Exhibit 4.1


 


 


VISTA GOLD CORP.


 


- and -


 


COMPUTERSHARE
TRUST COMPANY OF CANADA


 


 










 


WARRANT
INDENTURE


 


Providing for
the Issue of up to


2,168,812
Warrants


 










 


 


September 23,
2005


 





















 


TABLE OF CONTENTS


 


	
  ARTICLE ONE  INTERPRETATION

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  
	
   

  	
  1.2

  	
  Words Importing
  the Singular and Gender

  	
   

  
	
   

  	
  1.3

  	
  Interpretation
  Not Affected by Headings

  	
   

  
	
   

  	
  1.4

  	
  Day Not a Business
  Day

  	
   

  
	
   

  	
  1.5

  	
  Time of the Essence

  	
   

  
	
   

  	
  1.6

  	
  Currency

  	
   

  
	
   

  	
  1.7

  	
  Applicable Law

  	
   

  
	
   

  	
  1.8

  	
  English Language

  	
   

  
	
   

  	
  1.9

  	
  Meaning of
  “outstanding” for Certain Purposes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE TWO  ISSUE OF WARRANTS

  	
   

  
	
   

  	
  2.1

  	
  Creation
  and Issue of Warrants

  	
   

  
	
   

  	
  2.2

  	
  Terms of Warrants

  	
   

  
	
   

  	
  2.3

  	
  Warrant Certificates

  	
   

  
	
   

  	
  2.4

  	
  Issue
  in Substitution for Lost Warrants

  	
   

  
	
   

  	
  2.5

  	
  Warrantholder
  not a Shareholder

  	
   

  
	
   

  	
  2.6

  	
  Warrants to
  Rank Pari Passu

  	
   

  
	
   

  	
  2.7

  	
  Signing
  of Warrant Certificates

  	
   

  
	
   

  	
  2.8

  	
  Certification
  by the Trustee or Co-transfer Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE THREE  EXCHANGE AND OWNERSHIP OF WARRANTS

  	
   

  
	
   

  	
  3.1

  	
  Exchange of Warrants

  	
   

  
	
   

  	
  3.2

  	
  Charges
  for Exchange or Transfer

  	
   

  
	
   

  	
  3.3

  	
  Ownership of
  Warrants

  	
   

  
	
   

  	
  3.4

  	
  Registration
  and Transfer of Warrants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE FOUR  EXERCISE OF WARRANTS

  	
   

  
	
   

  	
  4.1

  	
  Notice of
  Acceleration Event

  	
   

  
	
   

  	
  4.2

  	
  Method of
  Exercise of Warrants

  	
   

  
	
   

  	
  4.3

  	
  Effect of
  Exercise of Warrants

  	
   

  
	
   

  	
  4.4

  	
  Partial
  Exercise of Warrants

  	
   

  
	
   

  	
  4.5

  	
  No
  Fractional Shares or Warrants

  	
   

  
	
   

  	
  4.6

  	
  Accounting and
  Recording

  	
   

  
	
   

  	
  4.7

  	
  Cancellation
  of Surrendered Warrants

  	
   

  
	
   

  	
  4.8

  	
  Expiration of
  Warrants

  	
   

  
	
   

  	
  4.9

  	
  Share Certificates

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE FIVE  ADJUSTMENT OF EXERCISE NUMBER

  	
   

  
	
   

  	
  5.1

  	
  Definitions

  	
   

  
	
   

  	
  5.2

  	
  Adjustment
  of Exercise Number

  	
   

  
	
   

  	
  5.3

  	
  Subscription Rights Adjustment Rules

  	
   

  
	
   

  	
  5.4

  	
  Postponement
  of Subscription

  	
   

  
	
   

  	
  5.5

  	
  Notice of
  Certain Events

  	
   

  
	
   

  	
  5.6

  	
  Protection of
  Trustee

  	
   

  
	
   

  	
  5.7

  	
  Proceedings
  Prior to Any Action Requiring Adjustment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE SIX  RIGHTS AND COVENANTS

  	
   

  
	
   

  	
  6.1

  	
  Purchase of Warrants

  	
   

  
	
   

  	
  6.2

  	
  General
  Covenants of the Corporation

  	
   

  
	
   

  	
  6.3

  	
  Trustee’s
  Remuneration and Expenses

  	
   

  
	
   

  	
  6.4

  	
  No Dividends
  or Distributions

  	
   

  



 


i





















 


	
   

  	
  6.5

  	
  Performance
  of Covenants by Trustee

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE SEVEN  ENFORCEMENT

  	
   

  
	
   

  	
  7.1

  	
  Suits by
  Warrantholders

  	
   

  
	
   

  	
  7.2

  	
  Immunity of
  Shareholders

  	
   

  
	
   

  	
  7.3

  	
  Limitation of
  Liability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE EIGHT  MEETINGS OF WARRANTHOLDERS

  	
   

  
	
   

  	
  8.1

  	
  Right to Convene
  Meetings

  	
   

  
	
   

  	
  8.2

  	
  Notice

  	
   

  
	
   

  	
  8.3

  	
  Chairman

  	
   

  
	
   

  	
  8.4

  	
  Quorum

  	
   

  
	
   

  	
  8.5

  	
  Power to Adjourn

  	
   

  
	
   

  	
  8.6

  	
  Show of Hands

  	
   

  
	
   

  	
  8.7

  	
  Poll

  	
   

  
	
   

  	
  8.8

  	
  Voting

  	
   

  
	
   

  	
  8.9

  	
  Regulations

  	
   

  
	
   

  	
  8.10

  	
  Corporation
  and Trustee may be Represented

  	
   

  
	
   

  	
  8.11

  	
  Powers
  Exercisable by Extraordinary Resolution

  	
   

  
	
   

  	
  8.12

  	
  Meaning
  of “Extraordinary Resolution”

  	
   

  
	
   

  	
  8.13

  	
  Powers Cumulative

  	
   

  
	
   

  	
  8.14

  	
  Minutes

  	
   

  
	
   

  	
  8.15

  	
  Instruments in
  Writing

  	
   

  
	
   

  	
  8.16

  	
  Binding
  Effect of Resolutions

  	
   

  
	
   

  	
  8.17

  	
  Holdings
  by Corporation Disregarded

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE NINE  SUPPLEMENTAL INDENTURES AND SUCCESSOR
  COMPANIES

  	
   

  
	
   

  	
  9.1

  	
  Provision
  for Supplemental Indentures for Certain Purposes

  	
   

  
	
   

  	
  9.2

  	
  Correction
  of Manifest Errors

  	
   

  
	
   

  	
  9.3

  	
  Amending
  Adjustment Provisions

  	
   

  
	
   

  	
  9.4

  	
  Successor Companies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE TEN  CONCERNING THE TRUSTEE

  	
   

  
	
   

  	
  10.1

  	
  Trust Indenture
  Legislation

  	
   

  
	
   

  	
  10.2

  	
  Rights and
  Duties of Trustee

  	
   

  
	
   

  	
  10.3

  	
  Evidence,
  Experts and Advisers

  	
   

  
	
   

  	
  10.4

  	
  Securities,
  Documents and Monies Held by Trustee

  	
   

  
	
   

  	
  10.5

  	
  Action
  by Trustee to Protect Interests

  	
   

  
	
   

  	
  10.6

  	
  Trustee
  not Required to Give Security

  	
   

  
	
   

  	
  10.7

  	
  Protection of
  Trustee

  	
   

  
	
   

  	
  10.8

  	
  Indemnification

  	
   

  
	
   

  	
  10.9

  	
  Replacement of
  Trustee

  	
   

  
	
   

  	
  10.10

  	
  Conflict of
  Interest

  	
   

  
	
   

  	
  10.11

  	
  Acceptance of Trust

  	
   

  
	
   

  	
  10.12

  	
  Trustee
  not to be Appointed Receiver

  	
   

  
	
   

  	
  10.13

  	
  Third Party
  Interests

  	
   

  
	
   

  	
  10.14

  	
  Compliance
  with Money Laundering Legislation

  	
   

  
	
   

  	
  10.15

  	
  Compliance
  with Privacy Laws

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE ELEVEN  GENERAL

  	
   

  
	
   

  	
  11.1

  	
  Notice
  to Corporation and Trustee

  	
   

  
	
   

  	
  11.2

  	
  Notice to
  Warrantholders

  	
   

  
	
   

  	
  11.3

  	
  Satisfaction
  and Discharge of Indenture

  	
   

  
	
   

  	
  11.4

  	
  Sole Benefit
  of Parties and Warrantholders

  	
   

  
	
   

  	
  11.5

  	
  Discretion of
  Directors

  	
   

  



 


ii





















 


	
   

  	
  11.6

  	
  Counterparts
  and Formal Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE “A”

  	
   

  



 


iii





















 


THIS WARRANT INDENTURE dated
as of September 23, 2005,


 


BETWEEN:


 


VISTA
GOLD CORP.,
a corporation continued under the laws of the Yukon Territory, having an office
at Suite 5, 7961 Shaffer Parkway, Littleton, Colorado, U.S.A. 80127


 


(the “Corporation”)


 


AND:


 


COMPUTERSHARE
TRUST COMPANY OF CANADA, a trust company organized under the laws of Canada, having an office
at 510 Burrard Street, Vancouver, British Columbia, V6C 3B9


 


(the “Trustee”)


 


WITNESSES THAT WHEREAS:


 


A.                                                                                   the Corporation proposes to create
and issue up to 2,168,812 Warrants exercisable by the holders thereof on the
terms hereinafter set forth for the acquisition of common shares in the capital
of the Corporation;


 


B.                                                                                     the Corporation is duly authorized
to create and issue the Warrants to be issued as herein provided;


 


C.                                                                                     all things necessary have been done
and performed to make the Warrants, when certified by the Trustee and 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


 


D.                                                                                    the Trustee 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 become holders of Warrants from time to
time issued pursuant to this Indenture;


 


NOW THEREFORE
in consideration of the premises and the covenants of the parties, the
Corporation hereby appoints the Trustee as trustee for the Warrantholders, to
hold all rights, interests and benefits contained herein for and on behalf of
those persons who become holders of Warrants from time to time issued pursuant
to this Indenture and it is hereby agreed and declared as follows:


 


ARTICLE ONE


 


INTERPRETATION


 


1.1                                                                               Definitions


 


In this Indenture
and in the recitals and schedules hereto, unless there is something in the
subject matter or context inconsistent therewith, the following phrases and
words shall have the following meanings:


 


1





















 


(a)                                  “Acceleration
Event” has the meaning given in section 4.1(1);


 


(b)                                 “Acceleration
Notice” has the meaning given in section 4.1(2);


 


(c)                                  “Applicable
Legislation” means the provisions of any statute of Canada or a
province thereof, and the regulations under any such statute, relating to trust
indentures or the rights, duties or obligations of corporations and trustees
under trust indentures as are from time to time in force and applicable to this
Indenture;


 


(d)                                 “board”
means the Board of Directors of the Corporation;


 


(e)                                  “business day”
means a day that is not a Saturday, Sunday, or civic or statutory holiday in
the City of Vancouver, British Columbia;


 


(f)                                    “Corporation”
means Vista Gold Corp. and its lawful successors from time to time as provided
for in section 9.4;


 


(g)                                 “Corporation’s
auditors” means the firm of chartered accountants duly appointed as
auditors of the Corporation from time to time;


 


(h)                                 “Convertible
Security” means a security of the Corporation (other than the Warrants)
or any other issuer convertible into or exchangeable for or otherwise carrying
the right to acquire Shares;


 


(i)                                     “Co-transfer
Agent” has the meaning given in section 2.1;


 


(j)                                     “counsel”
means a barrister or solicitor (who may be an employee of the Corporation) or a
firm of barristers and solicitors (who may be counsel for the Corporation) in
both cases acceptable to the Trustee;


 


(k)                                  “Current Market Price” of the Shares at any
date means the weighted average trading price of the Shares on the Toronto
Stock Exchange or the American Stock Exchange as may be selected for that
purpose by the board or, if the Shares are not then listed on the Toronto Stock
Exchange or the American Stock Exchange, on such other Canadian or United
States stock exchange as may be selected for that purpose by the board, or, if
the Shares are not then listed on any Canadian or United States stock exchange,
in the over-the-counter market, during the ten most recent consecutive trading
days ending on a date not earlier than the fifth trading day before such date;
provided that the weighted average trading price shall be determined by
dividing that aggregate sale price of all Shares sold on the said exchange or
market, as the case may be, during the said ten consecutive trading days by the
total number of Shares so sold; and provided further that, if the Shares are
not listed and posted for trading on any stock exchange in Canada or the United
States or traded in the over-the-counter market, the Current Market Price shall
be determined by the board of directors in accordance with generally accepted
accounting principles;


 


(l)                                     “director”
means a director of the Corporation for the time being, and 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 an executive committee of the
board, in each case by resolution duly passed;


 


2





















 


(m)                               “dividends”
means dividends or distributions (payable in cash or in securities, property or
assets of equivalent value) declared payable on the Shares;


 


(n)                                 “dividends
paid in the ordinary course” means such dividends or distributions
declared payable on a Share in any fiscal year of the Corporation to the extent
that such dividends or distributions in the aggregate do not exceed 5% of the
applicable Exercise Price and for such purposes the amount of any dividends or
distributions paid in other than cash or shares shall be the fair market value
of such dividends or distributions as determined by the directors;


 


(o)                                 “Exercise
Date” with respect to any Warrant means the date on which the
Warrant Certificate evidencing such Warrant is duly surrendered in accordance
with the provisions of section 4.2;


 


(p)                                 “Exercise
Number” at any time, means that number of Shares that Warrantholders
are entitled to receive from time to time for each Warrant held upon exercise
of the rights attached to the Warrant as that number may be adjusted by Article Five
hereof and that number, as at the date hereof, is equal to one Share for each
Warrant;


 


