Exhibit 10-2
REGISTRATION RIGHTS AGREEMENT
This REGISTRATION RIGHTS AGREEMENT (this "Agreement") is entered into as of
June 9, 1999 between GOLDEN STAR RESOURCES LTD., a corporation organized under
the laws of Canada with its principal offices located at 0000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxx 00000 (the "Company"); and XXXXXXX ASSOCIATES, L.P., a Delaware
limited partnership with an address at 000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000 ("Xxxxxxx"), and WESTGATE INTERNATIONAL, L.P., an exempted
company organized under the laws of the Cayman Islands with an address at c/o
Midland Bank Trust Corporation (Cayman) Ltd., X.X. Xxx 0000, Xxxx Xxxxxx, Xxxxx
Xxxxxx, Xxxxxx Xxxxxxx ("Westgate"; Xxxxxxx and Westgate are hereinafter
referred to each individually and collectively as "Lender").
W I T N E S S E T H:
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Whereas, pursuant to that certain letter agreement dated May 5, 1999 from
Xxxxxxx to the Company (the "Credit Facility Letter") and a letter agreement
dated May 5, 1999 from the Company to Xxxxxxx (the "Premium Letter Agreement,"
and together with the Credit Facility Letter, the "Letters of Intent"), Xxxxxxx
committed to lend (together with Westgate) the Company (or its designee) up to
$12 million to finance the acquisition (the "Acquisition") of Bogoso Gold
Limited, a mining company organized under the laws of the Republic of Ghana, by
the Company and Anvil Mining NL, a company organized under the laws of
Australia;
Whereas, any such loan will be documented by a loan agreement ("Loan
Agreement") to be entered into by Lender and the Company (or its designee) and
other documents to be entered into in connection therewith;
Whereas, pursuant to the Letters of Intent, the Company agreed to issue to
Lender warrants ("Warrants") to purchase up to 3,000,000 common shares ("Common
Shares") of the Company's common stock, no par value ("Common Stock"), in
connection with the loan commitment; and
Whereas, pursuant to the terms of, and in partial consideration for,
Lender's agreement to enter into the Letters of Intent and the Loan Agreement,
the Company has agreed to provide the Lender with certain registration rights
with respect to the Common Shares and certain other rights and remedies with
respect to the Warrants and Common Shares as set forth in this Agreement;
Now, Therefore, in consideration of the foregoing premises and the mutual
promises, representations, warranties, covenants and conditions set forth in the
Letters of Intent and this Agreement and which may be entered into in the Loan
Agreement, the Company and Lender agree as follows:
1. Certain Definitions. Capitalized terms used herein and not otherwise
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defined shall have the meaning ascribed thereto in the Warrants or the Loan
Agreement if entered into. As used in this Agreement, the following terms shall
have the following respective meanings:
"Abandonment" shall mean the date on which (i) the Company requests the
cancellation of the Letter of Credit or it is otherwise cancelled, or (ii) the
Letter of Credit is otherwise drawn upon or the sellers under the Acquisition
Agreement (as defined in the Credit Facility Letter) are entitled to draw down
upon it.
"Canadian Prospectus" shall have the meaning set forth in Section 2(a)
herein.
"Commission" or "SEC" shall mean the U.S. Securities and Exchange
Commission or any other U.S. federal agency at the time administering the
Securities Act.
"Exchange Act" shall mean the U.S. Securities Exchange Act of 1934, as
amended.
"Exercise Price" shall have meaning set forth in the applicable Warrant for
which such term is used.
"Fair Market Value" shall have the meaning set forth in the Warrants.
"Holder" and "Holders" shall include each Lender and any transferee of the
Warrants or Common Shares or Registrable Securities which have not been sold to
the public to whom the registration rights conferred by this Agreement have been
transferred in compliance with this Agreement.
"Letter of Credit" shall mean the $2 million letter of credit required to
be furnished by the Company pursuant to the terms of the Acquisition Agreement
in connection with the Acquisition.
"Note" shall have the meaning set forth in the Loan Agreement, if entered
into.
"OSA" shall mean the Securities Act (Ontario), as amended.
"OSC" shall mean the Ontario Securities Commission or any other agency at
any time administering the OSA.
"Registrable Securities" shall mean: (i) the Common Shares issuable or
issued to each Holder or its permitted transferee or designee upon exercise of
the Warrants, or upon any stock split, stock dividend, recapitalization or
similar event with respect to such Common Shares; (ii) any securities issued or
issuable to each Holder upon the conversion, exercise or exchange of any
Warrants; and (iii) any other security of the Company issued as a dividend or
other distribution with respect to or upon exchange for or in replacement for
Registrable Securities. For clarification purposes, "Registrable Securities"
includes without limitation the Common Shares to be issued upon exercise of the
1,500,000 Warrants issued to Lender on the date hereof and the Common Shares to
be issued upon exercise of the up to 1,500,000 additional Warrants to be issued
upon Closing of the Term Credit Facility under the Loan Agreement.
The terms "register", "registered" and "registration" shall refer to a
registration effected by preparing and filing a registration statement in
compliance with the Securities Act and applicable rules and regulations
thereunder, and the declaration or ordering of the effectiveness of such
registration statement, and the qualifying of the Registrable Securities for
distribution under the OSA pursuant to a prospectus filed with the OSC, as the
case may be.
