1
-1-
EXHIBIT 10.43
UNDERWRITING AGREEMENT
November 18, 1996
Glamis Gold Ltd.
3324 Four Bentall Centre
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇; ▇.▇.
▇▇▇ ▇▇▇
Dear Sirs:
ISSUE OF 4,500,000 COMMON SHARES
The undersigned Underwriters understand that Glamis Gold Ltd. (the
"Corporation") proposes to issue and offer 4,500,000 common shares (the
"Underwritten Shares") for sale to the public through the Underwriters.
Subject to the terms and conditions set forth in this Agreement, the
Underwriters severally offer to purchase all but not less than all of the
Underwritten Shares at a purchase price of U.S.$7.30 per Underwritten Share,
for an aggregate purchase price of U.S.$32,850,000 (the "Purchase Price"), and
by its acceptance of this offer the Corporation agrees to issue and sell the
Underwritten Shares to the Underwriters.
In consideration of the agreement of the Underwriters to purchase the
Underwritten Shares and the services rendered and to be rendered by the
Underwriters in connection herewith, the Corporation agrees to pay the
Underwriting Fee, to Midland ▇▇▇▇▇▇ Capital Inc., on behalf of the
Underwriters. Payment of the Purchase Price by the Underwriters and of the
Underwriting Fee by the Corporation will be made at the Closing Time at the
offices of Corporation's Counsel in Vancouver against delivery by the
Corporation of the Underwritten Shares.
The following are the terms and conditions of the agreement between the
Corporation and the Underwriters:
2
-2-
1. DEFINITIONS
1.1 Unless otherwise defined in this Agreement, the following
terms shall have the following meanings, respectively:
(a) "this Agreement", "hereto", "herein", "hereunder", "hereof"
and similar expressions refer to the agreement resulting from the
acceptance by the Corporation of this offer and not to any particular
section or other portion of this Agreement;
(b) "business day" means any day (other than a Saturday or Sunday)
on which banks in each of Vancouver and Toronto are open for business;
(c) "Canadian Securities Commissions" means the securities
commission or other securities regulatory authority in each of the
Provinces;
(d) "Canadian Securities Laws" means the securities acts or
similar statutes of the Provinces and all rules, regulations, policy
statements, notices and blanket orders or rulings thereunder;
(e) "Closing Date" shall mean December 5, 1996 or such later date
as the Underwriters may designate;
(f) "Closing Time" shall mean 10:00 a.m. Vancouver time) on the
Closing Date, or such other time on the Closing Date as the
Underwriters may designate;
(g) "Corporation's Counsel" means Lang ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & ▇▇▇▇;
(h) "Distribution Period" means the period commencing on the date
of this Agreement and ending on the earlier of:
(i) the date on which all of the Underwritten Shares have
been sold by the Underwriters to the public pursuant to the
Final Prospectus; and
(ii) 45 days after the Closing Date;
(i) "Financial Statements" means the financial statements
contained or incorporated by reference in the Prospectuses including,
unless the context requires otherwise, any auditors' report thereon;
(j) "material" or "materially", when used in relation to the
Corporation, means material in relation to the Corporation on a
consolidated basis;
(k) "material change", "material fact" and "misrepresentation"
have the meanings attributed thereto under applicable Canadian
Securities Laws;
(l) "Midland" means Midland ▇▇▇▇▇▇ Capital Inc.;
3
-3-
(m) "POP System" means the prompt offering qualification system
for the distribution of securities of certain issuers established by
National Policy Statement No.47 of the Canadian Securities
Administrators under the Canadian Securities Laws;
(n) "Preliminary Prospectus" means the preliminary short form
prospectus of the Corporation (which includes any French language
translation thereof) to be dated November 18, 1996 relating to the
distribution of the Underwritten Shares and, where the context
requires, includes all documents incorporated therein by reference;
(o) "Principal Jurisdiction" means the Securities Commission of
British Columbia;
(p) "Prospectus" means the final short form prospectus of the
Corporation (which includes any French language translation thereof)
relating to the distribution of the Underwritten Shares and, where the
context requires, includes all documents incorporated therein by
reference;
(q) "Prospectuses" means the Preliminary Prospectus and the
Prospectus;
(r) "Prospectus Amendment" means any amendment to the Preliminary
Prospectus or the Prospectus (which includes any French language
translation thereof) and of any amendment to any document incorporated
therein by reference;
(s) "Qualifying Provinces" means each of the provinces of Canada;
(t) "Subsidiary" means a subsidiary of the Corporation within the
meaning ascribed thereto in the Company Act (British Columbia) and
also includes a Subsidiary of a Subsidiary;
(u) "U.S. Offering Memorandum" means the private placement
memorandum for the private placement offering and resale of certain of
the Underwritten Shares by the Underwriters in the United States of
America;
(v) "Underwriters" means Midland and RBC Dominion Securities Inc.;
(w) "Underwriting Fee" means the fee to be paid to the
Underwriters under this Agreement of U.S.$0.30 per Underwritten Share,
being an aggregate of U.S.$1,350,000; and
(x) "$" and "dollars" means United States dollars.
Other terms which are defined elsewhere in this Agreement have the meanings so
ascribed.
4
-4-
2. FILING OBLIGATIONS
2.1 The Corporation shall, as soon as possible and not later than
4:00 p.m. (Vancouver time) on November 18, 1996, have prepared and filed the
Preliminary Prospectus with the Principal Jurisdiction and obtained a receipt
therefor pursuant to the expedited review procedures under the Canadian
Securities Laws for all provinces other than Quebec and by 5:00 p.m. Vancouver
time) on November 19, 1996 have prepared and filed the Preliminary Prospectus
in the English and French languages and obtained a receipt therefor from the
Quebec Securities Commission.
