exv4w1






URANERZ ENERGY CORPORATION




and




CORPORATE STOCK TRANSFER, INC.




 





WARRANT INDENTURE




Dated as of October 27, 2009




 











 



 


TABLE OF CONTENTS




	 	 	 	 	 
	ARTICLE 1

	INTERPRETATION

	 
	 	 	 	 
	Section 1.1 Definitions
	 	 	1	 
	Section 1.2 Gender and Number
	 	 	5	 
	Section 1.3 Interpretation not Affected by Headings, etc.
	 	 	5	 
	Section 1.4 Day not a Business Day
	 	 	5	 
	Section 1.5 Time of the Essence
	 	 	5	 
	Section 1.6 Currency
	 	 	6	 
	Section 1.7 Applicable Law
	 	 	6	 
	 
	 	 	 	 
	ARTICLE 2

	ISSUE OF WARRANTS

	 
	 	 	 	 
	Section 2.1 Issue of Warrants
	 	 	6	 
	Section 2.2 Terms of Warrants
	 	 	6	 
	Section 2.3 Warrantholder not a Shareholder
	 	 	6	 
	Section 2.4 Warrants to Rank Pari Passu
	 	 	6	 
	Section 2.5 Form of Warrants
	 	 	6	 
	Section 2.6 Signing of Warrant Certificates
	 	 	7	 
	Section 2.7 Certification by the Warrant Agent
	 	 	7	 
	Section 2.8 Issue in Substitution for Warrant Certificates Lost, etc.
	 	 	7	 
	Section 2.9 Exchange of Warrant Certificates
	 	 	8	 
	Section 2.10 Transfer and Ownership of Warrants
	 	 	8	 
	Section 2.11 Charges for Exchange or Transfer
	 	 	9	 
	Section 2.12 Cancellation of Surrendered Warrants
	 	 	9	 
	Section 2.13 Assumption by Transferee and Release of Transferor
	 	 	9	 
	 
	 	 	 	 
	ARTICLE 3

	EXERCISE OF WARRANTS

	 
	 	 	 	 
	Section 3.1 Exercise of Warrants by the Holder
	 	 	10	 
	Section 3.2 Transfer Fees and Taxes
	 	 	11	 
	Section 3.3 Warrant Agency
	 	 	11	 
	Section 3.4 Effect of Exercise of Warrants
	 	 	11	 
	Section 3.5 Partial Exercise of Warrants; Fractions
	 	 	12	 
	Section 3.6 Expiration of Warrants
	 	 	12	 
	Section 3.7 Accounting and Recording
	 	 	12	 
	Section 3.8 Securities Restrictions
	 	 	13	 
	Section 3.9 Cashless Exercise or Redemption of Warrants
	 	 	13	 
	Section 3.10 Acceleration of Expiry Date by Corporation
	 	 	14	 






i









 



 


	 	 	 	 	 
	ARTICLE 4

	ADJUSTMENT OF EXERCISE RIGHTS

	 
	 	 	 	 
	Section 4.1 Adjustment of Exercise Rights
	 	 	14	 
	Section 4.2 Adjustment Rules
	 	 	19	 
	Section 4.3 Postponement of Subscription
	 	 	20	 
	Section 4.4 Notice of Adjustment of Exercise Rights
	 	 	20	 
	Section 4.5 No Action after Notice
	 	 	21	 
	Section 4.6 No Duty to Inquire
	 	 	21	 
	Section 4.7 Rights Issued in Respect of Underlying Securities on Exercise
	 	 	21	 
	 
	 	 	 	 
	ARTICLE 5

	RIGHTS OF THE CORPORATION AND COVENANTS

	 
	 	 	 	 
	Section 5.1 General Covenants
	 	 	22	 
	Section 5.2 Warrant Agent’s Remuneration and Expenses
	 	 	23	 
	Section 5.3 Performance of Covenants by Warrant Agent
	 	 	24	 
	Section 5.4 Optional Purchases by the Corporation
	 	 	24	 
	 
	 	 	 	 
	ARTICLE 6

	ENFORCEMENT

	 
	 	 	 	 
	Section 6.1 Suits by Warrantholders
	 	 	24	 
	Section 6.2 Immunity of Shareholders, etc.
	 	 	25	 
	Section 6.3 Limitation of Liability
	 	 	25	 
	Section 6.4 Waiver of Default
	 	 	25	 
	 
	 	 	 	 
	ARTICLE 7

	MEETINGS OF WARRANTHOLDERS

	 
	 	 	 	 
	Section 7.1 Right to Convene Meetings
	 	 	25	 
	Section 7.2 Notice
	 	 	26	 
	Section 7.3 Chairman
	 	 	26	 
	Section 7.4 Quorum
	 	 	26	 
	Section 7.5 Power to Adjourn
	 	 	26	 
	Section 7.6 Show of Hands
	 	 	27	 
	Section 7.7 Poll and Voting
	 	 	27	 
	Section 7.8 Regulations
	 	 	27	 
	Section 7.9 Corporation and Warrant Agent May be Represented
	 	 	28	 
	Section 7.10 Powers Exercisable by Extraordinary Resolution
	 	 	28	 
	Section 7.11 Meaning of Extraordinary Resolution
	 	 	29	 
	Section 7.12 Powers Cumulative
	 	 	30	 
	Section 7.13 Minutes
	 	 	30	 
	Section 7.14 Instruments in Writing
	 	 	30	 
	Section 7.15 Binding Effect of Resolutions
	 	 	30	 
	Section 7.16 Holdings by Corporation Disregarded
	 	 	31	 





ii









 




	 	 	 	 	 
	ARTICLE 8

	SUPPLEMENTAL INDENTURES

	 
	 	 	 	 
	Section 8.1 Provision for Supplemental Indentures for Certain Purposes
	 	 	31	 
	Section 8.2 Successor Corporations
	 	 	32	 
	 
	 	 	 	 
	ARTICLE 9

	CONCERNING THE WARRANT AGENT

	 
	 	 	 	 
	Section 9.1 Trust Indenture Legislation
	 	 	32	 
	Section 9.2 Rights and Duties of Warrant Agent
	 	 	32	 
	Section 9.3 Evidence, Experts and Advisers
	 	 	33	 
	Section 9.4 Documents, Monies, etc. Held by Warrant Agent
	 	 	34	 
	Section 9.5 Actions by Warrant Agent to Protect Interest
	 	 	34	 
	Section 9.6 Warrant Agent Not Required to Give Security
	 	 	34	 
	Section 9.7 Protection of Warrant Agent
	 	 	34	 
	Section 9.8 Replacement of Warrant Agent; Successor by Merger
	 	 	35	 
	Section 9.9 Conflict of Interest
	 	 	36	 
	Section 9.10 Acceptance of Trust
	 	 	36	 
	Section 9.11 Warrant Agent Not to be Appointed Receiver
	 	 	37	 
	Section 9.12 Anti-Money Laundering and Anti-Terrorist Legislation
	 	 	37	 
	Section 9.13 Accounts Opened for Corporation
	 	 	37	 
	 
	 	 	 	 
	ARTICLE 10

	GENERAL

	 
	 	 	 	 
	Section 10.1 Notice to the Corporation and the Warrant Agent
	 	 	37	 
	Section 10.2 Notice to Warrantholders
	 	 	38	 
	Section 10.3 Counterparts
	 	 	39	 
	Section 10.4 Satisfaction and Discharge of Indenture
	 	 	39	 
	Upon the earlier of:
	 	 	39	 
	Section 10.5 Provisions of Indenture and Warrants for the Sole Benefit of Parties, Agent and Warrantholders
	 	 	39	 
	Section 10.6 Warrants Owned by the Corporation or its Subsidiaries — Certificate to be Provided
	 	 	39	 
	Section 10.7 Evidence of Ownership
	 	 	40	 
	Section 10.8 Privacy Laws
	 	 	40	 
	Section 10.9 Assignment
	 	 	41	 
	Section 10.10 No Waiver, etc.
	 	 	41	 
	Section 10.11 Language
	 	 	41	 
	Section 10.12 Further Assurances
	 	 	41	 
	 
	 	 	 	 
	ADDENDA

	 
	 	 	 	 
	SCHEDULE “A”

	 	 	 	 





iii









 



THIS WARRANT INDENTURE is made as of the 27th day of October, 2009.



BETWEEN:



URANERZ ENERGY CORPORATION, a corporation incorporated under the laws of the State of Nevada
(hereinafter referred to as the “Corporation”)



- and -



CORPORATE STOCK TRANSFER, INC., a company incorporated under the laws of the State of Colorado
(hereinafter referred to as the “Warrant Agent”)



WHEREAS:



A. the Corporation has agreed to issue up to 10,000,000 Units (as defined below), each Unit
consisting of one Common Share (as defined below) of the Corporation and one-half of one Warrant
(as defined below);



B. the Corporation has further agreed to grant an Agents’ Option, exercisable up to two business
days prior to the Closing Date (as defined below) for up to an additional 1,500,000 Units;



C. as of the date hereof, the Corporation has an effective Registration Statement (as defined
below) under the U.S. Securities Act (as defined below);



D. one whole Warrant shall, subject to adjustment, entitle the holder thereof to purchase from the
Corporation one Common Share of the Corporation at the Exercise Price (as defined below) at any
time prior to 5:00 p.m. (Denver time) 30 months from the Closing Date (as defined below), upon the
terms and conditions herein set forth;



E. all acts and deeds necessary have been done and performed to make the Warrants, when certified,
issued and delivered as provided in this Indenture, legal, valid and binding upon the Corporation
with the benefits of and subject to the terms of this Indenture; and



F. the Warrant Agent has agreed to enter into this Indenture and to hold all rights, interests and
benefits contained herein for and on behalf of those persons who from time to time become holders
of Warrants, as listed on the register as further described in Section 2.10 (1) below, issued
pursuant to this Indenture.



NOW THEREFORE, the parties hereto agree as follows:




ARTICLE 1

INTERPRETATION




Section 1.1 Definitions



In this Indenture, including the recitals and schedules hereto, and in all indentures supplemental
hereto;




     “Amex” means the NYSE Amex LLC;









 



- 2 -



“Applicable Legislation” means, as applicable, the provisions of the United States
Securities Act of 1933, as amended, and any other applicable statute of the United States
and Canada or a state or applicable province thereof, and the regulations under any such
named or other statute, relating to warrant indentures or to the rights, duties and
obligations of warrant agents and of corporations under warrant indentures, to the extent
that such provisions are at the time in force and applicable to this Indenture;




“book-based system” means the electronic system for clearing, depository and entitlement
services operated by DTC;




“Business Day” means a day which is not Saturday or Sunday or a legal holiday in the City
of New York, New York, Denver, Colorado or Vancouver, British Columbia;




“Capital Reorganization” has the meaning set forth in Section 4.1(e);




“Cashless Exercise” has the meaning set forth in Section 3.9(a);




“Closing Date” means October 27, 2009;




“Common Shares” means fully paid and non-assessable shares of common stock of the
Corporation;




“Corporation” means Uranerz Energy Corporation, a corporation incorporated under the laws
of the State of Nevada;




“Corporation’s Auditors” means a firm of independent chartered accountants duly appointed
as auditors of the Corporation;




“Counsel” means an attorney at law or a firm of attorneys at law retained by the Warrant
Agent or retained by the Corporation and acceptable to the Warrant Agent;




“Current Market Price” of a Common Share at any date means the price per share equal to the
weighted average price at which the Common Shares have traded on the Amex for the 20
consecutive Trading Days ending 5 Trading Days before the relevant date or, if the Common
Shares are not then listed on the Amex then on any other United States or Canadian stock
exchange on which the Common Shares are then listed or quoted as may be selected by the
directors of the Corporation or, if the Common Shares are not then listed or quoted on any
United States or Canadian stock exchange then on such other stock exchange on which the
Common Shares are then listed as may be selected by the directors of the Corporation or, if
the Common Shares are not then listed on a stock exchange, on the over-the-counter market
(provided that, in each case, if such average price is not in United States dollars, such
price will be translated into United States dollars using the then applicable Exchange
Rate); provided that, if there is no market for the Common Shares during all or part of
such period during which the Current Market Price per Common Share would otherwise be
determined, the Current Market Price per Common Share shall in respect of all or such part
of the period be determined by a nationally recognized firm of chartered accountants
appointed by the Corporation (who may be the Corporation’s Auditors), in each case
appropriately adjusted to take into account the









 



- 3 -



occurrence during such 20-Trading Day period of any event that would result in an
adjustment of the Exercise Price pursuant to Article 4;




“DTC” means the Depository Trust Company;




“director” means a director of the Corporation for the time being and, unless otherwise
specified herein, reference without more to action “by the directors” means action by the
directors of the Corporation as a board or, whenever duly empowered, action by any
committee of such board;




“Effective Date” means the Closing Date;




“Eligible Institution” means a member of the Medallion Signature Guarantee Program or, in
Canada, a Canadian Schedule 1 chartered bank, a major trust company in Canada, a member of
the Securities Transfer Association Medallion Program, or a member of the Stock Exchange
Medallion Program;




“Exchange Rate” means, on any date for determination, the rate at which United States
dollars may be exchanged into other currency calculated by reference to such publicly
available service for displaying exchange rates of a major bank in the City of New York as
may be determined by the Corporation;




“Exercise Date” means, with respect to any Warrant, the date on which the Warrant
Certificate representing such Warrant is duly surrendered for exercise along with full
payment of the Exercise Price, all in accordance with the terms hereof;




“Exercise Price” means $3.00 per share, unless such price shall have been adjusted in
accordance with the provisions of this Indenture;




“Expiry Date” means April 27, 2012, unless accelerated pursuant to Section 3.10, in which
case, Expiry Date means the date calculated pursuant to the provisions of Section 3.10 ;




“Extraordinary Resolution” has the meaning set forth in Section 7.11;




“Issuer Bid” has the meaning set forth in Section 4.1(d);




“person” means, without limitation, an individual, body corporate, partnership, trust,
Warrant Agent, executor, administrator, legal representative or any unincorporated
organization;




“Privacy Laws” has the meaning set forth in Section 10.8;




“Registration Statement” means a shelf registration statement filed with the SEC under the
U.S. Securities Act and relating to the Underlying Securities;




“Rights” has the meaning set forth in Section 4.7;




“Rights Agreement” has the meaning set forth in Section 4.7;




“Rights Offering” has the meaning set forth in Section 4.1(b);









 



- 4 -



“Rights Period” has the meaning set forth in Section 4.1(b);




“Regulatory Approval” means the approval of the Amex or the TSX, each as applicable;




“SEC” means the United States Securities and Exchange Commission;




“Share Reorganization” has the meaning set forth in Section 4.1(a);




“Shareholder” means a holder of record of one or more Common Shares;




“Special Distribution” has the meaning set forth in Section 4.1(c);




“Subsidiary of the Corporation” means a corporation, more than 50% of the outstanding
voting shares of which are owned, directly or indirectly, other than by way of security
only, by the Corporation or by one or more subsidiaries of the Corporation; and, as used in
this definition, “voting shares” means shares of a class or classes ordinarily entitled to
vote for the election of a majority of the directors of a corporation irrespective of
whether or not shares of any other class or classes shall have or might have the right to
vote for directors by reason of the happening of any contingency;