(q)                                 “Exercise
Price” has the meaning given in section 2.2;


 


(r)                                    “Exercise
Period” means the period commencing on the date the Warrants are
issued in accordance with Section 2.1 and ending at 4:30 p.m.
(Vancouver time) on the Expiry Date;


 


(s)                                  “Expiry Date” means the earlier of September 23,
2007, and the 15th business day following the date on which the
Corporation provides the Acceleration Notice;


 


(t)                                    “Extraordinary
Resolution” has the meaning given in sections 8.12 and 8.15;


 


(u)                                 “person”
means an individual, a corporation, a partnership, a trust or any
unincorporated organization, and words importing persons have a similar
meaning;


 


(v)                                 “Provinces”
means the provinces of British Columbia and Ontario;


 


(w)                               “Registrar”
means a registrar, from time to time, of the Warrants appointed pursuant to subsection 3.4(1);


 


(x)                                   “Registration
Notice” has the meaning given in section 2.3(2);


 


(y)                                 “Registration
Statement” means a registration statement under the U.S. Securities
Act relating to the Shares pursuant to the terms of the subscription agreements
of even date between the Corporation and purchasers of units of the
Corporation, each unit comprised of one Share and one Warrant;


 


(z)                                   “Regulation S”
means Regulation S under the U.S. Securities Act;


 


(aa)                            “Securities
Commissions” means, collectively, the United States Securities and
Exchange Commission and the securities commission or other securities
regulatory authority under each of the applicable Securities Laws of the
Provinces;


 


(bb)                          “Securities
Laws” means, collectively, the applicable securities laws of each of
Canada, the United States, the Provinces and the respective regulations made
and forms prescribed


 


3





















 


thereunder together
with all applicable published rules, policy statements, notices, blanket orders
and rulings of the Securities Commissions;


 


(cc)                            “Shares”
means fully paid and non-assessable common shares without par value in the
capital of the Corporation, provided that if the exercise rights are
subsequently adjusted or altered pursuant to subsection 5.2(4) or
(5), “Shares” shall thereafter
mean the shares or other securities or property that a Warrantholder is
entitled to on an exchange after the adjustment;


 


(dd)                          “shareholder”
means an owner of record of one or more Shares or shares of any other class or
series of the Corporation;


 


(ee)                            “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;


 


(ff)                                “this Warrant
Indenture”, “this Indenture”,
“herein”, “hereby” and similar expressions mean or
refer to this Warrant Indenture and any indenture, deed or instrument
supplemental or ancillary hereto; and the expressions “Article”, “section”, “subsection”,
“paragraph” or “clause” followed by a number or letter mean and refer to the
specified Article, section, subsection, paragraph or clause of this Indenture;


 


(gg)                          “trading day”
with respect to a stock exchange means a day on which Shares may be traded
through the facilities of such stock exchange, and with respect to the
over-the-counter market means a day on which Shares may be traded through
facilities of such over-the-counter market;


 


(hh)                          “Transfer
Agent” means the transfer agent for the time being of the Shares;


 


(ii)                                  “Trustee”
means Computershare Trust Company of Canada, or any lawful successor thereto in
the trusts hereby created including through the operation of section 10.9;


 


(jj)                                  “United
States” means the United States as that term is defined in
Regulation S;


 


(kk)                            “U.S. Person”
means a U.S. Person as that term is defined in Regulation S;


 


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


 


(mm)                      “Warrant
Certificates” means certificates substantially in the form attached
as Schedule “A” hereto or such other form as may be approved under subsection 2.3(1) evidencing
Warrants;


 


(nn)                          “Warrantholders”
or “holders” means the registered
holders of Warrants;


 


(oo)                          “Warrantholders’
Request” means an instrument signed in one or more counterparts by a
Warrantholder or Warrantholders entitled to purchase, in the aggregate, not
less than 25% of the aggregate number of Shares that could be acquired pursuant
to all the Warrants then


 


4





















 


unexercised and
outstanding requesting the Trustee to take some action or proceeding specified
therein;


 


(pp)                          “Warrants”
means the warrants authorized to be created by the Corporation under section 2.1
and issued and certified under this Indenture entitling the holders thereof to
acquire Shares and includes warrants and rights evidenced by Warrant
Certificates; and


 


(qq)                          “written
order of the Corporation”, “written
direction of the Corporation”, “written
request of the Corporation”, “written
consent of the Corporation” and “certificate
of the Corporation” mean respectively a written order, request,
consent and certificate signed in the name of the Corporation by any
one director or officer and may consist of one or more instruments so
executed.


 


1.2                                                                                 Words Importing the Singular
and Gender


 


Words importing the
singular include the plural and vice versa and words importing a particular
gender include all genders.


 


1.3                                                                                 Interpretation Not Affected by Headings


 


The division of
this Indenture into Articles, sections, subsections and paragraphs, 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.


 


1.4                                                                                 Day Not a Business Day


 


In the event that
the Expiry Date or any day on or before which any action is required to be
taken hereunder is not a business day, then the Expiry Date shall be on or the
action shall be required to be taken on or before the next succeeding day that
is a business day.


 


1.5                                                                                 Time of the Essence


 


Time shall be of
the essence in all respects in this Indenture, the Warrants and the Warrant
Certificates.


 


1.6                                                                                 Currency


 


Except as otherwise
stated, all dollar amounts herein are expressed in lawful money of the United
States.


 


1.7                                                                                 Applicable Law


 


This Indenture, the
Warrants and the Warrant Certificates shall be governed by, construed and
enforced in accordance with the laws of the Province of British Columbia and
shall be treated in all respects as British Columbia contracts.


 


1.8                                                                                 English Language


 


The parties hereto
have declared that they have required that this Indenture and all other
documents related hereto be in the English language.


 


5





















 


Les parties aux
présentes déclarent qu’elles ont exigé que la présente convention, de même que
tous les documents s’y rapportant, soient rédigés en anglais.


 


1.9                                                                                 Meaning of “outstanding” for Certain Purposes


 


Except as provided
in section  4.8, every Warrant Certificate certified and delivered by the
Trustee hereunder shall be deemed to be outstanding until it has been
surrendered to the Trustee pursuant to this Indenture, provided however that:


 


(a)                                  where the number of Warrants that has been
exercised is less than the number represented by a Warrant Certificate
surrendered in connection with the exercise, only the unexercised Warrants
shall be deemed to be outstanding;


 


(b)                                 where a Warrant Certificate has been issued in
substitution for a Warrant Certificate that has been lost, stolen or destroyed,
only the latest Warrant Certificate issued shall be counted for the purpose of
determining the Warrants outstanding; and


 


(c)                                  for the purpose of any provision of this
Indenture entitling holders of outstanding Warrants to vote, sign consents,
requests or other instruments or take any other action under this Indenture,
Warrants owned legally or equitably by the Corporation or any subsidiary of the
Corporation shall be disregarded, except that:


 


(i)                                     for
the purpose of determining whether the Trustee shall be protected in relying on
any vote, consent, request or other instrument or other action, only the Warrants of which the
Trustee has notice that they are so owned shall be so disregarded; and


 


(ii)                                  Warrants so owned that have been pledged in
good faith other than to the Corporation or any subsidiary of the Corporation
shall not be so disregarded if the pledgee establishes to the satisfaction of
the Trustee the pledgee’s right to vote the Warrants in the pledgee’s
discretion free from the control of the Corporation or any subsidiary of the
Corporation pursuant to the terms of the pledge.


 


ARTICLE TWO


 


ISSUE OF WARRANTS


 


2.1                                                                                 Creation and Issue of Warrants


 


A total of up to
2,168,812 Warrants, each entitling the holder thereof to acquire from the
Corporation on exercise thereof, subject to adjustment as provided for in section 2.2
and Article Five, one Share, are hereby authorized to be created and
issued by the Corporation upon the terms and conditions herein set forth and
the Warrant Certificates shall be executed by the Corporation and certified by
or on behalf of the Trustee, or by such other person as the Corporation may
from time to time appoint with the approval of the Trustee (hereinafter
referred to as the “Co-transfer Agent”),
upon the written direction of the Corporation and delivered by the Trustee in
accordance with section 2.3.


 


2.2                                                                                 Terms of Warrants


 


(1)                                  Subject to the provisions of Articles Four and
Five, each of the Warrants issued under section 2.1 shall entitle the
holder thereof to acquire from the Corporation, the number of Shares equal to
the


 


6





















 


Exercise Number at any time during the Exercise
Period, at an exercise price of U.S.$4.10 per Warrant (the “Exercise Price”).


 


(2)                                  Fractional Warrants shall not be issued or
otherwise provided for.


 


2.3                                                                                 Warrant Certificates


 


(1)                                  Warrants shall be issued in registered form
only and shall be evidenced only by Warrant Certificates, which shall be
substantially in the form attached as Schedule “A” hereto, with such
additions, variations or omissions as may be permitted by the provisions of
this Indenture or may from time to time be agreed upon between the Corporation
and the Trustee, shall be dated as of the date of the receipt by the Trustee of
the written direction referred to in section 2.1 above (regardless of
their actual dates of issue), shall bear such legends and distinguishing
letters and numbers as the Corporation shall, with the approval of the Trustee,
prescribe, and shall be issuable in any denomination excluding fractions.


 


(2)                                  Each Warrant Certificate as well as
all certificates issued in exchange for or in substitution of the foregoing
securities shall bear a legend to the following effect (the “Warrant Legend”):


 


“UNLESS PERMITTED UNDER
CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE
SECURITY BEFORE JANUARY 24, 2006.


 


NEITHER THIS CERTIFICATE
NOR THE SECURITIES REPRESENTED HEREBY NOR ANY SECURITIES ISSUABLE UPON THE
EXERCISE OF SUCH SECURITIES, NOR ANY INTEREST IN OR RIGHTS UNDER SAME, HAVE
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE, AND NEITHER THIS CERTIFICATE
NOR THE SECURITIES REPRESENTED HEREBY NOR ANY SECURITIES ISSUABLE UPON THE
EXERCISE OF SUCH SECURITIES, NOR ANY INTEREST IN OR RIGHTS UNDER SAME, MAY BE
SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED OR
DISPOSED OF WITHOUT (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE UNITED STATES STATE SECURITIES LAWS COVERING ANY SUCH
TRANSACTION, (B) RECEIPT BY THE CORPORATION OF AN ACCEPTABLE LEGAL OPINION
STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THE
CORPORATION OTHERWISE SATISFYING ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION.”,


 


except that all Warrant
Certificates issued after January 24, 2006 will not bear the
first paragraph of the Warrant Legend and if the Corporation provides the
Trustee with a written notice advising the Trustee that the Registration
Statement has been filed with and declared effective by the United States
Securities and Exchange Commission (such notice, the “Registration Notice”), all Warrant
Certificates issued after the receipt by the Trustee of the Registration Notice
will bear a Warrant Legend with the second paragraph thereof revised to read in
its entirety as follows:


 


“NEITHER THIS
CERTIFICATE NOR THE SECURITIES REPRESENTED HEREBY, NOR ANY INTEREST IN OR
RIGHTS UNDER SAME, HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT
OF


 


7





















 


1933, AS AMENDED
(THE “ACT”) OR UNDER THE SECURITIES LAWS OF ANY STATE, AND NEITHER THIS
CERTIFICATE NOR THE SECURITIES REPRESENTED HEREBY, NOR ANY INTEREST IN OR
RIGHTS UNDER SAME, MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR
OTHERWISE TRANSFERRED OR DISPOSED OF WITHOUT (A) AN EFFECTIVE REGISTRATION
STATEMENT UNDER SUCH ACT AND APPLICABLE UNITED STATES SECURITIES LAWS COVERING
ANY SUCH TRANSACTION, (B) RECEIPT BY THE CORPORATION OF AN ACCEPTABLE LEGAL
OPINION STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THE
CORPORATION OTHERWISE SATISFYING ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION.”.


 


(3)                                  The Trustee shall maintain and make available
to the Corporation lists of all persons who are entitled to Warrant
Certificates, and the Trustee shall mail or deliver Warrant Certificates
evidencing whole Warrants to those persons or as directed by the Corporation.


 


2.4                                                                                 Issue in Substitution for Lost Warrants


 


(1)                                  If a Warrant Certificate becomes mutilated or
is lost, destroyed or stolen, the Corporation, subject to applicable law and to
subsection 2.4(2), shall issue and thereupon the Trustee shall countersign
or certify and deliver a new Warrant Certificate of like date and tenor as the
one mutilated, lost, destroyed or stolen upon surrender of and in place of and
upon cancellation of the mutilated Warrant Certificate or in lieu of and in
substitution for the lost, destroyed or stolen Warrant Certificate and the
substituted Warrant Certificate shall be in a form approved by the Trustee and
shall be entitled to the benefit hereof, rank equally in accordance with its
terms with all other Warrant Certificates issued or to be issued hereunder and
will bear the same legends as the Warrant Certificate being replaced.


 


(2)                                  The applicant for the issue of a new Warrant
Certificate pursuant to this section 2.4 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 Trustee
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 Trustee in their discretion, and if required, furnish an
indemnity and surety bond in amount and form satisfactory to them in their
discretion, and pay the reasonable charges of the Corporation and the Trustee
in connection therewith.


 


2.5                                                                                 Warrantholder not a Shareholder


 


Nothing in this
Indenture or in the holding of a Warrant evidenced by a Warrant Certificate, or
otherwise, shall be construed as conferring upon a Warrantholder any right or
interest whatsoever as a shareholder of the Corporation, 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 any dividend and other distribution.


 


2.6                                                                                 Warrants to Rank Pari Passu


 


Except as otherwise
provided herein, a Warrant shall rank pari passu with
all other Warrants issued under this Indenture, whatever may be the actual date
of issue of the Warrant Certificates that evidence them.