2.2 The Corporation shall, as soon as possible after any comments
have been satisfied with respect to the Preliminary Prospectus, and in any
event not later than November 28, 1996, have prepared and filed under the
Canadian Securities Laws the Prospectus (in the English and French languages,
as appropriate) (and shall have obtained receipts therefor by the close of
business on the respective days of filing) and shall have taken all other steps
and proceedings that may be necessary in order to qualify the Underwritten
Shares for distribution (or distribution to the public, as the case may be) in
each of the Qualifying Provinces by the Underwriters under the provisions of
Canadian Securities Law.
3. DUE DILIGENCE
3.1 Prior to the filing of the Prospectuses and during the
Distribution Period, the Corporation shall have allowed the Underwriters and
their counsel to participate fully in the preparation of, and to approve the
form of, such documents and to have reviewed any documents incorporated by
reference therein.
3.2 During the Distribution Period, the Corporation shall allow
the Underwriters to conduct all due diligence which they may reasonably require
to conduct in order to fulfil their obligations as underwriters and in order to
enable the Underwriters to responsibly execute any certificate required to be
executed by them in the Prospectuses.
3.3 The Corporation hereby represents, warrants and covenants as
follows to each of the Underwriters and acknowledges that each of the
Underwriters is relying upon such representations, warranties and covenants in
connection with its execution and delivery of this Agreement:
(a) the Corporation has been and will be at the Closing Time duly
organized and is and will be at the Closing Time validly subsisting
under the laws of British Columbia; each of the Corporation and the
Subsidiaries has and will at the Closing Time have all requisite
corporate power and authority to own, lease and operate its properties
and assets and conduct its business as currently conducted and to
carry out its obligations under this Agreement; to its knowledge each
of the Corporation and the Subsidiaries is current with all filings
required to be made under the laws of Canada, the Provinces and all
other jurisdictions in which it carries on any material business and
has all necessary licenses, leases, permits, authorizations and other
approvals necessary to permit it to conduct its business as described
in the Prospectuses and any Prospectus Amendment, except where the
absence of such power and authority or failure to make any filing or
obtain any license, lease, permit or authorization would not result in
a material adverse change;
5
-5-
(b) the authorized and issued capital of the Corporation is as
described in the Prospectus and, in the case of the issued capital,
the outstanding common shares will be validly issued and outstanding
as fully-paid and non-assessable at the Closing Time;
(c) except as disclosed in the Preliminary Prospectus, as at the
Closing Time, no holder of outstanding shares of the Corporation will
be entitled to any preemptive or any similar rights to subscribe for
any common shares or other securities of the Corporation and no
rights, warrants or options to acquire, or instruments convertible
into or exchangeable for any treasury shares of the Corporation will
be outstanding;
(d) the Corporation has all requisite corporate power and
authority to
(i) enter into this Agreement;
(ii) issue, sell and deliver the Underwritten Shares in
accordance with this Agreement; and
(iii) carry out all the terms and provisions of this
Agreement;
(e) the Corporation and each Subsidiary is and will be at the
Closing Time qualified to carry on business in all jurisdictions where
the failure to so qualify would result in a material adverse change;
(f) each of the Corporation and the Subsidiaries is not and will
not be at the Closing Time
(i) in breach or violation of any of the terms or
provisions of, or in default under; any indenture, debenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which it is a party or by which it is bound or
to which any of its property or assets is subject, which
breach or violation or the consequences thereof would, alone
or in the aggregate, result in a material adverse change; or
(ii) in violation of the provisions of its articles,
bylaws or resolutions or any statute or any order; rule or
regulation of any court or governmental agency or body having
jurisdiction over it or any of its properties which violation
or the consequences thereof would, alone or in the aggregate,
would result in a material adverse change;
(g) the execution and delivery of this Agreement, the issue and
sale of the Underwritten Shares and the performance or the
consummation of the transactions contemplated in this Agreement do not
and will not conflict with or result in a breach or violation of any
of the terms or provisions of, or constitute a default under (whether
after notice or lapse of time or both), any indenture, debenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Corporation is a party or by which it is bound
or to which any of its property or assets is subject, other than such
agreements which will terminate simultaneously with the Closing, which
breach or violation or the consequences thereof would, alone or in the
aggregate, result in a material adverse change, nor will such action
conflict with or result in any violation of the provisions of the
articles, bylaws or resolutions of the Corporation or any statute or
any order; rule or regulation of any court or governmental agency or
body having jurisdiction over it or any of its properties which
violation
6
-6-
or the consequences thereof would, alone or in the aggregate, would
result in a material adverse change;
(h) other than as may be required under the rules and by-laws of
The Toronto Stock Exchange and the New York Stock Exchange, no
consent, approval, authorization, order, registration or qualification
of or with any court or governmental agency or body is required for
the issue and sale of the Underwritten Shares by the Corporation or
the consummation by the Corporation of the transactions contemplated
in this Agreement;
(i) there is no legal or governmental action, proceeding or
investigation pending or, to the knowledge of the Corporation,
threatened, which questions the validity of the issuance or sale of
the Underwritten Shares by the Corporation or the validity of any
action taken or to be taken by the Corporation in connection with this
Agreement;
(j) at or before the Closing Time, all actions required to be
taken by or on behalf of the Corporation, including the passing of all
requisite resolutions of the Board of Directors, shall have occurred
so as to validly authorize and issue the Underwritten Shares to be
issued and sold by the Corporation;
(k) this Agreement has been duly authorized, executed and
delivered by the Corporation and constitutes a valid and binding
obligation of the Corporation, enforceable against it in accordance
with its terms, except as enforcement may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or
affecting the rights of creditors generally, and except as limited by
the application of equitable principles when equitable remedies are
sought and by the fact that rights to indemnity, contribution and
waiver, and the ability to sever unenforceable terms, may be limited
by applicable law;
(l) the Corporation will apply the net proceeds from the issue and
sale of the Underwritten Shares substantially in accordance with the
description of such matter in the Prospectuses;
(m) neither the Corporation nor any Subsidiary has received notice
from any governmental or regulatory authority of any jurisdiction in
which it carries on a material part of its business, or owns or leases
any material property, of any restriction on its ability to or of a
requirement for it to qualify to, nor is the Corporation otherwise
aware of any restriction on its ability to or of a requirement for it
or any Subsidiary to qualify to, conduct its business as described in
the Prospectuses and any Prospectus Amendment in such jurisdiction,
except such qualifications as have been satisfied;
(n) The Montreal Trust Company of Canada, at its principal offices
in Toronto, Ontario and Vancouver, British Columbia, has been duly
appointed as the registrar and transfer agent for the common shares of
the Corporation;
(o) the Underwritten Shares will be duly and validly created and
issued at the Closing Time;
(p) the statements in the second sentence of the second paragraph
under the heading "Eligibility for Investment" in the Prospectuses are
true and complete;
7
-7-
(q) to its knowledge the operations of the Corporation and its
subsidiaries are in substantial compliance with applicable
environmental laws and permits except to the extent that noncompliance
would not have a material adverse effect on the Corporation and its
subsidiaries, taken as a whole.
