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                                                                     EXHIBIT 4.2

                        [FORM OF SENIOR CONVERTIBLE NOTE]

NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD,
TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
(B) AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES. ANY TRANSFEREE OF THIS NOTE SHOULD
CAREFULLY REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTIONS 3(c)(III) AND 16
HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY, THE
SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET
FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(III) OF THIS NOTE. UNLESS
PERMITTED UNDER CANADIAN SECURITIES LEGISLATION, THE HOLDER OF THESE SECURITIES
SHALL NOT TRADE THE SECURITIES BEFORE AUGUST 16, 2005.

                           GOLDEN STAR RESOURCES LTD.

                             SENIOR CONVERTIBLE NOTE

Issuance Date: April 15, 2005                        Principal: U.S. $50,000,000

      FOR VALUE RECEIVED, GOLDEN STAR RESOURCES LTD., a Canadian corporation
(the "COMPANY"), hereby promises to pay to the order of AMARANTH LLC or its
registered assigns ("HOLDER") the amount set out above as the Principal (as
reduced pursuant to the terms hereof pursuant to redemption, conversion or
otherwise, the "PRINCIPAL") when due, whether upon the Maturity Date (as defined
below), acceleration, redemption or otherwise (in each case in accordance with
the terms hereof) and to pay interest ("INTEREST") on any outstanding Principal
at the rate of 6.85% per annum, subject to adjustment pursuant to Section 2 (the
"INTEREST RATE"), from the date set out above as the Issuance Date (the
"ISSUANCE DATE") until the same becomes due and payable, whether upon an
Interest Date (as defined below), the Maturity Date, acceleration, conversion,
redemption or otherwise (in each case in accordance with the terms hereof). This
Senior Convertible Note (including all Senior Convertible Notes issued in
exchange, transfer or replacement hereof, this "NOTE") is one of an issue of
Senior Convertible Notes (collectively, the "NOTES" and such other Senior
Convertible Notes, the

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"OTHER NOTES") issued on the Issuance Date pursuant to
the Securities Purchase Agreement (as defined below). Certain capitalized terms
are defined in Section 27.

            (1)   MATURITY. On the Maturity Date, the Holder shall surrender
this Note to the Company and the Company shall pay to the Holder an amount
representing all outstanding Principal, accrued and unpaid Interest and accrued
and unpaid Late Charges, if any, in accordance with Section 10 hereof. The
"MATURITY DATE" shall be April 15, 2009, as may be extended at the option of the
Holder (i) in the event that, and for so long as, an Event of Default (as
defined in Section 4(a)) shall have occurred and be continuing or any event
shall have occurred and be continuing which with the passage of time and the
failure to cure would result in an Event of Default or (ii) through the date
that is ten days after the consummation of a Change of Control in the event that
a Change of Control is publicly announced or a Change of Control Notice (as
defined in Section 5(b)) is delivered prior to the Maturity Date.

            (2)   INTEREST; INTEREST RATE. Interest on this Note shall commence
accruing on the Issuance Date and shall be computed on the basis of a 365-day
year and actual days elapsed and shall be payable in arrears semi-annually on
each June 30 and December 31 and on the Maturity Date during the period
beginning on the Issuance Date and ending on, and including, the Maturity Date
(each, an "INTEREST DATE") with the first Interest Date being June 30, 2005.
Interest shall be payable on each Interest Date in cash. ]. From and after the
occurrence of an Event of Default, the Interest Rate shall be increased to
twelve percent (12%). In the event that such Event of Default is subsequently
cured, the adjustment referred to in the preceding sentence shall cease to be
effective as of the date of such cure; provided that the Interest as calculated
at such increased rate during the continuance of such Event of Default shall
continue to apply to the extent relating to the days after the occurrence of
such Event of Default through and including the date of cure of such Event of
Default. For the avoidance of doubt, no compensation or gross-up payment by the
Company will be made in respect of Canadian withholding taxes on payments of
Interest to the Holder.

            (3)   CONVERSION OF NOTES. This Note shall be convertible into
common shares of the Company, no par value per share (the "COMMON STOCK"), on
the terms and conditions set forth in this Section 3.

                  (a)   Conversion Right. Subject to the provisions of Section
3(d), at any time or times on or after the Issuance Date, the Holder shall be
entitled to convert any portion of the outstanding and unpaid Conversion Amount
(as defined below) into fully paid and nonassessable shares of Common Stock in
accordance with Section 3(c), at the Conversion Rate (as defined below). Upon
any conversion, the Company shall pay in cash to the Holder any accrued and
unpaid Interest and Late Charges on such Conversion Amount. The Company shall
not issue any fraction of a share of Common Stock upon any conversion. If the
issuance would result in the issuance of a fraction of a share of Common Stock,
the Company shall round such fraction of a share of Common Stock to the nearest
whole share. The Company shall pay any and all taxes that may be payable with
respect to the issuance and delivery of Common Stock upon conversion of any
Conversion Amount.

                  (b)   Conversion Rate. The number of shares of Common Stock
issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall
be

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determined by dividing (x) such Conversion Amount by (y) the Conversion Price
(the "CONVERSION RATE").

      (i)   "CONVERSION AMOUNT" means the portion of the Principal to be
      converted, redeemed or otherwise with respect to which this determination
      is being made.

      (ii)  "CONVERSION PRICE" means, as of any Conversion Date (as defined
      below) or other date of determination, $4.50, subject to adjustment as
      provided herein.

                  (c)   Mechanics of Conversion.

      (i)   Optional Conversion. To convert any Conversion Amount into shares of
      Common Stock on any date (a "CONVERSION DATE"), the Holder shall (A)
      transmit by facsimile (or otherwise deliver), for receipt on or prior to
      11:59 p.m., New York Time, on such date, a copy of an executed notice of
      conversion in the form attached hereto as Exhibit I (the "CONVERSION
      NOTICE") to the Company and (B) if required by Section 3(c)(iii),
      surrender this Note to a common carrier for delivery to the Company as
      soon as practicable on or following such date (or an indemnification
      undertaking with respect to this Note in the case of its loss, theft or
      destruction). On or before the second Business Day following the date of
      receipt of a Conversion Notice, the Company shall transmit by facsimile a
      confirmation of receipt of such Conversion Notice to the Holder and the
      Company's transfer agent (the "TRANSFER AGENT"). On or before the third
      Business Day following the date of receipt of a Conversion Notice (the
      "SHARE DELIVERY DATE"), the Company shall (i) (X) credit such aggregate
      number of shares of Common Stock to which the Holder shall be entitled to
      the Holder's or its designee's balance account with Depository Trust
      Company ("DTC") through its Deposit Withdrawal Agent Commission system or
      (Y) if the Transfer Agent is not participating in the DTC Fast Automated
      Securities Transfer Program, (ii) issue and deliver to the address as
      specified in the Conversion Notice, a certificate, registered in the name
      of the Holder or its designee, for the number of shares of Common Stock to
      which the Holder shall be entitled and (iii) deliver to the Holder an
      amount of cash equal to any accrued and unpaid Interest and Late Charges
      on such Conversion Amount. If this Note is physically surrendered for
      conversion as required by Section 3(c)(iii) and the outstanding Principal
      of this Note is greater than the Principal portion of the Conversion
      Amount being converted, then the Company shall as soon as practicable and
      in no event later than three (3) Business Days after receipt of this Note
      and at its own expense, issue and deliver to the Holder a new Note (in
      accordance with Section 17(d)) representing the outstanding Principal not
      converted. This Note or any portion thereof surrendered for conversion
      shall thereupon be deemed cancelled. The Person or Persons entitled to
      receive the shares of Common Stock issuable upon a conversion of this Note
      shall be treated for all purposes as the record holder or holders of such
      shares of Common Stock on the Conversion Date.

      (ii)  Company's Failure to Timely Convert. If the Company shall fail to
      issue a certificate to the Holder or credit the Holder's balance account
      with DTC for the number of shares of Common Stock to which the Holder is
      entitled upon conversion of any Conversion Amount on or prior to the date
      which is five Business Days after the Conversion Date (a "CONVERSION
      FAILURE"), then (A) the Company shall pay damages to

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      the Holder for each day of such Conversion Failure in an amount equal to
      1.0% of the product of (I) the sum of the number of shares of Common Stock
      not issued to the Holder on or prior to the Share Delivery Date and to
      which the Holder is entitled, and (II) the Closing Sale Price of the
      Common Stock on the Share Delivery Date and (B) the Holder, upon written
      notice to the Company, may void its Conversion Notice with respect to, and
      retain or have returned, as the case may be, any portion of this Note that
      has not been converted pursuant to such Conversion Notice; provided that
      the voiding of a Conversion Notice shall not affect the Company's
      obligations to make any payments which have accrued prior to the date of
      such notice pursuant to this Section 3(c)(ii) or otherwise. In addition to
      the foregoing, if within three (3) Trading Days after the Company's
      receipt of the facsimile copy of a Conversion Notice the Company shall
      fail to issue and deliver a certificate to the Holder or credit the
      Holder's balance account with DTC for the number of shares of Common Stock
      to which the Holder is entitled upon the Holder's conversion of any
      Conversion Amount, and if on or after such Trading Day the Holder
      purchases (in an open market transaction or otherwise) Common Stock to
      deliver in satisfaction of a sale by the Holder of Common Stock issuable
      upon such conversion that the Holder anticipated receiving from the
      Company (a "BUY-IN"), then the Company shall, within three (3) Business
      Days after the Holder's request and in the Holder's discretion, either (i)
      pay cash to the Holder in an amount equal to the Holder's total purchase
      price (including brokerage commissions and other out-of-pocket expenses,
      if any) for the shares of Common Stock so purchased (the "BUY-IN PRICE"),
      at which point the Company's obligation to deliver such certificate (and
      to issue such Common Stock) shall terminate, or (ii) promptly honor its
      obligation to deliver to the Holder a certificate or certificates
      representing such Common Stock and pay cash to the Holder in an amount
      equal to the excess (if any) of the Buy-In Price over the product of (A)
      such number of shares of Common Stock times (B) the Closing Bid Price on
      the Conversion Date.

      (iii) Book-Entry. Notwithstanding anything to the contrary set forth
      herein, upon conversion of any portion of this Note in accordance with the
      terms hereof, the Holder shall not be required to physically surrender
      this Note to the Company unless (A) the full Conversion Amount represented
      by this Note is being converted or (B) the Holder has provided the Company
      with prior written notice (which notice may be included in a Conversion
      Notice) requesting physical surrender and reissue of this Note. The Holder
      and the Company shall maintain records showing the Principal, Interest and
      Late Charges converted and the dates of such conversions or shall use such
      other method, reasonably satisfactory to the Holder and the Company, so as
      not to require physical surrender of this Note upon conversion.

      (iv)  Pro Rata Conversion; Disputes. In the event that the Company
      receives a Conversion Notice from more than one holder of Notes for the
      same Conversion Date and the Company can convert some, but not all, of
      such portions of the Notes submitted for conversion, the Company, subject
      to Section 3(d), shall convert from each holder of Notes electing to have
      Notes converted on such date a pro rata amount of such holder's portion of
      its Notes submitted for conversion based on the principal amount of Notes
      submitted for conversion on such date by such holder relative to the
      aggregate principal amount of all Notes submitted for conversion on such
      date. In the event of a dispute as to the number of shares of Common Stock
      issuable to the Holder in connection with a

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      conversion of this Note, the Company shall issue to the Holder the number
      of shares of Common Stock not in dispute and resolve such dispute in
      accordance with Section 22.

                  (d)   Limitations on Conversions.

            The Company shall not be obligated to issue any shares of Common
Stock upon conversion of this Note if the issuance of such shares of Common
Stock would exceed that number of shares of Common Stock which the Company may
issue upon conversion of the Notes without breaching the Company's obligations
under the rules or regulations of the Principal Market (the "EXCHANGE CAP"),
except that such limitation shall not apply in the event that the Company (A)
obtains the approval of its stockholders as required by the applicable rules of
the Principal Market for issuances of Common Stock in excess of such amount or
(B) obtains a written opinion from outside counsel to the Company that such
approval is not required, which opinion shall be reasonably satisfactory to the
Required Holders. Until such approval or written opinion is obtained, no
purchaser of the Notes pursuant to the Securities Purchase Agreement (the
"PURCHASERS") shall be issued, upon conversion of Notes, shares of Common Stock
in an amount greater than the product of the Exchange Cap multiplied by a
fraction, the numerator of which is the principal amount of Notes issued to such
Purchaser pursuant to the Securities Purchase Agreement on the Issuance Date and
the denominator of which is the aggregate principal amount of all Notes issued
to the Purchasers pursuant to the Securities Purchase Agreement on the Issuance
Date (with respect to each Purchaser, the "EXCHANGE CAP ALLOCATION"). In the
event that any Purchaser shall sell or otherwise transfer any of such
Purchaser's Notes, the transferee shall be allocated a pro rata portion of such
Purchaser's Exchange Cap Allocation, and the restrictions of the prior sentence
shall apply to such transferee with respect to the portion of the Exchange Cap
Allocation allocated to such transferee. In the event that any holder of Notes
shall convert all of such holder's Notes into a number of shares of Common Stock
which, in the aggregate, is less than such holder's Exchange Cap Allocation,
then the difference between such holder's Exchange Cap Allocation and the number
of shares of Common Stock actually issued to such holder shall be allocated to
the respective Exchange Cap Allocations of the remaining holders of Notes on a
pro rata basis in proportion to the aggregate principal amount of the Notes then
held by each such holder.

            (4)   RIGHTS UPON EVENT OF DEFAULT.

                  (a)   Event of Default. Each of the following events shall
constitute an "EVENT OF DEFAULT":

      (i)   the failure of the applicable Registration Statement required to be
      filed pursuant to the Registration Rights Agreement to be declared
      effective by the SEC on or prior to the date that is 60 days after the
      applicable Effectiveness Deadline (as defined in the Registration Rights
      Agreement), or, while the applicable Registration Statement is required to
      be maintained effective pursuant to the terms of the Registration Rights
      Agreement, the effectiveness of the applicable Registration Statement
      lapses for any reason (including, without limitation, the issuance of a
      stop order) or is unavailable to any holder of the Notes for sale of all
      of such holder's Registrable Securities (as defined in the Registration
      Rights Agreement) in accordance with the terms of the Registration Rights
      Agreement, and such lapse or unavailability continues for a period of ten
      (10)

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      consecutive days or for more than an aggregate of thirty (30) days in any
      365-day period (other than days during an Allowable Grace Period (as
      defined in the Registration Rights Agreement));

      (ii)  the suspension from trading or failure of the Common Stock to be
      listed on the Principal Market or an Eligible Market for a period of five
      consecutive days or for more than an aggregate of seven Trading Days in
      any 365-day period;

      (iii) the Company's (A) failure to cure a Conversion Failure by delivery
      of the required number of shares of Common Stock within ten (10) Business
      Days after the applicable Conversion Date or (B) notice, written or oral,
      to any holder of the Notes, including by way of public announcement or
      through any of its agents, at any time, of its intention not to comply
      with a request for conversion of any Notes into shares of Common Stock
      that is tendered in accordance with the provisions of the Notes, except
      where such noncompliance is in accordance with Section 3(d) hereof;

      (iv)  intentionally deleted;

      (v)   the Company's failure to pay to the Holder any amount of Principal,
      Interest, Late Charges or other amounts when and as due under this Note or
      any other Transaction Document (as defined in the Securities Purchase
      Agreement), except, in the case of a failure to pay amounts other than
      Principal when and as due, in which case only if such failure continues
      for a period of at least three Business Days;

      (vi)  any default under, redemption of or acceleration prior to maturity
      of any Indebtedness (as defined below) of the Company or any of its
      Subsidiaries (as defined in Section 3(a) of the Securities Purchase
      Agreement) with an unpaid principal amount in excess of $1,000,000 at the
      time of such acceleration other than with respect to any Other Notes;

      (vii) the Company or any of its Subsidiaries, pursuant to or within the
      meaning of Title 11, U.S. Code, or any similar Federal, foreign or state
      law for the relief of debtors (collectively, "BANKRUPTCY LAW"), (A)
      commences a voluntary case, (B) consents to the entry of an order for
      relief against it in an involuntary case, (C) consents to the appointment
      of a receiver, trustee, assignee, liquidator or similar official (a
      "CUSTODIAN"), (D) makes a general assignment for the benefit of its
      creditors or (E) admits in writing that it is generally unable to pay its
      debts as they become due;

      (viii) a court of competent jurisdiction enters an order or decree under
      any Bankruptcy Law that (A) is for relief against the Company or any of
      its Subsidiaries in an involuntary case not dismissed within 60 days, (B)
      appoints a Custodian of the Company or any of its Subsidiaries or (C)
      orders the liquidation of the Company or any of its Subsidiaries;

      (ix)  a final judgment or judgments for the payment of money aggregating
      in excess of $1,000,000 are rendered against the Company or any of its
      Subsidiaries and which judgments are not, within 60 days after the entry
      thereof, bonded, discharged or stayed pending appeal, or are not
      discharged within 60 days after the expiration of such stay; provided,
      however, that any judgment which is covered by insurance or an indemnity

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      from a credit worthy party shall not be included in calculating the
      $1,000,000 amount set forth above so long as the Company provides the
      Holder a written statement from such insurer or indemnity provider (which
      written statement shall be reasonably satisfactory to the Holder) to the
      effect that such judgment is covered by insurance or an indemnity and the
      Company will receive the proceeds of such insurance or indemnity within 30
      days of the issuance of such judgment;

      (x)   the Company materially breaches any material representation,
      warranty, covenant or other term or condition of any Transaction Document,
      except, in the case of a breach of a covenant or other term or condition
      which is curable, only if such breach continues for a period of at least
      thirty (30) consecutive days after notice thereof by a Holder to the
      Company; or

      (xi)  any Event of Default (as defined in the Other Notes) occurs with
      respect to any Other Notes.