 


8





















 


2.7                                                                                 Signing of Warrant Certificates


 


The Warrant
Certificates shall be signed by any one director or officer of the Corporation
and need not be under the seal of the Corporation.  The signatures of any of the director or
officer may be mechanically reproduced in facsimile and Warrant Certificates
bearing those facsimile signatures shall be binding upon the Corporation as if
they had been manually signed by the director or officer.  Notwithstanding that any of the persons whose
manual or facsimile signature appears on any Warrant Certificate as an officer
or director may no longer hold office at the date of the Warrant Certificate or
at the date of certification or delivery thereof, any Warrant Certificate
signed as aforesaid shall, subject to section 2.8, be valid and binding
upon the Corporation.


 


2.8                                                                                 Certification by the Trustee or Co-transfer Agent


 


(1)                                  The Trustee shall certify Warrant Certificates
upon the written direction of the Corporation. 
No Warrant Certificate shall be issued or, if issued, shall be valid or
entitle the holder to the benefit hereof until it has been certified by manual
signature by or on behalf of the Trustee, or by manual signature by the Co-transfer
Agent, substantially in the form approved by the Corporation and the Trustee
and the certification by the Trustee or by the Co-transfer 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 attributes and characteristics of the
Warrants provided for in this Indenture.


 


(2)                                  The certification of the Trustee or of the Co-transfer
Agent on Warrant Certificates issued hereunder shall not be construed as a
representation or warranty by the Trustee or by the Co-transfer Agent as to the
validity of this Indenture or of the Warrant Certificates (except the due
certification thereof) and the Trustee or the Co-transfer Agent shall in no
respect be liable or answerable for the use made of the Warrants or any of them
or of the consideration therefor, except as otherwise specified herein.


 


ARTICLE THREE


 


EXCHANGE AND OWNERSHIP OF WARRANTS


 


3.1                                                                                 Exchange of Warrants


 


(1)                                  Upon the request of a Warrantholder one or more
Warrant Certificates may, upon compliance with the reasonable requirements of the
Trustee, be exchanged for one or more Warrant Certificates of different
denominations evidencing, in the aggregate, the same number of Warrants as the
Warrant Certificate or Warrant Certificates being exchanged.


 


(2)                                  Warrants may be exchanged only at the principal
transfer offices of the Trustee in the Cities of Vancouver or Toronto, or at
the principal transfer office of the Co-transfer Agent designated by the
Corporation or at any other place that is designated by the Corporation with
the approval of the Trustee.  Any Warrant
Certificates tendered for exchange shall be surrendered to the Trustee or to
its agent or the Co-transfer Agent and, upon issuance of new Warrants in
exchange therefor, cancelled. The Corporation shall sign all Warrant
Certificates necessary to carry out exchanges as aforesaid and those Warrant
Certificates shall be certified by or on behalf of the Trustee.


 


3.2                                                                                 Charges for Exchange or Transfer


 


For each Warrant
transferred or Warrant Certificate exchanged, the Trustee or the Co-transfer
Agent except as otherwise herein provided, may charge a reasonable sum in
respect of each Warrant transferred or Warrant Certificate exchanged.  The party requesting the transfer or
exchange, as a


 


9





















 


condition precedent thereto, shall pay such charges and shall pay or
reimburse the Trustee, the Co-transfer Agent or the Corporation for all
exigible transfer taxes or governmental or other similar transfer charges
required to be paid in connection therewith.


 


3.3                                                                                 Ownership of Warrants


 


The Corporation and
the Trustee and their respective agents may deem and treat the person whose
name any Warrant is registered as the absolute owner of that Warrant for all
purposes, and the Corporation and the Trustee and their respective agents shall
not be affected by any notice or knowledge to the contrary except as required
by statute or by order of a court of competent jurisdiction.  The registered holder of any Warrant shall be
entitled to the rights evidenced by that Warrant free from all equities or
rights of set-off or counterclaim between the Corporation and the original or
any intermediate holder thereof and all persons may act accordingly and the
receipt from any holder for the Shares, Warrants or monies obtainable pursuant
thereto shall be a good discharge to the Corporation and the Trustee for the
same and neither the Corporation nor the Trustee shall be bound to inquire into
the title of any such registered holder.


 


3.4                                                                                 Registration and Transfer of Warrants


 


(1)                                  The Corporation hereby appoints the Trustee as
registrar of the Warrants.  The
Corporation may hereafter, with the consent of the Trustee, appoint one or more
other additional registrars of the Warrants, including any Co-transfer Agent.


 


(2)                                  The Corporation shall cause a register to be
kept by the Trustee, and the Trustee agrees to maintain such a register, at its
principal transfer office in the cities of Vancouver and Toronto, in which
shall be entered alphabetically the names and addresses of the holders of
Warrants and other particulars of the Warrants held by them respectively and
all transfers of Warrants and the date and other particulars of each
transfer.  Such registration shall be
noted on the Warrant Certificates by the Trustee or other Registrar.  The Corporation shall also cause a branch
register containing the foregoing information to be maintained by the Trustee
in such other place or places as the Corporation with the approval of the
Trustee may designate.


 


(3)                                  No transfer of a Warrant shall be valid unless
made on any one of the registers upon surrender of the Warrant Certificate to
the Trustee or other Registrar accompanied by a written instrument of transfer
in form satisfactory to the Trustee or other Registrar executed by the
registered holder or his executors, administrator or other legal
representatives or his attorney duly appointed by an instrument in writing in
form and execution satisfactory to the Trustee or other Registrar and upon
compliance with such reasonable requirements as the Trustee or other Registrar
may prescribe.


 


(4)                                  The registers referred to in this section 3.4
shall at all reasonable times be open for inspection by the Corporation, by the
Trustee and by any Warrantholder.


 


(5)                                  The registered holder of a Warrant may at any
time and from time to time have the registration of the Warrant transferred
from the register in which the registration thereof appears to another
authorized register upon compliance with such reasonable requirements as the
Trustee or other Registrar may prescribe.


 


(6)                                  Subject to subsection 3.4(7), the holder
of a Warrant may at any time and from time to time have the Warrant transferred
at any of the places at which a register of transfers is kept pursuant to this section 3.4
in accordance with the conditions herein, such reasonable requirements as the
Registrar may prescribe and all applicable securities legislation and
requirements of regulatory authorities, provided however that the transfer of
Warrants shall be accompanied by a transfer form.


 


10





















 


(7)                                  Except as required by law, neither the Trustee
nor any other Registrar nor the Corporation shall be charged with notice of or
be bound to see to the execution of any trust, whether express, implied or constructive,
in respect of any Warrant and may transfer any Warrant on the written direction
of the person registered as the holder thereof, whether named as trustee or
otherwise, as though that person were the beneficial owner thereof.


 


(8)                                  The register required to be kept in the Cities
of Vancouver and Toronto shall not be closed at any time.  In the event that an office of the Trustee or
a Co-transfer Agent in any place is closed, notice of the closing shall be
given, in the manner provided in section 11.2, to the Warrantholders.


 


(9)                                  The Trustee and every other Registrar shall
from time to time, when requested by the Corporation, or by the Trustee furnish
the Corporation, or the Trustee, as the case may be, with a list of names and
addresses of the holders of Warrants entered on the register kept by such
Trustee or other Registrar showing the number of Warrants held by each such
holder.


 


ARTICLE FOUR


 


EXERCISE OF WARRANTS


 


4.1                                                                                 Notice of Acceleration Event


 


(1)                                  The “Acceleration
Event” will occur if at any time after the date that is six months
after the Registration Statement is declared effective by the United States
Securities and Exchange Commission, the closing trading price of the Shares on
the American Stock Exchange is U.S.$5.40 or greater for a period of 20
consecutive trading days.


 


(2)                                  If the Acceleration Event occurs, the
Corporation will have the option for a period of 15 business days after the
occurrence of the Acceleration Event to provide each Warrantholder and the
Trustee with written notice: (i) specifying that the Acceleration Event
has occurred; (ii) requesting that all Warrants be exercised by the
holders thereof within 15 business days of the date the Corporation gives
notice of the Acceleration Event; and (iii) specifying the Expiry Date
(the “Acceleration Notice”).


 


(3)                                  If the Corporation elects to provide the
Acceleration Notice, it shall be delivered to the Warrantholders and the
Trustee in accordance with section 11.2 hereof, and a copy of such notice
shall be delivered by telecopy and registered mail to:


 


Global Resource
Investments Ltd.


7770 El Camino Real


Carlsbad, CA  92009


Attention:                                         Chief Executive Officer


Telecopy:                                           (760) 943-3935


 


and to:


 


Quest Securities
Corporation


Suite 3110, 77
King Street West


Royal Trust Tower


Toronto, ON M5K 1H1


Attention:                                         Robert Pollock


Telecopy:                                           (416) 367-4624


 


11





















 


4.2                                                                                 Method of Exercise of Warrants


 


(1)                                  The holder of any Warrants may, during the
Exercise Period, exercise the right thereby conferred to acquire Shares by
surrendering to the Trustee at its principal transfer office in the Cities of
Vancouver or Toronto, or at any other place or places that may be designated by
the Corporation with the approval of the Trustee, or to the Co-transfer Agent
at its principal transfer office designated by the Corporation, a Warrant
Certificate or Warrant Certificates representing the Warrants held by such
holder that are to be exercised, together with: (i) a duly completed and
executed exercise form in the form set out in Appendix ”A” to Schedule “A”
hereto; and (ii) a certified cheque, bank draft or money order in
lawful money of the United States payable to or to the order of the Corporation
in an amount equal to the Exercise Price multiplied by the number of Warrants
being exercised.  The Warrants shall only be deemed to have
been surrendered upon personal delivery thereof to, or if sent by mail or other
means of transmission upon actual receipt thereof by, the Trustee or the Co-transfer
Agent at the office specified in this section. 
Any such exercise shall be subject to the holder providing such
assurances and executing such documents as may, in the reasonable opinion of
the Corporation or the Trustee or the Co-transfer Agent, be required to ensure
compliance with all applicable securities legislation.


 


(2)                                  Any exercise form delivered pursuant to subsection 4.2(1) shall
be signed by the Warrantholder or the Warrantholder’s executors or
administrators or other legal representatives or an attorney of the
Warrantholder duly appointed by an instrument in writing satisfactory to the
Trustee or the Co-transfer Agent, as the case may be.  The exercise form attached to the Warrant
Certificate shall specify the number of Warrants being exercised, the person or
persons in whose name or names the Shares to be issued upon exercise are to be
issued, the person’s or persons’ address or addresses and the number of Shares
to be issued to each person if more than one is so specified.  If any of the Shares to be acquired are to be
issued to a person or persons other than the Warrantholder, the Warrantholder
shall pay to the Trustee or to its agent all exigible transfer taxes or
governmental or other charges required to be paid in respect of the transfer of
the Shares and the Corporation will not be required to issue or deliver any
certificate evidencing any Shares unless or until that amount has been so paid
or the Warrantholder has established to the satisfaction of the Corporation
that the taxes and charges have been paid or that no taxes or charges are
owing.


 


(3)                                  If at the time of exercise of the Warrants
there remain restrictions on resale under applicable Securities Laws on the
Shares acquired, the Corporation may, on the advice of counsel, endorse the
certificates representing the Shares and Warrants with respect to those
restrictions.


 


(4)                                  The Trustee shall record the particulars of the
Warrants exercised which particulars shall include the names and addresses of
the persons who become holders of Shares, if any, on exercise, the Exercise
Date and the Exercise Price.  Within five
business days of each Exercise Date, the Trustee shall provide such particulars
in writing to the Corporation and the Transfer Agent.


 


4.3                                                                                 Effect of Exercise of Warrants


 


(1)                                  Upon exercise of the Warrants in accordance
with section 4.2, and subject to sections 2.2, 4.4, 4.5, and 5.4, the
Corporation shall cause the holder thereof to be entered forthwith on its
register of shareholders as the holder of the Shares and the Shares so acquired
shall be deemed to have been issued, and the person or persons to whom those
Shares are to be issued shall be deemed to have become the shareholder or
shareholders of record of the Shares on the Exercise Date unless the register
of the Corporation shall be closed on that date, in which case the Shares so
acquired shall be deemed to be issued and the person or persons shall be deemed
to become the shareholder or shareholders of record of the Shares on the date
on which the register is reopened and the Shares shall be issued on the later
date.


 


12





















 


(2)                                  Upon the due exercise of the Warrants as
aforesaid, the Corporation shall, forthwith cause to be delivered to the
Trustee as agent for the person or persons in whose name or names the Shares
and Warrants so acquired are to be issued as specified in the exercise forms
attached to the Warrant Certificates, certificates for the appropriate number
of Shares that the Warrantholders are entitled to pursuant to the Warrants
surrendered.  Upon receipt by the Trustee
of such certificates the Trustee shall cause such certificates to be delivered
forthwith in accordance with the written delivery instructions of the holder,
or in the absence of such instructions, by registered mail without charge therefor,
to the person or persons in whose name or names the Shares have been issued at
the addresses specified in the exercise forms.


 


4.4                                                                                 Partial Exercise of Warrants


 


A Warrantholder may
exercise any number of Warrants up to the aggregate number of Warrants
represented by the Warrant Certificates surrendered.  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 be entitled to receive, without
charge therefor, a new Warrant Certificate in respect of the balance of the
Warrants represented by the surrendered Warrant Certificate and which were not
then exercised and the Trustee shall issue a new Warrant Certificate upon
surrender of such Warrant Certificate, if satisfied that the new Warrant
Certificate is properly issuable.


 


4.5                                                                                 No Fractional Shares or Warrants


 


Notwithstanding
anything herein contained including any adjustment provided for in section 2.2
or Article Five, the Corporation shall not be obliged to issue any
fractional Shares or to distribute certificates which evidence fractional
Shares upon the exercise of one or more Warrants. To the extent that the holder
of one or more Warrants would otherwise have been entitled to receive on the
exercise or partial exercise thereof a fraction of a Share that holder may
exercise that right in respect of the fraction only in combination with other
Warrants that in the aggregate entitle the holder to acquire a whole number of
Shares.  If not so exercised, the
Corporation shall not pay any amounts to the holder in satisfaction of the
right to otherwise have received a fraction of a Share.


