EXHIBIT 10.1
DEALER MANAGER AGREEMENT
June 10, 2004
BMO Xxxxxxx Xxxxx Inc.
Xxxxxx Xxxxxxx Corp.
c/o BMO Xxxxxxx Xxxxx Inc.
1 First Canadian Place
4th Floor, P.O. Box 150
Toronto, Ontario M5X 1H3
Attention: Xxxxx Xxxxxxxx
Dear Xxxxx:
1. General. Golden Star Resources Ltd., a Canadian corporation (the
"COMPANY"), plans to make a take-over bid in Canada and concurrent tender offer
in the United States (the "OFFER") for all of the outstanding common shares (the
"SECURITIES") of IAMGold Corporation ("IAMGOLD") for consideration consisting of
1.15 common shares of the Company (the "COMPANY SHARES") for each Security, on
the terms and subject to the conditions set forth in the Offer to Purchase and
Circular filed with the Ontario Securities Commission (the "OSC") on the date
hereof and attached hereto as Exhibit A (as amended, the "OFFER TO PURCHASE"),
the Preliminary Prospectus dated June 9, 2004 and attached hereto as Exhibit B
(and as amended or supplemented from time to time prior to effectiveness of the
Registration Statement (as defined below), the "PRELIMINARY PROSPECTUS"), and
the related Letter of Acceptance and Transmittal (the "LETTER OF TRANSMITTAL")
dated June 9, 2004 and attached hereto as Exhibit C. The Company also intends to
solicit proxies from IAMGold shareholders to vote against the proposed
arrangement between IAMGold and Wheaton River Minerals Ltd. (the "Proxy
Solicitation"). The schedules attached to this Agreement shall, for all purposes
of this Agreement, form an integral part of it.
The following materials to be used by the Company in connection with
the Offer, as any of them may be amended, modified or supplemented from time to
time, are collectively referred to herein as the "OFFER MATERIAL":
(a) The Offer to Purchase;
(b) The Company's Registration Statement on Form S-4 filed
with the Securities and Exchange Commission (the "COMMISSION") on June
10, 2004, in accordance with the Securities Act of 1933, as amended,
and the rules and regulations of the Commission thereunder
(collectively, the "1933 ACT") relating to the Offer and the issuance
of the Company Shares in connection therewith. As used in this
agreement (the "DEALER MANAGER AGREEMENT" or this "AGREEMENT"), the
term "REGISTRATION STATEMENT" means such registration statement,
including all exhibits, financial statements, schedules or other
information included or incorporated by reference therein, when it
becomes effective under the 1933 Act, and as amended or supplemented
from time to time;
(c) The Company's Prospectus relating to the Offer and the
Company Shares to be issued in connection therewith. As used in this
Agreement, the term "PROSPECTUS" means (i) any prospectus, as amended
or supplemented on or prior to the Acceptance Date (as defined below)
(including, but not limited to, the Preliminary Prospectus) that the
Company uses, prepares, files, distributes or approves in writing which
is used to solicit tenders of Securities to the Offer, or (ii) after
the effectiveness of the Registration Statement, the prospectus, if
any, filed with the Commission pursuant to Rule 424(b) under the 1933
Act, in the form it was first filed, provided that such prospectus was
used to solicit tenders of Securities to the Offer on or prior to the
Acceptance Date (as defined below). All references in this Agreement to
financial statements and schedules and other information which is
"contained", "included" or "stated" in the Registration Statement, any
preliminary prospectus or the Prospectus (or other references of like
import) shall be deemed to mean and include all such financial
statements and schedules and other information which is incorporated,
or deemed to be incorporated, by reference in the Registration
Statement, any preliminary prospectus or the Prospectus, as the case
may be. Any reference herein to the Registration Statement or the
Prospectus shall be deemed to refer to and include any documents,
financial statements and schedules incorporated, or deemed to be
incorporated, by reference therein pursuant to Form S-4 under the 1933
Act, as of the effective date of the Registration Statement or the date
of the Prospectus, as the case may be, and any reference to any
amendment or supplement to the Registration Statement or the Prospectus
shall be deemed to refer to and include any documents, financial
statements and schedules filed after such date under the Securities
Exchange Act of 1934, as amended, and the rules and regulations of the
Commission thereunder (collectively, the "1934 ACT") and so
incorporated, or deemed to be incorporated, by reference (such
incorporated documents, financial statements and schedules being herein
called the "INCORPORATED DOCUMENTS"). For purposes of this Agreement,
all references to the Registration Statement, any preliminary
prospectus, the Prospectus or any amendment or supplement to any of the
foregoing shall be deemed to include the copy filed with the Commission
pursuant to its Electronic Data Gathering, Analysis and Retrieval
system ("XXXXX").
(d) The Schedule 14D-1F (the "SCHEDULE 14D-1F") filed or to be
filed by the Company with the Commission pursuant to Rule 14d-1 under
the 1934 Act and all amendments to the Schedule 14D-1F (each an
"AMENDMENT" and, collectively, the "AMENDMENTS") and the Letter of
Transmittal.
(e) Any other documents or materials whatsoever (including
newspaper announcements and press releases) relating to the Offer that
are distributed or made available to the public or the holders of the
Securities by or at the direction of the Company in connection with the
Offer.
2. Engagement as Dealer Manager and Dissident Proxy Solicitor.. (a) The
Company hereby retains BMO Xxxxxxx Xxxxx, Inc. in Canada, and Xxxxxx Xxxxxxx
Corp., in the United States, to (i) act as the dealer manager with respect to
the Offer (together, the "DEALER MANAGER") and to form and manage a group
(together with the Dealer Manager, the "SOLICITING DEALER GROUP") consisting of
members of the Investment Dealers Association of Canada and the Toronto Stock
Exchange, or of the National Association of Securities Dealers, to act as
-2-
soliciting dealers with respect to the Offer (each a "SOLICITING DEALER") and
(ii) assist the Company with the Proxy Solicitation (together, the "Dissident
Proxy Solicitor"). On the basis of the representations and warranties and
agreements of the Company herein contained and subject to and in accordance with
the terms and conditions hereof and of the Offer Material, you hereby agree to
act as Dealer Manager in connection with the Offer and Dissident Proxy Solicitor
in connection with the Proxy Solicitation and in connection therewith, you shall
act in accordance with your customary practices and shall perform those services
in connection with the Offer and Proxy Solicitation that are customarily
performed by investment banking firms in connection with acting as a dealer
manager of take-over bids or exchange offers of a like nature and a dissident
proxy solicitor, including, but not limited to, soliciting tenders pursuant to
the Offer and communicating generally regarding the Offer and Proxy Solicitation
with brokers, dealers, commercial banks and trust companies and other persons,
including the holders of the Securities. The Soliciting Dealers will, on behalf
of the Company, use their reasonable efforts to solicit shareholders of IAMGold
to tender their Securities to the Offer and vote their Securities in the Proxy
Solicitation and are hereby authorized by the Company to make favorable
recommendations as to the Offer and Proxy Solicitation, by publication or other
appropriate oral, electronic or written communication provided that each such
publication or communication is made in accordance with the applicable
securities legislation, regulations, rules, policy statements, rulings, orders
and published notices of the securities regulatory authorities in Canada and the
United States and the applicable rules, by-laws and policies of applicable stock
exchanges (collectively, the "SECURITIES LEGISLATION").