4. DELIVERY OF PROSPECTUSES AND RELATED DOCUMENTS
4.1 The Corporation shall deliver to the Underwriters prior to or
contemporaneously, as nearly as practicable, with the filing with the Principal
Jurisdiction of the Prospectuses or any Prospectus Amendment, a copy of the
following for each of the Underwriters and Underwriters' counsel:
(a) the Prospectuses and any Prospectus Amendment and for all
supporting documents, as filed with the Securities Commissions of the
British Columbia Securities Commission signed on behalf of the
Corporation and its directors in accordance with Canadian Securities
Laws and the receipt therefor of the British Columbia Securities
Commission;
(b) all documents incorporated, or containing information
incorporated, by reference into the Prospectuses and any Prospectus
Amendment, if such documents have not previously been delivered to the
Underwriters; and
(c) with respect to the Prospectus and any Prospectus Amendment
only, a "comfort letter" of KPMG addressed to the directors of the
Corporation and to the Underwriters, in form and substance acceptable
to the Underwriters, confirming the accuracy of such financial
information as required by the Underwriters.
4.2 The delivery by the Corporation to the Underwriters of the
Prospectuses and any Prospectus Amendment shall constitute a representation and
warranty to the Underwriters by the Corporation that:
(a) the information and statements contained or incorporated by
reference in the Prospectuses and any Prospectus Amendment (except any
information and statements relating solely to the Underwriters)
constitutes full, true and plain disclosure of all material facts
relating to the Corporation and to the Underwritten Shares; and
(b) the Prospectuses and any Prospectus Amendment do not
contain a misrepresentation.
Such delivery shall also have constituted, and shall constitute, the consent of
the Corporation to the use of the Prospectuses and any Prospectus Amendment by
the Underwriters in connection with the distribution of the Underwritten Shares
in the Qualifying Provinces.
8
-8-
5. TRANSLATION
5.1 The Corporation shall deliver to the Underwriters prior to the
time any French language version (the "French Version") of the Prospectuses or
any Prospectus Amendment is to be filed an opinion of counsel in the Province
of Quebec addressed to the Underwriters and to its counsel to the effect that
the French Version of the Prospectuses or any Prospectus Amendment to be signed
by the Underwriters is in all material respects a reasonable translation of the
English language version (the "English Version") of the Prospectuses or any
Prospectus Amendment signed by the Underwriters (other than the Financial
Statements of the Corporation and any portion of a documents not specifically
incorporated therein by reference) and sets forth fairly the same meaning as
the English Version.
The Corporation shall also deliver to the Underwriters contemporaneously with
such opinion an opinion of the auditors of the Corporation addressed to the
Underwriters and to their counsel to the effect that:
(a) the Financial Statements of the Corporation contained or
incorporated int he French Version are in all material respects a
complete and accurate translation of the Financial Statements of the
Corporation contained or incorporated in the English Version; and
(b) the information contained in the French Version which is
derived from or related to the Financial Statements of the Corporation
is translated in such a way as to be consistent in meaning with the
Financial Statements of the Corporation contained or incorporated in
the English Version.
Similar opinions as to translation shall be provided to the Underwriters and
addressed to the Underwriters and to their counsel with respect to any
Prospectus Amendment or other relevant document in the French language at the
time the same is presented to the Underwriters for their signature or; if their
signature is not required, at the time the same is filed with the Quebec
Securities Commission.
6. COMMERCIAL COPIES OF PROSPECTUS
6.1 The Corporation shall deliver to the Underwriters as soon as
possible, but in any event
(a) on or before 4:00 p.m. Vancouver time) on November 19, 1996 in
Vancouver; Toronto and Montreal, the Underwriters' reasonable
requirements of commercial copies of the English Version of the
Preliminary Prospectus, and
(b) on or before 4:00 p.m. Montreal time) on November 20, 1996 in
Montreal, the Underwriters' reasonable requirements of commercial
copies of the French Version of the Preliminary Prospectus.
6.2 The Corporation shall deliver to the Underwriters as soon as
possible, but in any event on or before 10:00 a.m. (local time) on the second
business day after the issuance of receipts for the Final Prospectus in British
Columbia and Quebec respectively
(a) in Vancouver; Toronto and Montreal, the Underwriters'
reasonable requirements of commercial copies of the English Version of
the Final Prospectus, and
9
-9-
(b) in Montreal, the Underwriters' reasonable requirements of
commercial copies of the French Version of the Final Prospectus.
