Document:

ex10-11

 

Exhibit 10.11

SECURITY AGREEMENT

     THIS SECURITY AGREEMENT is made as of May 8, 2002 by and between Roger
Jeffs and Lisa Jeffs (collectively referred to as the “Borrowers”), jointly and
severally, and UNITED THERAPEUTICS CORPORATION, a Delaware corporation
(“Secured Party”).

RECITALS

     A.     Secured Party and Borrowers have entered into a Promissory Note of even
date herewith (the “Promissory Note”), pursuant to, and subject to the terms
and conditions of which, Secured Party will make a loan to Borrowers in an
amount equal to US$1,300,000; and

     B.     Borrowers have executed this Agreement to induce Secured Party to enter
into the Promissory Note.

     NOW, THEREFORE, for valuable consideration received, the receipt and
sufficiency of which are hereby acknowledged, Borrowers and Secured Party
hereby agree as follows:

     1.     DEFINITIONS.

             1.1 Definitions.

             “Collateral” means all of Borrowers’ right, title and interest in and to
shares of United Therapeutics Corporation common stock now or in the future
acquired by the Borrowers, whether individually or jointly.

             “Secured Obligations” means all of the indebtedness and obligations of
Borrowers to the Secured Party under the Promissory Note, including without
limitation the obligation of Borrowers to pay principal and interest in
accordance with the occurrence of certain Repayment Triggers.

             1.2 Attachment. The Secured Party and the Borrowers have not agreed to
postpone the time for attachment of the security interest granted hereby.

     2.     SECURITY INTEREST.

             2.1 Grant of Security Interest. In order to secure the full and punctual
payment and performance of the Secured Obligations, Borrowers hereby grant to
Secured Party a security interest in the Collateral.

             2.2 No Obligations Undertaken. Nothing contained in this Agreement shall
relieve Borrowers of, or impose on Secured Party, any obligation or liability
for, under or in respect of the Collateral.

 

 

     3.     REPRESENTATIONS AND WARRANTIES OF BORROWERS.

             Borrowers hereby represent and warrant to Secured Party that the
Collateral is owned by the Borrowers free of all security interests, mortgages,
liens, claims, charges and other encumbrances.

     4.     COVENANTS OF BORROWERS.

             Borrowers hereby covenant and agree to and with Secured Party as follows:

             4.1 Notice of Litigation. Borrowers shall give or cause to be given
prompt written notice to the Secured Party of any action, suit or proceeding
instituted against Borrowers or claim asserted relating to any of the
Collateral which could have a material adverse effect upon the business,
assets, value or condition (financial or otherwise) of Borrowers.

             4.2 Disposition of Collateral. Except as contemplated in the license
agreement to be entered into between the parties, the Borrowers shall not
dispose of any Collateral without the prior written consent of Secured Party
and shall not, without the prior written consent of the Secured Party, create
or permit to exist any security interest, mortgage, lien, claim, charge and
other encumbrance against any of the Collateral. Notwithstanding the
foregoing, Borrowers may annually gift up to 5% of the Collateral as bona fide
gifts only. Other transfers may be made with the prior written permission of
the Secured Party.

             4.3 Maintenance of Security Interests. Borrowers hereby authorize Secured
Party to file financing statements and continuation statements with respect to
the Collateral to the fullest extent permitted by law. In addition, Borrowers
shall from time to time execute and deliver to Secured Party such financing
statements, continuation statements or other filings or documents as Secured
Party may reasonably require to further assure to Secured Party its rights
under this Agreement.

             4.4 Expenses. Borrowers shall forthwith pay all costs, charges, expenses
and legal fees and disbursements that may be incurred by the Secured Party in:

			
	(a)	 	taking, recovering, keeping possession of and insuring the
Collateral; and
	 
	(b)	 	all other actions and proceedings taken in connection with
the preservation of the Collateral and the confirmation, perfection
and enforcement of this Security Agreement and of any other security
held by the Secured Party as security for the Obligations.

 

 

     5.     REMEDIES.

             5.1 Remedies. In the event that Borrowers fail to repay the Principal
Amount and accrued interest upon the occurrence of a Repayment Trigger in
accordance with the Promissory Note):

			
	(a)	 	Secured Party shall have, in addition to any other rights or
remedies Secured Party may have at law or in equity or otherwise,
the right to accelerate all indebtedness outstanding under the
Promissory Note and to declare such indebtedness to be immediately
due and payable, with or without notice to Borrowers; and
	(b)	 	the security hereby constituted will immediately become enforceable.

