Document:

Exhibit
4.1

 

VISTA GOLD CORP.

 

- and -

 

COMPUTERSHARE TRUST
COMPANY OF CANADA

 

 

 

WARRANT INDENTURE

 

Providing for the Issue of up to

1,966,456 Warrants

 

 

 

September
29, 2004

 

1

 

TABLE OF
CONTENTS

 

	
  ARTICLE
  ONE INTERPRETATION

  	
   

  
	
   

  	
  1.1

  	
  Definitions

  	
   

  
	
   

  	
  1.2

  	
  Words Importing the Singular and Gender

  	
   

  
	
   

  	
  1.3

  	
  Interpretation Not Affected by Headings

  	
   

  
	
   

  	
  1.4

  	
  Day Not a Business Day

  	
   

  
	
   

  	
  1.5

  	
  Time of the Essence

  	
   

  
	
   

  	
  1.6

  	
  Currency

  	
   

  
	
   

  	
  1.7

  	
  Applicable Law

  	
   

  
	
   

  	
  1.8

  	
  English Language

  	
   

  
	
   

  	
  1.9

  	
  Meaning of “outstanding” for Certain
  Purposes

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  TWO ISSUE OF WARRANTS

  	
   

  
	
   

  	
  2.1

  	
  Creation and Issue of Warrants

  	
   

  
	
   

  	
  2.2

  	
  Terms of Warrants

  	
   

  
	
   

  	
  2.3

  	
  Warrant Certificates

  	
   

  
	
   

  	
  2.4

  	
  Issue in Substitution for Lost Warrants

  	
   

  
	
   

  	
  2.5

  	
  Warrantholder not a Shareholder

  	
   

  
	
   

  	
  2.6

  	
  Warrants to Rank Pari Passu

  	
   

  
	
   

  	
  2.7

  	
  Signing of Warrant Certificates

  	
   

  
	
   

  	
  2.8

  	
  Certification by the Trustee or Co-transfer
  Agent

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  THREE EXCHANGE AND OWNERSHIP OF WARRANTS

  	
   

  
	
   

  	
  3.1

  	
  Exchange of Warrants

  	
   

  
	
   

  	
  3.2

  	
  Charges for Exchange or Transfer

  	
   

  
	
   

  	
  3.3

  	
  Ownership of Warrants

  	
   

  
	
   

  	
  3.4

  	
  Registration and Transfer of Warrants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  FOUR EXERCISE OF WARRANTS

  	
   

  
	
   

  	
  4.1

  	
  Notice of Acceleration Event

  	
   

  
	
   

  	
  4.2

  	
  Method of Exercise of Warrants

  	
   

  
	
   

  	
  4.3

  	
  Effect of Exercise of Warrants

  	
   

  
	
   

  	
  4.4

  	
  Partial Exercise of Warrants

  	
   

  
	
   

  	
  4.5

  	
  No Fractional Shares or Warrants

  	
   

  
	
   

  	
  4.6

  	
  Accounting and Recording

  	
   

  
	
   

  	
  4.7

  	
  Cancellation of Surrendered Warrants

  	
   

  
	
   

  	
  4.8

  	
  Expiration of Warrants

  	
   

  
	
   

  	
  4.9

  	
  Share Certificates

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  FIVE ADJUSTMENT OF EXERCISE NUMBER

  	
   

  
	
   

  	
  5.1

  	
  Definitions

  	
   

  
	
   

  	
  5.2

  	
  Adjustment of Exercise Number

  	
   

  
	
   

  	
  5.3

  	
  Subscription Rights Adjustment Rules

  	
   

  
	
   

  	
  5.4

  	
  Postponement of Subscription

  	
   

  
	
   

  	
  5.5

  	
  Notice of Certain Events

  	
   

  
	
   

  	
  5.6

  	
  Protection of Trustee

  	
   

  
	
   

  	
  5.7

  	
  Proceedings Prior to Any Action Requiring
  Adjustment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  SIX RIGHTS AND COVENANTS

  	
   

  
	
   

  	
  6.1

  	
  Purchase of Warrants

  	
   

  
	
   

  	
  6.2

  	
  General Covenants of the Corporation

  	
   

  
	
   

  	
  6.3

  	
  Trustee’s Remuneration and Expenses

  	
   

  
	
   

  	
  6.4

  	
  No Dividends or Distributions

  	
   

  
	
   

  	
  6.5

  	
  Performance of Covenants by Trustee

  	
   

  

 

i

 

	
  ARTICLE
  SEVEN ENFORCEMENT

  	
   

  
	
   

  	
  7.1

  	
  Suits by Warrantholders

  	
   

  
	
   

  	
  7.2

  	
  Immunity of Shareholders

  	
   

  
	
   

  	
  7.3

  	
  Limitation of Liability

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  EIGHT MEETINGS OF WARRANTHOLDERS

  	
   

  
	
   

  	
  8.1

  	
  Right to Convene Meetings

  	
   

  
	
   

  	
  8.2

  	
  Notice

  	
   

  
	
   

  	
  8.3

  	
  Chairman

  	
   

  
	
   

  	
  8.4

  	
  Quorum

  	
   

  
	
   

  	
  8.5

  	
  Power to Adjourn

  	
   

  
	
   

  	
  8.6

  	
  Show of Hands

  	
   

  
	
   

  	
  8.7

  	
  Poll

  	
   

  
	
   

  	
  8.8

  	
  Voting

  	
   

  
	
   

  	
  8.9

  	
  Regulations

  	
   

  
	
   

  	
  8.10

  	
  Corporation and Trustee may be Represented

  	
   

  
	
   

  	
  8.11

  	
  Powers Exercisable by Extraordinary Resolution

  	
   

  
	
   

  	
  8.12

  	
  Meaning of “Extraordinary Resolution”

  	
   

  
	
   

  	
  8.13

  	
  Powers Cumulative

  	
   

  
	
   

  	
  8.14

  	
  Minutes

  	
   

  
	
   

  	
  8.15

  	
  Instruments in Writing

  	
   

  
	
   

  	
  8.16

  	
  Binding Effect of Resolutions

  	
   

  
	
   

  	
  8.17

  	
  Holdings by Corporation Disregarded

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  NINE SUPPLEMENTAL INDENTURES AND SUCCESSOR COMPANIES

  	
   

  
	
   

  	
  9.1

  	
  Provision for Supplemental Indentures for
  Certain Purposes

  	
   

  
	
   

  	
  9.2

  	
  Correction of Manifest Errors

  	
   

  
	
   

  	
  9.3

  	
  Amending Adjustment Provisions

  	
   

  
	
   

  	
  9.4

  	
  Successor Companies

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  TEN CONCERNING THE TRUSTEE

  	
   

  
	
   

  	
  10.1

  	
  Trust Indenture Legislation

  	
   

  
	
   

  	
  10.2

  	
  Rights and Duties of Trustee

  	
   

  
	
   

  	
  10.3

  	
  Evidence, Experts and Advisers

  	
   

  
	
   

  	
  10.4

  	
  Securities, Documents and Monies Held by
  Trustee

  	
   

  
	
   

  	
  10.5

  	
  Action by Trustee to Protect Interests

  	
   

  
	
   

  	
  10.6

  	
  Trustee not Required to Give Security

  	
   

  
	
   

  	
  10.7

  	
  Protection of Trustee

  	
   

  
	
   

  	
  10.8

  	
  Indemnification

  	
   

  
	
   

  	
  10.9

  	
  Replacement of Trustee

  	
   

  
	
   

  	
  10.10

  	
  Conflict of Interest

  	
   

  
	
   

  	
  10.11

  	
  Acceptance of Trust

  	
   

  
	
   

  	
  10.12

  	
  Trustee not to be Appointed Receiver

  	
   

  
	
   

  	
  10.13

  	
  Third Party Interests

  	
   

  
	
   

  	
  10.14

  	
  Compliance with Money Laundering
  Legislation

  	
   

  
	
   

  	
  10.15

  	
  Compliance with Privacy Laws

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE
  ELEVEN GENERAL

  	
   

  
	
   

  	
  11.1

  	
  Notice to Corporation and Trustee

  	
   

  
	
   