6.3 The Corporation shall also deliver to the Underwriters as soon
as possible following the issuance of receipts for the Prospectus, copies of
the U.S. Offering Memorandum relating to the Final Prospectus and any amendment
or supplement thereto in such numbers and, at such cities as the Underwriters
may reasonably request by oral instructions given by the Underwriters to the
printer thereof.
7. DISTRIBUTION OF UNDERWRITTEN SHARES
7.1 The Underwriters:
(a) shall offer the Underwritten Shares for sale to the public,
directly and through banking and selling group members, only in
compliance with applicable Canadian Securities Laws and those
requirements set forth in Schedule A and the Underwriters will not
solicit offers to purchase or sell the Underwritten Shares so as to
require registration of the Underwritten Shares or filing of a
prospectus with respect to the distribution of the Underwritten Shares
under the laws of any jurisdiction other than the Provinces, and will
require each banking and selling group member to agree with the
Underwriters not to so solicit or sell. For purposes of this
subsection, the Underwriters shall be entitled to assume that the
Underwritten Shares are qualified for distribution in each Qualifying
Province and an Underwriter will not be liable to the Corporation
under this section with respect to a default by another Underwriter
under this section;
(b) shall not make use of any "green sheet" in respect of the
Underwritten Shares without the prior approval of the Corporation and
shall comply with the notice dated July 7, 1989, issued by the Ontario
Securities Commission with respect to the use of "green sheets" and
other marketing material during the waiting period under the Ontario
Securities Act; and
(c) shall use all reasonable efforts to complete and to cause the
members of the banking and selling group to complete the distribution
of the Underwritten Shares as soon as practicable after the closing
time.
7.2 Each of the Underwriters, within the Distribution Period, will
notify the Underwriters, and the Underwriters will notify the Corporation, when
distribution of the Underwritten Shares has terminated. Each of the
Underwriters will notify the Underwriters, and the Underwriters will notify the
Corporation, of the amount of Underwritten Shares sold in each Qualifying
Province as soon as possible after the Closing Date.
10
-10-
8. UNITED STATES OFFERS & SALES
8.1 The Underwriters shall offer and sell certain of the
Underwritten Shares in the United States in accordance with the terms and
conditions of Schedule A, which terms and conditions are incorporated herein by
reference.
9. MATERIAL CHANGES
9.1 During the Distribution Period, the Corporation shall promptly
notify the Underwriters in writing, with full particulars, of:
(a) any change (actual, contemplated or threatened) in the
business, affairs, operations, assets, liabilities (contingent or
otherwise), capital or ownership of the Corporation on a consolidated
basis; or
(b) any change in any matter covered by a statement contained or
incorporated by reference in the Prospectus or any Prospectus
Amendment;
which change is, or may be, of such a nature as to render the Prospectuses or
any Prospectus Amendment misleading or untrue in any material respect or would
result in any of such documents containing a misrepresentation or which would
result in any of such documents not complying in any material respect with any
of the Canadian Securities Laws or which change would reasonably be expected to
have a significant effect on the market price or value of the Underwritten
Shares. The Corporation shall in good faith discuss with the Underwriters any
change in circumstances (actual or proposed within the knowledge of the
Corporation) which is of such a nature that there is reasonable doubt whether
notice need be given to the Underwriters pursuant to this section and, in any
event, prior to making any filing referred to in section 9.2.
9.2 Subject to section 3.1, the Corporation shall promptly comply
with all applicable filing and other requirements, if any, under the Canadian
Securities Laws arising as a result of any change referred to in section 9.1
and shall prepare and file under all applicable Canadian Securities Laws, with
all possible dispatch, and in any event within any time limit prescribed under
applicable Canadian Securities Laws, any Prospectus Amendment as may be
required under applicable Canadian Securities Laws at any time during the
Distribution Period. The Corporation shall further promptly deliver to the
Underwriters a copy for each of the Underwriters and the Underwriters' counsel
of each Prospectus Amendment as filed with the Securities Commissions, and of
opinions and comfort letters with respect to each such Prospectus Amendment
substantially similar to those referred to in section 4.1.
9.3 The delivery by the Corporation to the Underwriters of each
Prospectus Amendment shall constitute a representation and warranty to the
Underwriters by the Corporation, with respect to the Prospectuses, as amended
by such Prospectus Amendment and by each Prospectus Amendment previously
delivered to the Underwriters, to the same effect as set forth in sections
4.2(a) and (b). Such delivery shall also constitute the consent of the
Corporation to the use of the Prospectuses, as amended or supplemented by any
Prospectus Amendment, by the Underwriters in connection with the distribution
of the Underwritten Shares in the Qualifying Provinces.
11
-11-
10. CLOSING
10.1 At the Closing Time the Corporation shall deliver to Midland,
on behalf of the Underwriters, a single certificate representing the
Underwritten Shares agreed to be purchased by the Underwriters pursuant to this
Agreement, registered in such name as Midland may specify at least 24 hours
prior to the Closing Time, against payment by Midland to or to the order of the
Corporation of the Purchase Price, and concurrently the Corporation shall pay
to the Underwriters the Underwriting Fee. All payments at the Closing Time
shall be made by certified cheque or bank draft in immediately available
Canadian funds.
10.2 The single common share certificate representing the
Underwritten Shares delivered to the Underwriters pursuant to section 10.1
shall be immediately exchanged for certificates representing Underwritten
Shares in the same aggregate number which will be released that day at such of
the principal offices of Montreal Trust Company in the cities of Vancouver;
Toronto and Montreal registered in such names as shall be designated in writing
by the Underwriters or their agents in sufficient time prior to the Closing
Date to permit such release. All exchanges of certificates representing
Underwritten Shares are to be made without cost to the Underwriters (other than
applicable transfer taxes, if any) for a period of 21 days after the Closing
Date.