“Time of Expiry” means 5:00 p.m. (Denver time) on the Expiry Date;




“TSX” means the Toronto Stock Exchange;




“Trading Day” means any day on which trading occurs on the Amex (or such other exchange or
market provided for in the definition of “Current Market Price”);




“Underlying Securities” means the Common Shares issuable upon the exercise of the
Warrants, including the shares or other securities or property issuable upon the exercise
of the Warrants as a result of any adjustment of exercise rights pursuant to Section 4.1
and Section 4.2;




“Units” means the units offered pursuant to a prospectus supplement dated October 22, 2009
by the Corporation, each such unit consisting of one Common Share and one-half of one
Warrant;




“U.S. Person” means a “U.S. person” as defined in Rule 902 (k) of Regulation S under the
U.S. Securities Act;




“U.S. Securities Act” means the United States Securities Act of 1933, as amended;




“Warrant” means a Common Share purchase warrant of the Corporation to be issued pursuant to
this Indenture entitling the holders thereof to acquire one Common Share at the Exercise
Price until the Time of Expiry for each whole warrant held, subject to the terms and
conditions herein;




“Warrant Agency” means the principal office of the Warrant Agent in the City of Denver,
Colorado or such other place as may be designated in accordance with Section 3.3;









 



- 5 -



“Warrant Agent” means Corporate Stock Transfer, Inc. or its successors from time to time in
the trust hereby created;




“Warrant Certificate” means a certificate, substantially in the form set forth in Schedule
“A”, issued on or after the Effective Date to evidence Warrants;




“this Warrant Indenture” “this Indenture”, “herein”, “hereby”, “hereof” and similar
expressions mean and refer to this Indenture and any indenture, deed or instrument
supplemental hereto; and the expressions “Article”, “Section”, “subsection” and “paragraph”
followed by a number, letter or both mean and refer to the specified article, section,
subsection or paragraph of this Indenture;




“Warrantholders”, or “holders” means the persons who are registered owners of Warrants,
which includes DTC, and, for greater certainty, in respect of any action to be taken by a
holder in respect of his Warrants, means the holder or his successors, executors,
administrators or other legal representatives or his or their attorney duly appointed by
instrument in writing in form, substance and execution satisfactory to the Warrant Agent
with signatures guaranteed by an Eligible Institution;




“Warrantholders’ Request” means an instrument signed in one or more counterparts by
Warrantholders entitled to acquire in the aggregate not less than 25% of the aggregate
number of Common Shares which could be acquired pursuant to all Warrants then unexercised
and outstanding, requesting the Warrant Agent to take some action or proceeding specified
therein; and




“written request of the Corporation” and “certificate of the Corporation” mean,
respectively, a written request and certificate signed in the name of the Corporation by
its Chairman, President or Chief Financial Officer and may consist of one or more
instruments so executed.



Section 1.2 Gender and Number




     Unless herein otherwise expressly provided or unless the context otherwise requires, words
importing the singular include the plural and vice versa and words importing gender include all
genders.



Section 1.3 Interpretation not Affected by Headings, etc.




     The division of this Indenture into Articles and Sections, the provision of a table of
contents and the insertion of headings are for convenience of reference only and shall not affect
the construction or interpretation of this Indenture.



Section 1.4 Day not a Business Day




     In the event that any day on or before which any action is required to be taken hereunder is
not a Business Day, then such action shall be required to be taken at or before the requisite time
on the next succeeding day that is a Business Day.



Section 1.5 Time of the Essence




     Time shall be of the essence in this Indenture.









 



- 6 -


Section 1.6 Currency




     Except as otherwise stated, all dollar amounts herein are expressed in United States dollars.



Section 1.7 Applicable Law




     This Indenture and the Warrant Certificates shall be governed by and construed in accordance
with the laws of the State of Nevada and any applicable federal laws of the United States.
Notwithstanding the preceding sentence, the exercise, performance or discharge by the Warrant Agent
of any of its rights, powers, duties or responsibilities under the Indenture shall be construed in
accordance with the laws of the State of Colorado.



ARTICLE 2

ISSUE OF WARRANTS




Section 2.1 Issue of Warrants




     A maximum of up to 5,750,000 Warrants, entitling the holders thereof to acquire up to 5,750,000
Common Shares (subject to adjustment in accordance with the terms hereof) on the terms and subject
to the conditions herein provided, are hereby created and authorized to be issued hereunder.



Section 2.2 Terms of Warrants





	(1)	 	Each whole Warrant shall entitle the holder thereof, upon the exercise thereof prior to the
Time of Expiry, to acquire one (1) Common Share (subject to adjustment in accordance with the
terms hereof) on payment of the Exercise Price.
	 
	(2)	 	No fractional Warrants shall be issued or otherwise provided for hereunder. To the extent
that any agreement, document or certificate evidences or purports to confer the right to be
issued a fraction of a Warrant, such Warrants issued shall be rounded down to the nearest
whole number without any compensation payable therefor.
	 
	(3)	 	The number of Common Shares which may be acquired pursuant to the exercise of Warrants shall
be adjusted in the circumstances and in the manner specified in Article 4.





Section 2.3 Warrantholder not a Shareholder




     Nothing in this Indenture or in the holding of a Warrant or Warrant Certificate or otherwise,
shall, in itself, confer or be construed as conferring upon a Warrantholder any right or interest
whatsoever as a Shareholder, including, but not limited to, the right to vote at, to receive notice
of, or to attend, meetings of Shareholders or any other proceedings of the Corporation, or the
right to receive dividends and other distributions.



Section 2.4 Warrants to Rank Pari Passu




     All Warrants shall rank pari passu, whatever may be the actual date of issue thereof.



Section 2.5 Form of Warrants




     The Warrant Certificates (including all replacements issued in accordance with this Indenture)
shall be substantially in the form set out in Schedule “A” hereto, shall be in









 



- 7 -

registered form, shall be dated as of the Effective Date regardless of the date of issuance,
shall bear such legends and distinguishing letters and numbers as the Corporation may, with the
approval of the Warrant Agent and subject to applicable securities laws, prescribe, and shall be
issuable in any denomination excluding fractions. The Warrants hereby created shall be issued by
the Warrant Agent in accordance with the written direction of the Corporation.




     For the purpose of the administration of this Warrant issue, an electronic acknowledgment of a
deposit request from DTC by the Warrant Agent will be permitted in lieu of the delivery of physical
Certificates in the name of each Warrantholder.



Section 2.6 Signing of Warrant Certificates




     The Warrant Certificates shall be signed (with or without the seal of the Corporation) by any
one or more directors or officers of the Corporation. The signatures of any such director or
officer may be mechanically reproduced in facsimile and Warrant Certificates bearing such facsimile
signatures shall be binding upon the Corporation as if they had been manually signed by such
director or officer. Notwithstanding that any person whose manual or facsimile signature appears on
any Warrant Certificate as a director or officer may no longer hold office at the date of such
Warrant Certificate or at the date of certification or delivery thereof, any Warrant Certificate
signed as aforesaid shall, subject to Section 2.7, be valid and binding upon the Corporation and
the holder thereof shall be entitled to the benefits of this Indenture.



Section 2.7 Certification by the Warrant Agent





	(1)	 	No Warrant Certificate shall be issued or, if issued, shall be valid for any purpose or
entitle the holder to the benefit of this Indenture hereof until it has been certified by
manual signature by or on behalf of the Warrant Agent by its authorized signing officers
located in the City of Denver and such certification by the Warrant Agent upon any Warrant
Certificate shall be conclusive evidence as against the Corporation that the Warrant
Certificate so certified has been duly issued hereunder and that the holder is entitled to the
benefits hereof.
	 
	(2)	 	The certification of the Warrant Agent on Warrant Certificates issued hereunder shall not be
construed as a representation or warranty by the Warrant Agent as to the validity of this
Indenture or the Warrant Certificates (except the due certification thereof) and the Warrant
Agent shall in no respect be liable or answerable for the use made of the Warrant Certificates
or any of them or of the consideration therefor except as otherwise specified herein.





Section 2.8 Issue in Substitution for Warrant Certificates Lost, etc.





	(1)	 	If any Warrant Certificate becomes mutilated or is lost, destroyed or stolen, the
Corporation, subject to applicable law and to subsection (2), shall issue and thereupon the
Warrant Agent shall certify and deliver, a new Warrant Certificate of like tenor as the one
mutilated, lost, destroyed or stolen in exchange for and in place of and upon cancellation of
such mutilated Warrant Certificate, or in lieu of and in substitution for such lost, destroyed
or stolen Warrant Certificate, and the substituted Warrant Certificate shall be in a form
pursuant to the provisions of this Warrant Indenture and approved by the Warrant Agent and the
Warrants evidenced thereby shall be entitled










 



- 8 -


	 	 	to the benefits hereof and shall rank equally in accordance with its terms with all other
Warrants issued or to be issued hereunder.
	 
	(2)	 	The applicant for the issue of a new Warrant Certificate pursuant to this Section 2.8 shall
bear the cost of the issue thereof and in case of loss, destruction or theft shall, as a
condition precedent to the issue thereof, furnish to the Corporation and to the Warrant Agent
such evidence of ownership and of the loss, destruction or theft of the Warrant Certificate so
lost, destroyed or stolen as shall be satisfactory to the Corporation and to the Warrant
Agent, in their sole discretion, and such applicant may also be required to furnish an
indemnity and/or a surety bond in amount and form satisfactory to the Corporation and the
Warrant Agent, in their sole discretion, and shall pay the reasonable charges of the
Corporation and the Warrant Agent in connection therewith.





Section 2.9 Exchange of Warrant Certificates





	(1)	 	Any one or more Warrant Certificates representing any number of Warrants may, upon compliance
with the reasonable requirements of the Warrant Agent, be exchanged for one or more other
Warrant Certificates representing the same aggregate number of Warrants as represented by the
Warrant Certificate or Warrant Certificates tendered for exchange.
	 
	(2)	 	Warrant Certificates may be exchanged only at the Warrant Agency or at any other place that
is designated by the Corporation with the approval of the Warrant Agent. Any Warrant
Certificate tendered for exchange shall be cancelled by the Warrant Agent.
	 
	(3)	 	Warrant Certificates issued pursuant to this Section shall be in the same form and shall bear
the same legends as those Warrant Certificates they are exchanged for.





Section 2.10 Transfer and Ownership of Warrants





	(1)	 	The Warrant Agent will cause to be kept (i) by and at the Warrant Agency, a register (or
registers) of holders in which shall be entered in alphabetical order the names and addresses
of the holders of Warrants and particulars of the Warrants held by them, respectively, and
(ii) by and at the Warrant Agency, a register of transfers in which all transfers of Warrants
and the date and other particulars of each transfer shall be entered.
	 
	(2)	 	The Warrants may only be transferred on the register referred to in subsection (1) by the
holder or its legal representatives or its attorney duly appointed by an instrument in writing
in form and execution satisfactory to the Warrant Agent with signatures guaranteed by Eligible
Institutions only upon surrendering to the Warrant Agent the Warrant Certificate or Warrant
Certificates representing the Warrants to be transferred, together with the duly completed
Transfer Form (in the form annexed to the Warrant Certificate), and upon compliance with and,
upon reasonable request of the Corporation or the Warrant Agent, satisfactory evidence of:






	 	(a)	 	the conditions set forth in this Indenture;










 



- 9 -


	 	(b)	 	such reasonable requirements as the Warrant Agent may prescribe; and
	 
	 	(c)	 	all applicable securities legislation and requirements of regulatory
authorities.





     Such transfer shall be duly noted in such register by the Warrant Agent. Upon compliance with
such requirements, the Warrant Agent shall issue to the transferee one or more Warrant Certificates
representing the Warrants transferred.




	(3)	 	The Corporation and the Warrant Agent may deem and treat the registered owner of any Warrant
as the beneficial owner thereof for all purposes and neither the Corporation nor the Warrant
Agent shall be affected by any notice or knowledge to the contrary except as required by
statute or court of competent jurisdiction.
	 
	(4)	 	Subject to the provisions of this Indenture and Applicable Legislation, the Warrantholders
shall be entitled to the rights and privileges attaching to the Warrants free from all
equities or rights of set off or counterclaims between the Corporation and the original and
any intermediate holder of the Warrants. The issue of Common Shares by the Corporation upon
the exercise or deemed exercise of Warrants in accordance with the terms and conditions herein
contained shall discharge all responsibilities of the Corporation and the Warrant Agent with
respect to such Warrants and neither the Corporation nor the Warrant Agent shall be bound to
inquire into the title of any such holder.





Section 2.11 Charges for Exchange or Transfer




     Except as otherwise herein provided, a reasonable charge may be levied by the Warrant Agent in
respect of the transfer or the exchange of any Warrant Certificate or the issue of a new Warrant
Certificate(s) pursuant hereto or for any and all transfer, stamp or similar taxes or other
governmental charges required to be paid by the holder requesting such transfer or exchange as a
condition precedent to such transfer or exchange.



Section 2.12 Cancellation of Surrendered Warrants




     All Warrant Certificates surrendered pursuant to Section 2.8, Section 2.9, Section 2.10,
Section 3.1, Section 3.5 or Section 5.4 shall be returned to the Warrant Agent for cancellation
and, after the expiry of any period of retention prescribed by law, destroyed by the Warrant Agent.
Upon request by the Corporation, the Warrant Agent shall furnish to the Corporation a destruction
certificate identifying the Warrant Certificates so destroyed, the number of Warrants evidenced
thereby and the number of Common Shares, if any, issued pursuant to such Warrants.



Section 2.13 Assumption by Transferee and Release of Transferor




     Upon becoming a Warrantholder in accordance with the provisions of this Indenture, the
transferee thereof shall be deemed to have acknowledged and agreed to be bound by this Indenture.
Upon the registration of such transferee as the Warrantholder of a Warrant, the transferor shall
cease to have any further rights under this Indenture with respect to such Warrant or the Common
Share in respect thereof.









 



- 10 -


ARTICLE 3

EXERCISE OF WARRANTS




Section 3.1 Exercise of Warrants by the Holder





	(1)	 	Subject to the terms hereof, including the provisions of Section 3.1, each holder of Warrants
may exercise the right conferred on such holder to purchase one Common Share (subject to
adjustment in accordance with the terms hereof) for each whole Warrant held by surrendering to
the Warrant Agent at the Warrant Agency, after the Effective Date and prior to the Time of
Expiry:






	 	(a)	 	the Warrant Certificate with a duly completed and executed Exercise Form in
the form substantially set out in Schedule “A”; and
	 
	 	(b)	 	a certified cheque, bank draft or money order in lawful money of the United
States payable to or to the order of the Corporation at par in the city where such
Warrant Certificate is surrendered in an amount equal to the Exercise Price multiplied
by the number of Common Shares subscribed for.





