EXHIBIT 4.1
SECURITIES PURCHASE AGREEMENT
SECURITIES PURCHASE AGREEMENT (the "AGREEMENT"), dated as of April 15,
2005, by and among Golden Star Resources Ltd., a corporation organized under the
laws of Canada, with headquarters located at 00000 Xxxx Xxxxxx Xxxxx, Xxxxx 000,
Xxxxxxxxx, Xxxxxxxx 00000-0000 (the "COMPANY"), and the investors listed on the
Schedule of Buyers attached hereto (individually, a "BUYER" and collectively,
the "BUYERS").
WHEREAS:
A. The Company and each Buyer is executing and delivering this Agreement
in reliance upon the exemption from securities registration afforded by Section
4(2) of the U.S. Securities Act of 1933, as amended (the "1933 ACT"), and Rule
506 of Regulation D ("REGULATION D") as promulgated by the United States
Securities and Exchange Commission (the "SEC") under the 1933 Act.
B. The Company has authorized a new series of senior convertible notes of
the Company, which notes shall be convertible into the Company's common shares,
no par value (the "COMMON STOCK"), in accordance with the terms of such notes
(the Common Stock issued on conversion of the notes, the "CONVERSION SHARES").
C. Each Buyer wishes to purchase, and the Company wishes to sell, upon the
terms and conditions stated in this Agreement, that aggregate principal amount
of notes, in substantially the form attached hereto as Exhibit A (as amended or
modified from time to time, collectively, the "NOTES"), set forth opposite such
Buyer's name in column (3) on the Schedule of Buyers (which aggregate amount for
all Buyers shall be $50,000,000).
D. Upon the occurrence of a Change of Control (as defined in the Note),
subject to certain conditions, the Buyers may receive additional shares of
Common Stock (the "ADDITIONAL SHARES").
E. Contemporaneously with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement,
substantially in the form attached hereto as Exhibit B (as amended or modified
from time to time, the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which the
Company has agreed to provide certain registration rights with respect to the
Conversion Shares and the Additional Shares under the 1933 Act and the rules and
regulations promulgated thereunder, and applicable state securities laws.
F. The Notes, the Conversion Shares and the Additional Shares collectively
are referred to herein as the "SECURITIES".
G. The Notes will be subordinated to any secured Permitted Senior and Pari
Passu Indebtedness (as defined in the Notes) and subordinated to or will rank
pari passu with all unsecured Permitted Senior and Pari Passu Indebtedness, but
will rank senior to all other outstanding and future indebtedness of the Company
and its Subsidiaries.
NOW, THEREFORE, the Company and each Buyer hereby agree as follows:
1. PURCHASE AND SALE OF NOTES.
(a) Purchase of Notes.
(i) Subject to the satisfaction (or waiver) of the conditions set
forth in Sections 6 and 7 below, the Company shall issue and sell to each Buyer,
and each Buyer severally, but not jointly, agrees to purchase from the Company
on the Closing Date (as defined below), a principal amount of Notes as is set
forth opposite such Buyer's name in column (3) on the Schedule of Buyers (the
"Closing").
(ii) Closing. The date and time of the Closing (the "CLOSING DATE")
shall be 10:00 a.m., New York City time, on the date hereof (or such later date
as is mutually agreed to by the Company and each Buyer) after notification of
satisfaction (or waiver) of the conditions to the Closing set forth in Sections
6 and 7 below at the offices of Xxxxxxx Xxxx & Xxxxx LLP, 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000.
(iii) Purchase Price. The aggregate purchase price for the Notes to
be purchased by each Buyer at the Closing (the "PURCHASE Price") shall be the
amount set forth opposite such Buyer's name in column (4) of the Schedule of
Buyers.
(b) Form of Payment. On the Closing Date, (i) each Buyer shall pay its
Purchase Price to the Company for the Notes to be issued and sold to such Buyer
at the Closing, by wire transfer of immediately available funds in accordance
with the Company's written wire instructions, and (ii) the Company shall deliver
to each Buyer the Notes (in the principal amounts as such Buyer shall request)
which such Buyer is then purchasing duly executed on behalf of the Company and
registered in the name of such Buyer or its designee.
2. BUYER'S REPRESENTATIONS AND WARRANTIES.
Each Buyer represents and warrants with respect only to itself that:
(a) No Public Sale or Distribution. Such Buyer is (i) acquiring the
Notes and (ii) upon conversion of the Notes will acquire the Conversion Shares
issuable upon conversion of the Notes, in each case, for its own account and not
with a view towards, or for resale in connection with, the public sale or
distribution thereof, except pursuant to sales registered or exempt from
registration under the 1933 Act; provided, however, that by making the
representations herein, such Buyer does not agree to hold any of the Securities
for any minimum or other specific term and reserves the right to dispose of the
Securities at any time in accordance with or pursuant to a registration
statement or an exemption from registration under the 1933 Act. Such Buyer is
acquiring the Securities hereunder in the ordinary course of its business. Such
Buyer does not presently have any agreement or understanding, directly or
indirectly, with any Person to distribute any of the Securities. For purposes of
this Agreement, "PERSON" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.
(b) Accredited Investor Status; Formation. Such Buyer is an "accredited
investor" as that term is defined in Rule 501(a) of Regulation D, in Ontario
Securities
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Commission Rule 45-501 and in Mutilateral Instrument 45-103. Such Buyer is not
an entity formed for the sole purpose of acquiring the Securities.
(c) Reliance on Exemptions. Such Buyer understands that the Securities
are being offered and sold to it in reliance on specific exemptions from (i) the
registration requirements of United States federal and state securities laws and
(ii) the prospectus and registration requirements pursuant to the securities
legislation and regulations of, and the instruments, policies, rules, orders,
codes, notices and published interpretation notes of, the securities regulatory
authorities of the provinces and territories of Canada (the "CANADIAN SECURITIES
LAWS") and that the Company is relying in part upon the truth and accuracy of,
and such Buyer's compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Buyer set forth herein in order to
determine the availability of such exemptions and the eligibility of such Buyer
to acquire the Securities.
(d) Information. Such Buyer and its advisors, if any, have been
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities
that have been requested by such Buyer. Such Buyer and its advisors, if any,
have been afforded the opportunity to ask questions of the Company. Neither such
inquiries nor any other due diligence investigations conducted by such Buyer or
its advisors, if any, or its representatives shall modify, amend or affect such
Buyer's right to rely on the Company's representations and warranties contained
herein. Such Buyer understands that its investment in the Securities involves a
high degree of risk. Such Buyer has sought such accounting, legal and tax advice
as it has considered necessary to make an informed investment decision with
respect to its acquisition of the Securities.
(e) No Governmental Review. Such Buyer understands that no United
States or Canadian, federal, state or provincial agency or any other government
or governmental agency has passed on or made any recommendation or endorsement
of the Securities or the fairness or suitability of the investment in the
Securities nor have such authorities passed upon or endorsed the merits of the
offering of the Securities.
(f) Transfer or Resale. Such Buyer understands that except as provided
in the Registration Rights Agreement: (i) the Securities have not been and are
not being registered under the 1933 Act or any state securities laws, and may
not be offered for sale, sold, assigned or transferred unless (A) subsequently
registered thereunder, (B) such Buyer shall have delivered to the Company an
opinion of counsel selected by the Buyer, in a generally acceptable form, to the
effect that such Securities to be sold, assigned or transferred may be sold,
assigned or transferred pursuant to an exemption from such registration, or (C)
such Buyer provides the Company with reasonable assurance that such Securities
can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A
promulgated under the 1933 Act, as amended, (or a successor rule thereto)
(collectively, "RULE 144"); (ii) any sale of the Securities made in reliance on
Rule 144 may be made only in accordance with the terms of Rule 144 and further,
if Rule 144 is not applicable, any resale of the Securities under circumstances
in which the seller (or the Person (as defined in Section 3(s)) through whom the
sale is made) may be deemed to be an underwriter (as that term is defined in the
0000 Xxx) may require compliance with some other exemption under the 1933 Act or
the rules and regulations of the SEC thereunder; (iii) neither the Company nor
any other Person is under any obligation to register the Securities under the
1933 Act or any state securities
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laws or to comply with the terms and conditions of any exemption thereunder; and
(iv) any sale or transfer of the Securities to a purchaser or transferee whose
address is in Canada (or who is a resident of Canada) is prohibited unless it is
made in compliance with applicable Canadian Securities Laws.
(g) U.S. Legends. Such Buyer understands that the certificates or other
instruments representing the Notes and, until such time as the resale of the
Conversion Shares have been registered under the 1933 Act as contemplated by the
Registration Rights Agreement, the stock certificates representing the
Conversion Shares, except as set forth below, shall bear any legend as required
by the "Blue Sky" laws of any state and a restrictive legend in substantially
the following form (and a stop-transfer order may be placed against transfer of
such stock certificates):
[NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN][THE SECURITIES REPRESENTED BY THIS CERTIFICATE
HAVE NOT BEEN] REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED
FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN
EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL
SELECTED BY THE HOLDER, IN A GENERALLY ACCEPTABLE FORM, THAT
REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD
PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES. [ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY REVIEW THE
TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(iii) AND 16 HEREOF. THE
PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE
SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS
SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii) OF THIS
NOTE.