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"Registration Expenses" shall mean all expenses to be incurred by the
Company in connection with each Holder's registration rights under this
Agreement, including, without limitation, all registration and filing fees,
printing expenses, fees and disbursements of counsel for the Company, blue sky
fees and expenses, reasonable fees and disbursements of counsel to Holders
(using one United States counsel and, to the extent necessary, one Canadian
counsel, each selected by a majority in interest of the Holders) for a
reasonable and customary "due diligence" examination of the Company and review
of the Registration Statement and related documents, and the expense of any
special audits incident to or required by any such registration (but excluding
the compensation of regular employees of the Company, which shall be paid in any
event by the Company).
"Registration Statement" shall have the meaning set forth in Section 2(a)
herein.
"Securities Act" or "Act" shall mean the U.S. Securities Act of 1933, as
amended.
"Selling Expenses" shall mean all underwriting discounts and selling
commissions applicable to the sale of Registrable Securities and all fees and
disbursements of counsel for Holders not included within "Registration
Expenses."
"Term Loan Amount" shall have the meaning ascribed to such term in the Loan
Agreement, if any.
2. Registration Requirements. The Company shall effect the registration of
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the Registrable Securities (including without limitation the execution of an
undertaking promptly to file post-effective amendments, appropriate
qualification under applicable blue sky or other state securities laws and the
OSA and appropriate compliance with applicable regulations issued under the
Securities Act and the OSA) as would permit or facilitate the sale or
distribution of all the Registrable Securities in the manner (including manner
of sale) and in the province of Ontario and all other provinces and all U.S.
states reasonably requested by the Holder, which registration shall include the
following:
(a) The Company shall, as expeditiously as possible:
(i) But in any event by the date which is the earlier of (i) 90
days after the completion or abandonment of the Acquisition or (ii)
October 31, 1999, use its reasonable best efforts to prepare and file a
registration statement with the Commission pursuant to Rule 415 under
the Securities Act on Form S-3 under the Securities Act (or in the
event that the Company is ineligible to use such form, such other form
as the Company is eligible to use under the Securities Act) covering
the Registrable Securities ("Registration Statement") and prepare and
file any documents necessary to cause the qualification of the
Registrable Securities under the securities laws of the province of
Ontario and such other provinces as may be reasonably requested by
Lender (collectively, "Canadian Securities Law"). If a Canadian
prospectus is not required for resales in Canada, as evidenced by a
written opinion of reputable Canadian counsel reasonably acceptable to
each Holder, no such prospectus need be qualified. Such Registration
Statement shall, in
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addition and without limitation, register (pursuant to Rule 416 under
the Securities Act, or otherwise) such additional indeterminate number
of Registrable Securities as shall be necessary to permit the exercise
in full of the Warrants and the issuance of additional shares of Common
Stock to Holders necessitated by the various exercise price adjustment
and reset provisions of the Warrants. Thereafter, the Company shall
cause such Registration Statement and other filings to be declared
effective, and shall obtain a receipt for a final prospectus, if
required (the "Canadian Prospectus"), qualifying the distribution of
the Common Shares in Ontario, each as soon as reasonably possible, and
in any event prior to the date ("Registration Commencement Date") which
is the earlier of (i) the date that the Company registers any of its
Common Stock under the Securities Act by registration on any form other
than Form S-8 and such registration is declared effective, provided
that if such other form is a Form S-4 and the Company files a
Registration Statement covering the Registrable Securities within
fifteen (15) days after filing such Form S-4, then such date under this
clause (i) shall be the earliest possible date that the Company, using
its reasonable best efforts, could reasonably cause such Registration
Statement to become effective after the effectiveness of such Form S-4,
(ii) 180 days following the date of completion or Abandonment of the
Acquisition, or (iii) January 31, 2000. The Company shall provide
Holders and their legal counsel a reasonable opportunity to review any
such Registration Statement or amendment or supplement thereto, and the
Canadian Prospectus and any other filings required in Canada, prior to
filing.
(ii) Prepare and file with the SEC such amendments and
supplements to such Registration Statement and the prospectus used in
connection with such Registration Statement, and prepare and file with
the OSC such amendments and supplements to the Canadian Prospectus, if
any, as may be necessary to comply with the provisions of the Act and
the OSA with respect to the disposition of all securities covered by
such Registration Statement and, if any, the Canadian Prospectus and
notify the Holders of the filing and effectiveness of such Registration
Statement and any amendments or supplements thereto, and the
qualification of such Canadian Prospectus and any amendments or
supplements thereto.
(iii) Furnish to each Holder such numbers of copies of a current
prospectus conforming with the requirements of the Act and the OSA,
copies of the Registration Statement and, if any, the Canadian
Prospectus, any amendment or supplement thereto and any documents
incorporated by reference therein and such other documents as such
Holder may reasonably require in order to facilitate the disposition of
Registrable Securities owned by such Holder.
(iv) Register and qualify the securities covered by such
Registration Statement under such other securities or "Blue Sky" laws
or
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Canadian Securities Law of such U.S. and Canadian jurisdictions as
shall be reasonably requested by each Holder; provided that the
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Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general
consent to service of process in any such states, provinces or
jurisdictions.