             5.2 Enforcement. To enforce and realize on the security constituted by
this Security Agreement, the Secured Party may take any action permitted by law
or in equity, as it may deem expedient, and in particular, without limiting the
generality of the foregoing, the Secured Party may do any one or more of the
following:

			
	(a)	 	appoint by instrument a receiver, receiver and manager or
receiver-manager (the person so appointed is herein called the
“Receiver”) of the Collateral, with or without bond as the Secured
Party may determine, and from time to time in its sole discretion
remove such Receiver and appoint another in its stead;
	 
	(b)	 	preserve, protect and maintain the Collateral as the Secured
Party may deem advisable; and
	 
	(c)	 	sell, lease or otherwise dispose of or concur in selling,
leasing or otherwise disposing of all or any part of the Collateral,
whether by public or private sale or lease or otherwise, in such
manner, at such price as can be reasonably obtained therefor and on
such terms as to credit and with such conditions of sale and
stipulations as to title or conveyance or evidence of title or
otherwise as to the Secured Party may seem reasonable, provided that
the Borrowers will not be entitled to be credited with the proceeds
of any such sale, lease or other disposition until the monies
therefor are actually received.

             5.3 Proceeds. Subject to applicable law, all amounts realized from the
disposition of the Collateral pursuant to this Security Agreement will be
applied as the Secured Party, in its sole discretion, may direct as follows:

	 	 	 
	   Firstly:	 	
in or toward payment of all costs, charges and expenses (including legal fees and disbursements on a solicitor and

 

 

	 	 	 
	 	 	 his own client basis) incurred by the Secured Party in connection with or incidental to:

			
	1.	 	the exercise by the Secured Party of all or any
of the powers granted to it pursuant to this Security
Agreement; and
	 
	2.	 	the appointment of the Receiver and the
exercise by the Receiver of all or any of the powers granted
to the Receiver pursuant to this Security Agreement,
including the Receiver’s reasonable remuneration and all
outgoings properly payable by the Receiver;

	 	 	 
	Secondly:	 	
in or toward payment to the Secured Party of all principal and
other monies (except interest) due in respect of the Secured
Obligations;
	 
	Thirdly:	 	
in or toward payment to the Secured Party of all interest
remaining unpaid in respect of the Secured Obligations; and
	 
	Fourthly:	 	
any surplus will be paid to the Borrowers.

             5.4 Waivers. Secured Party may exercise any of its rights and remedies
without demand, advertisement or notice other than as may be required by law.
To the fullest extent permitted by law, Borrowers waives demand, notice,
protest, notice of acceptance of this Agreement or other action taken in
reliance hereon and all other demands and notices of any description.

             5.5 Deficiency. If the amounts realized from the disposition of the
Collateral are not sufficient to pay the Secured Obligations in full to the
Secured Party, the Borrowers will immediately pay to the Secured Party the
amount of such deficiency.

             5.6 Rights Cumulative. All rights and remedies of the Secured Party set
out in this Security Agreement are cumulative and no right or remedy contained
herein is intended to be exclusive but each will be in addition to every other
right or remedy contained herein or in any existing or future security
agreement or now or hereafter existing at law or in equity or pursuant to any
other agreement between the Borrowers and the Secured Party that may be in
effect from time to time.

     6.     LIABILITY OF SECURED PARTY.

             6.1 Waiver. The Borrowers hereby waive any applicable provision of law
permitted to be waived by them that imposes higher or greater obligations upon
the Secured Party than provided in this Security Agreement.

 

 

     7.     MISCELLANEOUS.

             7.1 Performance of Obligations. If the Borrowers fail to perform any of
its Obligations hereunder, the Secured Party may, but shall not be obliged to,
perform any or all of such Obligations without prejudice to any other rights
and remedies of the Secured Party hereunder, and any payments made and any
costs, charges, expenses and legal fees and disbursements (on a solicitor and
his own client basis) incurred in connection therewith shall be payable by the
Borrowers to the Secured Party forthwith with interest until paid at the
highest rate borne by any of the Secured Obligations and such amounts shall
form part of the Secured Obligations and constitute a charge upon the
Collateral in favor of the Secured Party prior to all claims subsequent to this
Security Agreement.