  	
  11.2

  	
  Notice to Warrantholders

  	
   

  
	
   

  	
  11.3

  	
  Satisfaction and Discharge of Indenture

  	
   

  
	
   

  	
  11.4

  	
  Sole Benefit of Parties and Warrantholders

  	
   

  
	
   

  	
  11.5

  	
  Discretion of Directors

  	
   

  
	
   

  	
  11.6

  	
  Counterparts and Formal Date

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULE
  “A”

  	
   

  

 

ii

 

THIS WARRANT INDENTURE dated as
of September 29, 2004,

 

BETWEEN:

 

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

 

(the “Corporation”)

 

AND:

 

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

 

(the “Trustee”)

 

WITNESSES THAT WHEREAS:

 

A.               the Corporation proposes to create and issue up
to 1,966,456 Warrants exercisable by the holders thereof on the terms
hereinafter set forth for the acquisition of common shares in the capital of
the Corporation;

 

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

 

C.                all things necessary have been done and
performed to make the Warrants, when certified by the Trustee and issued and
delivered as provided in this Indenture, legal, valid and binding upon the
Corporation with the benefits of and subject to the terms of this Indenture;
and

 

D.               the Trustee has agreed to enter into this
Indenture and to hold all rights, interests and benefits contained herein for
and on behalf of those persons who become holders of Warrants from time to time
issued pursuant to this Indenture;

 

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

 

ARTICLE ONE

 

INTERPRETATION

 

1.1              Definitions

 

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

 

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

 

1

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(k)           “Current Market Price”
of the Shares at any date means the weighted average trading price of the
Shares on any stock exchange in Canada or the United States on which the Shares
are listed and posted for trading as may be selected for that purpose by the
board, during the ten most recent trading days ending on a date not earlier
than the fifth trading day before that date or, if the Shares are not listed
and posted for trading on any stock exchange, the Current Market Price as
determined by the board of directors in accordance with generally accepted
accounting principles;

 

(l)            “director”
means a director of the Corporation for the time being, and reference without
more to action by the directors means action by the directors of the
Corporation as a board or, whenever duly empowered, action by an executive
committee of the board, in each case by resolution duly passed;

 

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

 

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

 

2

 

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

 

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

 

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

 

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

 

(s)           “Expiry Date” means the earlier of
September 29, 2006, and the 15th business day following the date on
which the Corporation provides the Acceleration Notice;

 

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

 

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

 

(v)           “Province” means the province of British
Columbia;

 

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

 

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

 

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

 

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

 

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

 

(bb)         “Securities Laws” means,
collectively, the applicable securities laws of each of Canada, the United
States, the Province and the respective regulations made and forms prescribed
thereunder together with all applicable published rules, policy statements,
notices, blanket orders and rulings of the Securities Commissions;

 

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

 

3

 

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

 

(ee)         “subsidiary of the corporation”
means a corporation, more than 50% of the outstanding voting shares of which
are owned, directly or indirectly, other than by way of security only, by the
Corporation or by one or more subsidiaries of the Corporation; and, as used in
this definition, “voting shares” means shares of a class or classes ordinarily
entitled to vote for the election of a majority of the directors of a
corporation irrespective of whether or not shares of any other class or classes
shall have or might have the right to vote for directors by reason of the
happening of any contingency;

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(nn)         “Warrant Indenture”
means the warrant indenture to be entered into between the Corporation and the
Trustee pursuant to which the Warrants will be issued, such Warrant Indenture
to be dated as of the date hereof;

 

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

 

(pp)         “Warrantholders’ Request” means an instrument
signed in one or more counterparts by a Warrantholder or Warrantholders
entitled to purchase, in the aggregate, not less than 25% of the aggregate
number of Shares that could be acquired pursuant to all the Warrants then
outstanding requesting the Trustee to take some action or proceeding specified
therein;

 

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

 

4

 

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

 

1.2              Words Importing the Singular and
Gender

 

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

 

1.3              Interpretation
not Affected by Headings

 

The
division of this Indenture into Articles, sections, subsections and paragraphs,
the provision of a table of contents and the insertion of headings are for
convenience of reference only and shall not affect the construction or
interpretation of this Indenture.

 

1.4              Day not a Business Day

 

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

 

1.5              Time of the Essence

 

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

 

1.6              Currency

 

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

 

1.7              Applicable Law

 

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

 

1.8              English
Language

 

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

 

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

 

5

 

1.9              Meaning of
“Outstanding” for Certain Purposes

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE TWO

 

ISSUE OF WARRANTS

 

2.1              Creation and Issue of Warrants

 

A total
of up to 1,966,456 Warrants, each entitling the holder thereof to acquire from
the Corporation on exercise thereof, subject to adjustment as provided for in
section 2.2 and Article Five, one Share, are hereby authorized to be
created and issued by the Corporation upon the terms and conditions herein set
forth and the Warrant Certificates shall be executed by the Corporation and
certified by or on behalf of the Trustee, or by such other person as the
Corporation may from time to time appoint with the approval of the Trustee
(hereinafter referred to as the “Co-transfer Agent”), upon the written
direction of the Corporation and delivered by the Trustee in accordance with
subsection 2.3.

 

2.2              Terms of
Warrants

 

(1)    Subject to the provisions of
Articles Four and Five, each of the Warrants issued under section 2.1 shall
entitle the holder thereof to acquire from the Corporation, one Share at any
time during the Exercise Period, at an exercise price of U.S.$4.75 (the “Exercise
Price”), provided that in the event a Registration Statement is not declared
effective by the United States Securities and Exchange Commission within six
months from the date the Warrants are issued in accordance with section 2.1
above, the Exercise 

 

6

 

Price of each
outstanding Warrant shall automatically decrease to U.S.$4.25 per Share and
such Exercise Price shall be in effect until the Expiry Date.

 

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

 

2.3              Warrant Certificates

 

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

 

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

 

“UNLESS PERMITTED UNDER CANADIAN SECURITIES
LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE
JANUARY30, 2005.

 

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

 

except that all Warrant
Certificates issued after January 30, 2005 will not bear the
first paragraph of the Warrant Legend and if the Corporation provides the
Trustee with a written notice advising the Trustee that a registration
statement under the U.S. Securities Act respecting the Warrants and Shares
issuable upon exercise of the Warrants has been filed with and declared
effective by the United States Securities and Exchange Commission (such notice,
the “Registration
Notice”), all Warrant Certificates issued after the receipt by the Trustee
of the Registration Notice will bear a Warrant Legend with the second paragraph
thereof revised to read in its entirety as follows:

 

NEITHER THIS CERTIFICATE NOR THE
SECURITIES REPRESENTED HEREBY, NOR ANY INTEREST IN OR RIGHTS

 

7

 

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

 

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

 

2.4              Issue in
Substitution for Lost Warrants

 

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

 

(2)    The applicant for the issue of a new
Warrant Certificate pursuant to this section 2.4 shall bear the cost of
the issue thereof and in case of loss, destruction or theft shall, as a
condition precedent to the issue thereof, furnish to the Corporation and to the
Trustee such evidence of ownership and of the loss, destruction or theft of the
Warrant Certificate so lost, destroyed or stolen as shall be satisfactory to
the Corporation and to the Trustee in their discretion, and if required,
furnish an indemnity and surety bond in amount and form satisfactory to them in
their discretion, and pay the reasonable charges of the Corporation and the
Trustee in connection therewith.

 

2.5              Warrantholder not
a Shareholder

 

Nothing in this Indenture or in
the holding of a Warrant evidenced by a Warrant Certificate, or otherwise,
shall be construed as conferring upon a Warrantholder any right or interest
whatsoever as a shareholder of the Corporation, including but not limited to
the right to vote at, to receive notice of, or to attend meetings of
shareholders or any other proceedings of the Corporation or the right to
receive any dividend and other distribution.