(b) Neither the Dealer Manager nor any Soliciting Dealer will be
required to perform services except where lawfully licensed or registered to so
do, or pursuant to applicable exemptions from licensing and registration under
applicable law. Subject to the Securities Legislation, the Dealer Manager shall
be entitled to trade as agent for other parties, but not as principals, in the
securities of the Company and IAMGold and to otherwise advise its clients in
accordance with its duties to such clients.
(c) The Dealer Manager agrees to conduct the solicitation and to
perform the other services hereunder in accordance with the Securities
Legislation and the terms hereof and to obtain the agreement of each Soliciting
Dealer to conduct the solicitation and perform its services in accordance with
the Securities Legislation; provided, however, that the Dealer Manager will not
be responsible for the actions of any other Soliciting Dealer, as each will be
responsible for its own actions.
(d) The Dealer Manager agrees not to solicit or otherwise communicate
in respect of the Offer or Proxy Solicitation in any jurisdiction where, or from
any person in respect of which, the Offer is expressed to be excluded or not
made.
(e) The Company acknowledges and agrees that the Dealer Manager has
been retained hereunder to act solely as Dealer Manager and Dissident Proxy
Solicitor. In such capacity, the Dealer Manager shall act hereunder as an
independent contractor and shall not be deemed the agent or fiduciary of the
Company or any of its affiliates, equity holders or creditors or of any other
person, and any of the duties of the Dealer Manager arising out of the Dealer
Manager's engagement pursuant to this Agreement shall be owed solely to the
Company. None of the Soliciting Dealers (including the Dealer Manager) shall be
liable to the Company, its
-3-
affiliates, equity holders or creditors or to any other person for any act or
omission on the part of, and shall not be deemed to be the agent or fiduciary
of, any broker or dealer, commercial bank or trust company other than such
Soliciting Dealer and no such broker or dealer, commercial bank or trust company
shall be deemed to be acting as the agent or fiduciary any of the Soliciting
Dealers. Nothing contained in this Agreement shall constitute any of the
Soliciting Dealers (including the Dealer Manager) a partner of or joint venturer
with the Company.
(f) The Dealer Manager shall not be subject to any loss, claim, damage,
liability or expense owed to the Company or any of the Company's affiliates or
subsidiaries for any act or omission on the part of any broker or dealer in
securities (other than the Dealer Manager), bank, trust company, nominee or any
other person, and the Dealer Manager shall not be liable for (i) its own acts or
omissions in performing its obligations as Dealer Manager or Dissident Proxy
Solicitor, or (ii) for any loss, claim, damage, liability or expense incurred by
any person in connection with the Dealer Manager performing its obligations as
Dealer Manager or Dissident Proxy Solicitor hereunder, except for any losses,
claims, damages, liabilities and expenses determined in a final judgment by a
court of competent jurisdiction to have resulted directly from any such acts or
omissions undertaken or omitted to be taken by the Dealer Manager through its
negligence or willful misconduct. In soliciting or obtaining tenders of
Securities or votes in the Proxy Solicitation, the Company hereby acknowledges
that the Dealer Manager is and will be acting as an independent contractor and
shall not be deemed to be acting as the agent of the Company or as the agent of
any broker, dealer, bank, trust company, nominee or other person and no broker,
dealer, bank, trust company, nominee or other person shall be deemed to be
acting as the agent of the Dealer Manager or any of its subsidiaries or
affiliates.
3. Solicitation Material, Withdrawal. The Company agrees to furnish
each Soliciting Dealer with as many copies as you may reasonably request of any
Offer Material. The Company will, in a timely manner, provide the Dealer Manager
with a duplicate list of the names and addresses of the registered shareholders
of IAMGold and The Canadian Depository for Securities Limited participant list,
in such form(s) as are in the possession of the Company. The Company agrees
that, within a reasonable time prior to using any Offer Material, it will submit
copies of such material to you and will not use or publish any such material
without your comment. During the term of the Offer and so long as the
Registration Statement shall be effective, the Company shall inform you promptly
after it receives notice or becomes aware of the happening of any event, or the
discovery of any fact, that would require the making of any change in any Offer
Material then being used or that would affect the accuracy or completeness of
any representation or warranty contained in this Agreement if such
representation or warranty were being made immediately after the happening of
such event or the discovery of such fact.
In the event that (i) the Company uses or permits the use of any Offer
Material (a) that has not been submitted to you and your counsel for comment, or
(b) that has been so submitted and with respect to which you or your counsel
have made comments, but which comments have not resulted in a response
reasonably satisfactory to you to reflect such comments, (ii) the Company shall
have breached any of its representations, warranties, agreements, obligations or
covenants contained herein, (iii) there shall have occurred any material adverse
change in the business or operations of the Company and its subsidiaries taken
as a whole (a "MATERIAL ADVERSE EFFECT"), that, in your judgment, makes it
impracticable or inadvisable to carry out the Offer, the exchange of Securities
pursuant thereto or the performance of this Agreement, (iv) the
-4-
Offer is terminated or withdrawn for any reason or (v) any stop order,
restraining order, injunction or denial of an application for approval has been
issued in connection with the Offer and not thereafter stayed or vacated or any
proceeding, litigation or investigation in connection with the Offer has been
initiated, that, in either case in your judgment, makes it impracticable or
inadvisable to carry out the Offer, the exchange of Securities pursuant thereto
or the performance of this Agreement, then in any such case you shall be
entitled to withdraw as a Dealer Manager, by providing written notice of such
withdrawal to the Company, without any liability or penalty to you or any
Personnel (as defined in Schedule I hereto) and without loss of any right to the
payment of all expenses payable in accordance with Section 5 hereunder which
have been incurred by you to the date of such withdrawal. If you withdraw as
Dealer Manager in accordance with the foregoing provision, the reimbursement for
your expenses through the date of such withdrawal shall be paid to you promptly
after such date. Notwithstanding anything contained in this Agreement to the
contrary, the Company may, in its discretion, carry out the Offer after your
withdrawal as Dealer Manager, provided that the Company (y) amends or
supplements the Offer Material to disclose that you have withdrawn as Dealer
Manager and (z) utilizes a means reasonably calculated to reach holders of the
Securities to inform them of such withdrawal.
4. Compensation. The Company shall not pay the Dealer Manager any
additional professional fees for forming and managing the Soliciting Dealer
Group or for acting as the Dissident Proxy Solicitor.
5. Expenses. The Company agrees to pay all of your reasonable
out-of-pocket costs and expenses (including legal fees and GST) incurred in
connection with your service as Dealer Manager and Dissident Proxy Solicitor.