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped, if, unless otherwise required by state securities laws, (i) such
Securities are registered for resale under the 1933 Act, (ii) in connection with
a sale, assignment or other transfer, such holder provides the Company with an
opinion of counsel, in a generally acceptable form, to the effect that such
sale, assignment or transfer of the Securities may be made without registration
under the applicable requirements of the 1933 Act, or (iii) such holder provides
the Company with reasonable assurance that the Securities can be sold, assigned
or transferred pursuant to Rule 144 or Rule 144A. Each Buyer
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covenants and agrees that it will comply with the prospectus delivery
requirements of the 1933 Act as applicable to it in connection with sales of
Conversion Shares and Additional Shares pursuant to the Registration Statement
(as defined in the Registration Rights Agreement).
(h) Canadian Legends. Such Buyer understands that the certificates or
other instruments representing the Notes and, if the Notes are converted prior
to August 16, 2005, the stock certificates representing the Conversion Shares,
shall bear a legend set forth below:
"UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF
THESE SECURITIES SHALL NOT TRADE THE SECURITIES IN CANADA BEFORE AUGUST
16, 2005."
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped at anytime on or after August 16, 2005.
(i) TSX Legends. Such Buyer understands that if the stock certificates
representing the Conversion Shares are issued containing the legends set out in
Sections 2(g) or (h), such certificates shall also bear a legend set forth
below:
"THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO
STOCK EXCHANGE ("TSX"); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED
THROUGH THE FACILITIES OF TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND
CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT "GOOD
DELIVERY" IN SETTLEMENT OF TRANSACTIONS ON TSX."
The legend set forth above shall be removed and the Company shall issue a
certificate without such legend to the holder of the Securities upon which it is
stamped when the legends set out in Sections 2(g) and (h) may be removed from
the certificate.
(j) Organization; Validity; Enforcement. Such Buyer is an entity duly
organized and validly existing under the laws of the jurisdiction in which it
was formed, and has the requisite power and authorization to execute and deliver
this Agreement and the Registration Rights Agreement. This Agreement and the
Registration Rights Agreement to which such Buyer is a party have been duly and
validly authorized, executed and delivered on behalf of such Buyer and shall
constitute the legal, valid and binding obligations of such Buyer enforceable
against such Buyer in accordance with their respective terms, except as such
enforceability may be limited by general principles of equity or applicable
bankruptcy, insolvency, reorganization, moratorium, liquidation and other
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
(k) Domicile. The investment advisor making the investment decisions
for such Buyer is domiciled in that jurisdiction specified below its address on
the Schedule of Buyers.
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(l) No General Solicitation. Such Buyer has not learned of the
investment in the Notes as a result of any public advertising.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to each of the Buyers that:
(a) Organization and Qualification. The Company and its "SUBSIDIARIES"
(which for purposes of this Agreement means any entity listed on Schedule
3(a)(i)) are entities duly organized and validly existing in good standing under
the laws of the jurisdiction in which they are formed, and have the requisite
power and authorization to own their properties and to carry on their business
as now being conducted. Each of the Company and its Subsidiaries is duly
qualified as a foreign entity to do business and is in good standing in every
jurisdiction in which its ownership of property or the nature of the business
conducted by it makes such qualification necessary, except to the extent that
the failure to be so qualified or be in good standing would not have a Material
Adverse Effect. Except as set forth in Schedule 3(a)(ii), the Company has no
Material Subsidiaries (as defined below) other than the Subsidiaries. As used in
this Agreement, (x) "MATERIAL ADVERSE EFFECT" means any material adverse effect
on the business, properties, assets, operations, results of operations or
condition (financial or otherwise) of the Company and its Subsidiaries, taken as
a whole, or on the transactions contemplated hereby and the other Transaction
Documents (as defined below) or by the agreements and instruments to be entered
into in connection herewith or therewith, or on the authority or ability of the
Company to perform its obligations under the Transaction Documents and (y)
"MATERIAL SUBSIDIARY" means a subsidiary of the Company other than a subsidiary
if, at the most recent financial year end of the Company, (i) the total assets
of the subsidiary do not exceed 10 per cent of the consolidated assets of the
Company; (ii) the sales and operating revenues of the subsidiary do not exceed
10 percent of the consolidated sales and operating revenues of the Company; and
(iii) the conditions in (i) and (ii) are satisfied if the Company (A) aggregated
the subsidiaries that may be omitted under (i) and (ii); and (B) changed the
reference in (i) and (ii) from 10 per cent to 20 percent).
(b) Authorization; Enforcement; Validity. The Company has the requisite
power and authority to enter into and perform its obligations under this
Agreement, the Notes, the Registration Rights Agreement, the Irrevocable
Transfer Agent Instructions (as defined in Section 5(b)), and each of the other
agreements entered into by the parties hereto in connection with the
transactions contemplated by this Agreement (collectively, the "TRANSACTION
DOCUMENTS") and to issue the Securities in accordance with the terms hereof and
thereof. The execution and delivery of the Transaction Documents by the Company
and the consummation by the Company of the transactions contemplated hereby and
thereby, including, without limitation, the issuance of the Notes and the
reservation for issuance and the issuance of the Conversion Shares issuable upon
conversion of the Notes have been duly authorized by the Company's Board of
Directors and no further filing, consent, or authorization is required by the
Company, its Board of Directors or its stockholders. This Agreement and the
other Transaction Documents have been duly executed and delivered by the
Company, and constitute the legal, valid and binding obligations of the Company,
enforceable against the Company in accordance with their respective terms,
except as such enforceability may be limited by general principles of equity or
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applicable bankruptcy, insolvency, reorganization, moratorium, liquidation or
similar laws relating to, or affecting generally, the enforcement of applicable
creditors' rights and remedies.
(c) Issuance of Securities. The issuance of the Notes is duly
authorized and the Notes will be free from all taxes, liens and charges with
respect to the issue thereof. As of the Closing, a number of shares of Common
Stock shall have been duly authorized for issuance which equals 150% of the
maximum number of shares of Common Stock issuable upon conversion of the Notes.
Upon issuance or conversion in accordance with the Notes, the Conversion Shares
and Additional Shares will be validly issued, fully paid and nonassessable and
free from all preemptive or similar rights, taxes, liens and charges with
respect to the issue thereof, with the holders being entitled to all rights
accorded to a holder of Common Stock. Assuming the representations of the Buyers
in Section 2 are true and correct, the offer and issuance by the Company of the
Securities are exempt from registration under the 1933 Act and from the
prospectus and registration requirements of applicable Canadian Securities Laws.
(d) No Conflicts. The execution, delivery and performance of the
Transaction Documents by the Company and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Notes and the issuance of the Additional Shares and the
Conversion Shares) will not (i) result in a violation of any articles of
arrangement, certificate of incorporation, certificate of formation, any
certificate of designations or other constituent documents of the Company or any
of its Subsidiaries, any capital stock of the Company or any of its Subsidiaries
or bylaws of the Company or any of its Subsidiaries or (ii) conflict with, or
constitute a default (or an event which with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party, or (iii)
result in a violation of any law, rule, regulation, order, judgment or decree
(including U.S. federal and state or Canadian Securities Laws and regulations
and the rules and regulations of the American Stock Exchange (the "PRINCIPAL
MARKET") and the Toronto Stock Exchange (the "TSX")) applicable to the Company
or any of its Subsidiaries or by which any property or asset of the Company or
any of its Subsidiaries is bound or affected.
(e) Consents. Except for the requirement to give notice to the TSX of
the proposed issuance of the Securities and obtaining the acceptance of the TSX
to such notice, including the conditional listing of the Conversion Shares and
the Additional Shares (the "TSX APPROVAL") and the filing with and acceptance by
the Principal Market of a listing application with respect to the Conversion
Shares, the Company is not required to obtain any consent, authorization or
order of, or make any filing (other than the filing with the SEC of one or more
Registration Statements in accordance with the requirements of the Registration
Rights Agreement, the filing of a Form D, filings pursuant to the 1934 Act, the
filing with the Ontario Securities Commission of the report under 45-501F1 and
the filing with the British Columbia Securities Commission of the report under
45-103F4 and other filings required pursuant to any "Blue Sky" laws or state or
provincial securities laws) or registration with, any court, governmental agency
or any regulatory or self-regulatory agency or any other Person in order for it
to execute, deliver or perform any of its obligations under or contemplated by
the Transaction Documents, in each case in accordance with the terms hereof or
thereof. All consents, authorizations, orders, filings and registrations which
the Company is required to obtain on or
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prior to the Closing Date pursuant to the preceding sentence have been obtained
or effected or will be obtained or effected prior to the Closing Date, and the
Company and its Subsidiaries are unaware of any facts or circumstances which
might prevent the Company from obtaining or effecting any of the registration,
application or filings pursuant to the preceding sentence. The Company is not in
violation of the listing requirements of the Principal Market or the TSX and has
no knowledge of any facts that would reasonably lead to delisting or suspension
of the Common Stock in the foreseeable future.
(f) Acknowledgment Regarding Buyer's Purchase of Securities. The
Company acknowledges and agrees that each Buyer is acting solely in the capacity
of arm's length purchaser with respect to the Transaction Documents and the
transactions contemplated hereby and thereby and that no Buyer is (i) an officer
or director of the Company, (ii) to the knowledge of the Company's executive
officers (the "KNOWLEDGE OF THE COMPANY"), an "affiliate" of the Company (as
defined in Rule 144) or (iii) to the Knowledge of the Company, a "beneficial
owner" of more than 10% of the shares of Common Stock (as defined for purposes
of Rule 13d-3 of the Securities Exchange Act of 1934, as amended (the "1934
ACT")). The Company further acknowledges that no Buyer is acting as a financial
advisor or fiduciary of the Company (or in any similar capacity) with respect to
the Transaction Documents and the transactions contemplated hereby and thereby,
and any advice given by a Buyer or any of its representatives or agents in
connection with the Transaction Documents and the transactions contemplated
hereby and thereby is merely incidental to such Buyer's purchase of the
Securities. The Company further represents to each Buyer that the decision of
the Company to enter into the Transaction Documents has been based solely on the
independent evaluation by the Company and its representatives.