(v) Notify each Holder immediately of the happening of any
event as a result of which the prospectus (including any supplements
thereto or thereof) included in such Registration Statement and any
preliminary prospectus or Canadian Prospectus, as then in effect, includes
an untrue statement of material fact or omits to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading in light of the circumstances then existing, and use its
reasonable best efforts to promptly update and/or correct such prospectus.
(vi) Notify each Holder immediately of the issuance by the
Commission or any state securities commission or agency or the OSC of any
stop order suspending the effectiveness of the Registration Statement or
any prospectus or ceasing trading of any securities of the Company or the
initiation of any proceedings for that purpose. The Company shall use its
reasonable best efforts to prevent the issuance of any stop order and, if
any stop order is issued, to obtain the lifting thereof at the earliest
possible time.
(vii) Permit each Holder's counsel to review the Registration
Statement, the preliminary prospectus filed with the OSC, the Canadian
Prospectus, if any, and all amendments and supplements thereto within a
reasonable period of time prior to each filing, and shall not file any
document in a form to which any such counsel reasonably objects.
(viii) Cause the Registrable Securities covered by such
Registration Statement to be listed on each principal national and
international securities exchange and market on which the Company now lists
or may in the future list its Common Stock, and prepare and file any
required filings with each of such exchanges and markets, for the entire
Registration Period (as defined in Section 5 below). The Company shall
cause the Registrable Securities and the Common Stock to be listed and
remain listed on at least one of AMEX, the New York Stock Exchange or
NASDAQ (NMS or Small-Cap) at all times during the Registration Period.
(ix) Take all steps necessary to enable Holders to avail
themselves of the prospectus delivery mechanism set forth in Rule 153 (or
any successor thereto) under the Act.
(b) Set forth below in this Section 2(b) are (I) events that may
arise that the Lender considers will interfere with the full enjoyment of
their rights under the Warrants, the Loan Agreement (if entered into) and
this Agreement (the "Interfering Events"), and (II) certain remedies
applicable in each of these events.
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Paragraphs (i) through (iv) of this Section 2(b), together with
paragraph (vii) of this Section 2(b), describe the Interfering Events and
provide a remedy in the form of cash payments to each Holder if an Interfering
Event occurs.
Paragraph (v) provides, inter alia, that if cash payments
required as the remedy in the case of any of the Interfering Events are not paid
when due or if one or more Interfering Events continue in the aggregate for at
least six (6) months, the Company may be required by any Holder to redeem
outstanding Warrants and/or Common Shares at a specified price.
Paragraph (vi) provides, inter alia, that Lender has the right to
specific performance.
The preceding paragraphs in this Section 2(b) are meant to serve
only as an introduction to this Section 2(b), are for convenience only, and are
not to be considered in applying, construing or interpreting this Section 2(b).
(i) Delay in Effectiveness of Registration Statement. The
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Company agrees that it shall file the Registration Statement with the
SEC, and the preliminary prospectus (if required) in Ontario, as set
forth in Section 2(a)(i) above, and shall cause such Registration
Statement to become effective as soon as reasonably possible and in
any event by the Registration Commencement Date. The Company agrees to
cause a receipt to be obtained for any such Canadian Prospectus as
soon as reasonably possible after the filing of the preliminary
prospectus and in any event by the Registration Commencement Date. In
the event that such Registration Statement has not been declared
effective by the Registration Commencement Date, or (if applicable)
the receipt for the Canadian Prospectus has not been obtained by the
Registration Commencement Date (each a "Registration Default"), then
the Company shall pay each Holder 3% of the Fair Market Value (as
defined in the Warrant) of the Common Shares to be registered (subject
to reduction under Section 2(b)(vii) below, the "Monthly Default
Payment") for each 30 day period or portion thereof that such
Registration Default is continuing. At the election of each Holder as
made from time to time, the Company shall pay the Monthly Default
Payment (regardless of the subsection of this Section 2(b) under which
such Monthly Default Payment is payable) either (a) in cash or (b) by
adding such amount to the Term Loan Amount due such Holder under the
Loan Agreement (if entered into).
(ii) No Listing of Common Stock. In the event that the Company,
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at any time during the Listing Period (as defined below), fails,
refuses or for any reason is unable to cause the Registrable
Securities covered by the Registration Statement to be listed (A) with
at least one of AMEX, the New York Stock Exchange or NASDAQ (NMS or
Small-Cap) and (B) with each principal national and international
securities exchange and market on which the Company then lists its
Common Stock, then the Company shall pay to each Holder a Monthly
Default Payment for each 30-day period (or portion thereof) during the
Listing Period that the Registrable Securities are not so
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listed. The "Listing Period" shall mean the period beginning on the
earlier of the effectiveness of the Registration Statement or the
Registration Commencement Date and ending on the date that the
Registration Period ends (as defined in Section 5 below). For
clarification purposes only and without affecting clause (A) above in
any way, clause (B) above does not require the Company to cause the
Registrable Securities to be listed on an exchange or market on which
the Company no longer lists its Common Stock.
(iii) Blackout Periods.