The Company agrees that it will pay all of the following expenses related to the
Offer: (i) all fees and expenses relating to the preparation, printing, mailing
and publishing of the Offer Material, including the cost of preparation and
filing of the Registration Statement and any amendment thereto and Schedule
14D-1F and any Amendments thereto, (ii) all fees and expenses of the Company's
counsel and accountants and of the information agent, (iii) all advertising
charges, (iv) all fees and expenses of any depositary, transfer agent or other
person rendering services in connection with the Offer, (v) mailing and handling
expenses incurred by brokers and dealers (including you), commercial banks,
trust companies and other nominees in forwarding the Offer Material to their
customers, (vi) the cost of the preparation, issuance and delivery of the
Company Shares, including any and all transfer and other taxes payable thereon,
except as otherwise stated in the Letter of Transmittal, (vii) all expenses in
connection with the qualification of the Company Shares for offer and delivery,
(viii) all costs and expenses incident to the additional listing of the Company
Shares on the American Stock Exchange and the Toronto Stock Exchange and (ix)
all other costs and expenses (including taxes and GST) incident to the
performance of the obligations of the Company hereunder for which provision is
not otherwise made in this Section. All payments to be made by the Company to or
on behalf of the Dealer Manager pursuant to this Section 5 shall be made
promptly after the expiration or termination of the Offer or withdrawal by you
from acting as Dealer Manager in accordance with Section 3 or, if later,
promptly after the related fees or expenses accrue and are invoiced. The Company
shall perform its obligations set forth in this Section 5 whether or not the
Offer is commenced or the Company acquires any Securities pursuant to the Offer
or otherwise.
-5-
6. Depositary. The Company has appointed CIBC Mellon Trust Company (the
"DEPOSITARY") to act as its Depositary. The Company will instruct the Depositary
to provide, from time to time, designated employees of the Dealer Manager with
such timely information as the Dealer Manager may reasonably request as to the
number of Securities that have been tendered and received by the Depositary and
the names of holders of such Securities, including a list in writing (as soon as
practicable) of the names and addresses of the Soliciting Dealers whose names
have been designated in the appropriate space on the Letter of Transmittal
delivered to the Depositary or to the Company in accordance with the
instructions on the Letter of Transmittal enclosed with the Offer Material and
the number of Securities as to which each Soliciting Dealer was so designated.
7. Representations, Warranties and Certain Agreements of the Company.
The Company represents and warrants to the Dealer Manager, and agrees with the
Dealer Manager, as of the date hereof, as of the date of commencement of the
Offer (the "COMMENCEMENT DATE") and as of the date on which the Securities are
accepted by the Company pursuant to the Offer (the "ACCEPTANCE Date") (unless
another date is specifically referenced in which case the representation and
warranty shall speak as of such date) as set forth on Schedule II provided,
however, that, if the representations and warranties set forth on Schedule II
are not true and correct as of the Acceptance Date, the Dealer Manager may
withdraw as Dealer Manager in accordance with the second paragraph of Section 3.
8. Additional Agreements. (a) The Company shall notify you immediately
and, if requested, shall notify you in writing of (i) when the Registration
Statement has become effective and when any Prospectus is mailed (or otherwise
sent) for filing pursuant to Rule 424 under the 1933 Act, (ii) the receipt of
any comments from the Commission or the OSC, (iii) any request by the Commission
or the OSC for any amendment to the Registration Statement, the Offer to
Purchase or any amendment or supplement to the Prospectus or for additional
information, (iv) the filing of any post-effective amendment to the Registration
Statement, (v) the issuance by the Commission or the OSC of any stop order
suspending the effectiveness of the Registration Statement or any post-effective
amendment thereto or of any order preventing or suspending the use of the
Preliminary Prospectus or any Offer Material, or of the suspension of the
qualification of the Securities for offering or sale in any jurisdiction, or of
the initiation or threatening of any proceedings for any of such purposes, (vi)
the occurrence of any event that could cause the Company to withdraw or
terminate the Offer or would permit the Company to exercise any right not to
accept tendered Securities, (vii) any proposal or requirement to make, amend or
supplement any other Offer Material, (viii) the commencement of any material
litigation or the issuance of any order or the taking of any other action by any
administrative or judicial tribunal or other governmental agency or
instrumentality concerning the Offer (and, if in writing, will furnish you a
copy thereof), (ix) the issuance by any provincial or state securities
commission or other regulatory authority of any order suspending the
qualification or the exemption from qualification of the Company Shares under
state securities or blue sky laws or the initiation or threatening of any
proceeding for that purpose, (x) the occurrence of any event, or the discovery
of any fact, the occurrence or existence of which would reasonably be expected
to (a) cause the Company to amend, withdraw or terminate the Offer, (b) cause
any representation or warranty contained in this Agreement to be untrue or
inaccurate, or (c) permit the Company to exercise any right not to exchange the
Securities tendered under the Offer (and
-6-
the Company will so advise you before such rights are exercised) and (xi) any
other information relating to the Offer which you may from time to time
reasonably request.
The Company agrees that if any event occurs or condition exists as a
result of which the Offer Material would include an untrue statement of a
material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances existing when the Offer
Material is delivered to a holder of Securities, not misleading, or if, in the
opinion of the Company, after consultation with you, it is necessary at any time
to amend or supplement the Offer Material to comply with applicable law, the
Company shall immediately notify you, prepare an amendment or supplement to the
Offer Material that will correct such statement or omission or effect such
compliance and supply such amended or supplemented Offer Material to you.
(b) The Company will promptly effect the filings necessary pursuant to
Rule 424 and will take such steps as it deems necessary to ascertain promptly
whether the Prospectus transmitted for filing under Rule 424 was received for
filing by the Commission and, in the event that it was not, it will promptly
file the Prospectus. The Company will make every reasonable effort to prevent
the issuance of any stop order and, if any stop order is issued, will make every
reasonable effort to obtain the lifting thereof at the earliest possible moment.
The Company will file promptly all reports or information statements
required to be filed with the Commission pursuant to Section 13(a), 13(c), 14 or
15(d) of the 1934 Act subsequent to the date of the Preliminary Prospectus and
for so long as the delivery of a prospectus is required in connection with the
Offer. The Company will promptly file with the Commission on the Commencement
Date a Schedule 14D1-F and will promptly file as required any and all necessary
Amendments.
(c) On the Commencement Date, the Company will cause to be delivered to
each registered holder of the Securities, as soon practicable, a copy of the
Preliminary Prospectus and Letter of Transmittal and all other appropriate Offer
Material. Thereafter, to the extent practicable until the expiration or
termination of the Offer, the Company will use all reasonable efforts to cause
copies of such material to be mailed to each person who becomes a registered
holder of any Company Shares.