(g) No General Solicitation; Financial Advisor's Fees. Neither the
Company, nor any of its affiliates, nor any Person acting on its or their
behalf, has engaged in any form of general solicitation or general advertising
(within the meaning of Regulation D) in connection with the offer or sale of the
Securities. The Company shall be responsible for the payment of any placement
agent's fees, financial advisory fees, or brokers' commissions (other than for
persons engaged by any Buyer or its investment advisor) relating to or arising
out of the transactions contemplated hereby. The Company shall pay, and hold
each Buyer harmless against, any liability, loss or expense (including, without
limitation, attorney's fees and out-of-pocket expenses) arising in connection
with any such claim. The Company acknowledges that BMO Xxxxxxx Xxxxx Inc. is
acting as financial advisor (the "FINANCIAL ADVISOR") in connection with the
sale of the Notes. The Company has not engaged any placement agent or other
agent in connection with the sale of the Securities.
(h) No Integrated Offering. None of the Company, its Subsidiaries, any
of their affiliates, and any Person acting on their behalf has, directly or
indirectly, made any offers or sales of any security or solicited any offers to
buy any security, under circumstances that would require registration of any of
the Securities under the 1933 Act or cause this offering of the Securities to be
integrated with prior offerings by the Company for purposes of the 1933 Act or
any applicable stockholder approval provisions, including, without limitation,
under the rules and regulations of the Principal Market and the TSX.
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(i) Dilutive Effect. The Company understands and acknowledges that the
number of Conversion Shares issuable upon conversion of the Notes will increase
in certain circumstances. The Company further acknowledges that its obligation
to issue Conversion Shares upon conversion of the Notes in accordance with this
Agreement and the Notes is, in each case, absolute and unconditional regardless
of the dilutive effect, which may be substantial, that such issuance may have on
the ownership interests of other stockholders of the Company.
(j) Application of Takeover Protections; Rights Agreement. The Company
and its Board of Directors have taken all necessary action, if any, in order to
render inapplicable any control share acquisition, business combination, poison
pill (including any distribution under a rights agreement) or other similar
anti-takeover provision under the Certificate of Incorporation or the laws of
the jurisdiction of its formation or otherwise which is or could become
applicable to any Buyer as a result of the transactions contemplated by this
Agreement, including, without limitation, the Company's issuance of the
Securities and any Buyer's ownership of the Securities.
(k) SEC-CSA Documents; Financial Statements. During the two (2) years
prior to the date hereof, the Company has filed all reports, schedules, forms,
statements and other documents required to be filed by it with the SEC and the
Canadian Securities Administrators (the "CSA") pursuant to the reporting
requirements of the 1934 Act and the applicable Canadian Securities Laws,
including, without limitation, all technical reports on Form 43-101F pursuant to
the National Instrument 43-101 Standards for Disclosure for Mineral Projects,
and no such disclosure has been made on a confidential basis that remains
subject to confidentiality (all of the foregoing filed prior to the date hereof
and all exhibits included therein and financial statements, notes and schedules
thereto and documents specifically incorporated by reference therein being
hereinafter referred to as the "SEC-CSA DOCUMENTS"). The Company has made
available to the Buyers or their respective representatives true, correct and
complete copies of the SEC-CSA Documents not available on the XXXXX and SEDAR
systems. As of their respective dates, the SEC-CSA Documents complied in all
material respects with the applicable requirements of the 1934 Act and the
Canadian Securities Laws and the rules and regulations of the SEC and the CSA
promulgated thereunder applicable to the SEC-CSA Documents, and none of the
SEC-CSA Documents, at the time they were filed with the SEC or CSA, as
applicable, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading. As of their respective dates, the financial
statements of the Company included in the SEC-CSA Documents complied as to form
in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC and the CSA with respect thereto.
Such financial statements have been prepared in accordance with generally
accepted accounting principles in Canada, consistently applied, during the
periods involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited interim
statements, to the extent they may exclude footnotes or may be condensed or
summary statements) and fairly present in all material respects the financial
position of the Company as of the dates thereof and the results of its
operations and cash flows for the periods then ended (subject, in the case of
unaudited statements, to normal year-end audit adjustments). No other
information provided by or on behalf of the Company to the Buyers which is not
included in the SEC-CSA Documents, including, without limitation, information
referred to in Section 2(d) of this Agreement, taken as a whole with the SEC-CSA
Documents, contains any untrue statement of a material fact or omits to state
any material fact
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necessary in order to make the statements therein, in the light of the
circumstance under which they are or were made, not misleading.
(l) Absence of Certain Changes. Except as disclosed in Schedule 3(l),
since December 31, 2004, there has been no material adverse change and no
material adverse development in the business, properties, operations, condition
(financial or otherwise) or results of operations of the Company or its
Subsidiaries. Since December 31, 2004, the Company has not (i) declared or paid
any dividends, (ii) sold any assets, individually or in the aggregate, in excess
of $1,000,000 outside of the ordinary course of business, or (iii) waived any
material rights in excess of $1,000,000 with respect to any Indebtedness or
other rights owed to it. The Company has not taken any steps to seek protection
pursuant to any bankruptcy law nor does the Company have any knowledge or reason
to believe that its creditors intend to initiate involuntary bankruptcy
proceedings or any actual knowledge of any fact that would reasonably lead a
creditor to do so. The Company is not as of the date hereof, and after giving
effect to the transactions contemplated hereby to occur at the Closing will not
be, Insolvent (as defined below). For purposes of this Section 3(l), "Insolvent"
means (i) the present fair saleable value of the Company's assets is less than
the amount required to pay the Company's total Indebtedness (as defined in
Section 3(s)), (ii) the Company is unable to pay its debts and liabilities,
subordinated, contingent or otherwise, as such debts and liabilities become
absolute and matured, (iii) the Company intends to incur or believes that it
will incur debts that would be beyond its ability to pay as such debts mature or
(iv) the Company has unreasonably small capital with which to conduct the
business in which it is engaged as such business is now conducted and is
proposed to be conducted.
(m) Conduct of Business; Regulatory Permits. Neither the Company nor
its Subsidiaries are in violation of any term of or in default under its
Articles of Arrangement or Bylaws or their organizational charter or certificate
of incorporation or bylaws, respectively. Neither the Company nor any of its
Subsidiaries is in violation of any judgment, decree or order or any statute,
ordinance, rule or regulation applicable to the Company or its Subsidiaries,
except for violations or possible violations which would not, individually or in
the aggregate, have a Material Adverse Effect. Without limiting the generality
of the foregoing, the Company is not in violation of any of the rules,
regulations or requirements of the Principal Market or the TSX and has no
knowledge of any facts or circumstances that would reasonably lead to delisting
or suspension of the Common Stock by the Principal Market or the TSX in the
foreseeable future. Since December 31, 2004, (i) the Common Stock has been
designated for quotation on the Principal Market and the TSX, (ii) trading in
the Common Stock has not been suspended by the SEC, the Principal Market or the
TSX and (iii) the Company has received no communication, written or oral, from
the SEC, the Principal Market or the TSX regarding the suspension or delisting
of the Common Stock from the Principal Market or the TSX. The Company and its
Subsidiaries possess all certificates, authorizations, permits, mining claims,
concessions and leases, issued by the appropriate regulatory authorities,
necessary to conduct their respective businesses as currently conducted,
including, without limitation, the mining claims, concessions or leases
comprising: (i) the Bogoso/Prestea property; (ii) the Mampon property; and (iii)
the Wassa property, except where the failure to possess such certificates,
authorizations, permits, mining claims, concessions or leases would not have,
individually or in the aggregate, a Material Adverse Effect, and neither the
Company nor any such Subsidiary has received any notice of, or notice of
proceedings relating to, the revocation, cancellation or modification of any
such
- 10 -
certificate, authorization, permit, mining claim, concession or lease, except
where the revocation, cancellation or modification of such certificate,
authorization, permit, mining claim, concession or lease would not have,
individually or in the aggregate, a Material Adverse Effect. The Company is a
reporting issuer in good standing under applicable Canadian Securities Laws and
eligible to use the Short Form Prospectus System, established under National
Instrument 44-101 of the CSA (the "POP SYSTEM").
(n) Foreign Corrupt Practices. Neither (i) the Company, (ii) any of its
Subsidiaries, (iii) any director, nor (iv) to the extent it would result,
individually or in the aggregate, in a Material Adverse Effect, any officer,
agent, employee or other Person acting on behalf of the Company or any of its
Subsidiaries has, in the course of its actions for, or on behalf of, the Company
(i) used any corporate funds for any unlawful contribution, gift, entertainment
or other unlawful expenses relating to political activity; (ii) made any direct
or indirect unlawful payment to any foreign or domestic government official or
employee from corporate funds; (iii) violated or is in violation of any
provision of the U.S. Foreign Corrupt Practices Act of 1977, as amended; or (iv)
made any unlawful bribe, rebate, payoff, influence payment, kickback or other
unlawful payment to any foreign or domestic government official or employee.