     A Warrant Certificate with the duly completed and executed Exercise Form referred to in
Section 3.1(1)(a), together with the payment of the Exercise Price of the Common Shares subscribed
for and referred to in Section 3.1(1)(b), shall be deemed to be surrendered only upon personal
delivery thereof or, if sent by mail or other means of transmission, upon actual receipt thereof by
the Warrant Agent at the Warrant Agency.



     It is understood and agreed by the parties hereto that in every instance where a Warrantholder
whose Warrants are held in an electronic position through a depository wishes to exercise all or a
portion of his Warrants, such Warrants being exercised shall be certificated prior to the
submission of such Warrants for exercise.




	(2)	 	Notwithstanding any provision to the contrary contained in this Indenture, no Warrantholder
may exercise any Warrant at any time when no Registration Statement is effective, unless an
exemption from the registration requirements to the U.S. Securities Act is available and such
holder provides evidence of the availability of such exemption satisfactory to the Corporation
and the Warrant Agent. If no Registration Statement is effective, such Warrantholder shall be
notified forthwith by the Warrant Agent that such Warrantholder is entitled, at the sole
option of the Corporation, to a redemption or cashless exercise of his or her Warrant, in
whole or in part, in accordance with Section 3.9.
	 
	(3)	 	Any Exercise Form referred to in Section 3.1(1) shall be signed by the Warrantholder and
shall specify:






	 	(a)	 	the number of Common Shares which the holder wishes to acquire (being not
more than the number of Common Shares which the holder is entitled to acquire pursuant
to the Warrant Certificate(s) surrendered);
	 
	 	(b)	 	the person or persons in whose name or names such Common Shares are to be
issued;










 



- 11 -


	 	(c)	 	the address or addresses of such person or persons; and
	 
	 	(d)	 	the number of Common Shares to be issued to each such person if more than one
is so specified.





     The Warrantholder must comply with all applicable securities laws in connection with the
issuance of Common Shares upon exercise of Warrants.



     Notwithstanding the foregoing, if any of the Common Shares subscribed for are to be issued to
a person or persons other than the Warrantholder, the signature(s) set out in the Exercise Form
shall be guaranteed by an Eligible Institution, the Warrantholder shall comply with such reasonable
requirements as the Warrant Agent may prescribe and shall pay to the Corporation or the Warrant
Agency on behalf of the Corporation, all applicable transfer or similar taxes and the Corporation
shall not be required to issue or deliver certificates evidencing Common Shares unless or until
such Warrantholder shall have paid to the Corporation, or the Warrant Agency on behalf of the
Corporation, the amount of such tax or shall have established to the satisfaction of the
Corporation that such tax has been paid or that no tax is due. The duly completed and executed
Transfer Form shall be completed along with the Exercise Form.



Section 3.2 Transfer Fees and Taxes




     If any of the Common Shares subscribed for are to be issued to a person or persons other than
the Warrantholder, the Warrantholder shall comply with such reasonable requirements as the Warrant
Agent may prescribe and shall pay to the Corporation or the Warrant Agency on behalf of the
Corporation, all applicable transfer or similar taxes and the Corporation shall not be required to
issue or deliver certificates evidencing Common Shares unless or until such Warrantholder shall
have paid to the Corporation, or the Warrant Agency on behalf of the Corporation, the amount of
such tax or shall have established to the satisfaction of the Corporation that such tax has been
paid or that no tax is due.



Section 3.3 Warrant Agency




     In connection with the exchange or transfer of Warrant Certificates and exercise of Warrants
and compliance with such other terms and conditions hereof as may be required, the Corporation has
appointed the principal office of the Warrant Agent in the city of Denver, Colorado as the agency
at which Warrant Certificates may be surrendered for exchange or transfer or at which Warrants may
be exercised and the Warrant Agent has accepted such appointment. The Corporation may from time to
time designate alternate or additional places as the Warrant Agency and shall give notice to the
Warrant Agent of any change of the Warrant Agency.



Section 3.4 Effect of Exercise of Warrants





	(1)	 	Upon the exercise of Warrants pursuant to Section 3.1 and subject to Section 3.5, the Common
Shares to be issued shall be deemed to have been issued and the person or persons to whom such
Common Shares are to be issued shall be deemed to have become the holder or holders of record
of such Common Shares on the Exercise Date unless the transfer registers of the Corporation
shall be closed on such date, in which case the Underlying Securities shall be deemed to have
been issued and such person










 



- 12 -


	 	 	or persons deemed to have become the holder or holders of record of such Common Shares, on
the date on which such transfer registers are reopened.
	 
	(2)	 	The Corporation shall, upon receipt of the Warrant Certificate, the payment of the Exercise
Price and the Exercise Form duly completed, as soon as practicable and in any event within
three (3) Business Days after the Exercise Date, cause to be mailed to the person or persons
in whose name or names the Warrant is registered or, if so specified in writing by the holder,
cause to be delivered to such person or persons at the Warrant Agency where the Warrant
Certificate was surrendered, a certificate or certificates for the appropriate number of
Underlying Securities evidenced by the Warrant Certificate. In addition, if it is required by
law, the Corporation shall cause to be delivered to any Warrantholder in whose name the
Underlying Securities issuable upon exercise of the Warrants are to be issued a prospectus
that complies with the U.S. Securities Act.





Section 3.5 Partial Exercise of Warrants; Fractions





	(1)	 	The holder of any Warrants may exercise his right to acquire Common Shares in part and may
thereby acquire a number of Common Shares less than the aggregate number which such holder is
entitled to acquire pursuant to the surrendered Warrant Certificate(s). In the event of any
exercise of a number of Warrants less than the number which the holder is entitled to
exercise, the holder of the Warrants upon such exercise shall, in addition, be entitled to
receive, without charge therefor, a new Warrant Certificate(s) in respect of the balance of
the Warrants represented by the surrendered Warrant Certificate(s) and which were not then
exercised.
	 
	(2)	 	Notwithstanding anything herein contained including any adjustment provided for in Article 4,
the Corporation shall not be required, upon the exercise of any Warrants, to issue fractions
of Underlying Securities or to distribute certificates or Warrants which evidence a fractional
Underlying Security. In the event that a fractional share results upon the exercise of any
Warrants, the issuance shall be rounded down to the nearest whole Common Share. If more than
one Warrant shall be presented for exercise in full at the same time by the same
Warrantholder, the number of Underlying Securities that shall be issuable upon the exercise
thereof shall be computed on the basis of the aggregate number of Underlying Securities
purchasable on exercise of the Warrants so presented.





Section 3.6 Expiration of Warrants




     Immediately after the Time of Expiry, all rights under any Warrant in respect of which the
right of acquisition herein and therein provided for shall not have been exercised shall cease and
terminate and such Warrant shall be void and of no further force or effect except to the extent
that the Warrantholder has not received certificates representing the Common Shares held by it, in
which instances the Warrantholder’s rights hereunder shall continue until it has received that to
which it is entitled hereunder.



Section 3.7 Accounting and Recording





	(1)	 	The Warrant Agent shall promptly account to the Corporation with respect to Warrants
exercised. Any securities or other instruments (including any property),










 



- 13 -


	 	 	from time to time received by the Warrant Agent shall be received in trust for, and shall
be segregated and kept apart by the Warrant Agent in trust for, the Warrantholders and the
Corporation, as their interests may appear.
	 
	(2)	 	The Warrant Agent shall record the particulars of Warrants exercised which particulars shall
include the names and addresses of the persons who become holders of Common Shares and the
Exercise Date in respect thereof. The Warrant Agent shall provide such particulars in writing
to the Corporation within five Business Days of any request by the Corporation therefor.





Section 3.8 Securities Restrictions




     Notwithstanding any provision to the contrary contained in this Indenture, no Common Shares
will be issued pursuant to the exercise of any Warrant if the issuance of such securities would
constitute a violation of the securities laws of any applicable jurisdiction, and, without limiting
the generality of the foregoing, the Corporation will legend the certificates representing the
Common Shares if, in the opinion of counsel to the Corporation such legend is necessary in order to
avoid a violation of any securities laws of any applicable jurisdiction or to comply with the
requirements of any stock exchange on which the Common Shares are listed, provided that if, at any
time, in the opinion of outside counsel to the Corporation, acting reasonably, such legends are no
longer necessary in order to avoid a violation of any such laws, or the holder of any such legended
certificate, at his expense, provides the Corporation with evidence satisfactory in form and
substance to the Corporation (which may include an opinion of Counsel of recognized standing
satisfactory to the Corporation) to the effect that such holder is entitled to sell or otherwise
transfer such securities in a transaction in which such legends are not required, such legended
certificates may thereafter be surrendered to the Corporation in exchange for a certificate which
does not bear such legends. For greater certainty, should no Registration Statement be effective,
the Corporation shall permit, at the Corporation’s sole discretion, either the Cashless Exercise or
redemption of Warrants held by Warrantholders as set forth in Section 3.9 and shall not be
permitted to issue legended Underlying Securities in lieu thereof.



Section 3.9 Cashless Exercise or Redemption of Warrants





	(1)	 	If the Registration Statement ceases to be effective, prior to the Time of Expiry and for so
long as the Registration Statement is not effective, subject to applicable law, any holder of
any Warrant may provide the Corporation with a notice of intent to exercise such Warrant by
surrendering the certificate representing such Warrant at any time during such period to the
Warrant Agent at the Warrant Agency, with a duly completed and executed notice of intent to
exercise form (“Notice of Intent to Exercise Form”), upon which the holder shall indicate that
he or she is exercising his or her right to exercise the Warrants. At such time of the
receipt of the Notice of Intent to Exercise Form, the Warrant Agent at the Warrant Agency
shall inform the Corporation of the Warrantholder’s intent to exercise. Within three business
days of notice from the Warrant Agent at the Warrant Agency of the provision of a Notice of
Intent to Exercise Form, the Corporation shall elect, at its sole discretion, to either (i)
permit the redemption of the Warrants as provided in this section or (ii) permit the cashless
exercise of the Warrants as provided in this section (“Cashless Exercise”). If the holder
exercises the right provided for in this Section 3.9(1) in respect of a










 



- 14 -


	 	 	lesser number of Warrants than the aggregate number of Warrants represented by the Warrant
Certificate surrendered, the Warrantholder shall be entitled to receive a further Warrant
Certificate in respect of the Warrants represented by the Warrant Certificates that have
not been part of a cashless exercise or redeemed.
	 
	(2)	 	Forthwith following the election of the Corporation to permit the exercise by a Warrantholder
of the cashless exercise or redemption right in accordance with Section 3.9(1), the Warrant
Agent shall deliver to the Corporation a notice setting out the particulars of the Warrants to
be exercised or redeemed and the name and address of the Warrantholder, the number of Common
Shares to be issued, if a cashless exercise, or the amount of money to be paid pursuant to the
redemption right (“Final Exercise Notice”).
	 
	(3)	 	Within five Business Days of receipt of the Final Exercise Notice referred to in (2), the
Corporation shall cause either (i) in the case of a redemption, a cheque in the amount of
money determined by multiplying the number of Common Shares that would have been issued if the
Warrants to be redeemed were exercised on the redemption date by the excess (if any) of the
Current Market Price per Common Share on the Trading Day immediately preceding the redemption
date over the Exercise Price on the redemption date or (ii) in the case of a cashless
exercise, a certificate representing the number of Common Shares equal to the number of Common
Shares which would, but for such Cashless Exercise, have been issuable (“Total Share Number”)
less the number of Common Shares equal to the quotient obtained by dividing (a) the product of
the Total Share Number and Exercise Price by (b) the Current Market Price of the Common Shares
on the trading day immediately preceding the Cashless Exercise to be mailed to such
Warrantholder at the address specified in such Notice of Intent to Exercise Form, or, if so
specified in such Notice of Intent to Exercise Form, to be made available for pick-up by such
Warrantholder at the Warrant Agency.





Section 3.10 Acceleration of Expiry Date by Corporation




     In the event that the Common Shares trade in the United States at a closing price of greater
than $3.50 per share for a period of 20 consecutive Trading Days at any time after the Closing
Date, the Corporation may accelerate the Expiry Date of the Warrants by giving notice via a press
release to the holders thereof and in such case the Warrants will expire on the 30th day after the
date on which such notice is given by the Corporation.



ARTICLE 4

ADJUSTMENT OF EXERCISE RIGHTS




Section 4.1 Adjustment of Exercise Rights




     The Exercise Price per Common Share and the number of Common Shares or other property which
may be subscribed for upon exercise of a Warrant shall be subject to adjustment from time to time
upon the occurrence of any of the events and in the manner provided as follows:




	 	(a)	 	If and whenever at any time prior to the Time of Expiry the Corporation
shall:










 



- 15 -








	 	(i)	 	issue, declare a dividend or make a distribution on its
Common Shares in each case payable in Common Shares (or securities
exchangeable for or convertible into Common Shares) at no additional cost to
all or substantially all of the holders of Common Shares, or
	 
	 	(ii)	 	subdivide, redivide or change its outstanding Common Shares
into a greater number of Common Shares, or
	 
	 	(iii)	 	reduce, combine or consolidate its outstanding Common Shares
into a lesser number,





     (any of such events in clauses 4.1(a)(i), (ii) and (iii) being called a “Share
Reorganization”), then effective immediately after the record date or effective date, as the case
may be, at which the holders of Common Shares are determined for the purposes of the Share
Reorganization, the Exercise Price shall be adjusted to a price determined by multiplying the
applicable Exercise Price in effect on such effective date or record date by a fraction, the
numerator of which shall be the number of Common Shares outstanding on such effective date or
record date before giving effect to such Share Reorganization and the denominator of which shall be
the number of Common Shares outstanding immediately after giving effect to such Share
Reorganization (including, in the case where securities exchangeable for or convertible into Common
Shares are distributed, the number of additional Common Shares that would have been outstanding had
such securities been exchanged for or converted into Common Shares immediately after giving effect
to such Share Reorganization).




	 	(b)	 	If and whenever at any time prior to the Time of Expiry the Corporation shall
fix a record date for the issuing of rights, options or warrants to all or
substantially all of the holders of the Common Shares entitling them for a period
expiring not more than 45 days after such record date (the “Rights Period”) to
subscribe for or purchase Common Shares (or securities convertible into or
exchangeable for Common Shares) at a price per share (or having a conversion or
exchange price per share) which is less than 95% of the Current Market Price per
Common Share on the record date for such issue (any of such events being called a
“Rights Offering”), then effective immediately after the end of the Rights Period the
Exercise Price shall be adjusted to a price determined by multiplying the applicable
Exercise Price in effect at the end of the Rights Period by a fraction the numerator
of which shall be the sum of:






	 	(i)	 	the number of Common Shares outstanding as of the record date
for the Rights Offering, and
	 
	 	(ii)	 	the number determined by dividing (A) either the product of
(i) the number of Common Shares issued during the Rights Period upon exercise
of the rights, warrants or options under the Rights Offering and (ii) the
price at which such Common Shares are issued, or, as the case may be, the
product of (iii) the number of Common Shares for or into which the convertible
or exchangeable securities issued during the










 



- 16 -


	 	 	 	Rights Period upon exercise of the rights, warrants or options under the
Rights Offering are exchangeable or convertible and (iv) the exchange or
conversion price of the convertible or exchangeable securities so issued,
by (B) the Current Market Price per Common Share as of the record date for
the Rights Offering, and





     the denominator of which shall be the number of Common Shares outstanding (including the
number of Common Shares actually issued or subscribed for during the Rights Period upon exercise of
the rights, warrants or options under the Rights Offering) or which would be outstanding upon the
conversion or exchange of all convertible or exchangeable securities issued during the Rights
Period upon exercise of the rights, warrants or options under the Rights Offering, as applicable,
in each case after giving effect to the Rights Offering.



