EXHIBIT 1.1
CANADIAN UNDERWRITING AGREEMENT
June __, 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), ___ 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 ___ 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, (i) 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 and (ii) a registration
statement on Form S-3 (File No. 333_____) 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 a number of warrants equal to 5.5% of the number of Offered
Securities sold pursuant to the Offering (the "UNDERWRITERS' WARRANTS") and will
issue to the Canadian Underwriters at the Over-Allotment Closing a number of
Underwriters' Warrants equal to 5.5% of the number of Additional Units sold. The
Underwriters' Warrants shall be exercisable by the Underwriters at a price of
Cdn$___ [EQUAL TO 120% OF THE MARKET PRICE AT THE DATE OF THE OFFERING] per
Underwriters' Warrants for
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the period beginning one year following the Closing Date and ending three years
following the Closing Date. Each Underwriters' Warrant will be exercisable into
one Common Share.
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 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 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
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evidences the receipts by the applicable Canadian securities regulatory
authorities in 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 June ___,
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 Corporations as
approved by the shareholders of the Corporation, as constituted on the
date hereof;
"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. 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-___) 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;
"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;
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"U.S. AGENTS" means Canaccord Capital Corporation (USA) Inc. and BMO
Xxxxxxx Xxxxx Corp. together, and "U.S. AGENT" means either one of them;
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
(as defined in paragraph 13(1)(a) hereof), 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 to be delivered to the Canadian Underwriters by 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, public
and 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 has 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 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;
(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
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its obligations thereunder 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) 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;
(g) 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 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;
(h) 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;
(i) 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;
(j) 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;
(k) 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;
(l) as to certain Canadian federal income tax matters, as described
in the Final Prospectus under the heading "Eligibility for
Investment"; and
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(m) it has no reason to believe that, as of its date, the Final
Prospectus or any Prospectus Amendment prior to the Closing Date
(other than the financial statements and related schedules
therein or other financial data derived from accounting records,
as to which such counsel is not expressing an opinion) contained
an untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading or that, as of the Closing
Date, either the Final Prospectus or any Prospectus Amendment
prior to the Closing Date (other than the financial statements
and related schedules therein or other financial data derived
from accounting records, as to which such counsel is not
expressing an opinion) contains an untrue statement of a
material fact or omits to state a material fact necessary 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 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 paragraph 9(1)(a);
(3) the Canadian Underwriters receiving at the Time of Closing a legal
opinion (or opinions) addressed to the Canadian Underwriters and their
counsel, in form and substance satisfactory to the Canadian Underwriters
and their counsel, as to mining title matters with respect to each of
the Material Resource Properties (as hereinafter defined);
(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, stating that each of Caystar Holdings, Bogoso Holdings,
Bogoso Gold Limited and Wasford Holdings has been duly created 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;
(5) 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;
(6) 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.
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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;
(7) the U.S. Registration Statement being declared effective by the SEC;
(8) 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
(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;
(9) 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
(10) the Canadian Underwriters receiving at the Time of Closing such further
certificates, opinions of counsel and other documentation from the
Corporation as may be contemplated herein or as the Canadian
Underwriters or their counsel may reasonably require.
SECTION 5 COVENANTS OF THE CANADIAN UNDERWRITERS
(1) The Canadian Underwriters:
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(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;
(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 material 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.
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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 acquisition of the Wassa property as
described in the Preliminary Prospectus and the Final
Prospectus, 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 a security interest in such shares 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 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
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proceedings, investigations or inquiries for such purpose are
pending or threatened;
(h) the Corporation's Common Shares are posted and listed for
trading on the Exchanges and the Corporation is not in default
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, 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 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, 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;
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(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, and together with the Wassa property, also 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
[AND THE WASSA 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 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 a security
interest in the shares of Wexford Goldfields Limited that 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;
(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; no other 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) all interests in the Wassa property are owned, leased or held by
Wexford Goldfields Limited 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, other than a security interest in the shares of
Wexford Goldfields Limited that 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 no royalty is payable in
respect of any of them, except as set out in the Final
Prospectus or the Continuous Disclosure Materials; no other
property rights are necessary for the conduct or intended
conduct of business in respect of the Wassa property and there
are no restrictions on the ability of Wexford Goldfields Limited
to use,
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transfer or otherwise exploit any such property rights, other
than a restriction on the transfer of funds out of Wexford
Goldfields Limited imposed under the finance and security
agreements to be entered into in with the Secured Banks in
connection with the acquisition of Wexford Goldfields Limited,
and except as set out in the Final Prospectus or the Continuous
Disclosure Materials;
(p) (A) the Corporation and its Material Subsidiaries are in
compliance with all terms and provisions of all contracts,
agreements, indentures, leases, instruments and licences in
connection with 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 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 or reasonably should have
knowledge, information and belief 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
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. 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,
- 15 -
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 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;
(t) the execution and delivery of and the performance by the
Corporation of this Agreement and the consummation of the
transactions contemplated by it, 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 has been duly executed and delivered by the
Corporation and is a legal, valid and binding obligation of, and
is enforceable against, the Corporation in accordance with its
terms (subject to bankruptcy, insolvency or
- 16 -
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, as of the date hereof: (A) there has been
no material change in the business, affairs, operations, assets,
liabilities or financial condition of the Corporation on a
consolidated basis since March 31, 2002; (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 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;
(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, and, to the knowledge of the Corporation, are
substantially true, complete and correct and all taxes of the
- 17 -
Corporation and of its Material Subsidiaries, other than taxes
being contested in good faith, have been 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, 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 has 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;
(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 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 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,
- 18 -
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;
(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 warrant agent for the Warrants;
- 19 -
(oo) the forms of the certificates representing the Warrants have
been duly approved by the Corporation and comply with the
provisions of the Canada Business Corporations Act; 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.