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(A) In the event any Holder's ability to sell Registrable
Securities under the Registration Statement, or
pursuant to the Canadian Prospectus (if any), is
suspended (i) for more than thirty (30) consecutive
days, (ii) for more than sixty (60) days (whether or
not consecutive) in any twelve (12) month period, or
(iii) on more than two (2) occasions in any twelve
(12) month period ("Suspension Grace Period"),
including without limitation by reason of a
suspension of trading of the Common Stock on AMEX or
the TSE, any suspension or stop order with respect to
the Registration Statement or the Canadian
Prospectus, or the fact that an event has occurred as
a result of which the prospectus (including any
supplements thereto) included in such Registration
Statement or the Canadian Prospectus (including any
supplements thereto) then in effect includes an
untrue statement of material fact or omits to state a
material fact required to be stated therein or
necessary to make the statements therein not
misleading in light of the circumstances then
existing, then the Company shall pay to each Holder a
Monthly Default Payment on the Warrants and Common
Shares held by such Holder for each 30-day period (or
portion thereof) from and after the expiration of the
Suspension Grace Period.
(B) If after the Registration Commencement Date any event
shall occur that in the judgment of the Company is
required to be set forth in the Registration
Statement or the prospectus included therein or in
the Canadian Prospectus (if any) (in each case as
then amended or supplemented), or should be set forth
therein in order to make the
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statements therein, in the light of the circumstances
under which they were made, not misleading, or if it
is necessary to supplement or amend the Registration
Statement or such prospectus or the Canadian
prospectus or to file under the Exchange Act or
equivalent Canadian Securities Law any document
which, upon filing, will be incorporated by reference
therein in order to comply with the Securities Act,
the Exchange Act or equivalent Canadian Securities
Law or the rules and regulations thereunder, the
Company will (subject to the following sentence)
immediately notify each Holder in writing of such
event or requirement (a "Notice of Amendment") and
within three (3) business days after such event
prepare and file with the SEC and/or OSC, as
applicable, an appropriate supplement or amendment
thereto or document to be incorporated therein by
reference and furnish copies thereof, together with a
written notice of such amendment or supplement or
document to be incorporated therein by reference (a
"Notice of Correction"), to each Holder. If, in the
good faith and reasonable judgment of the Company,
disclosure of any such event would be materially
harmful or unduly burdensome to the Company or its
business, the Company shall furnish to each Holder a
notice of suspension to such effect and shall be
entitled to defer the preparation and delivery of any
such supplement, amendment and/or notice of
correction for a period not to exceed the Suspension
Grace Period (and such deferment shall count towards
the Suspension Grace Period). Nothing contained in
this paragraph 2(b)(iii)(B) shall in any way affect
the Monthly Default Payment due each Holder pursuant
to paragraph 2(b)(iii)(A) above.
(iv) Exercise Deficiency. In the event that the Company does not
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have a sufficient number of Common Shares available to satisfy the
Company's obligations to any Holder upon receipt of an Exercise Form
(as defined in the Warrant) or is otherwise unable or unwilling to
issue such Common Shares (including without limitation by reason of
any limits promulgated by AMEX, TSE or other exchange or governmental
or regulatory) in accordance with the terms of the Warrants for any
reason after receipt of an Exercise Form ("Exercise Deficiency"), then
the Company shall pay to each Holder a Monthly Default Payment on the
Warrants and
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Common Shares held by such Holder for each 30-day period (or portion
thereof) that the Company fails or refuses to issue Common Shares in
accordance with the Warrant terms.
(v) Liquidated Damages; Premium Price Redemption for Payment
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Defaults.
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(A) The Company acknowledges that any failure, refusal or
inability by the Company described in the foregoing
paragraphs (i) through (iv) will cause the Holders to
suffer damages in an amount that will be difficult to
ascertain, including without limitation damages
resulting from the loss of liquidity in the Registrable
Securities and the additional investment risk in
holding the Registrable Securities. Accordingly, the
parties agree that it is appropriate to include in this
Agreement the foregoing provisions for default payments
and the provisions set forth in Section 2(b)(v)(C)
below for mandatory redemption in order to compensate
the Holders for such damages. The parties acknowledge
and agree that the default payments and mandatory
redemption set forth herein represent the parties' good
faith effort to quantify such damages and, as such,
agree that the form and amount of such default payments
and mandatory redemption are reasonable and will not
constitute a penalty.
(B) Each default payment provided for in the foregoing
paragraphs (i) through (iv) shall be in addition to
each other default payment; provided, however, that in
no event shall the Company be obligated to pay to any
Holder default payments in an aggregate amount greater
than the Monthly Default Payment applicable to the
Warrants and Common Shares held by such Holder for any
30-day period (or portion thereof). All default
payments (which payments shall be pro rated on a per
diem basis for any period of less than 30 days)
required to be made in connection with the above
provisions shall be paid in cash, or added to the Term
Loan Amount under the Loan Agreement (if entered into),
at the election of each Holder, at any time upon
demand, and if a demand is not made, by the tenth
(10th) day of each calendar month for each partial or
full
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30-day period occurring prior to that date. Until paid
as required in this Agreement, any and all default
payments shall be deemed added to, and made a part of,
the Term Loan Amount under the Loan Agreement (if
entered into), and shall accrue interest at the rate
set forth therein. In the event of any additions
hereunder to the Term Loan Amount, the Company shall
execute any and all documents reasonably requested by
Lender in connection therewith, including without
limitation a replacement Note or additional Note
evidencing such new Term Loan Amount.