     Common Shares owned by or held (otherwise than as security) for the account of the Corporation
or any Subsidiary of the Corporation shall be deemed not to be outstanding for the purpose of any
such computation. In order to give effect to the provisions of Section 4.1(f) in the circumstances
described below, any holder who shall have exercised his right to purchase Underlying Securities
during the period beginning immediately after the record date for a Rights Offering and ending on
the last day of the Rights Period therefor, in addition to the Underlying Securities to which he is
otherwise entitled upon such exercise, shall be entitled to that number of additional Underlying
Securities equal to the result obtained when the difference, if any, between the Exercise Price in
effect immediately prior to the end of such Rights Offering and the Exercise Price as adjusted for
such Rights Offering pursuant to this Section 4.1(b), is multiplied by the number of Common Shares
purchased upon exercise of the Warrant held by such holder during such period, and the resulting
product is divided by the Exercise Price as adjusted for such Rights Offering pursuant to this
Section 4.1(b). Such additional Common Shares shall be deemed to have been issued to the holder
immediately following the end of the Rights Period and a certificate for such additional Common
Shares shall be delivered to such holder within 10 Business Days following the end of the Rights
Period.




	 	(c)	 	If and whenever at any time prior to the Time of Expiry the Corporation shall
fix a record date for the payment, issue or distribution to all or substantially all
of the holders of the Common Shares of (i) a dividend, (ii) cash or assets (including
evidences of the Corporation’s indebtedness), or (iii) rights, options, warrants or
other securities (including securities convertible into or exchangeable for Common
Shares), and such payment, issue or distribution does not constitute a Share
Reorganization or a Rights Offering (any of such non-excluded events being herein
called a “Special Distribution”), the Exercise Price shall be adjusted effective
immediately after such record date to a price determined by multiplying the applicable
Exercise Price in effect on such record date by a fraction:






	 	(i)	 	the numerator of which shall be:










 



- 17 -








	 	(A)	 	the product of the number of Common Shares
outstanding on such record date and the Current Market Price per
Common Share on such record date; less
	 
	 	(B)	 	the fair market value, as determined in good
faith by action of the directors whose determination shall be
conclusive, subject to any required Regulatory Approval, to the
holders of the Common Shares of such cash, assets, rights, options,
warrants or securities so paid, issued or distributed less the fair
market value, as determined in good faith by action of the directors
whose determination shall be conclusive, subject to any required
Regulatory Approval, of the consideration, if any, received therefor
by the Corporation, and






	 	(ii)	 	the denominator of which shall be the number of Common Shares
outstanding on such record date multiplied by the Current Market Price per
Common Share on such record date.





     Such adjustment shall be made successively whenever such a record date is fixed. To the extent
that such payment, issuance or distribution is not so made, the Exercise Price shall be readjusted
effective immediately to the Exercise Price which would then be in effect based upon such payment,
issuance or distribution actually made.




	 	(d)	 	If and whenever at any time prior to the Time of Expiry an issuer bid or a
tender or exchange offer (other than an odd lot offer or a normal course issuer bid)
made by the Corporation or a Subsidiary of the Corporation to all or substantially all
of the Shareholders for all or any portion of the Common Shares where the cash and the
value of any other consideration included in such payment per Common Share exceeds the
Current Market Price per Common Share on the Trading Day immediately preceding the
commencement of the issuer bid or tender or exchange offer (any such issuer bid or
tender or exchange offer being called an “Issuer Bid”), the Exercise Price shall be
adjusted to a price determined by multiplying the applicable Exercise Price in effect
on the date of the completion of such Issuer Bid by a fraction, the numerator of which
shall be the product of (i) the number of Common Shares outstanding immediately prior
to the completion of the Issuer Bid (without giving effect to any reduction in respect
of any tendered or exchanged shares) and, (ii) the Current Market Price per Common
Share on the Trading Day immediately preceding the commencement of the Issuer Bid, and
the denominator of which shall be the sum of (i) the fair market value (determined in
good faith by the board of directors of the Corporation whose determination shall be
conclusive, subject to any required Regulatory Approval, and described in a resolution
of the board of directors of the Corporation) of the aggregate consideration paid by
the Corporation or subsidiary to holders of Common Shares upon the completion of such
Issuer Bid, and (ii) the product of (A) the difference between the number of Common
Shares outstanding immediately prior to the completion of the Issuer Bid (without
giving effect to any reduction in respect of tendered or










 



- 18 -


	 	 	 	exchanged shares) and the number of Common Shares actually purchased by the
Corporation or Subsidiary of the Corporation pursuant to the Issuer Bid, and (B)
the Current Market Price Per Common Share on the Trading Day immediately preceding
the commencement of the Issuer Bid.
	 
	 	(e)	 	If and whenever at any time prior to the Time of Expiry there shall be a
reclassification of Common Shares outstanding at such time or change of the Common
Shares into other shares or into other securities (other than a Share Reorganization,
a Rights Offering or a Special Distribution), or a consolidation, amalgamation,
arrangement or merger of the Corporation with or into any other corporation or other
entity (other than a consolidation, amalgamation, arrangement or merger which does not
result in any reclassification of the outstanding Common Shares or a change of the
Common Shares into other shares), or a sale, conveyance or transfer of the undertaking
or assets of the Corporation as an entirety or substantially as an entirety to another
corporation or entity in which the holders of Common Shares are entitled to receive
shares, other securities or property, including cash (other than transfers of the
property or assets of the Corporation which do not result in any reclassification of
the outstanding Common Shares or a change of the Common Shares into other shares) (any
of such events being herein called a “Capital Reorganization”), and subject to any
required Regulatory Approval, any holder who exercises his right to subscribe for and
purchase Common Shares pursuant to the exercise of Warrants after the effective date
of such Capital Reorganization shall be entitled to receive, and shall accept for the
same aggregate consideration in lieu of the number of Common Shares to which such
holder was theretofore entitled upon such exercise, the aggregate number of shares,
other securities or other property which such holder would have received as a result
of such Capital Reorganization had he exercised his right to acquire Underlying
Securities immediately prior to the effective date or record date, as the case may be,
of the Capital Reorganization and had he been the registered holder of such Underlying
Securities on such effective date or record date, as the case may be, subject to
adjustment thereafter in accordance with provisions the same, or nearly as may be
possible, as those contained in Section 4.1(b) and Section 4.1(c) hereof. If
determined appropriate by the directors, acting in good faith, appropriate adjustments
shall be made as a result of any such Capital Reorganization in the application of the
provisions set forth in this Section 4.1, with respect to the rights and interests
thereafter of the holder of a Warrant to the end that the provisions set forth in this
Section 4.1 shall thereafter correspondingly be made applicable as nearly as may be
reasonably possible in relation to any shares, other securities or other property
thereafter deliverable upon the exercise of the Warrant. Any such adjustment shall be
made by and set forth in an agreement supplemental hereto approved by action of the
directors, acting in good faith, and shall for all purposes be conclusively deemed to
be an appropriate adjustment.










 



- 19 -


	 	(f)	 	If and whenever at any time prior to the Time of Expiry there shall occur a
Share Reorganization, a Rights Offering, a Special Distribution or an Issuer Bid and
any such event results in an adjustment to the Exercise Price pursuant to the
provisions of this Section 4.1, the number of Common Shares purchasable upon the
exercise of each Warrant (at the adjusted Exercise Price) shall be adjusted
contemporaneously with the adjustment of the Exercise Price by multiplying the number
of Common Shares theretofore purchasable on the exercise thereof by a fraction, the
numerator of which shall be the applicable Exercise Price in effect immediately prior
to such adjustment and the denominator of which shall be the applicable Exercise Price
resulting from such adjustment.
	 
	 	(g)	 	In case the Corporation after the date of issue of the Warrants shall take
any action affecting the Common Shares, other than action described in this
Section 4.1, which in the opinion of the directors, acting reasonably, would
materially adversely affect the rights of the Warrantholders, the Exercise Price or
the number of Common Shares purchasable upon the exercise of each Warrant shall be
adjusted in such manner, if any, and at such time, by action of the directors, acting
reasonably, as they may determine to be equitable in the circumstances, but subject in
all cases to any necessary regulatory approvals.





Section 4.2 Adjustment Rules




     For the purposes of Section 4.1, any adjustment shall be made successively whenever an event
referred to therein shall occur, subject to the following provisions:




	 	(a)	 	all calculations shall be made to the nearest 1/100th of a Common Share;
	 
	 	(b)	 	no adjustment to an Exercise Price shall be required unless such adjustment
would result in a change of at least one per cent in the prevailing Exercise Price and
no adjustment shall be made in the number of Common Shares which may be subscribed for
upon exercise of the Warrant unless it would require a change of at least 1/100th of a
Common Share; provided, however, that any adjustments which, except for the provisions
of this Section 4.2(b) would otherwise have been required to be made shall be carried
forward and taken into account in any subsequent adjustment;
	 
	 	(c)	 	if any question shall arise with respect to adjustments provided for in this
Article 4, such question shall, absent manifest error, be conclusively determined by a
firm of chartered accountants appointed by the Corporation (who may be the
Corporation’s Auditors) and acceptable to the Warrant Agent, acting reasonably; such
chartered accountants shall have access to all necessary records of the Corporation
and such determination shall be binding on the Corporation, the Warrant Agent and the
Warrantholders, absent manifest error. In the event that any such determination is
made, the Corporation shall deliver a certificate to the Warrant Agent describing such
determination and confirming such consent;










 



- 20 -


	 	(d)	 	if the Corporation shall set a record date to determine the holders of its
Common Shares for the purpose of entitling them to receive any dividend or
distribution or any subscription or purchase rights, options or warrants and shall
thereafter and before the distribution to such Shareholders of any such dividend,
distribution or subscription or purchase rights legally abandon its plan to pay or
deliver such dividend, distribution or subscription or purchase rights, then no
adjustment in the Exercise Price or the number of Common Shares purchasable upon
exercise of the Warrant shall be required by reason of the setting of such record
date; and
	 
	 	(e)	 	as a condition precedent to the taking of any action which would require any
adjustment in any of the subscription rights pursuant to any of the Warrants, the
Corporation shall take any corporate action which may, in the opinion of Counsel, be
necessary in order that the Corporation has unissued and reserved in its authorized
capital, and may validly and legally issue as fully paid and non-assessable, all of
the Underlying Securities that the Warrantholders are entitled to receive on full
exercise thereof in accordance with the provisions hereof.





Section 4.3 Postponement of Subscription




     In any case where the application of Section 4.1 results in an increase in the number of
Underlying Securities taking effect immediately after the record date for a specific event, if any
Warrant is exercised after that record date and prior to completion of the event, the Corporation
may postpone the issuance to the holder of the Warrant of the Common Shares to which such
Warrantholder is entitled by reason of such adjustment but such Common Shares shall be so issued
and delivered to that holder upon completion of that event, with the number of such Common Shares
calculated on the basis of the number of Common Shares on the date that the Warrant was adjusted
for completion of that event and the Corporation shall deliver to the person or persons in whose
name or names the Common Shares are to be issued an appropriate instrument evidencing the right of
such person or persons to receive such Common Shares and the right to receive any dividends or
other distributions which, but for the provisions of this Section 4.3, such person or persons would
have been entitled to receive in respect of such Common Shares from and after the date that the
Warrant was exercised in respect thereof.



Section 4.4 Notice of Adjustment of Exercise Rights





	 	(a)	 	At least 14 days prior to the effective date or record date, as the case may
be, of any event that requires or that may require an adjustment in any of the
exercise rights pursuant to any of the Warrants, including the number of Underlying
Securities that may be acquired upon the exercise thereof, the Corporation shall:






	 	(i)	 	file with the Warrant Agent a certificate of the Corporation
specifying the particulars of such event (including the record date or the
effective date for such event) and, if determinable, the required adjustment
and the computation of such adjustment; and










 



- 21 -


	 	(ii)	 	give notice to the Warrantholders of the particulars of such
event (including the record date or the effective date for such event) and, if
determinable, the required adjustment, in accordance with the provisions set
out in Section 10.2.






	 	(b)	 	In case any adjustment for which a notice in Section 4.4(a) has been given is
not then determinable, the Corporation shall promptly after such adjustment is
determinable:






	 	(i)	 	file a certificate of the Corporation with the Warrant Agent
showing how such adjustment was computed; and
	 
	 	(ii)	 	give notice to the Warrantholders of the adjustment, in
accordance with the provisions set out in Section 10.2.






	 	(c)	 	The Warrant Agent may act and rely for all purposes upon any certificates and
any other documents filed by the Corporation pursuant to this Section 4.4.





Section 4.5 No Action after Notice




     The Corporation shall not take any other corporate action that might deprive any Warrantholder
of the opportunity to exercise Warrants during the 14-day period after the giving of the notice set
forth in Section 4.4(a).



Section 4.6 No Duty to Inquire




     The Warrant Agent shall not at any time be under any duty or responsibility to any
Warrantholder to determine whether any facts exist which may require any adjustment contemplated by
Section 4.1 and Section 4.2, or with respect to the nature or extent of any such adjustment when
made, or with respect to the method employed in making the same. The Warrant Agent shall not be
accountable with respect to the validity or value (or the kind or amount) of any securities or
property which may at any time be issued or delivered upon the exercise of any Warrant.



Section 4.7 Rights Issued in Respect of Underlying Securities on Exercise




     Each Common Share issued on the exercise of Warrants shall be entitled to receive the
appropriate number of purchase rights (“Rights”), if any, that all Common Shares are entitled to
receive, and the certificates representing such Common Shares shall bear such legends, if any, in
each case as may be provided by the terms of any shareholder rights agreement adopted by the
Corporation, as the same may be amended from time to time (a “Rights Agreement”); provided that
such Rights Agreement requires that each Common Share issued on exercise of Warrants at any time
prior to the distribution of separate certificates representing the Rights be entitled to receive
such Rights, then, not withstanding anything else to the contrary in this Indenture, there shall
not be any adjustment made pursuant to this Article 4 as a result of the issuance of Rights, the
distribution of separate certificates representing the Rights, the exercise or redemption of such
Rights in accordance with any such Rights Agreement, or the termination or invalidation of such
Rights.