             7.2 Notices. Any notice, request, demand, statement, authorization,
approval or consent required or permitted under this Agreement shall be in
writing and shall be made by, and deemed duly given upon, (a) deposit in the
United States mail, postage prepaid, registered or certified, return receipt
requested, such mailing to be effective upon receipt, (b) personal delivery,
(c) 24 hours after delivery to a courier of recognized reputation (such as
FedEx) or (d) transmission by facsimile with a copy sent separately by mail, as
follows or to such other address and/or such additional parties as either party
may specify by notice given in accordance with this Section 7.2:

	 	 	 
	Borrowers:	 	
Roger and Lisa Jeffs

3410 Forest Oaks Drive

Chapel Hill, NC 27514

Telephone:      (781) 693-1504

Telecopier:       (781) 466-8740
	 
	Secured Party:	 	
United Therapeutics Corporation

1735 Connecticut Avenue, N.W.

Washington, D.C. 20009
	 
	 	 	
Attention:Paul A. Mahon, General Counsel

Telephone:      (202) 483-7000

Telecopier:       (202) 483-4006

           7.3 Waiver, Amendment or Modification. No waiver, amendment or
modification of any provision hereof or of any right or remedy hereunder shall
be effective unless in writing and signed by the party against whom such
waiver, amendment or modification is sought to be enforced. No failure by
Secured Party to exercise, and no delay by Secured Party in exercising, any
right, power or remedy granted hereunder shall operate as a waiver of any such
right, power or remedy. A waiver of any right or remedy by Secured Party on
any one occasion

 

 

shall not be construed as a bar to or waiver of any right or remedy on any
future occasion.

           7.4 Assignment. Borrowers may not assign any of its rights or delegate
any of its duties under this Agreement without the prior written consent of
Secured Party.

           7.5 Governing Law. This Agreement is governed by and shall be construed
in accordance with the laws of the State of North Carolina.

           7.6 Severability. If any term, covenant or provision of this Agreement
shall be held to be invalid, illegal or unenforceable in any respect, this
Agreement shall be construed without such term, covenant or provision.

           7.7 Construction of Agreement. The titles and headings of the sections of
this Agreement have been inserted for convenience of reference only and are not
intended to summarize or otherwise describe the subject matter of such
paragraphs and shall not be given any consideration in the construction of this
Agreement.

           7.8 Further Assurances. At the Secured Party’s reasonable request at any
time and from time to time, the Borrowers shall execute and deliver such
further and other documents and instruments to further mortgage, charge and
grant an assignment to the Secured Party in and to the Collateral, whether in
any other jurisdiction or otherwise, and do all other acts and things as the
Secured Party reasonably requires in order to give effect to this Security
Agreement or such other mortgage, charge or assignment against the Collateral
or to confirm and perfect, and maintain perfection of, the security constituted
by this Security Agreement or such other mortgage, charge or assignment in
favor of the Secured Party.

           7.10 Financing Statement. The Borrowers hereby:

			
	(a)	 	acknowledge receiving a copy of this Security Agreement; and
	 
	(b)	 	waive all rights to receive from the Secured Party a copy of
any financing statement, financing change statement or verification
statement filed at any time or from time to time respect of this
Security Agreement.

           7.11 Additional Security. This Security Agreement and the security
constituted hereby are in addition to and not in substitution for any other
security that the Secured Party may now or from time to time hold or take from
the Borrowers or from any other person whomsoever.

 

 

     IN WITNESS WHEREOF, Borrowers has caused this Note to executed on the date
first above written.

