covenant, agree and declare as follows:
ARTICLE ONE
INTERPRETATION
Section 1.01
Definitions
In this Indenture and in the Subscription Receipt Certificates, unless there is
something in the subject matter or context inconsistent therewith:
(A)
"ACCREDITED INVESTOR" MEANS AN "ACCREDITED
INVESTOR" AS DEFINED IN RULE 501(A) OF REGULATION D;
(B)
"ADJUSTMENT PERIOD" MEANS THE PERIOD
COMMENCING ON THE DATE HEREOF AND ENDING AT THE TIME OF EXPIRY;
(C)
"AGENT" MEANS GMP SECURITIES L.P. AND
GRIFFITHS MCBURNEY CORP. COLLECTIVELY;
(D)
"AGENT'S COMPENSATION OPTION" MEANS THE
AGENT'S COMPENSATION OPTION ISSUED TO THE AGENT ON THE DATE HEREOF ENTITLING THE
AGENT, WITHOUT PAYMENT OF ANY CONSIDERATION, TO BE ISSUED THE AGENT'S WARRANT AT
THE TIME OF EXPIRY;
(E)
"AGENT'S WARRANTS" MEANS THE AGENTS
WARRANTS ISSUABLE TO THE AGENT UPON THE CONVERSION OF THE AGENT'S COMPENSATION
OPTION WHICH WILL ENTITLE THE AGENT TO ACQUIRE UP TO 1,002,000 UNITS OF THE
CORPORATION, AT A PRICE OF $4.50 PER UNIT, WITH EACH UNIT CONSISTING OF ONE
COMMON SHARE AND ONE WARRANT;
(F)
"APPLICABLE LEGISLATION" MEANS SUCH
PROVISIONS OF ANY STATUTE OF CANADA OR OF A PROVINCE THEREOF, AND OF REGULATIONS
UNDER ANY SUCH STATUTE, RELATING TO TRUST INDENTURES OR TO THE RIGHTS, DUTIES
AND OBLIGATIONS OF CORPORATIONS AND OF TRUSTEES UNDER TRUST INDENTURES, AS ARE
FROM TIME TO TIME IN FORCE AND APPLICABLE TO THIS INDENTURE;
(G)
"BUSINESS DAY" MEANS ANY DAY THAT IS NOT A
SATURDAY, SUNDAY OR STATUTORY HOLIDAY IN TORONTO, ONTARIO OR DENVER, COLORADO,
OR A DAY WHEN THE PRINCIPAL OFFICE OF THE SUBSCRIPTION RECEIPT AGENT IN SUCH
CITY IS NOT GENERALLY OPEN TO THE PUBLIC FOR THE TRANSACTION OF BUSINESS;
(H)
"COMMON SHARES" MEANS THE SHARES OF COMMON
STOCK, NO PAR VALUE, OF THE CORPORATION AS CONSTITUTED ON THE DATE HEREOF,
PROVIDED THAT, IN THE EVENT OF ANY ADJUSTMENT PURSUANT TO SECTION 4.06 HEREOF,
COMMON SHARES SHALL THEREAFTER MEAN
OR INCLUDE, AS THE CASE MAY BE, THE SHARES,
OTHER SECURITIES OR PROPERTY RESULTING FROM SUCH ADJUSTMENT;
2
(I)
"CONVERSION DATE" MEANS THE DAY ON WHICH
THE SUBSCRIPTION RECEIPT AGENT IS REQUIRED TO CONVERT EACH SUBSCRIPTION RECEIPT
PURSUANT TO SUBSECTION 4.01(A) HEREOF;
(J)
"CORPORATION" MEANS U.S. GOLD
CORPORATION, THE PARTY OF THE FIRST PART HEREUNDER, AND INCLUDES ANY SUCCESSOR
CORPORATION TO OR OF THE CORPORATION WHICH SHALL HAVE COMPLIED WITH THE
PROVISIONS OF SECTION 9.02 HEREOF;
(K)
"CORPORATION'S AUDITORS" MEANS STARK,
WINTER, SCHENKEIN & CO. LLP OR SUCH OTHER FIRM OF CHARTERED ACCOUNTANTS
APPOINTED AS THE AUDITOR OF THE CORPORATION;
(L)
"COUNSEL" MEANS A BARRISTER OR SOLICITOR
OR AN ATTORNEY-AT-LAW OR A FIRM OF BARRISTERS AND SOLICITORS OR
ATTORNEYS-AT-LAW, WHO MAY BE COUNSEL FOR THE CORPORATION, ACCEPTABLE TO THE
SUBSCRIPTION RECEIPT AGENT, ACTING REASONABLY;
(M)
"CURRENT MARKET PRICE" OF A COMMON SHARE AT
ANY DATE MEANS THE PRICE PER SHARE EQUAL TO THE VOLUME WEIGHTED AVERAGE PRICE AT
WHICH THE COMMON SHARES HAVE TRADED ON THE STOCK EXCHANGE FOR ANY 20 CONSECUTIVE
TRADING DAYS SELECTED BY THE CORPORATION ENDING NOT MORE THAN FIVE TRADING DAYS
BEFORE SUCH DATE, OR, IF THE COMMON SHARES