 



- 22 -


ARTICLE 5

RIGHTS OF THE CORPORATION AND COVENANTS




Section 5.1 General Covenants




     The Corporation covenants with the Warrant Agent that so long as any Warrants remain
outstanding:




	 	(a)	 	it will allot and reserve and keep available a sufficient number of Common
Shares for the purpose of enabling it to satisfy its obligations to issue Common
Shares upon the exercise of the Warrants;
	 
	 	(b)	 	it will cause the Common Shares and the certificates representing the Common
Shares from time to time acquired pursuant to the exercise of the Warrants to be duly
issued and delivered in accordance with the Warrant Certificates and the terms hereof;
	 
	 	(c)	 	upon payment of the Exercise Price, all Common Shares which shall be issued
upon exercise of the rights to acquire provided for herein and in the Warrant
Certificates shall be fully paid and non-assessable;
	 
	 	(d)	 	it will maintain its corporate existence carry on and conduct its business in
a proper, efficient and business-like manner and, in accordance with good business
practice, keep or cause to be kept proper books of account in accordance with United
States generally accepted accounting practice, and, if and whenever required in
writing by the Warrant Agent, file with the Warrant Agent copies of all annual and
interim financial statements of the Corporation furnished to its shareholders during
the term of this Indenture;
	 
	 	(e)	 	subject to a Capital Reorganization described in Section 4.1(e) above or a
tender offer, it will use its reasonable best efforts to ensure that all Common Shares
outstanding or issuable from time to time (including without limitation the Underlying
Securities) continue to be or are listed and posted for trading on the Amex and the
Toronto Stock Exchange;
	 
	 	(f)	 	subject to a Capital Reorganization described in Section 4.1(e) above or a
tender offer, it will use its reasonable efforts to maintain its status as a reporting
issuer or equivalent in good standing under the federal securities laws of the United
States and in each of the provinces of Canada, other than Quebec, and it will make all
requisite filings to be made by it under applicable United States and Canadian
securities legislation and stock exchange rules including without limitation to report
the exercise of the rights to acquire Common Shares pursuant to Warrants or otherwise;
	 
	 	(g)	 	if at any time no Registration Statement is effective, it will give notice to
the Warrant Agent forthwith and will give notice, in accordance with the provisions
set out in Article 10, together with a form for notice to exercise for the cashless
exercise or redemption right set out in Section 3.9 to each Warrantholder shown on the
register of holders of Warrants kept by the










 



- 23 -


	 	 	 	Warrant Agent pursuant to this Indenture of such fact as soon as reasonably
practicable, but in any event such notice must be sent within five Business Days,
after learning that no Registration Statement is effective. Such notice must be
sent by fax if possible to any securities depositary that is a registered holder;
	 
	 	(h)	 	it will use reasonable best efforts to maintain the Registration Statement
continuously effective under the U.S. Securities Act until the Expiry Date or exercise
of all Warrants (provided, however, that nothing shall prevent the Corporation’s
amalgamation, arrangement, merger or sale, including any take-over bid, and any
associated delisting or deregistration or ceasing to be a reporting issuer, provided
that, so long as the Warrants are still outstanding and represent a right to acquire
securities of the acquiring company, the acquiring company shall assume our
obligations under this Warrant Indenture);
	 
	 	(i)	 	if, in the opinion of Counsel, any instrument is required to be filed with,
or any permission, order or ruling is required to be obtained from any securities
administrator, regulatory agency or governmental authority in Canada or the United
States or any other step is required under any federal or provincial law of Canada or
any federal or state law of the United States before the Underlying Securities may be
issued or delivered to a Warrantholder, the Corporation will use its reasonable best
efforts to file such instrument, obtain such permission, order or ruling or take all
such other actions, at its expense, as are required; and
	 
	 	(j)	 	generally, it will well and truly perform and carry out all of the acts or
things to be done by it as provided in this Indenture.





Section 5.2 Warrant Agent’s Remuneration and Expenses




     The Corporation covenants that it will pay to the Warrant Agent from time to time reasonable
remuneration for its services hereunder and will pay or reimburse the Warrant Agent upon its
request for all reasonable expenses, disbursements and advances incurred or made by the Warrant
Agent in the administration or execution of the trusts hereby created (including the reasonable
compensation and the disbursements of its Counsel and all other advisers and assistants not
regularly in its employ) both before any default hereunder and thereafter until all duties of the
Warrant Agent hereunder shall be finally and fully performed, except any such expense, disbursement
or advance as may arise out of or result from the Warrant Agent’s gross negligence, wilful
misconduct or bad faith.



     Any amount due to the Warrant Agent under this Section 5.2 and unpaid for 30 days after a
request for such payment has been made shall bear interest at the then current rate charged by the
Warrant Agent, and such interest amount shall be added to and form part of the Warrant Agent’s
remuneration and shall become due and payable immediately by the Corporation.









 



- 24 -


Section 5.3 Performance of Covenants by Warrant Agent




     If the Corporation shall fail to perform any of its covenants contained in this Indenture, the
Warrant Agent shall notify the Warrantholders of such failure on the part of the Corporation in
accordance with Section 6.4 or may itself perform any of the covenants capable of being performed
by it but, subject to Section 9.2, shall be under no obligation to perform said covenants. All sums
expended or advanced by the Warrant Agent in so doing shall be repayable as provided in
Section 5.2. No such performance, expenditure or advance by the Warrant Agent shall relieve the
Corporation of any default hereunder or of its continuing obligations under the covenants herein
contained.



Section 5.4 Optional Purchases by the Corporation




     Subject to compliance with applicable securities legislation, the Corporation may purchase
from time to time by private contract or otherwise any of the Warrants. Any such purchase may be
made in such manner, from such persons and on such other terms as the Corporation, in its sole
discretion, may negotiate with such persons. Any Warrant Certificates representing the Warrants
purchased pursuant to this Section 5.4 shall forthwith be delivered to and cancelled by the Warrant
Agent. No Warrants shall be issued in replacement thereof.



ARTICLE 6

ENFORCEMENT




Section 6.1 Suits by Warrantholders





	(1)	 	No Warrantholder shall have any right to institute any action, suit or proceeding at law or
in equity for the purpose of enforcing the execution of this Indenture or power hereunder or
seeking the liquidation of the Corporation, its winding-up, composition of its debts under any
law relating to bankruptcy, insolvency, or reorganisation or relief of the debtors of the
Corporation, or the seeking appointment of a receiver, receiver and manager, Warrant Agent,
custodian or similar official for the Corporation or any substantial part of the Corporation’s
property or assets unless (i) the Warrantholders by Extraordinary Resolution shall have made a
request to the Warrant Agent and the Warrant Agent shall have been afforded reasonable
opportunity to proceed or complete any action or suit for any such purpose whether or not in
its own name; and (ii) the Warrantholders or any of them shall have furnished to the Warrant
Agent, when so requested by the Warrant Agent, sufficient funds and security and indemnity
reasonably satisfactory to it against the costs, expenses and liabilities to be incurred
therein or thereby; and (iii) the Warrant Agent shall have failed to act within a reasonable
time or where the Warrant Agent shall have failed to have actively pursued any such action,
suit or proceeding.






	(2)	 	Subject to the provisions of this Section and Section 7.10, all or any of the rights
conferred upon a Warrantholder by the terms of a Warrant may be enforced by such Warrantholder
by appropriate legal proceedings without prejudice to the right which is hereby conferred upon
the Warrant Agent to proceed in its own name to enforce each and all of the provisions herein
contained for the benefit of the Warrantholders from time to time.










 



- 25 -







Section 6.2 Immunity of Shareholders, etc.




     The Warrant Agent and, by the acceptance of the Warrant Certificates and as part of the
consideration for the issue of the Warrants, the Warrantholders hereby waive and release any right,
cause of action or remedy now or hereafter existing in any jurisdiction against any incorporator or
any past, present or future shareholder, director, officer, employee or agent of the Corporation or
of any “successor Corporation” (as such term is defined in Section 8.2) on any covenant, agreement,
representation or warranty by the Corporation contained herein or in the Warrant Certificates.



Section 6.3 Limitation of Liability




     The obligations hereunder are not personally binding upon, nor shall resort hereunder be had
to, the private property of any of the past, present or future shareholders, directors, officers,
employees or agents of the Corporation or of any successor corporation, but only the property of
the Corporation or of any successor corporation shall be bound in respect hereof.



Section 6.4 Waiver of Default




     Upon the happening of any default hereunder, the Warrant Agent shall provide a notice as
provided in Section 10.2 to the Warrantholders setting out, in reasonable detail, the particulars
of such default and:




	 	(a)	 	the holders of greater than 50% of the Warrants then outstanding shall have
the power (in addition to the powers exercisable by Extraordinary Resolution) by
requisition in writing to instruct the Warrant Agent to waive any default hereunder
and the Warrant Agent shall thereupon waive the default upon such terms and conditions
as shall be prescribed in such requisition; or
	 
	 	(b)	 	the Warrant Agent shall have power to waive any default hereunder upon such
terms and conditions as the Warrant Agent may deem advisable, if, in the Warrant
Agent’s opinion, the same shall have been cured or adequate provision made therefor;
provided that no delay or omission of the Warrant Agent or of the Warrantholders to
exercise any right or power accruing upon any default shall impair any such right or
power or shall be construed to be a waiver of any such default or acquiescence therein
and provided further that no act or omission either of the Warrant Agent or of the
Warrantholders in the premises shall extend to or be taken in any manner whatsoever to
affect any subsequent default hereunder of the rights resulting therefrom.





ARTICLE 7

MEETINGS OF WARRANTHOLDERS




Section 7.1 Right to Convene Meetings




     The Warrant Agent may at any time and from time to time, and shall on receipt of a written
request of the Corporation or of a Warrantholders’ Request and upon being indemnified to its
reasonable satisfaction by the Corporation or by the Warrantholders signing such Warrantholders’
Request against the cost which may be incurred in connection with the calling and holding of such
meeting, convene a meeting of the Warrantholders. In the event of the Warrant Agent failing to so
convene a meeting within ten (10) days after









 



- 26 -



receipt of such written request of the Corporation or such Warrantholders’ Request and
indemnity given as aforesaid, the Corporation or such Warrantholders, as the case may be, may
convene such meeting. Every such meeting shall be held in the City of Denver, Colorado or at such
other place as may be approved or determined by the Warrant Agent.



Section 7.2 Notice




     At least twenty-one calendar days prior notice of any meeting of Warrantholders shall be given
to the Warrantholders in the manner provided for in Section 10.2 and a copy of such notice shall be
sent by mail to the Warrant Agent (unless the meeting has been called by the Warrant Agent) and to
the Corporation (unless the meeting has been called by the Corporation). Such notice shall state
the time when and the place where the meeting is to be held, shall state briefly the general nature
of the business to be transacted thereat and shall contain such information as is reasonably
necessary to enable the Warrantholders to make a reasoned decision on the matter, but it shall not
be necessary for any such notice to set out the terms of any resolution to be proposed or any of
the provisions of this Article 7.



Section 7.3 Chairman




     An individual (who need not be a Warrantholder) designated in writing by the Warrant Agent
shall be chairman of any meeting of Warrantholders and if no individual is so designated, or if the
individual so designated is not present within 15 minutes from the time fixed for the holding of
the meeting, the Warrantholders present in person or by proxy shall choose some individual present
to be chairman.



Section 7.4 Quorum




     Subject to the provisions of Section 7.11, at any meeting of the Warrantholders a quorum shall
consist of Warrantholders present in person or by proxy and entitled to acquire at least 25% of the
aggregate number of Common Shares which could be acquired pursuant to all the then outstanding
Warrants, provided that at least two persons entitled to vote thereat are personally present. If a
quorum of the Warrantholders shall not be present within 30 minutes from the time fixed for holding
any meeting, the meeting, if summoned by Warrantholders or on a Warrantholders’ Request, shall be
dissolved; but in any other case the meeting shall be adjourned to the same day in the next week
(unless such day is not a Business Day, in which case it shall be adjourned to the next following
Business Day) at the same time and place, to the extent possible, and no notice of the adjournment
need be given. Any business may be brought before or dealt with at an adjourned meeting which might
have been dealt with at the original meeting in accordance with the notice calling the same. No
business shall be transacted at any meeting unless a quorum be present at the commencement of
business. At the adjourned meeting the Warrantholders present in person or by proxy shall form a
quorum and may transact the business for which the meeting was originally convened, notwithstanding
that they may not be entitled to acquire at least 25% of the aggregate number of Common Shares
which may be acquired pursuant to all then outstanding Warrants.



Section 7.5 Power to Adjourn




     The chairman of any meeting at which a quorum of the Warrantholders is present may, with the
consent of the meeting, adjourn any such meeting, and no notice of such adjournment need be given
except such notice, if any, as the meeting may prescribe.









 



- 27 -


Section 7.6 Show of Hands




     Every question submitted to a meeting shall be decided in the first place by a majority of the
votes given on a show of hands except that votes on an Extraordinary Resolution shall be given in
the manner hereinafter provided. At any such meeting, unless a poll is duly demanded as herein
provided, a declaration by the chairman that a resolution has been carried or carried unanimously
or by a particular majority or lost or not carried by a particular majority shall be conclusive
evidence of the fact.



Section 7.7 Poll and Voting




     On every Extraordinary Resolution, and on any other question submitted to a meeting and after
a vote by show of hands when demanded by the chairman or by one or more of the Warrantholders
acting in person or by proxy, a poll shall be taken in such manner as the chairman shall direct.
Questions other than those required to be determined by Extraordinary Resolution shall be decided
by a majority of the votes cast on the poll.



     On a show of hands, every person who is present and entitled to vote, whether as a
Warrantholder or as proxy for one or more absent Warrantholders, or both, shall have one vote. On a
poll, each Warrantholder present in person or represented by a proxy duly appointed by instrument
in writing shall be entitled to one vote in respect of each whole Common Share which he is entitled
to acquire pursuant to the Warrant or Warrants then held or represented by it. A proxy need not be
a Warrantholder. The chairman of any meeting shall be entitled, both on a show of hands and on a
poll, to vote in respect of the Warrants, if any, held or represented by him.



Section 7.8 Regulations




     The Warrant Agent, or the Corporation with the approval of the Warrant Agent, may from time to
time make and from time to time vary such regulations as it shall think fit for:




	 	(a)	 	the setting of the record date for a meeting of Warrantholders for the
purpose of determining Warrantholders entitled to receive notice of and to vote at the
meeting;
	 
	 	(b)	 	the issue of voting certificates by any bank, trust company or other
depositary satisfactory to the Warrant Agent stating that the Warrant Certificates
specified therein have been deposited with it by a named person and will remain on
deposit until after the meeting, which voting certificate shall entitle the persons
named therein to be present and vote at any such meeting and at any adjournment
thereof or to appoint a proxy or proxies to represent them and vote for them at any
such meeting and at any adjournment thereof in the same manner and with the same
effect as though the persons so named in such voting certificates were the actual
bearers of the Warrant Certificates specified therein;
	 
	 	(c)	 	the deposit of voting certificates and instruments appointing proxies at such
place and time as the Warrant Agent, the Corporation or the Warrantholders convening
the meeting, as the case may be, may in the notice convening the meeting direct;










 



- 28 -


	 	(d)	 	the deposit of voting certificates and instruments appointing proxies at some
approved place or places other than the place at which the meeting is to be held and
enabling particulars of such instruments appointing proxies to be mailed or telecopied
before the meeting to the Corporation or to the Warrant Agent at the place where the
same is to be held and for the voting of proxies so deposited as though the
instruments themselves were produced at the meeting;
	 
	 	(e)	 	the form of the instrument of proxy; and
	 
	 	(f)	 	generally for the calling of meetings of Warrantholders and the conduct of
business thereat.





