Document:

ex4_5.htm

 

EXHIBIT 4.5

 

SUPPLEMENTAL NOTE INDENTURE

 

 

 

GRYPHON GOLD CORPORATION

 

- and –

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

 

Supplementing the Note Indenture dated as of November 22, 2011 between Gryphon Gold Corporation, as issuer, and Computershare Trust Company of Canada, as Trustee, and providing for the issuance of 2011 Series B 10% Subordinate Secured Notes Due November 22, 2012

 

 

March 20, 2012

 

 

 

  

  

  

 TABLE OF CONTENTS

 

	 	 Page No.
	 	 
	

ARTICLE I INTERPRETATION

	2 
	 	1.1	Definitions	2 

 

 

	

 
ARTICLE II AMENDMENTS AND SUPPLEMENTS

	3 
	 	2.1	Additional Definitions	3 
	 	2.2	Definition of Permitted Borealis Indebtedness	3 
	 	2.3	Definition of Permitted Encumbrances	4 
	 	2.4	

Definition of Senior Creditor Obligation

	4 
	 	2.5	Section 2.2	4 
	 	2.6	 
Section 5

	5 
	 	2.7	 
Prepayment

	5 
	 	2.8	Waiver of Restrictive Covenants	5 
	 	2.9	Cancellation of Subordinate Secured Notes	6 
	 	2.10	Section 8.2	6 
	 	2.11	Section 8.9	7 

 

 

	

 
ARTICLE III EXECUTION AND FORMAL DATE

	7 
	 	3.1	Confirmation of Indenture	7 
	 	3.2	Acceptance of Trusts	7 
	 	3.3	Counterparts and Formal Date	7 
	 	3.4	

Governing Law

	7 

 

	

 
SCHEDULE A  TO SUPPLEMENTAL NOTE INDENTURE

	1 

 

-i-

  

  

  

THIS SUPPLEMENTAL NOTE INDENTURE, relating to the 10% Subordinate Secured Notes Due November 22, 2012 is made as of March 20, 2012.

 

BETWEEN:

GRYPHON GOLD CORPORATION, a corporation existing under the laws of Nevada,

(hereinafter called “Gryphon” or the “Corporation”),

- and -

COMPUTERSHARE TRUST COMPANY OF CANADA, a trust company existing under the laws of Canada and duly authorized to carry on the business of a trust company in each province of Canada,

(hereinafter called the “Trustee”),

 

WHEREAS by a note indenture (the “Base Indenture”) dated as of November 22, 2011 between the Corporation and the Trustee, provision was made for the issuance of the Subordinate Secured Notes (as defined in the Base Indenture) by the Corporation upon and subject to the conditions set out in such Base Indenture;

 

AND WHEREAS pursuant to Sections 11.11(b) and 11.16 of the Indenture, the Noteholders (as defined in the Base Indenture) have the power to act by Extraordinary Resolution (as defined in the Base Indenture) to assent to any modification of or change in or addition to or omission from the provisions contained in the Base Indenture which shall be agreed to by the Corporation and to authorize the Trustee to concur in and execute a supplemental indenture embodying such modification, change, addition or omission, which power may be exercised by an instrument in writing signed in one or more counterparts by the holders of not less than 66 2/3% of the aggregate outstanding principal amount of the Subordinate Secured Notes;

 

AND WHEREAS on March 16, 2012, an Extraordinary Resolution of the Noteholders was approved by holders of not less than 66 2/3% of the aggregate outstanding principal amount of the Subordinate Secured Notes authorizing and directing the Trustee to enter into this supplemental indenture (this “Supplemental Indenture”, and the Base Indenture as supplemented by this Supplemental Indenture, the “Indenture”) for the purposes of amending and supplementing the Base Indenture to (a) amend the definition of Senior Creditor Obligations to permit the Corporation to incur Senior Creditor Debt (as defined in the Base Indenture), (b) permit the subordination of the Subordinate Secured Notes to Senior Creditor Obligations, (c) permit and mandate the prepayment of the Subordinate Secured Notes, and (d) waive certain restrictive covenants contained in the Base Indenture in connection with incurring Senior Creditor Debt, subordination to Senior Creditor Obligations and prepayment of the Subordinate Secured Notes;

 

 

  

  

  

 

AND WHEREAS the Corporation wishes to enter into this Supplemental Indenture and all things necessary have been done and performed to authorize the execution of this Supplemental Indenture;

 

 

NOW THEREFORE THIS SUPPLEMENTAL INDENTURE WITNESSES it is hereby agreed and declared as follows:

 

ARTICLE I

INTERPRETATION

 

 

In this Supplemental Indenture, except as otherwise defined herein or unless the context otherwise requires, all terms defined in the Base Indenture and used but not defined in this Supplemental Indenture shall have the meanings specified in the Base Indenture.

 

 

This Supplemental Indenture shall, unless otherwise required, be subject to the interpretation provisions contained in Section 1 of the Base Indenture.  When entered into by the parties, this Supplemental Indenture shall be supplemental to, part of and read together with the Base Indenture as a single instrument, and all of the provisions of the Base Indenture, as supplemented by this Supplemental Indenture, shall apply to the Subordinate Secured Notes.

 

 

If any term or provision contained in this Supplemental Indenture shall conflict or be inconsistent with any term or provision of the Base Indenture, the terms and provisions of this Supplemental Indenture shall govern; provided, however, that the terms and provisions of this Supplemental Indenture may modify or amend the terms of the Base Indenture solely as applied to the Subordinate Secured Notes.

 

	
1.1  

	
Definitions

 

When used in this Supplemental Indenture, the following terms shall have the following meanings:

 

	
(a)  

	
“Base Indenture” is defined in the recitals;

 

	
(b)  

	
“Indenture” is defined in the recitals;

 

	
(c)  

	
“July Pledge Agreement” means the Pledge and Security Agreement between the Trustee and the Corporation dated July 27, 2011 as it may be amended to give effect to delivery by the Trustee to the Senior Lender of the Pledged Securities described in the Extraordinary Resolution of the Noteholders dated March 16, 2012;

 

	
(d)  

	
“Prepayment Date” means, with respect to any Subordinate Secured Notes, the date fixed for such prepayment by or pursuant to this Indenture; and

 

	
(e)  

	
“Supplemental Indenture” is defined in the recitals.

 

-2-

  

  

 

ARTICLE II

AMENDMENTS AND SUPPLEMENTS

 

	
2.1  

	
Additional Definitions

 

The Base Indenture is amended and supplemented by adding the following definitions to Section 1.1:

 

“Senior Creditor” means Waterton Global Value, L.P. or its assignee.