                  (b)   Redemption Right Upon Event of Default. Promptly after
becoming aware of the occurrence of an Event of Default or any breach requiring
notice from the Holder pursuant to Section 4(a)(x) with respect to this Note or
any Other Note, the Company shall deliver written notice thereof via facsimile
and overnight courier (an "EVENT OF DEFAULT NOTICE") to the Holder. At any time
after the earlier of the Holder's receipt of an Event of Default Notice and the
Holder becoming aware of an Event of Default, or, in the case of a breach of
Section 4(a)(x), after the date that is thirty (30) consecutive days after
notice thereof from the Holder to the Company, the Holder may require the
Company to redeem all or any portion of this Note by delivering written notice
thereof (the "EVENT OF DEFAULT REDEMPTION NOTICE") to the Company, which Event
of Default Redemption Notice shall indicate the portion of this Note the Holder
is electing to redeem. Each portion of this Note subject to redemption by the
Company pursuant to this Section 4(b) shall be redeemed by the Company at a
price equal to the greater of (i) the product of (x) the sum of the Conversion
Amount to be redeemed and accrued and unpaid Interest and Late Charges thereon
and (y) the Event of Default Redemption Premium and (ii) the product of (A) the
Conversion Rate with respect to such Conversion Amount in effect at such time as
the Holder delivers an Event of Default Redemption Notice and (B) the Closing
Sale Price of the Common Stock on the date immediately preceding such Event of
Default (the "EVENT OF DEFAULT REDEMPTION PRICE"). Redemptions required by this
Section 4(b) shall be made in accordance with the provisions of Section 12.

            (5)   RIGHTS UPON FUNDAMENTAL TRANSACTION AND CHANGE OF CONTROL.

                  (a)   Assumption. The Company shall not enter into or be party
to a Fundamental Transaction unless (i) the Successor Entity assumes in writing
all of the obligations of the Company under this Note and the other Transaction
Documents in accordance with the provisions of this Section 5(a) pursuant to
written agreements in form and substance satisfactory to the Required Holders
and approved by the Required Holders prior to such Fundamental Transaction,
including agreements to deliver to each holder of Notes in exchange for such
Notes a security of the Successor Entity evidenced by a written instrument
substantially similar in form and substance to the Notes, including, without
limitation, having a principal

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amount and interest rate equal to the principal amounts and the interest rates
of the Notes held by such holder and having similar ranking to the Notes, and
satisfactory to the Required Holders and (ii) the Successor Entity (including
its Parent Entity) is a publicly traded corporation whose common stock is quoted
on or listed for trading on an Eligible Market. Upon the occurrence of any
Fundamental Transaction, the Successor Entity shall succeed to, and be
substituted for (so that from and after the date of such Fundamental
Transaction, the provisions of this Note referring to the "Company" shall refer
instead to the Successor Entity), and may exercise every right and power of the
Company and shall assume all of the obligations of the Company under this Note
with the same effect as if such Successor Entity had been named as the Company
herein. Upon consummation of the Fundamental Transaction, the Successor Entity
shall deliver to the Holder confirmation that there shall be issued upon
conversion or redemption of this Note at any time after the consummation of the
Fundamental Transaction, in lieu of the shares of the Company's Common Stock (or
other securities, cash, assets or other property) purchasable upon the
conversion or redemption of the Notes prior to such Fundamental Transaction,
such shares of stock of the Successor Entity, securities, cash, assets or any
other property whatsoever (including warrants or other purchase or subscription
rights) which the Holder would have been entitled to receive upon the happening
of such Fundamental Transaction had this Note been converted immediately prior
to such Fundamental Transaction, as adjusted in accordance with the provisions
of this Note. The provisions of this Section shall apply similarly and equally
to successive Fundamental Transactions and shall be applied without regard to
any limitations on the conversion or redemption of this Note.

                  (b)   Redemption Right Upon a Change of Control. No sooner
than 15 days nor later than 10 days prior to the consummation of a Change of
Control, but not prior to the public announcement of such Change of Control, the
Company shall deliver written notice thereof via facsimile and overnight courier
to the Holder (a "CHANGE OF CONTROL NOTICE"). Such Change of Control Notice
shall also indicate (i) that, subject to the conditions set forth in Section 9,
a Additional Shares are required to be issued by the Company upon any conversion
by the Holder in connection with a Change of Control, (ii) if applicable,
whether such Additional Shares are to be issued pursuant to Section 9 or shall
be paid in cash and (iii) if Additional Shares are to be issued in shares of
Common Stock that the Equity Conditions are satisfied as of the date of such
notice. In the event that the Company fails to deliver a Change of Control
Notice, the date of such notice shall be deemed to be the later of (i) the date
that is 10 days prior to the consummation of a Change of Control and (ii) the
date of the public announcement thereof.

                  (c)   At any time during the period beginning after the
Holder's receipt of a Change of Control Notice and ending on the date that is
thirty Trading Days after the date of the consummation of such Change of Control
("CHANGE OF CONTROL REDEMPTION/CONVERSION PERIOD"), the Holder may require the
Company to redeem all or any portion of this Note by delivering written notice
thereof ("CHANGE OF CONTROL REDEMPTION NOTICE") to the Company, which Change of
Control Redemption Notice shall indicate the Conversion Amount the Holder is
electing to redeem. The portion of this Note that the Holder specifies to be
redeemed pursuant to this Section 5 shall be redeemed by the Company at a price
equal to 101% of the sum of the Conversion Amount being redeemed and accrued and
unpaid Interest and Late Charges thereon (the "CHANGE OF CONTROL REDEMPTION
PRICE"). Redemptions required by this Section 5 shall be made in accordance with
the provisions of Section 12 and shall have priority to payments to

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shareholders in connection with a Change of Control. Notwithstanding anything to
the contrary in this Section 5, until the Change of Control Redemption Price
(together with any interest thereon) is paid in full, the Conversion Amount
submitted for redemption under this Section 5(b) (together with any interest
thereon) may be converted, in whole or in part, by the Holder into Common Stock,
or in the event the Conversion Date is after the consummation of the Change of
Control, shares of stock or equity interests of the Successor Entity
substantially equivalent to the Company's Common Stock pursuant to Section 3.

                  (d)   Other Corporate Events. In addition to and not in
substitution for any other rights hereunder, prior to the consummation of any
Fundamental Transaction pursuant to which holders of shares of Common Stock are
entitled to receive securities or other assets with respect to or in exchange
for shares of Common Stock (a "CORPORATE EVENT"), the Company shall make
appropriate provision to ensure that the Holder will thereafter have the right
to receive upon a conversion of this Note, (i) in addition to the shares of
Common Stock receivable upon such conversion, such securities or other assets to
which the Holder would have been entitled with respect to such shares of Common
Stock had such shares of Common Stock been held by the Holder upon the
consummation of such Corporate Event (without taking into account any
limitations or restrictions on the convertibility of this Note) or (ii) in lieu
of the shares of Common Stock otherwise receivable upon such conversion, such
securities or other assets received by the holders of shares of Common Stock in
connection with the consummation of such Corporate Event in such amounts as the
Holder would have been entitled to receive had this Note initially been issued
with conversion rights for the form of such consideration (as opposed to shares
of Common Stock) and at a conversion rate for such consideration commensurate
with the Conversion Rate. Provision made pursuant to the preceding sentence
shall be in a form and substance satisfactory to the Required Holders. The
provisions of this Section shall apply similarly and equally to successive
Corporate Events and shall be applied without regard to any limitations on the
conversion or redemption of this Note.

            (6)   ADJUSTMENT OF CONVERSION PRICE .

                  (a)   Subject at all times to the restrictions set forth in
Section 14, the Conversion Price shall be adjusted from time to time by the
Company as follows:

                        (i)   In case the Company shall (A) pay a dividend on
      its Common Stock in shares of Common Stock, (B) make a distribution on its
      Common Stock in shares of Common Stock, (C) subdivide its outstanding
      Common Stock into a greater number of shares, or (D) combine its
      outstanding Common Stock into a smaller number of shares, the Conversion
      Price in effect immediately prior thereto shall be adjusted so that the
      Holder of any Note thereafter surrendered for conversion shall be entitled
      to receive that number of shares of Common Stock which it would have owned
      had such Note been converted immediately prior to the happening of such
      event. An adjustment made pursuant to this subsection (i) shall become
      effective immediately after the record date in the case of a dividend or
      distribution and shall become effective immediately after the effective
      date in the case of a subdivision or combination.

                        (ii)  In case the Company shall issue rights, options or
      warrants to all or substantially all holders of its Common Stock entitling
      them (for a period of not

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      more than 60 days after such issuance) to subscribe for or purchase shares
      of Common Stock (or securities convertible into or exercisable or
      exchangeable for Common Stock) at a price per share (or having a
      conversion, exercise or exchange price per share) less than the Current
      Market Price (as defined in Section 6(a)(vi)) per share of Common Stock on
      the record date for the determination of stockholders entitled to receive
      such rights, options or warrants (or if no record date is fixed, the
      Business Day immediately prior to the date of announcement of such
      issuance) (treating the conversion, exercise or exchange price per share
      of the securities convertible into or exercisable or exchangeable for
      Common Stock as equal to (x) the sum of (i) the price for a unit of the
      security convertible into or exercisable or exchangeable for Common Stock
      and (ii) any additional consideration initially payable upon the
      conversion of such security into or exercise or exchange of such security
      for Common Stock divided by (y) the number of shares of Common Stock
      initially underlying such security), the Conversion Price in effect
      immediately prior thereto shall be adjusted so that the same shall equal
      the rate determined by multiplying the Conversion Price in effect
      immediately prior to such record date by a fraction of which:

                              (A) the numerator shall be the number of shares of
      Common Stock outstanding on the close of business on such record date with
      respect to such issuance (or if no record date is fixed, the date
      immediately prior to the date of announcement of such issuance), plus the
      number of shares which the aggregate subscription or purchase price for
      the total number of shares of Common Stock underlying the rights options,
      or warrants so issued (or the aggregate conversion, exercise or exchange
      price of the securities so offered) would purchase at the Current Market
      Price of the Common Stock on such record date; and

                              (B) the denominator shall be the number of shares
      of Common Stock outstanding at the close of business on the record date
      with respect to such issuance (or if no such record date is fixed, the
      date immediately prior to the date of announcement of such issuance), plus
      the total number of additional shares of Common Stock underlying the
      rights, options or warrants so issued.

                  Such adjustment shall be made successively whenever any such
      rights, options or warrants are issued, and shall become effective
      immediately after such record date. If at the end of the period during
      which such rights or warrants are exercisable not all rights or warrants
      shall have been exercised, the adjusted Conversion Price shall be
      immediately readjusted to what it would have been based upon the number of
      additional shares of Common Stock actually issued (or the number of shares
      of Common Stock issuable upon conversion of convertible securities
      actually issued).

                        (iii) (1) In case the Company shall distribute to all or
      substantially all holders of its Common Stock any shares of capital stock
      of the Company (other than Common Stock), evidences of indebtedness or
      other non-cash assets (including securities of any person other than the
      Company but excluding (A) dividends or distributions paid exclusively in
      cash or (B) dividends or distributions referred to in subsection (iii) of
      this Section 6(a)), or shall distribute to all or substantially all
      holders of its Common Stock rights or warrants to subscribe for or
      purchase any of its securities

                                       10
<PAGE>

      (excluding those rights and warrants referred to in subsection (ii) of
      this Section 6(a)) and also excluding the distribution of rights to all
      holders of Common Stock pursuant to a Rights Plan (as defined below)),
      then in each such case the Conversion Price shall be adjusted so that the
      same shall equal the rate determined by multiplying the current Conversion
      Price by a fraction of which:

                              (A) the numerator shall be the Current Market
      Price per share of the Common Stock on such record date; less the fair
      market value on such record date (as determined in good faith by the board
      of directors of the Company) of the portion of the distributed assets
      (other than cash) so distributed applicable to one share of Common Stock
      (determined on the basis of the number of shares of Common Stock
      outstanding on the record date); and

                              (B) the denominator shall be such Current Market
      Price on such record date.

            Such adjustment shall be made successively whenever any such
      distribution is made and shall become effective immediately after the
      record date for the determination of stockholders entitled to receive such
      distribution.

                  (2)   In the event the then fair market value (as so
      determined) of the portion of the capital stock, evidences of indebtedness
      or other non-cash assets so distributed or of such rights or warrants
      applicable to one share of Common Stock is equal to or greater than the
      Current Market Price per share of the Common Stock on such record date, in
      lieu of the foregoing adjustment, adequate provision shall be made prior
      to the time the foregoing adjustment could otherwise be made in a writing
      delivered to the Holders so that each Holder of a Note shall have the
      right to receive upon conversion the amount of capital stock, evidences of
      indebtedness or other non-cash assets so distributed or of such rights or
      warrants such Holder would have received had such holder converted each
      Note on such record date. In the event that such dividend or distribution
      is not so paid or made, the Conversion Price shall again be adjusted to be
      the Conversion Price which would then be in effect if such dividend or
      distribution had not been declared. If the board of directors of the
      Company determines the fair market value of any distribution for purposes
      of this Section 6(a)(iii) by reference to the actual or when issued
      trading market for any securities, it must in doing so consider the prices
      in such market over the same period used in computing the Current Market
      Price of the Common Stock.

                  Notwithstanding the foregoing, if the securities distributed
      by the Company to all or substantially all holders of its Common Stock
      consist of capital stock of, or similar equity interests in, a Subsidiary
      or other business unit, the Conversion Price shall be adjusted so that the
      same shall be equal to the rate determined by multiplying the Conversion
      Price in effect on the record date with respect to such distribution by a
      fraction of which:

                        (A)   the numerator shall be the arithmetic average of
      the Closing Sale Prices of one share of Common Stock over the ten
      consecutive Trading Day period (the "SPINOFF VALUATION PERIOD") commencing
      on and including the fifth Trading Day

                                       11
<PAGE>

      after the date on which "ex-dividend trading" commences on the Common
      Stock on the Principal Market or such other national or regional exchange
      or market on which the Common Stock is then listed or quoted; and

                        (B)   the denominator shall be the sum of (x) the
      arithmetic average of the Closing Sale Prices of one share of Common Stock
      over the Spinoff Valuation Period and (y) the arithmetic average of the
      Closing Sale Prices over the Spinoff Valuation Period of the portion of
      the securities so distributed applicable to one share of Common Stock,
      such adjustment to become effective immediately prior to the opening of
      business on the fifteenth Trading Day after the date on which "ex-dividend
      trading" commences.

                  In lieu of the foregoing, the Company may at the time of the
      public announcement of such distribution elect in a writing provided to
      the Holders to reserve the pro rata portion of such Notes so that each
      Holder of securities shall have the right to receive upon conversion the
      amount of such shares of capital stock or similar equity interests of such
      Subsidiary or business unit that such Holder would have received if such
      Holder had converted such Notes on the record date with respect to such
      distribution.

                  (3)   With respect to any rights (the "RIGHTS") that may be
      issued or distributed pursuant to any rights plan of the Company (any
      Rights that may be issued pursuant to any rights plan being referred to
      as, a "RIGHTS PLAN"), upon conversion of the Notes into Common Stock, to
      the extent that such Rights Plan is in effect upon such conversion, the
      holders of Notes will receive, in addition to the Common Stock, the Rights
      described therein (whether or not the Rights have separated from the
      Common Stock at the time of conversion), subject to the limitations set
      forth in any such Rights Plan. If the Rights Plan provides that upon
      separation of rights under such plan from the Common Stock that the
      Holders would not be entitled to receive any such rights in respect of the
      Common Stock issuable upon conversion of the Notes, the Conversion Price
      will be adjusted as provided in this Section 6(a) (with such separation
      deemed to be the distribution of such rights), subject to readjustment in
      the event of the expiration, termination or redemption of the rights. Any
      distribution of rights or warrants pursuant to a Rights Plan complying
      with the requirements set forth in the immediately preceding sentence of
      this paragraph shall not constitute a distribution of rights or warrants
      pursuant to this Section 6(a)(iii).

                  (4)   Rights, options or warrants (other than rights issued
      pursuant to a Rights Plan) distributed by the Company to all or
      substantially all holders of Common Stock entitling the holders thereof to
      subscribe for or purchase shares of the Company's capital stock (either
      initially or under certain circumstances), which rights, options or
      warrants, until the occurrence of a specified event or events ("TRIGGER
      EVENT"): (i) are deemed to be transferred with such shares of Common
      Stock; (ii) are not exercisable; and (iii) are also issued in respect of
      future issuances of Common Stock (including issuances of Common Stock upon
      conversion of the Notes), shall be deemed not to have been distributed for
      purposes of this Section 6 (and no adjustment to the Conversion Rate under
      this Section 6 will be required) until the occurrence of the earliest
      Trigger Event, whereupon such rights and warrants shall be deemed to have
      been distributed and an

                                       12
<PAGE>

      appropriate adjustment (if any is required) to the Conversion Rate shall
      be made under this Section 6(a)(iii). If any such right, option or
      warrant, including any such existing rights, options or warrants
      distributed prior to the Issuance Date, are subject to events, upon the
      occurrence of which such rights, options or warrants become exercisable to
      purchase different securities, evidences of indebtedness or other assets,
      then the date of the occurrence of any and each such event shall be deemed
      to be the date of distribution and record date with respect to new rights
      or warrants with such rights (and a termination or expiration of the
      existing rights, options or warrants without exercise by any of the
      holders thereof). In addition, in the event of any distribution (or deemed
      distribution) of rights, options or warrants, or any Trigger Event or
      other event (of the type described in the preceding sentence) with respect
      thereto that was counted for purposes of calculating a distribution amount
      for which an adjustment to the Conversion Rate under this Section 6 was
      made, (1) in the case of any such rights, options or warrants which shall
      all have been redeemed, purchased by the Company or repurchased without
      exercise by any holders thereof, the Conversion Rate shall be readjusted
      upon such final redemption, purchase by the Company or repurchase to give
      effect to such distribution or Trigger Event, as the case may be, as
      though it were a cash distribution, equal to the per share redemption or
      repurchase price received by a holder or holders of Common Stock with
      respect to such rights or warrants (assuming such holder had retained such
      rights or warrants), made to all or substantially all holders of Common
      Stock as of the date of such redemption or repurchase, and (2) in the case
      of such rights, options or warrants which shall have expired or been
      terminated without exercise by any holders thereof, the Conversion Rate
      shall be readjusted as if such rights and warrants had not been issued.

                        (iv)  In case the Company shall, by dividend or
      otherwise, at any time distribute cash (a "TRIGGERING DISTRIBUTION") to
      all or substantially all holders of its Common Stock, the Conversion Price
      shall be adjusted so that the same shall equal the rate determined by
      multiplying such Conversion Price in effect immediately prior to the
      Business Day immediately preceding the day on which such Triggering
      Distribution is declared ("DETERMINATION DATE") by a fraction of which:

                              (A) the numerator shall be such Current Market
      Price per share of the Common Stock (as determined in accordance with
      subsection (vi) of this Section 6(a)) on the Determination Date, less the
      Triggering Distribution applicable to one share of Common Stock
      (determined on the basis of the number of shares of Common Stock
      outstanding on the Determination Date); and

                              (B) the denominator shall be such Current Market
      Price on such Determination Date.