     Any regulations so made shall be binding and effective and the votes given in accordance
therewith shall be valid and shall be counted. Save as such regulations may provide, the only
persons who shall be recognized at any meeting as a Warrantholder, or be entitled to vote or be
present at the meeting in respect thereof (subject to Section 7.9), shall be Warrantholders or
proxies of Warrantholders.



Section 7.9 Corporation and Warrant Agent May be Represented




     The Corporation and the Warrant Agent, by their respective directors and officers, and the
Counsel for the Corporation and for the Warrant Agent may attend any meeting of the Warrantholders,
but shall not be entitled to vote thereat, whether in respect of any Warrants held by them or
otherwise.



Section 7.10 Powers Exercisable by Extraordinary Resolution




     In addition to all other powers conferred upon them by any other provisions of this Indenture
or by law, the Warrantholders at a meeting shall, subject to the provisions of Section 7.11, have
the power, exercisable from time to time by Extraordinary Resolution:




	 	(a)	 	to agree to any modification, abrogation, alteration, compromise or
arrangement of the rights of Warrantholders or the Warrant Agent in its capacity as
Warrant Agent hereunder or on behalf of the Warrantholders against the Corporation
whether such rights arise under this Indenture or the Warrant Certificates or
otherwise;
	 
	 	(b)	 	to amend, alter or repeal any Extraordinary Resolution previously passed or
sanctioned by the Warrantholders;
	 
	 	(c)	 	to direct or to authorize the Warrant Agent to enforce any of the covenants
on the part of the Corporation contained in this Indenture or the Warrant Certificates
or to enforce any of the rights of the Warrantholders in any manner specified in such
Extraordinary Resolution or to refrain from enforcing any such covenant or right;
	 
	 	(d)	 	to waive, and to direct the Warrant Agent to waive, any default on the part
of the Corporation in complying with any provisions of this Indenture or the










 



- 29 -


	 	 	 	Warrant Certificates either unconditionally or upon any conditions specified in
such Extraordinary Resolution;
	 
	 	(e)	 	to restrain any Warrantholder from taking or instituting any suit, action or
proceeding against the Corporation for the enforcement of any of the covenants on the
part of the Corporation in this Indenture or the Warrant Certificates or to enforce
any of the rights of the Warrantholders;
	 
	 	(f)	 	to direct any Warrantholder who, as such, has brought any suit, action or
proceeding to stay or to discontinue or otherwise to deal with the same upon payment
of the costs, charges and expenses reasonably and properly incurred by such
Warrantholder in connection therewith;
	 
	 	(g)	 	to assent to any change in or omission from the provisions contained in the
Warrant Certificates and this Indenture or any ancillary or supplemental instrument
which may be agreed to by the Corporation, and to authorize the Warrant Agent to
concur in and execute any ancillary or supplemental indenture embodying the change or
omission; and
	 
	 	(h)	 	with the consent of the Corporation (which consent shall not be unreasonably
withheld), to remove the Warrant Agent or its successor in office and to appoint a new
Warrant Agent or Warrant Agents to take the place of the Warrant Agent so removed.





Section 7.11 Meaning of Extraordinary Resolution





	(1)	 	The expression “Extraordinary Resolution” when used in this Indenture means, subject as
hereinafter provided in this Section 7.11 and in Section 7.14, a resolution proposed at a
meeting of Warrantholders duly convened for that purpose and held in accordance with the
provisions of this Article 7 at which there are present in person or by proxy Warrantholders
entitled to acquire at least 25% of the aggregate number of Common Shares which may be
acquired pursuant to all the then outstanding Warrants and passed by the affirmative votes of
not less than two-thirds of the votes cast upon such resolution.






	(2)	 	If, at the meeting at which an Extraordinary Resolution is to be considered, Warrantholders
entitled to acquire at least 25% of the aggregate number of Common Shares which may be
acquired pursuant to all the then outstanding Warrants are not present in person or by proxy
within 30 minutes after the time appointed for the meeting, then the meeting, if convened by
Warrantholders or on a Warrantholders’ Request, shall be dissolved; but in any other case it
shall stand adjourned to such day, being not less than 15 or more than 60 days later, and to
such place and time as may be appointed by the chairman. Not less than ten days’ prior notice
shall be given of the time and place of such adjourned meeting in the manner provided for in
Section 10.2. Such notice shall state that at the adjourned meeting the Warrantholders present
in person or by proxy shall form a quorum but it shall not be necessary to set forth the
purposes for which the meeting was originally called or any other particulars. At the
adjourned meeting the Warrantholders present in person or by proxy shall form a quorum and may
transact the business for which the meeting was










 



- 30 -


		 	originally convened and a resolution proposed at such adjourned meeting and passed by the
requisite vote as provided in Section 7.11(1) shall be an Extraordinary Resolution within
the meaning of this Indenture notwithstanding that Warrantholders entitled to acquire at
least 25% of the aggregate number of Common Shares which may be acquired pursuant to all
the then outstanding Warrants are not present in person or by proxy at such adjourned
meeting.
	 
	(3)	 	Votes on an Extraordinary Resolution shall always be given on a poll and no demand for a poll
on an Extraordinary Resolution shall be necessary.





Section 7.12 Powers Cumulative




     Any one or more of the powers or any combination of the powers in this Indenture stated to be
exercisable by the Warrantholders by Extraordinary Resolution or otherwise may be exercised from
time to time and the exercise of any one or more of such powers or any combination of powers from
time to time shall not be deemed to exhaust the right of the Warrantholders to exercise such power
or powers or combination of powers then or thereafter from time to time.



Section 7.13 Minutes




     Minutes of all resolutions and proceedings at every meeting of Warrantholders shall be made
and duly entered in books to be provided from time to time for that purpose by the Warrant Agent at
the expense of the Corporation, and any such minutes as aforesaid, if signed by the chairman or the
secretary of the meeting at which such resolutions were passed or proceedings had shall be prima
facie evidence of the matters therein stated and, until the contrary is proved, every such meeting
in respect of the proceedings of which minutes shall have been made shall be deemed to have been
duly convened and held, and all resolutions passed thereat or proceedings taken shall be deemed to
have been duly passed and taken.



Section 7.14 Instruments in Writing




     All actions which may be taken and all powers that may be exercised by the Warrantholders at a
meeting held as provided in this Article 7 may also be taken and exercised by Warrantholders
entitled to acquire at least 66 2/3% of the aggregate number of Common Shares which may be acquired
pursuant to all the then outstanding Warrants by an instrument in writing signed in one or more
counterparts by such Warrantholders in person or by attorney duly appointed in writing, and the
expression “Extraordinary Resolution” when used in this Indenture shall include an instrument so
signed.



Section 7.15 Binding Effect of Resolutions




     Every resolution and every Extraordinary Resolution passed in accordance with the provisions
of this Article 7 at a meeting of Warrantholders shall be binding upon all the Warrantholders,
whether present at or absent from such meeting, and every instrument in writing signed by
Warrantholders in accordance with Section 7.14 shall be binding upon all the Warrantholders,
whether signatories thereto or not, and each and every Warrantholder and the Warrant Agent (subject
to the provisions for indemnity herein contained) shall be bound to give effect accordingly to
every such resolution and instrument in writing.












 




- 31 -


Section 7.16 Holdings by Corporation Disregarded




     In determining whether Warrantholders holding Warrant Certificates evidencing the entitlement
to acquire the required number of Common Shares are present at a meeting of Warrantholders for the
purpose of determining a quorum or have concurred in any consent, waiver, Extraordinary Resolution,
Warrantholders’ Request or other action under this Indenture, Warrants owned legally or
beneficially by the Corporation or any Subsidiary of the Corporation, if any, shall be disregarded
in accordance with the provisions of Section 10.6.



ARTICLE 8

SUPPLEMENTAL INDENTURES




Section 8.1 Provision for Supplemental Indentures for Certain Purposes




     From time to time the Corporation (when authorized by action of the directors) and the Warrant
Agent may, subject to the provisions hereof, and they shall, when so directed in accordance with
the provisions hereof, execute and deliver by their proper officers, indentures or instruments
supplemental hereto, which thereafter shall form part hereof, for any one or more or all of the
following purposes:




	 	(a)	 	setting forth any adjustments resulting from the application of the
provisions of Article 4;
	 
	 	(b)	 	adding to the provisions hereof such additional covenants and enforcement
provisions as, in the opinion of Counsel, are necessary or advisable in the premises,
provided that the same are not in the opinion of the Warrant Agent prejudicial to the
interests of the Warrantholders as a group;
	 
	 	(c)	 	giving effect to any Extraordinary Resolution passed as provided in Article
7;
	 
	 	(d)	 	making such provisions not inconsistent with this Indenture as may be
necessary or desirable with respect to matters or questions arising hereunder or for
the purpose of obtaining a listing or quotation of the Warrants on any stock exchange,
provided that such provisions are not, in the opinion of the Warrant Agent,
prejudicial to the interests of the Warrantholders;
	 
	 	(e)	 	adding to or altering the provisions hereof in respect of the transfer of
Warrants, making provision for the exchange of Warrant Certificates, and making any
modification in the form of the Warrant Certificates which does not affect the
substance thereof;
	 
	 	(f)	 	modifying any of the provisions of this Indenture, including relieving the
Corporation from any of the obligations, conditions or restrictions herein contained,
provided that such modification or relief shall be or become operative or effective
only if, in the opinion of the Warrant Agent, such modification or relief in no way
prejudices any of the rights of the Warrantholders or of the Warrant Agent, and
provided further that the Warrant Agent may in its sole discretion decline to enter
into any such










 



- 32 -


	 	 	 	supplemental indenture which in its opinion may not afford adequate protection to
the Warrant Agent when the same shall become operative; and






	 	(g)	 	for any other purpose not inconsistent with the terms of this Indenture,
including the correction or rectification of any ambiguities, defective or
inconsistent provisions, errors, mistakes or omissions herein, provided that in the
opinion of the Warrant Agent the rights of the Warrant Agent and of the Warrantholders
are in no way prejudiced thereby.





Section 8.2 Successor Corporations




     In the case of the consolidation, amalgamation, arrangement, merger or transfer of the
undertaking or assets of the Corporation as an entirety or substantially as an entirety to another
corporation (“Successor Corporation”), the Successor Corporation resulting from such consolidation,
amalgamation, merger or transfer (if not the Corporation) shall expressly assume, by supplemental
indenture satisfactory in form to the Warrant Agent and executed and delivered to the Warrant
Agent, the due and punctual performance and observance of each and every covenant and condition of
this Indenture to be performed and observed by the Corporation, and in any event shall be bound by
the provisions hereof and all obligations for the due and punctual performance and observance of
each and every covenant and condition of this Indenture to be performance and observed by the
Corporation.



ARTICLE 9

CONCERNING THE WARRANT AGENT




Section 9.1 Trust Indenture Legislation





	(1)	 	If and to the extent that any provision of this Indenture limits, qualifies or conflicts with
a mandatory requirement of Applicable Legislation, such mandatory requirement shall prevail.
	 
	(2)	 	The Corporation and the Warrant Agent agree that each will, at all times in relation to this
Indenture and any action to be taken hereunder, observe and comply with and be entitled to the
benefits of Applicable Legislation.





Section 9.2 Rights and Duties of Warrant Agent





	(1)	 	In the exercise of the rights and duties prescribed or conferred by the terms of this
Indenture, the Warrant Agent shall exercise that degree of care, diligence and skill that a
reasonably prudent Warrant Agent and/or custodian would exercise in comparable circumstances.
No provision of this Indenture shall be construed to relieve the Warrant Agent from, or
require any other person to indemnify the Warrant Agent against, liability for its own gross
negligent action, its own gross negligent failure to act, or its own wilful misconduct or bad
faith.
	 
	(2)	 	In addition to Section 6.1 above, the obligation of the Warrant Agent to commence or continue
any act, action or proceeding for the purpose of enforcing any rights of the Warrant Agent or
the Warrantholders hereunder shall be conditional upon the Warrantholders furnishing, when
required by notice by the Warrant Agent, sufficient funds to commence or to continue such act,
action or proceeding and an indemnity










 



- 33 -


	 	 	reasonably satisfactory to the Warrant Agent to protect and to hold harmless the Warrant
Agent against the costs, charges and expenses and liabilities to be incurred thereby and
any loss and damage it may suffer by reason thereof. None of the provisions contained in
this Indenture shall require the Warrant Agent to expend or to risk its own funds or
otherwise to incur financial liability in the performance of any of its duties or in the
exercise of any of its rights or powers.
	 
	(3)	 	The Warrant Agent may, before commencing or at any time during the continuance of any such
act, action or proceeding, require the Warrantholders, at whose instance it is acting to
deposit with the Warrant Agent the Warrants held by them, for which Warrants the Warrant Agent
shall issue receipts.
	 
	(4)	 	Every provision of this Indenture that by its terms relieves the Warrant Agent of liability
or entitles it to rely upon any evidence submitted to it is subject to the provisions of
Applicable Legislation, of this Section 9.2 and of Section 9.3.
	 
	(5)	 	The Warrant Agent shall incur no liability and it shall be fully protected in acting or not
acting in accordance with any opinion or instruction of counsel or other expert, whether
retained or employed by the Corporation or the Warrant Agent, in relation to any matters
arising in fulfilling its duties and obligations hereof.





Section 9.3 Evidence, Experts and Advisers





	(1)	 	In addition to the reports, certificates, opinions and other evidence required by this
Indenture, the Corporation shall furnish to the Warrant Agent such additional evidence of
compliance with any provision hereof, and in such form, as may be prescribed by Applicable
Legislation or as the Warrant Agent may reasonably require by written notice to the
Corporation.
	 
	(2)	 	In the exercise of its rights and duties hereunder, the Warrant Agent may, if it is acting in
good faith, rely as to the truth of the statements and the accuracy of the opinions expressed
in statutory declarations, opinions, reports, written requests, consents, or orders of the
Corporation, certificates of the Corporation or other evidence furnished to the Warrant Agent
pursuant to a request of the Warrant Agent.
	 
	(3)	 	Whenever it is provided in this Indenture or under Applicable Legislation that the
Corporation shall deposit with the Warrant Agent resolutions, certificates, reports, opinions,
requests, orders or other documents, it is intended that the trust, accuracy and good faith on
the effective date thereof and the facts and opinions stated in all such documents so
deposited shall, in each and every such case, be conditions precedent to the right of the
Corporation to have the Warrant Agent take the action to be based thereon.
	 
	(4)	 	Proof of the execution of an instrument in writing, including a Warrantholders’ Request, by
any Warrantholder may be made by the certificate of a notary public, or other officer with
similar powers, that the person signing such instrument acknowledged to it the execution
thereof, or by an affidavit of a witness to such execution or in any other manner which the
Warrant Agent may consider adequate.