 

“Bridge Loan” means that certain senior secured bridge loan in the amount of US$1,500,000 to be extended to the Corporation by the Senior Creditor under the terms of a Bridge Loan Agreement to be executed by the Senior Creditor, the Corporation and Borealis Mining Company on or about March 20, 2012.

 

“Senior Credit Facility” means that certain senior secured, non-revolving credit facility in the amount of US$15,000,000 the proceeds of which shall be used to prepay the Bridge Loan and the Subordinate Secured Note Indebtedness, to be extended to the Corporation by the Senior Creditor under the terms of a Loan Agreement to be executed by the Senior Creditor, the Corporation and Borealis Mining Company prior to May 30, 2012.

 

“Senior Creditor Subordination Agreement” means the subordination agreement to subordinate the Subordinate Secured Note Indebtedness to the Senior Creditor Debt in the form requested by the Corporation and the Senior Creditor and substantially in the form attached hereto as Schedule A.

 

	
2.2  

	
Definition of Permitted Borealis Indebtedness

 

The Base Indenture is amended and supplemented by deleting clauses (c), (d) and (h) of the definition of “Permitted Borealis Indebtedness” in Section 1.1 in their entirety and inserting new clauses (c), (d) and (h) which shall read as follows:

 

(c)           all Indebtedness under agreements related to the general development,construction and operation of the Borealis Mine;

 

(d)           all present and future Security Interests held as security for the payment orperformance of any debts, liabilities or obligations under any agreements,instruments, documents related or delivered or entered into in connection with aSenior Creditor Transaction, to the extent existing as of the Closing Date, as they may, from time to time, be amended, supplemented or otherwise modified (including without limitation the registration of any security granted by Borealis Mining Company or the Corporation thereunder); and

 

(h)           Obligations or amounts owed to trade creditors, suppliers and service providersand accruals in relation thereto in the ordinary course of business.

 

 

-3-

  

  

	
2.3  

	
Definition of Permitted Encumbrances

 

The Base Indenture is amended and supplemented by deleting clauses (b), (h) and (j) of the definition of “Permitted Encumbrances” in Section 1.1 in their entirety and inserting new clauses (b), (h), and (j) which shall read as follows:

 

(b)           any Security Interest constituted by a Purchase Money Mortgage or Capital Leaseor similar title retention with respect to, or any Security Interest over, goodsacquired in the ordinary course of business of the Corporation or any of itsSubsidiaries;

 

	
  

	
(h)

	
all present and future Security Interests held as security for the payment or performance of any present or future debts, liabilities or obligations under any agreements, instruments, documents related or delivered or entered into in connection with a Senior Creditor Transaction or a Senior Creditor Obligation permitted hereunder as they may be entered into or otherwise, from time to time, be amended, supplemented or otherwise modified (including without limitation the registration of any security granted by Borealis Mining Company or the Corporation thereunder); and

 

	
  

	
(j)

	
any Security Interest created in relation to the shares of Borealis Mining Company for the benefit of the Corporation or to secure any obligations or Indebtedness as between any of the Corporation and/or its Subsidiaries and the Senior Creditor or other creditor in connection with a Senior Creditor Transaction or a Senior Creditor Obligation or any Security Interest that is subordinated in priority to the Security Interest securing the Subordinate Secured Note Indebtedness.

 

	
2.4  

	
Definition of Senior Creditor Obligation

 

The Base Indenture is amended and supplemented by deleting the definition of “Senior Creditor Obligation” in Section 1.1 in its entirety and inserting a new definition of “Senior Creditor Obligation” which shall read as follows:

 

“Senior Creditor Obligation” means: (i) the Bridge Loan; (ii) the Senior Credit Facility; (iii) the instrument creating or evidencing the same and Security Interests related thereto or the assumption or guarantee thereof (or related agreements or documents to which the Corporation, Borealis Mining Company or any Subsidiary of the Corporation is a party); and (iv) the obligations of the Corporation and its Subsidiaries under the July Notes secured by the July Pledge.

 

	
2.5  

	
Section 2.2

 

The Base Indenture is amended and supplemented by deleting Section 2.2 in its entirety and adding the following as a new Section 2.2:

 

“2.2           Description of the Subordinate Secured Notes

 

-4-

  

  

 

The aggregate principal amount of Subordinate Secured Notes that may be issued under this Indenture is limited to CAD$5,000,000. The Subordinate Secured Notes shall be direct obligations of the Corporation dated November 22, 2011 (being their date of issue) and will become due and payable, together with all accrued interest and unpaid interest thereon, on November 22, 2012. The Subordinate Secured Notes shall be secured by a charge on the Secured Assets, subject only to current and future Permitted Encumbrances and Senior Creditor Obligations.  The Subordinate Secured Notes shall be subordinate to Senior Creditor Obligations and Senior Creditor Debt.”

 

	
2.6  

	
Section 5

 

The Base Indenture is amended and supplemented by renaming Section 5 as follows:

 

“SECTION 5 REDEMPTION, PURCHASE, AND PREPAYMENT OF SUBORDINATE SECURED NOTES,”

 

	
2.7  

	
Prepayment

 

The Base Indenture is amended and supplemented by deleting Section 5.4 in its entirety and adding the following as a new Section 5.4:

 

“5.4           Prepayment

 

The Corporation shall have the right to prepay the Subordinate Secured Notes in full, without penalty or the consent of the Trustee or the respective Noteholders, upon delivery to the Trustee and the Noteholders, at least 10 Business Days prior to the Prepayment Date, of a notice informing the Trustee and the Noteholders that the Subordinate Secured Notes are to be prepaid in full.  The Corporation shall, concurrent with the entering into and drawdown of the Senior Creditor Facility, prepay the Subordinate Secured Notes in full without penalty or the consent of the trustee or the respective Noteholders.  The prepayment price for the Subordinate Secured Notes shall be equal to the outstanding principal amount of the Subordinate Secured Notes plus accrued interest to the Prepayment Date.”

 

	
2.8  

	
Waiver of Restrictive Covenants

 

The Base Indenture is amended and supplemented by adding the following as a new Section 5.5:

 

“5.5           Waiver of Restrictive Covenants

 

The execution and delivery by the Corporation of the agreements giving effect to the Senior Credit Facility shall not constitute an Event of Default under section 9.1(c) of this Indenture.”

 

-5-

  

  

2.9  Cancellation of Subordinate Secured Notes

 

The Base Indenture is amended and supplemented by adding the following as a new Section 5.6:

 

“5.6           Cancellation of Subordinate Secured Notes

 

All Subordinate Secured Notes redeemed or purchased in whole or in part or prepaid in full by the Corporation shall not be reissued or resold and shall be forthwith delivered to and cancelled by the Trustee, and no Subordinate Secured Notes shall be issued in substitution therefor.”