(o) Xxxxxxxx-Xxxxx Act. The Company is in compliance with any and all
applicable requirements of the Xxxxxxxx-Xxxxx Act of 2002 that are effective as
of the date hereof, and any and all applicable rules and regulations promulgated
by the SEC thereunder that are effective as of the date hereof, except where
such noncompliance would not have, individually or in the aggregate, a Material
Adverse Effect.
(p) Transactions With Affiliates. Except as set forth in the SEC-CSA
Documents filed at least ten days prior to the date hereof and other than the
grant of stock options or Common Stock pursuant to equity incentive plans of the
Company, none of the officers, directors or employees of the Company is
presently a party to any transaction with the Company or any of its Subsidiaries
(other than for ordinary course services as employees, officers or directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any such
officer, director or employee or, to the Knowledge of the Company, any
corporation, partnership, trust or other entity in which any such officer,
director, or employee has a substantial interest or is an officer, director,
trustee or partner.
(q) Equity Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of (i) unlimited shares of Common Stock,
of which as of the date hereof, 142,389,060 are issued and outstanding and (ii)
First Preferred Shares, no par value, of which as of the date hereof none of
which is issued and outstanding or reserved for issuance. All of such
outstanding shares have been validly issued and are fully paid and
nonassessable. Except as disclosed in Schedule 3(q) or in the SEC-CSA Documents:
(i) none of the Company's share capital is subject to preemptive rights or any
other similar rights or any liens or encumbrances suffered or permitted by the
Company; (ii) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, or exercisable or exchangeable for, any
share capital of the Company or any of its Subsidiaries, or contracts,
commitments, understandings or arrangements by which
- 11 -
the Company or any of its Subsidiaries is or may become bound to issue
additional share capital of the Company or any of its Subsidiaries or options,
warrants, scrip, rights to subscribe to, calls or commitments of any character
whatsoever relating to, or securities or rights convertible into, or exercisable
or exchangeable for, any share capital of the Company or any of its
Subsidiaries; (iii) there are no financing statements securing obligations in
any material amounts, either singly or in the aggregate, filed in connection
with the Company; (iv) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the 1933 Act (except the Registration Rights Agreement)
or under any applicable Canadian Securities Laws; (v) there are no outstanding
securities or instruments of the Company or any of its Subsidiaries which
contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries; and (vi) the Company does not have any stock appreciation
rights or "phantom stock" plans or agreements or any similar plan or agreement.
There are no securities or instruments containing anti-dilution or similar
provisions that will be triggered by the issuance of the Securities. The Company
and its Subsidiaries have no liabilities or obligations required to be disclosed
in the SEC-CSA Documents but not so disclosed in the SEC-CSA Documents, other
than those incurred in the ordinary course of the Company's or its Subsidiaries'
respective businesses and which, individually or in the aggregate, do not or
would not have a Material Adverse Effect. The Company has made available to the
Buyer true, correct and complete copies of the Company's Articles of
Arrangement, as amended and as in effect on the date hereof (the "ARTICLES OF
ARRANGEMENT"), and the Company's Bylaws, as amended and as in effect on the date
hereof (the "BYLAWS"), and the terms of all securities convertible into, or
exercisable or exchangeable for, shares of Common Stock and the material rights
of the holders thereof in respect thereto.
(r) Indebtedness and Other Contracts. Except as disclosed in Schedule
3(r), neither the Company nor any of its Subsidiaries (i) has any outstanding
Indebtedness (as defined in the Note), (ii) is in violation of any term of or in
default under any contract, agreement or instrument relating to any
Indebtedness, except where such violations and defaults would not result,
individually or in the aggregate, in a Material Adverse Effect, or (iii) is a
party to any contract, agreement or instrument relating to any Indebtedness, the
performance of which, in the judgment of the Company's officers, has or is
expected to have a Material Adverse Effect.
(s) Absence of Litigation. There is no action, suit, proceeding,
inquiry or investigation before or by the Principal Market, TSX, any court,
public board, government agency, self-regulatory organization or body pending
or, to the Knowledge of the Company, threatened against or affecting the
Company, the Common Stock or any of the Company's Subsidiaries or any of the
Company's or the Company's Subsidiaries' officers or directors, which would
result, individually or in the aggregate, in a Material Adverse Effect.
(t) Insurance. The Company and each of its Subsidiaries are insured by
insurers of recognized financial responsibility against such losses and risks
and in such amounts as management of the Company believes to be prudent and
customary in the businesses in which the Company and its Subsidiaries are
engaged. Neither the Company nor any such Subsidiary has been refused any
insurance coverage sought or applied for and neither the Company nor any such
Subsidiary has any reason to believe that it will not be able to renew its
existing insurance
- 12 -
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.
(u) Employee Relations. (i) The Company and its Subsidiaries believe
that their relations with their employees are good. No executive officer of the
Company (as defined in Rule 501(f) of the 0000 Xxx) has notified the Company
that such officer intends to leave the Company or otherwise terminate such
officer's employment with the Company. To the Knowledge of the Company, no
executive officer of the Company is, or is now expected to be, in violation of
any material term of any employment contract, confidentiality, disclosure or
proprietary information agreement, non-competition agreement, or any other
contract or agreement or any restrictive covenant, and the continued employment
of each such executive officer does not subject the Company or any of its
Subsidiaries to any liability with respect to any of the foregoing matters.
(ii) The Company has not breached or otherwise failed to comply with
any provisions of any collective bargaining agreement or other labor union
contract applicable to persons employed by the Company or its Subsidiaries, and
is in full compliance with all terms of any collective bargaining agreement and
there are no grievances outstanding thereunder. The Company is in compliance
with all applicable laws relating to employment and employment practices, wages,
hours, and terms and conditions of employment and is not engaged in any unfair
labor practice, except where failure to be in compliance would not, either
individually or in the aggregate reasonably be expected to result in a Material
Adverse Effect; (ii) there is no unfair labor practice charge or complaint
pending before the National Labor Relations Board ("NLRB"); (iii) there is no
labor strike, material slowdown or material work stoppage or lockout actually
pending or threatened against or affecting the Company, and the Company has not
at any time experienced any strike, material slow down or material work
stoppage, lockout or other collective labor action by or with respect to
employees of the Company; (iv) there is no representation claim or petition
pending before the NLRB or any similar foreign agency and no question concerning
representation exists relating to the employees of the Company; (v) there are no
charges with respect to or relating to the Company pending before the Equal
Employment Opportunity Commission or any state, local or foreign agency
responsible for the prevention of unlawful employment practices; and (vi) the
Company has no formal notice from any federal, state, local or foreign agency
responsible for the enforcement of labor or employment laws of an intention to
conduct an investigation of the Company and no such investigation is in
progress.
(v) Title. The Company and each of its Subsidiaries have good title to
all assets owned by them free and clear of all liens, charges and encumbrances,
other than such liens, charges and encumbrances that would not result,
individually or in the aggregate, in a Material Adverse Effect. All interests in
each of the properties owned, leased or held by the Company or its Subsidiaries
as owner or lessee thereof, are so owned with good 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 forth in Schedule 3(v) or as would not
result, individually or in the aggregate, in a Material Adverse Effect. No other
material property rights are necessary for the conduct or presently intended
conduct of the Company's or the Subsidiaries' business and there are no
restrictions on the ability of the Company or the Subsidiaries to use, transfer
or otherwise exploit
- 13 -
any such property rights, except as would not result, individually or in the
aggregate, in a Material Adverse Effect.
(w) Intellectual Property Rights. The Company and its Subsidiaries own
or possess adequate rights or licenses to use all trademarks, service marks, and
all applications and registrations therefor, trade names, patents, patent
rights, copyrights, original works of authorship, inventions, licenses,
approvals, governmental authorizations, trade secrets and other intellectual
property rights ("INTELLECTUAL PROPERTY RIGHTS") necessary to conduct their
respective businesses as now conducted. Except as set forth in Schedule 3(w),
none of the Company's Intellectual Property Rights have expired or terminated,
or are expected to expire or terminate, within three years from the date of this
Agreement. The Company does not have any knowledge of any infringement by the
Company or its Subsidiaries of Intellectual Property Rights of others. There is
no claim, action or proceeding being made or brought, or to the Knowledge of the
Company, being threatened, against the Company or its Subsidiaries regarding its
Intellectual Property Rights. The Company is unaware of any facts or
circumstances that might give rise to any of the foregoing infringements or
claims, actions or proceedings. The Company and its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and value
of all of their Intellectual Property Rights.
(x) Environmental Laws. To the Knowledge of the Company, the Company
and its Subsidiaries (i) are in compliance with any and all Environmental Laws
(as hereinafter defined), (ii) have received all permits, licenses or other
approvals required of them under applicable Environmental Laws to conduct their
respective businesses as currently conducted and (iii) are in compliance with
all terms and conditions of any such permit, license or approval where, in each
of the foregoing clauses (i), (ii) and (iii), the failure to so comply could be
reasonably expected to have, individually or in the aggregate, a Material
Adverse Effect. The term "ENVIRONMENTAL LAWS" means all federal, state, local or
foreign laws relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata), including, without limitation,
laws relating to emissions, discharges, releases or threatened releases of
chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes
(collectively, "HAZARDOUS MATERIALS") into the environment, or otherwise
relating to the manufacture, processing, distribution, use, treatment, storage,
disposal, transport or handling of Hazardous Materials, as well as all
authorizations, codes, decrees, demands or demand letters, injunctions,
judgments, licenses, notices or notice letters, orders, permits, plans or
regulations issued, entered, promulgated or approved thereunder.