(3) The representations and warranties of the Corporation contained in this
Agreement shall be true at the Time of Closing as though they were made
at the Time of Closing and they shall survive the completion of the
transactions contemplated under this Agreement and remain in full force
and effect thereafter for the benefit of the Canadian Underwriters for a
period of four years from the Closing Date.
SECTION 7 REPRESENTATIONS AND WARRANTIES OF THE CANADIAN UNDERWRITERS
(1) The Canadian Underwriters hereby severally, and not jointly, represent
and warrant 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.
(2) The representations and warranties of each of the Canadian Underwriters
contained in this Agreement shall be true at the Time of Closing as
though they were made at the Time of Closing and they shall not survive
the completion of the transactions contemplated under this Agreement but
shall terminate on the completion of the Offering.
SECTION 8 COVENANTS OF THE CORPORATION
(1) The Corporation covenants with the Canadian Underwriters that:
(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
- 20 -
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, 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 any
amendment or supplement to the Preliminary Prospectus or the
Final 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
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 and the Final 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
such delivery shall constitute consent by the Corporation to the
use by the Canadian Underwriters and the Selling Firms of
documents in connection with the Offering in all Qualifying
Provinces, subject to the provisions of applicable Canadian
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, subject
only to the documentary filing requirements of each such
exchange;
(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
- 21 -
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
(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 contain
financial, accounting or other numerical data of a
- 22 -
financial nature), or 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 ___, 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 ___, 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 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
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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 in any Common Shares or the distribution of the
Securities;
(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
- 24 -
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)(a), Section
12(2)(b), Section 12(2)(c) or Section 12(2)(d), 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 may be exercised by
the Canadian Underwriters and 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 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
- 25 -
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 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.
(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.
- 26 -
(5) The rights of indemnity contained in this section 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 the applicable securities
legislation or regulations, to be delivered to such party by the
Canadian Underwriters or members of 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.
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 cost of qualifying the Securities,
including the costs of the Corporation's professional advisors, (ii) the cost of
printing the Preliminary Prospectus, the Final Prospectus, any Prospectus
Amendment, the U.S. Registration Statement and any amendment thereto, and
Supplementary Material and certificates for the Securities, and (iii) the fees
and expenses of the Corporation's auditors, counsel and any local counsel
(including U.S. counsel). The fees and disbursements of any counsel (whether
Canadian or U.S.) to the Canadian Underwriters and the U.S. Agents up to an
- 27 -
aggregate amount of Cdn$170,000 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 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 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.
- 28 -
(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 the agreement resulting from the Corporation's acceptance of
this offer, 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.
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 four years following
the Closing Date. Without limitation of the foregoing, the provisions contained
in this agreement in
- 29 -
any way related to the indemnification or the contribution obligations 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:
Stoel Rives LLP
000 X.X. 0xx Xxxxxx
Xxxxxxxx, Xxxxxx
X.X.X. 00000-0000
Attention: Xxxx Xxxxx
Facsimile No.: (000) 000-0000
- 30 -
(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
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).
- 31 -
SECTION 23 JUDGMENT CURRENCY
In respect of any judgment or order given or made for any amount due
hereunder that is expressed and paid in a currency (the "JUDGMENT CURRENCY")
other than Canadian dollars, the Corporation shall indemnify each Canadian
Underwriter against any loss incurred by such Canadian Underwriter as a result
of any variation as between (i) the rate of exchange at which the Canadian
dollar amount is converted into the judgment currency for the purpose of such
judgment or order and (ii) the rate of exchange at which a Canadian Underwriter
is able to purchase Canadian dollars with the amount of the judgment currency
actually received by such Canadian Underwriter. The term "rate of exchange"
shall include any premiums and costs of exchange payable in connection with the
purchase of or conversion into Canadian dollars.
SECTION 24 COUNTERPART SIGNATURE
This agreement may be executed in one or more counterparts (including
counterparts by facsimile) which, together, shall constitute an original copy
hereof as of the date first noted above.
SECTION 25 ENTIRE AGREEMENT
This agreement constitutes the entire agreement between the Canadian
Underwriters and the Corporation relating to the subject matter hereof and
supersede 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 (Ghana) Shares 90%
Guyanor Resources S.A. (France) Shares 73%
Societe de Traveux Publics et Shares 100%
de Mines Auriferes en Guyane
S.A.R.L. (France)
Societe des Mines de Yaou & Shares 100%
Dorlin [S.A.R.L.] (France)
Societe de Mines de Saint-Elie Shares 100%
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. (Ivory Shares 100%
Coast)
Wasford Holdings (Cayman Shares 100%
Islands)
SCHEDULE B
CONVERTIBLE SECURITIES
-----------------------------------------------------------------------------
NUMBER OF COMMON
SHARES EXERCISABLE
SECURITY 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
-----------------------------------------------------------------------------