 


4.6                                                                                 Accounting and Recording


 


The Trustee shall
record the particulars of the Warrants exercised, including the name or names
and addresses of the persons who become holders of Shares and Warrants on
exercise and the Exercise Date.  Within
three business days of each Exercise Date, the Trustee shall provide those
particulars in writing to the Corporation.


 


4.7                                                                                 Cancellation of Surrendered Warrants


 


All Warrant
Certificates surrendered to the Trustee shall be cancelled by the Trustee and,
upon request therefor of the Corporation, the Trustee shall furnish the
Corporation with a certificate identifying the Warrant Certificates so
cancelled and the number of Shares and Warrants which have been issued pursuant
to each.


 


4.8                                                                                 Expiration of Warrants


 


After the expiry of
the Exercise Period, all rights under any Warrant in respect of which the right
of subscription and payment herein and therein provided for shall not
theretofore have been exercised shall wholly cease and terminate and the
Warrant shall be void and of no effect.


 


13





















 


4.9                                                                                 Share Certificates


 


Certificates
representing Shares issued upon the exercise of Warrants shall bear the
following legend (the “Share Legend”),
except that all certificates representing Shares issued after January 24,
2006 will not bear the first and
second paragraphs of the Share Legend and if the Corporation provides the
Trustee with a Registration Notice, all certificates representing Shares issued
after the receipt by the Trustee of the Registration Notice will not bear the
third paragraph of the Share Legend:


 


“UNLESS PERMITTED UNDER
CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE
SECURITY BEFORE JANUARY 24, 2006.


 


THE SECURITIES REPRESENTED
BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK EXCHANGE (“TSX”); HOWEVER,
THE SAID SECURITIES CANNOT BE TRADED THROUGH THE FACILITIES OF TSX SINCE THEY
ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH
SECURITIES IS NOT “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON TSX.


 


THE SECURITIES EVIDENCED BY
THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE “ACT”) OR ANY APPLICABLE STATE SECURITIES
LAW.  NO INTEREST THEREIN MAY BE
SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED OR OTHERWISE TRANSFERRED OR
DISPOSED OF WITHOUT (A) AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT
AND APPLICABLE UNITED STATES STATE SECURITIES LAWS COVERING ANY SUCH
TRANSACTION, (B) RECEIPT BY THE CORPORATION OF AN ACCEPTABLE LEGAL OPINION
STATING THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION, OR (C) THE
CORPORATION OTHERWISE SATISFYING ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM
REGISTRATION.”


 


The Trustee may remove the Share Legend (or any portion thereof) on any
particular certificate if:


 


(a)                                  in
the event that the Shares represented by the certificate are being sold (1) to
the Corporation, or (2) in accordance with Rule 144 under the U.S.
Securities Act or (3) pursuant to a registration statement filed with and
declared effective by the United States Securities and Exchange Commission, the
Trustee receives an opinion of counsel, of recognized standing reasonably
satisfactory to the Corporation, that such legend (or portion thereof) is no
longer required under applicable requirements of the U.S. Securities Act or
state securities laws; or


 


(b)                                 otherwise,
the Trustee receives an opinion of counsel, of recognized standing reasonably
satisfactory to the Corporation that such legend (or portion thereof) is no
longer required under applicable Securities Laws.


 


14





















 


ARTICLE FIVE


 


ADJUSTMENT OF EXERCISE NUMBER


 


5.1                                                                                 Definitions


 


In this Article the
terms “record date” and “effective date” where used herein shall
mean 4:30 p.m. (Vancouver time) on the relevant date.


 


5.2                                                                                 Adjustment of Exercise Number


 


The Exercise Number
(or the number and kind of Shares or securities to be received upon exercise in
the case of subsections 5.2(4) and 5.2(5) below) shall be
subject to adjustment from time to time in the events and in the manner
provided in section 5.3 and as follows:


 


(1)                                  If during the Exercise Period the Corporation:


 


(a)                                  fixes the record date for the issue, or issues
to, all or substantially all of the holders of the Shares by way of a stock
dividend or otherwise Shares or Convertible Securities, other than (i) the
issue from time to time of Shares or Convertible Securities by way of stock
dividend to shareholders who elect to receive Shares or Convertible Securities
in lieu of cash dividends in the ordinary course or pursuant to a dividend
reinvestment plan or (ii) as dividends paid in the ordinary course; or


 


(b)                                 subdivides or redivides its outstanding Shares
into a greater number of Shares; or


 


(c)                                  combines, consolidates or reduces its
outstanding Shares into a smaller number of Shares


 


(any of those
events being herein called a “Share
Reorganization”),


 


the Exercise Number shall be
adjusted effective immediately after the record date at which the holders of
Shares are determined for the purposes of the Share Reorganization or the
effective date of the Share Reorganization if no record date is fixed to a
number that is the product of (1) the Exercise Number in effect on the
record date and (2) a fraction:


 


(i)                                     the numerator of which shall be the number of
Shares outstanding after giving effect to the Share Reorganization; and


 


(ii)                                  the denominator of which shall be the number of
Shares outstanding on the record date, or effective date if no record date is
fixed, before giving effect to the Share Reorganization.


 


For the purposes of
determining the number of Shares outstanding at any particular time for the
purpose of this subsection 5.2(1) there shall be included that number
of Shares which would have resulted from the conversion at that time of all
outstanding Convertible Securities.


 


(2)                                  If during the Exercise Period the Corporation
fixes a record date for the issuance of rights, options or warrants to all or
substantially all the holders of the Shares pursuant to which those holders are
entitled to subscribe for, purchase or otherwise acquire Shares or Convertible
Securities within a period of not


 


15





















 


more than 45 days from such record date at a price per
share, or at a conversion price per share, of less than 95% of the Current
Market Price on such record date (any such issuance being herein called a “Rights Offering” and Shares that may be
acquired in exercise of the Rights Offering, or upon conversion of the
Convertible Securities offered by the Rights Offering, being herein called the “Offered Shares”), the Exercise Number shall
be adjusted effective immediately after the applicable record date to an
Exercise Number that is the product of (1) the Exercise Number in effect
on the record date and (2) a fraction:


 


(i)                                     the numerator of which shall be the sum of (a) the
number of Shares outstanding on the record date plus (b) the number of
Offered Shares offered pursuant to the Rights Offering or the maximum number of
Offered Shares into which the Convertible Securities so offered pursuant to the
Rights Offering may be converted, as the case may be; and


 


(ii)                                  the denominator of which shall be the sum of:


 


(A)                              the number of Shares outstanding on the record
date; and


 


(B)                                the number arrived at when (I) either the
product of (a) the number of Offered Shares so offered and (b) the
price at which such Offered Shares are offered, or the product of (c) the
conversion price of the Offered Shares so offered and (d) the maximum
number of Offered Shares for or into which the Convertible Securities so
offered pursuant to the Rights Offering may be converted, as the case may be,
is divided by (II) the Current Market Price of the Shares on the record date
for the Rights Offering.


 


If by the terms of the rights,
options, or warrants referred to in this subsection 5.2(2), there is more
than one purchase, conversion or exchange price per Offered Share, the
aggregate price of the total number of additional Offered Shares offered for
subscription or purchase, or the aggregate conversion or exchange price of the
Convertible Securities so offered, shall be calculated for purposes of the
adjustment on the basis of the lowest purchase, conversion or exchange price
per Offered Share, as the case may be. 
Any Offered Shares owned by or held for the account of the Corporation or
a subsidiary of the Corporation shall be deemed not to be outstanding for the
purpose of any such computation; if all the rights, options or warrants are not
so issued or if all rights, options or warrants are not exercised prior to the
expiration thereof, the Exercise Number shall be readjusted to the Exercise
Number in effect immediately prior to the record date, and the Exercise Number
shall be further adjusted based upon the number of Offered Shares (or
Convertible Securities that are convertible into Offered Shares) actually
delivered upon the exercise of the rights, options or warrants, as the case may
be, but subject to any other adjustment required hereunder by reason of any
event arising after that record date.


 


(3)                                  If during the Exercise Period the Corporation
issues or distributes to all or substantially all the holders of Shares, (i) shares
of any class other than Shares, or (ii) rights, options or warrants to
acquire Shares or Convertible Securities other than rights, options or warrants
exercisable within 45 days from the date of issue thereof at a price, or at a
conversion price, of at least 95% of the Current Market Price at the record
date for such distribution, or (iii) evidences of indebtedness, or (iv) any
other cash, securities or other property or assets and that issuance or
distribution does not constitute a Share Reorganization or a Rights Offering
(any of those events being herein called a “Special
Distribution”), the Exercise Number shall be adjusted effective
immediately after the record date at which the holders of Shares are determined
for purposes of the Special Distribution to an Exercise Number that is the
product of (1) the Exercise Number in effect on the record date and (2) a
fraction:


 


16





















 


(i)                                     the numerator of which shall be the product of
(I) the sum of the number of Shares outstanding on the record date plus the
number of Shares which the Warrantholders would be entitled to receive upon
exercise of all their outstanding Warrants if they were exercised on the record
date and (II) the Current Market Price thereof on that date; and


 


(ii)                                  the denominator of which shall be:


 


(A)                              the product of (I) the sum of the number of
Shares outstanding on the record date plus the number of Shares which the
Warrantholders would be entitled to receive upon exercise of all their
outstanding Warrants if they were exercised on the record date and (II) the
Current Market Price thereof on the earlier of such record date and the date on
which the Corporation announces its intention to make such distribution;


 


less


 


(B)                                the aggregate fair market value, as determined
by the board, whose determination shall be conclusive, of the shares, rights,
options, warrants, evidences of indebtedness or other assets issued or
distributed in the Special Distribution.


 


Any Shares owned by or held
for the account of the Corporation shall be deemed not to be outstanding for
the purpose of any such computation; to the extent that the distribution of
shares, rights, options, warrants, evidences of indebtedness or assets is not
so made or to the extent that any rights, options or warrants so distributed
are not exercised, the Exercise Number shall be readjusted to the Exercise
Number that would then be in effect based upon shares, rights, options,
warrants, evidences of indebtedness or assets actually distributed or based
upon the number of Shares or Convertible Securities actually delivered upon the
exercise of the rights, options or warrants, as the case may be, but subject to
any other adjustment required hereunder by reason of any event arising after
the record date.


 


(4)                                  If during the Exercise Period there is a
reorganization of the Corporation not otherwise provided for in subsection 5.2(1) or
a consolidation or merger or amalgamation of the Corporation with or into
another body corporate including a transaction whereby all or substantially all
of the Corporation’s undertaking and assets become the property of any other
corporation through sale, lease, exchange or otherwise (any such event being
herein called a “Capital Reorganization”)
any holder of a Warrant who has not exercised his right to exchange his Warrant
for Shares prior to the effective date of the Capital Reorganization shall be
entitled to receive and shall accept, upon the exercise of his right at any
time after the effective date of the Capital Reorganization, in lieu of the
number of Shares (and any other securities or properties to which holders are
entitled upon exercise of the Warrants) to which he or she was theretofore
entitled upon exercise of the Warrant, the aggregate number of shares or other
securities or property of the Corporation, or the continuing, successor or
purchasing corporation, as the case may be, under the Capital Reorganization
that the holder would have been entitled to receive as a result of the Capital
Reorganization if, on the effective date thereof, he or she had been the holder
of the number of Shares (and any other securities to which holders are entitled
upon exercise of the Warrants) to which immediately before the transaction he
or she was entitled upon exercise of the Warrants; no Capital Reorganization
shall be carried into effect unless all necessary steps have been taken so that
the holders of Warrants shall thereafter be entitled to receive the number of
shares or other securities or property of the Corporation, or of the
continuing, successor or purchasing corporation, as the case may be, under the
Capital Reorganization, subject to adjustment thereafter in accordance with
provisions the same, as nearly as may be possible, as those contained in this


 


17





















 


section 5.2 and in section 5.3.  In addition, if necessary, as a result of any
such Capital Reorganization, appropriate adjustments shall be made in the
application of the provisions of this Indenture with respect to the rights and
interests thereafter of the Warrantholder to the end that the provisions shall
thereafter correspondingly be made applicable as nearly as may reasonably be
possible in relation to any shares or other securities or property thereafter
deliverable upon the exercise of the Warrants. 
Any such adjustments shall be made by and set forth in an indenture
supplemental hereto approved by action by the Directors and shall for all
purposes be conclusively deemed to be an appropriate adjustment.


 


(5)                                  If the Corporation reclassifies or otherwise
changes the outstanding Shares, the exercise right shall be adjusted effective
immediately upon the reclassification becoming effective so that holders of
Warrants who exercise their rights thereafter shall be entitled to receive such
shares as they would have received had the Warrants been exercised immediately
prior to the effective date, subject to adjustment thereafter in accordance
with provisions the same, as nearly as may reasonably be possible, as those
contained in this section 5.2 and in section 5.3.


 


5.3                                                                                 Subscription Rights Adjustment Rules


 


The following rules and
procedures are applicable to adjustments made pursuant to section 5.2:


 


(1)                                  The adjustments and readjustments provided for
in this Article Five are cumulative and, subject to subsection 5.3(2),
apply (without duplication) to successive issues, subdivisions, combinations,
consolidations, distributions and any other events that require adjustment of
the Exercise Number or the number or kind of shares or securities purchasable
hereunder.


 


(2)                                  No adjustment in the Exercise Number is
required unless the adjustment will result in a change of at least 2% in the
Exercise Number then in effect provided, however, that any adjustments that,
except for the provisions of this subsection 5.3(2) would otherwise
have been required to be made, are carried forward and taken into account in
any subsequent adjustment.