 



- 34 -


	(5)	 	The Warrant Agent may employ or retain such Counsel, accountants, appraisers or other experts
or advisers as it may reasonably require for the purpose of discharging its duties hereunder
and may pay reasonable remuneration for all services so performed by any of them, without
taxation of costs of any Counsel, and shall not be responsible for any misconduct or
negligence on the part of any such experts or advisers who have been appointed with due care
by the Warrant Agent. All costs and expenses related to such employment or retention shall
become and form part of the Warrant Agent’s remuneration as described in Section 5.2 above.





Section 9.4 Documents, Monies, etc. Held by Warrant Agent




     Any securities, documents of title or other instruments that may at any time be held by the
Warrant Agent subject to the trusts hereof may be placed in the deposit vaults of the Warrant Agent
or of any chartered bank in the State of New York, the State of Colorado or a Canadian chartered
bank listed in Schedule I of the Bank Act (Canada) or deposited for safekeeping with any such bank.
Unless herein otherwise expressly provided, any monies so held pending the application or
withdrawal thereof under any provisions of this Indenture, upon the direction of the Corporation,
shall be or, with the consent of the Corporation, may be deposited in the name of the Warrant Agent
in any FDIC insured chartered bank in the State of New York, the State of Colorado or Canadian
chartered bank listed in Schedule I of the Bank Act (Canada) at the rate of interest (if any) then
current on similar deposits; or



Section 9.5 Actions by Warrant Agent to Protect Interest




     The Warrant Agent shall have power to institute and to maintain such actions and proceedings
as it may consider necessary or expedient to preserve, protect or enforce its interests and the
interests of the Warrantholders.



Section 9.6 Warrant Agent Not Required to Give Security




     The Warrant Agent shall not be required to give any bond or security in respect of the
execution of the trusts and powers of this Indenture or otherwise in respect of the premises.



Section 9.7 Protection of Warrant Agent




     By way of supplement to the provisions of any law for the time being relating to Warrant
Agents it is expressly declared and agreed as follows:




	 	(a)	 	the Warrant Agent shall not be liable for or by reason of any statements of
fact or recitals in this Indenture or in the Warrant Certificates (except the
representation contained in Section 9.9 or in the certificate of the Warrant Agent on
the Warrant Certificates) or be required to verify the same, but all such statements
or recitals are and shall be deemed to be made by the Corporation;
	 
	 	(b)	 	nothing herein contained shall impose any obligation on the Warrant Agent to
see to or to require evidence of the registration or filing (or renewal thereof) of
this Indenture or any instrument ancillary or supplemental hereto;
	 
	 	(c)	 	the Warrant Agent shall not be bound to give notice to any person or persons
of the execution hereof;










 



- 35 -


	 	(d)	 	the Corporation indemnifies and saves harmless the Warrant Agent and its
officers from and against any and all liabilities, losses, costs, claims, actions, or
demands whatsoever which may be brought against the Warrant Agent or which it may
suffer or incur as a result of or arising out of the performance of its duties and
obligations under this Indenture, save only in the event of the gross negligent
failure to act, or the wilful misconduct or bad faith of the Warrant Agent. It is
understood and agreed that this indemnification shall survive the termination or
discharge of this Indenture or the resignation of the Warrant Agent;
	 
	 	(e)	 	The Warrant Agent shall incur no liability with respect to the delivery or
non-delivery of any certificate or certificates whether delivered by hand, mail or any
other means;
	 
	 	(f)	 	The Warrant Agent shall not be liable for any error in judgement or for any
act performed or step taken or omitted by it in good faith for any mistake, in fact or
in law, or for anything it may do or refrain from doing in connection herewith except
arising out of its own gross negligence or wilful misconduct or bad faith; and
	 
	 	(g)	 	The Warrant Agent will not be bound to give any notice or do or take any act,
action or proceeding by virtue of the powers conferred on it by this Indenture until
it has been required so to do under the terms of this Indenture. The Warrant Agent
will not be required to take notice of any default under this Indenture unless and
until notified in writing of such default which notice will specify the default
desired to be brought to the attention of the Warrant Agent. In the absence of such
notice, the Warrant Agent may for all purposes of this Indenture assume that no
default has been made in the observance or performance of any of the representations,
warranties, covenants, agreements or conditions contained in this Indenture. Any such
notice will in no way limit any discretion given to the Warrant Agent in this
Indenture to determine whether or not to take action with respect to any default.





Section 9.8 Replacement of Warrant Agent; Successor by Merger





	(1)	 	The Warrant Agent may resign its trust and be discharged from all further duties and
liabilities hereunder, subject to this Section 9.8, by giving to the Corporation not less than
60 days’ prior notice in writing or such shorter prior notice as the Corporation may accept as
sufficient. The Warrantholders by Extraordinary Resolution shall have power at any time to
remove the existing Warrant Agent and to appoint a new Warrant Agent. In the event of the
Warrant Agent resigning or being removed as aforesaid or being dissolved, becoming bankrupt,
going into liquidation or otherwise becoming incapable of acting hereunder, the Corporation
shall forthwith appoint a new Warrant Agent unless a new Warrant Agent has already been
appointed by the Warrantholders; failing such appointment by the Corporation, the retiring
Warrant Agent or any Warrantholder may apply to a Court of the State of New York or a court of
the Province of Ontario on such notice as such a justice of that Court may direct, for the
appointment of a new Warrant Agent; but any new Warrant Agent so










 



- 36 -


	 	 	appointed by the Corporation or by the Court shall be subject to removal as aforesaid by
the Warrantholders. Any new Warrant Agent appointed under any provision of this Section 9.8
shall be a corporation authorized to carry on the business in its jurisdiction of
incorporation. On any such appointment the new Warrant Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named herein as
Warrant Agent hereunder.
	 
	(2)	 	Upon the appointment of a successor Warrant Agent, the Corporation shall promptly notify the
Warrantholders thereof in the manner provided for in Section 10.2 hereof.
	 
	(3)	 	Upon the payment by the Corporation to the retiring Warrant Agent of any and all outstanding
fees or charges still properly owing to it, the retiring Warrant Agent shall undertake to
transfer all requisite files, inventory and other records to the succeeding Warrant Agent upon
request.
	 
	(4)	 	Any corporation into or with which the Warrant Agent may be merged or consolidated or
amalgamated, or any corporation resulting therefrom to which the Warrant Agent shall be a
party, or any corporation succeeding to all or substantially all of the corporate trust
business of the Warrant Agent shall be the successor to the Warrant Agent hereunder without
any further act on its part or any of the parties hereto, provided that such corporation would
be eligible for appointment as a successor Warrant Agent under Section 9.8(1).
	 
	(5)	 	Any Warrant Certificates certified but not delivered by a predecessor Warrant Agent may be
certified by the successor Warrant Agent in the name of the predecessor or successor Warrant
Agent.





Section 9.9 Conflict of Interest





	(1)	 	The Warrant Agent represents to the Corporation that at the time of execution and delivery
hereof no material conflict of interest exists between its role as a Warrant Agent hereunder
and its role in any other capacity and agrees that in the event of a material conflict of
interest arising hereafter it will, within 90 days after ascertaining that it has such
material conflict of interest, either eliminate the same or assign its trust hereunder to a
successor Warrant Agent approved by the Corporation and meeting the requirements set forth in
Section 9.8(1). Notwithstanding the foregoing provisions of this Section 9.1(1), if any such
material conflict of interest exists or hereafter shall exist, the validity and enforceability
of this Indenture and the Warrant Certificate shall not be affected in any manner whatsoever
by reason thereof.
	 
	(2)	 	Subject to Section 9.1(1), the Warrant Agent, in its personal or any other capacity, may buy,
lend upon and deal in securities of the Corporation and generally may contract and enter into
financial transactions with the Corporation or any Subsidiary of the Corporation without being
liable to account for any profit made thereby.





Section 9.10 Acceptance of Trust




     The Warrant Agent hereby accepts the trusts in this Indenture declared and provided for and
agrees to perform the same upon the terms and conditions herein set forth.









 



- 37 -


Section 9.11 Warrant Agent Not to be Appointed Receiver




     The Warrant Agent and any person related to the Warrant Agent shall not be appointed a
receiver, a receiver and manager or liquidator of all or any part of the assets or undertakings of
the Corporation.



Section 9.12 Anti-Money Laundering and Anti-Terrorist Legislation




     The Warrant Agent shall retain the right not to act and shall not be liable for refusing to
act if, due to lack of information or for any other reason whatsoever, the Warrant Agent, in its
sole judgment, determines that such act might cause it to be in non-compliance with any applicable
anti-money laundering or anti-terrorist legislation, regulation or guideline. Further, should the
Warrant Agent, in its sole judgment, determine at any time that its acting under this Indenture has
resulted in its being in non-compliance with any applicable anti-money laundering or anti-terrorist
legislation, regulation or guideline, then it shall have the right to resign on thirty (30) days
written notice to the Corporation, provided that (a) the Warrant Agent’s written notice shall
describe the circumstances of such non-compliance; and (b) if such circumstances are rectified to
the Warrant Agent’s satisfaction within such ten (10) day period, then such resignation shall not
be effective.



Section 9.13 Accounts Opened for Corporation




     The Corporation hereby represents to the Warrant Agent that any account to be opened by, or
interest to be held by, the Warrant Agent in connection with this Indenture, for or to the credit
of the Corporation, either (a) is not intended to be used by or on behalf of any third party; or
(b) is intended to be used by or on behalf of a third party, in which case the Corporation hereto
agrees to complete and execute forthwith a declaration in the Warrant Agent’s prescribed form as to
the particulars of such third party.



ARTICLE 10

GENERAL




Section 10.1 Notice to the Corporation and the Warrant Agent





	(1)	 	Unless herein otherwise expressly provided, any notice to be given hereunder to the
Corporation or the Warrant Agent shall be deemed to be validly given if delivered or if sent
by registered letter, postage prepaid or if telecopied:





	 	 	 	 	 
	 	 	If to the Corporation:
	 
	 	 	 	 
	 	 	Uranerz Energy Corporation
	 	 	Suite 1400, 800 West Pender Street
	 	 	Vancouver, British Columbia
	 	 	V6C 2V6
	 
	 	 	 	 
	 

	 	Attention:
	 	Sandra R. MacKay
	 

	 	 	 	Corporate Secretary
	 

	 	 	 	Telecopier: (604) 689-1722
	 
	 	 	 	 
	 	 	With a copy to (which shall constitute notice hereunder):












 



- 38 -


	 	 	 	 	 
	 	 	Dorsey & Whiney LLP
	 	 	370 17th Street, Suite 4700
	 	 	Denver, Colorado 80202
	 
	 	 	 	 
	 

	 	Attention:
	 	Jason K. Brenkert
	 

	 	 	 	Telecopier: (303) 629-3450
	 
	 	 	 	 
	 	 	If to the Warrant Agent:
	 
	 	 	 	 
	 	 	Corporate Stock Transfer Inc.
	 	 	3200 Cherry Creek Drive South
	 	 	Suite 430
	 	 	Denver, Colorado 80209
	 
	 	 	 	 
	 

	 	Attention:
	 	Carylyn Bell
	 

	 	 	 	Telecopier: (303) 282-5800






     and any such notice delivered in accordance with the foregoing shall be deemed to have been
received on the date of delivery or, if mailed, on the fifth Business Day following the actual
posting of the notice, or if telecopied, the next Business Day after transmission provided that
transmission has been completely and accurately transmitted.




	(2)	 	The Corporation or the Warrant Agent, as the case may be, may from time to time notify the
other in the manner provided in Section 10.1(1) of a change of address which, from the
effective date of such notice and until changed by like notice, shall be the address of the
Corporation or the Warrant Agent, as the case may be, for all purposes of this Indenture.
	 
	(3)	 	If, by reason of a strike, lockout or other work stoppage, actual or threatened, involving
postal employees, any notice to be given to the Warrant Agent or to the Corporation hereunder
could reasonably be considered unlikely to reach its destination, such notice shall be valid
and effective only if it is delivered or sent by telecopier at the appropriate address or
number provided in Section 10.1(1).





Section 10.2 Notice to Warrantholders





	(1)	 	Unless otherwise provided herein, any notice to the Warrantholders under the provisions of
this Indenture shall be valid and effective if delivered or if sent by telecopier or letter or
circular through the ordinary post addressed to such holders at their post office addresses
appearing on the register hereinbefore mentioned and shall be deemed to have been effectively
given on the date of delivery or, if mailed, five Business Days following actual posting of
the notice, or if telecopied, the next Business Day after transmission provided that
transmission has been completely and accurately transmitted.
	 
	(2)	 	If, by reason of a strike, lockout or other work stoppage, actual or threatened, involving
postal employees, any notice to be given to the Warrantholders hereunder could reasonably be
considered unlikely to reach its destination, such notice shall be










 



- 39 -


	 	 	valid and effective only if it is
delivered or sent by telecopier at
the appropriate address or number.





Section 10.3 Counterparts




     This Indenture may be executed in several counterparts, each of which when so executed shall
be deemed to be an original and such counterparts together shall constitute one and the same
instrument and notwithstanding their date of execution they shall be deemed to be dated as of the
date hereof.



Section 10.4 Satisfaction and Discharge of Indenture




Upon the earlier of:





	 	(a)	 	the date by which there shall have been delivered to the Warrant Agent for
exercise or destruction all Warrant Certificates theretofore certified hereunder; or
	 
	 	(b)	 	the Time of Expiry,





     and if all certificates representing Common Shares and Warrants required to be issued in
compliance with the provisions hereof have been issued and delivered hereunder or to the Warrant
Agent in accordance with such provisions and if all payments required to be made in compliance with
the provisions of Article 4 have been made in accordance with such provisions, this Indenture shall
cease to be of further effect and the Warrant Agent, on demand of and at the cost and expense of
the Corporation and upon delivery to the Warrant Agent of a certificate of the Corporation stating
that all conditions precedent to the satisfaction and discharge of this Indenture have been
complied with, shall execute proper instruments acknowledging satisfaction of and discharging this
Indenture. Notwithstanding the foregoing, the indemnities provided to the Warrant Agent by the
Corporation hereunder shall remain in full force and effect and survive the termination of this
Indenture.




			
	Section 10.5	 	Provisions of Indenture and Warrants for the Sole Benefit of Parties, Agent and
Warrantholders.





     Nothing in this Indenture or in the Warrant Certificates, expressed or implied, shall give or
be construed to give to any person other than the parties hereto and the Warrantholders, as the
case may be, any legal or equitable right, remedy or claim under this Indenture, or under any
covenant or provision herein or therein contained, all such covenants and provisions being for the
sole benefit of the parties hereto and the Warrantholders.




			
	Section 10.6	 	Warrants Owned by the Corporation or its Subsidiaries — Certificate to be Provided





     For the purpose of disregarding any Warrants owned legally or beneficially by the Corporation
or any Subsidiary of the Corporation in Section 7.16, if any, the Corporation shall provide to the
Warrant Agent, from time to time, a certificate of the Corporation setting forth as at the date of
such certificate:




	 	(a)	 	the names (other than the name of the Corporation) of the registered holders
of Warrants which, to the knowledge of the Corporation, are owned by or held for the
account of the Corporation or any Subsidiary of the Corporation; and










 



- 40 -


	 	(b)	 	the number of Warrants owned legally or beneficially by the Corporation or
any Subsidiary of the Corporation,




and the Warrant Agent, in making the computations in Section 7.16, shall be entitled to rely on
such certificate without any additional evidence.