 

8

 

2.6              Warrants to Rank Pari Passu

 

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

 

2.7              Signing of Warrant Certificates

 

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

 

2.8              Certification by the Trustee or Co-transfer Agent

 

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

 

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

 

ARTICLE THREE

 

EXCHANGE AND OWNERSHIP OF
WARRANTS

 

3.1              Exchange of Warrants

 

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

 

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

 

9

 

3.2              Charges for Exchange or
Transfer

 

For each Warrant transferred or
Warrant Certificate exchanged, the Trustee or the Co-transfer Agent except as
otherwise herein provided, may charge a reasonable sum in respect of each
Warrant transferred or Warrant Certificate exchanged.  The party requesting the transfer or
exchange, as a condition precedent thereto, shall pay such charges and shall
pay or reimburse the Trustee, the Co-transfer Agent or the Corporation for all
exigible transfer taxes or governmental or other similar transfer charges
required to be paid in connection therewith.

 

3.3              Ownership of
Warrants

 

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

 

3.4              Registration and Transfer of Warrants

 

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

 

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

 

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

 

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

 

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

 

10

 

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

 

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

 

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

 

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

 

ARTICLE FOUR

 

EXERCISE OF WARRANTS

 

4.1              Notice of Acceleration Event

 

(1)    The “Acceleration Event” will occur if at any time starting six
months after the Registration Statement is declared effective by the United
States Securities and Exchange Commission, the closing trading price of the
Shares on the American Stock Exchange is U.S.$5.50 or greater for 20 or more
consecutive trading days.

 

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

 

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

 

	
  Global Resource Investments Ltd.

  
	
  7770 El Camino Real

  
	
  Carlsbad, CA  92009

  
	
  Attention:

  	
  Chief Executive Officer

  
	
  Telecopy:

  	
  (760) 943-3935

  

 

4.2              Method of Exercise of Warrants

 

(1)    The holder of any Warrants may,
during the Exercise Period, exercise the right thereby conferred to acquire
Shares by surrendering to the Trustee at its principal transfer office in the
Cities of

 

11

 

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

 

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

 

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

 

4.3              Effect of Exercise of
Warrants

 

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

 

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

 

12

 

4.4              Partial Exercise of
Warrants

 

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

 

4.5              No Fractional Shares or Warrants

 

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

 

4.6              Accounting and Recording

 

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

 

4.7              Cancellation of Surrendered Warrants

 

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

 

4.8              Expiration of
Warrants

 

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

 

4.9              Share Certificates

 

Certificates representing Shares
issued upon the exercise of Warrants shall bear the following legend (the
“Share Legend”), except that all
certificates representing Shares issued after January 30, 2005 will not bear the
first paragraph of the Share Legend and if the Corporation provides the Trustee
with a Registration Notice, all certificates representing Shares issued after
the receipt by the Trustee of the Registration Notice will not bear the second
paragraph of the Share Legend:

 

13

 

“UNLESS PERMITTED UNDER CANADIAN SECURITIES
LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT TRADE THE SECURITY BEFORE
JANUARY 30, 2005.

 

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

 

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

 

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

 

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

 

ARTICLE FIVE

 

ADJUSTMENT OF EXERCISE NUMBER

 

5.1              Definitions

 

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

 

5.2              Adjustment of
Exercise Number

 

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

 

(1)    If during the Exercise Period the
Corporation:

 

(a)           issues to all or substantially all
the holders of the Shares by way of a stock dividend or otherwise Shares or
Convertible Securities, other than (i) the issue

 

14

 

from time to
time of Shares or Convertible Securities by way of stock dividend to
shareholders who elect to receive Shares or Convertible Securities in lieu of
cash dividends in the ordinary course or pursuant to a dividend reinvestment
plan or (ii) as dividends paid in the ordinary course; or

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(2)    If during the Exercise Period the
Corporation fixes a record date for the issuance of rights, options or warrants
to all or substantially all the holders of the Shares pursuant to which those
holders are entitled to subscribe for, purchase or otherwise acquire Shares or
Convertible Securities within a period of not more than 45 days from such
record date at a price per share, or at a conversion price per share, of less
than 95% of the Current Market Price on such record date (any such issuance
being herein called a “Rights Offering”
and Shares that may be acquired in exercise of the Rights Offering, or upon
conversion of the Convertible Securities offered by the Rights Offering, being
herein called the “Offered Shares”),
the Exercise Number shall be adjusted effective immediately after the
applicable record date to an Exercise Number that is the product of (1) the
Exercise Number in effect on the record date and (2) a fraction:

 

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

 

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

 

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

 

(B)           the number arrived at when (I)
either the product of (a) the number of Offered Shares so offered and (b) the
price at which those shares are offered, or the product of (c) the conversion
price thereof and (d) the

 

15

 

maximum number
of Offered Shares for or into which the Convertible Securities so offered
pursuant to the Rights Offering may be converted, as the case may be, is
divided by (II) the Current Market Price of the Shares on the record date.

 

Any Offered Shares owned by or
held for the account of the Corporation or a subsidiary of the Corporation
shall be deemed not to be outstanding for the purpose of any such computation;
if all the rights, options or warrants are not so issued or if all rights,
options or warrants are not exercised prior to the expiration thereof, the
Exercise Number shall be readjusted to the Exercise Number in effect
immediately prior to the record date, and the Exercise Number shall be further
adjusted based upon the number of Offered Shares (or Convertible Securities
that are convertible into Offered Shares) actually delivered upon the exercise
of the rights, options or warrants, as the case may be, but subject to any
other adjustment required hereunder by reason of any event arising after that
record date.

 

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

 

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

 

(ii)           the denominator of which shall be:

 

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

 

less

 

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

 

Any Shares owned by or held for
the account of the Corporation shall be deemed not to be outstanding for the
purpose of any such computation; to the extent that the distribution of shares,
rights, options, warrants, evidences of indebtedness or assets is not so made
or to the extent that any rights, options or warrants so distributed are not exercised,
the Exercise Number shall be readjusted to the Exercise Number that would then
be in effect based upon shares, rights, options, warrants, evidences of
indebtedness or assets actually 

 

16

 

distributed or based upon the
number of Shares or Convertible Securities actually delivered upon the exercise
of the rights, options or warrants, as the case may be, but subject to any
other adjustment required hereunder by reason of any event arising after the record
date.

 

(4)    If during the Exercise Period there
is a reorganization of the Corporation not otherwise provided for in
subsection 5.2(1) or a consolidation or merger or amalgamation of the
Corporation with or into another body corporate including a transaction whereby
all or substantially all of the Corporation’s undertaking and assets become the
property of any other corporation through sale, lease, exchange or otherwise
(any such event being herein called a “Capital
Reorganization”) any holder of a Warrant who has not exercised his
right to exchange his Warrant for Shares prior to the effective date of the
Capital Reorganization shall be entitled to receive and shall accept, upon the
exercise of his right at any time after the effective date of the Capital
Reorganization, in lieu of the number of Shares (and any other securities or
properties to which holders are entitled upon exercise of the Warrants) to
which he or she was theretofore entitled upon exercise of the Warrant, the
aggregate number of shares or other securities or property of the Corporation,
or the continuing, successor or purchasing corporation, as the case may be,
under the Capital Reorganization that the holder would have been entitled to
receive as a result of the Capital Reorganization if, on the effective date
thereof, he or she had been the holder of the number of Shares (and any other
securities to which holders are entitled upon exercise of the Warrants) to
which immediately before the transaction he or she was entitled upon exercise of
the Warrants; no Capital Reorganization shall be carried into effect unless all
necessary steps have been taken so that the holders of Warrants shall
thereafter be entitled to receive the number of shares or other securities or
property of the Corporation, or of the continuing, successor or purchasing
corporation, as the case may be, under the Capital Reorganization, subject to
adjustment thereafter in accordance with provisions the same, as nearly as may
be possible, as those contained in this section 5.2 and in
section 5.3.

 

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

 

5.3              Subscription Rights Adjustment Rules

 

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

 

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

 

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

 

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

 

17

 

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

 

(a)    this Indenture;

 

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

 

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

 

(d)    the exercise of Warrants; or

 

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

 

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

 

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

 

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

 

5.4              Postponement of Subscription

 

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

 

5.5              Notice of Certain Events

 

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

 

18

 

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

 

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

 

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

 

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

 

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

 

5.6              Protection of Trustee

 

The Trustee shall not at any
time be under any duty or responsibility to any Warrantholder to determine
whether any facts exist which may require any adjustment contemplated by
section 5.2, or with respect to the nature or extent of any such
adjustment when made, or with respect to the method employed in making the
same.