 


(3)                                  If at any time after the Exercise Period the Corporation
shall take any action affecting the Shares, other than an action described in section 5.2,
which in the opinion of the directors would have a material adverse effect upon
the rights of Warrantholders, the Exercise Number shall be adjusted in such
manner and at such time by action by the directors, in their sole discretion,
but subject to the prior written consent of the Toronto Stock Exchange and the
American Stock Exchange, as may be equitable in the circumstances.  Failure of the taking of action by the
directors so as to provide for an adjustment prior to the effective date of any
action by the Corporation affecting the Shares shall be deemed to be conclusive
evidence that the directors have determined that it is equitable to make no
adjustment in the circumstances.


 


(4)                                  No adjustment in the Exercise Number shall be
made in respect of any event described in paragraph 5.2(1)(a) or
subsections 5.2(2) or 5.2(3) if the holders of the Warrants are
entitled to participate in the event on the same terms, mutatis mutandis, as if
they had exercised their Warrants immediately prior to the effective date or
record date of the event.  Any such
participation is subject to regulatory approval.


 


(5)                                  No adjustment in the Exercise Number shall be
made pursuant to section 5.2 in respect of the issue of Shares, rights,
options or warrants pursuant to:


 


(a)                                  this Indenture;


 


18





















 


(b)                                 the exercise of director, officer and employee
options or options granted for services in accordance with the rules of
the Toronto Stock Exchange or the American Stock Exchange;


 


(c)                                  the
exercise of special rights to acquire Shares of the Corporation issued to
employees of a subsidiary of the Corporation as part of the acquisition by the
Corporation of options to acquire securities of such subsidiary held by such
employees;


 


(d)                                 the exercise of Warrants; or


 


(e)                                  the issuance of Shares by the Corporation
pursuant to any agreements in effect as at the date of this Indenture,


 


and any such issue shall be
deemed not to be a Share Reorganization, a Rights Offering or a Special
Distribution.


 


(6)                                  If a dispute at any time arises with respect to
adjustments of the Exercise Number, the dispute shall be conclusively
determined (as between the Corporation, the Warrantholders, the Trustee and all
transfer agents and shareholders of the Corporation) by the auditors of the
Corporation or if they are unable or unwilling to act, by such firm of
independent chartered accountants as may be selected by the directors and any
such determination shall be binding upon the Corporation, the Warrantholders,
the Trustee and all transfer agents and shareholders of the Corporation.


 


(7)                                  If the Corporation sets a record date to
determine the holders of Shares for the purpose of entitling them to receive
any dividend or distribution or any subscription or purchase rights and
thereafter legally abandons its plans to pay or deliver the dividend,
distribution or subscription or purchase rights, then no adjustment in the
Exercise Number shall be required by reason of the setting of the record date.


 


5.4                                                                                 Postponement of Subscription


 


In any case where
the application of section 5.2 results in an increase of the Exercise
Number taking effect immediately after the record date for or occurrence of a
specific event, if any Warrants are exercised after that record date or
occurrence and prior to completion of the event or of the period for which a
calculation is required to be made, the Corporation may postpone the issuance
to the holder of the Warrants of the Shares to which the holder is entitled by
reason of the increase of the Exercise Number but the Shares shall be so issued
and delivered to that holder upon completion of that event or period, with the
number of those Shares calculated on the basis of the Exercise Number on the
Exercise Date adjusted for completion of that event or period, and the
Corporation shall forthwith after the Exercise Date deliver to the person or
persons in whose name or names the Shares are to be issued an appropriate
instrument evidencing the person’s or persons’ right to receive the Shares.


 


5.5                                                                                 Notice of Certain Events


 


(1)                                  Upon the occurrence of any event referred to in
sections 5.2 or 5.3 that requires an adjustment in the Exercise Number,
the Corporation shall promptly thereafter:


 


(a)                                  file with the Trustee a certificate of the
Corporation specifying the particulars of the event and, if determinable, the
adjustment and a computation of the adjustment; and


 


(b)                                 give notice to the Warrantholders of the particulars
of the event and, if determinable, the adjustment.


 


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(2)                                  If notice has been given under subsection 5.5(1) and
the adjustment is not then determinable, the Corporation shall promptly after
the adjustment is determinable:


 


(a)                                  file with the Trustee a certificate of the
Corporation evidencing the computation of the adjustment; and


 


(b)                                 give notice to the Warrantholders of the
adjustment.


 


5.6                                                                                 Protection of Trustee


 


The Trustee 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 5.2, 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.


 


5.7                                                                                 Proceedings Prior to Any Action Requiring Adjustment


 


As a condition
precedent to the taking of any action which would require an adjustment in any
of the acquisition rights pursuant to any of the Warrants, including the number
of Shares which are to be received upon the exercise 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 the Shares which the holders of such Warrants are entitled
to receive on the full exercise thereof in accordance with the provisions
hereof.


 


ARTICLE SIX


 


RIGHTS AND COVENANTS


 


6.1                                                                                 Purchase of Warrants


 


(1)                                  The Corporation, when not in default under this
Indenture, may purchase in the market, by a private contract, by tender or
otherwise, all or any portion of the Warrants in such manner, from such persons
and on such terms as the Corporation and such persons may determine.  All Warrants so purchased shall forthwith be
delivered to the Trustee and cancelled by it and no Warrants shall be issued in
substitution therefor.


 


(2)                                  If, upon an invitation for tenders, the number
of Warrants tendered at the lowest price exceeds the number of Warrants that
the Corporation is prepared to accept at that price, the Warrants to be
purchased by the Corporation shall be selected by the Trustee by lot, or in any
other manner as the Trustee may deem equitable, from the Warrants tendered by
each tendering Warrantholder who tendered at such lowest price.  For this purpose, the Trustee may make, and
from time to time amend, regulations with respect to the manner in which
Warrants may be so selected and regulations so made shall be valid and binding
upon all Warrantholders notwithstanding the fact that, as a result thereof, the
Warrants held by a holder or represented by a Warrant Certificate become
subject to purchase in part only.


 


6.2                                                                                 General Covenants of the Corporation


 


The Corporation
covenants with the Trustee, for the benefit of the Trustee and the
Warrantholders that so long as any Warrants remain outstanding and may be
exercised for Shares:


 


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(1)                                  The Corporation will at all times maintain its
existence, carry on and conduct its business in a prudent manner in accordance
with industry standards and good business practice, keep or cause to be kept
proper books of account in accordance with applicable law, and if and whenever
required in writing by the Trustee, file with the Trustee copies of all annual
financial statements of the Corporation furnished to its shareholders during
the term of this Indenture.


 


(2)                                  The Corporation is duly authorized to create and
issue the Warrants to be issued hereunder and the Warrant Certificates when
issued and certified as herein provided will be legal, valid and binding
obligations of the Corporation.


 


(3)                                  The Corporation will cause the Shares from time
to time subscribed for pursuant to the exercise of the Warrants issued by the
Corporation hereunder, in the manner herein provided, to be duly issued in
accordance with the Warrants and the terms hereof.


 


(4)                                  The Corporation will reserve and keep available
a sufficient number of Shares for issuance upon the exercise of Warrants issued
by the Corporation hereunder.


 


(5)                                  Upon the exercise by the holder of any Warrant
of the right to purchase provided for therein and herein and, upon payment of
the Exercise Price applicable thereto for each Share in respect of which the
right of purchase is so exercised, all Shares issuable upon the exercise of
Warrants shall be issued as fully paid and non-assessable.


 


(6)                                  The Corporation will cause the certificates
representing the Shares from time to time to be acquired pursuant to the
exercise of the Warrants in the manner herein provided, to be duly issued and
delivered in accordance with the Warrants and the terms hereof.


 


(7)                                  The Corporation will use commercially
reasonable efforts to maintain the listing of the Shares on the Toronto Stock
Exchange and the American Stock Exchange, and will take all steps necessary to
ensure that the Shares issuable upon exercise of the Warrants will be listed
and posted for trading on the Toronto Stock Exchange and American Stock
Exchange upon their issue.


 


(8)                                  The Corporation will use commercially
reasonable efforts to maintain its status as a “reporting issuer” under
applicable Securities Laws in the Provinces and as a “reporting company” with
the United States Securities and Exchange Commission until the Expiry Date and
for a period of 12 months thereafter and shall in a timely fashion file or
deposit all documents and reports with the relevant securities commissions and
similar securities authorities required to be filed or deposited pursuant to
the Securities Laws.


 


(9)                                  The Corporation shall prepare and file under
the Securities Laws any documents required to be filed therewith relating to
the proposed distribution of Shares to holders of Warrants upon the exercise
thereof.


 


(10)                            Generally, the Corporation will well and truly
perform and carry out all the acts or things to be done by it as provided in
this Indenture.


 


(11)                            If the Corporation is a party to any
transaction in which the Corporation is not the continuing corporation, the
Corporation shall use commercially reasonable efforts to obtain all consents
which may be necessary or appropriate under Canadian and United States law to
enable the continuing corporation to give effect to the Warrants.


 


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6.3                                                                                 Trustee’s Remuneration and Expenses


 


The
Corporation covenants that it will pay to the Trustee from time to time such
reasonable remuneration for its services hereunder as may be agreed upon
between the Corporation and the Trustee and will pay or reimburse the Trustee
upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in the administration or execution of the
trusts hereby created (including the reasonable compensation and the
disbursements of counsel and all other advisers and assistants not regularly in
its employ), both before any default hereunder and thereafter until all duties
of the Trustee under the trusts hereof have been finally and fully performed,
except any expense, disbursement or advance as may arise from the negligence,
wilful misconduct or bad faith of the Trustee or of persons for whom the
Trustee is responsible.


 


6.4                                                                                 No Dividends or Distributions


 


During
the Exercise Period, the Corporation shall not pay any dividend or make any distribution
to all or substantially all of the holders of Shares or declare any such
dividend, or provide for any such distribution, payable to all or substantially
all the holders of Shares of record during that period.  Such restrictions shall not apply to stock
dividends or distributions in respect of which an adjustment can be made in the
Exercise Number pursuant to paragraph 5.2(1)(a) or
subsections 5.2(2) or 5.2(3).


 


6.5                                                                                 Performance of Covenants by Trustee


 


If the
Corporation fails to perform any of its covenants and obligations contained in
this Indenture, the Trustee may notify the Warrantholders of the failure on the
part of the Corporation or may itself perform any of the said covenants capable
of being performed by it, but shall be under no obligation to do so or to
notify the Warrantholders.  All sums
expended or advanced by the Trustee in so doing shall be repayable as provided
in section 6.3.  No performance,
expenditure or advance by the Trustee shall be deemed to relieve the
Corporation of any default or of its continuing obligations hereunder.


 


ARTICLE SEVEN


 


ENFORCEMENT


 


7.1                                                                                 Suits by Warrantholders


 


All or
any of the rights conferred upon any Warrantholder by any of the terms of the
Warrants, the Warrant Certificates or of this Indenture, or both of them, may
be enforced by the Warrantholder by appropriate legal proceedings, but without
prejudice to the right which is hereby conferred upon the Trustee to proceed in
its own name to enforce each and all of the provisions herein contained for the
benefit of all Warrantholders, subject, in each case, to the provisions of section 8.11.


 


7.2                                                                                 Immunity of Shareholders, Directors and Officers


 


The
Trustee, and by their 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 past, present or future shareholder, director or
officer of the Corporation or of any of the subsidiaries of the Corporation, or
any subsidiary of the Corporation, in their capacity as such, for the issue of
Shares pursuant to any Warrants or on any covenant, agreement, representation
or warranty by the Corporation contained herein or in the Warrant Certificates.


 


22





















 


7.3                                                                                 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
directors, shareholders, officers, employees or agents of the Corporation or
any of the subsidiaries of the Corporation, or any subsidiary of the
Corporation, but only the property of the Corporation (or any successor
corporation) shall be bound in respect hereof.


 


ARTICLE EIGHT


 


MEETINGS OF WARRANTHOLDERS


 


8.1                                                                                 Right to Convene Meetings


 


The
Trustee 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 and funded to its reasonable satisfaction by the Corporation or by
one or more of the Warrantholders signing the Warrantholders’ Request against
the costs that may be incurred in connection with the calling and holding of
the meeting, convene a meeting of the Warrantholders. In the event of the
Trustee failing, within 15 days after receipt of the written request of the
Corporation or Warrantholders’ Request and indemnity given as aforesaid, to
give notice convening a meeting, the Corporation or the Warrantholders, as the
case may be, may convene the meeting. Every meeting shall be held in the City
of Vancouver or at such other place as may be approved or determined by the
Trustee.


 


8.2                                                                                 Notice


 


At
least 14 days notice of any meeting shall be given to the Warrantholders in the
manner provided in section 11.2 and a copy of the notice shall be sent by
mail to the Trustee unless the meeting has been called by it, and to the
Corporation unless the meeting has been called by it. Each notice shall state
the time when and the place where the meeting is to be held and shall state
briefly the general nature of the business to be transacted thereat and it
shall not be necessary for the notice to set out the terms of any resolution to
be proposed or any of the provisions of this Article Eight.  Any accidental omission in the notice of a
meeting shall not invalidate any resolution passed at the meeting.


 


8.3                                                                                 Chairman


 


An
individual (who need not be a Warrantholder) designated in writing by the
Trustee shall be chairman of the meeting, 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 a person present to be chairman.


 


8.4                                                                                 Quorum


 


Subject
to the provisions of section 8.12, at any meeting of the Warrantholders a
quorum shall consist of one or more Warrantholders present in person or by
proxy and holding in aggregate at least 10% of the then outstanding Warrants.
If a quorum of the Warrantholders is not present within half an hour from the
time fixed for holding a meeting, the meeting, if summoned by the
Warrantholders pursuant to a Warrantholders’ Request, shall be dissolved; but,
subject to section 8.12, in any other case the meeting shall be adjourned
to the same day in the next week (unless that day is not a business day, in
which event the meeting shall be reconvened on the next day that is a business
day) at the same time and place and no notice of the adjournment need be given.
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


 


23





















 


was originally convened,
notwithstanding the number of outstanding Warrants that such Warrantholders
hold.