11. CONDITIONS PRECEDENT
11.1 The following are conditions precedent to the obligation of
the Underwriters to close the transaction contemplated by this Agreement, which
conditions the Corporation covenants to exercise its best efforts to have
fulfilled at or prior to the Closing Time and which conditions may be waived in
writing in whole or in part by the Underwriters:
(a) the Underwritten Shares shall have attributes substantially as
set forth in the Prospectus;
(b) at the Closing Time, the Corporation shall have delivered to
the Underwriters a certificate, dated the Closing Date, signed on
behalf of the Corporation by any two of its officers satisfactory to
the Underwriters, and certifying that:
(i) there has been no adverse material change, financial
or otherwise, to the Closing Time in the assets, liabilities
(contingent or otherwise), capital, business, operations or
affairs of the Corporation on a consolidated basis, since
November 18, 1996;
(ii) no transaction of a nature material to the
Corporation on a consolidated basis has been entered into,
directly or indirectly, by the Corporation since November 18,
1996; and
(iii) the Corporation on a consolidated basis has no
material contingent liabilities;
(iv) no order, ruling or determination (excluding
temporary trading halts for the dissemination of information)
having the effect of ceasing or suspending trading in the
Underwritten Shares or any other securities of the Corporation
has been issued in any of the
12
-12-
Provinces or the United States of America and, to the
Corporation's knowledge, no proceedings for such purpose are
pending, contemplated or threatened;
(v) the representations and warranties of the Corporation
contained herein are true and correct as of the Closing Time
with the same force and effect as if made at and as of the
Closing Time; and
(vi) the Corporation has complied in all material respects
with all terms and conditions of this Agreement to be complied
with by the Corporation at or prior to the Closing Time;
(vii) no event of default under any agreement or instrument
pursuant to which indebtedness of the Corporation or any of
its Subsidiaries has been issued, and no event which, with the
giving of notice or the passage of time, or both, would
constitute an event of default under any such agreement or
instrument, has occurred and is continuing and no default
under any agreement or instrument to which the Corporation or
any of its Subsidiaries is a party or subject will occur as a
result of the sale of the Underwritten Shares in accordance
with the terms hereof;
(viii) there are no actions, suits or proceedings, whether
on behalf of or against the Corporation or its Subsidiaries
pending or; to the knowledge of the Corporation and its
Subsidiaries at law or in equity, before or by any court or
federal, provincial, municipal or governmental department,
commission, board, bureau, agency or instrumentality, domestic
or foreign, and which may in any way materially adversely
affect the Corporation or its Subsidiaries, which are not
fully disclosed in the Preliminary Prospectus;
(c) at the Closing Time, the Corporation shall have furnished to
the Underwriters evidence that the Underwritten Shares have been
listed for trading on The Toronto Stock Exchange and the New York
Stock Exchange and will be posted for trading at the opening of
trading on the Closing Date;
(d) the Underwriters shall have received at the Closing Time a
letter of the auditors of the Corporation updating their "comfort
letter" referred to in section 4.1, such letter to be in form and
content satisfactory to the Underwriters and their counsel; and
(e) at the Closing Time, the Underwriters shall have received
favourable legal opinions, dated the Closing Date, on behalf of the
Corporation from the Corporation's Counsel (and the Corporation's U.S.
counsel), and on behalf of the Underwriters from their counsel, with
respect to all such matters as the Underwriters may reasonably
request, including, without limitation, as to the issue and sale to
the public of the Underwritten Shares and that the attributes of the
Underwritten Shares are consistent with the description thereof in the
Prospectus and as to the matters set forth under the heading
"Eligibility for Investment" in the Prospectus.
13
-13-
12. TERMINATION
12.1 In addition to any other remedies which may be available to
the Underwriters, the Underwriters (or any of them) shall be entitled, at their
or its option, to terminate and cancel their or its obligations under this
Agreement, without any liability on their or its part, if prior to the Closing
Time:
(a) there shall have occurred any adverse material change in
relation to the Corporation, or a development that could result in an
adverse material change in relation to the Corporation; or
(b) there shall have occurred any change in the applicable
securities laws of any province of Canada, or any state of the United
States or any inquiry, investigation or other proceeding is made or
any order is issued under or pursuant to any statute of Canada or any
province thereof or any statute of the United States or any state
thereof or any stock exchange in relation to the Corporation or any of
its securities (except for any inquiry, investigation or other
proceeding or order based upon activities of the Underwriters and not
upon activities of the Corporation);
which, in the reasonable opinion of any of the Underwriters, prevents or
restricts trading in or the distribution of the Underwritten Shares or
adversely affects or might reasonably be expected to adversely affect the
investment quality or marketability of the Underwritten Shares; or
(c) there should develop, occur or come into effect or existence
any event, action, state, condition or major financial occurrence of
national or international consequence or any law or regulation which,
in the opinion of any of the Underwriters, seriously adversely
affects, or involves, or will seriously adversely affect or involve,
the financial markets or the business, operations or affairs of the
Corporation and its subsidiaries, taken as a whole; or
(d) a cease trading order is made by any Securities Commission or
other competent authority by reason of the fault of the Corporation or
its respective directors, officers and agents and such cease trading
order is not rescinded within 48 hours prior to Closing;
each Underwriter shall be entitled, at its respective option, to terminate and
cancel its obligations to the Corporation under this Agreement by written
notice to that effect given to the Corporation prior to the Closing. In the
event of any such termination pursuant to the provisions of this section (or
any termination pursuant to the provisions of this Agreement) by one of the
Underwriters, each of the other Underwriters shall be deemed contemporaneously
to have terminated its obligations under this Agreement unless any such other
Underwriter shall, within 24 hours after notice of termination is given, notify
the Corporation to the effect that it is assuming the obligations of the
Underwriters terminating their obligations. In the event of any such
termination, the Corporation's obligations under this Agreement to the
Underwriters who have so terminated shall be at an end except for any liability
of the Corporation provided for in sections 15 and 16.