 

5.7              Proceedings
Prior To Any Action Requiring Adjustment

 

As a condition precedent to the
taking of any action which would require an adjustment in any of the
acquisition rights pursuant to any of the Warrants, including the number of
Shares which are to be received upon the exercise of the Warrants, the
Corporation shall take any corporate action which may, in the opinion of
counsel, be necessary in order that the Corporation has unissued and reserved
in its authorized capital and may validly and legally issue as fully paid and
non-assessable all the Shares which the holders of such Warrants are entitled
to receive on the full exercise thereof in accordance with the provisions
hereof.

 

ARTICLE SIX

 

RIGHTS AND COVENANTS

 

 

6.1              Purchase of Warrants

 

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

 

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

 

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6.2              General
Covenants of the Corporation

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(8)      The
Corporation will use commercially reasonable efforts to maintain its status as
a “reporting issuer” under applicable Securities Laws in the Province and as a “reporting
company” with the United States Securities and Exchange Commission until the
Expiry Date and for a period of 12 months thereafter.

 

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

 

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

 

20

 

6.3              Trustee’s
Remuneration and Expenses

 

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

 

6.4              No Dividends
or Distributions

 

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

 

6.5              Performance
of Covenants by Trustee

 

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

 

ARTICLE SEVEN

 

ENFORCEMENT

 

7.1              Suits by
Warrantholders

 

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

 

7.2              Immunity of
Shareholders

 

The Trustee, and by their
acceptance of the Warrant Certificates and as part of the consideration for the
issue of the Warrants, the Warrantholders, hereby waive and release any right,
cause of action or remedy now or hereafter existing in any jurisdiction against
any past, present or future shareholder, director or officer of the Corporation
or of any of the subsidiaries of the Corporation, or any subsidiary of the
Corporation, in their capacity as such, for the issue of Shares pursuant to any
Warrants or on any covenant, agreement, representation or warranty by the
Corporation contained herein or in the Warrant Certificates.

 

21

 

7.3              Limitation of
Liability

 

The obligations hereunder are
not personally binding upon, nor shall resort hereunder be had to, the private
property of any of the past, present or future directors, shareholders,
officers, employees or agents of the Corporation or any of the subsidiaries of
the Corporation, or any subsidiary of the Corporation, but only the property of
the Corporation (or any successor corporation) shall be bound in respect
hereof.

 

ARTICLE EIGHT

 

MEETINGS OF WARRANTHOLDERS

 

8.1              Right to
Convene Meetings

 

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

 

8.2              Notice

 

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

 

8.3              Chairman

 

A person (who need not be a
Warrantholder) designated in writing by the Trustee shall be chairman of the
meeting, and if no person is so designated, or if the person so designated is not present within 15 minutes
from the time fixed for the holding of the meeting, the Warrantholders present
in person or by proxy shall choose a person present to be chairman.

 

8.4              Quorum

 

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

 

22

 

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

 

8.5              Power to Adjourn

 

The chairman of any meeting at
which a quorum of the Warrantholders is present may, with the consent of the
meeting, adjourn the meeting and no notice of the adjournment need be given
except such notice, if any, as the meeting may prescribe.

 

8.6              Show of Hands

 

Every question submitted to a
meeting shall be decided in the first place by a majority of the votes given on
a show of hands except that votes on an Extraordinary Resolution shall be given
in the manner hereinafter provided.  At
any meeting, unless a poll is duly demanded or required as herein provided, a
declaration by the chairman that a resolution has been carried or carried
unanimously or by a particular majority or lost or not carried by a particular
majority shall be conclusive evidence of the fact.

 

8.7              Poll

 

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

 

8.8              Voting

 

On a show of hands, every person
who is present and entitled to vote, whether as a Warrantholder or as proxy for
one or more absent Warrantholders or both, shall have one vote.  On a poll each Warrantholder present in
person or represented by proxy, duly appointed by instrument in writing, shall
be entitled to one vote in respect of each Warrant then held by him.  A proxyholder need not be a Warrantholder.

 

8.9              Regulations

 

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

 

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

 

23

 

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

 

(c)     for the deposit of voting certificates or
instruments appointing proxies at some approved place or places other than the
place at which the meeting is to be held and enabling particulars of the voting
certificates or instruments appointing proxies to be sent by mail, cable, telex
or other means of prepaid, transmitted, recorded communication before the meeting
to the Corporation or to the Trustee at the place where the same is to be held
and for the voting of proxies so deposited as though the instruments themselves
were produced at the meeting;

 

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

 

(e)     generally for the calling of meetings of
Warrantholders and the conduct of business thereat.

 

Any regulations so made shall be
binding and effective and the votes given in accordance therewith shall be
valid and shall be counted.  Save as the
regulations may provide, the only persons who shall be recognized at any
meeting as the holders of any Warrants, or as entitled to vote or, subject to
section 8.10, be present at the meeting in respect thereof, shall be
persons who are the registered holders of Warrants or their duly appointed
proxyholders.

 

8.10            Corporation
and Trustee may be Represented

 

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

 

8.11            Powers
Exercisable by Extraordinary Resolution

 

In addition to all other powers
conferred upon them by any other provisions of this Indenture or by law, the
Warrantholders at a meeting shall have the following powers exercisable from
time to time by Extraordinary Resolution (subject to regulatory approval, if
required):

 

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

 

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

 

24

 

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

 

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

 

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

 

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

 

(g)     power to assent to any change in or
omission from the provisions contained in the Warrant Certificates and this
Indenture or any ancillary or supplemental instrument which may be agreed to by
the Corporation, and to authorize the Trustee to concur in and execute any
ancillary or supplemental indenture embodying the change or omission;

 

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

 

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

 

8.12            Meaning of
“Extraordinary Resolution”

 

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

 

(2)    If at any meeting called for the
purpose of passing an Extraordinary Resolution Warrantholders holding in
aggregate not less than 51% of the total number of Warrants  then outstanding are not present in person or
by proxy within half an hour after the time appointed for the meeting, then the
meeting, if convened by Warrantholders pursuant to a Warrantholders’ Request,
shall be dissolved; but in any other case it shall stand adjourned to such day,
being not less than 15 or more than 60 days later, and to such place and time
as may be appointed by the chairman.  Not
less than ten days’ notice shall be given to the Warrantholders of the time and
place of the adjourned meeting in the manner provided in
section 11.2.  The notice shall
state that at the adjourned meeting the Warrantholders present in person or by
proxy shall form a quorum but it shall not be necessary to set forth the
purposes for which the meeting was originally called or any other particulars.
At the adjourned meeting the Warrantholders present in person or by proxy shall
form a quorum and may transact the business for which the meeting was
originally convened and a resolution proposed at the adjourned meeting and passed
by the requisite vote as provided in subsection 8.12(1) shall be

 

25

 

an Extraordinary
Resolution within the meaning of this Indenture notwithstanding the number of
Warrants held by those Warrantholders voting.

 

(3)    Votes on an Extraordinary Resolution
shall always be given on a poll and no demand for a poll on an Extraordinary
Resolution shall be necessary.

 

8.13            Powers Cumulative

 

It is hereby declared and agreed
that any one or more of the powers or any combination of the powers in this
Indenture stated to be exercisable by the Warrantholders by Extraordinary
Resolution or otherwise may be exercised from time to time and the exercise of
any one or more of the powers or any combination of the powers from time to
time shall not prevent the Warrantholders from exercising that power or those
powers or combination of powers then or any other power or powers or
combination of powers thereafter from time to time.