 


8.5                                                                                 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 the meeting and no notice of the
adjournment need be given except such notice, if any, as the meeting may
prescribe.


 


8.6                                                                                 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 meeting, unless a poll
is duly demanded or required 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.  Any Warrantholder
present in person or by proxy can demand a poll at any meeting in accordance
with the provisions of section 8.7.


 


8.7                                                                                 Poll


 


On
every Extraordinary Resolution, and on any other question submitted to a
meeting upon which a poll is directed by the chairman or requested by one or
more of the Warrantholders acting in person or by proxy and holding in the
aggregate not less than 5% of the total number of the Warrants then
outstanding, a poll shall be taken in such manner as the chairman shall
direct.  Questions other than an
Extraordinary Resolution shall be decided by a majority of the votes cast on a
poll.  The results of a poll shall be
deemed to be the decision of the meeting at which the poll was demanded and
shall be binding on all Warrantholders.


 


8.8                                                                                 Voting


 


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 proxy, duly appointed by
instrument in writing, shall be entitled to one vote in respect of each Warrant
then held by him.  A proxyholder need not
be a Warrantholder.


 


8.9                                                                                 Regulations


 


The
Trustee, or the Corporation with the approval of the Trustee, may from time to
time make or vary such regulations as they think fit:


 


(a)                                  for the issue of voting certificates
by any bank, trust company or other depository satisfactory to the Trustee
stating that the Warrants specified therein have been deposited with the
depository by a named person and will remain on deposit until a specified date,
which voting certificates shall entitle the persons named therein to be present
and vote at the meeting of the Warrantholders and at any adjournment thereof
held before that date or to appoint a proxy or proxies to represent them and
vote for them at any such meeting and at any adjournment thereof held before
that date in the same manner and with the same effect as though the persons so
named in the voting certificates were the actual holders of the Warrants
specified therein;


 


24





















 


(b)                                 for the deposit of voting
certificates or instruments appointing proxies at such place and time as the
Trustee, the Corporation or the Warrantholders convening the meeting, as the
case may be, may in the notice convening the meeting direct;


 


(c)                                  for the deposit of voting
certificates or 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 the voting certificates or instruments appointing proxies to be
sent by mail, cable, telex or other means of prepaid, transmitted, recorded
communication before the meeting to the Corporation or to the Trustee 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;


 


(d)                                 for the form of instrument
appointing a proxy (which shall be in writing), the manner in which the same
shall be executed and the verification of any authority under which a person
executes a proxy on behalf of a Warrantholder; and


 


(e)                                  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 the
regulations may provide, the only persons who shall be recognized at any
meeting as the holders of any Warrants, or as entitled to vote or, subject to section 8.10,
be present at the meeting in respect thereof, shall be persons who are the
registered holders of Warrants or their duly appointed proxyholders.


 


8.10                                                                           Corporation and Trustee may be Represented


 


The
Corporation and the Trustee, by their respective officers or directors, and the
counsel to the Corporation and the Trustee may attend any meeting of the
Warrantholders, but shall have no vote as such.


 


8.11                                                                           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 have the
following powers exercisable from time to time by Extraordinary Resolution
(subject to regulatory approval, if required):


 


(a)                                  power to agree to or sanction any
modification, abrogation, alteration, compromise or arrangement of the rights
of Warrantholders or the Trustee in its capacity as trustee hereunder or on
behalf of the Warrantholders against the Corporation, whether those rights
arise under this Indenture, the Warrant Certificates or otherwise which shall
be agreed to by the Corporation, and to authorize the Trustee to concur in and
execute any indenture supplement, except that in respect of a change in the
Exercise Period or the Exercise Price the amendment shall not be binding upon a
Warrantholder who does not consent thereto;


 


(b)                                 power to direct or authorize the
Trustee to enforce any of the obligations on the part of the Corporation
contained in this Indenture or the Warrants or to enforce any of the rights of
the Warrantholders in any manner specified in the Extraordinary Resolution or
to refrain from enforcing any such covenant or right;


 


25





















 


(c)                                  power to waive and direct the
Trustee to waive any default on the part of the Corporation in complying with
any provisions of this Indenture or the Warrants, either unconditionally or
upon any conditions specified in the Extraordinary Resolution;


 


(d)                                 power to restrain any Warrantholder
from taking or instituting any suit, action or proceeding against the
Corporation for the enforcement of any of the obligations on the part of the
Corporation contained in this Indenture or the Warrant Certificates or to
enforce any of the rights of the Warrantholders;


 


(e)                                  power to direct any Warrantholder
who, as such, has brought any suit, action or proceeding to stay or discontinue
or otherwise deal with the same upon payment of the costs, charges and expenses
reasonably and properly incurred by the Warrantholder in connection therewith;


 


(f)                                    power from time to time and at any
time, with the consent of the Corporation, not to be unreasonably withheld, to
remove the Trustee and appoint a successor trustee;


 


(g)                                 power 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 Trustee to concur in and execute any
ancillary or supplemental indenture embodying the change or omission;


 


(h)                                 power to assent to any compromise or
arrangement with any creditor or any class of creditors, whether secured or
otherwise, and with holders of any shares or other securities of the
Corporation; and


 


(i)                                     power to amend, alter or repeal any
Extraordinary Resolution previously passed or consented to by Warrantholders.


 


8.12                                                                           Meaning of “Extraordinary Resolution”


 


(1)                                  The expression “Extraordinary Resolution” when used in this Indenture means,
subject as hereinafter in this section and in sections 8.15 and 8.16
provided, a resolution proposed at a meeting of the Warrantholders duly
convened for that purpose and held in accordance with the provisions of this Article Eight
at which there are present in person or by proxy one or more Warrantholders
holding in aggregate not less than 51% of the total number of Warrants then
outstanding and passed by the affirmative votes of Warrantholders holding in
aggregate not less than 66.67% of the total number of Warrants then outstanding
and represented at the meeting and voted on the poll upon the resolution.


 


(2)                                  If at any meeting called for the purpose of
passing an Extraordinary Resolution Warrantholders holding in aggregate not
less than 51% of the total number of Warrants 
then outstanding are not present in person or by proxy within half an
hour after the time appointed for the meeting, then the meeting, if convened by
Warrantholders pursuant to 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’ notice
shall be given to the Warrantholders of the time and place of the adjourned
meeting in the manner provided in section 11.2.  The 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,
notwithstanding the provisions of this subsection 8.12(2) to the
contrary, and may transact the business for which the meeting was originally
convened and a resolution proposed at the adjourned meeting


 


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and passed by the
requisite vote as provided in subsection 8.12(1) shall be an
Extraordinary Resolution within the meaning of this Indenture notwithstanding
the number of Warrants held by those Warrantholders voting.


 


(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.


 


8.13                                                                           Powers Cumulative


 


It is
hereby declared and agreed that 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 the powers or any
combination of the powers from time to time shall not prevent the
Warrantholders from exercising that power or those powers or combination of
powers then or any other power or powers or combination of powers thereafter
from time to time.


 


8.14                                                                           Minutes


 


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


 


8.15                                                                           Instruments in Writing


 


All
actions that may be taken and all powers that may be exercised by the
Warrantholders at a meeting held as in this Article Eight provided may
also be taken and exercised by one or more Warrantholders who hold in the
aggregate not less than 66.67% of the total number of then outstanding
Warrants, by an instrument in writing signed in one or more counterparts by
each Warrantholder in person or by attorney duly appointed in writing and the
expression “Extraordinary Resolution”
when used in this Indenture shall include a resolution embodied in an
instrument so signed.


 


8.16                                                                           Binding Effect of Resolutions


 


Every
resolution and every Extraordinary Resolution passed in accordance with the
provisions of this Article Eight at a meeting of Warrantholders shall be
binding upon all the Warrantholders, except as provided in subsection 8.11(a),
whether present at or absent from the meeting, and whether voting for or
against the resolution or abstaining and every instrument in writing signed by
Warrantholders in accordance with section 8.15 shall be binding upon all
the Warrantholders, except as provided in subsection 8.11(a), whether
signatories thereto or not, and each and every Warrantholder and the Trustee
(subject to the provisions for its indemnity herein contained) shall be bound
to give effect accordingly to every resolution and instrument in writing passed
or executed in accordance with these provisions.


 


8.17                                                                           Holdings by Corporation Disregarded


 


In
determining whether the Warrantholders holding the requisite number of Warrants
are present for the purpose of obtaining a quorum or have voted or consented to
any resolution, Extraordinary


 


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Resolution, consent, waiver,
Warrantholders’ Request or other action under this Indenture, Warrants owned by
the Corporation or any subsidiary of the Corporation shall be deemed to be not
outstanding.


 


ARTICLE NINE


 


SUPPLEMENTAL INDENTURES AND SUCCESSOR
COMPANIES


 


9.1                                                                                 Provision for Supplemental Indentures for Certain Purposes


 


From
time to time the Corporation and the Trustee may, subject to the provisions
hereof, and they shall, when so directed hereby, execute and deliver by their
proper officers or directors, as the case may be, 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 Five;


 


(b)                                 adding to the provisions hereof such
additional covenants and enforcement provisions as, in the opinion of counsel,
are necessary or advisable, provided that the same are not in the opinion of
the Trustee, based on the opinion of counsel, prejudicial to the interests of
the Warrantholders as a group;


 


(c)                                  giving effect to any Extraordinary
Resolution passed as provided in Article Eight;


 


(d)                                 adding to, deleting or altering the
provisions hereof in respect of the transfer of Warrants, the exchange of
Warrants and the making of any modification in the form of a Warrant
Certificate which additions, deletions or alterations, in the opinion of the
Trustee, based on the opinion of counsel, do not affect the substance thereof;


 


(e)                                  making any additions to, deletions
from or alterations of the provisions of this Indenture which, in the opinion
of the Trustee, based on the opinion of counsel, do not materially and
adversely affect the interests of the Warrantholders and are necessary or advisable
in order to incorporate, reflect or comply with any Applicable Legislation;


 


(f)                                    making 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 Shares issuable under the Warrants on a stock exchange, bourse
or over-the-counter market, provided that the provisions are not, in the
opinion of the Trustee, based on the opinion of counsel, prejudicial to the
interests of the Warrantholders as a group;


 


(g)                                 modifying any of the provisions of
this Indenture or relieving the Corporation from any of the obligations,
conditions or restrictions herein contained, provided that no such modification
or relief shall be or become operative or effective if in the opinion of the
Trustee, based on the opinion of counsel, the modification or relief impairs
any of the rights of the Warrantholders provided hereunder, or of the Trustee,
and provided that the Trustee may in its uncontrolled discretion decline to
enter into any supplemental indenture which in its opinion may not afford
adequate protection to the Trustee when the same shall become operative;


 


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(h)                                 evidencing any succession, or
successive successions, of other bodies corporate to the Corporation and the
assumption by any successor of the obligations of the Corporation herein and in
the Warrant Certificates as provided hereafter in this Article Nine; and


 


(i)                                     for any other purpose not
inconsistent with the terms of this Indenture, including the correction or
rectification of any ambiguities, defective provisions, errors or omissions
herein, provided that, in the opinion of the Trustee, based on the opinion of
counsel, the rights of the Trustee and the Warrantholders provided hereunder,
are in no way prejudiced thereby.


 


9.2                                                                                 Correction of Manifest Errors


 


The
Corporation and the Trustee may correct typographical, clerical and other
manifest errors in this Indenture in writing provided that such corrections
shall, in the opinion of the Trustee based on advice from its counsel, in no
way prejudice the rights of the Trustee or of the Warrantholders hereunder, and
the Corporation and the Trustee may execute and deliver all such documents as
may be necessary to correct such errors.


 


9.3                                                                                 Amending Adjustment Provisions


 


The
Corporation and the Trustee may modify the adjustments resulting from the
application of the provisions of Article Five if a modification is
required as a result of any approval of the Toronto Stock Exchange or the
American Stock Exchange contemplated by the provisions of Article Five and
the Corporation and the Trustee may execute and deliver such documents as may
be necessary to effect the modification.


 


9.4                                                                                 Successor Companies


 


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 entity (“successor
corporation”), the successor corporation resulting from the
consolidation, amalgamation, arrangement, merger or transfer (if not the
Corporation) shall be bound by the provisions hereof and all obligations for
the due and punctual performance and observance of each and every covenant and
obligation contained in this Indenture to be performed by the Corporation and,
if requested by the Trustee, the successor corporation shall by supplemental
indenture satisfactory in form to the Trustee and executed and delivered to the
Trustee, expressly assume those obligations.


 


ARTICLE TEN


 


CONCERNING THE TRUSTEE


 


10.1                                                                           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, the mandatory requirement shall prevail.


 


(2)                                  The Corporation and the Trustee 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.


 


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10.2                                                                           Rights and Duties of Trustee


 


(1)                                  In the exercise of the rights, duties and
obligations prescribed or conferred by the terms of this Indenture, the Trustee
shall act honestly and in good faith with a view to the best interests of the
Warrantholders and shall exercise that degree of care, diligence and skill that
a reasonably prudent trustee would exercise in comparable circumstances.


 


(2)                                  No provision of this Indenture will be
construed to relieve the Trustee from liability for its own gross negligence or
wilful misconduct.


 


(3)                                  The obligation of the Trustee to commence or
continue any act, action or proceeding for the purpose of enforcing any rights
of the Trustee or the Warrantholders or obligations of the Corporation
hereunder shall be conditional upon the Warrantholders furnishing, when
required by notice in writing by the Trustee, sufficient funds to commence or
continue the act, action or proceeding and an indemnity reasonably satisfactory
to the Trustee to protect and hold harmless the Trustee 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
Trustee to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties or in the exercise of any of its rights
or powers unless indemnified and funded as aforesaid.