(d) The Company will give you notice of its intention to file or
prepare any amendment to the Registration Statement (including any filing under
Rule 462(b) of the 1933 Act regulations), or any amendment, supplement or
revision to either the prospectus included in the Registration Statement at the
time it became effective or to the Prospectus, whether pursuant to the 1933 Act,
the 1934 Act or otherwise, will furnish you with copies of any such documents a
reasonable amount of time prior to such proposed filing or use, as the case may
be, and will not file or use any such document to which you shall reasonably
object, but nothing herein shall prevent the Company from complying with
applicable law.
(e) The Company has furnished or will deliver to you, without charge,
one signed copy of the Registration Statement as originally filed and of each
amendment thereto (including exhibits filed therewith or incorporated by
reference therein and documents incorporated or deemed to be incorporated by
reference therein) and signed copies of all consents and certificates
-7-
of experts, and will also deliver to you, without charge, as many conformed
copies of the Registration Statement as originally filed and of each amendment
thereto (without exhibits) as you may reasonably request. The Company further
agrees that the Registration Statement and each amendment thereto furnished to
you will be identical to any electronically transmitted copies thereof filed
with the Commission pursuant to XXXXX, except to the extent permitted by
Regulation S-T.
(f) The Company will deliver to you, without charge, as many copies of
the Prospectus and the other Offer Materials as you may reasonably request, and
the Company hereby consents to the use of such copies for purposes permitted by
the 1933 Act and as contemplated hereunder. The Company will furnish to you,
without charge, during the period when the Prospectus is required to be
delivered under the 1933 Act or the 1934 Act, such number of copies of the
Prospectus and the other Offer Materials as you may reasonably request. The
Company further agrees that the Prospectus and the other Offer Materials and any
amendments or supplements thereto furnished to you will be identical to any
electronically transmitted copies thereof filed with the Commission pursuant to
XXXXX, except to the extent permitted by Regulation S-T.
(g) The Company will comply with the 1933 Act and the 1934 Act so as to
permit the completion of the distribution of the Company Shares as contemplated
in this Agreement and in the Registration Statement and the Prospectus. If at
any time when the Prospectus is required by the 1933 Act or the 1934 Act to be
delivered in connection with the distribution of the Company Shares, any event
shall occur or condition shall exist as a result of which it is necessary, in
the opinion of counsel for the Company, to amend the Registration Statement in
order that the Registration Statement and the other Offer Materials will not
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading or to amend or supplement the Prospectus in order that the Prospectus
will not include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
holder of Securities, or if it shall be necessary, in the opinion of such
counsel, at any such time to amend the Registration Statement or amend or
supplement the Prospectus in order to comply with the requirements of the 1933
Act, the Company will promptly prepare and file with the Commission, subject to
the terms of this Agreement, such amendment or supplement as may be necessary to
correct such statement or omission or to make the Registration Statement or the
Prospectus comply with such requirements, and the Company will furnish to you,
without charge, such number of copies of such amendment or supplement as you may
reasonably request.
(h) The Company will use all reasonable efforts to qualify the Company
Shares for offering and sale under the applicable securities laws of such states
of the United States and in such provinces of Canada as you and the Company may
reasonably designate; provided, however, that the Company shall not be obligated
to file any general consent to service of process or to qualify as a foreign
corporation or as a dealer in securities in any jurisdiction in which it is not
so qualified or to subject itself to taxation in respect of doing business in
any jurisdiction in which it is not otherwise so subject.
-8-
(i) The Company will not, directly or indirectly, distribute the Offer
Material to any holder of Securities in or from any jurisdiction outside the
United States or Canada, or otherwise extend the Offer to any holder of
Securities residing in any jurisdiction outside the United States, except under
circumstances that will result in compliance with the applicable laws and
regulations of such jurisdiction.
9. Documentary Covenants. (a) The Company covenants that it shall,
within three business days of the Commencement Date, deliver or cause to be
delivered to you each of (i) the signed opinion, dated within three business
days of the Commencement Date, of Xxxxx Xxxxxx & Xxxxxx LLP, which opinion shall
address the matters contemplated by Rule 10b-5 under the 1934 Act in form and
substance satisfactory to you, (ii) a certificate of the Treasurer or Assistant
Treasurer of the Company and the chief financial officer or chief accounting
officer of the Company, dated as of the Commencement Date, to the effect that,
since the date of the most recent financial statements included in the
Registration Statement and the Prospectus, there has been no material adverse
change, or any development involving a prospective material adverse change, in
the condition, financial or otherwise, or in the earnings, business or
operations of the Company and its subsidiaries taken as a whole (other than as
set forth in the Prospectus).
(b) Unless you have previously withdrawn as Dealer Manager, the Company
covenants that it shall, on the Acceptance Date, deliver or cause to be
delivered to you each of the documents listed in clauses (i) through (v) below
and that it will not accept Securities tendered pursuant to the Offer unless on
such Acceptance Date: (i) the Company shall have delivered or caused to be
delivered to you the signed opinions, dated the Acceptance Date, of Xxxxx Xxxxxx
& Xxxxxx LLP and Fasken Xxxxxxxxx DuMoulin LLP, counsel for the Company, in form
and substance reasonably satisfactory to you, which opinions shall, in the case
of Xxxxx Xxxxxx & Xxxxxx LLP only, include, for certainty and without
limitation, a statement addressing the matters contemplated by Rule 00x-0 xxxxx
xxx 0000 Xxx, (xx) the Company shall have delivered or caused to be delivered
written evidence that the Company Shares are duly authorized for listing on the
America Stock Exchange and the Toronto Stock Exchange, (iii) the Company shall
have delivered or caused to be delivered to you a certificate of the Treasurer
of the Company and the chief financial officer or chief accounting officer of
the Company, dated as of the Acceptance Date, to the effect that (w) since the
date of this Agreement, there has been no material adverse change, or any
development or event involving a prospective material adverse change, in the
condition, financial or otherwise, or in the results of operations or business
affairs of the Company and its subsidiaries considered as one enterprise,
whether or not arising from the ordinary course of business (other than as set
forth in the Prospectus), (x) the Company's representations and warranties in
this Agreement are true and correct with the same force and effect as though
expressly made at and as of the Acceptance Date, and (y) the Company has
complied with all agreements and taken all actions to be performed or satisfied
by the Company pursuant to this Agreement at or prior to the Acceptance Date,
and (z) the Registration Statement has been declared effective by the Commission
and no stop order suspending the effectiveness of the Registration Statement has
been issued and no proceedings for that purpose have been instituted, are
pending or, to the best of such officer's knowledge, are threatened by the
Commission, (iv) the Company shall have delivered or caused to be delivered to
you a certificate, dated the Acceptance Date, of the Secretary of the Company in
form and substance reasonably satisfactory to you, (v) the Company shall have
delivered or have caused to be delivered to you a letter from
PriceWaterhouseCoopers LLP, dated as of the Acceptance Date, to
-9-
the effect that PriceWaterhouseCoopers LLP reaffirms the statements made in the
letter furnished pursuant to subsection (a)(iv) of this Section 9, except that
the specified date referred to shall be a date not more than three business days
prior to the Acceptance Date and (vi) there shall not be any reasonable
likelihood that the acceptance for exchange of the outstanding Securities
pursuant to the Offer will cause the outstanding Securities to be de-listed from
the American Stock Exchange or the Toronto Stock Exchange for any reason.