 

8.14            Minutes

 

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

 

8.15            Instruments in Writing

 

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

 

8.16            Binding
Effect of Resolutions

 

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

 

8.17            Holdings by
Corporation Disregarded

 

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

 

26

 

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

 

ARTICLE NINE

 

SUPPLEMENTAL INDENTURES AND
SUCCESSOR COMPANIES

 

9.1              Provision for
Supplemental Indentures for Certain Purposes

 

From time to time the
Corporation and the Trustee may, subject to the provisions hereof, and they
shall, when so directed hereby, execute and deliver by their proper officers or
directors, as the case may be, indentures or instruments supplemental hereto,
which thereafter shall form part hereof, for any one or more or all of the
following purposes:

 

(a)     setting forth any adjustments
resulting from the application of the provisions of Article Five;

 

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

 

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

 

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

 

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

 

(f)      making provisions not inconsistent
with this Indenture as may be necessary or desirable with respect to matters or
questions arising hereunder or for the purpose of obtaining a listing or
quotation of the Shares issuable under the Warrants on a stock exchange, bourse
or over-the-counter market, provided that the provisions are not, in the opinion
of the Trustee, based on the opinion of counsel, prejudicial to the interests
of the Warrantholders as a group;

 

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

 

27

 

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

 

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

 

9.2              Correction of
Manifest Errors

 

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

 

9.3              Amending
Adjustment Provisions

 

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

 

9.4              Successor Companies

 

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

 

ARTICLE TEN

 

CONCERNING THE TRUSTEE

 

10.1            Trust
Indenture Legislation

 

(1)    If and to the extent that any
provision of this Indenture limits, qualifies or conflicts with a mandatory
requirement of Applicable Legislation, the mandatory requirement shall prevail.

 

(2)    The Corporation and the Trustee
agree that each will, at all times in relation to this Indenture and any action
to be taken hereunder, observe and comply with and be entitled to the benefits
of Applicable Legislation.

 

28

 

10.2            Rights and
Duties of Trustee

 

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

 

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

 

(3)    The obligation of the Trustee to
commence or continue any act, action or proceeding for the purpose of enforcing
any rights of the Trustee or the Warrantholders or obligations of the
Corporation hereunder shall be conditional upon the Warrantholders furnishing,
when required by notice in writing by the Trustee, sufficient funds to commence
or continue the act, action or proceeding and an indemnity reasonably
satisfactory to the Trustee to protect and hold harmless the Trustee against
the costs, charges and expenses and liabilities to be incurred thereby and any
loss and damage it may suffer by reason thereof.  None of the provisions contained in this
Indenture shall require the Trustee to expend or risk its own funds or
otherwise incur financial liability in the performance of any of its duties or
in the exercise of any of its rights or powers unless indemnified and funded as
aforesaid.

 

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

 

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

 

10.3            Evidence, Experts and Advisers

 

(1)    In addition to the reports,
certificates, opinions and other evidence required by this Indenture, the
Corporation shall furnish to the Trustee such additional evidence of compliance
with any provision hereof, and in such form, as may be prescribed by Applicable
Legislation or as the Trustee may reasonably require by written notice to the
Corporation.

 

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

 

(3)    The Trustee may employ or retain
such counsel, accountants, engineers, appraisers, or other experts or advisers
as it may reasonably require for the purpose of discharging its duties
hereunder and may pay reasonable remuneration for all services so performed by
any of them payable by the Corporation in accordance with section 6.3, without
taxation of costs of any counsel, and shall not be responsible for any
misconduct on the part of any of them who has been selected with due care by
the Trustee.

 

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

 

29

 

10.4            Securities, Documents
and Monies Held by Trustee

 

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

 

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

 

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

 

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

 

10.5            Action by
Trustee to Protect Interests

 

The Trustee shall have power to
institute and to maintain such actions and proceedings as it may consider
necessary or expedient to preserve, protect or enforce its interests and the
interests of the Warrantholders.

 

10.6            Trustee not
Required to Give Security

 

The Trustee shall not be
required to give any bond or security in respect of the execution of the trusts
and powers of this Indenture or otherwise in respect of the premises contained
herein.

 

10.7            Protection of Trustee

 

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

 

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

 

(2)    Nothing herein contained shall
impose any obligation on the Trustee to see to or to require evidence of the
registration (or filing or renewal thereof) of this Indenture or any instrument
ancillary or supplemental hereto.

 

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

 

30

 

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

 

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

 

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

 

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

 

10.8            Indemnification

 

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

 

10.9            Replacement of Trustee

 

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

 

31

 

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

 

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

 

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

 

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

 

10.10          Conflict of
Interest

 

(1)    The Trustee represents to the
Corporation that at the time of the execution and delivery hereof no material
conflict of interest exists between the Trustee’s role as a fiduciary hereunder
and its role in any other capacity and agrees that in the event of a material
conflict of interest arising hereafter it will, within 90 days after
ascertaining that it has a material conflict of interest, either eliminate the
same or assign its trust hereunder to a successor Trustee approved by the
Corporation and meeting the requirements set forth in
subsection 10.9(1).  Notwithstanding
the foregoing provisions of this subsection 10.10(1), if any such material
conflict of interest exists or hereafter shall exist, the validity and
enforceability of this Indenture and the Warrant Certificate shall not be
affected in any manner whatsoever by reason thereof.

 

(2)    Subject to subsection 10.10(1),
the Trustee, in its personal or any other capacity, may buy, lend upon and deal
in securities of the Corporation, may act as registrar and transfer agent for
the Shares and trustee for the Warrants under the Warrant Indenture and
generally may contract and enter into financial transactions with the
Corporation or any subsidiary of the Corporation, all without being liable to
account for any profit made thereby.

 

10.11          Acceptance of Trust

 

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

 

10.12          Trustee not
to be Appointed Receiver

 

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

 

32

 

10.13          Third Party Interests

 

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

 

10.14          Compliance
With Money Laundering Legislation

 

The Trustee shall retain the right not to act and shall not be liable
for refusing to act if, due to a lack of information or for any other reason
whatsoever, the Trustee reasonably determines that such act might cause it to
be in non-compliance with any applicable anti-money laundering or
anti-terrorist legislation, regulation or guideline. Further, should the
Trustee reasonably determine at any time that its acting under this Indenture
has resulted in its being in non-compliance with any applicable anti-money
laundering or anti-terrorist legislation, regulation or guideline, then it
shall have the right to resign on 10 days written notice to
the Corporation, provided: (i) that the Trustee’s written notice shall
describe the circumstances of such non-compliance; and (ii) that if such
circumstances are rectified to the Trustee’s satisfaction within such 10 day
period, then such resignation shall not be effective.

 

10.15          Compliance
with Privacy Laws

 

The parties acknowledge that federal and/or provincial legislation that addresses the protection of
individuals’ personal information (collectively, “Privacy Laws”) applies to obligations and activities under
this Agreement.  Despite any other
provision of this Agreement, neither party shall take or direct any action that
would contravene, or cause the other to contravene, applicable Privacy Laws.
The Corporation shall, prior to transferring or causing to be transferred
personal information to the Trustee, obtain and retain required consents of the
relevant individuals to the collection, use and disclosure of their personal
information, or shall have determined that such consents either have previously
been given upon which the parties can rely or are not required under the
Privacy Laws. The Trustee shall use commercially reasonable efforts to ensure
that its services hereunder comply with Privacy Laws. Specifically, the Trustee
agrees: (a) to have a designated chief privacy officer; (b) to maintain policies and procedures to protect
personal information and to receive and respond to any privacy complaint or
inquiry; (c) to use personal information solely for the purposes of providing
its services under or ancillary to this Agreement and not to use it for any
other purpose except with the consent of or direction from the Corporation or
the individual involved; (d) not to sell or otherwise improperly disclose
personal information to any third party; and (e) to employ
administrative, physical and technological safeguards to reasonably secure and
protect personal information against loss, theft, or unauthorized access, use
or modification.

 

ARTICLE ELEVEN

 

GENERAL

 

11.1            Notice to
Corporation and Trustee

 

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

 

33

 

(a)    if to the Corporation:

 

Vista Gold Corp.

Suite 5, 7961 Shaffer Parkway

Littleton, Colorado

U.S.A. 80127

 

Attention:  Chief Financial Officer

 

Telecopier
No.:  (720) 981-1186

 

(b)    if to the Trustee:

 

Computershare
Trust Company of Canada

510 Burrard Street

Vancouver, British Columbia

V6C 3B9

 

Attention:  Corporate Trust Services

 

Telecopier
No.:  (604) 661-9403

 

and any notice given in
accordance with the foregoing shall be deemed to have been received on the date
of delivery or, if mailed, on the fifth business day following the day of the mailing
of the notice or, if transmitted by telecopy, on the day following the
transmission.