 

2.10  Section 8.2

 

The Base Indenture is amended and supplemented by deleting clauses (f), (g), (h), (i), and (j) of Section 8.2 in their entirety and inserting new clauses (f), (g), (h), (i), and (j) which shall read as follows:

 

	
  

	
(f)

	
except with respect to the Senior Credit Facility, declare or pay any dividend or make any distribution or payment of any kind to its shareholders;

 

	
  

	
(g)

	
issue, purchase, redeem or otherwise acquire for cash or retire for value any shares of capital stock or any warrants, rights or options to purchase or acquire shares of capital stock, except with respect to (i) the Senior Creditor Obligation and the issuance of any equity securities in connection therewith, (ii) the Consent Warrants and the issuance of any equity securities in connection therewith, and (iii) the issue of common stock upon exercise of any option or warrant outstanding as at November 22, 2011,;

 

	
  

	
(h)

	
except with respect to the Senior Credit Facility, permit Borealis Mining Company to enter into any agreement restricting the right of Borealis MiningCompany to declare or pay any dividend or make any distribution or payment of any kind;

 

	
  

	
(i)

	
permit Borealis Mining Company, except with respect to the Senior Credit Facility, to make any principal payment on, purchase, defease, redeem, prepay, decrease or otherwise acquire or retire for value, prior to any scheduled final maturity, scheduled repayment or scheduled sinking fund payment, any Borealis Indebtedness other than Permitted Borealis Indebtedness, that is not subordinated to the Notes; or

 

	
  

	
(j)

	
except with respect to the Senior Credit Facility, enter into or permit Borealis Mining Company to enter into any Senior Creditor Transaction without the approval of Holders of a majority in principal amount of the outstanding Subordinate Secured Notes;

 

-6-

  

  

2.11  Section 8.9

 

The Base Indenture is amended and supplemented by adding the following paragraph to the end of Section 8.9:

 

“Trustee may execute and deliver the Senior Creditor Subordination Agreement upon written demand of the Corporation, with an officer’s certificate confirming that the agreement to be executed is the Senior Credit Subordination Agreement.”

 

ARTICLE III

EXECUTION AND FORMAL DATE

 

	
3.1  

	
Confirmation of Indenture

 

 

The Base Indenture, as amended and supplemented by this Supplemental Indenture, is in all respects confirmed.

 

	
3.2  

	
Acceptance of Trusts

 

 

 The Trustee hereby accepts the trusts in the Indenture declared and provided for and agree to perform the same upon the terms and conditions and subject to the provisions set forth in the Base Indenture, as amended and supplemented by this Supplemental Indenture.

 

	
3.3  

	
Counterparts and Formal Date

 

 

 This Supplemental Indenture may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all of which shall together constitute one and the same instrument and notwithstanding their date of execution shall be deemed to bear the date set forth on the first page of this Supplemental Indenture.

 

	
3.4  

	
Governing Law

 

 

This Supplemental Indenture shall be governed by and construed with the internal laws of the State of New York, without giving effect to any of the conflicts of law principles which would result in the application of the substantive law of another jurisdiction and shall be treated in all respects as New York contracts.  Notwithstanding the foregoing, the performance or discharge by the Trustee of any of its rights, powers, duties or responsibilities under this Agreement shall be construed in accordance with the laws of the Province of British Columbia and the federal laws of Canada applicable therein.

 

[Remainder of page intentionally left blank]

 

 

 

-7-

  

  

 

IN WITNESS whereof the parties hereto have executed this Supplemental Indenture under the hands of their proper signatories in that behalf.

 

	 	

GRYPHON GOLD CORPORATION

	 	 
	 	By:  ___________________________________
	 	    Name:
	 	    Title: 

 

 

	 	

COMPUTERSHARE TRUST COMPANY OF CANADA

	 	 
	 	By:  ___________________________________
	 	    Name:
	 	    Title: 

 

 

	 	By:  ___________________________________
	 	    Name:
	 	    Title: 

 

 

- S1 -

  

  

  

SCHEDULE A

 

TO SUPPLEMENTAL NOTE INDENTURE

 

[See below]

 

  

  

  

SUBORDINATION (this “Subordination”)

TO:           WATERTON GLOBAL VALUE, L.P. (the “Senior Creditor”)

	
RE:

	
Bridge Loan Agreement dated as of March ___, 2012 (the “Bridge Loan Agreement”), among Gryphon Gold Corporation (“Gryphon”), Borealis Mining Company and the Senior Creditor

	
  

	
DATE: March ___, 2012

________________________________________________________________________

WHEREAS Computershare Trust Company of Canada (the “Subordinated Trustee”) is trustee to the holders (the “Holders”) of certain 10% Series B Subordinate Secured Notes issued by Gryphon and maturing on November 22, 2012 (the “Notes”), pursuant to a note indenture dated as of November 22, 2011 between Gryphon and the Subordinated Trustee (the “Note Indenture”);

WHEREAS to secure Gryphon’s obligations under the Notes and Note Indenture, Gryphon granted the Subordinated Trustee a security interest over certain of its assets pursuant to the pledge and security agreement dated as of July 27, 2011 (the “Pledge and Security Agreement”, and together with the Notes and the Note Indenture, the “Transaction Documents”);

WHEREAS Borealis Mining Company (“Borealis”) is a wholly-owned subsidiary of Gryphon;

WHEREAS Gryphon and Borealis (collectively, the “Debtors”) wish to enter into the Bridge Loan Agreement with the Senior Creditor;

WHEREAS it is a condition precedent of the Bridge Loan Agreement that the Debtors each grant the Senior Creditor a security interest over all their real and personal property (the “Senior Security”) to secure their respective obligations (the “Senior Indebtedness”) under the Bridge Loan Agreement and associated loan documentation (collectively, the “Loan Documents”);

WHEREAS the Senior Creditor has requested this Subordination from the Subordinated Trustee as a condition precedent to the Bridge Loan Agreement;

NOW THEREFORE for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the undersigned hereby:

	
1.  

	
consents to each of the Debtors entering into the Loan Documents and incurring the Senior Indebtedness;

	
2.  

	
consents to each of the Debtors granting the Senior Security in favour of the Senior Creditor;

	
3.  

	
agrees that any and all security, liens, charges, pledges, encumbrances or any other security granted by the Debtors to the Subordinated Trustee now or in the future (collectively, the “Subordinate Security”) shall rank behind and be subordinated, in all respects, to the Senior Security;

	
4.  

	
agrees that it shall not take any steps whatsoever to enforce the Subordinate Security (including, without limitation, rights of set-off, commencement of bankruptcy proceedings, initiating an action, appointing or making application to a court for an order appointing an agent or a receiver or receiver manager or by any other means of enforcement whatsoever) until:

 

	
(a)  

	
the Senior Indebtedness has been paid in full and the Debtors have no other right or entitlement under the Loan Documents; or

 

	
(b)  

	
the Senior Creditor has consented to the enforcement of the Subordinate Security (which consent may be withheld in the sole and absolute discretion of the Senior Creditor);

 

 

  

  

  

 

	
5.  