14
-14-
13. CONDITIONS
13.1 All terms and conditions of this Agreement and all
representations and warranties contained herein shall be construed as
conditions and any breach or failure to comply in all material respects thereof
shall entitle the Underwriters, at their respective options, in addition to and
not in lieu of any other remedies the Underwriters have in respect thereof, to
terminate and cancel their obligation to purchase the Underwritten Shares by
notice in writing to that effect given to the Corporation at or prior to the
Closing Time. The Underwriters may waive in whole or in part or extend the
time for compliance with any of such terms and conditions without prejudice to
their rights in respect of any other of such terms and conditions or any other
or subsequent breach or non-compliance, provided that to be binding on the
Underwriters any such waiver or extension must be in writing by each of them.
14. RESTRICTION ON FURTHER ISSUES
14.1 During the period commencing on the date hereof and ending on
the day which is 90 days following the Closing Date, the Corporation shall not,
without the prior written consent of the Underwriters, not to be unreasonably
withheld:
(a) issue any of its common shares or financial instruments
convertible or exercisable into common shares of the Corporation,
other than:
(i) to satisfy instruments in existence on November 18,
1996; or
(ii) pursuant to any directors', officers', employees'
benefit, incentive or stock option plans of the Corporation in
existence on November 18, 1996;
(b) agree or become bound to do so; or
(c) publicly announce any intention to do so.
15. INDEMNIFICATION
15.1 As further consideration for the services provided by the
Underwriters pursuant to this Agreement, the Corporation agrees to indemnify
and save harmless each of the Underwriters and each of their directors,
officers, employees and agents (each an "Indemnified Party") from and against
all liabilities, claims, losses (other than loss of profits), reasonable costs,
damages and reasonable expenses ("liabilities") in any way caused by, or
arising directly or indirectly from, or in consequence of:
(a) any information or statement (except any statement furnished
by or relating solely to the Underwriters and provided by the
Underwriters to the Corporation in writing) contained in the
Prospectuses or any Prospectus Amendment or in any certificate of the
Corporation delivered pursuant to this Agreement which at the time and
in the light of the circumstances under which it was made contains or
is alleged to contain a misrepresentation;
15
-15-
(b) any omission or alleged omission to state in the Prospectuses,
any Prospectus Amendment or any certificate of the Corporation
delivered pursuant to this Agreement any fact (except facts relating
solely to the Underwriters), whether material or not, required to be
stated in such document or necessary to make any statement in such
document not misleading in light of the circumstances under which it
was made;
(c) any order made or enquiry, investigation or proceedings
commenced or threatened by any securities commission or other
competent authority based upon any untrue statement or omission or
alleged untrue statement or alleged omission or any misrepresentation
or alleged misrepresentation (except a statement or omission or
alleged statement or omission relating solely to the Underwriters) in
the Prospectuses or any Prospectus Amendment or based upon any failure
to comply with applicable securities laws (other than any failure or
alleged failure to comply by the Underwriters or members of the
banking and selling group), preventing or restricting the trading in
or the sale or distribution of the Underwritten Shares in any of the
Provinces;
(d) the non-compliance or alleged non-compliance by the
Corporation with any Securities Laws including the Corporation's
noncompliance with any statutory requirement to make any document
available for inspection; or
(e) the inaccuracy or breach of any representation or warranty of
the Corporation contained in this Agreement or in any document
delivered by the Corporation in connection with this offering or the
failure by the Corporation to perform any covenant contained in this
Agreement.
15.2 Notification of Claims
If any matter or tiling contemplated by this section 15 (any such matter or
thing being referred to as a "Claim") is asserted against any person or company
m respect of which indemnification is or might reasonably be considered to be
provided, such person or company (the "Indemnified Party") will notify the
Corporation, as soon as possible of the nature of such Claim and the
Corporation shall be entitled (but not required) to assume the defence of any
suit brought to enforce such Claim; provided, however, that the defence shall
be conducted through legal counsel acceptable to the Indemnified Party and that
no settlement of any such Claim may be made by the Indemnified Party without
the prior written consent of the Corporation and the Corporation shall not be
liable for any settlement of any such Claim unless it has consented in writing
to such settlement.
15.3 Right of Indemnity in Favour of Others
With respect to any Indemnified Party who is not a party to this Agreement, the
Underwriters shall obtain and hold the rights and benefits of this section 15
in trust for and on behalf of such Indemnified Party.
15.4 Retaining Counsel
In any such Claim, the Indemnified Party shall have the right to retain other
counsel to act on his or its behalf, provided that the reasonable fees and
disbursements of such counsel shall be paid by the Indemnified Party unless
16
-16-
(a) the Corporation, on the one hand, and the Indemnified Party,
on the other hand, shall have mutually agreed to the retention of the
other counsel; or
(b) the named parties to any such Claim (including any added third
or impleaded party) include both the Indemnified Party, on the one
hand, and the Corporation, on the other hand, and the representation
of both parties by the same counsel would be inappropriate due to the
actual or potential differing interests between them. The Corporation
shall be responsible hereunder only for the payment of the fees and
disbursements of one set of counsel acting on behalf of the
Indemnified Party.