(C) In the event that (i) during any continuous period for
which Monthly Default Payments are accruing, the
Company fails or refuses to pay, on more than one
occasion, any default payment following any applicable
30-day period in the manner elected by any Holder
within five (5) days after the due date or (ii) the
Company becomes obligated to make Monthly Default
Payments (whether or not paid) for a period of at least
six (6) months (whether or not consecutive), then at
such Holder's request and option the Company shall
purchase all or a portion of the Warrants and Common
Shares held by such Holder (with default payments
accruing through the date of such purchase), within
three (3) business days after such request, at a price
in immediately available funds (the "Premium Redemption
Price") equal to (A) as to unexercised Warrants, the
greater of the Exercise Price (as adjusted or reset)
for each Warrant being redeemed or 1.5 times (i.e.,
150% of) the product of (x) the excess of the Fair
Market Value of a share of Common Stock over such
Exercise Price, multiplied by (y) the number of Common
Shares for which the Warrants being redeemed could be
exercised (notwithstanding any Exercise Deficiency),
and (B) as to Common Shares actually held, 1.5 times
the product of (x) the number of Common Shares so to be
redeemed pursuant to this paragraph, and (y) the Fair
Market Value of each such Common Share as of the date
of delivery of the notice of redemption. Payment of
such amount shall be due and payable within three (3)
business days of demand therefor, which demand (for
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payment and redemption) shall be revocable by the
Holder at any time after such due date and prior to its
actual receipt of the full Premium Redemption Price.
(vi) Cumulative Remedies. The default payments and mandatory
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redemption provided for above are in addition to and not in lieu or
limitation of any other rights the Holders may have at law, in equity
or under the terms of the Warrants, the Letters of Intent, the Loan
Agreement, this Agreement or any other documents or instruments
related hereto or thereto, including without limitation the right to
specific performance. Each Holder shall be entitled to specific
performance of any and all obligations of the Company in connection
with the registration rights of the Holders hereunder.
(vii) Monthly Default Payment Reduction. Notwithstanding
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anything contained herein, in the event any Interfering Event results
solely from the Company's failure to cause or maintain the
qualification for distribution of Registrable Securities under the OSA
or from the de-listing of Registrable Securities on the TSE (but not a
failure of registration under U.S. law or a de-listing by AMEX or
other U.S. market), then the Monthly Default Payment amount shall be
computed based upon one percent (1%) of the applicable figure instead
of three percent (3%).
(c) If the Holder(s) intend to distribute the Registrable Securities
by means of an underwriting, the Holder(s) shall so advise the Company. Any such
underwriting may only be administered by investment bankers reasonably
satisfactory to the Company. The Company shall only be obligated to permit one
underwritten offering, which offering shall be determined by a majority-in-
interest of the Holders. The Company shall enter into such customary agreements
for secondary offerings (including a customary underwriting agreement with the
underwriter or underwriters, if any) and take all such other reasonable actions
reasonably requested by the Holders in connection therewith in order to expedite
or facilitate the disposition of such Registrable Securities.
(d) The Company shall make available for inspection by the Holders,
representative(s) of all the Holders together, any underwriter participating in
any disposition pursuant to a Registration Statement or the Canadian Prospectus,
and any attorney or accountant retained by any Holder or underwriter, all
financial and other records customary for purposes of the Holders' due diligence
examination of the Company and review of any Registration Statement or any
prospectus filed with the OSC, all SEC Filings (as defined in the Loan
Agreement) and the equivalent filings under the OSA filed subsequent to the
Registration Commencement Date, pertinent corporate documents and properties of
the Company, and cause the Company's officers, directors and employees to supply
all information reasonably requested by any such representative, underwriter,
attorney or accountant in connection with such Registration Statement or
prospectus, provided that such parties agree to keep such information
confidential.
(e) Subject to Section 2(b) above, the Company may suspend the use of
any prospectus used in connection with the Registration Statement or the
Canadian Prospectus only in
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the event, and for such period of time as, such a suspension is required by the
rules and regulations of the Commission or OSC. The Company will use its
reasonable best efforts to cause such suspension to terminate at the earliest
possible date.
(f) The Company shall file a Registration Statement and (if required
by Canadian Securities Law to provide Holders with free tradeability in Canada)
qualify a Canadian Prospectus with respect to any shares newly authorized and/or
reserved for exercise of the Warrants within five (5) business days after any
shareholders or board of directors meeting authorizing same and shall use its
best efforts to cause such Registration Statement to become effective, and
receive a receipt for the Canadian Prospectus (if any), within sixty (60) days
after such shareholders or board of directors meeting. If the Holders become
entitled, pursuant to an event described in clause (iii) of the definition of
Registrable Securities, to receive any securities in respect of Registrable
Securities that were already included in a Registration Statement, subsequent to
the date such Registration Statement is declared effective, and the Company is
unable under the securities laws to add such securities to the then effective
Registration Statement and/or Canadian Prospectus, the Company shall promptly
file, in accordance with the procedures set forth herein, an additional
Registration Statement and/or Canadian Prospectus, as applicable, with respect
to such newly Registrable Securities. The Company shall use its reasonable best
efforts to (i) promptly cause any such additional Registration Statement and/or
Canadian Prospectus, when filed, to become effective, and a receipt to be
obtained from the OSC, respectively, and (ii) keep such additional Registration
Statement and/or Canadian Prospectus, effective during the period described in
Section 5 below. All of the registration rights and remedies under this
Agreement shall apply to the registration and qualification of such newly
reserved shares and such new Registrable Securities, including without
limitation the provisions providing for default payments contained herein.