                  Such increase to become effective immediately prior to the
      opening of business on the day following the date on which the Triggering
      Distribution is paid.

                        (v)   In case the Company or any of its Subsidiaries
      shall purchase any shares of the Common Stock by means of tender offer,
      then immediately prior to the opening of business on the day (the
      "EXPIRATION DATE") after the last date tenders could have been made
      pursuant to such tender offer (as it may be amended) (the

                                       13
<PAGE>

      last time at which such tenders could have been made on the Expiration
      Date is hereinafter sometimes called the "EXPIRATION TIME"), the
      Conversion Price shall be adjusted so that the same shall equal the rate
      determined by multiplying the Conversion Price in effect immediately prior
      to the close of business on the Expiration Date by a fraction of which:

                              (A) the numerator shall be product of the number
      of shares of Common Stock outstanding (including Purchased Shares (as
      defined below) but excluding any shares held in the treasury of the
      Company) immediately prior to the Expiration Time and the Current Market
      Price per share of Common Stock (as determined in accordance with
      subsection (vi) of this Section 6(a)) on the Trading Day next succeeding
      the Expiration Date; and

                              (B) the denominator shall be the sum of (x) the
      aggregate consideration (determined as set forth below) payable to
      stockholders of the Company based on the acceptance (up to any maximum
      specified in the terms of the tender offer) of all shares validly tendered
      and not withdrawn as of the Expiration Time (the shares deemed so
      accepted, up to any such maximum, being referred to as the "PURCHASED
      SHARES") and (y) the product of the number of shares of Common Stock
      outstanding (less any Purchased Shares and excluding any shares held in
      the treasury of the Company) immediately prior to the Expiration Time and
      the Current Market Price per share of Common Stock (as determined in
      accordance with subsection (vi) this Section 6(a)) on the Trading Day next
      succeeding the Expiration Date.

                  For purposes of this Section 6(a)(v), the aggregate
      consideration in any such tender offer shall equal the sum of the
      aggregate amount of cash consideration and the aggregate fair market value
      (as determined in good faith by the board of directors of the Company) of
      any other consideration payable in such tender offer. Such increase shall
      be effective immediately prior to the opening of business on the day
      following the Expiration Date. In the event that the Company is obligated
      to purchase shares pursuant to any such tender offer, but the Company is
      permanently prevented by applicable law from effecting any or all such
      purchases or any or all such purchases are rescinded, the Conversion Price
      shall again be adjusted to be the Conversion Price which would have been
      in effect based upon the number of shares actually purchased. If the
      application of this Section 6(a)(v) to any tender offer would result in an
      increase to the Conversion Price, no adjustment shall be made for such
      tender offer under this Section 6(a)(v). For purposes of this Section
      6(a)(v), the term "tender offer" shall mean and include both tender offers
      and exchange offers, all references to "purchases" of shares in tender
      offers (and all similar references) shall mean and include both the
      purchase of shares in tender offers and the acquisition of shares pursuant
      to exchange offers, and all references to "tendered shares" (and all
      similar references) shall mean and include shares tendered in both tender
      offers and exchange offers.

                        (vi)  For the purpose of any computation under this
      Section 6(a), the current market price (the "CURRENT MARKET PRICE") per
      share of Common Stock on any date shall be deemed to be the arithmetic
      average of the Weighted Average Price for each of the 20 consecutive
      Trading Days commencing 21 Trading Days before (A) the

                                       14
<PAGE>

      Determination Date or the Expiration Date, as the case may be, with
      respect to distributions or tender offers under subsection (v) of this
      Section 6(a) or (B) the record date with respect to distributions,
      issuances or other events requiring such computation under this Section
      6(a).

                        (vii) In any case in which this Section 6 shall require
      that an adjustment be made following a record date or a Determination Date
      or Expiration Date, as the case may be, established for purposes of this
      Section 6, the Company may elect to defer (but only until five Business
      Days following the delivery by the Company to the Holders of the notice
      described in Section 7(d)) issuing to the Holder of any Note converted
      after such record date or Determination Date or Expiration Date the shares
      of Common Stock and other capital stock of the Company issuable upon such
      conversion over and above the shares of Common Stock and other capital
      stock of the Company issuable upon such conversion on the basis of the
      Conversion Price prior to adjustment; and, in lieu of the shares the
      issuance of which is so deferred, the Company shall issue or cause its
      transfer agents to issue due bills or other appropriate evidence prepared
      by the Company of the right to receive such shares. If any distribution in
      respect of which an adjustment to the Conversion Price is required to be
      made as of the record date or Determination Date or Expiration Date
      therefor is not thereafter made or paid by the Company for any reason, the
      Conversion Price shall be readjusted to the Conversion Price which would
      then be in effect if such record date had not been fixed or such effective
      date or Determination Date or Expiration Date had not occurred.

            (b)   For purposes of this Section 6, "record date" shall mean, with
respect to any dividend, distribution or other transaction or event in which the
holders of Common Stock have the right to receive any cash, securities or other
property or in which the Common Stock (or other applicable security) is
exchanged or converted into any combination of cash, securities or other
property, the date fixed for determination of stockholders entitled to receive
such cash, security or other property (whether or not such date is fixed by the
board of directors of the Company or by statute, contract or otherwise).

            (7)   NO ADJUSTMENT.

                  (a)   No adjustment in the Conversion Price shall be required
unless such adjustment would require an increase or decrease of at least $0.01
in the Conversion Price as last adjusted; provided, however, that any
adjustments which would otherwise be required to be made but for the provisions
of this Section 7(a), shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 7 shall be made to
the nearest cent or to the nearest one-hundredth of a share, as the case may be.

                  (b)   No adjustment in the Conversion Price shall be required
for issuances of Common Stock pursuant to a Company plan for reinvestment of
dividends or interest or for a change in the par value or a change to no par
value of the Common Stock.

                  (c)   To the extent that the Notes become convertible into a
right to receive cash, no adjustment need be made thereafter as to the cash
received by the Holders.

                                       15
<PAGE>

                  (d)   Whenever the Conversion Price is required to be adjusted
pursuant to Section 6, the Company shall promptly mail to the Holders a notice
of the adjustment and briefly stating the facts requiring the adjustment and the
manner of computing it.

            (8)   ADJUSTMENT FOR TAX PURPOSES.

                  (a)   The Company shall be entitled to make such increases in
the Conversion Price, in addition to those required by Section 6, as it in its
discretion shall determine to be advisable in order that any stock dividends,
subdivisions of shares, distributions of rights to purchase stock or securities
or distributions of securities convertible into or exercisable or exchangeable
for stock hereafter made by the Company to its stockholders shall not be
taxable.

            (9)   ADDITIONAL SHARES.

            In connection with a Cash Transaction, the Holder will be entitled
to receive from the Company upon any conversion of this Note pursuant to Section
5 hereof during the Change of Control Redemption/Conversion Period, in addition
to the number of shares of Common Stock such Holder would otherwise have been
entitled to receive pursuant hereto upon such conversion, an additional number
of shares of Common Stock ("ADDITIONAL SHARES") as is set forth below:

(a)   the number of Additional Shares to which the Holder shall be entitled for
      every $100 of Principal amount of Notes being converted shall be
      determined by reference to the table set out in Schedule "1" hereto, based
      on the date such Change of Control is consummated (the "EFFECTIVE DATE")
      and the consideration paid per share of Common Stock in respect of such
      Cash Transaction (the "COMMON SHARE PRICE");

(b)   if the Common Share Price is equal to or in excess of $25.00 per share of
      Common Stock or if the Common Share Price is less than $3.04 per share of
      Common Stock, no Additional Shares shall be issued upon conversion;

(c)   if the Common Share Price is between two Common Share Price amounts in the
      table set out in Schedule "1" or the Effective Date is between two dates
      in said table, the number of Additional Shares shall be determined by a
      straight-line interpolation between the number of Additional Shares set
      forth for the higher and lower Common Share Price amounts and the two
      dates, as applicable, based on a 365-day year;

(d)   the Common Share Prices set forth in the first row of the table in
      Schedule "1" hereto and set forth in the paragraph (b) above shall be
      adjusted as of any date on which the Conversion Price is adjusted pursuant
      to Section 6. The adjusted Common Share Price shall equal the Common Share
      Price applicable immediately prior to such adjustment, multiplied by a
      fraction, the numerator of which is the Conversion Price immediately prior
      to the adjustment giving rise to the Common Share Price adjustment and the
      denominator of which is the Conversion Price as so adjusted. The Company's
      obligation to deliver Additional Shares shall be subject to adjustment in
      the same manner as the Conversion Price as set forth in Section 6.

            The Company shall provide the Holders with a certificate of an
executive officer

                                       16
<PAGE>

of the Company calculating the Additional Shares issuable, upon which the
Holders may rely. If the Equity Conditions are not satisfied or waived by the
Holder during each Trading Day of the Change of Control Redemption/Conversion
Period then in lieu of issuing the Additional Shares, the Company shall pay to
the Holder an amount in cash equal to the product of (x) the number of
applicable Additional Shares and (y) the arithmetic average of the Weighted
Average Price for each of the five consecutive Trading Days before the
applicable Conversion Date.

            (10)  COMPANY MATURITY CONVERSION OR REDEMPTION.

                  (a)   General. On the Maturity Date, the Company shall pay to
the Holder of this Note all outstanding Principal, accrued and unpaid Interest
and Late Charges, if any, as of the Maturity Date by the combination of any of
the following, but subject to and in accordance with the terms of this Section
10, (i) provided that during the period commencing with the Company Maturity
Notice (as defined below) through the Maturity Date, the Equity Conditions have
been satisfied (or waived in writing by the Holder), requiring the conversion of
a portion of the outstanding Conversion Amount, in whole or in part, in
accordance with this Section 10 (a "COMPANY CONVERSION"), and/or (ii) redeeming
the outstanding Conversion Amount, in whole or in part, in accordance with this
Section 10 (a "COMPANY REDEMPTION"). On or prior to the date which is the
fortieth (40th) day prior to the Maturity Date (the "MATURITY NOTICE DUE DATE"),
but not earlier than the sixtieth (60th) day prior to the Maturity Date, the
Company shall deliver written, irrevocable notice (each, a "COMPANY MATURITY
NOTICE"), to the Holder which Company Maturity Notice shall state (i) the
portion, if any, of the applicable Conversion Amount which the Company will
require Holders to convert pursuant to a Company Conversion, (the "COMPANY
CONVERSION AMOUNT"), (ii) the portion, if any, of the applicable Conversion
Amount which the Company elects to redeem together with any accrued and unpaid
Interest and Late Charges thereon pursuant to a Company Redemption (the "COMPANY
REDEMPTION AMOUNT"), and (iii) if the Company has elected, in whole or in part,
a Company Conversion, then the Company Maturity Notice shall certify that the
Equity Conditions have been satisfied as of the date of the Company Maturity
Notice. Each Company Maturity Notice shall be irrevocable. If the Company does
not timely deliver a Company Maturity Notice in accordance with this Section 10,
then the Company shall be deemed to have delivered an irrevocable Company
Maturity Notice electing a Company Conversion and shall be deemed to have
certified that the Equity Conditions in connection with any such conversion have
been satisfied. Except as expressly provided in this Section 10(a), the Company
shall redeem and convert the Conversion Amount of this Note pursuant to this
Section 10 and the corresponding Conversion Amounts of the Other Notes pursuant
to the corresponding provisions of the Other Notes in the same ratio as the
Conversion Amount being redeemed and converted hereunder. The Company Redemption
Amount shall be redeemed in accordance with Section 10(b) and the Company
Conversion Amount (whether set forth in the Company Maturity Notice or by
operation of this Section 10) shall be converted in accordance with Section
10(c).

                  (b)   Mechanics of Company Redemption. If the Company elects a
Company Redemption in accordance with Section 10(a), then the Company Redemption
Amount, if any, shall be redeemed by the Company on the Maturity Date, and the
Company shall pay to the Holder on the Maturity Date, by wire transfer of
immediately available funds, an amount in cash (the "COMPANY MATURITY REDEMPTION
PRICE") equal to 100% of the Company Redemption Amount. If the Company fails to
pay the Company Maturity Redemption Price on

                                       17
<PAGE>

such date, then at the option of the Holder designated in writing to the Company
(any such designation, a "CONVERSION NOTICE" for purposes of this Note), the
Holder may require the Company to (i) convert all or any part of the Conversion
Amount included in the Company Redemption Amount at the Company Conversion Price
and (ii) pay in cash any accrued and unpaid Interest and Late Charges thereon.
Conversions required by this Section 10(b) shall be made in accordance with the
provisions of Section 3(c). Notwithstanding anything to the contrary in this
Section 10(b), but subject to Section 3(d), until the Company Maturity
Redemption Price (together with any interest thereon) is paid in full, the
Conversion Amount included in the Company Redemption Amount (together with any
interest thereon) may be converted, in whole or in part, by the Holder into
Common Stock pursuant to Section 3. In the event the Holder elects to convert
all or any portion of the Company Redemption Amount prior to the applicable
Maturity Date as set forth in the immediately preceding sentence, the Company
Redemption Amount so converted plus any Interest and Late Charges paid in
connection with such conversion shall be deducted from the Company Redemption
Amount to be paid on such Maturity Date.

                  (c)   Mechanics of Company Conversion. Subject to Section
3(d), if the Company delivers a Company Maturity Notice and elects, or is deemed
to have elected, in whole or in part, a Company Conversion in accordance with
Section 10(a), then the applicable Company Conversion Amount, if any, which
remains outstanding shall be converted as of the Maturity Date by converting on
the Maturity Date such Company Conversion Amount at the Company Conversion Price
and paying to the Holder in cash any accrued and unpaid Interest and Late
Charges on such Company Conversion Amount; provided that the Equity Conditions
have been satisfied (or waived in writing by the Holder) on the Maturity Date.
If the Equity Conditions are not satisfied (or waived in writing by the Holder)
on the Maturity Date, then at the option of the Holder designated in writing to
the Company, the Holder may require the Company to do any one or more of the
following: (i) the Company shall redeem all or any part designated by the Holder
of the unconverted Company Conversion Amount (such designated amount together
with any accrued and unpaid Interest and Late Charges thereon is referred to as
the "FIRST REDEMPTION AMOUNT") on the Maturity Date and the Company shall pay to
the Holder on the Maturity Date, by wire transfer of immediately available
funds, an amount in cash equal to 110% of such First Redemption Amount, or (ii)
the Company Conversion shall be null and void with respect to all or any part
designated by the Holder of the unconverted Company Conversion Amount and the
Holder shall be entitled to all the rights of a holder of this Note with respect
to such amount of the Company Conversion Amount If the Company fails to redeem
any First Redemption Amount on the Maturity Date by payment of such amount on
the Maturity Date, then the Holder shall have the rights set forth in this Note
(including, without limitation, such failure constituting an Event of Default
described in Section 4(a)(v)). Notwithstanding anything to the contrary in this
Section 10(c), but subject to 3(d), until the Company delivers Common Stock
representing the Company Conversion Amount to the Holder and cash representing
the accrued and unpaid Interest and Late Charges thereon, the Company Conversion
Amount may be converted by the Holder into Common Stock pursuant to Section 3.
In the event the Holder elects to convert the Company Conversion Amount prior to
the Maturity Date as set forth in the immediately preceding sentence, the
Company Conversion Amount so converted shall be deducted from the Company
Conversion Amount to be paid on the Maturity Date.

            (11)  RESERVATION OF AUTHORIZED SHARES. The Company covenants

                                       18
<PAGE>

that it will at all times reserve and keep available out of its authorized
Common Stock, solely for the purpose of issue of Common Stock upon conversion of
any Conversion Amount or payment of any Additional Shares, and conditionally
allot to a holder who may (i) exercise its conversion rights under the Note or
(ii) be issued any Additional Shares, such Common Stock as could be issuable
upon conversion of any Conversion Amount or issued as Additional Shares. The
Company covenants that all Common Stock which shall be so issuable shall be duly
and validly issued as fully-paid and non-assessable.

            (12)  HOLDER'S REDEMPTIONS.

                  (a)   Mechanics. In the event that the Holder has sent an
Event of Default Redemption Notice or a Change of Control Redemption Notice to
the Company pursuant to Section 4(b) or Section 5(b), respectively (each, a
"REDEMPTION NOTICE"), the Holder shall promptly submit this Note to the Company.
The Company shall deliver the applicable Event of Default Redemption Price or
Change of Control Redemption Price to the Holder within five Business Days after
the Company's receipt of the Holder's Event of Default Redemption Notice or
Change of Control Redemption Notice, as the case may be. If the Holder has
submitted a Change of Control Redemption Notice in accordance with Section 5(b),
the Company shall deliver the applicable Change of Control Redemption Price to
the Holder concurrently with the consummation of such Change of Control if such
notice is received prior to the consummation of such Change of Control and
within five Business Days after the Company's receipt of such notice otherwise.
In the event of a redemption of less than all of the Conversion Amount of this
Note, the Company shall promptly cause to be issued and delivered to the Holder
a new Note (in accordance with Section 17(d)) representing the outstanding
Principal which has not been redeemed. In the event that the Company does not
pay the Event of Default Redemption Price or the Change of Control Redemption
Price (each, the "REDEMPTION PRICE"), as applicable, to the Holder (or deliver
any Common Stock to be issued in lieu of cash) within the time period required
at any time thereafter and until the Company pays such unpaid Redemption Price
(or issues any Common Stock in lieu of cash in full) the Holder shall have the
option, in lieu of redemption, to require the Company by written notice to
promptly return to the Holder all or any portion of this Note representing the
Conversion Amount that was submitted for redemption and for which the applicable
Redemption Price or any Common Stock in lieu of cash to be issued in lieu of
cash (together with any Late Charges thereon) has not been paid. Upon the
Company's receipt of such notice, (x) the Redemption Notice shall be null and
void with respect to such Conversion Amount, (y) the Company shall immediately
return this Note, or issue a new Note (in accordance with Section 17(d)) to the
Holder representing such Conversion Amount and (z) the Conversion Price of this
Note or such new Notes shall be adjusted to the lesser of (A) the Conversion
Price as in effect on the date on which the Redemption Notice is voided and (B)
the lowest Closing Bid Price during the period beginning on and including the
date on which the Redemption Notice is delivered to the Company and ending on
and including the date on which the Redemption Notice is voided.