 


(4)                                  The Trustee may, before commencing any such
act, action or proceeding, or at any time during the continuance thereof
require the Warrantholders at whose instance it is acting to deposit with the
Trustee the Warrant Certificates held by them, for which Warrant Certificates
the Trustee shall issue receipts.


 


(5)                                  Every provision of this Indenture that by its
terms relieves the Trustee of liability or entitles it to rely upon any
evidence submitted to it is subject to the provisions of Applicable
Legislation, and of this section 10.2 and sections 10.3 and 10.8.


 


10.3                                                                           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 Trustee such additional evidence of compliance with any
provision hereof, and in such form, as may be prescribed by Applicable
Legislation or as the Trustee may reasonably require by written notice to the
Corporation.


 


(2)                                  In the exercise of its rights and duties
hereunder the Trustee may, if it is acting in good faith, rely as to due
execution and as to the truth of the statements and the accuracy of the
opinions expressed therein, upon statutory declarations, opinions, reports,
certificates or other evidence furnished to the Trustee pursuant to any
provision hereof or pursuant to a request of the Trustee.


 


(3)                                  The Trustee may employ or retain such counsel,
accountants, engineers, 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
payable by the Corporation in accordance with section 6.3, without
taxation of costs of any counsel, and shall not be responsible for any
misconduct on the part of any of them who has been selected with due care by
the Trustee.


 


(4)                                  The Trustee may as a condition precedent to any
action to be taken by it under this Indenture require such opinions, statutory
declarations, reports, certificates or other evidence as it, acting reasonably,
considers necessary or advisable in the circumstances.


 


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10.4                                                                           Securities, Documents and Monies Held by Trustee


 


Any
securities, documents of title or other instruments that may at any time be
held by the Trustee subject to the trusts hereof may be placed in the deposit
vaults of the Trustee or of any of the Canadian Imperial Bank of Commerce, BMO
Bank of Montreal, Bank of Nova Scotia, The Toronto-Dominion Bank, RBC Royal
Bank and HSBC Bank Canada or deposited for safekeeping with any of those
Canadian chartered banks.  Unless herein
otherwise expressly provided, any money so held pending the application or
withdrawal thereof under any provision of this Indenture shall be deposited in
the name of the Trustee in any of the foregoing Canadian chartered banks at the
rate of interest, if any, then current on similar deposits or, with the consent
of the Corporation, be:


 


(a)                                  deposited in the deposit department
of the Trustee or of any other loan or trust company authorized to accept deposits
under the laws of Canada or a province thereof whose short term debt
obligations or deposits have a rating of at least R1 as rated by Dominion Bond
Rating Service, or


 


(b)                                 invested in securities issued or
guaranteed by the Government of Canada or a province thereof or in obligations
maturing not more than one year from the date of investment of or guaranteed by
any of the foregoing Canadian chartered banks.


 


Unless the Corporation is in
default hereunder, all interest or other income received by the Trustee in
respect of deposits and investments will belong to the Corporation.


 


10.5                                                                           Action by Trustee to Protect Interests


 


The
Trustee 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.


 


10.6                                                                           Trustee not Required to Give Security


 


The
Trustee 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 contained herein.


 


10.7                                                                           Protection of Trustee


 


By way
of supplement to the provisions of any law from time to time applicable to
trustees, it is expressly declared and agreed as follows:


 


(1)                                  The Trustee shall not be liable for or by
reason of any representations, statements of fact or recitals in this Indenture
or in the Warrant Certificates (except the representation contained in section 10.10
or by virtue of the certification by the Trustee of the Warrant Certificates)
or required to verify the same, but all those statements or recitals are and
shall be deemed to be made by the Corporation.


 


(2)                                  Nothing herein contained shall impose any
obligation on the Trustee 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.


 


(3)                                  The Trustee shall not be bound to give notice
to any person or persons of the execution hereof.


 


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(4)                                  The Trustee shall not incur any liability or
responsibility whatever or be in any way responsible for the consequence of any
breach on the part of the Corporation of any of the covenants or warranties
herein contained or of any acts of any director, officer, employee or agent of
the Corporation.


 


(5)                                  The Trustee shall not be bound to give any
notice or to do or take any act, action or proceeding by virtue of the powers
conferred on it hereby unless and until it has been required to under the terms
hereof nor shall the Trustee be required to take notice of any default of the
Corporation hereunder unless and until notified in writing of the default
(which notice must specify the nature of the default) and, in the absence of
that notice, the Trustee may for all purposes hereunder conclusively assume
that no default by the Corporation hereunder has occurred. The giving of any
notice shall in no way limit the discretion of the Trustee hereunder as to
whether any action is required to be taken in respect of any default hereunder.


 


(6)                                  The Trustee shall not be accountable with
respect to the validity or value (or the kind or amount) of any Shares or
Warrants or other securities or property which may at any time be issued or
delivered upon the exercise of the rights attaching to any Warrant.


 


(7)                                  The Trustee is not responsible for any failure
of the Corporation to make any cash payment or to issue, transfer or deliver
Shares or certificates for the same upon the surrender or deemed surrender of
any Warrant Certificates for the purpose of the exercise of the Warrants
represented by such Warrant Certificates.


 


10.8                                                                           Indemnification


 


Without
limiting any protection or indemnity of the Trustee under any other provision
hereof, or otherwise at law, the Corporation hereby agrees to indemnify and
hold harmless the Trustee, its directors, officers, employees and agents
(collectively, the “Indemnified Parties”)
from and against any and all liabilities, losses, damages, penalties, claims,
actions, suits, costs, expenses and disbursements, including reasonable legal
or advisor fees and disbursements, of whatever kind and nature which may at any
time be imposed on, incurred by or asserted against the Indemnified Parties in
connection with the performance of its duties and obligations hereunder, other
than such liabilities, losses, damages, penalties, claims, actions, suits,
costs, expenses and disbursements arising by reason of the gross negligence or
fraud of the Indemnified Parties.  This
provision shall survive the resignation or removal of the Trustee, or the
termination of the Indenture.  The
Indemnified Parties shall not be under any obligation to prosecute or to defend
any action or suit in respect of the relationship which, in the opinion of
their counsel, may involve them in expense or liability, unless the Corporation
shall, so often as required, furnish the Indemnified Parties with satisfactory
indemnity and funding against such expense or liability.


 


10.9                                                                           Replacement of Trustee


 


(1)                                  The Trustee may resign its trust and be
discharged from all further duties and liabilities hereunder, except as
provided in this Article Ten, by giving to the Corporation and the
Warrantholders not less than 90 days’ notice in writing or, if a new Trustee
has been appointed such shorter notice as the Corporation may accept as
sufficient. The Warrantholders by Extraordinary Resolution shall have power at
any time, with the consent of the Corporation, not to be unreasonably withheld,
to remove the Trustee and to appoint a new Trustee.  In the event of the Trustee 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 Trustee unless a new Trustee has already
been appointed by the Warrantholders; failing that appointment by the
Corporation, the retiring Trustee or any Warrantholder may apply to the Supreme
Court of British Columbia, on such notice as the Court may direct, for the
appointment of a new Trustee; but any new Trustee so appointed by the
Corporation or by the Court shall be subject to removal as aforesaid by the
Warrantholders and the Corporation.  Any
new Trustee appointed under any


 


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provision of this section 10.9
shall be a corporation authorized to carry on the business of a trust company
in the provinces of British Columbia and Ontario and, if required by the
Applicable Legislation of any other province, in that other province.  On any appointment, the new Trustee shall be
vested with the same powers, rights, duties and responsibilities as if it had
been originally named herein as Trustee without any further assurance,
conveyance, act or deed; but there shall be immediately executed, at the
expense of the Corporation, all such conveyances or other instruments as may,
in the opinion of counsel, be necessary or advisable for the purpose of
assuring such powers, rights, duties and responsibilities of the new Trustee.


 


(2)                                  Upon the appointment of a new Trustee, the
Corporation shall promptly give notice thereof to the Warrantholders.


 


(3)                                  Any corporation into or with which the Trustee
may be merged or consolidated or amalgamated, or any corporation succeeding to
the trust business of the Trustee, shall be the successor to the Trustee
hereunder without any further act on its part or any of the parties hereto
provided that the corporation would be eligible for appointment as a new
Trustee under subsection 10.9(1).


 


(4)                                  Any Warrant Certificates certified but not
delivered by a predecessor Trustee may be certified by the new or successor
Trustee in the name of the predecessor or new or successor Trustee.


 


10.10                                                                     Conflict of Interest


 


(1)                                  The Trustee represents to the Corporation that
at the time of the execution and delivery hereof no material conflict of
interest exists between the Trustee’s role as a fiduciary 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 a material conflict of interest, either eliminate the same or assign its
trust hereunder to a successor Trustee approved by the Corporation and meeting
the requirements set forth in subsection 10.9(1).  Notwithstanding the foregoing provisions of
this subsection 10.10(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 subsection 10.10(1), the
Trustee, in its personal or any other capacity, may buy, lend upon and deal in
securities of the Corporation, may act as registrar and transfer agent for the
Shares and trustee for the Warrants under the Warrant Indenture and generally
may contract and enter into financial transactions with the Corporation or any
subsidiary of the Corporation, all without being liable to account for any
profit made thereby.


 


10.11                                                                     Acceptance of Trust


 


The
Trustee hereby accepts the trusts in this Indenture declared and provided for,
agrees to perform the same upon the terms and conditions herein set forth and
agrees to hold all rights, interests and benefits contained herein for and on
behalf of those persons who become holders of Warrants from time to time issued
pursuant to this Indenture.


 


10.12                                                                     Trustee not to be Appointed Receiver


 


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


 


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10.13                                                                     Third Party Interests


 


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


 


10.14                                                                     Compliance with Money Laundering Legislation


 


The Trustee shall retain the right not to act
and shall not be liable for refusing to act if, due to a lack of information or
for any other reason whatsoever, the Trustee reasonably 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 Trustee reasonably 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 10 days written notice to
the Corporation, provided: (i) that the Trustee’s written notice
shall describe the circumstances of such non-compliance; and (ii) that if
such circumstances are rectified to the Trustee’s satisfaction within such 10
day period, then such resignation shall not be effective.


 


10.15                                                                     Compliance with Privacy Laws


 


The parties acknowledge that federal and/or provincial legislation that addresses the
protection of individuals’ personal information (collectively, “Privacy Laws”) applies to obligations and
activities under this Agreement.  Despite
any other provision of this Agreement, 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 Trustee, 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 Trustee shall use commercially reasonable efforts
to ensure that its services hereunder comply with Privacy Laws. Specifically,
the Trustee 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 inquiry; (c) to use personal information solely for
the purposes of providing its services under or ancillary to this Agreement and
not to use it for any other purpose except with the consent of or direction
from the Corporation or the individual 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.


 


ARTICLE ELEVEN


 


GENERAL


 


11.1                                                                           Notice to Corporation and Trustee


 


(1)                                  Unless herein otherwise expressly provided, any
notice to be given hereunder to the Corporation or the Trustee shall be given
in writing and shall be deemed to be validly given if delivered or if sent by
registered letter, postage prepaid or if transmitted by telecopy:


 


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(a)                                  if to the Corporation:


 


Vista Gold Corp. 

Suite 5, 7961 Shaffer Parkway

Littleton, Colorado

U.S.A. 80127


 


Attention:  Chief Financial
Officer


 


Telecopier No.:  (720) 981-1186


 


(b)                                 if to the Trustee:


 


Computershare
Trust Company of Canada

510 Burrard Street

Vancouver, British Columbia

V6C 3B9


 


Attention:  Corporate Trust Services


 


Telecopier
No.:  (604) 661-9403


 


and any notice given 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 day of the
mailing of the notice or, if transmitted by telecopy, on the day following the
transmission.


 


(2)                                  The Corporation or the Trustee, as the case may
be, may from time to time notify the other in the manner provided in subsection 11.1(1) of
a change of address which, from the effective date of the notice and until
changed by like notice, shall be the address of the Corporation or the Trustee,
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 Trustee or to the Corporation hereunder could reasonably be
considered unlikely to reach or to be delayed in reaching its destination, the
notice shall be valid and effective only if it is delivered to an officer of
the party to which it is addressed or if it is delivered to that party at the
appropriate address provided in subsection 11.1(1) by cable,
telegram, telex, telecopy or other means of prepaid, transmitted, or written
communication and any notice delivered in accordance with the foregoing shall
be deemed to have been received on the date of delivery to the officer or if
delivered by cable, telegram, telex, telecopy or other means of prepaid,
transmitted, recorded communication, on the first business day following the
date of the sending of the notice by the person giving the notice.


 


11.2                                                                           Notice to Warrantholders


 


(1)                                  Unless herein otherwise expressly provided, any
notice to be given hereunder to Warrantholders shall be written and shall be
deemed to be validly given if the notice is sent by prepaid mail, addressed to
the holder or delivered by hand or transmitted by telecopy (or so mailed to
certain holders and so delivered to other holders and so telecopied to other
holders) at their respective addresses and telecopy numbers appearing on the
register maintained by the Trustee; and if in the case of joint holders of any
Warrants more than one address or telecopy number appears on the register in
respect of that joint holding, the notice shall be addressed or delivered, as
the case may be, only to the first address or telecopier number, as the case
may be, so appearing.  Any notice so
given shall be deemed to have been received on the day of


 


35





















 


delivery by hand or
telecopy or, if mailed, on the next business day following the day of mailing
of the notice.  Accidental error or
omission in giving notice or accidental failure to mail notice to any
Warrantholder shall not invalidate any action or proceeding founded thereon.