Section 10.7 Evidence of Ownership





	(1)	 	Upon receipt of a certificate of any bank, trust company or other depositary satisfactory to
the Warrant Agent stating that the Warrants specified therein have been deposited by a named
person with such bank, trust company or other depositary and will remain so deposited until
the expiry of the period specified therein, the Corporation and the Warrant Agent may treat
the person so named as the owner, and such certificate as sufficient evidence of the ownership
by such person of such Warrant during such period, for the purpose of any requisition,
direction, consent, instrument or other document to be made, signed or given by the holder of
the Warrant so deposited.
	 
	(2)	 	The Corporation and the Warrant Agent may accept as sufficient evidence of the fact and date
of the signing of any requisition, direction, consent, instrument or other document by any
person:






	 	(a)	 	the signature of any officer of any bank, trust company, or other depositary
satisfactory to the Warrant Agent as witness of such execution, the certificate of any
notary public or other officer authorized to take acknowledgments of deeds to be
recorded at the place where such certificate is made that the person signing
acknowledged to him the execution thereof,
	 
	 	(b)	 	a statutory declaration of a witness of such execution, or
	 
	 	(c)	 	such other documentation as is satisfactory to the Warrant Agent.





Section 10.8 Privacy Laws




     The Corporation and the Warrant Agent acknowledge that Canadian federal and/or provincial
legislation and United States federal and/or state legislation that addresses the protection of
individuals’ personal information (collectively, “Privacy Laws”) applies to obligations and
activities under this Indenture. Despite any other provision of this Indenture, neither party shall
take or direct any action that would contravene, or cause the other to contravene, applicable
Privacy Laws. The Corporation shall, prior to transferring or causing to be transferred personal
information to the Warrant Agent, obtain and retain required consents of the relevant individuals
to the collection, use and disclosure of their personal information, or shall have determined that
such consents either have previously been given upon which the parties can rely or are not required
under the Privacy Laws. The Warrant Agent shall use commercially best efforts to ensure that its
services hereunder comply with Privacy Laws. Specifically, the Warrant Agent agrees: (a) to have a
designated chief privacy officer; (b) to maintain policies and procedures to protect personal
information and to receive and respond to any privacy complaint or injury; (c) to use personal
information solely for the purposes of providing its services under or ancillary to this Indenture
and not to use it for any other purpose except with the consent of or direction from the
Corporation or the individual









 



- 41 -



involved; (d) not to sell or otherwise improperly disclose personal information to any third
party; and (e) to employ administrative, physical and technological safeguards to reasonably secure
and protect personal information against loss, theft, or unauthorized access, use or modification.



Section 10.9 Assignment




     This Indenture may not be assigned by either party hereto without the consent in writing of
the other party, which consent shall not be unreasonably withheld. This Indenture shall enure to
and bind the parties and their lawful successors and permitted assigns.



Section 10.10 No Waiver, etc.




     No act, omission, delay, acquiescence of course of conduct on the part of either party hereto,
other than a specific written instrument, shall constitute a waiver of or consent to any breach or
default by the other party hereto, or affect or limit the right of the party to insist on strict or
timely performance of the obligation of the other party.



Section 10.11 Language




     The parties hereto have expressly requested that this Warrant Indenture, all documents
attached hereto, any notices or other documents to be given under this Warrant Indenture, and other
documents related thereto be drawn up in the English language. Les parties aux présentes ont
expressément exigé que le présent acte relatif aux bons de souscription et tous les documents qui y
sont affixés ainsi que tout avis donné en vertu dudit acte relatif aux bons de souscription ou tout
autre document qui s’y rapporte, soient rédigés en anglais.



Section 10.12 Further Assurances




     Each of the parties hereto shall do or cause to be done all such acts and things as the other
party hereto reasonably requests in order to better evidence or effectuate the provisions and
intent of this Indenture.



[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]










 



- 42 -

IN WITNESS WHEREOF the parties hereto have executed this Indenture under their respective corporate
seals and the hands of their proper officers in that behalf.





     DATED this 27th day of October, 2009.



	 	 	 	 	 
	 	URANERZ ENERGY CORPORATION

 	 
	 	By:  	/s/ Dennis Higgs 	 
	 	 	Name:  	Dennis Higgs 	 
	 	 	Title:  	Chairman of the Board 	 
	 
	 	 	 
	 	By:  	/s/ Ben Leboe 	 
	 	 	Name:  	Ben Leboe 	 
	 	 	Title:  	Chief Financial Officer 	 
	 
	 	CORPORATE STOCK TRANSFER INC.

 	 
	 	By:  	/s/
Carylyn Bell 	 
	 	 	Name: Carylyn Bell 	 
	 	 	Title: President 	 
	 
	 










 



 


SCHEDULE “A”




WARRANT CERTIFICATE




     THIS IS SCHEDULE “A” to the Warrant Indenture made as of October 27, 2009 between Uranerz
Energy Corporation and Corporate Stock Transfer Inc., as Warrant Agent.



WARRANT CERTIFICATE

URANERZ ENERGY CORPORATION

(Incorporated under the laws of the State of Nevada)




CUSIP



WARRANT CERTIFICATE NO.                                                         
           
           
        WARRANTS entitling the
holder to acquire, subject to adjustment, one (1)
Common Share for each whole Warrant represented hereby.



THIS CERTIFIES THAT, for value received,                                                             (hereinafter referred to
as the “holder”), subject to the terms, covenants, conditions and provisions of that Warrant
Indenture between Uranerz Energy Corporation, a Nevada Corporation (the “Corporation”), and
Corporate Stock Transfer Inc. (the “Warrant Agent”), dated October 27, 2009 (the “Indenture”), is
entitled at any time prior to 5:00 p.m. (Denver time) on April 27, 2012 (the “Time of Expiry”) to
acquire in the manner and subject to the restrictions and adjustments set forth in the Indenture,
one (1) fully paid and non-assessable common share (“Common Share”) of the Corporation, as such
shares were constituted on the Effective Date, upon payment of US$3.00 per share payable to the
Corporation by way of a certified cheque, money order or bank draft. Any Warrants not exercised
prior to the Time of Expiry shall be void and of no effect. In the event that the Company’s
common shares trade in the United States at a closing price of greater than $3.50 per share for a
period of 20 consecutive trading days at any time after the Closing Date, the Company may
accelerate the expiry date of the Warrants by giving notice via a press release to the holders
thereof and in such case the Warrants will expire on the 30th day after the date on which such
notice is given by the Company. Any terms utilized herein and not otherwise defined shall have the
meanings ascribed thereto in the Indenture.



The certificates representing the Common Shares issued may be obtained upon duly completing and
executing the Exercise Form attached hereto and surrendering this Warrant Certificate to the
Warrant Agent at the principal office of the Warrant Agent in the city of Denver, Colorado (or such
alternate place or additional place as may be designated from time to time), together with a
certified cheque, bank draft or money order payable to the Corporation for the applicable Exercise
Price. These Warrants shall be deemed to be surrendered only upon personal delivery hereof or, if
sent by mail or other means of transmission, upon actual receipt thereof by the Warrant Agent at
the office referred to above, unless the Corporation accepts another form of delivery. Upon
surrender of these Warrants for Common Shares, the person or persons in whose name or names the
Common Shares issuable upon exercise of the Warrants are to be issued shall be deemed for all
purposes (except as provided in the Indenture) to be the holder or holders of record of such








 



- 2 -


Common Shares and the Corporation has covenanted that it will (subject to the provisions of the
Indenture) as soon as practicable and in any event within three (3) Business Days after the
Exercise Date cause a certificate or certificates representing such Common Shares to be delivered
to the Warrant Agency or to be mailed to the person or persons at the address or addresses
specified in the Exercise Form. The registered holder of these Warrants may only acquire that
number of Common Shares that is equal to the number of Common Shares which may be acquired for the
Warrants represented by this Warrant Certificate. The registered holder of these Warrants may
acquire any lesser number of Common Shares than the total number of Common Shares that may be
acquired upon the exercise of the Warrants represented by this Warrant Certificate. In such event,
the holder shall be entitled to receive a new Warrant Certificate for the balance of the Common
Shares which may be acquired. No fractional Common Shares will be issued.



The Warrants represented by this certificate are issued under and pursuant to the Indenture between
the Corporation and the Warrant Agent. Reference is made to the Indenture and any instruments
supplemental thereto for a full description of the rights of the holders of the Warrants and the
terms and conditions upon which the Warrants are, or are to be, issued and held, with the same
effect as if the provisions of the Indenture and all instruments supplemental thereto were herein
set forth. By acceptance hereof, the holder assents to all provisions of the Indenture. A copy of
the Indenture will be provided at no cost to a holder who makes a request for such copy to the
Corporation. The Indenture provides for adjustments to the right of exercise, including the amount
of and class and kind of securities or other property issuable upon exercise, upon the happening of
certain stated events, including the subdivision or consolidation of the Common Shares, certain
distributions of Common Shares or securities convertible into Common Shares or of other securities
or assets of the Corporation, certain offerings of rights, warrants or options and certain
reorganizations. IF ANY CONFLICT EXISTS BETWEEN THE PROVISIONS CONTAINED HEREIN AND THE PROVISIONS
OF THE INDENTURE, THE PROVISIONS OF THE INDENTURE SHALL GOVERN.



The Warrants evidenced hereby shall not be exercised by any person during any time that no
registration statement under the U.S. Securities Act registering the Common Shares issuable upon
the exercise of the Warrants evidenced hereby is effective, unless an exemption from the
registration requirements to the U.S. Securities Act is available and such holder provides evidence
of the availability of such exemption satisfactory to the Corporation and the Warrant Agent. During
such time and prior to the Time of Expiry, any person holding such Warrants shall have the right to
provide notice to the Corporation of their intent to exercise, at which time the Corporation shall,
at its own discretion, permit such holder to exercise on a cashless basis such Warrant (provided
that the Common Shares issued pursuant to such cashless exercise shall not be subject to any
transfer restrictions in the United States or Canada) or redeem such warrants in accordance with
the terms of the Indenture.



The holder of this Warrant Certificate may, at any time prior to the Time of Expiry, upon surrender
hereof to the Warrant Agent at its principal office in the city of Denver, Colorado (or such
alternate place or additional place as may be designated from time to time), exchange this Warrant
Certificate for other Warrant Certificates entitling the holder to








 



- 3 -


acquire, in the aggregate, the same number of Common Shares as may be acquired under this Warrant
Certificate.



The holding of the Warrants evidenced by this Warrant Certificate shall not constitute the holder
hereof a shareholder of the Corporation or entitle the holder to any right or interest in respect
thereof except as expressly provided in the Indenture and in this Warrant Certificate.



The parties hereto have expressly requested that this Warrant Certificate, all documents attached
hereto, any notices or other documents to be given under this Warrant Certificate, and other
documents related thereto be drawn up in the English language. Les parties aux présentes ont
expressément exigé que le présent certificat de bons de souscription et tous les documents qui y
sont affixés à ledit certificat de bons de souscription, ainsi que tout avis donné en vertu dudit
certificat de bons de souscription ou tout autre document qui s’y rapporte, soient rédigés en
anglais.










 



- 4 -


     IN WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be signed by its
duly authorized officer as of the date hereof.



	 	 	 	 	 
	 	URANERZ ENERGY CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 



	 	 	 
	COUNTERSIGNED:
	 	 
	 
	 	 
	CORPORATE STOCK TRANSFER INC.
	 	 
	 
	 
	 	 
	 


	 	 
	Authorized Signatory
	 	 












 



 


TRANSFER FORM




FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to




	 	 	 
	(full name of Transferee)

	 	(full address of Transferee)





Warrants of Uranerz Energy Corporation registered in the name of the undersigned on the records of
Uranerz Energy Corporation represented by the Warrant Certificate attached and irrevocably appoints
the attorney of the undersigned to transfer the said securities on the books or register with full
power of substitution.




	 	 	 
	Signature Guaranteed

	 	(Signature of Registered Warrantholder)






Instructions:





	1.	 	The signature of the Warrantholder must be the signature of the person appearing on the face
of this Warrant Certificate.
	 
	2.	 	If the Transfer Form is signed by a Warrant Agent, executor, administrator, curator,
guardian, attorney, officer of a corporation or any person acting in a judiciary or
representative capacity, the certificate must be accompanied by evidence of authority to sign
satisfactory to the Warrant Agent and the Corporation.
	 
	3.	 	The signature of the holder on the Transfer Form must be guaranteed by an authorized officer
of a Canadian Schedule 1 chartered bank, a major trust company in Canada, a member of the
Securities Transfer Association Medallion program, or a member of the Stock Exchange Medallion
Program.
	 
	4.	 	Warrants shall only be transferable in accordance with applicable laws.
	 
	5.	 	In the United States, signature guarantees must be executed by members of a “Medallion
Signature Guarantee Program” only.












 



 




EXERCISE FORM





			
	TO:	 	Uranerz Energy Corporation and

Corporate Stock Transfer Inc.





     The undersigned hereby exercises the right to acquire Common Shares of Uranerz Energy
Corporation (or such number of other securities or property to which such Warrants entitle the
undersigned in lieu thereof or in addition thereto under the provisions of the Indenture referred
to in the accompanying Warrant Certificate) in accordance with and subject to the provisions of
such Indenture and in connection therewith has enclosed a certified cheque, money order or bank
draft payable to Uranerz Energy Corporation in an amount equal to US$       (or a price as adjusted
pursuant to the Indenture) in respect of each Common Share to be issued.



     Number of Warrants Exercised:



     The Common Shares (or other securities or property) are to be issued as follows:



Name:




Address in full:




Social Insurance Number:




Number of Common Shares:



Note: If further nominees intended, please attach (and initial) a schedule giving these
particulars.




	 	 	 
	Signature Guaranteed

	 	(Signature of Warrantholder)
	 
	 	 
	 

	 	(Print full name)






Instructions:





	1.	 	The registered holder may receive its Common Shares by completing this form and surrendering
this form and the Warrant Certificate representing the Warrants to Corporate Stock Transfer
Inc. at its principal office at Denver, Colorado.
	 
	2.	 	If the Exercise Form indicates that Common Shares are to be issued to a person or persons
other than the registered holder of the Warrant Certificate, the signature of such holder on
the Exercise Form must be guaranteed by an authorized officer of a Canadian Schedule 1
chartered bank, a major trust company in Canada, a member of the Securities Transfer
Association Medallion program, or a member of the Stock Exchange Medallion Program.










 



- 2 -


	3.	 	If the Exercise Form is signed by a Warrant Agent, executor, administrator, curator,
guardian, attorney, officer of a corporation or any person acting in a judiciary or
representative capacity, the certificate must be accompanied by evidence of authority to sign
satisfactory to the Warrant Agent and the Corporation.
	 
	4.	 	In the United States, signature guarantees must be executed by members of a “Medallion
Signature Guarantee Program” only.