(y) Subsidiary Rights. Except as set forth in Schedule 3(y), the
Company or one of its Subsidiaries has the unrestricted right to vote, and
(subject to limitations imposed by applicable law) to receive dividends and
distributions on, all capital securities of its Subsidiaries as owned by the
Company or such Subsidiary.
(z) Tax Status. The Company and each of its Subsidiaries (i) has made
or filed all foreign, federal and state income and all other tax returns,
reports and declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and charges that are
material in amount, shown or determined to be due on such returns, reports and
declarations, except those being contested in good faith and (iii) has set aside
- 14 -
on its books provision reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports or declarations
apply. There are no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Company know of no
basis for any such claim. No liens have been filed and no claims are being
asserted by or against the Company or any of its Subsidiaries with respect to
any taxes (other than liens for taxes not yet due and payable). Neither the
Company nor it Subsidiaries has received notice of assessment or proposed
assessment of any taxes claimed to be owed by it or any other Person on its
behalf. Neither the Company nor its Subsidiaries is a party to any tax sharing
or tax indemnity agreement or any other agreement of a similar nature that
remains in effect. Each of the Company and its Subsidiaries has complied in all
material respects with all applicable legal requirements relating to the payment
and withholding of taxes and, within the time and in the manner prescribed by
law, has withheld from wages, fees and other payments and paid over to the
proper governmental or regulatory authorities all amounts required.
(aa) Internal Accounting Controls. The Company and each of its
Subsidiaries maintain 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 and to maintain asset
and liability accountability, (iii) access to assets or incurrence of
liabilities is permitted only in accordance with management's general or
specific authorization and (iv) the recorded accountability for assets and
liabilities is compared with the existing assets and liabilities at reasonable
intervals and appropriate action is taken with respect to any difference.
(bb) Ranking of Notes. Except as set forth on Schedule (bb), no
Indebtedness of the Company is senior to or ranks pari passu with the Notes in
right of payment, whether with respect of payment of redemptions, interest,
damages or upon liquidation or dissolution or otherwise.
(cc) Form S-3 Eligibility. The Company is eligible to register the
Additional Shares and Conversion Shares for resale by the Buyers using Form S-3
promulgated under the 1933 Act.
(dd) Manipulation of Price. The Company has not, and to its knowledge
no one acting on its behalf has, (i) taken, directly or indirectly, any action
designed to cause or to result in the stabilization or manipulation of the price
of any security of the Company to facilitate the sale or resale of any of the
Securities, (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Securities, or (iii) paid or agreed to pay
to any person any compensation for soliciting another to purchase any other
securities of the Company.
(ee) Acknowledgement Regarding Buyers' Trading Activity. Anything in
this Agreement or elsewhere herein to the contrary notwithstanding, but subject
to compliance by the Buyers with applicable law, it is understood and
acknowledged by the Company (i) that none of the Buyers have been asked to
agree, nor has any Buyer agreed, to desist from purchasing or selling, long
and/or short, securities of the Company, or "derivative" securities based on
securities issued by the Company or to hold the Securities for any specified
term; (ii) that past or future open market or other transactions by any Buyer,
including, without limitation, short sales
- 15 -
or "derivative" transactions, before or after the closing of this or future
private placement transactions, may negatively impact the market price of the
Company's publicly-traded securities; (iii) that any Buyer, and counter parties
in "derivative" transactions to which any such Buyer is a party, directly or
indirectly, presently may have a "short" position in the Common Stock, and (iv)
that each Buyer shall not be deemed to have any affiliation with or control over
any arm's length counter-party in any "derivative" transaction. The Company
further understands and acknowledges that (a) one or more Buyers may engage in
hedging activities at various times during the period that the Securities are
outstanding, including, without limitation, during the periods that the value of
the Conversion Shares and Additional Shares deliverable with respect to
Securities are being determined and (b) such hedging activities (if any) could
reduce the value of the existing stockholders' equity interests in the Company
at and after the time that the hedging activities are being conducted.
(ff) Disclosure. The Company confirms that neither it nor any other
Person acting on its behalf has provided any of the Buyers or their agents or
counsel with any information that constitutes or could reasonably be expected to
constitute material, nonpublic information. The Company understands and confirms
that each of the Buyers will rely on the foregoing representations in effecting
transactions in securities of the Company. All disclosure provided to the Buyers
regarding the Company, its business and the transactions contemplated hereby,
including the Schedules to this Agreement, furnished by or on behalf of the
Company is true and correct and does not contain any untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading. Each press release issued by the Company during the twelve
(12) months preceding the date of this Agreement did not at the time of release
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they are made, not
misleading. No event or circumstance has occurred or information exists with
respect to the Company or any of its Subsidiaries or its or their business,
properties, operations or financial conditions, which, under applicable law,
rule or regulation, requires public disclosure or announcement by the Company
but which has not been so publicly announced or disclosed.
4. COVENANTS.
(a) Best Efforts. Each party shall use its best efforts timely to
satisfy each of the conditions to be satisfied by it as provided in Sections 6
and 7 of this Agreement.
(b) Form D and Blue Sky. The Company agrees to file a Form D with
respect to the Securities as required under Regulation D and to provide a copy
thereof to each Buyer promptly after such filing. The Company shall, on or
before the Closing Date, take such action as the Company shall reasonably
determine is necessary in order to obtain an exemption for or to qualify the
Securities for sale to the Buyers at the Closing pursuant to this Agreement
under applicable securities or "Blue Sky" laws of the states of the United
States (or to obtain an exemption from such qualification), and shall provide
evidence of any such action so taken to the Buyers on or prior to the Closing
Date. The Company shall make all filings and reports relating to the offer and
sale of the Securities required under applicable securities or "Blue Sky" laws
of
- 16 -
the states of the United States and the applicable Canadian Securities Laws
following the Closing Date.
(c) Reporting Status. Until the date on which the Investors (as defined
in the Registration Rights Agreement) shall have sold all the Conversion Shares
and Additional Shares and none of the Notes is outstanding (the "REPORTING
PERIOD"), the Company shall (x) timely file all annual and quarterly reports and
(y) shall file all other reports (at such times as would not result,
individually or in the aggregate, in a Material Adverse Effect) required to be
filed with the SEC pursuant to the 1934 Act and the CSA under applicable
Canadian Securities Laws, and the Company shall not terminate its status as an
issuer required to file reports under the 1934 Act even if the 1934 Act or the
rules and regulations thereunder would otherwise permit such termination and
will remain a reporting issuer in good standing under applicable Canadian
Securities Laws and eligible to use the POP System.
(d) Use of Proceeds. The Company will use the proceeds from the sale of
the Securities primarily for capital expenditures with respect to the sulfide
expansion project of Bogoso Gold Limited, with any remaining proceeds used for
general capital expenditures of the Company's Subsidiaries and general corporate
purposes other than for redemption or repurchase of any equity securities or for
the repayment of any outstanding indebtedness of the Company or its
Subsidiaries.
(e) Financial Information. The Company agrees to send the following to
each Investor during the Reporting Period (i) unless the following are filed
with the SEC through XXXXX and are available to the public through the XXXXX
system, within one (1) Business Day after the filing thereof with the SEC, a
copy of its annual reports, any interim reports or any consolidated balance
sheets, income statements, stockholders' equity statements and/or cash flow
statements for any period other than annual, any current reports and any
registration statements (other than on Form S-8 or its equivalent) or amendments
filed pursuant to the 1933 Act, (ii) on the same day as the release thereof,
facsimile copies of all press releases issued by the Company or any of its
Subsidiaries, and (iii) copies of any notices and other information made
available or given to the stockholders of the Company generally,
contemporaneously with the making available or giving thereof to the
stockholders.
(f) Listing; Certain Canadian Filings. The Company shall promptly
secure the listing of (x) all of the Registrable Securities (as defined in the
Registration Rights Agreement) upon the Principal Market (subject to official
notice of issuance) and (y) 110% of the number of Conversion Shares from time to
time issuable under the terms of the Transaction Documents on the TSX (provided,
however, that if Additional Shares are to be issued such that the aggregate
number of Conversion Shares and Additional Shares are greater than 110% of the
number of Conversion Shares to be issued from time to time under the terms of
the Transaction Documents, the Company shall promptly secure the listing of such
greater number of shares on the TSX) and shall maintain such listing of all such
shares of Common Stock on the TSX, the Principal Market or each national
securities exchange and automated quotation system, if any, upon which the
Common Stock is then listed. The Company shall maintain the Common Stocks'
authorization for quotation on an Eligible Market and the TSX. Neither the
Company nor any of its Subsidiaries shall take any action that would be
reasonably expected to result in the delisting
- 17 -
or suspension of the Common Stock on the Principal Market or the TSX. The
Company shall pay all fees and expenses in connection with satisfying its
obligations under this Section 4(f).
(g) Fees. The Company shall reimburse Amaranth LLC (a Buyer) or its
designee(s) for all reasonable costs and expenses incurred in connection with
the transactions contemplated by the Transaction Documents (including all
reasonable legal fees and disbursements in connection therewith, documentation
and implementation of the transactions contemplated by the Transaction Documents
and due diligence in connection therewith), which amount shall be withheld by
such Buyer from its Purchase Price at the Closing. The Company shall be
responsible for the payment of any placement agent's fees, financial advisory
fees, or broker's commissions (other than for Persons engaged by any Buyer)
relating to or arising out of the transactions contemplated hereby, including,
without limitation, any fees payable to the Financial Advisor. The Company shall
pay, and hold each Buyer harmless against, any liability, loss or expense
(including, without limitation, reasonable attorney's fees and out-of-pocket
expenses) arising in connection with any claim relating to any such payment.