                  (b)   Redemption by Other Holders. Upon the Company's receipt
of notice from any of the holders of the Other Notes for redemption or repayment
as a result of an event or occurrence substantially similar to the events or
occurrences described in Section 4(b) or Section 5(b) (each, an "OTHER
REDEMPTION NOTICE"), the Company shall immediately, but no later than one (1)
Business Day of its receipt thereof, forward to the Holder by facsimile a copy

                                       19
<PAGE>

of such notice. If the Company receives a Redemption Notice and one or more
Other Redemption Notices during the seven Business Day period beginning on and
including the date which is three Business Days prior to the Company's receipt
of the Holder's Redemption Notice and ending on and including the date which is
three Business Days after the Company's receipt of the Holder's Redemption
Notice and the Company is unable to redeem all principal, interest and other
amounts designated in such Redemption Notice and such Other Redemption Notices
received during such seven Business Day period, then the Company shall redeem a
pro rata amount from each holder of the Notes (including the Holder) based on
the principal amount of the Notes submitted for redemption pursuant to such
Redemption Notice and such Other Redemption Notices received by the Company
during such seven Business Day period.

            (13)  VOTING RIGHTS. The Holder shall have no voting rights as the
holder of this Note, except as required by law and as expressly provided in this
Note.

            (14)  COVENANTS

                  (a)   Rank. All payments due under this Note shall rank pari
passu with payments under the Other Notes and senior to all other Indebtedness
of the Company except for Permitted Indebtedness.

                  (b)   Incurrence of Indebtedness. So long as this Note is
outstanding, the Company shall not, and the Company shall not permit any of its
Subsidiaries to, directly or indirectly, incur or guarantee, assume or suffer to
exist any Indebtedness other than intercompany Indebtedness, Permitted
Subordinated Indebtedness and Permitted Indebtedness.

                  (c)   Existence of Liens. So long as this Note is outstanding,
the Company shall not, and the Company shall not permit any of its Subsidiaries
to, directly or indirectly, allow or suffer to exist any mortgage, lien, pledge,
charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by the Company or any of its
Subsidiaries (collectively, "LIENS") other than Permitted Liens.

                  (d)   Restricted Payments. So long as Notes having an
aggregate principal amount of at least $25,000,000 are outstanding, (i) the
Company shall not, and the Company shall not permit any of its Subsidiaries to,
directly or indirectly, redeem, defease or repurchase, repay or make any
payments in respect of, by the payment of cash or cash equivalents or otherwise
in specie (in whole or in part, whether by way of open market purchases, tender
offers, private transactions or otherwise), all or any portion of any
Indebtedness, other than intercompany Indebtedness or Permitted Indebtedness,
whether by way of payment in respect of principal of (or premium, if any) or
interest on, such Indebtedness if at the time such payment is due or is
otherwise made or, after giving effect to such payment, an event constituting,
or that with the passage of time would constitute, an Event of Default has
occurred and is continuing and (ii) the Company shall not, and the Company shall
not permit any of its Subsidiaries to, directly or indirectly, redeem, defease
or repurchase any of its capital stock, or pay any dividends or make any other
payments or distributions to holders of its capital stock or otherwise (except
for intercompany dividends or distributions paid by the Company's Subsidiaries
to the Company).

                                       20
<PAGE>

                  (e)   Asset Dispositions. Other than (i) in connection with
Guyanor Ressources S.A. (France) ("Guyanor") but not including any assets,
divisions or subsidiaries transferred to Guyanor to avoid the application of
this Section 14(e) and (ii) in the ordinary course or in connection with the
sale of obsolete equipment, the Company shall not, and the Company shall not
permit any of its Subsidiaries to, dispose, sell or transfer any material
assets, divisions or subsidiaries (including, without limitation, in connection
with a spin-off), (which material assets, divisions or subsidiaries specifically
includes, without limitation, Bogoso Gold Limited (Ghana) and Wexford Goldfields
Limited (Ghana)) in any one year, that exceed in value the aggregate of
$5,000,000.

                  (f)   Change in Business. The Company shall not, and shall not
permit any of its Subsidiaries to, change the nature of the business of the
Company and the Subsidiaries taken as a whole from exploration, development and
mining of properties and interests in properties for gold.

            (15)  VOTE TO ISSUE, OR CHANGE THE TERMS OF, NOTES. The affirmative
vote of the Required Holders at a meeting duly called for such purpose or the
written consent without a meeting of the Required Holders and the agreement of
the Company shall be required for any change or amendment to this Note or the
Other Notes. Notwithstanding the foregoing or anything herein to the contrary,
without the written consent of each Holder of Notes affected, an amendment,
supplement or waiver may not: (i) change the Maturity Date or Interest Rate, or
any Registration Default Payments (as defined in the Registration Rights
Agreement) or Late Charges with respect to any Note; (ii) reduce the Principal
amount of, Interest on, or the amount payable upon redemption or purchase
pursuant to Section 4(b) or 5(c), with respect to any Note; (iii) make any
change that impairs or adversely affects the conversion rights of any Note; (iv)
change the currency of payment of Principal of, Interest on any Note; (v) impair
the right to institute suit for the enforcement of any payment on or with
respect to, or conversion of, any Note; or (vi) reduce the percentage set forth
in the definition of Required Holders.

            (16)  TRANSFER. This Note and any shares of Common Stock issued upon
conversion of this Note may be offered, sold, assigned or transferred by the
Holder without the consent of the Company, subject only to the provisions of
Section 2(f) of the Securities Purchase Agreement and the legend set forth on
the face of this Note.

            (17)  REISSUANCE OF THIS NOTE.

                  (a)   Transfer. If this Note is to be transferred, the Holder
shall surrender this Note to the Company, whereupon the Company will forthwith
issue and deliver upon the order of the Holder a new Note (in accordance with
Section 17(d)), registered in the records of the Company as the Holder may
request, representing the outstanding Principal being transferred by the Holder
and, if less then the entire outstanding Principal is being transferred, a new
Note (in accordance with Section 17(d)) to the Holder representing the
outstanding Principal not being transferred. The Holder and any assignee, by
acceptance of this Note, acknowledge and agree that, by reason of the provisions
of Section 3(c)(iii) and this Section 17(a), following conversion or redemption
of any portion of this Note, the outstanding Principal represented by this Note
may be less than the Principal stated on the face of this Note.

                                       21
<PAGE>

                  (b)   Lost, Stolen or Mutilated Note. Upon receipt by the
Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note, and, in the case of loss, theft or
destruction, of any indemnification undertaking by the Holder to the Company in
customary form and, in the case of mutilation, upon surrender and cancellation
of this Note, the Company shall execute and deliver to the Holder a new Note (in
accordance with Section 17(d)) representing the outstanding Principal.

                  (c)   Note Exchangeable for Different Denominations. This Note
is exchangeable, upon the surrender hereof by the Holder at the principal office
of the Company, for a new Note or Notes (in accordance with Section 17(d) and in
principal amounts of at least $100,000) representing in the aggregate the
outstanding Principal of this Note, and each such new Note will represent such
portion of such outstanding Principal as is designated by the Holder at the time
of such surrender.

                  (d)   Issuance of New Notes. Whenever the Company is required
to issue a new Note pursuant to the terms of this Note, such new Note (i) shall
be of like tenor with this Note, (ii) shall represent, as indicated on the face
of such new Note, the Principal remaining outstanding (or in the case of a new
Note being issued pursuant to Section 17(a) or Section 17(c), the Principal
designated by the Holder which, when added to the principal represented by the
other new Notes issued in connection with such issuance, does not exceed the
Principal remaining outstanding under this Note immediately prior to such
issuance of new Notes), (iii) shall have an issuance date, as indicated on the
face of such new Note, which is the same as the Issuance Date of this Note, (iv)
shall have the same rights and conditions as this Note, and (v) shall represent
accrued Interest and Late Charges on the Principal and Interest of this Note,
from the Issuance Date.

            (18)  REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND
INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative and in
addition to all other remedies available under this Note, the Securities
Purchase Agreement and the Registration Rights Agreement, at law or in equity
(including a decree of specific performance and/or other injunctive relief), and
nothing herein shall limit the Holder's right to pursue actual and consequential
damages for any failure by the Company to comply with the terms of this Note.
Amounts set forth or provided for herein with respect to payments, conversion
and the like (and the computation thereof) shall be the amounts to be received
by the Holder and shall not, except as expressly provided herein, be subject to
any other obligation of the Company (or the performance thereof). The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Holder and that the remedy at law for any such breach
may be inadequate. The Company therefore agrees that, in the event of any such
breach or threatened breach, the Holder shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.

            (19)  PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a)
this Note is placed in the hands of an attorney for collection or enforcement or
is collected or enforced through any legal proceeding or the Holder otherwise
takes action to collect amounts due under this Note or to enforce the provisions
of this Note or (b) there occurs any bankruptcy, reorganization, receivership of
the Company or other proceedings affecting

                                       22
<PAGE>

Company creditors' rights and involving a claim under this Note, then the
Company shall pay the costs incurred by the Holder for such collection,
enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, but not limited to, reasonable
attorneys' fees and disbursements.

            (20)  CONSTRUCTION; HEADINGS. This Note shall be deemed to be
jointly drafted by the Company and all the Buyers (as defined in the Securities
Purchase Agreement) and shall not be construed against any person as the drafter
hereof. The headings of this Note are for convenience of reference and shall not
form part of, or affect the interpretation of, this Note.

            (21)  FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the
part of the Holder in the exercise of any power, right or privilege hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such power, right or privilege preclude other or further exercise thereof or
of any other right, power or privilege.

            (22)  DISPUTE RESOLUTION. In the case of a dispute as to the
determination of the Closing Bid Price, the Closing Sale Price or the Weighted
Average Price or the arithmetic calculation of the Conversion Price or the
Redemption Price, the Company shall submit the disputed determinations or
arithmetic calculations via facsimile within one Business Day of receipt of the
Conversion Notice or Redemption Notice or other event giving rise to such
dispute, as the case may be, to the Holder. If the Holder and the Company are
unable to agree upon such determination or calculation within one Business Day
of such disputed determination or arithmetic calculation being submitted to the
Holder, then the Company shall, within one Business Day submit via facsimile (a)
the disputed determination of the Closing Bid Price, the Closing Sale Price or
the Weighted Average Price to an independent, reputable investment bank selected
by the Company and approved by the Holder or (b) the disputed arithmetic
calculation of the Conversion Price or the Redemption Price to any independent,
outside accountant agreed upon by the Company and the Required Holders. The
Company, at the Company's expense, shall cause the investment bank or the
accountant, as the case may be, to perform the determinations or calculations
and notify the Company and the Holder of the results no later than five Business
Days from the time it receives the disputed determinations or calculations. Such
investment bank's or accountant's determination or calculation, as the case may
be, shall be binding upon all parties absent demonstrable error.

            (23)  NOTICES; PAYMENTS.

                  (a)   Notices. Whenever notice is required to be given under
this Note, unless otherwise provided herein, such notice shall be given in
accordance with Section 9(g) of the Securities Purchase Agreement. Without
limiting the generality of the foregoing, the Company will give written notice
to the Holder (i) immediately upon any adjustment of the Conversion Price,
setting forth in reasonable detail, and certifying, the calculation of such
adjustment and (ii) at least twenty days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to holders of Common Stock or (C) for determining rights to
vote with respect to any Fundamental Transaction, dissolution or liquidation,
provided in each case that such information shall be made known to the public
prior to or in conjunction with such notice being provided to the Holder.

                                       23
<PAGE>

                  (b)   Payments. Whenever any payment of cash is to be made by
the Company to any Person pursuant to this Note, such payment shall be made in
lawful money of the United States of America by a check drawn on the account of
the Company and sent via overnight courier service to such Person at such
address as previously provided to the Company in writing (which address, in the
case of each of the Purchasers, shall initially be as set forth on the Schedule
of Buyers attached to the Securities Purchase Agreement); provided that the
Holder may elect to receive a payment of cash via wire transfer of immediately
available funds by providing the Company with prior written notice setting out
such request and the Holder's wire transfer instructions. Whenever any amount
expressed to be due by the terms of this Note is due on any day which is not a
Business Day, the same shall instead be due on the next succeeding day which is
a Business Day and, in the case of any Interest Date which is not the date on
which this Note is paid in full, the extension of the due date thereof shall not
be taken into account for purposes of determining the amount of Interest due on
such date. Any amount of Principal or other amounts due under the Transaction
Documents which is not paid when due shall result in a late charge being
incurred and payable by the Company in an amount equal to interest on such
amount at the rate of 1% per month from the date such amount was due until the
same is paid in full ("LATE CHARGE").

            (24)  CANCELLATION. After all Principal, accrued Interest and other
amounts at any time owed on this Note have been paid in full, this Note shall
automatically be deemed canceled, shall be surrendered to the Company for
cancellation and shall not be reissued.

            (25)  WAIVER OF NOTICE. To the extent permitted by law, the Company
hereby waives demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement of
this Note and the Securities Purchase Agreement.

            (26)  GOVERNING LAW. This Note shall be construed and enforced in
accordance with, and all questions concerning the construction, validity,
interpretation and performance of this Note shall be governed by, the internal
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any other
jurisdictions) that would cause the application of the laws of any jurisdictions
other than the State of New York.

            (27)  CERTAIN DEFINITIONS. For purposes of this Note, the following
terms shall have the following meanings:

                  (a)   "APPROVED STOCK PLAN" means any employee benefit, option
or incentive plan which has been approved by the board of directors of the
Company, pursuant to which the Company's securities may be issued to any
employee, consultant, officer or director for services provided to the Company.

                  (b)   "BLOOMBERG" means Bloomberg Financial Markets.

                  (c)   "BUSINESS DAY" means any day other than Saturday, Sunday
or other day on which commercial banks in The City of New York are authorized or
required by law to remain closed.

                                       24
<PAGE>

                  (d)   "CALENDAR QUARTER" means each of: the period beginning
on and including January 1 and ending on and including March 31; the period
beginning on and including April 1 and ending on and including June 30; the
period beginning on and including July 1 and ending on and including September
30; and the period beginning on and including October 1 and ending on and
including December 31.

                  (e)   "CASH TRANSACTION" means a Change of Control in respect
of which (i) the consideration received for shares of Common Stock is wholly in
cash or (ii) 20% or more of the aggregate fair market value of the consideration
received for shares of Common Stock includes cash, other property or equities
that are not traded or scheduled to be traded immediately following such Change
of Control on an Eligible Market.

                  (f)   "CHANGE OF CONTROL" means any Fundamental Transaction
other than (A) a Fundamental Transaction in which holders of the Company's
voting power immediately prior to the Fundamental Transaction continue after the
Fundamental Transaction to hold publicly traded securities and, directly or
indirectly, the voting power of the surviving entity or entities necessary to
elect a majority of the members of the board of directors (or their equivalent
if other than a corporation) of such entity or entities, or (B) pursuant to a
migratory merger effected solely for the purpose of changing the jurisdiction of
incorporation of the Company.

                  (g)   "CLOSING BID PRICE" and "CLOSING SALE PRICE" means, for
any security as of any date, the last closing bid price and last closing trade
price, respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price,
as the case may be, then the last bid price or last trade price, respectively,
of such security prior to 4:00:00 p.m., New York Time, as reported by Bloomberg,
or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price,
respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if
the foregoing do not apply, the last closing bid price or last trade price,
respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade price, respectively, is reported for such security by
Bloomberg, the average of the bid prices, or the ask prices, respectively, of
any market makers for such security as reported in the "pink sheets" by Pink
Sheets LLC (formerly the National Quotation Bureau, Inc.). If the Closing Bid
Price or the Closing Sale Price cannot be calculated for a security on a
particular date on any of the foregoing bases, the Closing Bid Price or the
Closing Sale Price, as the case may be, of such security on such date shall be
the fair market value as mutually determined by the Company and the Holder. If
the Company and the Holder are unable to agree upon the fair market value of
such security, then such dispute shall be resolved pursuant to Section 22. All
such determinations to be appropriately adjusted for any stock dividend, stock
split, stock combination or other similar transaction during the applicable
calculation period.

                  (h)   "COMPANY CONVERSION PRICE" means that price which shall
be the price computed as 95% of the arithmetic average of the Weighted Average
Price of the Common

                                       25
<PAGE>

Stock during each of the 20 consecutive Trading Days ending
on the fifth Trading Day prior to the Maturity Date. All such determinations to
be appropriately adjusted for any stock split, stock dividend, stock combination
or other similar transaction that proportionately decreases or increases the
Common Stock during such period.

                  (i)   "CONTINGENT OBLIGATION" means, as to any Person, any
direct or indirect liability, contingent or otherwise, of that Person with
respect to any indebtedness, lease, dividend or other obligation of another
Person if the primary purpose or intent of the Person incurring such liability,
or the primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any agreements
relating thereto will be complied with, or that the holders of such liability
will be protected (in whole or in part) against loss with respect thereto.

                  (j)   "ELIGIBLE MARKET" means the Principal Market, the New
York Stock Exchange, the Nasdaq National Market, the Toronto Stock Exchange or
The Nasdaq Small Cap Market.