	
As between the Senior Creditor and the Subordinated Trustee, the Senior Creditor shall have first and prior rights of payment as herein contemplated and the undersigned will not:

 

	
(a)  

	
assert in any action, suit or proceeding whatsoever the invalidity, unenforceability or ineffectiveness of any of the Senior Security now or hereafter held by the Senior Creditor; or

 

	
(b)  

	
participate in or cooperate with any other party to pursue any such action, suit or proceeding except as may be required by law or by court order.

 

	
6.  

	
The undersigned shall not permit any changes, amendments, or modifications whatsoever to any of the Transaction Documents, except with the prior written consent of Senior Creditor;

	
7.  

	
The undersigned shall not exercise any right whatsoever in relation to or under the Subordinate Security, except with the prior written consent of the Senior Creditor.

	
8.  

	
The Senior Creditor may grant time, renewals, extensions, amendments, modifications and releases to, and otherwise deal with, the Debtors and others, as the Senior Creditor may see fit, without notice to the undersigned and without prejudice to or in any way limiting or affecting the obligations of the undersigned hereunder.

	
9.  

	
This Subordination shall terminate upon the earlier of (i) the irrevocable receipt by the Senior Creditor of the full amount of the Senior Indebtedness; and (ii) the termination of all the Loan Documents.

	
10.  

	
This Subordination shall be construed in accordance with and governed by the laws of the Province of Ontario and the laws of Canada applicable therein.

	
11.  

	
This Subordination and any amendments, waivers, consents, or supplements may be executed by facsimile or other electronic delivery which shall be as effective as delivery of a manually executed counterpart thereof.

 

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

 

Per: _______________________________ex4_6.htm

EXHIBIT 4.6

 

 

 

THE SECURITIES REPRESENTED HEREBY AND THE SECURITIES ISSUABLE UPON EXERCISE HEREOF HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE JULY 21, 2012.

THIS WARRANT AND THE SHARES ISSUABLE UPON EXERCISE THEREOF HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”), OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.  THIS WARRANT MAY NOT BE EXERCISED UNLESS THE WARRANT AND THE UNDERLYING SHARES HAVE BEEN REGISTERED UNDER THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR UNLESS AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE.

THESE WARRANTS WILL EXPIRE AND BECOME NULL AND VOID

AT 5:00 P.M. (VANCOUVER TIME) ON March 20, 2015.

 

2012 SERIES R

 

SHARE PURCHASE WARRANTS

TO PURCHASE SHARES OF COMMON STOCK

GRYPHON GOLD CORPORATION

 

incorporated in the State of Nevada

 

THIS IS TO CERTIFY THAT WATERTON GLOBAL VALUE, L.P., (the “Holder”), has the right to purchase, upon and subject to the terms and conditions hereinafter referred to, up to 1,500,000 fully paid and non-assessable shares of common stock (the “Shares”) in the capital of Gryphon Gold Corporation (hereinafter called the “Company”) on or before 5:00 p.m. (Vancouver time) on March 20, 2015 (the “Expiry Date”) at a price per Share (the “Exercise Price”) of CDN$0.1862, on the terms and conditions attached hereto as Appendix “A” (the “Terms and Conditions”).

 

	
  

	
1.

	
ONE (1) WHOLE SERIES R WARRANT AND THE EXERCISE PRICE ARE REQUIRED TO PURCHASE ONE SHARE.  THIS CERTIFICATE REPRESENTS 2012 SERIES R WARRANTS.

 

	
  

	
2.

	
These Warrants are issued subject to the Terms and Conditions, and the Warrant Holder may exercise the right to purchase Shares only in accordance with those Terms and Conditions.

 

	
  

	
3.

	
Nothing contained herein or in the Terms and Conditions will confer any right upon the Holder hereof or any other person to subscribe for or purchase any Shares at any time subsequent to the Expiry Date, and from and after such time, these Warrants and all rights hereunder will be void and of no value.

 

[Signature Page Follows]

  

  

  

 

IN WITNESS WHEREOF the Company has executed this Warrant Certificate this _____ day of March, 2012.

 

 

	 	GRYPHON GOLD CORPORATION
	 	 
	 	Per:  ________________________________
	 	James O’Neil, Chief Executive Officer
	 	 

 

 

 

 

  

  

  

 

PLEASE NOTE THAT ALL SHARE CERTIFICATES MUST BE LEGENDED AS FOLLOWS DURING THE CURRENCY OF APPLICABLE HOLD PERIODS:

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “U.S. SECURITIES ACT”) OR THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT OF THE COMPANY THAT SUCH SECURITIES MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED, DIRECTLY OR INDIRECTLY, EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE U.S. SECURITIES ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE JULY 21, 2012.

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

  

  

  

APPENDIX “A”

TERMS AND CONDITIONS dated March 20, 2012, attached to the Series R Warrants issued by Gryphon Gold Corporation.

 

	
1.

	
INTERPRETATION

 

1.1           Definitions

 

In these Terms and Conditions, unless there is something in the subject matter or context inconsistent therewith:

 

	
  

	
(a)

	
“Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on which banking institutions in New York, New York are generally authorized or obligated by law or executive order to close;

 

	
  

	
(b)

	
“Company” means Gryphon Gold Corporation until a successor corporation will have become such as a result of consolidation, amalgamation or merger with or into any other corporation or corporations, or as a result of the conveyance or transfer of all or substantially all of the properties and estates of the Company as an entirety to any other corporation and thereafter “Company” will mean such successor corporation;

 

	
  

	
(c)

	
“Company’s Auditors” means an independent firm of accountants duly appointed as auditors of the Company;

 

	
  

	
(d)

	
“Director” means a director of the Company for the time being, and reference, without more, to action by the directors means action by the directors of the Company as a Board, or whenever duly empowered, action by an executive committee of the Board;

 

	
  

	
(e)