Except as otherwise set forth in the Transaction Documents, each party to this
Agreement shall bear its own expenses in connection with the sale of the
Securities to the Buyers.
(h) Pledge of Securities. The Company acknowledges and agrees that the
Securities may be pledged by an Investor (as defined in the Registration Rights
Agreement) in connection with a bona fide margin agreement or other loan or
financing arrangement that is secured by the Securities. The pledge of
Securities shall not be deemed to be a transfer, sale or assignment of the
Securities hereunder, and no Investor effecting a pledge of Securities shall be
required to provide the Company with any notice thereof or otherwise make any
delivery to the Company pursuant to this Agreement or any other Transaction
Document, including, without limitation, Section 2(f) hereof; provided that an
Investor and its pledgee shall be required to comply with the provisions of
Section 2(f) hereof in order to effect a sale, transfer or assignment of
Securities to such pledgee. The Company hereby agrees to execute and deliver
such documentation as a pledgee of the Securities may reasonably request in
connection with a pledge of the Securities to such pledgee by an Investor.
(i) Disclosure of Transactions and Information. On or before 8:30 a.m.,
New York Time, on the second Business Day following the date of this Agreement,
the Company shall file a press release, a Current Report on Form 8-K describing
the terms of the transactions contemplated by the Transaction Documents in the
form required by the 1934 Act and attaching the material Transaction Documents
(including, without limitation, this Agreement (and all schedules to this
Agreement), the form of each of the Notes and the Registration Rights Agreement)
as exhibits to such filing (including all attachments, the "8-K FILING") and a
material change report on Form 51-102F3 in accordance with National Instrument
51-102 of the CSA (the "MATERIAL CHANGE REPORT"). From and after the filing of
the 8-K Filing with the SEC and the Material Change Report with the CSA, no
Buyer shall be in possession of any material, nonpublic information received
from the Company, any of its Subsidiaries or any of its respective officers,
directors, employees or agents, that is not disclosed in the 8-K Filing and the
Material Change Report. The Company shall not, and shall cause each of its
Subsidiaries and its and each of their respective officers, directors, employees
and agents, not to, provide any Buyer with any material, nonpublic information
regarding the Company or any of its Subsidiaries from and after the filing of
the 8-K Filing with the SEC and the Material Change Report with the CSA
- 18 -
without the express written consent of such Buyer. If a Buyer has, or believes
it has, received any such material, nonpublic information regarding the Company
or any of its Subsidiaries, it shall provide the Company with written notice
thereof. The Company shall, within one (1) Trading Day of receipt of such
notice, make public disclosure of such material, nonpublic information. In the
event of a breach of the foregoing covenant by the Company, any of its
Subsidiaries, or any of its or their respective officers, directors, employees
and agents, in addition to any other remedy provided herein or in the
Transaction Documents, a Buyer shall have the right to make a public disclosure,
in the form of a press release, public advertisement or otherwise, of such
material, nonpublic information without the prior approval by the Company, its
Subsidiaries, or any of its or their respective officers, directors, employees
or agents. No Buyer shall have any liability to the Company, its Subsidiaries,
or any of its or their respective officers, directors, employees, stockholders
or agents for any such disclosure. Subject to the foregoing, neither the Company
nor any Buyer shall issue any press releases or any other public statements with
respect to the transactions contemplated hereby; provided, however, that the
Company shall be entitled, without the prior approval of any Buyer, to make any
press release or other public disclosure with respect to such transactions (i)
in substantial conformity with the 8-K Filing and the Material Change Report and
contemporaneously therewith and (ii) as is required by applicable law and
regulations (provided that in the case of clause (i) each Buyer shall be
consulted by the Company in connection with and given an opportunity to review
and comment on any such press release or other public disclosure prior to its
release). Notwithstanding the foregoing, the Company shall not publicly disclose
the name of any Buyer, or include the name of any Buyer in any filing with the
SEC or any regulatory agency or the Principal Market or the TSX, without the
prior written consent of such Buyer, except (i) for disclosure thereof in the
8-K Filing, Registration Statement, Form D, filings pursuant to "Blue Sky" laws
or other state or provincial securities laws or the Material Change Report or
(ii) as required by law or Principal Market or the TSX regulations or the CSA or
any order of any court or other governmental agency, in which case the Company
shall provide such Buyer with prior notice of such disclosure.
(j) Dilutive Issuances. For long as any Notes remain outstanding, the
Company shall not, in any manner, enter into or effect any transaction if the
effect of such transaction is to cause the Company to be required to issue upon
conversion of any Note any shares of Common Stock in excess of that number of
shares of Common Stock which the Company may issue upon conversion of the Notes
without breaching the Company's obligations under the rules or regulations of
the Principal Market or the TSX.
(k) Corporate Existence. So long as any Buyer beneficially owns any
Notes, the Company shall not be party to any Fundamental Transaction (as defined
in the Notes) unless the Company is in compliance with the applicable provisions
governing Fundamental Transactions set forth in the Notes.
(l) Authorization of Shares. The Company shall take all action
necessary to at all times have authorized for the purpose of issuance, after the
Closing Date, 150% of the number of shares of Common Stock issuable upon
conversion of all of the Notes.
(m) Conduct of Business; Permits. The business of the Company and its
Subsidiaries shall not be conducted in violation of any law, ordinance or
regulation of any
- 19 -
governmental entity, including, without limitation, any requirement to obtain
any certificate, authorization, permit, mining claim, concession or lease with
respect to any mining operations of the Company, except where such violations
would not result, either individually or in the aggregate, in a Material Adverse
Effect. The Company or its Subsidiaries, as applicable, shall maintain and
possess all certificates, authorizations, permits, mining claims, concessions
and leases, issued by the appropriate regulatory authorities, necessary to
conduct their respective businesses, including, without limitation, the mining
claims, concessions or leases comprising: (i) the Bogoso/Prestea property; (ii)
the Mampon property; and (iii) the Wassa property, except where the failure to
possess such certificates, authorizations, permits, mining claims, concessions
or leases would not have, individually or in the aggregate, a Material Adverse
Effect.
(n) Integration. None of the Company, its Subsidiaries, their
affiliates and any Person acting on their behalf will take any action or steps
referred to in Section 3(h) that would require registration of any of the
Securities under the 1933 Act or cause the offering of the Securities to be
integrated with other offerings.
(o) Form S-3 Eligibility. The Company shall use its best efforts to
maintain the eligibility of its registration statement on Form S-3 or its
successor form so that it is available for the registration of the resale of
Registrable Securities.
(p) Holding Period. For the purposes of Rule 144 and applicable
Canadian Securities Laws, the Company acknowledges that the holding period of
the Conversion Shares and Additional Shares may be tacked onto the holding
period of the Notes and the Company agrees not to take a position contrary to
this Section 4(p).
(q) Purchase for Cancellation. The Buyers acknowledge that the Company
may elect from time to time to purchase Notes for cancellation in open market or
private transactions at any time, subject to the satisfaction of any applicable
regulatory requirements.
(r) Post-Closing Certificate. On or prior to 10 Business Days after the
Closing Date, the Company shall deliver to the Buyers a certificate evidencing
(i) the formation and good standing of each of its Subsidiaries set forth on
Schedule 4(r) in such entity's jurisdiction of formation issued by the Secretary
of State (or comparable office) of such jurisdiction, as of a date within 10
Business Days of the date of issuance of such certificate and (ii) the Company's
qualification as a foreign corporation and good standing issued by the Secretary
of State (or comparable office) of each jurisdiction listed on Schedule 4(r) in
which the Company is required to be qualified.
(s) Additional Securities. From the date hereof until the date that is
30 Trading Days (as defined in the Notes) following the Effective Date (as
defined in the Registration Rights Agreement), the Company will not, directly or
indirectly, offer, sell, grant any option to purchase, or otherwise dispose of
(or announce any offer, sale, grant or any option to purchase or other
disposition of) any of its or its Subsidiaries' equity or equity equivalent
securities, including without limitation any debt, preferred stock or other
instrument or security that is, at any time during its life and under any
circumstances, convertible into or exchangeable or exercisable for shares of
Common Stock.
- 20 -
5. REGISTER; TRANSFER AGENT INSTRUCTIONS.
(a) Register. The Company shall maintain at its principal executive
offices (or such other office or agency of the Company as it may designate by
notice to each holder of Securities), a register for the Notes in which the
Company shall record the name and address of the Person in whose name the Notes
have been issued (including the name and address of each transferee), the
principal amount of Notes held by such Person, and the number of Conversion
Shares issuable upon conversion of the Notes held by such Person. The Company
shall keep the register open and available at all times during business hours
for inspection of any Buyer or its legal representatives.