	 	 	 
	ROGER JEFFS	 	
Witness:
	 
	/s/ Roger Jeffs

	 	
/s/ Fred Hadeed                        
                                
        
	 
	 	 	
Printed:Fred Hadeed                         
                                

	 
	LISA JEFFS	 	
Witness:
	 
	/s/ Lisa Jeffs

	 	
/s/ John Ferrari                        
                 
         

	 
	 	 	
Printed:John Ferrari<PAGE>
                                                                     EXHIBIT 4.2

                             EXAMPLE FORM OF WARRANT
                                (DO NOT EXECUTE)

SERIAL NO. W-___

         THIS WARRANT, AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF THIS
         WARRANT, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
         AMENDED (THE "ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND NEITHER
         THIS WARRANT, SUCH SECURITIES NOR ANY INTEREST THEREIN MAY BE SOLD,
         TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN
         EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE
         SECURITIES LAWS OR PURSUANT TO A WRITTEN OPINION OF COUNSEL
         SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

                          CANYON RESOURCES CORPORATION
                             a Delaware corporation

                             STOCK PURCHASE WARRANT

___________ shares                                                March 29, 2002

         THIS CERTIFIES THAT, for value received, _____________ ("Holder") is
entitled to subscribe for and purchase up to _____________ validly issued, fully
paid and nonassessable shares ("Warrant Shares") of Common Stock of Canyon
Resources Corporation, a Delaware corporation (the "Company"), at the exercise
price to be determined in accordance with Section 2 below (the "Exercise
Price"), subject to the terms, conditions and adjustments hereinafter set forth.

     1. Definitions. As used in this Warrant, in addition to other capitalized
terms defined elsewhere herein, the following terms have the meanings indicated:

                  "Act" means the Securities Act of 1933, as amended, and the
              Rules and Regulations promulgated thereunder.

                  "Business Day" means any day other than a Saturday, Sunday or
              a day on which national banks are authorized by law to close in
              the State of Colorado.

                  "Common Stock" means the authorized voting common stock of the
              Company.

                  "Exercise Date" has the meaning specified in Section 3(c)
              below.

                  "Exercise Form" means an Exercise Form in the form annexed
              hereto as Exhibit A.

                  "Exercise Period" has the meaning specified in Section 2(a)
              below.

                  "Expiration Date" means March 29, 2003.

                  "Issue Date" means the date this Warrant was issued to Holder,
              which is set forth on the first page of this Warrant.
<PAGE>
                  "Organic Change" has the meaning specified in Section 5(b)
              below.

     2.       Exercise of Warrant.

              a. Term of Warrant. Subject to the terms and conditions set forth
     below, this Warrant may be exercised, in whole or in part, by Holder at any
     time, or from time to time, during the term commencing on the Issue Date
     and ending at 5:00 p.m., Denver, Colorado time on the Expiration Date (the
     "Exercise Period"). This Warrant shall expire on the Expiration Date if and
     to the extent not exercised by Holder during the Exercise Period.

              b. Exercise Price. Subject to potential adjustment from time to
     time pursuant to Section 5 hereof, this Warrant shall be exercisable at an
     Exercise Price of $1.67 per share of Common Stock.

     3.       Method of Exercise; Payment; Stock Certificates.

              a. Method of Exercise; Payment of Exercise Price. The purchase
     rights represented by this Warrant may be exercised by Holder, in whole or
     in part, at any time, or from time to time, during the Exercise Period by
     the surrender of this Warrant (with a duly executed Exercise Form
     specifying the number of Warrant Shares to be purchased) at the principal
     office of the Company, and by the payment to the Company in cash, by
     certified, cashier's or other check acceptable to the Company, of an amount
     equal to the aggregate Exercise Price for those Warrant Shares specified in
     the Exercise Form.

              b. Stock Certificates. In the event of the exercise of the rights
     represented by this Warrant as provided above, the Company shall promptly
     issue and deliver to Holder a certificate representing the shares of Common
     Stock so purchased by Holder.

              c. When Exercise Effective. The exercise of this Warrant shall be
     deemed effective on the Business Day on which this Warrant is surrendered
     to the Company as provided in this Section 3 (the "Exercise Date"). If this
     Warrant is exercised in part, the Company at its expense will execute and
     deliver to Holder a new Warrant of like tenor exercisable for the number of
     Warrant Shares for which this Warrant may still thereafter be exercised.

     4. Stock Fully Paid; Reservation of Shares. All shares of Common Stock
issuable upon the exercise of the rights represented by this Warrant will, upon
issuance, be duly authorized, validly issued, fully paid and nonassessable, and
free of all taxes, liens and charges with respect to the issue thereof. During
the Exercise Period, the Company shall at all times have authorized and reserved
(or promptly hereafter shall take such actions as may be necessary or
appropriate to increase its authorized capital so as to be able to authorize and
reserve) a sufficient number of shares of its Common Stock to provide for the
exercise of the rights represented by this Warrant.