10. Confidentiality of Information. The Dealer Manager will keep and
cause each of its directors, officers, employees, agents and advisors to keep
strictly confidential and will use only for the purpose of performing its
obligations hereunder all information, whether written or oral, acquired from
the Company, its agents and advisors in connection with the Dealer Manager's
work hereunder (collectively "Information") except information that (i) is or
becomes generally available to the public (other than as a result of disclosure
by the Dealer Manager), (ii) was in the possession of the Dealer Manager on a
non-confidential basis prior to its disclosure by the Company, (iii) becomes
available to the Dealer Manager on a non-confidential basis from a person other
than the Company who, to the knowledge of the Dealer Manager, is not bound by a
confidentiality agreement with the Company or otherwise prohibited from
transferring such information to the Dealer Manager, (iv) the Company agrees may
be disclosed or (v) the Dealer Manager is required by law, regulation, legal
process or regulatory authority to disclose. If we are required by legal process
or otherwise requested to disclose any Information, the Dealer Manager will
provide the Company with prompt notice of such request or requirement, so that
the Company may seek an appropriate protective order or waive compliance with
this requirement. In the event such protective order is not obtained, the
Company agrees that such disclosure may be made without liability hereunder.
Notwithstanding anything to the contrary set forth in the previous
paragraph, the Dealer Manager and its affiliates shall at all times be entitled
to retain all Information and to use it without liability to the Company, (i) in
carrying out its legal and contractual obligations as the Dealer Manager for the
Offer or as underwriter or placement agent in any subsequent public offering or
private placement of securities of the Company and (ii) to assert any defenses
available under the various securities laws, including, without limitation, "due
diligence" defenses. Furthermore, if the Dealer Manager or any of its affiliates
participates as an underwriter or placement agent in a public offering or
private placement of securities of the Company or any affiliate of the Company,
the term "Information" shall not include any information that is required to be
stated in the prospectus, registration statement or other offering document or
is necessary to make the statements therein not misleading.
11. Indemnification and Contribution. The Company agrees to indemnify
the Dealer Manager and any of the Soliciting Dealers and certain other parties
in accordance with Schedule I, attached hereto which schedule forms a part of
this Agreement and the consideration for which is the entering into of this
Agreement. Such indemnity shall be in addition to, and not in substitution for,
any liability at law, in equity or otherwise, which the Company or any other
party may have to the Dealer Manager or to the other parties to such indemnity.
12. Survival of Indemnities, Representations, Warranties, Etc. The
indemnity and contribution agreements contained in Schedule I, the provisions of
Sections 2(b), (e) and (f), 4 and 5 and the representations and warranties of
the Company set forth in this Agreement
-10-
(including the schedules thereto) shall remain operative and in full force and
effect, regardless of (i) any failure to commence, or the withdrawal,
termination or consummation of, the Offer or the termination or assignment of
this Agreement, (ii) any investigation made by or on behalf of the Company or
NBI (as defined in Schedule I) or its Personnel (as defined in Schedule I) and
(iii) any withdrawal by you pursuant to Section 3.
13. Severability of Provisions. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law,
or public policy, all other provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the agreements contained herein is not affected in any manner adverse to any
party. Upon such determination that any term or provision is invalid, illegal or
unenforceable, the parties hereto shall negotiate in good faith to modify this
Agreement so as to effect the original intent of the parties as closely as
possible in a mutually acceptable manner in order that the agreements contained
herein may be performed as originally contemplated to the fullest extent
possible.
14. Counterparts. This Agreement may be executed and delivered
(including by facsimile transmission) in two or more separate counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
15. Parties In Interest. This Agreement, including any right to
indemnity or contribution hereunder, shall inure to the benefit of and be
binding upon the Company, the Dealer Manager, NBI (as defined in Schedule I),
the Personnel (as defined in Schedule I) and their respective successors and
assigns. Nothing in this Agreement is intended, or shall be construed, to give
to any other person or entity any right hereunder or by virtue hereof.
16. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE PROVINCE OF ONTARIO AND THE PARTIES HEREBY
IRREVOCABLY ATTORN TO THE JURISDICTION OF THE COURTS OF THE PROVINCE OF ONTARIO.
17. References to the Dealer Manager. The Company agrees that any
reference to the Dealer Manager in the Registration Statement, Prospectus or
Offer Material, or in any other release or communication relating to the Offer,
is subject to your prior approval, which approval shall not be unreasonably
withheld.
18. Notices. All notices and other communications required or permitted
to be given under this Agreement shall be in writing and shall be deemed to have
been duly given if delivered personally to the parties hereto as follows:
-11-
(a) If to the Dealer Manager:
BMO Xxxxxxx Xxxxx Inc.
1 First Canada Place
4th Floor, P.O. Box 150
Toronto, Ontario M5X 1H3
Attention: Xxxxx Xxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
and
(b) If to the Company:
Golden Star Resources Ltd.
00000 X. Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
19. Securities Positions. The Company acknowledges that it has no
objection to the fact that, in the course of trading activities, the Dealer
Manager may from time to time have positions in, and buy or sell securities of,
the Company and IAMGold.
20. Tombstone. You may place an announcement in such newspapers and
periodicals as you may choose, stating that the Dealer Manager is acting or has
acted as exclusive dealer manager to the Company in connection with the Offer.
Any such announcement shall be at your sole option and expense and subject to
the reasonable approval of the Company.
21. Waiver of Right to Trial by Jury and Applicable Law. The Dealer
Manager and the Company each waive any right to trial by jury in any action,
claim, suit or proceeding with respect to the engagement of the Dealer Manager
hereunder.
22. Miscellaneous. The descriptive headings contained in this Agreement
are incorporated for convenience of reference only and shall not affect in any
way the meaning or interpretation of this Agreement.
23. Entire Agreement; Amendment. This Agreement supersedes all prior
agreements and undertakings, both written and oral, of the parties hereto, or
any of them, with respect to the subject matter hereof and constitute the entire
understanding of the parties hereto with respect to the subject matter hereof.
This Agreement may not be waived, amended or modified except in writing signed
by each party to be bound hereby. For the avoidance of doubt, this Agreement
shall not be construed to supersede the Engagement Letter dated as of April 12,
2004 between the Company and BMO Xxxxxxx Xxxxx Inc.
[SIGNATURE PAGES FOLLOW]
-12-
Please indicate your willingness to act as Dealer Manager on the terms
set forth herein and your acceptance of the foregoing provisions by signing in
the space provided below for that purpose and returning to us a copy of this
letter, whereupon this letter shall constitute a binding agreement among us.
Very truly yours,
GOLDEN STAR RESOURCES LTD.