(b) Transfer Agent Instructions. The Company shall issue irrevocable
instructions to its transfer agent, and any subsequent transfer agent, to issue
certificates or credit shares to the applicable balance accounts at The
Depository Trust Company ("DTC"), registered in the name of each Buyer or its
respective nominee(s), for the Conversion Shares and any Additional Shares
issued upon conversion of the Notes in such amounts as specified from time to
time by each Buyer to the Company upon conversion of the Notes in the form of
Exhibit C attached hereto (the "IRREVOCABLE TRANSFER AGENT INSTRUCTIONS"). The
Company warrants that no instruction that conflicts with the Irrevocable
Transfer Agent Instructions referred to in this Section 5(b), and stop transfer
instructions to give effect to Section 2(g) hereof, will be given by the Company
to its transfer agent, and that the Securities shall otherwise be freely
transferable on the books and records of the Company as and to the extent
provided in this Agreement and the other Transaction Documents. If a Buyer
effects a sale, assignment or transfer of the Securities in accordance with
Section 2(f), the Company shall permit the transfer and shall promptly instruct
its transfer agent to issue one or more certificates or credit shares to the
applicable balance accounts at DTC in such name and in such denominations as
specified by such Buyer to effect such sale, transfer or assignment. In the
event that such sale, assignment or transfer involves Conversion Shares or
Additional Shares sold, assigned or transferred pursuant to an effective
registration statement or pursuant to Rule 144, the transfer agent shall issue
such Securities to the Buyer, assignee or transferee, as the case may be,
without any restrictive legend. The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to a Buyer. Accordingly,
the Company acknowledges that the remedy at law for a breach of its obligations
under this Section 5(b) will be inadequate and agrees, in the event of a breach
or threatened breach by the Company of the provisions of this Section 5(b), that
a Buyer shall be entitled, in addition to all other available remedies, to an
order and/or injunction restraining any breach and requiring immediate issuance
and transfer, without the necessity of showing economic loss and without any
bond or other security being required.
6. CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.
(a) Closing Date. The obligation of the Company hereunder to issue and
sell the Notes to each Buyer at the Closing is subject to the satisfaction, at
or before the Closing Date, of each of the following conditions, provided that
these conditions are for the Company's sole benefit and may be waived by the
Company at any time in its sole discretion by providing each Buyer with prior
written notice thereof:
- 21 -
(i) Such Buyer shall have executed each of the Transaction Documents
to which it is a party and delivered the same to the Company.
(ii) Such Buyer and each other Buyer shall have delivered to the
Company the Purchase Price (less, in the case of Amaranth LLC, the amounts
withheld pursuant to Section 4(g)) for the Notes and being purchased by such
Buyer at the Closing by wire transfer of immediately available funds pursuant to
the wire instructions provided by the Company.
(iii) The representations and warranties of such Buyer shall be true
and correct in all material respects as of the date when made and as of the
Closing Date as though made at that time (except for representations and
warranties that speak as of a specific date), and such Buyer shall have
performed, satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed, satisfied
or complied with by such Buyer at or prior to the Closing Date.
(iv) The TSX Approval shall have been obtained.
7. CONDITIONS TO EACH BUYER'S OBLIGATION TO PURCHASE.
(a) Closing Date. The obligation of each Buyer hereunder to purchase
the Notes at the Closing is subject to the satisfaction, at or before the
Closing Date, of each of the following conditions, provided that these
conditions are for each Buyer's sole benefit and may be waived by such Buyer at
any time in its sole discretion by providing the Company with prior written
notice thereof:
(i) The Company shall have executed and delivered to such Buyer (i)
each of the Transaction Documents and (ii) the Notes (in such principal amounts
as such Buyer shall request) being purchased by such Buyer at the Closing
pursuant to this Agreement.
(ii) Such Buyer shall have received the opinions of Xxxxx Xxxxxx &
Xxxxxx LLP, the Company's outside counsel and Fasken Xxxxxxxxx DuMoulin LLP, the
Company's Canadian counsel, dated as of the Closing Date, in substantially the
form of Exhibit D-1 and Exhibit D-2 attached hereto, respectively.
(iii) The Company shall have delivered to such Buyer a copy of the
Irrevocable Transfer Agent Instructions, in the form of Exhibit C attached
hereto, which instructions shall have been delivered to and acknowledged in
writing by the Company's transfer agent.
(iv) The Company shall have delivered to such Buyer a certificate
evidencing the formation and good standing of the Company and each of its
Subsidiaries (other than the Subsidiaries listed on Schedule 4(r)) in such
entity's jurisdiction of formation issued by the Secretary of State (or
comparable office or authority) of such jurisdiction, as of a date within 10
days of the Closing Date.
(v) The Company shall have delivered to such Buyer a certificate
evidencing the Company's qualification as a foreign corporation and good
standing issued by the Secretary of State (or comparable office) of each
jurisdiction (other than the jurisdictions listed on Schedule 4(r)) in which the
Company is required to be qualified, as of a date within 10 days
- 22 -
of the Closing Date; provided that is such certificate is not available from the
State of Colorado on the Closing Date, the Company covenants and agrees to
deliver such certificate no later than ten (10) Business Days after the Closing
Date.
(vi) The Company shall have delivered to such Buyer a certified copy
of the Articles of Arrangement as certified by such entity's jurisdiction of
formation within ten (10) days of the Closing Date.
(vii) The Company shall have delivered to such Buyer a certificate,
executed by the Secretary of the Company and dated as of the Closing Date, as to
(i) the resolutions consistent with Section 3(b) as adopted by the Company's
Board of Directors in a form reasonably acceptable to such Buyer, (ii) the
Articles of Arrangement and (iii) the Bylaws, each as in effect at the Closing,
in the form attached hereto as Exhibit E.
(viii) The representations and warranties of the Company shall be
true and correct as of the date when made and as of the Closing Date as though
made at that time (except for representations and warranties that speak as of a
specific date) and the Company shall have performed, satisfied and complied in
all respects with the covenants, agreements and conditions required by the
Transaction Documents to be performed, satisfied or complied with by the Company
at or prior to the Closing Date. Such Buyer shall have received a certificate,
executed by the Chief Executive Officer or other authorized officer of the
Company, dated as of the Closing Date, to the foregoing effect and as to such
other matters as may be reasonably requested by such Buyer in the form attached
hereto as Exhibit F.
(ix) The Company shall have delivered to such Buyer a letter from
the Company's transfer agent certifying the number of shares of Common Stock
outstanding as of a date within five days of the Closing Date.
(x) The Common Stock (I) shall be designated for quotation or listed
on the Principal Market and the TSX and (II) shall not have been suspended, as
of the Closing Date, by the SEC, the Principal Market or the TSX from trading on
the Principal Market or the TSX nor shall suspension by the SEC or the CSA, the
Principal Market or the TSX have been threatened, as of the Closing Date, either
(A) in writing by the SEC, the Principal Market or the TSX or (B) by falling
below the minimum listing maintenance requirements of the Principal Market or
the TSX.
(xi) The Company shall have obtained all governmental, regulatory or
third party consents and approvals, if any, necessary for the sale of the Notes.
(xii) The Company shall have paid to the Financial Advisor a
financial advisory fee of $375,000.
(xiii) The Company shall have paid to Amaranth LLC a commitment fee
of $500,000.
(xiv) The TSX Approval shall have been obtained.
- 23 -
(xv) The Company shall have delivered to such Buyer such other
documents relating to the transactions contemplated by this Agreement as such
Buyer or its counsel may reasonably request.
8. TERMINATION. In the event that the Closing shall not have occurred with
respect to a Buyer on or before five (5) Business Days from the date hereof due
to such Buyer's or the Company's failure to satisfy the conditions set forth in
Sections 6 and 7 above (and the nonbreaching party's failure to waive such
unsatisfied condition(s)), the nonbreaching party shall have the option to
terminate this Agreement with respect to such breaching party at the close of
business on such date without liability of any party to any other party;
provided, however, if this Agreement is terminated pursuant to this Section 8,
the Company shall remain obligated to reimburse the non-breaching Buyers for the
amounts described in Section 4(g) above.
9. MISCELLANEOUS.
(a) Governing Law; Jurisdiction; Jury Trial. All questions concerning
the construction, validity, enforcement and interpretation of this Agreement
shall be governed by the internal laws of the State of New York, without giving
effect to any choice of law or conflict of law provision or rule (whether of the
State of New York or any other jurisdictions) that would cause the application
of the laws of any jurisdictions other than the State of New York. Each party
hereby irrevocably submits to the exclusive jurisdiction of the state and
federal courts sitting in The City of New York, Borough of Manhattan, for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such suit, action or proceeding by mailing a copy thereof to such
party at the address for such notices to it under this Agreement and agrees that
such service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY
WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE
ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF
THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(b) Counterparts. This Agreement may be executed in two or more
identical counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been signed by each
party and delivered to the other party; provided that a facsimile signature
shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original, not
a facsimile signature.
(c) Headings. The headings of this Agreement are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Agreement.
- 24 -
(d) Currency. Unless otherwise indicated, all dollar amounts referred
to in this Agreement are in United States Dollars.
(e) Severability. If any provision of this Agreement shall be invalid
or unenforceable in any jurisdiction, such invalidity or unenforceability shall
not affect the validity or enforceability of the remainder of this Agreement in
that jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction.
(f) Entire Agreement; Amendments. This Agreement supersedes all other
prior oral or written agreements between the Buyers, the Company, their
affiliates and Persons acting on their behalf with respect to the matters
discussed herein, and this Agreement and the instruments referenced herein
contain the entire understanding of the parties with respect to the matters
covered herein and therein and, except as specifically set forth herein or
therein, neither the Company nor any Buyer makes any representation, warranty,
covenant or undertaking with respect to such matters. No provision of this
Agreement may be amended other than by an instrument in writing signed by the
Company and the holders of at least a majority of the aggregate number of
Registrable Securities issued and issuable hereunder, and any amendment to this
Agreement made in conformity with the provisions of this Section 9(e) shall be
binding on all Buyers and holders of Securities, as applicable. No provision
hereof may be waived other than by an instrument in writing signed by the party
against whom enforcement is sought. No such amendment shall be effective to the
extent that it applies to less than all of the holders of the applicable
Securities then outstanding. No consideration shall be offered or paid to any
Person to amend or consent to a waiver or modification of any provision of any
of the Transaction Documents unless the same consideration also is offered to
all of the parties to the Transaction Documents, holders of Notes. The Company
has not, directly or indirectly, made any agreements with any Buyers relating to
the terms or conditions of the transactions contemplated by the Transaction
Documents except as set forth in the Transaction Documents.