 

(2)    The Corporation or the Trustee, as
the case may be, may from time to time notify the other in the manner provided
in subsection 11.1(1) of a change of address which, from the effective
date of the notice and until changed by like notice, shall be the address of
the Corporation or the Trustee, as the case may be, for all purposes of this
Indenture.

 

(3)    If, by reason of a strike, lockout
or other work stoppage, actual or threatened, involving postal employees, any
notice to be given to the Trustee or to the Corporation hereunder could
reasonably be considered unlikely to reach or to be delayed in reaching its
destination, the notice shall be valid and effective only if it is delivered to
an officer of the party to which it is addressed or if it is delivered to that
party at the appropriate address provided in subsection 11.1(1) by cable,
telegram, telex, telecopy or other means of prepaid, transmitted, or written communication
and any notice delivered in accordance with the foregoing shall be deemed to
have been received on the date of delivery to the officer or if delivered by
cable, telegram, telex, telecopy or other means of prepaid, transmitted,
recorded communication, on the first business day following the date of the
sending of the notice by the person giving the notice.

 

11.2            Notice to
Warrantholders

 

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

 

34

 

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

 

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

 

11.3            Satisfaction
and Discharge of Indenture

 

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

 

11.4            Sole Benefit
of Parties and Warrantholders

 

Nothing in this Indenture or in
the Warrant Certificates, expressed or implied, shall give or be construed to
give to any person other than the parties hereto and the Warrantholders any legal
or equitable right, remedy or claim under this Indenture, or under any covenant
or provision therein contained, all such covenants and provisions being for the
sole benefit of the parties hereto and the Warrantholders.

 

35

 

11.5            Discretion of
Directors

 

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

 

11.6            Counterparts
and Formal Date

 

This Indenture may be executed
in several original or facsimile counterparts, each of which when so executed
shall be deemed to be an original and the counterparts together shall
constitute one and the same instrument and notwithstanding their date of execution
shall be deemed to bear the date as of 
September 29, 2004.

 

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

 

 

	
   

  	
  VISTA GOLD CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  COMPUTERSHARE TRUST COMPANY OF CANADA

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
						

 

36

 

SCHEDULE “A”

 

UNLESS PERMITTED UNDER CANADIAN
SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY SHALL NOT TRADE THE
SECURITY BEFORE JANUARY 30, 2005.

 

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

 

WARRANT

 

to acquire common shares of

 

VISTA GOLD CORP.

 

(continued
under the laws of the Yukon Territory)

 

	
  Warrant Certificate

  No.

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

  

 

 

THIS IS TO CERTIFY THAT, for value received,

 

(the “Holder”) is the registered Holder of the number of common
share purchase warrants (the “Warrants”)
of the Corporation specified above, and is entitled, on exercise of these
Warrants upon and subject to the terms and conditions set forth herein and in
the Warrant Indenture hereinafter referred to, to purchase at any time before
4:30 p.m. (Vancouver time) on the earlier of (i) September 29, 2006, and
(ii) the 15th business day following the date on which the
Corporation provides notice to the Holder and to Computershare Trust Company of
Canada (the “Trustee”) that the
Acceleration Event (as defined below) has occurred (such earlier date, the “Expiry Date”), one fully paid and
non-assessable common share without par value in the capital of the Corporation
as constituted on the date hereof (a “Share”) for each Warrant by surrendering to the
Trustee at its principal transfer office in the Cities of Vancouver or Toronto
with this certificate an exercise form in the form attached hereto duly
completed and executed, accompanied by cash, a certified cheque, bank draft or
money order in lawful money of the United States of America payable to or to
the order of the Corporation at par in the city where this Warrant Certificate
is so surrendered in an amount equal to the purchase price of the Shares so
subscribed for.  The “Acceleration Event” will occur if, at any time
starting six months after the Registration Statement, as defined in the Warrant Indenture hereinafter referred to, relating
to the Shares is declared effective by the United States Securities and
Exchange Commission, the closing trading price of the Shares on the American
Stock Exchange is U.S.$5.50 or greater for 20 or more consecutive trading
days.  If the Acceleration Event

 

A-1

 

occurs, the Corporation will
have the option for a period of 15 business days after the occurrence of the
Acceleration Event to provide notice that the Acceleration Event has occurred.

 

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

 

Subject to adjustment thereof in
the events and in the manner set forth in the Warrant Indenture hereinafter
referred to, the exercise price (the “Exercise Price”) payable for each Share
upon the exercise of Warrants shall be U.S.$4.75, provided that
in the event a Registration Statement relating to the Shares is not declared
effective by the United States Securities and Exchange Commission within six
months from the date hereof, the Exercise Price of each outstanding Warrant
shall automatically decrease to U.S.$4.25 per Share and such Exercise Price
shall be in effect until the Expiry Date.

 

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

 

This Warrant Certificate
evidences Warrants of the Corporation issued or issuable under the provisions
of a warrant indenture (which indenture together with all other instruments
supplemental or ancillary thereto is herein referred to as the “Warrant Indenture”) dated as of September
29, 2004 between the Corporation and the Trustee, as trustee, to which Warrant
Indenture reference is hereby made for particulars of the rights of the Holders
of Warrants, the Corporation and the Trustee in respect thereof and the terms
and conditions on which the Warrants are issued and held, all to the same
effect as if the provisions of the Warrant Indenture were herein set forth, to
all of which the Holder by acceptance hereof assents.  The Corporation will furnish to the Holder,
on request and without charge, a copy of the Warrant Indenture.  In the event of any discrepancy between
anything contained in this Warrant Certificate and the terms and conditions of
the Warrant Indenture, the terms and conditions of the Warrant Indenture shall
govern.

 

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

 

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

 

The Warrant Indenture also
contains provisions making binding on all Holders of Warrants outstanding
thereunder resolutions passed at meetings of Holders of Warrants held in
accordance with the provisions of the Warrant Indenture and instruments in writing
signed by Holders of Warrants entitled to purchase a specific majority of the
Shares that can be purchased pursuant to such Warrants.  In the event of any discrepancy between
anything contained in this Warrant Certificate and the terms and conditions of
the Warrant Indenture, the terms and conditions of the Warrant Indenture shall
govern.

 

A-2

 

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

 

Warrants are issuable only as
fully registered Warrants.  Warrants may
only be transferred in compliance with the conditions of the Warrant Indenture
on one of the registers to be kept by and at the principal offices of the
Trustee in Vancouver or Toronto, and by the Trustee or such other registrar as
the Corporation, with the approval of the Trustee, may appoint at such other place
or places, if any, as may be designated, upon surrender of this Warrant
Certificate to the Trustee or other registrar accompanied by a written
instrument of transfer in form and execution satisfactory to the Trustee or
other registrar and upon compliance with the conditions prescribed in the
Warrant Indenture and with such reasonable requirements as the Trustee or other
registrar may prescribe and upon the transfer being duly noted thereon by the
Trustee or other registrar.

 

Time is of the essence hereof.

 

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

 

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

 

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

 

	
   

  	
  VISTA GOLD CORP.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  
	
   

  	
   

  
	
  Countersigned and Registered by:

  	
   

  
	
   

  	
   

  
	
  COMPUTERSHARE TRUST COMPANY OF CANADA

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Signatory

  
						

 

A-3

 

APPENDIX “A”

 

EXERCISE FORM

 

TO:         Vista Gold Corp.

c/o Computershare Trust Company of Canada

510 Burrard Street

Vancouver, British Columbia

V6C 3B9

 

Attention:      Stock
Transfer Department

 

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

 

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

 

 

	
  Name(s) in Full

  	
   

  	
  Address(es) (include
  Postal/Zip Code)

  	
   

  	
  Numbers(s) of

  common shares

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  

 

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

 

DATED this
             
day of
                             ,
                           .

 

 

	
   

  	
   

  	
   

  
	
  Witness or Signature Guarantee*

  	
  Signature of Registered Holder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name of Registered Holder

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Address of Registered Holder

  

 

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

 

	
  o

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

  

 

A-4

 

APPENDIX “B”

 

TRANSFER OF WARRANTS

 

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

 

	
   

  	
   

  
	
  (name)

  	
  (the “transferee”)

  
	
   

  	
   

  
	
   

  
	
  (address)

  	
   

  

 

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

 

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

 

DATED the
               
day of
                             ,
                                  .