                  (k)   "EQUITY CONDITIONS" means (i) on each day during the
period beginning twenty (20) Trading Days prior to the applicable date of
determination and ending on and including the applicable date of determination
(the "EQUITY CONDITIONS MEASURING PERIOD"), either (x) the Registration
Statement filed pursuant to the Registration Rights Agreement shall be effective
and available for the resale of all remaining Registrable Securities in
accordance with the terms of the Registration Rights Agreement and there shall
not have been any Grace Periods (as defined in the Registration Rights
Agreement) during the Equity Conditions Measuring Period or (y) all shares of
Common Stock issuable upon conversion of the Notes shall be eligible for sale
without restriction and without the need for registration under any applicable
federal or state securities laws; (ii) on each day during the Equity Conditions
Measuring Period, the Common Stock is designated for quotation on the Principal
Market and the TSX and shall not have been suspended from trading on such
exchange or market (other than suspensions of not more than two days and
occurring prior to the applicable date of determination due to business
announcements by the Company) nor shall delisting or suspension by such exchange
or market been threatened or pending either (A) in writing by such exchange or
market or (B) by falling below the minimum listing maintenance requirements of
such exchange or market; (iii) during the one year period ending on and
including the date immediately preceding the applicable date of determination,
the Company shall have delivered Conversion Shares upon conversion of the Notes
to the holders on a timely basis as set forth in Section 3(c)(ii) hereof (and
analogous provisions under the Other Notes); provided, however, that for
purposes of this clause (iii) only, the Company shall be deemed to have
satisfied the conditions set forth in this clause (iii) if on not more than two
occasions prior to the Equity Conditions Measuring Period the Company has failed
to meet the requirements set forth in Section 3(c)(ii) hereof by no more than
three days; (iv) any applicable shares of Common Stock to be issued in
connection with such conversion may be issued in full without violating Section
3(d) hereof and the rules or regulations of the Principal Market and the TSX;
(v) during the Equity Conditions Measuring Period, the Company shall not have
failed to timely make any payments within ten (10) Business Days of when such
payment is due pursuant to any Transaction Document; (vi) during the Equity
Conditions Measuring Period, there shall not have occurred either (A) other than
in connection with the issuance of the Additional Shares, the

                                       26
<PAGE>

public announcement of a pending, proposed or intended Fundamental Transaction
or Change of Control which has not been abandoned, terminated or consummated or
(B) an Event of Default or an event that with the passage of time or giving of
notice would constitute an Event of Default; (vii) other than the existence of
the Change of Control relating to the issuance of the Additional Shares, the
Company shall have no knowledge of any fact that would cause (x) the
Registration Statements required pursuant to the Registration Rights Agreement
not to be effective and available for the resale of all remaining Registrable
Securities in accordance with the terms of the Registration Rights Agreement or
(y) any shares of Common Stock issuable upon conversion of the Notes not to be
eligible for sale without restriction pursuant to Rule 144(k) and any applicable
state securities laws; and (viii) the Company otherwise shall have been in
material compliance with and shall not have materially breached any provision,
covenant, representation or warranty of any Transaction Document.

                  (l)   "EVENT OF DEFAULT REDEMPTION PREMIUM" means (i) in the
case of the Events of Default described in Section 4(a)(i) - (vi) and (ix) -
(xi), 110% or (ii) in the case of the Events of Default described in Section
4(a)(vii) - (viii), 100%.

                  (m)   "FUNDAMENTAL TRANSACTION" means that the Company shall,
directly or indirectly, in one or more related transactions, (i) consolidate or
merge with or into (whether or not the Company is the surviving corporation)
another Person, or (ii) sell, assign, transfer, convey or otherwise dispose of
all or substantially all of the properties or assets of the Company to another
Person, or (iii) allow another Person or group of related Persons (as defined in
Sections 13(d) and 14(d) of the Exchange Act) to make a purchase, tender or
exchange offer that is accepted by the holders of more than two-thirds of the
outstanding shares of Common Stock (not including any shares of Common Stock
held by the Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such purchase, tender or exchange offer),
or (iv) consummate a stock purchase agreement or other business combination
(including, without limitation, a reorganization, recapitalization, spin-off or
scheme of arrangement) with another Person or group of related Persons (as
defined in Sections 13(d) and 14(d) of the Exchange Act) whereby such other
Person acquires more than two-thirds of the outstanding shares of Common Stock
(not including any shares of Common Stock held by the other Person or other
Persons making or party to, or associated or affiliated with the other Persons
making or party to, such stock purchase agreement or other business
combination), or (v) reorganize, recapitalize or reclassify its Common Stock.

                  (n)   "GAAP" means Canadian generally accepted accounting
principles, consistently applied.

                  (o)   "INDEBTEDNESS" of any Person means, without duplication
(A) all indebtedness for borrowed money, (B) all obligations issued, undertaken
or assumed as the deferred purchase price of property or services (other than
trade payables and legal, accounting, technical and other consulting or
professional fees entered into in the ordinary course of business), (C) all
reimbursement or payment obligations with respect to letters of credit, surety
bonds and other similar instruments, (D) all obligations evidenced by notes,
bonds, debentures or similar instruments, including obligations so evidenced
incurred in connection with the acquisition of property, assets or businesses,
(E) all indebtedness created or arising under any conditional sale or other
title retention agreement, or incurred as financing, in either case with

                                       27
<PAGE>

respect to any property or assets acquired with the proceeds of such
indebtedness (even though the rights and remedies of the seller or bank under
such agreement in the event of default are limited to repossession or sale of
such property), (F) all monetary obligations under any leasing or similar
arrangement which, in connection with generally accepted accounting principles,
consistently applied for the periods covered thereby, is classified as a capital
lease, (G) off-balance sheet liabilities retained in connection with asset
securitization programs, synthetic leases, sale and leaseback transactions or
other similar obligations arising with respect to any other transaction which is
the functional equivalent of or takes the place of borrowing but which does not
constitute a liability on the consolidated balance sheet of such Person and its
subsidiaries, and (H) all indebtedness referred to in clauses (A) through (G)
above secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any mortgage, lien, pledge,
charge, security interest or other encumbrance upon or in any property or assets
(including accounts and contract rights) owned by any Person, even though the
Person which owns such assets or property has not assumed or become liable for
the payment of such indebtedness, and (I) all Contingent Obligations in respect
of indebtedness or obligations of others of the kinds referred to in clauses (A)
through (H) above.

                  (p)   "ISSUANCE DATE" means April 15, 2005.

                  (q)   "PARENT ENTITY" of a Person means an entity that,
directly or indirectly, controls the applicable Person and whose common stock or
equivalent equity security is quoted or listed on an Eligible Market, or, if
there is more than one such Person or Parent Entity, the Person or Parent Entity
with the largest public market capitalization as of the date of consummation of
the Fundamental Transaction.

                  (r)   "PERMITTED ACQUISITION" means acquisitions made in the
ordinary course of business consistent with past practice of exploring,
developing and mining of properties and interests, including royalty interests,
in gold properties.

                  (s)   "PERMITTED ACQUISITION INDEBTEDNESS" the incurrence
and/or assumption by the Company of Indebtedness in an amount not to exceed at
any one time in the aggregate $50 million; provided that (i) such Permitted
Acquisition Indebtedness is incurred or assumed in connection with a Permitted
Acquisition and the Permitted Acquisition is a bona fide purchase of a property
or interest in property, business or assets not for purposes of incurrence of
Indebtedness, (ii) the amount of such Permitted Acquisition Indebtedness
incurred and assumed is not in excess of 50% of the purchase price (including
cash paid, market value of equity issued and any assumption of debt) in any such
Permitted Acquisition and (iii) such Permitted Acquisition Indebtedness is not
secured by or involving any Lien other than solely on the assets acquired in
such Permitted Acquisition.

                  (t)   "PERMITTED INDEBTEDNESS" means Permitted Senior and Pari
Passu Indebtedness and Permitted Acquisition Indebtedness.

                  (u)   "PERMITTED LIENS" means (i) any Lien for taxes not yet
due or delinquent or being contested in good faith by appropriate proceedings
for which adequate reserves have been established in accordance with GAAP, (ii)
any statutory Lien arising in the

                                       28
<PAGE>

ordinary course of business by operation of law with respect to a liability that
is not yet due or delinquent, (iii) any Lien created by operation of law, such
as materialmen's liens, mechanics' liens and other similar liens, arising in the
ordinary course of business with respect to a liability that is not yet due or
delinquent or that are being contested in good faith by appropriate proceedings,
(iv) any Lien incurred to secure Permitted Indebtedness, (v) Liens (A) upon or
in any equipment acquired or held by the Company or any of its Subsidiaries to
secure the purchase price of such equipment or indebtedness incurred solely for
the purpose of financing the acquisition or lease of such equipment, or (B)
existing on such equipment at the time of its acquisition, provided that the
Lien is confined solely to the property so acquired and improvements thereon,
and the proceeds of such equipment; (vi) Liens incurred in connection with the
extension, renewal or refinancing of the indebtedness secured by Liens of the
type described in clauses (i), (iv) and (v) above, provided that any extension,
renewal or replacement Lien shall be limited to the property encumbered by the
existing Lien and the principal amount of the Indebtedness being extended,
renewed or refinanced does not increase, (vii) leases or subleases and licenses
and sublicenses granted to others in the ordinary course of the Company's
business, not interfering in any material respect with the business of the
Company and its Subsidiaries taken as a whole; (viii) Liens in favor of customs
and revenue authorities arising as a matter of law to secure payments of custom
duties in connection with the importation of goods and (ix) Liens arising from
judgments, decrees or attachments in circumstances not constituting an Event of
Default under Section 4(a).

                  (v)   "PERMITTED SUBORDINATED INDEBTEDNESS" means Indebtedness
that (x) is made expressly subordinate in right of payment to the Indebtedness
evidenced by the Notes on terms reasonably satisfactory to the Required Holders
as set forth in an intercreditor agreement, (y) does not provide at any time for
the payment, prepayment, repayment, repurchase or defeasance, directly or
indirectly, of any principal or premium, if any, thereon until at least 91 days
after the Maturity Date and (iii) does not provide for an interest rate in
excess of 15% per annum.

                  (w)   "PERMITTED SENIOR AND PARI PASSU INDEBTEDNESS" means the
incurrence by the Company of Indebtedness that is senior or pari passu to the
Notes and is (i) incurred from a financial institution as part of secured
commercial revolving or term credit facility in a principal amount not to exceed
at any one time outstanding $30 million, (ii) incurred for equipment financing
in an amount not to exceed at any one time outstanding $25 million and (iii)
incurred in support of Company guarantees in an amount not to exceed at any one
time outstanding $15 million or (iv) incurred in connection with required
environmental bonding pursuant to applicable law or regulation.

                  (x)   "PERSON" means an individual, a limited liability
company, a partnership, a joint venture, a corporation, a trust, an
unincorporated organization, any other entity and a government or any department
or agency thereof.

                  (y)   "PRINCIPAL MARKET" means the American Stock Exchange.

                  (z)   "REGISTRATION RIGHTS AGREEMENT" means that certain
registration rights agreement between the Company and the initial holders of the
Notes relating to the registration of the resale of the Common Stock issuable
upon conversion of the Notes.

                                       29
<PAGE>

                  (aa)  "REQUIRED HOLDERS" means the holders of Notes
representing more than 50% of the aggregate principal amount of the Notes then
outstanding.

                  (bb)  "SEC" means the United States Securities and Exchange
Commission.

                  (cc)  "SECURITIES PURCHASE AGREEMENT" means that certain
securities purchase agreement between the Company and the initial holders of the
Notes pursuant to which the Company issued the Notes.

                  (dd)  "SUBSCRIPTION DATE" means April 15, 2005.

                  (ee)  "SUCCESSOR ENTITY" means the Person, which may be the
Company, formed by, resulting from or surviving any Fundamental Transaction or
the Person with which such Fundamental Transaction shall have been made,
provided that if such Person is not a publicly traded entity whose common stock
or equivalent equity security is quoted or listed for trading on an Eligible
Market, Successor Entity shall mean such Person's Parent Entity.

                  (ff)  "TRADING DAY" means any day on which the Common Stock is
traded on the Principal Market, or, if the Principal Market is not the principal
trading market for the Common Stock, then on the principal securities exchange
or securities market on which the Common Stock is then traded; provided that
"Trading Day" shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00 p.m., New York Time).

                  (gg)  "TSX" means the Toronto Stock Exchange.

                  (hh)  "WEIGHTED AVERAGE PRICE" means, for any security as of
any date, the dollar volume-weighted average price for such security on the
Principal Market during the period beginning at 9:30:01 a.m., New York Time (or
such other time as the Principal Market publicly announces is the official open
of trading), and ending at 4:00:00 p.m., New York Time (or such other time as
the Principal Market publicly announces is the official close of trading) as
reported by Bloomberg through its "Volume at Price" functions, or, if the
foregoing does not apply, the dollar volume-weighted average price of such
security in the over-the-counter market on the electronic bulletin board for
such security during the period beginning at 9:30:01 a.m., New York Time (or
such other time as such market publicly announces is the official open of
trading), and ending at 4:00:00 p.m., New York Time (or such other time as such
market publicly announces is the official close of trading) as reported by
Bloomberg, or, if no dollar volume-weighted average price is reported for such
security by Bloomberg for such hours, the average of the highest closing bid
price and the lowest closing ask price of any of the market makers for such
security as reported in the "pink sheets" by Pink Sheets LLC (formerly the
National Quotation Bureau, Inc.). If the Weighted Average Price cannot be
calculated for a security on a particular date on any of the foregoing bases,
the Weighted Average Price of such security on

                                       30
<PAGE>

such date shall be the fair market value as mutually determined by the Company
and the Holder. If the Company and the Holder are unable to agree upon the fair
market value of such security, then such dispute shall be resolved pursuant to
Section 22. All such determinations to be appropriately adjusted for any stock
dividend, stock split, stock combination or other similar transaction during the
applicable calculation period.

            (28)  NONCIRCUMVENTION. The Company hereby covenants and agrees that
the Company will not, by amendment of its Certificate of Incorporation or
through any reorganization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities, or any other voluntary action, avoid
or seek to avoid the observance or performance of any of the terms of this Note,
and will at all times in good faith carry out all of the provisions of this Note
and take all action as may be required to protect the rights of the Holder of
this Note.

            (29)  CURRENCY. Unless otherwise indicated, all dollar amounts
referred to in this Note are in United States Dollars.

            (30)  PURCHASE FOR CANCELLATION. The Holder acknowledges that the
Company may elect from time to time to purchase Notes for cancellation in open
market or private transactions at any time, subject to the satisfaction of any
applicable regulatory requirements.

                            [SIGNATURE PAGE FOLLOWS]

                                       31
<PAGE>

            IN WITNESS WHEREOF, the Company has caused this Note to be duly
executed as of the Issuance Date set out above.

                                               GOLDEN STAR RESOURCES LTD.

                                               By: _____________________________
                                               Name:
                                               Title:

<PAGE>

                                                                       EXHIBIT I

                           GOLDEN STAR RESOURCES LTD.

            Reference is made to the Senior Convertible Note (the "NOTE") issued
to the undersigned by Golden Star Resources Ltd. (the "COMPANY"). In accordance
with and pursuant to the Note, the undersigned hereby elects to convert the
Conversion Amount (as defined in the Note) of the Note indicated below into
shares of Common Stock, no par value per share (the "COMMON STOCK"), of the
Company as of the date specified below.

      Date of Conversion: ______________________________________________________

      Aggregate Conversion Amount to be converted: _____________________________

Please confirm the following information:

      Conversion Price: ________________________________________________________

      Number of shares of Common Stock to be issued: ___________________________

Please issue the Common Stock into which the Note is being converted in the
following name and to the following address:

      Issue to: ________________________________________________________________

                ________________________________________________________________

                ________________________________________________________________

      Facsimile Number: ________________________________________________________

      Authorization: ___________________________________________________________

            By: ________________________________________________________________

                  Title: _______________________________________________________

Dated: _________________________________________________________________________

      DTC Participant Number:

      Account Number: __________________________________________________________

<PAGE>

      (if electronic book entry transfer)

      Transaction Code Number: _________________________________________________

      (if electronic book entry transfer)

<PAGE>

                                 ACKNOWLEDGMENT

            The Company hereby acknowledges this Conversion Notice and hereby
directs CIBC Mellon to issue the above indicated number of shares of Common
Stock in accordance with the Transfer Agent Instructions dated April 15, 2005
from the Company and acknowledged and agreed to by CIBC Mellon.

                                               GOLDEN STAR RESOURCES LTD.

                                               By: _____________________________
                                               Name:
                                               Title:

<PAGE>

                                   Schedule 1

       TABLE FOR DETERMINING THE NUMBER OF ADDITIONAL SHARES IN EVENT OF A
                                CASH TRANSACTION<PAGE>

                                                                     EXHIBIT 4.3

                          REGISTRATION RIGHTS AGREEMENT

            REGISTRATION RIGHTS AGREEMENT (this "AGREEMENT"), dated as of April
15, 2005, by and among Golden Star Resources Ltd., a corporation organized under
the laws of Canada, with headquarters located at 10901 West Toller Drive, Suite
300, Littleton, Colorado 80127-6312 (the "COMPANY"), and the undersigned buyers
(each, a "BUYER", and collectively, the "BUYERS").

            WHEREAS:

            A. In connection with the Securities Purchase Agreement by and among
the parties hereto of even date herewith (the "SECURITIES PURCHASE AGREEMENT"),
the Company has agreed, upon the terms and subject to the conditions set forth
in the Securities Purchase Agreement, to issue and sell to the Buyers senior
unsecured convertible notes of the Company (the "NOTES"), which will, among
other things, be convertible into the Company's common stock, without par value
(the "COMMON STOCK", as issued upon conversion of the Notes, the "CONVERSION
SHARES"), in accordance with the terms of the Notes.

            B. Upon the occurrence of a Change of Control (as defined in the
Note), subject to certain conditions, the Buyers may receive additional shares
of Common Stock (the "ADDITIONAL SHARES").

            C. To induce the Buyers to execute and deliver the Securities
Purchase Agreement, the Company has agreed to provide certain registration
rights under the Securities Act of 1933, as amended, and the rules and
regulations thereunder, or any similar successor statute (collectively, the
"1933 ACT"), and applicable state securities laws.

            NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Company and each
of the Buyers hereby agree as follows:

            1. Definitions.

            Capitalized terms used herein and not otherwise defined herein shall
have the respective meanings set forth in the Securities Purchase Agreement. As
used in this Agreement, the following terms shall have the following meanings:

                  a. "BUSINESS DAY" means any day other than Saturday, Sunday or
any other day on which commercial banks in The City of New York are authorized
or required by law to remain closed.

                  b. "CLOSING DATE" shall have the meaning set forth in the
Securities Purchase Agreement.

                  c. "EFFECTIVE DATE" means the date the Registration Statement
has been declared effective by the SEC.