	
“Eligible Market” means any of NYSE, the NYSE Amex, The NASDAQ Global Market, The NASDAQ Global Select Market, The NASDAQ Capital Market or the Toronto Stock Exchange;

 

	
  

	
(f)

	
“herein”, “hereby” and similar expressions refer to these Terms and Conditions as the same may be amended or modified from time to time; and the expression “Article” and “Section,” followed by a number refer to the specified Article or Section of these Terms and Conditions;

 

	
  

	
(g)

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

 

	
  

	
(h)

	
“shares” means the common shares in the capital of the Company as constituted at the date hereof and any shares resulting from any subdivision or consolidation of the shares;

 

	
  

	
(i)

	
“Trading Day” shall mean (a) any day on which the common stock of the Company is listed or quoted and traded on its primary Trading Market, (b) if the common stock of the Company is not then listed or quoted and traded on any Eligible Market, then a day on which trading occurs on the OTC Bulletin Board (or any successor thereto), or (c) if trading does not occur on the OTC Bulletin Board (or any successor thereto), any Business Day;

 

	
  

	
(j)

	
“Trading Market” shall mean the OTC Bulletin Board or any Eligible Market or any other national securities exchange, market or trading or quotation facility on which the shares are then listed or quoted; and

 

	
  

	
(k)

	
“Warrants” means the Series R Warrants of the Company issued and presently authorized and for the time being outstanding.

 

  

  

  

- 2 -

 

1.2           Gender

 

Words importing the singular number include the plural and vice versa and words importing the masculine gender include the feminine and neuter genders.

 

1.3           Interpretation not affected by Headings

 

The division of these Terms and Conditions into Articles and Sections, and the insertion of headings are for convenience of reference only and will not affect the construction or interpretation thereof.

 

1.4           Applicable Law

 

The Warrants will be construed in accordance with the laws of the Province of Ontario without regard to its conflicts of law principles, and the federal law of Canada. The Company and Holder each irrevocably consents to the jurisdiction of the courts of the Province of Ontario in connection with any action or proceeding arising out of, or relating to, these Warrants, any document or instrument delivered pursuant to, in connection with, or simultaneously with these Warrants, or a breach of the Terms and Conditions of these Warrants or any such document or instrument.

 

1.5           Severability

 

In the event that any one or more of the provisions contained in this Warrant Certificate or in any other document referenced in this Warrant Certificate shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision of this Warrant Certificate or any other such document.

 

1.6           Time is of the Essence

 

Time is absolutely of the essence in construing each provision of this Warrant Certificate.

 

	
2.

	
ISSUE OF WARRANTS

 

2.1           Additional Warrants

 

The Company may at any time and from time to time issue additional warrants or grant options or similar rights to purchase shares of its capital stock.

 

2.2           Warrants to Rank Pari Passu

 

All Warrants and additional warrants, options or similar rights to purchase shares from time to time issued or granted by the Company, will rank pari passu whatever may be the actual dates of issue or grant thereof, or of the dates of the certificates by which they are evidenced.

 

2.3           Issue in substitution for Lost Warrants

 

	
  

	
(a)

	
In case a Warrant Certificate becomes mutilated, lost, destroyed or stolen, the Company, at its discretion, may issue and deliver a new Warrant Certificate of like date and tenor as the one mutilated, lost, destroyed or stolen, in exchange for and in place of and upon cancellation of such mutilated Warrant Certificate, or in lieu of, and in substitution for such lost, destroyed or stolen Warrant Certificate and the substituted Warrant Certificate will be entitled to the benefit hereof and rank equally in accordance with its terms with all other Warrants issued or to be issued by the Company.

 

	
  

	
(b)

	
The applicant for the issue of a new Warrant Certificate pursuant hereto will bear the cost of the issue thereof and in case of loss, destruction or theft furnish to the Company such evidence of 

 

  

  

  

- 3 -

	
  

	
 

	
The applicant for the issue of a new Warrant Certificate pursuant hereto will bear the cost of the issue thereof and in case of loss, destruction or theft furnish to the Company such evidence of ownership and of loss, destruction, or theft of the Warrant Certificate so lost, destroyed or stolen as will be satisfactory to the Company in its discretion and such applicant may also be required to furnish indemnity in amount and form satisfactory to the Company in its discretion, and will pay the reasonable charges of the Company in connection therewith.

 

2.4           Warrant Holder Not a Shareholder

 

The holding of a Warrant will not constitute the Holder thereof a shareholder of the Company, nor entitle him to any right or interest in respect thereof except as in the Warrant Certificate expressly provided.

 

	
3.

	
NOTICE

 

3.1           Notice to Holders

 

Any notice required or permitted to be given to the Holders will be in writing and may be given by prepaid registered post, electronic facsimile transmission, portable document format (pdf) transmission or other means of electronic communication capable of producing a printed copy to the address of the Holder appearing on the Holder’s Warrant Certificate or to such other address as any Holder may specify by notice in writing to the Company, and any such notice will be deemed to have been given and received by the Holder to whom it was addressed if mailed, on the third day following the mailing thereof, if by facsimile, pdf or other electronic communication, on successful transmission, or, if delivered, on delivery; but if at the time of mailing or between the time of mailing and the third Business Day thereafter there is a strike, lockout, or other labour disturbance affecting postal service, then the notice will not be effectively given until actually delivered.

 

3.2           Notice to the Company

 

Any notice required or permitted to be given to the Company will be in writing and may be given by prepaid registered post, electronic facsimile transmission, portable document format (pdf) transmission or other means of electronic communication capable of producing a printed copy to the address of the Company set forth below or such other address as the Company may specify by notice in writing to the Holder, and any such notice will be deemed to have been given and received by the Company to whom it was addressed if mailed, on the third day following the mailing thereof, if by facsimile, pdf or other electronic communication, on successful transmission, or, if delivered, on delivery; but if at the time or mailing or between the time of mailing and the third Business Day thereafter there is a strike, lockout, or other labour disturbance affecting postal service, then the notice will not be effectively given until actually delivered:

 

Gryphon Gold Corporation

611 N. Nevada St.

Carson City, Nevada  89703

Attention:  Lisanna Lewis

Fax No. 604-608-3262

 

	
4.

	
EXERCISE OF WARRANTS

 

4.1           Method of Exercise of Warrants

 

	
  

	
(a)

	
The right to purchase shares conferred by the Warrants may be exercised by the Holder surrendering the Warrant Certificate representing same, with a duly completed and executed Form of Subscription in the form attached hereto and a bank draft or certified cheque payable to or to the order of the Company, at par, in Carson City, Nevada, U.S.A., for the purchase price applicable at the time of surrender in respect of the shares subscribed for in lawful money of the United States of America, to the Company at the address set forth in, or from time to time specified by the Company pursuant to, Section 3.2.