 

 

	
  Signature of
  Warrantholder

  	
   

  
	
  Guaranteed
  by:

  	
  (Signature of Warrantholder)

  

 

	
   

  	
   

  	
   

  
	
   

  	
  *

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  * Authorized Signature Number

  
				

 

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

 

A-5Exhibit 10.1

 

GLOBAL RESOURCE INVESTMENTS LTD.

7770 El Camino Real

Carlsbad, California 92009

U.S.A.

 

 

September 1, 2004

 

Vista Gold Corp.

Suite
5, 7961 Shaffer Parkway

Littleton, Colorado 80127

 

 

Attention: 
Mr. Michael B. Richings

 

Re: 
Amended and Restated Finder’s Fee Agreement– Vista Gold Corp. Private
Placement

 

The following letter agreement (this “Letter Agreement”)
amends and restates in its entirety the letter agreement, dated August 25, 2004
between Vista Gold Corp. (the “Company”) and Global Resource Investments Ltd.
(the “Finder”) respecting the proposed Financing as defined below.

 

Further to our recent conversations, this Letter
Agreement will confirm our various discussions, and, when executed, will
constitute a legally binding agreement for the payment by the Company to the
Finder of a finder’s fee (the “Fee”) respecting the proposed private placement
by the Company (the “Financing”) of Units (the “Units”) comprised of one Share
and one Warrant, with any persons introduced by the Finder to the Company, or
associates or affiliates of such persons (the “Investors”).  Capitalized terms not defined herein have the
meanings given them in the Subscription Agreement of approximate even date
among the Company and the Purchasers named therein.

 

We confirm that the Finder has introduced or will
introduce potential Investors to the Company as possible funding sources.  In consideration for the Finder’s services in
bringing the Company and the Investors together, the Company has agreed to pay
the Fee to the Finder on any part of the Financing which is ultimately
completed by the Company and the Investors. 
The terms of the proposed Financing and Fee are as follows:

 

1.             Financing:                         The
Financing will be on the terms and conditions as set out in the Amended and
Restated Term Sheet between the Company and the Finder, dated as of the date
hereof (the “Term Sheet”), a copy of which is attached to this Letter
Agreement.

 

2.             Finder’s
Fee:                     The
Finder will be paid a finder’s fee equal to five (5%) percent of the gross
proceeds received by the Company from the sale of the Units.  The Fee will be paid to the Finder in cash at
each closing of the Financing.

 

3.             Closing:                             The
Finder has no obligations or responsibilities in respect of the Financing and
completion of the Financing is the responsibility of the Company and the
Investors.  However, the Finder agrees to
use its reasonable best efforts to assist the Company and the Investors with

 

 

the administrative matters related to Closing,
including exchange and delivery of documents and subscription funds at each
Closing of the Financing.

 

4.             No
Agency:                        The
Company acknowledges that:

 

(a)          the Finder is not and has not
acted as its agent in respect of the Financing, and the Fee is paid as
consideration only for the Finder’s services in introducing the Investors to
the Company;

 

(b)          the Finder will be paid the Fee
by the Company upon the closing of the Financing or a portion thereof;

 

(c)          the Fee is payable to the Finder
irrespective of any other commissions or fees which the Company may pay to any
broker or other third party in respect of the Financing.

 

5.             Indemnity.                          The
Company has previously agreed to indemnify the Finder in respect of the
Financing, on the terms and conditions as set out in the form of Indemnity
executed by the Company as of August 25, 2004, a copy of which is attached
hereto.

 

6.             Governing
Law                  This
Letter Agreement and the payment of the Fee shall be governed by, at the
election of the Finder in its sole discretion, the laws of the Province of
British Columbia, Canada or the State of California.

 

7.             Agreement                         This
Letter Agreement including the attached Term Sheet and Indemnity,
represents the entire agreement between the parties and supersedes any and all
prior agreements and understandings, whether written or oral, between the
parties.  This Letter Agreement may not
be amended or otherwise modified except by an instrument in writing signed by
both parties.

 

If the foregoing accurately sets out your
understanding of our agreement, please sign the acknowledgement below and
return a signed copy of this Letter Agreement to the undersigned by fax at
(760) 943-3935 at your earliest convenience.

 

	
  Yours truly,

  
	
   

  
	
  GLOBAL RESOURCE INVESTMENTS LTD.

  
	
   

  
	
  Per:

  	
  /s/ Jeffrey Howard

  	
   

  
	
   

  
	
  Jeffrey Howard, Chief Executive Officer

  

 

 

The foregoing terms are hereby acknowledged and agreed
to,

this   1st                   
day of      September   , 2004.

 

	
  VISTA GOLD CORP.

  
	
   

  
	
  Per:

  	
  /s/ Gregory G. Marlier

  	
   

  
	
   

  
	
  Gregory G. Marlier, Chief Financial Officer

  

 

 

Attachment to Amended and
Restated Finder’s Fee Agreement dated September 1, 2004

 

AMENDMENT AND RESTATED TERM SHEET

For private placement with Vista
Gold Corp.

 

The following term sheet
(this “Term Sheet”) amends and restates in its entirety the term sheet as
amended by Amendment No. 1, dated August 25, 2004 between the Finder and the
Corporation (as such terms are defined herein).

 

The transactions
contemplated by this Term Sheet are subject to receipt of all required
regulatory approvals and subject to negotiation of a mutually satisfactory form
of subscription agreement and finder’s fee agreement.  All amounts are expressed in U.S. $’s.

 

Finder

Global Resource
Investments Ltd. (“Global”).

 

Proceeds

Maximum allowable without
shareholder approval.

 

Placees

All placees are at arm’s
length to Vista Gold Corp. (the “Corporation”).

 

Structure

The Corporation will
issue units (“Units”), each priced at $3.30. 
Each Unit will consist of one common share and one warrant.  The exercise price for each warrant (the “Exercise
Price”) will be $4.75; provided, however, that if a registration statement for
the securities issued pursuant to this private placement is not declared
effective by the SEC within six months from the closing date (the “Registration
Date”), the Exercise Price of each outstanding warrant shall automatically
decrease to $4.25, and such Exercise Price shall be in effect until the expiry
of the warrants.  The warrants will be
exercisable for a period of two years from the date of issue, subject to the
Warrant Trigger (defined below).

 

Warrant
Trigger

Starting six months after
the date a registration statement for the securities issued pursuant to this
private placement is declared effective, if the closing trading price of the
common shares of the Corporation on the American Stock Exchange is $5.50 or
more for a period of 20 consecutive trading days (such event the “Warrant
Trigger”), the Corporation will have the option for a period of 15 business
days after the end of such period to request that the warrants be exercised
within 15 business days of the date the Corporation provides notice that the
Warrant Trigger has occurred.  If the
warrants are not exercised within 15 business days following this notice, the
warrants will expire.

 

Closing
Date

 

As soon as practicable.

 

Registration

 

The Corporation will make all reasonable commercial
efforts to ensure that the securities to be issued pursuant to this private
placement are registered with the SEC and have such registration statement
declared effective by the Registration Date. 
In the event the registration statement is not declared effective by the
Registration Date, the Exercise Price for each warrant will be reduced to $4.25
as a penalty for said failure (see “Structure,” above).

 

Finder’s
Fees

Global will be acting
only as finder, not as an agent. (Accordingly there will be no Agency
Agreement.) Finder’s fees will be 5% of the gross proceeds raised from the sale
of the Units, payable in cash to Global; the Corporation will pay reasonable
legal costs of the finder, such costs not to exceed $25,000.

 

Dated as of September 1,
2004.

 

 

	
  Global Resource
  Investments Ltd.

  	
  Vista Gold Corp.