(g) Notices. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit with
an overnight courier service, in each case properly addressed to the party to
receive the same. The addresses and facsimile numbers for such communications
shall be:
If to the Company:
Golden Star Resources Ltd.
00000 Xxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000-0000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxx X. Xxxxxx
Copy to:
- 25 -
Xxxxx Xxxxxx & Xxxxxx LLP
0000 Xxxxxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxx
If to the Transfer Agent:
CIBC Mellon
0000 Xxxx Xxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, XX X0X 0XX
Telephone: 000-000-0000
Facsimile: 000-000-0000
Attention: Xxxxxx XxxXxxxxxx
If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers, with copies to such Buyer's representatives as set forth on the Schedule
of Buyers,
with a copy (for informational purposes only) to:
Xxxxxxx Xxxx & Xxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
or to such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party five (5) days prior to the effectiveness of such change.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission (C)
provided by an overnight courier service shall be rebuttable evidence of
personal service, receipt by facsimile or receipt from an overnight courier
service in accordance with clause (i), (ii) or (iii) above, respectively;
provided however that the foregoing clause (B) shall only be valid if such
communication contained in the facsimile is delivered by an overnight courier
service within 24 hours of the transmission of facsimile.
(h) Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their respective successors and assigns,
including any purchasers of the Notes. The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the holders of at least a majority of the aggregate number of
Registrable Securities issued and issuable hereunder, including by way of a
Fundamental Transaction (unless the Company is in compliance with the applicable
provisions governing Fundamental Transactions set forth in the Notes). A Buyer
may assign some or all of
- 26 -
its rights hereunder without the consent of the Company, in which event such
assignee shall be deemed to be a Buyer hereunder with respect to such assigned
rights.
(i) No Third Party Beneficiaries. This Agreement is intended for the
benefit of the parties hereto and their respective permitted successors and
assigns, and is not for the benefit of, nor may any provision hereof be enforced
by, any other Person.
(j) Survival. Unless this Agreement is terminated under Section 8, the
representations and warranties of the Company and the Buyers contained in
Sections 2 and 3 and the agreements and covenants set forth in Sections 4, 5 and
9 shall survive the Closing. Each Buyer shall be responsible only for its own
representations, warranties, agreements and covenants hereunder.
(k) Further Assurances. Each party shall do and perform, or cause to be
done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
any other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
(l) Indemnification. In consideration of each Buyer's execution and
delivery of the Transaction Documents and acquiring the Securities thereunder
and in addition to all of the Company's other obligations under the Transaction
Documents, the Company shall defend, protect, indemnify and hold harmless each
Buyer and each other holder of the Securities and all of their stockholders,
partners, members, officers, directors, employees and direct or indirect
investors and any of the foregoing Persons' agents or other representatives
(including, without limitation, those retained in connection with the
transactions contemplated by this Agreement) (collectively, the "INDEMNITEES")
from and against any and all actions, causes of action, suits, claims, losses,
costs, penalties, fees, liabilities and damages, and expenses in connection
therewith (irrespective of whether any such Indemnitee is a party to the action
for which indemnification hereunder is sought), and including reasonable
attorneys' fees and disbursements (the "INDEMNIFIED LIABILITIES"), incurred by
any Indemnitee as a result of, or arising out of, or relating to (a) any
misrepresentation or breach of any representation or warranty made by the
Company in any Transaction Documents, (b) any breach of any covenant, agreement
or obligation of the Company contained in any Transaction Documents or (c) any
cause of action, suit or claim brought or made against such Indemnitee by a
third party (including for these purposes a derivative action brought on behalf
of the Company) and arising out of or resulting from (i) the execution,
delivery, performance or enforcement of any Transaction Documents, (ii) any
transaction financed or to be financed in whole or in part, directly or
indirectly, with the proceeds of the issuance of the Securities, (iii) any
disclosure made by such Buyer pursuant to Section 4(i), or (iv) assuming the
representations of the Buyers in Section 2 are true and correct, the status of
such Buyer or holder of the Securities as an investor in the Company pursuant to
the transactions contemplated by the Transaction Documents. To the extent that
the foregoing undertaking by the Company may be unenforceable for any reason,
the Company shall make the maximum contribution to the payment and satisfaction
of each of the Indemnified Liabilities that is permissible under applicable law.
Except as otherwise set forth herein, the mechanics and procedures with respect
to the rights and obligations under this Section 9(k) shall be the same as those
set forth in Section 6 of the Registration Rights Agreement.
- 27 -
(m) No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
(n) Remedies. Each Buyer and each holder of the Securities shall have
all rights and remedies set forth in the Transaction Documents and all rights
and remedies which such holders have been granted at any time under any other
agreement or contract and all of the rights which such holders have under any
law. Any Person having any rights under any provision of this Agreement shall be
entitled to enforce such rights specifically (without posting a bond or other
security), to recover damages by reason of any breach of any provision of this
Agreement and to exercise all other rights granted by law. Furthermore, the
Company recognizes that in the event that it fails to perform, observe, or
discharge any or all of its obligations under the Transaction Documents, any
remedy at law may prove to be inadequate relief to the Buyers. The Company
therefore agrees that the Buyers shall be entitled to seek temporary and
permanent injunctive relief in any such case without the necessity of proving
actual damages and without posting a bond or other security.
(o) Payment Set Aside. To the extent that the Company makes a payment
or payments to the Buyers hereunder or pursuant to any of the other Transaction
Documents or the Buyers enforce or exercise their rights hereunder or
thereunder, and such payment or payments or the proceeds of such enforcement or
exercise or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside, recovered from, disgorged by or are
required to be refunded, repaid or otherwise restored to the Company, a trustee,
receiver or any other Person under any law (including, without limitation, any
bankruptcy law, foreign, state or federal law, common law or equitable cause of
action), then to the extent of any such restoration the obligation or part
thereof originally intended to be satisfied shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.
(p) Independent Nature of Buyers' Obligations and Rights. The
obligations of each Buyer under any Transaction Document are several and not
joint with the obligations of any other Buyer, and no Buyer shall be responsible
in any way for the performance of the obligations of any other Buyer under any
Transaction Document. Nothing contained herein or in any other Transaction
Document, and no action taken by any Buyer pursuant hereto or thereto, shall be
deemed to constitute the Buyers as a partnership, an association, a joint
venture or any other kind of entity, or create a presumption that the Buyers are
in any way acting in concert or as a group with respect to such obligations or
the transactions contemplated by the Transaction Documents and the Company
acknowledges that the Buyers are not acting in concert or as a group with
respect to such obligations or the transactions contemplated by the Transaction
Documents. Each Buyer confirms that it has independently participated in the
negotiation of the transaction contemplated hereby with the advice of its own
counsel and advisors. Each Buyer shall be entitled to independently protect and
enforce its rights, including, without limitation, the rights arising out of
this Agreement or out of any other Transaction Documents, and it shall not be
necessary for any other Buyer to be joined as an additional party in any
proceeding for such purpose.
[SIGNATURE PAGE FOLLOWS]
- 28 -
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.
COMPANY:
GOLDEN STAR RESOURCES LTD.
By: /s/ XXXXX X. XXXXXX
------------------------------------
Name: XXXXX X. XXXXXX
Title: Senior Vice President and
Chief Financial Officer
[Signature Page to Securities Purchase Agreement]
IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Securities Purchase Agreement to be duly
executed as of the date first written above.
BUYERS:
AMARANTH LLC
By: Amaranth Advisors (Canada), ULC
Its Trading Advisor
By: /s/ XXXX X. XXXXXXX
-----------------------------------------
Name: Xxxx X. Xxxxxxx
Title: Authorized Signatory
[Signature Page to Securities Purchase Agreement]
SCHEDULE OF BUYERS
(1) (2) (3) (4) (5)
AGGREGATE
ADDRESS AND PRINCIPAL LEGAL REPRESENTATIVE'S ADDRESS
BUYER FACSIMILE NUMBER AMOUNT OF NOTES PURCHASE PRICE AND FACSIMILE NUMBER
-------------------------------------------------------------------------------------------------------------------------
Amaranth LLC c/o Amaranth Advisors L.L.C. $50,000,000 $50,000,000 Xxxxxxx Xxxx & Xxxxx LLP
One American Lane 000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000 Xxx Xxxx, Xxx Xxxx 00000
Attention: General Counsel Attention: Xxxxxxx Xxxxx, Esq.
Facsimile: (000) 000-0000 Facsimile: (000) 000-0000
Telephone: (000) 000-0000 Telephone: (000) 000-0000
Domicile: Toronto, Canada
EXHIBITS
Exhibit A Form of Notes
Exhibit B Registration Rights Agreement
Exhibit C Irrevocable Transfer Agent Instructions
Exhibit D-1 Form of US Outside Company Counsel Opinion
Exhibit D-2 Form of Canadian Outside Company Counsel Opinion
Exhibit E Form of Secretary's Certificate
Exhibit F Form of Officer's Certificate