15.5 Contribution
In order to provide for a just and equitable contribution in circumstances m
which the indemnity provided in this section 15 would otherwise be available in
accordance with its terms but is, for any reason, held to be unavailable to or
unenforceable by the Underwriters or enforceable otherwise than in accordance
with its terms, the Underwriters and the Corporation shall contribute to the
aggregate of all claims, expenses, costs and liabilities and all losses (other
than loss of profits) of a nature contemplated in this section 15 in such
proportions so that: (i) each Underwriter is responsible for the portion
represented by the percentage that the aggregate fee payable by the Corporation
to such Underwriter bears to the aggregate offering price of the Underwritten
Shares; and (ii) the Corporation is responsible for the balance, whether or not
they have been sued together or sued separately. The Underwriters shall not in
any event be liable to contribute, in the aggregate, any amounts in excess of
such aggregate fee or any portion of such fee actually received. However, no
party who has engaged in any fraud, fraudulent misrepresentation or negligence
shall be entitled to claim contribution from any person who has not engaged in
such fraud, fraudulent misrepresentation or negligence.
15.6 Right of Contribution in Addition to Other Rights
The rights to contribution provided in this section 15 shall be in addition to
and not in derogation of any other right to contribution which the Underwriters
may have by statute or otherwise at law.
15.7 Calculation of Contribution
In the event that the Corporation may be held to be entitled to contribution
from the Underwriters under the provisions of any statute or at law, the
Corporation shall be limited to contribution in an amount not exceeding the
lesser of:
(a) the portion of the full amount of the loss or liability giving
rise to such contribution for which the Underwriters are responsible,
as determined in section 15.1; and
(b) the amount of the aggregate fee actually received by the
Underwriters from the Corporation under this Agreement.
17
-17-
15.8 Notice
If the Underwriters have reason to believe that a claim for contribution may
arise, they shall give the Corporation notice of such claim in writing, as soon
as reasonably possible, but failure to notify the Corporation shall not relieve
the Corporation of any obligation which it may have to the Underwriters under
this section 15.
15.9 Right of Contribution in Favour of Others
With respect to this section 15, the Corporation acknowledges and agrees that
the Underwriters are contracting on their own behalf and as agents for their
directors, officers, employees and agents.
16. EXPENSES
Whether or not the transactions contemplated in this Agreement shall be
completed, all expenses of or incidental to the creation, issue and delivery of
the Underwritten Shares and all expenses of or incidental to all other matters
in connection with the transactions set out in this Agreement shall be
collectively borne by the Corporation directly including, without limitation,
(i) fees and expenses payable in connection with the qualification of the
Underwritten Shares for distribution to the public, fees relating to listing
the Underwritten Shares on any exchanges, fees and expenses of counsel for the
Corporation, all fees and expenses of local counsel, all fees and expenses of
the Corporation's auditors, all costs incurred in connection with the
preparation and printing of the Prospectuses, Prospectus Amendments and
certificates representing the Underwritten Shares and all costs incurred in
connection with the preparation of any marketing documents or other marketing
devices (including slide presentations and videos, if any); and (ii) fees,
taxes and disbursements of the Underwriters' legal counsel; provided, however,
if any Underwritten Shares are sold in the Province of Quebec pursuant to the
Prospectus, the Underwriters agree that the Corporation shall only bear
responsibility for 50% of the fees, taxes and disbursements of the
Underwriters' legal counsel.
17. SEVERAL OBLIGATIONS
17.1 The obligations of the Underwriters to purchase the
Underwritten Shares at the Closing Time shall be several and not joint, and the
percentage of the Underwritten Shares which each of the Underwriters shall be
severally obligated to purchase is as follows:
Midland ▇▇▇▇▇▇ Capital Inc. 50%
RBC Dominion Securities Inc. 50%
----
100%
17.2 If one of the Underwriters shall or refuse to purchase its
applicable percentage of the Underwritten Shares, the other Underwriter shall
be relieved, without liability, of its obligation to purchase its respective
percentage of the Underwritten Shares, provided that the Underwriter who shall
be willing and able to purchase its respective percentage of the Underwritten
Shares shall have the right, but not the obligation, to purchase severally the
Underwritten Shares not taken up.
18
-18-
17.3 Notwithstanding anything contained in section 17.2, the
Underwriters shall not be entitled to purchase in any event less than all of
the Underwritten Shares. In addition, nothing contained in section 17.2 shall
relieve from responsibility to the Corporation the Underwriters who shall
default in its obligation to purchase its respective percentage of the
Underwritten Shares.
18. AUTHORITY TO UNDERWRITERS
18.1 All steps which must or may be taken by the Underwriters in
connection with this Agreement, including any agreement to amend this
Agreement, but with the exception of steps contemplated by sections 12 and 15,
may be taken by Midland on the Underwriters' behalf, after consultation with
the other Underwriters, and this is the authority to the Corporation for
accepting notification of any such steps from Midland on their behalf.
19. NOTICES
19.1 Any notices or other communication that may be required or
desired to be given pursuant to this Agreement may be given in writing by
telecopier or by hand delivery, delivery or other charges prepaid, and:
(a) in the case of notice to the Corporation, be addressed to:
Glamis Gold Ltd.
3324 Four Bentall Centre
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Chief Financial Officer and Treasurer
(telecopy: (▇▇▇) ▇▇▇-▇▇▇▇)
(b) in the case of notice to the Underwriters, be addressed to:
Midland ▇▇▇▇▇▇ Capital Inc.
▇▇▇▇ - ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇
(telecopy: (▇▇▇) ▇▇▇-▇▇▇▇)
and to:
RBC Dominion Securities Inc.
▇▇▇▇ - ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇; B.C.