 

  

  

  

- 4 -

(b)           Net Issue Exercise.

 

	
  

	
(i)

	
Section 4.1(b)(ii) shall not apply and shall have no force or effect if the shares issuable upon exercise of these Warrants have been registered for resale under the Securities Act of 1933, as amended (the “1933 Act”), on a Registration Statement on Form S-1, S-3, or another appropriate form and such Registration Statement remains effective under the 1933 Act and available for use by Holder at the time of exercise or the shares issuable upon exercise of these Warrants may otherwise be immediately resold upon exercise pursuant to available exemptions from the 1933 Act and any applicable securities laws of any state of the United States.

 

	
  

	
(ii)

	
Subject to Section 4.1(b)(i), if, at any time after the issuance of these Warrants but prior to the Expiry Date, the Fair Market Value of one share is greater than the Exercise Price, in lieu of exercising these Warrants for cash, the Holder may elect to receive shares equal to the value (as determined below) of these Warrants (or the portion thereof being exercised) by surrender of this Warrant Certificate at the principal office of the Company with a duly completed and executed Form of Subscription in the form attached hereto in which event the Company shall issue to the Holder a number of shares computed using the following formula:

 

X = (Y (A - B)) / A

 

Where X = the number of shares to be issued to Holder

 

Y = the number of shares purchasable under the Warrants or, if only a portion of the Warrants are being exercised, the portion of the Warrants being exercised (at the date of such calculation)

 

A = the Fair Market Value of one share (at the date of such calculation)

 

B = Exercise Price (at the date of such calculation)

 

For purposes of the above calculation, the “Fair Market Value” of one share shall mean (i) the volume weighted average trading price for the shares on the Eligible Market on which the shares are listed or traded as reported by Bloomberg Financial Markets (or a comparable reporting service of national reputation selected by the Company and reasonably acceptable to the Holder if Bloomberg Financial Markets is not then reporting sales prices of such security) (collectively, “Bloomberg”) for the five (5) consecutive Trading Days immediately prior to the date of exercise, or (ii) if an Eligible Market is not the principal Trading Market for the shares, the average of the reported sales prices reported by Bloomberg on the principal Trading Market for the shares during the same period, or (iii) if neither of the foregoing applies, the last sales price of such security as reported by Bloomberg, or if no sales price is so reported for such security, the last bid price of such security as reported by Bloomberg, or (iv) if fair market value cannot be calculated as of such date on any of the foregoing bases, the fair market value shall be as determined by the Board of Directors of the Company in the exercise of its good faith judgment.

 

4.2           Effect of Exercise of Warrants

 

	
  

	
(a)

	
Upon surrender and payment (in the case of exercise pursuant to Section 4.1(b)(i) as aforesaid the shares so subscribed for will be deemed to have been issued and such person or persons will be deemed to have become the Holder or Holders of record of such shares on the date of such surrender and payment, and such shares will be issued based on the Exercise Price in effect on the date of such surrender and payment.

 

  

  

  

- 5 -

 

	
  

	
(b)

	
Within three (3) Business Days after surrender and payment (in the case of exercise pursuant to Section 4.1(b)(i) as aforesaid, the Company will forthwith cause to be delivered to the person or persons in whose name or names the Shares so subscribed for are to be issued as specified in such Form of Subscription or mailed to him or them at his or their respective addresses specified in such Form of Subscription, a certificate or certificates for the appropriate number of Shares not exceeding those which the Holder is entitled to purchase pursuant to the Warrant Certificate surrendered.

 

4.3           Restrictions on Exercise of Warrants

The Warrants represented by this Warrant Certificate may only be exercised by or for the account or benefit of a holder who, at the time of exercise, represents to the Company, pursuant to subparagraph 1 of the attached Form of Subscription, that (a) the holder was the original holder of the Warrants, and (b) the holder is an accredited investor as defined in Rule 501(a) of Regulation D under the 1933 Act.

 

4.4           Subscription for Less Than Entitlement

 

The Holder of any Warrant may subscribe for and purchase a number of shares less than the number which he is entitled to purchase pursuant to the surrendered Warrant Certificate. In the event of any purchase of a number of shares less than the number which can be purchased pursuant to a Warrant Certificate, the Holder thereof upon exercise thereof will in addition be entitled to receive a new Warrant Certificate in respect of the balance of the shares which he was entitled to purchase pursuant to the surrendered Warrant Certificate and which were not then purchased.

 

4.5           Warrants for Fractions of Shares

 

To the extent that the Holder of any Warrant is entitled to receive on the exercise or partial exercise thereof a fraction of a share, such right may be exercised in respect of such fraction only in combination with another Warrant or other Warrants which in the aggregate entitle the Holder to receive a whole number of such shares.

 

4.6           Expiration of Warrants

 

After the expiration of the period within which a Warrant is exercisable, all rights thereunder will wholly cease and terminate and such Warrant will be void and of no further force or effect.

 

4.7           Exercise Price; Beneficial Ownership Limitation

 

Each whole Warrant is exercisable at a price per share (the “Exercise Price”) of CDN$0.1862 if exercised on or before 5:00 p.m. (Vancouver time) on March 20, 2015.  Subject to Section 4.1(b)(ii), one (1) Warrant and the Exercise Price are required to subscribe for each Share during the term of the Warrants.

 

4.8           Adjustment of Exercise Price

 

The Exercise Price and the number of Shares purchasable hereunder (or any shares of stock or other securities or property receivable or issuable upon exercise of this Warrant) are subject to adjustment from time to time as follows:

 

	
  

	
(a)

	
Reclassification of Shares. If the Company at any time shall, by reclassification or exchange of securities or otherwise, change all of the outstanding Shares into the same or a different number of securities of any other class or classes, this Warrant Certificate shall thereafter represent the right to acquire such number and kind of securities as would have been issuable hereunder had the Holder exercised its rights with respect to all of the Shares then represented by this Warrant Certificate immediately prior to such combination, reclassification, exchange, subdivision or other change.

 

  

  

  

- 6 -

 

	
  

	
(b)

	
Subdivision, Split, Reverse Split or Combination of Shares. If the Company at any time shall subdivide or split its Shares into a larger number of outstanding Shares, the Exercise Price shall be proportionately decreased and the number of Shares issuable upon exercise of these Warrants (or any shares of stock or other securities at the time issuable upon exercise of these Warrants) shall be proportionally increased to reflect any such subdivision or stock split. If the Company at any time shall reverse split or combine its Shares into a smaller number of outstanding Shares, the Exercise Price of these Warrants shall be proportionally increased and the number of Shares issuable upon exercise of these Warrants (or any shares of stock or other securities at the time issuable upon exercise of these Warrants) shall be proportionally decreased to reflect any such reverse stock split or combination.