  
	
   

  	
   

  
	
  /s/ Jeffrey Howard

  	
   

  	
  /s/ Gregory G. Marlier

  	
   

  
	
  Jeffrey Howard, Chief
  Executive Officer

  	
  Gregory G. Marlier,
  Chief Financial Officer

  
	
  (Print Name and Title)

  	
  (Print Name and Title)

  
				

 

2

 

INDEMNITY

 

In accordance with
a Finders Fee agreement (the “Agreement”) dated for reference August _25, 2004
between VISTA GOLD CORP. (the “Company”) and GLOBAL RESOURCE INVESTMENTS LTD.
(the “Finder”), the Company agrees as follows:

 

1.     The
Company agrees to indemnify and hold harmless the Finder and its affiliates,
their respective directors, officers, employees, partners, agents and each
other person, if any, controlling the Finder or any of its affiliates
(collectively including the Finder, the “Indemnified Parties” and individually,
an “Indemnified Party”), to the full extent lawful, from and against any and
all expenses, losses, claims, actions, damages and liabilities, joint or
several, (including the aggregate amount paid in reasonable settlement of any
actions, suits, proceedings, investigations or claims and the reasonable fees and
expenses of their counsel that may be incurred in advising and defending any
action, suit, proceeding, investigation or claim that may be made or threatened
against any Indemnified Party but not including any amount for lost profits) to
which any Indemnified Party may become subject or otherwise involved in any
capacity under any statute or common law or otherwise insofar as such expenses,
losses, claims, actions, damages or liabilities relate to, are caused by,
result from, arise out of or are based upon, directly or indirectly, the
performance of services rendered by the Finder under the Agreement, or
otherwise in connection with the Financing (as defined in the Agreement).

 

2.     Notwithstanding
the foregoing, this indemnity shall not apply to the extent that a court of
competent jurisdiction in a final judgment that has become non-appealable shall
determine that such expenses, losses, claims, actions, damages or liabilities
to which the Indemnified Party may be subject were directly caused by the gross
negligence, bad faith or wilful misconduct of the Indemnified Party.

 

3.     If for
any reason (other than determinations as to any of the events referred to in
paragraph 2 of this indemnity) the foregoing indemnification is unavailable to
any Indemnified Party or is insufficient to hold any Indemnified Party
harmless, the Company will jointly and severally contribute to the amount paid
or payable by the Indemnified Party as a result of such expense, loss, claim,
action, damage or liability in such proportion as is appropriate to reflect not
only the relative benefits received by the Company on the one hand and the
Finder or any other Indemnified Party on the other hand, but also the relative
fault of the Company, the Finder or any other Indemnified Party as well as any
relevant equitable considerations; provided that the Company will in any event
contribute to the amount or amounts paid or payable by the Finder or any other
Indemnified Party as a result of any such expense, loss, claim, action, damage
or liability (except for any such expense, loss, claim, action, damage or
liability which is determined by a court of competent jurisdiction to have been
caused directly by the gross negligence, bad faith or wilful misconduct of the
Indemnified Party), the portion of such amount or of the aggregate of such
amount that is in excess of the amount of the fees received by the Finder under
the Agreement.

 

4.     The
Company agrees that if: (a) any legal proceeding is brought against the Company
or the Finder or any other Indemnified Party by any person or entity, including
without limitation any governmental commission or regulatory authority, or (b)
any stock exchange or other entity having regulatory authority, either domestic
or foreign, investigates the Company or the Finder or any other Indemnified
Party, and the Finder or such other Indemnified Party is required to testify in
connection therewith or is required to respond to procedures designed to
discover information regarding, in connection with, or by reason of the Agreement,
the engagement of the Finder

 

 

thereunder or the
performance of services rendered by the Finder thereunder, the Finder or such
other Indemnified Party will have the right to employ its own counsel in
connection therewith, and the reasonable fees and expenses of such counsel as
well as the reasonable costs (including an amount to reimburse the Finder for
time spent by its, or any of its affiliates, directors, officers, employees,
partners or agents (collectively, “Personnel”) in connection therewith) and
out-of-pocket expenses incurred by its Personnel in connection therewith will
be paid by the Company as they occur.

 

5.     Promptly
after receiving notice of an action, suit, proceeding or claim against the
Finder or any other Indemnified Party or receipt of notice of the commencement
of any investigation which is based, directly or indirectly, upon any matter in
respect of which indemnification may be sought from the Company, the Finder
will notify the Company in writing of the particulars thereof, will provide
copies of all relevant documentation to them and, unless the Company assumes
the defence thereof, will keep the Company advised of the progress thereof and
will discuss all significant actions proposed. The omission to so notify the
Company will not relieve them of any liability which they may have to the
Finder or any other Indemnified Party except only to the extent that any such
delay in or failure to give notice prejudices the defence of such action, suit,
proceeding, claim or investigation or results in any material increase in the
liability which the Company would otherwise have under this indemnity had the
Finder or the Indemnified Party not so delayed in or failed to give the notice
required.

 

6.     The
Company will be entitled, at its own expense, to participate in and, to the
extent it may wish to do so, assume the defence thereof, provided such defence
is conducted by experienced and competent counsel. Upon the Company notifying
the Finder in writing of their election to assume the defence and retaining
counsel, the Company will not be liable to the Finder or any other Indemnified
Party for any legal expenses subsequently incurred by them in connection with
such defence. If such defence is assumed by the Company, it throughout the
course thereof will provide copies of all relevant documentation to the Finder,
will keep the Finder advised of the progress thereof and will discuss with the
Finder all significant actions proposed.

 

7.     Notwithstanding
the foregoing paragraph, any Indemnified Party will have the right, at the
joint and several expense of the Company, to employ counsel of such Indemnified
Party’s choice in respect of the defence of any action, suit, proceeding, claim
or investigation if: (i) the employment of such counsel has been authorized by
the Company; or (ii) the Company has not assumed the defence and employed
counsel within a reasonable time after receiving notice of such action, suit,
proceeding, claim or investigation; or (iii) counsel retained by the Company or
the Indemnified Party has advised the Indemnified Party that representation of
the parties by the same counsel would be inappropriate because there may be
legal defences available to the Indemnified Party which are different from or
in addition to those available to the Company (in which event and to that
extent, the Company will not have the right to assume or direct the defence on
the Indemnified Party’s behalf) or that there is a conflict of interest between
the Company and the Indemnified Party (in which event the Company will not have
the right to assume or direct the defence on the Indemnified Party’s behalf).

 

8.     No
admission of liability and no settlement of any action, suit, proceeding, claim
or investigation shall be made without the consent of the Indemnified Parties
affected, such consent not to be unreasonably withheld. No admission of
liability shall be made and the Company will not be liable for any settlement
of any action, suit, proceeding, claim or investigation made without their
consent, such consent not to be unreasonably withheld.

 

9.     The
Company hereby acknowledges that the Finder acts as trustee for other
Indemnified Parties of the covenants of the Company under this indemnity with
respect to such persons and the

 

2

 

Finder agrees to
accept such trust and to hold and enforce such covenants on behalf of such
persons.

 

10.   The Company agrees
to waive any right they may have of first requiring any Indemnified Party to
proceed against or enforce any other right, power, remedy or security or claim
payment from any other person before claiming under this indemnity. The
indemnity and contribution obligations of the Company hereunder will be in
addition to, but not in duplication of, any liability which the Company may
otherwise have, shall extend upon the same terms and conditions to the
Indemnified Parties and shall be binding upon and enure to the benefit of any
successors, assigns, heirs and personal representatives of the Company, the
Finder and any other Indemnified Party. The foregoing provisions shall survive
the completion of professional services rendered under the Agreement or any
termination of the authorization given by the Agreement, and shall continue for
a period of three years after the date of the last of such events to occur.

 

	
  DATED as of the
  25th day of August, 2004.

  
	
   

  
	
   

  
	
  VISTA GOLD CORP.

  
	
   

  
	
   

  
	
  /s/ Gregory G.
  Marlier

  	
   

  
	
  Authorized
  Signatory

  
	
   

  
	
  Gregory G.
  Marlier, Chief Financial Officer

  
	
   

  
	
  GLOBAL RESOURCE
  INVESTMENTS LTD.

  
	
   

  
	
   

  
	
  /s/ Jeffrey
  Howard

  	
   

  
	
  Authorized
  Signatory

  
	
   

  
	
  Jeffrey Howard, Chief Executive Officer

  

 

3

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