<PAGE>

                  d. "EFFECTIVENESS DEADLINE" means the date which is (i) in the
event that the Registration Statement is not subject to review by the SEC,
ninety (90) calendar days after the Closing Date or (ii) in the event that the
Registration Statement is subject to review by the SEC, one hundred eighty (180)
calendar days after the Closing Date.

                  e. "FILING DEADLINE" means thirty (30) calendar days after the
Closing Date.

                  f. "INVESTOR" means Buyer or any transferee or assignee
thereof to whom Buyer assigns its rights under this Agreement and who agrees to
become bound by the provisions of this Agreement in accordance with Section 9
and any transferee or assignee thereof to whom a transferee or assignee assigns
its rights under this Agreement and who agrees to become bound by the provisions
of this Agreement in accordance with Section 9.

                  g. "PERSON" means an individual, a limited liability company,
a partnership, a joint venture, a corporation, a trust, an unincorporated
organization and a government or any department or agency thereof.

                  h. "REGISTER," "REGISTERED," and "REGISTRATION" refer to a
registration effected by preparing and filing one or more Registration
Statements (as defined below) in compliance with the 1933 Act and pursuant to
Rule 415 and the declaration or ordering of effectiveness of such Registration
Statement(s) by the SEC.

                  i. "REGISTRABLE SECURITIES" means (i) the Conversion Shares
issued or issuable upon conversion of the Notes, (ii) any Additional Shares
issued or issuable under the Notes and (iii) any share capital of the Company
issued or issuable with respect to the Conversion Shares, Additional Shares or
the Notes as a result of any split, dividend, recapitalization, exchange or
similar event or otherwise, without regard to any limitations on conversions of
the Notes.

                  j. "REGISTRATION STATEMENT" means a registration statement or
registration statements of the Company filed under the 1933 Act covering the
Registrable Securities.

                  k. "REQUIRED HOLDERS" means the holders of at least a majority
of the Registrable Securities.

                  l. "REQUIRED REGISTRATION AMOUNT" means one hundred fifty
percent (150%) of the number of Conversion Shares issued and issuable pursuant
to the Notes, in each case as of the trading day immediately preceding the
applicable date of determination.

                  m. "RULE 415" means Rule 415 under the 1933 Act or any
successor rule providing for offering securities on a continuous or delayed
basis.

                  n. "SEC" means the United States Securities and Exchange
Commission.

                                       2
<PAGE>

            2. Registration.

                  a. Mandatory Registration. The Company shall prepare, and, as
soon as practicable but in no event later than the Filing Deadline, file with
the SEC the Registration Statement on Form S-3 covering the resale of all of the
Registrable Securities. In the event that Form S-3 is unavailable for such a
registration, the Company shall use such other form as is available for such a
registration, subject to the provisions of Section 2(d). The Registration
Statement prepared pursuant hereto shall register for resale at least the number
of shares of Common Stock equal to the Required Registration Amount as of date
the Registration Statement is initially filed with the SEC. The Registration
Statement shall contain (except if otherwise directed by the Required Holders)
the "Selling Stockholders" and "Plan of Distribution" sections in substantially
the form attached hereto as Exhibit B. The Company shall use its best efforts to
have the Registration Statement declared effective by the SEC as soon as
practicable, but in no event later than the Effectiveness Deadline.

                  b. Allocation of Registrable Securities. The initial number of
Registrable Securities included in any Registration Statement and any increase
in the number of Registrable Securities included therein shall be allocated pro
rata among the Investors based on the number of Registrable Securities held by
each Investor at the time the Registration Statement covering such initial
number of Registrable Securities or increase thereof is declared effective by
the SEC. In the event that an Investor sells or otherwise transfers any of such
Investor's Registrable Securities, each transferee shall be allocated a pro rata
portion of the then remaining number of Registrable Securities included in such
Registration Statement and previously allocated to such transferor. Any Shares
of Common Stock included in a Registration Statement and which remain allocated
to any Person which ceases to hold any Registrable Securities covered by such
Registration Statement shall be allocated to the remaining Investors, pro rata
based on the number of Registrable Securities then held by such Investors which
are covered by such Registration Statement. In no event shall the Company
include any securities other than Registrable Securities on any Registration
Statement without the prior written consent of the Required Holders.

                  c. Legal Counsel. Subject to Section 5 hereof, the Required
Holders shall have the right to select one legal counsel to review and comment
on any registration statements pursuant to this Section 2 ("LEGAL COUNSEL"),
which shall be Schulte Roth & Zabel LLP or such other counsel as thereafter
designated by the Required Holders by written notice to the Company. The Company
and Legal Counsel shall reasonably cooperate with each other in performing the
Company's obligations under this Agreement.

                  d. Ineligibility for Form S-3. In the event that Form S-3 is
not available for the registration of the resale of Registrable Securities
hereunder, the Company shall (i) register the resale of the Registrable
Securities on another appropriate form reasonably acceptable to the Required
Holders and (ii) undertake to register the Registrable Securities on Form S-3 as
soon as such form is available, provided that the Company shall maintain the
effectiveness of the Registration Statement then in effect until such time as a
Registration Statement on Form S-3 covering the Registrable Securities has been
declared effective by the SEC.

                                       3
<PAGE>

                  e. Sufficient Number of Shares Registered. In the event the
number of shares available under a Registration Statement filed pursuant to
Section 2(a) is insufficient to cover all of the Registrable Securities required
to be covered by such Registration Statement or an Investor's allocated portion
of the Registrable Securities pursuant to Section 2(b), the Company shall amend
the applicable Registration Statement, or file a new Registration Statement (on
the short form available therefor, if applicable), or both, so as to cover at
least the Required Registration Amount as of the Trading Day (as defined in the
Notes) immediately preceding the date of the filing of such amendment or new
Registration Statement, in each case, as soon as practicable, but in any event
not later than thirty (30) days after the necessity therefor arises. The Company
shall use its reasonable best efforts to cause such amendment and/or new
Registration Statement to become effective as soon as practicable following the
filing thereof. For purposes of the foregoing provision, the number of shares
available under a Registration Statement shall be deemed "insufficient to cover
all of the Registrable Securities" if at any time the number of shares of Common
Stock available for resale under the Registration Statement is less than the
product determined by multiplying (i) the Required Registration Amount as of
such time by (ii) 0.90. The calculation set forth in the foregoing sentence
shall be made without regard to any limitations on the conversion of the Notes
and such calculation shall assume that the Notes are then convertible into
shares of Common Stock at the then prevailing Conversion Rate (as defined in the
Notes).

                  f. Effect of Failure to File and Obtain and Maintain
Effectiveness of Registration Statement. If (i) a Registration Statement
covering all of the Registrable Securities required to be covered thereby and
required to be filed by the Company pursuant to this Agreement is not declared
effective by the SEC on or before the respective Effectiveness Deadline (an
"EFFECTIVENESS FAILURE") or (ii) on any day after the Effective Date sales of
all of the Registrable Securities required to be included on such Registration
Statement cannot be made for more than five (5) days (other than during an
Allowable Grace Period (as defined in Section 3(p)) pursuant to such
Registration Statement or otherwise (including, without limitation, because of a
failure to keep such Registration Statement effective, to disclose such
information as is necessary for sales to be made pursuant to such Registration
Statement, to register a sufficient number of shares of Common Stock (after, if
applicable, the thirty (30) day period allowed in Section 2(e)) or to maintain
the listing of the Common Stock) (a "MAINTENANCE FAILURE") then, as partial
relief for the damages to any holder by reason of any such delay in or reduction
of its ability to sell the underlying Shares of Common Stock (which remedy shall
not be exclusive of any other remedies available at law or in equity), the
Company shall pay to each holder of Registrable Securities relating to such
Registration Statement an amount in cash equal to one percent (1.0%) of the
aggregate Purchase Price (as such term is defined in the Securities Purchase
Agreement) of such Investor's Notes relating to the Registrable Securities
included in such Registration Statement on each of the following dates: (i) on
every thirtieth day after the day of an Effectiveness Failure and thereafter
(pro rated for periods totaling less than thirty days) until such Effectiveness
Failure is cured; and (ii) on every thirtieth day after the initial day of a
Maintenance Failure and thereafter (pro rated for periods totaling less than
thirty days) until such Maintenance Failure is cured. The payments to which a
holder shall be entitled pursuant to this Section 2(g) are referred to herein as
"REGISTRATION DELAY PAYMENTS." Registration Delay Payments shall be paid on the
earlier of (I) the last day of the calendar month during which such Registration
Delay Payments are incurred and (II) the third Business Day after the event or
failure giving rise to the Registration Delay Payments is cured. In the event
the Company fails to

                                       4
<PAGE>

make Registration Delay Payments in a timely manner, such Registration Delay
Payments shall bear interest at the rate of one percent (1.0%) per month
(prorated for partial months) until paid in full.

            3. Related Obligations.

            At such time as the Company is obligated to file a Registration
Statement with the SEC pursuant to Section 2(a), 2(d) or 2(e), the Company will
use its best efforts to effect the registration of the Registrable Securities in
accordance with the intended method of disposition thereof and, pursuant
thereto, the Company shall have the following obligations:

                  a. The Company shall submit to the SEC, within two (2)
Business Days after the Company learns that no review of a particular
Registration Statement will be made by the staff of the SEC or that the staff
has no further comments on a particular Registration Statement, as the case may
be, a request for acceleration of effectiveness of such Registration Statement
to a time and date not later than forty-eight (48) hours after the submission of
such request. The Company shall keep each Registration Statement effective
pursuant to Rule 415 at all times until the earlier of (i) the date as of which
the Investors may sell all of the Registrable Securities covered by such
Registration Statement without restriction pursuant to Rule 144(k) (or any
successor thereto) promulgated under the 1933 Act or (ii) the date on which the
Investors shall have sold all of the Registrable Securities covered by such
Registration Statement (the "REGISTRATION PERIOD"). The Company shall ensure
that each Registration Statement (including any amendments or supplements
thereto and prospectuses contained therein) shall not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein, or necessary to make the statements therein (in the case of
prospectuses, in the light of the circumstances in which they were made) not
misleading (other than with respect to any information provided by the Buyers).

                  b. The Company shall prepare and file with the SEC such
amendments (including post-effective amendments) and supplements to a
Registration Statement and the prospectus used in connection with such
Registration Statement, which prospectus is to be filed pursuant to Rule 424
promulgated under the 1933 Act, as may be necessary to keep such Registration
Statement effective at all times during the Registration Period, and, during
such period, comply with the provisions of the 1933 Act with respect to the
disposition of all Registrable Securities of the Company covered by such
Registration Statement until such time as all of such Registrable Securities
shall have been disposed of in accordance with the intended methods of
disposition by the seller or sellers thereof as set forth in such Registration
Statement. The Company shall have incorporated its report, on Form 10-Q, Form
10-K or any analogous report under the Securities Exchange Act of 1934, as
amended (the "1934 ACT") by reference into such Registration Statement, if
applicable, or shall file such amendments or supplements with the SEC on the
same day on which the 1934 Act report is filed which created the requirement for
the Company to amend or supplement such Registration Statement.

                  c. The Company shall (A) permit Legal Counsel to review and
comment upon (i) a Registration Statement at least five (5) calendar days prior
to its filing with the SEC and (ii) all amendments and supplements to all
Registration Statements (which shall be deemed to exclude Annual Reports on Form
10-K, and Reports on Form 10-Q and any other

                                       5
<PAGE>

reports filed by the Company under the 1934 Act) within a reasonable number of
days prior to their filing with the SEC, and (B) not file any Registration
Statement or amendment or supplement thereto in a form to which Legal Counsel
reasonably and timely objects. The Company shall not submit a request for
acceleration of the effectiveness of a Registration Statement or any amendment
or supplement thereto without the prior approval of Legal Counsel, which consent
shall not be unreasonably withheld. The Company shall furnish to Legal Counsel,
without charge, (i) copies of any correspondence from the SEC or the staff of
the SEC to the Company or its representatives relating to any Registration
Statement, (ii) promptly after the same is prepared and filed with the SEC, one
copy of any Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, and all exhibits (unless such
Registration Statement is available on EDGAR) and (iii) upon the effectiveness
of any Registration Statement, one copy of the prospectus included in such
Registration Statement and all amendments and supplements thereto. The Company
shall reasonably cooperate with Legal Counsel in performing the Company's
obligations pursuant to this Section 3.

                  d. The Company shall furnish to each Investor whose
Registrable Securities are included in any Registration Statement, without
charge, (i) promptly after the same is prepared and filed with the SEC, at least
one copy of such Registration Statement and any amendment(s) thereto, including
financial statements and schedules, all documents incorporated therein by
reference, if requested by an Investor, all exhibits and each preliminary
prospectus (unless such Registration Statement is available on EDGAR), (ii) upon
the effectiveness of any Registration Statement, ten (10) copies of the
prospectus included in such Registration Statement and all amendments and
supplements thereto (or such other number of copies as such Investor may
reasonably request) (unless such supplement or amendment is available on EDGAR)
and (iii) such other documents, including copies of any preliminary or final
prospectus, as such Investor may reasonably request from time to time in order
to facilitate the disposition of the Registrable Securities owned by such
Investor.

                  e. The Company shall use its reasonable best efforts to (i)
register and qualify, unless an exemption from registration and qualification
applies, the resale by Investors of the Registrable Securities covered by a
Registration Statement under such other securities or "blue sky" laws of all
applicable jurisdictions in the United States, (ii) prepare and file in those
jurisdictions, such amendments (including post-effective amendments) and
supplements to such registrations and qualifications as may be necessary to
maintain the effectiveness thereof during the Registration Period, (iii) take
such other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period, and (iv)
take all other actions reasonably necessary or advisable to qualify the
Registrable Securities for sale in such jurisdictions; provided, however, that
the Company shall not be required in connection therewith or as a condition
thereto to (x) qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this Section 3(e), (y) subject itself
to general taxation in any such jurisdiction, or (z) file a general consent to
service of process in any such jurisdiction. The Company shall promptly notify
Legal Counsel and each Investor who holds Registrable Securities of the receipt
by the Company of any notification with respect to the suspension of the
registration or qualification of any of the Registrable Securities for sale
under the securities or "blue sky" laws of any jurisdiction in the

                                       6
<PAGE>

United States or its receipt of notice of the initiation or threatening of any
proceeding for such purpose.

                  f. The Company shall notify Legal Counsel and each Investor in
writing of the happening of any event, as promptly as practicable after becoming
aware of such event, as a result of which the prospectus included in a
Registration Statement, as then in effect, includes an untrue statement of a
material fact or omission to state a material fact required to be stated therein
or necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading (provided that in no event shall such
notice contain any material, nonpublic information), and, subject to Section
3(p), promptly prepare a supplement or amendment to such Registration Statement
to correct such untrue statement or omission, and deliver ten (10) copies of
such supplement or amendment to Legal Counsel and each Investor (or such other
number of copies as Legal Counsel or such Investor may reasonably request)
(unless such supplement or amendment is available on EDGAR). The Company shall
also promptly notify Legal Counsel and each Investor in writing (i) when a
prospectus or any prospectus supplement or post-effective amendment has been
filed, and when a Registration Statement or any post-effective amendment has
become effective (notification of such effectiveness shall be delivered to Legal
Counsel and each Investor by facsimile on the next Business Day of such
effectiveness and by overnight mail), (ii) of any request by the SEC for
amendments or supplements to a Registration Statement or related prospectus or
related information, and (iii) of the Company's reasonable determination that a
post-effective amendment to a Registration Statement would be appropriate.

                  g. The Company shall use its reasonable best efforts to
prevent the issuance of any stop order or other suspension of effectiveness of a
Registration Statement, or the suspension of the qualification of any of the
Registrable Securities for sale in any jurisdiction and, if such an order or
suspension is issued, to obtain the withdrawal of such order or suspension at
the earliest possible moment and to notify Legal Counsel and each Investor who
holds Registrable Securities being sold of the issuance of such order and the
resolution thereof or its receipt of notice of the initiation or threat of any
proceeding for such purpose.

                  h. The Company shall hold in confidence and not make any
disclosure of information concerning an Investor provided to the Company unless
(i) disclosure of such information is necessary to comply with federal or state
securities laws, (ii) the disclosure of such information is necessary to avoid
or correct a misstatement or omission in any Registration Statement, (iii) the
release of such information is ordered pursuant to a subpoena or other final,
non-appealable order from a court or governmental body of competent
jurisdiction, or (iv) such information has been made generally available to the
public other than by disclosure in violation of this Agreement or any other
agreement between the Company and the Investors. The Company agrees that it
shall, upon learning that disclosure of such information concerning an Investor
is sought in or by a court or governmental body of competent jurisdiction or
through other means, give prompt written notice to such Investor and allow such
Investor, at the Investor's expense, to undertake appropriate action to prevent
disclosure of, or to obtain a protective order for, such information.

                  i. The Company shall use its reasonable best efforts either to
(i) cause all of the Registrable Securities covered by a Registration Statement
to be listed on each

                                       7
<PAGE>

securities exchange on which securities of the same class or series issued by
the Company are then listed, if any, if the listing of such Registrable
Securities is then permitted under the rules of such exchange or (ii) secure the
inclusion for quotation of all of the Registrable Securities on the American
Stock Exchange or (iii) if, despite the Company's reasonable best efforts, the
Company is unsuccessful in satisfying the preceding clauses (i) and (ii), to
secure the inclusion for quotation of all of the Registrable Securities on The
Nasdaq National Market or (iv) if, despite the Company's reasonable best
efforts, the Company is unsuccessful in satisfying the preceding clauses (i),
(ii) and (iii), to secure the inclusion for quotation of all of the Registrable
Securities on The Nasdaq SmallCap Market for such Registrable Securities and,
without limiting the generality of the foregoing, to use its reasonable best
efforts to arrange for at least two market makers to register with the National
Association of Securities Dealers, Inc. ("NASD") as such with respect to such
Registrable Securities or (v) if, despite the Company's reasonable best efforts,
the Company is unsuccessful in satisfying the preceding clauses (i)-(iv), to
secure the inclusion for quotation of all of the Registrable Securities on the
NASD's OTC Bulletin Board or the TSX Venture Exchange. The Company shall pay all
fees and expenses in connection with satisfying its obligation under this
Section 3(i).

                  j. The Company shall cooperate with the Investors who hold
Registrable Securities being offered and, to the extent applicable, facilitate
the timely preparation and delivery of certificates (not bearing any restrictive
legend) representing the Registrable Securities to be offered pursuant to a
Registration Statement and enable such certificates to be in such denominations
or amounts, as the case may be, as the Investors may reasonably request and
registered in such names as the Investors may request.

                  k. If requested by an Investor, the Company shall (i) as soon
as practicable incorporate in a prospectus supplement or post-effective
amendment such information as an Investor reasonably requests to be included
therein relating to the sale and distribution of Registrable Securities,
including, without limitation, information with respect to the number of
Registrable Securities being offered or sold, the purchase price being paid
therefor and any other terms of the offering of the Registrable Securities to be
sold in such offering; (ii) as soon as practicable make all required filings of
such prospectus supplement or post-effective amendment after being notified of
the matters to be incorporated in such prospectus supplement or post-effective
amendment; and (iii) as soon as practicable, supplement or make amendments to
any Registration Statement if reasonably requested by an Investor holding any
Registrable Securities.

                  l. The Company shall use its reasonable best efforts to cause
the Registrable Securities covered by a Registration Statement to be registered
with or approved by such other governmental agencies or authorities as may be
necessary to consummate the disposition of such Registrable Securities.

                  m. The Company shall make generally available to its security
holders as soon as practical, but not later than ninety (90) days after the
close of the period covered thereby, an earnings statement (in form complying
with, and in the manner provided by, the provisions of Rule 158 under the 1933
Act) covering a twelve-month period beginning not later than the first day of
the Company's fiscal quarter next following the effective date of a Registration
Statement.