By: /s/ Xxxxx X. Xxxxxx
----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Senior Vice President and
Chief Financial Officer
Accepted as of the date first above written:
BMO XXXXXXX XXXXX INC.
By: /s/ Xxxxx Xxxxxxxxxxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxxxxxxxxxx
Title: Managing Director
XXXXXX XXXXXXX CORP.
By: /s/ Xxxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Managing Director
-13-
SCHEDULE I
GOLDEN STAR RESOURCES LTD. (the "Indemnitor") hereby agrees to indemnify and
hold BMO Xxxxxxx Xxxxx Inc., Xxxxxx Xxxxxxx Corp. and/or any of their respective
subsidiary or affiliated companies (hereinafter collectively referred to as
"NBI") and each and every of the directors, officers, employees, agents and
shareholders of NBI (hereinafter referred to as the "Personnel") harmless from
and against any and all expenses, losses, claims, actions, damages or
liabilities, joint or several (including the aggregate amount paid in reasonable
settlement of any actions, suits, proceedings or claims and the reasonable fees
and expenses of its counsel that may be incurred in advising with respect to
and/or defending any claim that may be made against NBI) to which NBI and/or its
Personnel may become subject or otherwise involved in any capacity under any
statute or common law or otherwise insofar as such expenses, losses, claims,
damages, liabilities or actions arise out of or are based, directly or
indirectly, upon the performance of professional services by NBI or its
Personnel in connection with the matters referred to in the attached letter
agreement, provided, however, that this indemnity shall not apply to the extent
that a court of competent jurisdiction in a final judgment that has become
non-appealable shall determine that:
(i) NBI or its Personnel have been negligent or dishonest or have committed
any fraudulent act in the course of such performance; and
(ii) the expenses, losses, claims, damages or liabilities, as to which
indemnification is claimed, were directly caused by the negligence,
dishonesty or fraud referred to in (i).
If in connection with any legal proceeding, for any reason (other than the
occurrence of any of the events itemized in (i) and (ii) above), the foregoing
indemnification is unavailable to NBI or insufficient to hold it harmless (other
than in accordance with the terms hereof), then the Indemnitor shall contribute
to the amount paid or payable by NBI as a result of such expense, loss, claim,
damage or liability in such proportion as is appropriate to reflect not only the
relative benefits received by the Indemnitor on the one hand and NBI on the
other hand but also the relative fault of the Indemnitor and NBI, as well as any
relevant equitable considerations provided that the Indemnitor shall in any
event contribute to the amount paid or payable by NBI as a result of such
expense, loss, claim, damage or liability any excess of such amount over the
amount of the fees received by NBI pursuant to the attached letter agreement.
The Indemnitor agrees that in case any legal proceeding shall be brought against
the Indemnitor and/or NBI or if governmental commission or regulatory authority
or any stock exchange or other entity having regulatory authority, either
domestic or foreign, shall investigate the Indemnitor and/or NBI and Personnel
of NBI shall be required to testify in connection therewith or shall be required
to respond to procedures designed to discover information regarding, in
connection with, or by reason of the performance of professional services
rendered by NBI and/or its Personnel in connection with the matters referred to
in the attached letter agreement, NBI shall have the right to employ their own
counsel in connection therewith, and the reasonable fees and expenses of such
counsel as well as the reasonable and out-of-pocket expenses incurred by its
Personnel in connection therewith shall be paid by the Indemnitor as they occur.
Promptly after receipt of notice of the commencement of any legal proceeding
against NBI or any of its Personnel or after receipt of notice of the
commencement of any investigation, which is based, directly or indirectly, upon
any matter in respect of which indemnification may be sought from the
Indemnitor, NBI and/or its Personnel will notify the Indemnitor in writing of
the commencement thereof and, throughout the course thereof, will provide copies
of all relevant documentation to the Indemnitor, will keep the Indemnitor
advised of the progress thereof and will discuss with the Indemnitor all
significant actions proposed unless precluded from doing so by law or court
order.
The indemnity and contribution obligations of the Indemnitor shall be in
addition to any liability which the Indemnitor may otherwise have, shall extend
upon the same terms and conditions to the Personnel of NBI and shall be binding
upon and enure to the benefit of any successors, assigns, heirs and personal
representatives of the Indemnitor, NBI and any of its Personnel of NBI. The
foregoing provisions shall survive the completion of professional services
rendered under the attached letter agreement or any termination of the
authorization given by the attached letter of agreement. This agreement shall be
governed and construed in accordance with the laws in force in the Province of
Ontario.
-14-
/s/ Xxxxx Xxxxxxxxxxxxxxx for BMO Xxxxxxx Xxxxx Inc.
----------------------------
/s/ Xxxxxxx X. Xxxxx for Xxxxxx Xxxxxxx Corp.
----------------------------
/s/ Xxxxx X. Xxxxxx for Golden Star Resources Ltd.
----------------------------
-15-
SCHEDULE II
REPRESENTATIONS AND WARRANTIES OF GSC
DEFINITIONS
-----------
The following terms shall have the following meanings in this Schedule
II:
"Agreement" means the Dealer Manager Agreement, dated June 10, 2004, between
GSC, BMO Xxxxxxx Xxxxx Inc. and Xxxxxx Xxxxxxx Corp., to which this Schedule II
is attached.
"Circular" means the Offer to Purchase all of the outstanding common shares of
IAMGold Corporation, including all Schedules dated June 9, 2004 relating to the
Exchange Offer.
"Closing Date" means the consummation of the Exchange Offer on July 16, 2004 or
at such other time and/or such other date as GSC and the Dealer Manager may
agree upon.
"Dealer Manager" means BMO Xxxxxxx Xxxxx Inc. in Canada and Xxxxxx Xxxxxxx Corp.
in the United States.
"Exchange Offer" means the exchange offer by GSC of all of the outstanding
common shares of IAMGold Corporation for consideration of 1.15 GSC common shares
for each IMG common share.
"Exchanges" means the Toronto Stock Exchange ("TSX") and the American Stock
Exchange ("AMEX").
"GSC" means Golden Star Resources Ltd.
"Incorporated Documents" means any documents, financial statements and schedules
incorporated, or deemed to be incorporated, by reference in the Offer Documents.
"Material Adverse Effect" means any material adverse change in the condition,
financial or otherwise, or in the earnings, business or operations of GSC and
its subsidiaries taken as a whole.
"Material Fact" and "Misrepresentation" have the respective meanings ascribed
thereto under the Securities Legislation.
"Material Subsidiaries" means the entities set out in Exhibit A in which GSC
holds the types and percentages of securities or other ownership interests
therein set forth.
"NI 44-101" means National Instrument 44-101 of the Canadian Securities
Administrators.
-16-
"Offer Documents" means the Registration Statement, Prospectus, Circular and the
Letter of Transmittal, including all amendments or supplements thereto, and
including the Incorporated Documents.
