Exhibit 1.1
CANADIAN UNDERWRITING AGREEMENT
July -, 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$- until -, 2004
(each whole warrant, a "WARRANT"), at an offering price of Cdn$- per Unit
for aggregate gross proceeds of $-. 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$- 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$- 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 -, 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 - 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
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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;
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(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
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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;
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(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:
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(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
-, 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;
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(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
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(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
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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 - 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
and to:
-00-
Xxxxx Xxxxx 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
-31-
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
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.
-32-
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: ________________________________
Authorized Signing Officer
BMO XXXXXXX XXXXX INC.
By: ________________________________
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 ______________ as of this ______ day of_________________,
2002.
GOLDEN STAR RESOURCES LTD.
By: _________________________________
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 Ressources S.A. Shares 73%
(France)
Societe de Traveux Shares 100%
Publics et 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 Shares 100%
Saint-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