 

	
  

	
(c)

	
Stock Dividends or Other Non-Cash Distributions. If the Company at any time shall make, issue, fix a record date for or pay a dividend or other distribution with respect to the Shares (or any shares of stock or other securities at the time issuable upon exercise of the Warrants) payable in (i) securities of the Company or (ii) assets (excluding cash dividends), then, in each such case, the Holder on exercise of these Warrants at any time after the consummation, effective date or record date of such dividend or other distribution, shall receive, in addition to the Shares (or such other stock or securities) issuable on such exercise prior to such date, and without the payment of additional consideration therefor, the securities or such other assets of the Company to which such Holder would have been entitled upon such date if such Holder had exercised these Warrants on the date hereof and had thereafter, during the period from the date hereof to and including the date of such exercise, retained such shares and all such additional securities or other assets distributed with respect to such shares as aforesaid during such period giving effect to all adjustments called for by this Section 4.8.

 

	
  

	
(d)

	
Capital Reorganization, Merger or Consolidation. In case of any capital reorganization of the capital stock of the Company (other than a combination, stock split, reverse stock split, reclassification or subdivision of shares otherwise provided for herein), or any merger or consolidation of the Company with or into another corporation, or the sale of all or substantially all the assets of the Company then, and in each such case, as a part of such reorganization, merger, consolidation, sale or transfer, lawful provision shall be made so that the Holder shall thereafter be entitled to receive upon exercise of these Warrants until the Expiry Date and upon payment of the Exercise Price (or use of net exercise if then permitted hereunder), the number of shares or other securities or property of the successor corporation resulting from such reorganization, merger, consolidation, sale or transfer that a holder of the Shares deliverable upon exercise of these Warrants would have been entitled to receive in such reorganization, consolidation, merger, sale or transfer if these Warrants had been exercised immediately before such reorganization, merger, consolidation, sale or transfer, all subject to further adjustment as provided in this Section 4.8. The foregoing provisions of this Section 4.8(d) shall similarly apply to successive reorganizations, consolidations, mergers, sales and transfers and to the stock or securities of any other corporation that are at the time receivable upon the exercise of these Warrants. If the per-Share consideration payable to the Holder hereof for Shares in connection with any such transaction is in a form other than cash or marketable securities, then the value of such consideration shall be determined in good faith by the Company’s Board of Directors. In addition to the adjustments set forth above, appropriate adjustments (as determined in good faith by the Company’s Board of Directors) shall be made in the application of the provisions of this Warrant Certificate with respect to the rights and interests of the Holder after the transaction, to the end that the provisions of this Warrant Certificate shall be applicable after that event, as near as reasonably may be, in relation to any shares or other property deliverable after that event upon exercise of these Warrants.

 

	
  

	
(e)

	
Certificate as to Adjustments. In each case of any adjustment in the Exercise Price, or number or type of Shares or other securities or property issuable upon exercise of these Warrants, the Chief Financial Officer or Controller of the Company shall compute such adjustment in accordance with the terms of this Warrant Certificate and prepare a certificate setting forth such adjustment and showing in detail the facts upon which such adjustment is based, including a statement of the adjusted Exercise Price and/or Shares, other securities or property issuable upon exercise, as applicable. The Company shall promptly send a copy of each such certificate to the Holder.

 

  

  

  

- 7 -

 

4.9           Determination of Adjustments

 

If any questions will at any time arise with respect to the Exercise Price or any adjustment provided for in Section 4.8, such questions will be conclusively determined by the Company’s Auditors, or, if they decline to so act any other firm of certified public accountants in the United States of America that the Company may designate and who will have access to all appropriate records and such determination will be binding upon the Company and the Holders of the Warrants.

 

4.10        Charges, Taxes and Expenses

 

Issuance of certificates for Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder (or in such name or names as may be directed by the Holder).

 

	
5.

	
REPRESENTATIONS AND WARRANTIES, OTHER AGREEMENTS OF THE COMPANY

 

5.1           Due Authorization; Consents

 

The Company hereby represents and warrants to the Holder that all corporate authorizations necessary for the execution and delivery of, and the performance of all obligations of the Company under, this Warrant have been obtained. This Warrant constitutes a valid and binding obligation of the Company enforceable in accordance with its terms, subject, as to enforcement of remedies, to applicable bankruptcy, insolvency, moratorium, reorganization and similar laws affecting creditors’ rights generally and to general equitable principles.

 

5.2           Organization

 

The Company hereby represents and warrants to Holder that the Company is a corporation duly organized and validly existing under the laws of the State of Nevada and has all requisite corporate power to own, lease and operate its property and to carry on its business as now being conducted and as currently proposed to be conducted.

 

5.3           Reservation of Shares

 

The Company has duly authorized and reserved, and shall at all times have authorized and reserved, a sufficient number of shares of its common stock to provide for the exercise of the rights to purchase the Shares as provided in this Warrant Certificate.

 

5.4           Valid Issuance

 

All Shares issued upon the exercise of these Warrants shall be validly issued, fully paid and nonassessable when issued consistent with the terms hereof, and free from all taxes, liens and charges created by the Company in respect of the issue thereof. The Company will take all such reasonable action as may be necessary to assure that such Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of any Trading Market upon which the Shares may be listed.

 

Before taking any action which would result in an adjustment in the number of Shares for which these Warrants are exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

 

  

  

  

- 8 -

 

	
6.

	
HOLDER REPRESENTATIONS AND WARRANTIES

 

Holder hereby represents and warrants as follows:

 

6.1           Securities Not Registered

 

The Holder understands that neither the Warrants nor the Shares have been registered under the 1933 Act or the securities laws of any state of the United States and are being issued in reliance on exemptions or exclusions from such registration requirements.

 

6.2           Restricted Shares/Legend

 

The Holder understands that the Company will treat the Shares issuable upon the exercise of the Warrants under this Warrant Certificate as “restricted securities” as that term is defined in Rule 144 promulgated under the 1933 Act, and the Share certificates representing the Shares shall bear a legend in the form substantially set forth on the second page of this Warrant Certificate.

 

	
7.

	
MODIFICATION OF TERMS, MERGER, SUCCESSORS

 

7.1           Modification of Terms and Conditions for Certain Purposes

 

From time to time the Company may, subject to the provisions hereof, modify the Terms and Conditions hereof, for the purpose of correction or rectification of any ambiguities, defective provisions, errors or omissions herein of a non-substantive nature.

