Corporation has delivered an opinion letter to the Holder and the
Corporation's transfer agent that the Common Shares issuable upon conversion may
be sold in the United States under the registration statement or pursuant to an
exemption without volume limitations or restriction.
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(h)
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Schedule
"A" of the
Debentures is hereby deleted and replaced with the form attached hereto as
Schedule "A".
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(i)
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Except
as expressly amended hereby, the Debentures are in all respects ratified
and confirmed and all the terms, conditions and provisions thereof shall
remain in full force and effect.
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3
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Section
3.
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Issuance
of Warrants and Shares.
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Apollo
shall:
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(a)
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issue
to RAB 800,000 common shares of Apollo (the "Consideration Shares")
as promptly as reasonably practicable following the date hereof upon
receipt of all necessary regulatory
approvals;
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(b)
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issue
to RAB 2,145,000 common share purchase warrants (the "Consideration
Warrants"), as promptly as reasonably practicable following the
date hereof upon receipt of all necessary regulatory approvals, each
Consideration Warrant entitling the holder thereof to purchase one common
share of Apollo at an exercise price of US$0.50 at any time before
5:00p.m. (Toronto time) on February 23,
2011;
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(c)
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use
its commercially reasonable best efforts
to:
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(i)
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obtain
all required stock exchange approvals for the amendments to the Debentures
and the conditional listing of the Consideration Shares and the common
shares underlying the Consideration Warrants on the Toronto Stock Exchange
and NYSE Amex Equities (formerly the American Stock
Exchange);
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(ii)
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issue
the Consideration Shares as free trading shares, or enter into a
registration rights agreement with RAB in respect of the Consideration
Shares and prepare and file or cause to be prepared and filed with the
United States Securities and Exchange Commission (the "SEC") a registration
statement in respect of the resale of the Consideration Shares;
and
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(iii)
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prepare
and file or cause to be prepared and filed with the SEC a registration
statement on Form S-3 (or other appropriate form) in respect of the resale
of common shares issuable upon the exercise of the Consideration Warrants
or conversion of the Debentures.
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Section
4.
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Entire
Agreement.
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This
Third Amending Agreement constitutes the entire agreement between the parties
with respect to the amendments contemplated in this Third Amending Agreement and
supersedes all prior agreements, understandings, negotiations and discussions,
whether oral or written, of the parties, the purpose of which were to amend the
Debentures and the Debenture Warrants. The parties have not relied
and are not relying on any other information, discussion or understanding in
implementing the amendments contemplated by this Third Amending
Agreement.
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Section
5.
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Successors
and Assigns.
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This
Third Amending Agreement becomes effective when executed by all of the
parties. After that time, it is binding upon and enures to the
benefit of the parties and their respective successor and permitted
assigns.
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Section
6.
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Governing
Law.
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This
Third Amending Agreement is governed by, interpreted and enforced in accordance
with the laws of the Province of Ontario and the federal laws of Canada
applicable therein.
[REMAINDER
OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]
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Section
7.
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Counterparts.
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This
Third Amending Agreement may be executed in any number of counterparts
(including counterparts by facsimile or other form of electronic format) and all
such counterparts taken together constitute one and the same
instrument.
IN WITNESS WHEREOF, the
parties have executed this Third Amending Agreement on the date first written
above.
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RAB SPECIAL SITUATIONS (MASTER) FUND
LIMITED
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Per:
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/s/ Xxxx Xxxxxxxxx
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Name: Xxxx Xxxxxxxxx
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Per:
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/s/ Xxxxx Xxxxxxx
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Name: Xxxxx Xxxxxxx
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Title:
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Authorized signatories for RAB Capital plc for
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and on behalf of RAB Special Situations
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(Master) Fund Limited
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APOLLO
GOLD CORPORATION
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Per:
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/s/
G. Xxxxxxx Xxxxxx
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Name:
G. Xxxxxxx Xxxxxx
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Title:
Assistant Secretary and Director
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| I have authority to bind the Corporation | ||
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