 


(2)                                  If, by reason of strike, lock-out 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 or be delayed in reaching its destination, the notice shall be valid
and effective if published or distributed once in the Report on Business section of
the national edition of The Globe and Mail newspaper, or, in the event of a
disruption in the circulation of that newspaper, once in a daily newspaper in
the English language approved by the Trustee of general circulation in the City
of Toronto and Vancouver; provided that in the case of a notice convening a
meeting of the holders of Warrants, the Trustee may require such additional
publications of that notice, in the same or in other cities or both, as it may
deem necessary for the reasonable protection of the holders of Warrants or to
comply with any applicable requirement of law or any stock exchange.  Any notice so given shall be deemed to have
been given on the day on which it has been published in all of the cities in
which publication was required (or first published in a city if more than one
publication in that city is required). 
In determining under any provision hereof, the date when notice of any
meeting or other event must be given, the date of giving notice shall be
included and the date of the meeting or other event shall be excluded.


 


11.3                                                                           Satisfaction and Discharge of Indenture


 


Upon
the earlier of (i) the date by which certificates representing Shares
shall have been delivered to Warrantholders to the full extent of the rights
attached to all Warrants theretofore certified hereunder and the monies to be
paid hereunder, if any, have been paid and (ii) the Expiry Date; this
Indenture shall cease to be of further effect and the Trustee, on demand of and
at the cost and expense of the Corporation and upon delivery to the Trustee of
a certificate of the Corporation stating that all conditions precedent to the
satisfaction and discharge of this Indenture have been complied with and upon
payment to the Trustee of the fees and other remuneration payable to the
Trustee, shall execute proper instruments acknowledging satisfaction of and
discharging this Indenture.


 


11.4                                                                           Sole Benefit of Parties 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 any legal or equitable right, remedy or claim under this
Indenture, or under any covenant or provision therein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
the Warrantholders.


 


11.5                                                                           Discretion of Directors


 


Any
matter provided herein to be determined by the directors will be determined
acting reasonably in their sole discretion, and a determination so made will be
conclusive.


 


36





















 


11.6                                                                           Counterparts and Formal Date


 


This
Indenture may be executed in several original or facsimile counterparts, each
of which when so executed shall be deemed to be an original and the
counterparts together shall constitute one and the same instrument and
notwithstanding their date of execution shall be deemed to bear the date as of September 23,
2005.


 


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


 


	
   

  	
  VISTA
  GOLD CORP.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  [ILLEGIBLE]

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMPUTERSHARE
  TRUST COMPANY OF CANADA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  	
   

  



 


37





















 


SCHEDULE ”A”


 


UNLESS
PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY
MUST NOT TRADE THE SECURITY BEFORE JANUARY 24,
2006.


 


NEITHER THIS CERTIFICATE NOR THE SECURITIES REPRESENTED HEREBY NOR ANY
SECURITIES ISSUABLE UPON THE EXERCISE OF SUCH SECURITIES, NOR ANY INTEREST IN
OR RIGHTS UNDER SAME, HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”)
OR UNDER THE SECURITIES LAWS OF ANY STATE, AND NEITHER THIS CERTIFICATE NOR THE
SECURITIES REPRESENTED HEREBY NOR ANY SECURITIES ISSUABLE UPON THE EXERCISE OF
SUCH SECURITIES, NOR ANY INTEREST IN OR RIGHTS UNDER SAME, MAY BE SOLD, DISTRIBUTED, ASSIGNED, OFFERED, PLEDGED
OR OTHERWISE TRANSFERRED OR DISPOSED OF WITHOUT (A) AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE UNITED STATES STATE
SECURITIES LAWS COVERING ANY SUCH TRANSACTION, (B) RECEIPT BY THE
CORPORATION OF AN ACCEPTABLE LEGAL OPINION STATING THAT SUCH TRANSACTION IS
EXEMPT FROM REGISTRATION, OR (C) THE CORPORATION OTHERWISE SATISFYING
ITSELF THAT SUCH TRANSACTION IS EXEMPT FROM REGISTRATION.


 


WARRANT


to acquire common shares of


 


VISTA GOLD CORP.


(continued under the laws of the Yukon Territory)


 


	
  Warrant
  Certificate

  No.

  	
   

  	
  Certificate
  for
                                             
  Warrants, each entitling the holder to acquire one Share of Vista Gold Corp.

  



 


THIS
IS TO CERTIFY THAT, for value received,


 


 


 


(the “Holder”) is the registered Holder of the number of common
share purchase warrants (the “Warrants”)
of the Corporation specified above, and is entitled, on exercise of these
Warrants upon and subject to the terms and conditions set forth herein and in
the Warrant Indenture hereinafter referred to, to purchase at any time before
4:30 p.m. (Vancouver time) on the earlier of (i) September 23,
2007, and (ii) the 15th business day following the date on
which the Corporation provides notice to the Holder and to Computershare Trust
Company of Canada (the “Trustee”)
that the Acceleration Event (as defined below) has occurred (such earlier date,
the “Expiry Date”), one fully paid
and non-assessable common share without par value in the capital of the
Corporation as constituted on the date hereof (a “Share”) for each Warrant by surrendering to the Trustee at its
principal transfer office in the Cities of Vancouver or Toronto with this
certificate an exercise form in the form attached hereto duly completed and
executed, accompanied by cash, a certified cheque, bank draft or money order in
lawful money of the United States of America payable to or to the order of the
Corporation at par in the city where this Warrant Certificate is so surrendered
in an amount equal to the purchase price of the Shares so subscribed for.  The “Acceleration
Event” will occur if, at any time after the date that is six months
after the Registration Statement, as
defined in the Warrant Indenture hereinafter referred to, relating to
the Shares is declared effective by the United States Securities and Exchange
Commission, the closing trading price of the Shares 


 


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on the American Stock Exchange
is U.S.$5.40 or greater for a period of 20 consecutive trading days.  If the Acceleration Event occurs, the
Corporation will have the option for a period of 15 business days after the
occurrence of the Acceleration Event to provide notice that the Acceleration
Event has occurred.


 


Surrender
of this Warrant Certificate, the duly completed exercise form and payment as
provided above will be deemed to have been effected only on personal delivery
thereof to, or if sent by mail or other means of transmission on actual receipt
thereof by, the Trustee at the Cities of Vancouver and Toronto.


 


Subject
to adjustment thereof in the events and in the manner set forth in the Warrant
Indenture hereinafter referred to, the exercise price (the “Exercise Price”) upon the exercise of a
Warrant shall be U.S.$4.10 per Warrant.


 


Certificates
for the Shares subscribed for will be mailed to the persons specified in the
exercise form at their respective addresses specified therein or, if so
specified in the exercise form, delivered to such persons at the office where
this Warrant Certificate is surrendered. 
If fewer Shares are purchased than the number that can be purchased
pursuant to this Warrant Certificate, the Holder hereof will be entitled to
receive without charge a new Warrant Certificate in respect of the balance of
the Shares not so purchased.  No fractional
Shares will be issued upon exercise of any Warrant.


 


This
Warrant Certificate evidences Warrants of the Corporation issued or issuable
under the provisions of a warrant indenture (which indenture together with all
other instruments supplemental or ancillary thereto is herein referred to as
the “Warrant Indenture”) dated as
of September 23, 2005 between the Corporation and the Trustee, as trustee,
to which Warrant Indenture reference is hereby made for particulars of the
rights of the Holders of Warrants, the Corporation and the Trustee in respect
thereof and the terms and conditions on which the Warrants are issued and held,
all to the same effect as if the provisions of the Warrant Indenture were
herein set forth, to all of which the Holder by acceptance hereof assents.  The Corporation will furnish to the Holder,
on request and without charge, a copy of the Warrant Indenture.


 


On
presentation at the principal transfer office of the Trustee in the Cities of
Vancouver or Toronto as specified below, subject to the provisions of the
Warrant Indenture and on compliance with the reasonable requirements of the
Trustee, one or more Warrant Certificates may be exchanged for one or more
Warrant Certificates entitling the Holder thereof to purchase in the aggregate
an equal number of Shares as are purchasable under the Warrant Certificate or
Certificates so exchanged.


 


The
Warrant Indenture contains provisions for the adjustment of the number and kind
of Shares issuable upon the exercise of Warrants in the events and in the
manner set forth therein.


 


The
Warrant Indenture also contains provisions making binding on all Holders of
Warrants outstanding thereunder resolutions passed at meetings of Holders of
Warrants held in accordance with the provisions of the Warrant Indenture and
instruments in writing signed by Holders of Warrants entitled to purchase a
specific majority of the Shares that can be purchased pursuant to such
Warrants.


 


Nothing
contained in this Warrant Certificate, the Warrant Indenture or elsewhere shall
be construed as conferring upon the Holder hereof any right or interest
whatsoever as a Holder of Shares or any other right or interest except as
herein and in the Warrant Indenture expressly provided.


 


Warrants
are issuable only as fully registered Warrants. 
Warrants may only be transferred in compliance with the conditions of
the Warrant Indenture on one of the registers to be kept by and at the
principal offices of the Trustee in Vancouver or Toronto, and by the Trustee or
such other


 


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registrar as the Corporation,
with the approval of the Trustee, may appoint at such other place or places, if
any, as may be designated, upon surrender of this Warrant Certificate to the
Trustee or other registrar accompanied by a written instrument of transfer in
form and execution satisfactory to the Trustee or other registrar and upon
compliance with the conditions prescribed in the Warrant Indenture and with
such reasonable requirements as the Trustee or other registrar may prescribe
and upon the transfer being duly noted thereon by the Trustee or other
registrar.


 


In the
event of any discrepancy between anything contained in this Warrant Certificate
and the terms and conditions of the Warrant Indenture, the terms and conditions
of the Warrant Indenture shall govern.


 


Time is
of the essence hereof.


 


This
Warrant Certificate will not be valid for any purpose until it has been
countersigned by or on behalf of the Trustee from time to time under the
Warrant Indenture.


 


The
parties hereto have declared that they have required that these presents and
all other documents related hereto be in the English language.  Les parties aux présentes déclarent qu’elles
ont exigé que la présente convention, de même que tous les documents s’y
rapportant, soient rédigés en anglais.


 


IN
WITNESS WHEREOF Vista Gold Corp. has caused this Warrant Certificate to be duly
executed as of the             
day of                                           ,
200        .


 


	
   

  	
  VISTA
  GOLD CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized
  Signatory

  	
   

  
	
   

  	
   

  
	
  Countersigned
  and Registered by:

  	
   

  
	
   

  	
   

  
	
  COMPUTERSHARE
  TRUST COMPANY OF CANADA

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized
  Signatory

  	
   

  	
   

  



 


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APPENDIX “A”


 


EXERCISE FORM


 


TO:                            Vista Gold Corp.

c/o Computershare Trust Company of Canada

510 Burrard Street

Vancouver, British Columbia

V6C 3B9


 


Attention:                                         Stock Transfer Department


 


The
undersigned holder of the within Warrants hereby exercises                           
of the Warrants represented hereby and the right provided for in such exercised
Warrants to receive the common shares of Vista Gold Corp. issuable pursuant to
such Warrants.


 


The
undersigned hereby irrevocably directs that the said common shares be issued
and delivered as follows:


 


	
  Name(s) in Full

  	
   

  	
  Address(es) (include
  Postal/Zip Code)

  	
   

  	
  Numbers(s) of

  common shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  



 


(Please print in full the name
in which certificates are to be issued. 
If any of the securities are to be issued to a person or persons other
than the Warrantholder, the Transfer of Warrants form must be completed and the
Warrantholder must pay to the Trustee all exigible transfer taxes or other
government charges.)


 


The
undersigned represents, warrants and certifies as follows:  the undersigned (i) is an “accredited
investor” (as such term is defined in Rule 501(a) of Regulation D
under the U.S. Securities Act of 1933, as amended (an “Accredited Investor”)),
exercising the Warrant for its own account or the account of an Accredited
Investor over which it exercises sole investment discretion, and (ii) has
had access to such current public information concerning Vista Gold Corp. as it
considered necessary in connection with its investment decision.


 


DATED this              
day of                               ,
                      .


 


	
   

  	
   

  	
   

  	
   

  
	
  Witness or
  Signature Guarantee*

  	
  Signature of
  Registered Holder

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name of
  Registered Holder

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Address of
  Registered Holder

  



 


A-4





















 










*  If the underlying securities
are to be issued to a person other than the registered holder then the
signature must be guaranteed by a Schedule I Canadian Chartered Bank or a
guarantee under the North American STAMP, SEMP or MSP Medallion Programs.


 


o                                    Please check box if these certificates
are to be delivered to the office where this Warrant Certificate is
surrendered, failing which the certificates will be mailed to the address shown
on the register.


 


A-5





















 


APPENDIX “B”


 


TRANSFER OF WARRANTS


 


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


 


	
   

  	
   

  
	
  (name)

  	
  (the “transferee”)

  
	
   

  	
   

  
	
  (address)

  	
   

  
	
   

  	
   

  
	
                                            of
  the Warrants registered in the name of the undersigned represented by the
  within certificate.

  



 


The
undersigned hereby certifies that the Warrants are being sold, assigned or
transferred in accordance with applicable securities laws covering any such
transaction.


 


DATED
the              
day of                             ,
                                   .


 


	
  Signature of
  Warrantholder

  	
   

  
	
  Guaranteed
  by:

  	
  (Signature of Warrantholder)

  
	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  *

  
	
   

  	
   

  	
   

  
				











	
   

  	
   

  	
  * Authorized
  Signature Number

  



 


NOTE:  The signature to this transfer must
correspond with the name as recorded on the Warrants in every particular
without alteration or enlargement or any change whatever.  The signature of the person executing this
transfer must be guaranteed by a Schedule I Canadian
Chartered Bank or a guarantee under the North American STAMP, SEMP or MSP
Medallion Programs.


 


A-6