 

7.2           Warrants Transferable

 

These Warrants are transferable on the books of the Company at its principal office by the Holder upon surrender of this Warrant Certificate properly endorsed, and subject to compliance with this Section 7.2 and applicable federal and state securities laws. The Company shall issue and deliver to the transferee a new Warrant Certificate representing the Warrants so transferred (a “New Warrant Certificate”). Upon any partial transfer, the Company will issue and deliver to the Holder a New Warrant Certificate with respect to the portion of the Warrants not so transferred.

 

Any purported transfer of all or any portion of these Warrants in violation of the provisions of this Warrant Certificate shall be null and void.

 

 

[SIGNATURE PAGE FOLLOWS]

 

  

  

  

- 9 -

 

DATED as of the date first above written in these Terms and Conditions.

 

 

 

	 	GRYPHON GOLD CORPORATION
	 	 
	 	Per:  ________________________________
	 	James O’Neil, Chief Executive Officer
	 	 

 

 

  

  

  

- 10 -

 

SERIES R SHARE PURCHASE WARRANT

 

FORM OF SUBSCRIPTION

 

	
TO:

	
Gryphon Gold Corporation

	
  

	
611 N. Nevada Street

	
  

	
Carson City, Nevada  89703

 

The undersigned Holder of the within Series R Warrants hereby subscribes for _______ shares of common stock (the “Shares”) of Gryphon Gold Corporation (the “Company) pursuant to the within Warrants at the Exercise Price on the terms specified in the said Warrants.  This subscription is (check one):

 

	
o

	
accompanied by a certified cheque or bank draft payable to or to the order of the Company for the whole amount of the purchase price of the Shares; or

 

	
o

	
being exercised pursuant to Section 4.1(b)(ii) of the Warrant Certificate.

 

In connection with this exercise, the undersigned hereby (check one):

 

	
_____

	
represents to the Company that (i) the holder was the original holder of the Warrants, and (ii) the holder is an accredited investor as defined in Rule 501(a) of Regulation D under the 1933 Act; or

 

	
_____

	
has been advised by the Company that the Shares to be delivered upon exercise of these Warrants have been registered under the United States Securities Act of 1933, as amended, (the "1933 Act").

 

The undersigned hereby directs that the Shares be registered as follows:

	
NAME(S) IN FULL

	 	
ADDRESS(ES)

	 	
NUMBER OF SHARES

	  	  	  	  	  
	__________________________________	  	__________________________________	  	__________________________________
	__________________________________	 	__________________________________	 	__________________________________
	 	 	 	 	 
	  	  	
TOTAL:

	  	__________________________________

 

(Please print full name in which share certificates are to be issued, stating whether Mr., Mrs. or Miss is applicable).

 

DATED this ________  day of __________________ , 20__.

 

In the presence of:

 

_________________________________          _____________________________

Signature of Witness                                                                           Signature of Holder

 

Please print below your name and address in full.

 

Name (Mr./Mrs./Miss)  ___________________________________________                                                                                                         

 

Address  ______________________________________________________

 

 

  

  

  

- 11 -

 

INSTRUCTIONS FOR SUBSCRIPTION

 

The signature to the subscription must correspond in every particular with the name written upon the face of the Warrant Certificate without alteration or enlargement or any change whatever.  If there is more than one subscriber, all must sign.

 

In the case of persons signing by agent or attorney or by personal representative(s), the authority of such agent, attorney or representative(s) to sign must be proven to the satisfaction of the Company.

 

If the Warrant Certificate and the form of subscription are being forwarded by mail, registered mail must be employed.

  

  

  

- 12 -

 

SERIES R SHARE PURCHASE WARRANT

TRANSFER FORM

 Dated ___________ ___, _____

FOR VALUE RECEIVED, ___________________________________ hereby sells, assigns and transfers unto_____________________________,

(please type or print in block letters)

 

(insert address)

the Warrants represented by these Series R Warrants and does hereby irrevocably constitute and appoint _______________________ Attorney, to transfer the same on the books of the Company, with full power of substitution in the premises.

The undersigned represents that, as a condition to any transfer of these Warrants, such transfer is exempt from the registration requirements of the 1933 Act.

	
SPACE FOR GUARANTEES OF SIGNATURES (BELOW)

	
)

)

)

)

	
 

__________________________________

Signature of Transferor

 

	
_________________________________

Guarantor’s Signature/Stamp

	
)

)

)

	
__________________________________

Name of Transferor

THE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”) OR THE APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES.  THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND, IN EACH CASE, IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.

  

  

  

- 13 -

 

CERTAIN REQUIREMENTS RELATING TO TRANSFERS – READ CAREFULLY

 

 

The signature(s) of the transferor(s) must correspond with the name(s) as written upon the face of this certificate(s), in every particular, without alteration or enlargement, or any change whatsoever.  The signature(s) on this form must be guaranteed in accordance with the transfer agent’s then current guidelines and requirements at the time of transfer.  Notarized or witnessed signatures are not acceptable as guaranteed signatures.  As at the time of closing, you may choose one of the following methods (although subject to change in accordance with industry practice and standards):

 

	
  

	
●

	
Canada and the USA: A Medallion Signature Guarantee obtained from a member of an acceptable Medallion Signature Guarantee Program (STAMP, SEMP, NYSE MSP).  Many commercial banks, savings banks, credit unions, and all broker dealers participate in a Medallion Signature Guarantee Program.  The Guarantor must affix a stamp bearing the actual words “Medallion Guaranteed”, with the correct prefix covering the face value of the certificate.

 

	
  

	
●

	
Canada:  A Signature Guarantee obtained from the Guarantor must affix a stamp bearing the actual words “Signature Guaranteed”.  Signature Guarantees are not accepted from Treasury Branches, Credit Unions or Caisse Populaires unless they are members of a Medallion Signature Guarantee Program. For corporate holders, corporate signing resolutions, including certificate of incumbency, are also required to accompany the transfer, unless there is a “Signature & Authority to Sign Guarantee” Stamp affixed to the transfer (as opposed to a “Signature Guarantee” Stamp) obtained from an authorized officer of a major Canadian Schedule 1 chartered bank.

 

	
  

	
●

	
Outside North America:  For holders located outside North America, present the certificates(s) and/or document(s) that require a guarantee to a local financial institution that has a corresponding Canadian or American affiliate which is a member of an acceptable Medallion Signature Guarantee Program.  The corresponding affiliate will arrange for the signature to be over-guaranteed.

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