                                       8
<PAGE>

                  n. The Company shall otherwise use its reasonable best efforts
to comply with all applicable rules and regulations of the SEC in connection
with any registration hereunder.

                  o. Within two (2) Business Days after a Registration Statement
which covers Registrable Securities is ordered effective by the SEC, the Company
shall deliver, and shall cause legal counsel for the Company to deliver, to the
transfer agent for such Registrable Securities (with copies to the Investors
whose Registrable Securities are included in such Registration Statement)
confirmation that such Registration Statement has been declared effective by the
SEC in the form attached hereto as Exhibit A.

                  p. Notwithstanding anything to the contrary herein, at any
time after the Effective Date, the Company may delay the disclosure of material,
non-public information concerning the Company the disclosure of which at the
time is not, in the good faith opinion of the Board of Directors of the Company,
in the best interest of the Company and otherwise required (a "GRACE PERIOD");
provided, that the Company shall promptly (i) notify the Investors in writing of
the existence of material, non-public information giving rise to a Grace Period
(provided that in each notice the Company will not disclose the content of such
material, non-public information to the Investors) and the date on which the
Grace Period will begin, and (ii) notify the Investors in writing of the date on
which the Grace Period ends; and, provided further, that no Grace Period shall
exceed fifteen (15) consecutive days and during any three hundred sixty five
(365) day period such Grace Periods shall not exceed an aggregate of forty-five
(45) days and the first day of any Grace Period must be at least two (2) trading
days after the last day of any prior Grace Period (each, an "ALLOWABLE GRACE
PERIOD"). For purposes of determining the length of a Grace Period above, the
Grace Period shall begin on and include the date the Investors receive the
notice referred to in clause (i) and shall end on and include the later of the
date the Investors receive the notice referred to in clause (ii) and the date
referred to in such notice. The provisions of Section 3(g) hereof shall not be
applicable during the period of any Allowable Grace Period. Upon expiration of
the Grace Period, the Company shall again be bound by the first sentence of
Section 3(f) with respect to the information giving rise thereto unless such
material, non-public information is no longer applicable. Notwithstanding
anything to the contrary, the Company shall cause its transfer agent to deliver
unlegended shares of Common Stock to a transferee of an Investor in accordance
with the terms of the Securities Purchase Agreement in connection with any sale
of Registrable Securities with respect to which an Investor has entered into a
contract for sale prior to the Investor's receipt of the notice of a Grace
Period and for which the Investor has not yet settled.

                  q. The Company shall use its best efforts to maintain the
eligibility of its registration statement on Form S-3 so that it is available
for the registration of the resale of Registrable Securities.

            4. Obligations of the Investors.

                  a. At least seven (7) Business Days prior to the first
anticipated filing date of a Registration Statement, the Company shall notify
each Investor in writing of the information the Company requires from each such
Investor if such Investor elects to have any of such Investor's Registrable
Securities included in such Registration Statement. It shall be a

                                       9
<PAGE>

condition precedent to the obligations of the Company to complete the
registration pursuant to this Agreement with respect to the Registrable
Securities of a particular Investor that such Investor shall furnish to the
Company such information regarding itself, the Registrable Securities held by it
and the intended method of disposition of the Registrable Securities held by it
as shall be reasonably required to effect the effectiveness of the registration
of such Registrable Securities and shall execute such documents in connection
with such registration as the Company may reasonably request.

                  b. Each Investor, by such Investor's acceptance of the
Registrable Securities, agrees to cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of any
Registration Statement hereunder, unless such Investor has notified the Company
in writing of such Investor's election to exclude all of such Investor's
Registrable Securities from such Registration Statement.

                  c. Each Investor agrees that, upon receipt of any notice from
the Company of the happening of any event of the kind described in Section 3(g)
or the first sentence of 3(f), such Investor will immediately discontinue
disposition of Registrable Securities pursuant to any Registration Statement(s)
covering such Registrable Securities until such Investor's receipt of the copies
of the supplemented or amended prospectus contemplated by Section 3(g) or the
first sentence of 3(f) or receipt of notice that no supplement or amendment is
required. Notwithstanding anything to the contrary, the Company shall cause its
transfer agent to deliver unlegended Shares of Common Stock to a transferee of
an Investor in accordance with the terms of the Securities Purchase Agreement in
connection with any sale of Registrable Securities with respect to which an
Investor has entered into a contract for sale prior to the Investor's receipt of
a notice from the Company of the happening of any event of the kind described in
Section 3(g) or the first sentence of 3(f) and for which the Investor has not
yet settled.

                  d. Each Investor covenants and agrees that it will comply with
the prospectus delivery requirements of the 1933 Act as applicable to it in
connection with sales of Registrable Securities pursuant to the Registration
Statement.

            5. Expenses of Registration.

            All reasonable expenses, other than underwriting discounts and
commissions, incurred in connection with registrations, filings or
qualifications pursuant to Sections 2 and 3, including, without limitation, all
registration, listing and qualifications fees, printers and accounting fees, and
fees and disbursements of counsel for the Company shall be paid by the Company.
The Company shall also reimburse the Investors for the fees and disbursements of
Legal Counsel in connection with registration, filing or qualification pursuant
to Sections 2 and 3 of this Agreement which amount shall be limited to $10,000.

            6. Indemnification.

            In the event any Registrable Securities are included in a
Registration Statement under this Agreement:

                                       10
<PAGE>

                  a. To the fullest extent permitted by law, the Company will,
and hereby does, indemnify, hold harmless and defend each Investor, the
directors, officers, members, partners, employees, agents, representatives of,
and each Person, if any, who controls any Investor within the meaning of the
1933 Act or the 1934 Act (each, an "INDEMNIFIED PERSON"), against any losses,
claims, damages, liabilities, judgments, fines, penalties, charges, costs,
reasonable attorneys' fees, amounts paid in settlement or expenses, joint or
several, (collectively, "CLAIMS") incurred in investigating, preparing or
defending any action, claim, suit, inquiry, proceeding, investigation or appeal
taken from the foregoing by or before any court or governmental, administrative
or other regulatory agency, body or the SEC, whether pending or threatened,
whether or not an indemnified party is or may be a party thereto ("INDEMNIFIED
DAMAGES"), to which any of them may become subject insofar as such Claims (or
actions or proceedings, whether commenced or threatened, in respect thereof)
arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of a material fact in a Registration Statement or any post-effective
amendment thereto or in any filing made in connection with the qualification of
the offering under the securities or other "blue sky" laws of any jurisdiction
in which Registrable Securities are offered ("BLUE SKY FILING"), or the omission
or alleged omission to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (ii) any untrue
statement or alleged untrue statement of a material fact contained in any
preliminary prospectus if used prior to the effective date of such Registration
Statement, or contained in the final prospectus (as amended or supplemented, if
the Company files any amendment thereof or supplement thereto with the SEC) or
the omission or alleged omission to state therein any material fact necessary to
make the statements made therein, in the light of the circumstances under which
the statements therein were made, not misleading, (iii) any violation or alleged
violation by the Company of the 1933 Act, the 1934 Act, any other law,
including, without limitation, any state securities law, or any rule or
regulation thereunder relating to the offer or sale of the Registrable
Securities pursuant to a Registration Statement or (iv) any violation of this
Agreement (the matters in the foregoing clauses (i) through (iv) being,
collectively, "VIOLATIONS"). Subject to Section 6(c), the Company shall
reimburse the Indemnified Persons, promptly as such expenses are incurred and
are due and payable, for any legal fees or other reasonable expenses incurred by
them in connection with investigating or defending any such Claim.
Notwithstanding anything to the contrary contained herein, the indemnification
agreement contained in this Section 6(a): (i) shall not apply to a Claim by an
Indemnified Person arising out of or based upon a Violation which occurs in
reliance upon and in conformity with information furnished in writing to the
Company by such Indemnified Person for such Indemnified Person expressly for use
in connection with the preparation of the Registration Statement or any such
amendment thereof or supplement thereto; (ii) with respect to any preliminary
prospectus, shall not inure to the benefit of any such Person from whom the
Person asserting any such Claim purchased the Registrable Securities that are
the subject thereof (or to the benefit of any Person controlling such Person) if
the untrue statement or omission of material fact contained in the preliminary
prospectus was corrected in the prospectus, as then amended or supplemented, if
such prospectus was timely made available by the Company pursuant to Section
3(d), and the Indemnified Person was promptly advised in writing not to use the
incorrect prospectus prior to the use giving rise to a violation and such
Indemnified Person, notwithstanding such advice, used it or failed to deliver
the correct prospectus as required by the 1933 Act; (iii) shall not be available
to the extent such Claim is based on a failure of the Investor to deliver or to
cause to be delivered the prospectus made available by the Company, including a

                                       11
<PAGE>

corrected prospectus, if such prospectus or corrected prospectus was timely made
available by the Company pursuant to Section 3(d); and (iv) shall not apply to
amounts paid in settlement of any Claim if such settlement is effected without
the prior written consent of the Company, which consent shall not be
unreasonably withheld or delayed. Such indemnity shall remain in full force and
effect regardless of any investigation made by or on behalf of the Indemnified
Person and shall survive the transfer of the Registrable Securities by the
Investors pursuant to Section 9.

                  b. In connection with any Registration Statement in which an
Investor is participating, each such Investor agrees to severally and not
jointly indemnify, hold harmless and defend, to the same extent and in the same
manner as is set forth in Section 6(a), the Company, each of its directors, each
of its officers who signs the Registration Statement and each Person, if any,
who controls the Company within the meaning of the 1933 Act or the 1934 Act
(each, an "INDEMNIFIED PARTY"), against any Claim or Indemnified Damages to
which any of them may become subject, under the 1933 Act, the 1934 Act or
otherwise, insofar as such Claim or Indemnified Damages arise out of or are
based upon any Violation, in each case to the extent, and only to the extent,
that such Violation occurs in reliance upon and in conformity with written
information furnished to the Company by such Investor expressly for use in
connection with such Registration Statement; and, subject to Section 6(c), such
Investor will reimburse any legal or other reasonable expenses incurred by an
Indemnified Party in connection with investigating or defending any such Claim;
provided, however, that the indemnity agreement contained in this Section 6(b)
and the agreement with respect to contribution contained in Section 7 shall not
apply to amounts paid in settlement of any Claim if such settlement is effected
without the prior written consent of such Investor, which consent shall not be
unreasonably withheld or delayed; provided, further, however, that the Investor
shall be liable under this Section 6(b) for only that amount of a Claim or
Indemnified Damages as does not exceed the net proceeds to such Investor as a
result of the sale of Registrable Securities pursuant to such Registration
Statement. Such indemnity shall remain in full force and effect regardless of
any investigation made by or on behalf of such Indemnified Party and shall
survive the transfer of the Registrable Securities by the Investors pursuant to
Section 9. Notwithstanding anything to the contrary contained herein, the
indemnification agreement contained in this Section 6(b) with respect to any
preliminary prospectus shall not inure to the benefit of any Indemnified Party
if the untrue statement or omission of material fact contained in the
preliminary prospectus was corrected on a timely basis in the prospectus, as
then amended or supplemented.

                  c. Promptly after receipt by an Indemnified Person or
Indemnified Party under this Section 6 of notice of the commencement of any
action or proceeding (including any governmental action or proceeding) involving
a Claim, such Indemnified Person or Indemnified Party shall, if a Claim in
respect thereof is to be made against any indemnifying party under this Section
6, deliver to the indemnifying party a written notice of the commencement
thereof, and the indemnifying party shall have the right to participate in, and,
to the extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume control of the defense thereof
with counsel mutually satisfactory to the indemnifying party and the Indemnified
Person or the Indemnified Party, as the case may be; provided, however, that an
Indemnified Person or Indemnified Party shall have the right to retain its own
counsel with the fees and expenses of not more than one counsel for such
Indemnified Person or Indemnified Party to be paid by the indemnifying party,
if, in the reasonable opinion of counsel retained by the indemnifying party, the
representation by such counsel of the

                                       12
<PAGE>

Indemnified Person or Indemnified Party and the indemnifying party would be
inappropriate due to actual or potential differing interests between such
Indemnified Person or Indemnified Party and any other party represented by such
counsel in such proceeding. In the case of an Indemnified Person, legal counsel
referred to in the immediately preceding sentence shall be selected by the
Investors holding at least a majority in interest of the Registrable Securities
included in the Registration Statement to which the Claim relates. The
Indemnified Party or Indemnified Person shall cooperate fully with the
indemnifying party in connection with any negotiation or defense of any such
action or Claim by the indemnifying party and shall furnish to the indemnifying
party all information reasonably available to the Indemnified Party or
Indemnified Person which relates to such action or Claim. The indemnifying party
shall keep the Indemnified Party or Indemnified Person reasonably apprised at
all times as to the status of the defense or any settlement negotiations with
respect thereto. No indemnifying party shall be liable for any settlement of any
action, claim or proceeding effected without its prior written consent,
provided, however, that the indemnifying party shall not unreasonably withhold,
delay or condition its consent. No indemnifying party shall, without the prior
written consent of the Indemnified Party or Indemnified Person, consent to entry
of any judgment or enter into any settlement or other compromise which does not
include as an unconditional term thereof the giving by the claimant or plaintiff
to such Indemnified Party or Indemnified Person of a release from all liability
in respect to such Claim or litigation, and such settlement shall not include
any admission as to fault on the part of the Indemnified Party. Following
indemnification as provided for hereunder, the indemnifying party shall be
subrogated to all rights of the Indemnified Party or Indemnified Person with
respect to all third parties, firms or corporations relating to the matter for
which indemnification has been made. The failure to deliver written notice to
the indemnifying party within a reasonable time of the commencement of any such
action shall not relieve such indemnifying party of any liability to the
Indemnified Person or Indemnified Party under this Section 6, except to the
extent that the indemnifying party is prejudiced in its ability to defend such
action.

                  d. The indemnification required by this Section 6 shall be
made by periodic payments of the amount thereof during the course of the
investigation or defense, as and when bills are received or Indemnified Damages
are incurred.

                  e. The indemnity agreements contained herein shall be in
addition to (i) any cause of action or similar right of the Indemnified Party or
Indemnified Person against the indemnifying party or others, and (ii) any
liabilities the indemnifying party may be subject to pursuant to the law.

            7. Contribution.

            To the extent any indemnification by an indemnifying party is
prohibited or limited by law, the indemnifying party agrees to make the maximum
contribution with respect to any amounts for which it would otherwise be liable
under Section 6 to the fullest extent permitted by law; provided, however, that:
(i) no Person involved in the sale of Registrable Securities which Person is
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the 1933 Act) in connection with such sale shall be entitled to contribution
from any Person involved in such sale of Registrable Securities who was not
guilty of fraudulent misrepresentation; and (ii) contribution by any seller of
Registrable Securities shall be limited in

                                       13
<PAGE>

amount to the net amount of proceeds received by such seller from the sale of
such Registrable Securities pursuant to such Registration Statement.

            8. Reports Under the 1934 Act.

            With a view to making available to the Investors the benefits of
Rule 144 promulgated under the 1933 Act or any other similar rule or regulation
of the SEC that may at any time permit the Investors to sell securities of the
Company to the public without registration ("RULE 144"), the Company agrees to:

                  a. make and keep public information available, as those terms
are understood and defined in Rule 144;

                  b. file with the SEC in a timely manner all reports and other
documents required of the Company under the 1933 Act and the 1934 Act so long as
the Company remains subject to such requirements and the filing of such reports
and other documents is required for the applicable provisions of Rule 144; and

                  c. furnish to each Investor so long as such Investor owns
Registrable Securities, promptly upon request, (i) a written statement by the
Company, if true, that it has complied with the reporting requirements of Rule
144, the 1933 Act and the 1934 Act, (ii) a copy of the most recent annual report
of the Company and such other reports and documents so filed by the Company, and
(iii) such other information as may be reasonably requested to permit the
Investors to sell such securities pursuant to Rule 144 without registration.

            9. Assignment of Registration Rights.

            The rights under this Agreement shall be automatically assignable by
the Investors to any transferee of all or any portion of such Investor's
Registrable Securities if: (i) the Investor agrees in writing with the
transferee or assignee to assign such rights, and a copy of such agreement is
furnished to the Company within a reasonable time after such assignment; (ii)
the Company is, within a reasonable time after such transfer or assignment,
furnished with written notice of (a) the name and address of such transferee or
assignee, and (b) the securities with respect to which such registration rights
are being transferred or assigned; (iii) immediately following such transfer or
assignment the further disposition of such securities by the transferee or
assignee is restricted under the 1933 Act or applicable state securities laws;
(iv) at or before the time the Company receives the written notice contemplated
by clause (ii) of this sentence the transferee or assignee agrees in writing
with the Company to be bound by all of the provisions contained herein; and (v)
such transfer shall have been made in accordance with the applicable
requirements of the Securities Purchase Agreement.

            10. Amendment of Registration Rights.

            Provisions of this Agreement may be amended and the observance
thereof may be waived (either generally or in a particular instance and either
retroactively or prospectively), only with the written consent of the Company
and the Required Holders. Any amendment or waiver effected in accordance with
this Section 10 shall be binding upon each Investor and the Company. No such
amendment shall be effective to the extent that it applies to less than all of

                                       14
<PAGE>

the holders of the Registrable Securities. No consideration shall be offered or
paid to any Person to amend or consent to a waiver or modification of any
provision of any of this Agreement unless the same consideration also is offered
to all of the parties to this Agreement.