3. Expenses of Registration. All Registration Expenses incurred in
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connection with any registration, qualification or compliance with registration
pursuant to this Agreement shall be borne by the Company, and all Selling
Expenses of a Holder shall be borne by such Holder.
4. Registration on Form S-3. The Company shall use its reasonable best
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efforts to qualify for registration on Form S-3 or any comparable or successor
form or forms, or in the event that the Company is ineligible to use such form,
the Company shall use such form as it is eligible to use under the Securities
Act.
5. Registration Period. In the case of every registration and
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qualification effected by the Company pursuant to this Agreement, the Company
will keep such registration effective until the earlier of (a) the fourth
anniversary of the issue of the last issuable Warrants under the Letters of
Intent, and (b) the date upon which all Common Shares issuable upon exercise of
all Warrants have been sold ("Registration Period").
6. Indemnification.
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(a) The Company Indemnity. The Company will indemnify each Holder,
each of its officers, directors and partners, and each person controlling each
Holder, within the meaning of Section 15 of the Securities Act and the rules and
regulations thereunder with respect to which registration, qualification or
compliance has been effected pursuant to this Agreement, and each underwriter,
if any, and each person who controls, within the meaning of Section 15 of the
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Securities Act and the rules and regulations thereunder, any underwriter,
against all claims, losses, damages and liabilities (or actions in respect
thereof) arising out of or based on any untrue statement (or alleged untrue
statement) of a material fact contained in any prospectus, offering circular or
other document (including any related registration statement, notification or
the like) incident to any such registration, qualification or compliance, or
based on any omission (or alleged omission) to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or any violation by the Company of the Securities Act or any state
securities law or the OSA or any other Canadian Securities Law, or, in any case,
any rule or regulation thereunder applicable to the Company and relating to
action or inaction required of the Company in connection with any such
registration, qualification or compliance, and will reimburse each Holder, each
of its officers, directors and partners, and each person controlling such
Holder, each such underwriter and each person who controls any such underwriter,
for any legal and any other expenses reasonably incurred in connection with
investigating and defending any such claim, loss, damage, liability or action,
provided that the Company will not be liable in any such case to a Holder to the
extent that any such claim, loss, damage, liability or expense arises out of or
is based on any untrue statement or omission based upon written information
furnished to the Company by such Holder or the underwriter (if any) therefor and
stated to be specifically for use therein. The indemnity agreement contained in
this Section 6(a) shall not apply to amounts paid in settlement of any such
loss, claim, damage, liability or action if such settlement is effected without
the consent of the Company (which consent will not be unreasonably withheld).
(b) Holder Indemnity. Each Holder will, severally and not jointly, if
Registrable Securities held by it are included in the securities as to which
such registration, qualification or compliance is being effected, indemnify the
Company, each of its directors, officers, partners, and each underwriter, if
any, of the Company's securities covered thereby, each person who controls the
Company or such underwriter within the meaning of Section 15 of the Securities
Act and the rules and regulations thereunder, each other Holder (if any), and
each of their officers, directors and partners, and each person controlling such
other Holder(s) against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or similar document, or any omission
(or alleged omission) to state therein a material fact required to be stated
therein or necessary to make the statement therein not misleading, and will
reimburse the Company and such other Holder(s) and their directors, officers and
partners, underwriters or control persons for any legal or any other expenses
reasonably incurred in connection with investigating and defending any such
claim, loss, damage, liability or action, in each case to the extent, but only
to the extent, that such untrue statement (or alleged untrue statement) or
omission (or alleged omission) is made in such registration statement,
prospectus, offering circular or similar document in reliance upon and in
conformity with written information furnished to the Company by such Holder and
stated to be specifically for use therein, and provided that the maximum amount
for which such Holder shall be liable under this indemnity shall not exceed the
net proceeds received by such Holder from the sale of the Registrable
Securities. The indemnity agreement contained in this Section 6(b) shall not
apply to amounts paid in settlement of any such claims, losses, damages or
liabilities if such settlement is effected without the consent of such Holder
(which consent shall not be unreasonably withheld).