"Prospectus" means the preliminary prospectus and prospectus filed as part of
the Registration Statement, including all amendments and supplements thereto.
"Qualifying Provinces" means the provinces of British Columbia, Alberta,
Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Xxxxxx Xxxxxx
Island, Quebec and Newfoundland and Labrador.
"Registration Statement" means the registration statement on Form S-4, including
all amendments or supplements thereto, relating to the Exchange Offer.
"SEC" means the United States Securities and Exchange Commission.
"Securities Legislation" means the applicable securities legislation,
regulations, rules, policy statements, rulings, orders and published notices of
the securities regulatory authorities in Canada and the United States and the
applicable rules, by-laws and policies of applicable stock exchanges.
"Soliciting Dealer" means a member of the Soliciting Dealer Group.
"Soliciting Dealer Group" means those members of the Investment Dealers
Association of Canada and the Toronto Stock Exchange, selected by the Dealer
Manager to be a Soliciting Dealer in connection with the Exchange Offer,
including BMO Xxxxxxx Xxxxx Inc.
"U.S. Exchange Act" means the United States Securities Exchange Act of 1934, as
amended.
"U.S. Securities Act" means the United States Securities Act of 1933, as
amended.
REPRESENTATIONS AND WARRANTIES OF GSC
-------------------------------------
GSC hereby represents and warrants, intending that the same may be
relied upon by the Dealer Manager and each Soliciting Dealer, that:
(a) each of GSC 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 and has all requisite corporate power and authority to
carry on its business as now conducted and as contemplated by the Offer
Documents, and to own, lease and operate its properties and assets, and
GSC has all requisite power and authority to carry out its obligations
under the Agreement;
(b) the only material operating subsidiaries of GSC are listed in
Exhibit A;
(c) GSC or one of its Material Subsidiaries owns the issued and outstanding
shares of each of the Material Subsidiaries as set out in Exhibit A, in
each case free and clear of any
-00-
xxxxxx, xxxx, security interest, charge, claim or encumbrance other
than as described in the Offer Documents;
(d) GSC is a reporting issuer or the equivalent in each of the Qualifying
Provinces and in the United States and GSC is not in default of any of
the requirements of the Securities Legislation;
(e) the Exchange Offer will be executed in compliance with the Securities
Legislation, and the Offer Documents, including any and all amendments
and supplements thereto, have been prepared in conformity with and
comply in all material respects with the requirements of the Securities
Legislation and do not contain, and will not contain, with respect to
all information regarding the Company, and to the actual knowledge of
the Company with respect to information regarding IAMGold Corporation,
any Misrepresentation or any untrue statement of a Material Fact or
material fact or omit to state a Material Fact or material fact
required to be stated therein or necessary to make any statement
therein, in light of the circumstances under which it is made, not
misleading;
(f) no order, ruling or determination having the effect of ceasing,
suspending or restricting trading in any securities of GSC or the sale
of the GSC common shares has been issued and no proceedings,
investigations or inquiries for such purpose are pending or, to GSC's
knowledge, threatened;
(g) GSC's common shares are, and the GSC common shares to be issued in the
Exchange Offer will be, posted and listed for trading on the Exchanges
and GSC is not in default in any material respect of any of the listing
requirements of the Exchanges;
(h) other than the Exchange Offer and options under GSC's stock option
plans, GSC 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 GSC common
shares or securities convertible into or exchangeable for GSC common
shares other than as set out in Exhibit B;
(i) as at June 2, 2004, the authorized share capital of GSC consisted of an
unlimited number of common shares and an unlimited number of first
preferred shares, of which 138,646,013 common shares and no first
preferred shares are issued and outstanding;
(j) GSC 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 GSC and the Material Subsidiaries in each
jurisdiction in which GSC 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. Each
of GSC and the Material Subsidiaries holds all certificates,
authorities, permits, licenses, registrations and
-18-
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. To the best of GSC'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, provision, condition or
limitation which has or is likely to have any material adverse effect
on the business of GSC and the Material Subsidiaries (taken as a whole)
as now conducted or as proposed to be conducted. Neither GSC 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 unfavorable
decision, ruling or finding, would materially adversely affect the
business, operations, financial condition, or income of GSC 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/Prestea property;
(ii) the Mampon property;
(iii) the Xxxx Xxxxxx property;
(iv) the Prestea Underground property;
(v) the Yaou and Dorlin properties; and
(vi) the Wassa property.
The properties specified in (i), (ii), (iv) and (vi) above are referred
to, collectively, as the "Resource Properties" and each such property,
other than the Mampon property, is as described in the Form 10-K of GSC
dated February 3, 2004. The Resource Properties are material properties
to the Company.
(k) all interests in the Resource Properties and other material assets are
owned, leased or held by GSC 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 Offer Documents or as are not individually or in the aggregate
material to GSC or Material Subsidiaries, or other than as would not
have a material effect on the value of such interests; no other
material property rights are necessary for the conduct or intended
conduct of GSC's or the Material Subsidiaries' business and there are
no restrictions on the ability of GSC or the Material Subsidiaries to
use, transfer or otherwise exploit any such property rights, except as
set out in the Offer Documents;
(l) GSC and its Material Subsidiaries are in material compliance with all
material terms and provisions of all contracts, agreements, indentures,
leases, instruments and licenses material to the conduct of its
business and all such contracts, agreements, indentures,
-19-
leases, policies, instruments and licenses are valid and binding in
accordance with their terms and in full force and effect;
(m) to the best of GSC's knowledge, information and belief none of the real
property (and the buildings constructed thereon) in which GSC 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. Except in material compliance with applicable
environmental laws, neither GSC nor any Material Subsidiary nor, to
GSC'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 material compliance with applicable
environmental laws, none of the Real Property has at any time been used
by GSC or a Material Subsidiary or, to the best of GSC's knowledge,
information and belief by any other occupier, as a waste storage or
waste disposal site. Except as disclosed in the Offer Documents, GSC,
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 GSC nor any Material Subsidiary nor, to the best of
GSC'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 material contravention of 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. To GSC'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 (n), "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;
-20-
(n) except as disclosed in the Offer Documents, GSC 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;
(o) the consolidated audited financial statements of GSC for its fiscal
years ended December 31, 2001, December 31, 2002 and December 31, 2003
and the unaudited interim financial statements of GSC for the three
months ended March 31, 2004 (collectively "GSC's Financial
Statements"), copies of which are incorporated by reference in the
Offer Documents, 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 GSC on a consolidated basis for the periods then ended
and GSC'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; the summary historical financial data of
GSC contained within the caption "Summary Golden Star and IAMGold
Historical and Pro Forma Financial Data" in the Prospectus fairly