     5. Certain Adjustments.

              a. Capital Adjustments. The number of Warrant Shares purchasable
     upon the exercise of this Warrant and the Exercise Price then in effect
     pursuant to Section 2(b) shall be subject to adjustment as follows:

                                                                               2
<PAGE>
                  (i) Stock Splits, Etc. If at any time after the Issue Date the
                  number of shares of Common Stock outstanding shall be
                  increased by a subdivision or split-up of shares of Common
                  Stock, or by a stock dividend or recapitalization, then
                  immediately after the effective date of such increase, as the
                  case may be, the number of Warrant Shares to be delivered upon
                  exercise of this Warrant will be increased so that Holder will
                  be entitled to receive the number of shares of Common Stock
                  that such Holder would have owned immediately following such
                  action had this Warrant been exercised immediately prior
                  thereto, and the Exercise Price will be adjusted as provided
                  below in paragraph (iii).

                  (ii) Combination of Stock. If at any time after the Issue Date
                  the number of shares of Common Stock outstanding shall be
                  decreased by a combination of shares of Common Stock, then,
                  immediately after the effective date of such combination, the
                  number of Warrant Shares to be delivered upon exercise of this
                  Warrant will be decreased so that Holder thereafter will be
                  entitled to receive the number of shares of Common Stock that
                  such Holder would have owned immediately following such action
                  had this Warrant been exercised immediately prior thereto, and
                  the Exercise Price will be adjusted as provided below in
                  paragraph (iii).

                  (iii) Exercise Price Adjustment. Whenever the number of
                  Warrant Shares purchasable upon the exercise of this Warrant
                  is adjusted as provided pursuant to this Section 5(a), the
                  Exercise Price payable upon the exercise of this Warrant shall
                  be adjusted by multiplying such Exercise Price immediately
                  prior to such adjustment by a fraction, of which the numerator
                  shall be the number of Warrant Shares purchasable upon the
                  exercise of the Warrant immediately prior to such adjustment,
                  and of which the denominator shall be the number of Warrant
                  Shares purchasable immediately thereafter.

              b. Reorganization, Reclassification, Consolidation, Merger or
     Sale. Any reorganization, recapitalization, reclassification,
     consolidation, merger, sale of all or substantially all of the Company's
     assets or other transaction, in each case which is effected in such a
     manner that the holders of Common Stock are entitled to receive (either
     directly or upon subsequent liquidation) cash, securities and/or other
     property with respect to or in exchange for Common Stock, is referred to
     herein as an "Organic Change". Prior to the consummation of any Organic
     Change, the Company shall make appropriate provision to ensure that Holder
     shall thereafter have the right to acquire and receive, in lieu of or in
     addition to (as the case may be) the shares of Common Stock immediately
     theretofore acquirable and receivable upon exercise of the rights
     represented by this Warrant, such cash, securities and/or other property as
     such Holder would have received in connection with such Organic Change if
     such Holder had exercised this Warrant immediately prior to such Organic
     Change. The Company shall not effect any Organic Change, unless prior to
     the consummation thereof, the successor entity (if other than the Company)
     resulting from the Organic Change assumes, by written instrument, the
     obligation to deliver to Holder such cash, securities and/or other property
     as, in accordance with the foregoing provisions, Holder may be entitled to
     acquire.

                                                                               3
<PAGE>
              c. Similar Actions. In the case the Company, at any time or from
     time to time, shall take any action affecting its Common Stock similar to
     or having an effect similar to any of the actions described in Section 5(a)
     or (b) (but not including any action described in any such subsections) and
     the Board of Directors in good faith determines that it would be equitable
     in the circumstances to adjust the number of Warrant Shares and/or the
     Exercise Price as a result of such action, then, and in each such case, the
     number of Warrant Shares and/or the Exercise Price shall be adjusted in
     such manner and at such time as the Board of Directors of the Company in
     good faith determines would be equitable in the circumstances (such
     determination to be evidenced in a resolution, a certified copy of which
     shall be mailed to the Holder).