13
(c) Procedure. Each party entitled to indemnification under this
Article (the "Indemnified Party") shall give notice to the party required to
provide indemnification (the "Indemnifying Party") promptly after such
Indemnified Party has actual knowledge of any claim as to which indemnity may be
sought, and shall permit the Indemnifying Party to assume the defense of any
such claim in any litigation resulting therefrom, provided that counsel for the
Indemnifying Party, who shall conduct the defense of such claim or any
litigation resulting therefrom, shall be approved by the Indemnified Party
(whose approval shall not be unreasonably withheld), and the Indemnified Party
may participate in such defense at such party's expense, and provided further
that the failure of any Indemnified Party to give notice as provided herein
shall not relieve the Indemnifying Party of its obligations under this Article
except to the extent that the Indemnifying Party is materially and adversely
affected by such failure to provide notice. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent of each
Indemnified Party, consent to entry of any judgment or enter into any settlement
which does not include as an unconditional term thereof the giving by the
claimant or plaintiff to such Indemnified Party of a release from all liability
in respect to such claim or litigation. Each Indemnified Party shall furnish
such information regarding itself or the claim in question as an Indemnifying
Party may reasonably request in writing and as shall be reasonably required in
connection with the defense of such claim and litigation resulting therefrom.
7. Contribution. If the indemnification provided for in Section 6
------------
herein is unavailable to the Indemnified Parties in respect of any losses,
claims, damages or liabilities referred to herein (other than by reason of the
exceptions provided therein), then each such Indemnifying Party, in lieu of
indemnifying such Indemnified Party, shall contribute to the amount paid or
payable by such Indemnified Party as a result of such losses, claims, damages or
liabilities as between the Company on the one hand and any Holder on the other,
in such proportion as is appropriate to reflect the relative fault of the
Company and of such Holder in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations. The relative fault of the Company on the one
hand and of any Holder on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to information
supplied by the Company or by such Holder.
In no event shall the obligation of any Indemnifying Party to
contribute under this Section 7 exceed the amount that such Indemnifying Party
would have been obligated to pay by way of indemnification if the
indemnification provided for under Section 6(a) or 6(b) hereof had been
available under the circumstances.
The Company and the Holders agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation (even if the Holders or the underwriters were treated as one entity
for such purpose) or by any other method of allocation which does not take
account of the equitable considerations referred to in the immediately preceding
paragraphs. The amount paid or payable by an Indemnified Party as a result of
the losses, claims, damages and liabilities referred to in the immediately
preceding paragraphs shall be deemed to include, subject to the limitations set
forth above, any legal or other expenses reasonably incurred by such Indemnified
Party in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this section, no Holder or underwriter shall
be required to
14
contribute any amount in excess of the amount by which (i) in the case of any
Holder, the net proceeds received by such Holder from the sale of Registrable
Securities or (ii) in the case of an underwriter, the total price at which the
Registrable Securities purchased by it and distributed to the public were
offered to the public exceeds, in any such case, the amount of any damages that
such Holder or underwriter has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
not guilty of such fraudulent misrepresentation.
8. Survival. The indemnity and contribution agreements contained in
--------
Sections 6 and 7 and the representations and warranties of the Company referred
to in Section 2(d)(i) shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement or the Loan Agreement or any
underwriting agreement, (ii) any investigation made by or on behalf of any
Indemnified Party or by or on behalf of the Company, and (iii) the consummation
of the sale or successive resales of the Registrable Securities.
9. Information by Holders. Each Holder shall furnish to the Company such
----------------------
information regarding such Holder and the distribution and/or sale proposed by
such Holder as the Company may reasonably request in writing and as shall be
reasonably required in connection with any registration, qualification or
compliance referred to in this Agreement. The intended method or methods of
disposition and/or sale (Plan of Distribution) of such securities as so provided
by such Holder shall be included without alteration in the Registration
Statement covering the Registrable Securities and shall not be changed without
written consent of such Holder.
10. Replacement Certificates. The certificate(s) representing the Common
------------------------
Shares held by either Lender (or then Holder) may be exchanged by such Lender
(or such Holder) at any time and from time to time for certificates with
different denominations representing an equal aggregate number of Common Shares,
as reasonably requested by such Lender (or such Holder) upon surrendering the
same. No service charge will be made for such registration or transfer or
exchange.
11. Transfer or Assignment. Except as otherwise provided herein, this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties and
their successors and permitted assigns. The rights granted to the Lender by the
Company under this Agreement to cause the Company to register Registrable
Securities may be transferred or assigned (in whole or in part) to a transferee
or assignee of Warrants or Common Shares, and all other rights granted to Lender
by the Company hereunder may be transferred or assigned to any transferee or
assignee of any Warrants or Common Shares; provided in each case that the
Company must be given written notice by such Lender at the time of or within a
reasonable time after said transfer or assignment, stating the name and address
of said transferee or assignee and identifying the securities with respect to
which such registration rights are being transferred or assigned.
12. Reports under Securities Exchange Act of 1934. With a view to making
---------------------------------------------
available to the Holders the benefits of Rule 144 promulgated under the
Securities Act ("Rule 144"), the Company agrees to:
15
(a) Make and keep public information available, as those terms are
understood and defined in Rule 144, at all times;
(b) File with the SEC in a timely manner all reports and other
documents required of the Company under the Securities Act and the Exchange Act;
and
(c) Furnish to each Holder so long as such Holder owns, or has the
right to obtain upon exercise of the Warrants, Registrable Securities, promptly
upon request (i) a written statement by the Company that it has complied with
all the reporting requirements of Rule 144, the Securities Act and the Exchange
Act, (ii) a copy of the most recent annual or quarterly report of the Company
and such other reports and documents so filed by the Company, and (iii) such
other information as may be reasonably requested to permit the Holders to sell
such securities without registration.