present in all material respects, on the basis stated in the
Prospectus, the information included therein;
(p) the execution and delivery of and the performance by GSC of the
Agreement and the consummation of the transactions contemplated hereby
and thereby, including the issuance and sale of a sufficient number of
GSC common shares to consummate the Exchange Offer, have been
authorized by all necessary action on the part of GSC, all necessary
corporate action has been taken or will have been taken prior to the
Closing Date by GSC so that when any GSC common shares are issued and
delivered by GSC as provided in the Offer Documents, such GSC common
shares will be validly issued and outstanding as fully paid and
non-assessable shares of GSC and the attributes of the GSC common
shares conform in all material respects with the description thereof
contained in the Offer Documents;
(q) the Agreement has been duly executed and delivered by GSC and
constitutes a legal, valid and binding obligation of, and is
enforceable against, GSC 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);
(r) Since the respective dates as of which information is given in the
Offer Documents, except as otherwise stated therein: (A) there has been
no Material Adverse Effect in the business, affairs, operations,
assets, liabilities or financial condition of GSC on a consolidated
basis; (B) no material change reports or other documents have been
filed on a confidential basis with any securities regulatory
authorities in Canada and the United States; (C) there has been no
transaction entered into by GSC or any of its subsidiaries and not
disclosed in the Incorporated Documents which is material to GSC and
its
-21-
subsidiaries; (D) GSC 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 GSC or, except for
dividends paid to GSC or its Material Subsidiaries, any of its Material
Subsidiaries, on any class of capital stock or repurchase or redemption
by GSC or any of its Material Subsidiaries of any class of capital
stock;
(s) all tax returns, reports, elections, remittances and payments of GSC
and of its Material Subsidiaries required by law to have been filed (or
are in the process of being prepared for filing, which delayed filing
will not have a material adverse effect on GSC or its Material
Subsidiaries) or made in any applicable jurisdiction, have been filed
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 GSC and the Material Subsidiaries and, to the knowledge
of GSC, are substantially true, complete and correct and all taxes of
GSC 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 GSC's
financial statements;
(t) the GSC common shares are not "foreign property" for purposes of the
Income Tax Act (Canada);
(u) there is no material action, suit, proceeding, investigation or
judgment pending, or to GSC's knowledge threatened or outstanding
against or affecting GSC 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 is
required to be disclosed in the Offer Documents (other than as stated
therein either directly or by incorporation by reference) in accordance
with Securities Legislation or which in any way materially adversely
affects or may materially adversely affect the business, operations or
condition of GSC 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 GSC common shares, the
consummation of the Exchange Offer or any action taken or to be taken
by GSC or any Material Subsidiary pursuant to or in connection with the
Agreement or any other material contract to which GSC or any Material
Subsidiary is a party, as the case may be;
(v) no consent, approval, authorization, order, filing, registration or
qualification of or with any court, governmental agency or body or
regulatory authority or under any applicable legislation is required
for the creation, issue, sale and delivery (as the case may be) of the
GSC common shares or the consummation by GSC of the transactions
contemplated in the Agreement, other than (1) such as have been already
obtained or as may be required under the U.S. Securities Act or U.S.
Exchange Act or state or foreign securities laws, (2) the approval for
listing of GSC common shares upon official notice of issuance from the
Exchanges and (3) such as are required under applicable competition
statutes and the Investment Canada Act.
-22-
(w) neither GSC nor any of GSC'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 GSC common shares;
(x) neither GSC nor any Material Subsidiary (i) 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, 2003 or for any
previous taxable year, or (ii) expects that it will constitute a PHC, a
FPHC or a CFC for its current taxable year ending December 31, 2003;
(y) GSC (i) 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, 2003 or for any previous taxable year and (ii) expects
that it will not constitute a PFIC for its current taxable year ending
December 31, 2004;
(z) CIBC Mellon Trust Company, at its principal office in Vancouver, has
been duly appointed as the depositary, transfer agent and registrar for
the GSC common shares;
(aa) (i) The execution, delivery and performance by GSC of the Agreement,
(ii) the making and consummation of the Exchange Offer by GSC
(including but not limited to the issuance and delivery of GSC common
shares thereunder), (iii) the obtaining and use by GSC of funds
required in connection with the Exchange Offer, (iv) the use of the
Offer Documents and the filing of the Registration Statement and the
Prospectus, and any amendments or supplements thereto and (v) the
consummation by GSC of the transactions contemplated by the Agreement
and in the Offer Documents, in each case, do not and will not (y)
whether with or without the giving of notice or passage of time or
both, conflict with or constitute a breach of, or default under, or
result in the creation or imposition of any lien, charge or encumbrance
upon any assets, properties or operations of GSC or any of its
subsidiaries pursuant to, any indenture, contract, lease, mortgage,
deed of trust, note agreement, loan agreement or other agreement,
obligation, condition, covenant or instrument to which GSC or any
subsidiary is a party or is bound or to which their property is subject
(except for such conflicts, breaches, defaults, liens, charges, or
encumbrances that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect); or (z)
violate (a) the provisions of the charter or by-laws (or other similar
document) of GSC or any of its subsidiaries or (b) any law, statute,
rule, regulation, judgment, order, writ or decree applicable to GSC or
any of its subsidiaries of any court, regulatory body, administrative
agency, governmental body, arbitrator or other authority, domestic or
foreign, having jurisdiction over GSC or any of its subsidiaries or any
of their assets, properties or operations, except in the case of clause
(b), for such violations that would not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect;
(bb) no Material Subsidiary of GSC is currently prohibited, directly or
indirectly, from paying any dividends to GSC, from making any other
distribution on such Material Subsidiary's
-23-
capital stock, from repaying to GSC any loans or advances to such
Material Subsidiary from GSC or from transferring any of such Material
Subsidiary's property or assets to GSC or any other subsidiary of GSC,
except as described in or contemplated by the Offer Documents
(exclusive of any amendment or supplement thereto); and
(cc) GSC is not and, after giving effect to the issuance of the GSC common
shares in connection with the Exchange Offer, will not be an
"investment company" required to be registered under the Investment
Company Act of 1940, as amended.
-24-
EXHIBIT A
MATERIAL SUBSIDIARIES
NAME TYPE OF OWNERSHIP PERCENTAGE
---------------------------------------- ----------------- ----------
Caystar Holdings (Cayman Islands) Shares 100%
Bogoso Holdings (Cayman Islands) Shares 100%
Bogoso Gold Limited (Ghana) Shares 90%
Prestea Underground JV (Ghana) Shares 81%
Wasford Holdings (Cayman Islands) Shares 100%
Wexford Goldfields Limited (Ghana) Shares 90%
GSR Exploration Limited (Ghana) Shares 100%
-------------------------------------------------------------------------------
-25-
EXHIBIT B
CONVERTIBLE SECURITIES AS OF JUNE 10, 2004
NUMBER OF COMMON
SECURITY SHARES EXERCISABLE INTO EXERCISE OR CONVERSION PRICE
------------ ----------------------- --------------------------------------------
Options 5,463,472 Cdn$1.02 to Cdn$9.07
Warrants 12,493,649 Weighted average exercise price of U.S.$2.82
TOTAL 17,957,121
-----------------------------------------------------------------------------------------
-26-