     6. Notices of Adjustment. Whenever the Exercise Price and/or the number of
Warrant Shares purchasable hereunder shall be adjusted pursuant to Section 5
hereof, the Company shall give written notice to Holder, setting forth in
reasonable detail the calculation of such adjustment. The Corporation shall also
give written notice to Holder at least 20 days prior to the date on which any
Organic Change shall take place.

     7. Replacement of Warrant. On receipt by the Company of an affidavit of an
authorized representative of Holder stating the circumstances of the loss,
theft, destruction or mutilation of this Warrant (and in the case of any such
mutilation, on surrender and cancellation of this Warrant), the Company, at its
expense, shall promptly execute and deliver, in lieu thereof, a new Warrant of
like tenor.

     8. Restrictive Legends.

              a. Each Warrant issued in substitution for this Warrant shall be
     stamped or otherwise imprinted with a legend in substantially the following
     form:

                  THIS WARRANT, AND ANY SECURITIES ACQUIRED UPON THE EXERCISE OF
                  THIS WARRANT, HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
                  ACT OF 1933, AS AMENDED (THE ACT"), OR THE SECURITIES LAWS OF
                  ANY STATE, AND NEITHER THIS WARRANT, SUCH SECURITIES NOR ANY
                  INTEREST THEREIN MAY BE SOLD, TRANSFERRED, PLEDGED OR
                  OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
                  REGISTRATION STATEMENT UNDER THE ACT AND APPLICABLE STATE
                  SECURITIES LAWS OR PURSUANT TO A WRITTEN OPINION OF COUNSEL
                  SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT
                  REQUIRED.

              b. Each certificate for Warrant Shares issued upon the exercise of
     this Warrant shall be stamped or otherwise imprinted with legends in
     substantially the following form:

                  THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN
                  REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
                  "ACT"), OR THE SECURITIES LAWS OF ANY STATE. THE SECURITIES
                  MAY NOT BE SOLD, TRANSFERRED, PLEDGED OR OTHERWISE DISPOSED OF
                  EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER
                  THE ACT

                                                                               4
<PAGE>
                  AND APPLICABLE STATE SECURITIES LAWS OR PURSUANT TO A WRITTEN
                  OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH
                  REGISTRATION IS NOT REQUIRED.

     9. No Rights as Stockholder. This Warrant shall not entitle its Holder to
any of the rights of a stockholder of the Company.

     10. Notices. All notices and communications under this Warrant shall be in
writing and shall be either delivered in person accompanied by a signed receipt
therefor or mailed first-class United States certified mail, return receipt
requested, postage prepaid, and addressed as follows:

                  (i)    if to the Company, to:

                         Canyon Resources Corporation
                         14142 Denver West Parkway, Suite 250
                         Golden, Colorado 80401

                  (ii)   if to Holder, to the address of Holder as it appears in
                         the books of the Company.

Any notice or communication shall be deemed given when received.

     11. Governing Law. This Warrant shall be governed by and construed and
enforced in accordance with the laws of the State of Colorado.

                                         CANYON RESOURCES CORPORATION

                                         By:
                                            ------------------------------------
                                            Richard H. De Voto, President

                                                                               5
<PAGE>
                                  - Exhibit A -

                                  EXERCISE FORM

                  (To be executed upon exercise of the Warrant)

         Reference is made to the attached Stock Purchase Warrant. The
undersigned hereby irrevocably elects to exercise the right, represented by the
attached Warrant, to purchase __________ Warrant Shares and herewith tenders
payment for such Warrant Shares to the order of Canyon Resources Corporation in
the amount of $__________ in accordance with the terms of the Warrant. The
undersigned requests that a certificate for such Warrant Shares be registered in
the name of the undersigned and that such certificate be delivered to the
undersigned's address below.

         If such number of Warrant Shares purchased shall not be all of the
Warrant Shares evidenced by the Warrant, the undersigned requests that a new
Warrant of like tenor for the balance remaining of such Warrant Shares be
registered in the name of the undersigned and that such Warrant be delivered to
the undersigned's address below.

         Dated:  ___________________

                                         _____________________________________
                                         Signature

                                         _____________________________________
                                         (Print Name and Title, if applicable)

                                         _____________________________________
                                         (Street Address)

                                         _____________________________________
                                         (City)  (State)  (Zip Code)

Signed in the presence of:

_____________________________________

                                                                               6

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