13. Miscellaneous.
-------------
(a) Remedies. The Company and Lender acknowledge and agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent or cure breaches of the provisions of
this Agreement and to enforce specifically the terms and provisions hereof, this
being in addition to any other remedy to which any of them may be entitled by
law or equity.
(b) Jurisdiction. The company and each lender (i) hereby irrevocably
submits to the exclusive jurisdiction of the united states district court, the
new york state courts and other courts of the united states sitting in new york
county, new york for the purposes of any suit, action or proceeding arising out
of or relating to this agreement and (ii) hereby waives, and agrees not to
assert in any such suit action or proceeding, any claim that it is not
personally subject to the jurisdiction of such court, that the suit, action or
proceeding is brought in an inconvenient forum or that the venue of the suit,
action or proceeding is improper. the company and each lender consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address in effect for notices to it under this
agreement and agrees that such service shall constitute good and sufficient
service of process and notice thereof. nothing in this paragraph shall affect or
limit any right to serve process in any other manner permitted by law.
(c) Notices. Any notice or other communication required or permitted
to be given hereunder shall be in writing by facsimile, mail or personal
delivery and shall be effective upon actual receipt of such notice. The
addresses for such communications shall be:
to the Company:
Golden Star Resources Ltd.
0000 Xxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxx, Esq.
16
with copies to:
Xxxx Xxxxx Rifkind Xxxxxxx & Xxxxxxxx
0000 Xxxxxx xx Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
and
Xxxxxxx Xxxxx
000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
Xxxxxx X0X 0X0
Facsimile: (000) 000-0000
Attention: Xxxxxxx Xxxxxxxxx
to Lenders:
Xxxxxxx Associates, L.P.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxxxx
Westgate International, L.P.
c/o Midland Bank Trust Corporation (Cayman) Ltd.
X.X. Xxx 0000
Xxxx Xxxxxx
Xxxxx Xxxxxx, Xxxxxx Xxxxxxx
Attn: Xxxx Xxxxxx
with copies to:
Kleinberg, Kaplan, Xxxxx & Xxxxx, P.C.
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
Any party hereto may from time to time change its address for notices by giving
at least 10 days' written notice of such changed address to the other parties
hereto.
(d) Indemnity. Each party shall indemnify each other party against
any loss, cost or damages (including reasonable attorney's fees) incurred as a
result of such parties' breach of any representation, warranty, covenant or
agreement in this Agreement.
(e) Waivers. No waiver by any party of any default with respect to
any provision, condition or requirement of this Agreement shall be deemed to be
a continuing waiver in the future or a waiver of any other provision, condition
or requirement hereof, nor shall any delay or
17
omission of any party to exercise any right hereunder in any manner impair the
exercise of any such right accruing to it thereafter. The representations and
warranties and the agreements and covenants of the Company and each Lender
contained herein shall survive the Acquisition, if it occurs, and the Closing
under the Loan Agreement, if it occurs.
(f) Execution; Effectiveness. This Agreement may be executed in two
or more counterparts, all of which shall be considered one and the same
agreement, it being understood that all parties need not sign the same
counterpart. This Agreement shall become effective upon the execution hereof by
the Company and each Lender and shall become enforceable against the Borrower
(to be defined in the Loan Agreement) upon execution hereof by the Borrower.
(g) Entire Agreement. This Agreement, together with the Loan
Agreement, the Warrants and the agreements and documents contemplated hereby and
thereby, contains the entire understanding and agreement of the parties, and may
not be modified or terminated except by a written agreement signed by both
parties.
(h) Governing Law; Consent of Jurisdiction. This agreement and the
validity and performance of the terms hereof shall be governed by and construed
and enforced in accordance with the internal laws of the state of new york
applicable to contracts executed and to be performed entirely in such state.
(i) Severability. The parties acknowledge and agree that the
representations, warranties, covenants and agreements of each Lender hereunder
are several and not joint, that neither Lender shall have any responsibility or
liability for the representations, warrants, agreements, acts or omissions of
the other Lender, and that any rights granted to "Lender" hereunder shall be
enforceable by each Lender hereunder.
(j) Jury Trial. Each party hereto waives the right to a trial by
jury.
(k) Further Assurances. Each of the Company and each Lender shall do
and perform all such further acts and things and execute and deliver all such
other certificates, documents and instruments as the Company or such Lender may,
at any time and from time to time, reasonably request in connection with the
performance of any of the terms of this Agreement.
(l) Titles. The titles used in this Agreement are used for
convenience only and are not to be considered in construing or interpreting this
Agreement.
[ Signature page follows ]
18
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
GOLDEN STAR RESOURCES LTD.
By: /s/ Xxxxxx Xxxx
---------------
Vice President and Chief Financial Officer
XXXXXXX ASSOCIATES, L.P.
By: /s/ Xxxx X. Xxxxxx
------------------
General Partner
WESTGATE INTERNATIONAL, L.P.
By: Martley International, Inc., as Attorney-in-fact
By: /s/ Xxxx X. Xxxxxx
------------------
President
ACCEPTED AND AGREED TO:
[BORROWER]
By:__________________________
Name:
Title:
19