            11. Miscellaneous.

                  a. A Person is deemed to be a holder of Registrable Securities
whenever such Person owns or is deemed to own of record such Registrable
Securities. If the Company receives conflicting instructions, notices or
elections from two or more Persons with respect to the same Registrable
Securities, the Company shall act upon the basis of instructions, notice or
election received from the such record owner of such Registrable Securities.

                  b. Any notices, consents, waivers or other communications
required or permitted to be given under the terms of this Agreement must be in
writing and will be deemed to have been delivered: (i) upon receipt, when
delivered personally; (ii) upon receipt, when sent by facsimile (provided
confirmation of transmission is mechanically or electronically generated and
kept on file by the sending party); or (iii) one Business Day after deposit for
overnight delivery with a nationally recognized overnight delivery service, in
each case properly addressed to the party to receive the same. The addresses and
facsimile numbers for such communications shall be:

      If to the Company:

            Golden Star Resources Ltd.
            10901 West Toller Drive
            Suite 300
            Littleton, Colorado 80127-6312
            Telephone: (303)830-9000
            Facsimile: (303)830-9094
            Attention: Allan J. Marter

            Copy to:

            Davis Graham & Stubbs LLP
            1550 Seventeenth Street, Suite 500
            Denver, Colorado 80202
            Telephone: (303)892-9400
            Facsimile: (303)893-1379
            Attention: Deborah J. Friedman

      If to Legal Counsel:

            Schulte Roth & Zabel LLP
            919 Third Avenue
            New York, New York  10022
            Telephone: (212)756-2000

                                       15
<PAGE>

            Facsimile: (212)593-5955
            Attention: Eleazer N. Klein, Esq.

If to a Buyer, to its address and facsimile number set forth on the Schedule of
Buyers attached hereto, with copies to such Buyer's representatives as set forth
on the Schedule of Buyers, or to such other address and/or facsimile number
and/or to the attention of such other Person as the recipient party has
specified by written notice given to each other party five (5) days prior to the
effectiveness of such change. If a notice provided for hereunder is delivered
via facsimile, such notice shall be valid only if an original hard copy is
delivered within twenty-four (24) hours of the time such facsimile is delivered.
Written confirmation of receipt (A) given by the recipient of such notice,
consent, waiver or other communication, (B) mechanically or electronically
generated by the sender's facsimile machine containing the time, date, recipient
facsimile number and an image of the first page of such transmission or (C)
provided by a courier or overnight courier service shall be rebuttable evidence
of personal service, receipt by facsimile or receipt from a nationally
recognized overnight delivery service in accordance with clause (i), (ii) or
(iii) above, respectively.

                  c. Failure of any party to exercise any right or remedy under
this Agreement or otherwise, or delay by a party in exercising such right or
remedy, shall not operate as a waiver thereof.

                  d. All questions concerning the construction, validity,
enforcement and interpretation of this Agreement shall be governed by the
internal laws of the State of New York, without giving effect to any choice of
law or conflict of law provision or rule (whether of the State of New York or
any other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Each party hereby irrevocably
submits to the exclusive jurisdiction of the state and federal courts sitting in
The City of New York, Borough of Manhattan, for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein, and hereby irrevocably waives, and agrees not to assert in
any suit, action or proceeding, any claim that it is not personally subject to
the jurisdiction of any such court, that such suit, action or proceeding is
brought in an inconvenient forum or that the venue of such suit, action or
proceeding is improper. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or
proceeding by mailing a copy thereof to such party at the address for such
notices to it under this Agreement and agrees that such service shall constitute
good and sufficient service of process and notice thereof. Nothing contained
herein shall be deemed to limit in any way any right to serve process in any
manner permitted by law. If any provision of this Agreement shall be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect the validity or enforceability of the remainder of this Agreement in that
jurisdiction or the validity or enforceability of any provision of this
Agreement in any other jurisdiction. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION
OF ANY DISPUTE HEREUNDER OR IN CONNECTION HEREWITH OR ARISING OUT OF THIS
AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

                                       16
<PAGE>

                  e. This Agreement, the other Transaction Documents (as defined
in the Securities Purchase Agreement) and the instruments referenced herein and
therein constitute the entire agreement among the parties hereto with respect to
the subject matter hereof and thereof. There are no restrictions, promises,
warranties or undertakings, other than those set forth or referred to herein and
therein. This Agreement, the other Transaction Documents and the instruments
referenced herein and therein supersede all prior agreements and understandings
among the parties hereto with respect to the subject matter hereof and thereof.

                  f. Subject to the requirements of Section 9, this Agreement
shall inure to the benefit of and be binding upon the permitted successors and
assigns of each of the parties hereto.

                  g. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

                  h. This Agreement may be executed in identical counterparts,
each of which shall be deemed an original but all of which shall constitute one
and the same agreement. This Agreement, once executed by a party, may be
delivered to the other party hereto by facsimile transmission of a copy of this
Agreement bearing the signature of the party so delivering this Agreement.

                  i. Each party shall do and perform, or cause to be done and
performed, all such further acts and things, and shall execute and deliver all
such other agreements, certificates, instruments and documents, as any other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

                  j. All consents and other determinations required to be made
by the Investors pursuant to this Agreement shall be made, unless otherwise
specified in this Agreement, by the Required Holders.

                  k. The language used in this Agreement will be deemed to be
the language chosen by the parties to express their mutual intent and no rules
of strict construction will be applied against any party.

                  l. This Agreement is intended for the benefit of the parties
hereto and their respective permitted successors and assigns, and is not for the
benefit of, nor may any provision hereof be enforced by, any other Person.

                  m. The obligations of each Buyer hereunder are several and not
joint with the obligations of any other Buyer, and no provision of this
Agreement is intended to confer any obligations on any Buyer vis-a-vis any other
Buyer. Nothing contained herein, and no action taken by any Buyer pursuant
hereto, shall be deemed to constitute the Buyers as a partnership, an
association, a joint venture or any other kind of entity, or create a
presumption that the Buyers are in any way acting in concert or as a group with
respect to such obligations or the transactions contemplated herein.

                            [Signature Page Follows]

                                       17
<PAGE>

            IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                            COMPANY:

                                            GOLDEN STAR RESOURCES LTD.

                                            By: /s/ ALLAN J. MARTER
                                                --------------------------------
                                                Name:  Allan J. Marter
                                                Title: Senior Vice President and
                                                       Chief Financial Officer
<PAGE>

            IN WITNESS WHEREOF, each Buyer and the Company have caused their
respective signature page to this Registration Rights Agreement to be duly
executed as of the date first written above.

                                     BUYER:

                                     AMARANTH LLC

                                            By:  Amaranth Advisors (Canada), ULC
                                                        Its Trading Advisor

                                     By: /s/ KARL J. WACHTER
                                        ----------------------------------------
                                         Name:  Karl J. Wachter
                                         Title: Authorized Signatory

<PAGE>

                               SCHEDULE OF BUYERS

<TABLE>
<CAPTION>
                      BUYER'S ADDRESS           BUYER'S REPRESENTATIVE'S ADDRESS
   BUYER           AND FACSIMILE NUMBER              AND FACSIMILE NUMBER
------------    ----------------------------    --------------------------------
<S>             <C>                             <C>
Amaranth LLC    c/o Amaranth Advisors L.L.C.         Schulte Roth & Zabel LLP
                One American Lane                    919 Third Avenue
                Greenwich, CT 06831                  New York, New York 10022
                Attention: General Counsel           Attn:  Eleazer Klein, Esq.
                Facsimile: (203) 422-3540            Facsimile: (212) 593-5955
                Telephone: (203) 422-3340            Telephone: (212) 756-2000
</TABLE>

<PAGE>

                                                                       EXHIBIT A

                         FORM OF NOTICE OF EFFECTIVENESS
                            OF REGISTRATION STATEMENT

[Transfer Agent]
[Address]
Attention:

            Re:   Golden Star Resources Ltd.

Ladies and Gentlemen:

            We are counsel to Golden Star Resources Ltd., a corporation
organized under the laws of Canada (the "COMPANY"), and have acted as United
States counsel to the Company in connection with that certain Securities
Purchase Agreement (the "SECURITIES PURCHASE AGREEMENT") entered into by and
among the Company and the buyer named therein (the "HOLDER"), pursuant to which
the Company issued to the Holder convertible senior unsecured notes (the
"NOTES") convertible into the Company's common shares, without par value (the
"COMMON SHARES"). Pursuant to the Securities Purchase Agreement, the Company
also has entered into a Registration Rights Agreement with the Holder (the
"REGISTRATION RIGHTS AGREEMENT") pursuant to which the Company agreed, among
other things, to register for resale the Registrable Securities (as defined in
the Registration Rights Agreement), including the Common Shares issuable upon
conversion of the Notes (including additional shares issued in connection with
certain changes of control of the Company), under the Securities Act of 1933, as
amended (the "1933 ACT"). Pursuant to the Company's obligations under the
Registration Rights Agreement, on ______ __, 2005, the Company filed a
Registration Statement on Form S-3 (File No. 333-_____________) (the
"REGISTRATION STATEMENT") with the Securities and Exchange Commission (the
"SEC") registering the Registrable Securities which names the Holder as a
selling stockholder thereunder.

                  In connection with the foregoing, we advise you that a member
of the SEC's staff has advised us by telephone that the SEC has entered an order
declaring the Registration Statement effective under the 1933 Act at [ENTER TIME
OF EFFECTIVENESS] on [ENTER DATE OF EFFECTIVENESS] and we have no knowledge,
after telephonic inquiry of a member of the SEC's staff, that any stop order
suspending its effectiveness has been issued or that any proceedings for that
purpose are pending before, or threatened by, the SEC. Accordingly, the
Registrable Securities are available for resale under the 1933 Act pursuant and
subject to the terms of the Registration Statement.

            This letter shall serve as our standing opinion to you that the
shares of Common Stock are freely transferable in the United States by the
Holders pursuant to the Registration Statement. Assuming the Holder's compliance
with the prospectus delivery provisions of the 1933 Act and the Securities
Purchase Agreement, you need not require further letters from us to effect any
future legend-free issuance or reissuance of Common Shares to the Holders as

<PAGE>

contemplated by the Company's Irrevocable Transfer Agent Instructions dated
April 15, 2005. This letter shall serve as our standing opinion with regard to
this matter.

                                                   Very truly yours,

                                                   [ISSUER'S COUNSEL]

                                                   By:__________________________

CC: AMARANTH LLC

<PAGE>

                                                                       EXHIBIT B

                              SELLING STOCKHOLDERS

      The shares of Common Stock being offered by the selling stockholders are
issuable upon conversion of the convertible notes, including additional shares
issued in connection with certain changes of control of the Company, and as
principal on the convertible notes. For additional information regarding the
issuance of those convertible notes, see "Private Placement of Convertible
Notes" above. We are registering the shares of Common Stock in order to permit
the selling stockholders to offer the shares for resale from time to time.
Except for the ownership of the Convertible Notes issued pursuant to the
Securities Purchase Agreement, the selling stockholders have not had any
material relationship with us within the past three years.

      The table below lists the selling stockholders and other information
regarding the beneficial ownership of the shares of Common Stock by each of the
selling stockholders. The second column lists the number of shares of Common
Stock beneficially owned by each selling stockholder, based on its ownership of
the convertible notes, as of ________, 200_, assuming conversion of all
convertible notes held by the selling stockholders on that date, without regard
to any limitations on conversions.

      The third column lists the shares of Common Stock being offered by this
prospectus by the selling stockholders.

      In accordance with the terms of registration rights agreements with the
selling stockholders, this prospectus generally covers the resale of at least
150% of the number of shares of Common Stock issuable upon conversion of the
convertible notes as of the trading day immediately preceding the date the
registration statement is initially filed with the SEC. Because the conversion
price of the convertible notes and the number of additional shares that may be
issued in connection with certain changes of control of the Company may be
adjusted, the number of shares that will actually be issued may be more or less
than the number of shares being offered by this prospectus. The fourth column
assumes the sale of all of the shares offered by the selling stockholders
pursuant to this prospectus.

      The selling stockholders may sell all, some or none of their shares in
this offering. See "Plan of Distribution."

<PAGE>

<TABLE>
<CAPTION>
                                                         MAXIMUM NUMBER OF SHARES
                               NUMBER OF SHARES OWNED     TO BE SOLD PURSUANT TO      NUMBER OF SHARES OWNED
NAME OF SELLING STOCKHOLDER      PRIOR TO OFFERING            THIS PROSPECTUS             AFTER OFFERING
---------------------------    ----------------------    ------------------------     ----------------------
<S>                            <C>                       <C>                          <C>
AMARANTH LLC(1)                                                                                0
</TABLE>

      (1) [Amaranth Advisors L.L.C., the trading advisor for Amaranth LLC,
exercises voting and/or dispositive power over the shares of common stock.
Amaranth Advisors L.L.C. has designated authorized signatories who will sign on
behalf of Amaranth LLC, the selling stockholder. Nicholas M. Maounis is the
managing member of Amaranth Advisors L.L.C.].

<PAGE>

                              PLAN OF DISTRIBUTION

      We are registering the shares of Common Stock issuable upon conversion of
the convertible notes, including additional shares issued in connection with
certain changes of control of the Company, to permit the resale of these shares
of Common Stock by the holders of the convertible notes from time to time after
the date of this prospectus. We will not receive any of the proceeds from the
sale by the selling stockholders of the shares of Common Stock. We will bear all
fees and expenses incident to our obligation to register the shares of Common
Stock.

         The selling stockholders may sell all or a portion of the shares of
Common Stock beneficially owned by them and offered hereby from time to time
directly or through one or more underwriters, broker-dealers or agents. If the
shares of Common Stock are sold through underwriters or broker-dealers, the
selling stockholders will be responsible for underwriting discounts or
commissions or agent's commissions. The shares of Common Stock may be sold in
one or more transactions at fixed prices, at prevailing market prices at the
time of the sale, at varying prices determined at the time of sale, or at
negotiated prices. These sales may be effected in transactions, which may
involve crosses or block transactions,

      -     on any national securities exchange or quotation service on which
            the securities may be listed or quoted at the time of sale;

      -     in the over-the-counter market;

      -     in transactions otherwise than on these exchanges or systems or in
            the over-the-counter market;

      -     through the writing of options, whether such options are listed on
            an options exchange or otherwise;

      -     ordinary brokerage transactions and transactions in which the
            broker-dealer solicits purchasers;

      -     block trades in which the broker-dealer will attempt to sell the
            shares as agent but may position and resell a portion of the block
            as principal to facilitate the transaction;

      -     purchases by a broker-dealer as principal and resale by the
            broker-dealer for its account;

      -     an exchange distribution in accordance with the rules of the
            applicable exchange;

      -     privately negotiated transactions;

      -     short sales;

      -     sales pursuant to Rule 144;

<PAGE>

      -     broker-dealers may agree with the selling securityholders to sell a
            specified number of such shares at a stipulated price per share;

      -     a combination of any such methods of sale; and

      -     any other method permitted pursuant to applicable law.

      If the selling stockholders effect such transactions by selling shares of
Common Stock to or through underwriters, broker-dealers or agents, such
underwriters, broker-dealers or agents may receive commissions in the form of
discounts, concessions or commissions from the selling stockholders or
commissions from purchasers of the shares of Common Stock for whom they may act
as agent or to whom they may sell as principal (which discounts, concessions or
commissions as to particular underwriters, broker-dealers or agents may be in
excess of those customary in the types of transactions involved). In connection
with sales of the shares of Common Stock or otherwise, the selling stockholders
may enter into hedging transactions with broker-dealers, which may in turn
engage in short sales of the shares of Common Stock in the course of hedging in
positions they assume. The selling stockholders may also sell shares of Common
Stock short and deliver shares of Common Stock covered by this prospectus to
close out short positions and to return borrowed shares in connection with such
short sales. The selling stockholders may also loan or pledge shares of Common
Stock to broker-dealers that in turn may sell such shares.

      The selling stockholders may pledge or grant a security interest in some
or all of the convertible notes or shares of Common Stock owned by them and, if
they default in the performance of their secured obligations, the pledgees or
secured parties may offer and sell the shares of Common Stock from time to time
pursuant to this prospectus or any amendment to this prospectus under Rule
424(b)(3) or other applicable provision of the Securities Act of 1933, as
amended, amending, if necessary, the list of selling stockholders to include the
pledgee, transferee or other successors in interest as selling stockholders
under this prospectus. The selling stockholders also may transfer and donate the
shares of Common Stock in other circumstances in which case the transferees,
donees, pledgees or other successors in interest will be the selling beneficial
owners for purposes of this prospectus.

      The selling stockholders and any broker-dealer participating in the
distribution of the shares of Common Stock may be deemed to be "underwriters"
within the meaning of the Securities Act, and any commission paid, or any
discounts or concessions allowed to, any such broker-dealer may be deemed to be
underwriting commissions or discounts under the Securities Act. At the time a
particular offering of the shares of Common Stock is made, a prospectus
supplement, if required, will be distributed which will set forth the aggregate
amount of shares of Common Stock being offered and the terms of the offering,
including the name or names of any broker-dealers or agents, any discounts,
commissions and other terms constituting compensation from the selling
stockholders and any discounts, commissions or concessions allowed or reallowed
or paid to broker-dealers.

      Under the securities laws of some states, the shares of Common Stock may
be sold in such states only through registered or licensed brokers or dealers.
In addition, in some states the shares of Common Stock may not be sold unless
such shares have been registered or qualified

<PAGE>

for sale in such state or an exemption from registration or qualification is
available and is complied with.

      There can be no assurance that any selling stockholder will sell any or
all of the shares of Common Stock registered pursuant to the shelf registration
statement, of which this prospectus forms a part.

      The selling stockholders and any other person participating in such
distribution will be subject to applicable provisions of the Securities Exchange
Act of 1934, as amended, and the rules and regulations thereunder, including,
without limitation, Regulation M of the Exchange Act, which may limit the timing
of purchases and sales of any of the shares of Common Stock by the selling
stockholders and any other participating person. Regulation M may also restrict
the ability of any person engaged in the distribution of the shares of Common
Stock to engage in market-making activities with respect to the shares of Common
Stock. All of the foregoing may affect the marketability of the shares of Common
Stock and the ability of any person or entity to engage in market-making
activities with respect to the shares of Common Stock.

      We will pay all expenses of the registration of the shares of Common Stock
pursuant to the registration rights agreement, estimated to be $[ ] in total,
including, without limitation, Securities and Exchange Commission filing fees
and expenses of compliance with state securities or "blue sky" laws; provided,
however, that a selling stockholder will pay all underwriting discounts and
selling commissions, if any. We will indemnify the selling stockholders against
liabilities, including some liabilities under the Securities Act, in accordance
with the registration rights agreements, or the selling stockholders will be
entitled to contribution. We may be indemnified by the selling stockholders
against civil liabilities, including liabilities under the Securities Act, that
may arise from any written information furnished to us by the selling
stockholder specifically for use in this prospectus, in accordance with the
related registration rights agreements, or we may be entitled to contribution.

      Once sold under the shelf registration statement, of which this prospectus
forms a part, the shares of Common Stock will be freely tradable in the hands of
persons other than our affiliates.

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