19
-19-
V6C 3B1
Attention: ▇▇▇ ▇▇▇▇▇
(telecopy: (▇▇▇) ▇▇▇-▇▇▇▇)
19.2 Any such notice or other communication shall be deemed to be
given at the time telecopied or delivered, if telecopied or delivered to the
recipient on a business day and before 5:00 p.m. Vancouver time) on such
business day, and otherwise shall be deemed to be given at 9:00 a.m. Vancouver
time) on the next following business day.
20. MISCELLANEOUS
20.1 The representations and warranties contained in this Agreement
shall survive the purchase by the Underwriters of the Underwritten Shares and
shall continue in full force and effect unaffected by any subsequent
disposition by the Underwriters of the Underwritten Shares.
20.2 Time shall be of the essence of this Agreement.
20.3 This Agreement may be executed in several counterparts, each
of which when so executed shall be deemed to be an original but which together
shall constitute one and the same agreement.
20.4 This Agreement constitutes the entire agreement between the
parties with respect to the subject matter hereof and supersedes all prior
agreements and understandings, both written and oral, among such parties with
respect to the subject matter hereof.
20.5 If any provision of this Agreement is determined to be void or
unenforceable in whole or in part, it shall be deemed not to affect or impair
the validity of any other provision of this Agreement and such void or
unenforceable provision shall be severable from this Agreement.
20.6 This Agreement shall be governed by and interpreted in
accordance with the laws of the Province of British Columbia and the federal
laws of Canada applicable therein. Each of the parties hereto irrevocably
attorns to the jurisdiction of the courts of the Province of British Columbia.
Please confirm your acceptance of this offer by signature of an authorized
officer or officers in the space set forth below.
MIDLAND ▇▇▇▇▇▇ CAPITAL INC. RBC DOMINION SECURITIES INC.
By: "▇.▇. ▇▇▇▇▇▇▇▇▇▇" By: "▇▇▇ ▇▇▇▇▇"
----------------------- --------------------------
20
-20-
The foregoing is accepted by Glamis Gold Ltd.
Dated the 18th day of November, 1996.
GLAMIS GOLD LTD.
By: "▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇"
-----------------------
Chief Financial Officer
21
-21-
SCHEDULE A
UNITED STATES OFFERS AND SALES
As used in this Schedule A, the following terms shall have the meanings
indicated:
(a) "Directed Selling Efforts" means "directed selling efforts" as that
term is defined in Regulation S. Without limiting the foregoing, but
for greater clarity in this Schedule, it means, subject to the
exclusions from the definition of "directed selling efforts" contained
in Regulation S, any activity undertaken for the purpose of, or that
could reasonably be expected to have the effect of, conditioning the
market in the United States for any of the securities offered, and
includes the placement of any advertisement in a publication with a
general circulation in the United States that refers to the offering
of the Underwritten Shares;
(b) "Institutional Accredited Investor" means an "accredited investor" as
that term is defined in Rule 501(a)(1),(2),(3) or (7) of Regulation D;
(c) "Regulation D" means Regulation D adopted by the SEC under the U.S.
Securities Act;
(d) "Regulation S" means Regulation S adopted by the SEC under the U.S.
Securities Act;
(e) "Reporting Issuer" means a "reporting issuer" as that term is defined
in Regulation S;
(f) "Restricted Period" means the 40 day period that commences on the
later of (i) the date the securities are first offered to persons
other than distributors in reliance on Regulation S or (ii) the
Closing Date;
(g) "SEC" means the United States Securities and Exchange Commission;
(h) "United States" means the United States of America, its territories
and possessions, any state of the United States, and the District of
Columbia;
(i) "U.S. Person" means U.S. person as that term is defined in Regulation
S; and
(j) "U.S. Exchange Act" means the United States Securities Exchange Act of
1934, as amended;
(k) "U.S. Securities Act" means the United States Securities Act of 1933,
as amended.
Capitalized terms not otherwise defined herein shall have the meanings ascribed
thereto in the Underwriting Agreement.
22
-2-
1. The Company represents, warrants, covenants and agrees that:
(a) the Company is a Reporting Issuer;
(b) neither the Company nor any of its affiliates, nor any person
acting on its or their behalf, has made or will make:
(i) any offer to sell, or any solicitation of an offer to
buy, any Underwritten Shares to a U.S. Person or a person in
the United States; or
(ii) any sale of Underwritten Shares unless, at the time
the buy order was or will have been originated, the purchaser
was outside the United States or the Company, its affiliates,
and any person acting on its or their behalf reasonably
believe that the purchaser was outside the United States;
(c) during the period in which the Underwritten Shares are offered
for sale, neither it nor any of its affiliates, nor any person acting
on its or their behalf has made or will make any Directed Selling
Efforts in the United States, or has taken or will take any action
that would cause the exclusion from registration afforded by
Regulation S to be unavailable for offers and sales of the
Underwritten Shares pursuant to this Agreement;
(d) none of the Company, its affiliates or any person acting on
its or their behalf has engaged or will engage in any form of general
solicitation or general advertising (as those terms are used in
Regulation D of the U.S. Securities Act) including advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar media, or broadcast over radio, or television, or
any seminar or meeting whose attendees have been invited by general
solicitation or general advertising;
(e) except with respect to the offer and sale of Underwritten
Shares offered hereby, the Company has not, since December 31, 1995,
sold, offered for sale or solicited any offer to buy any of its
securities in the United States or to a U.S. Person;
(f) the Company is not an open-end investment company or unit
investment trust registered or required to be registered or close- end
investment company required to be registered but not registered, under
the United States Investment Company Act of 1940;
(g) any press release issued by the Company in the United States
in connection with the offering will comply with the requirements of
Rule 135c of the U.S. Securities Act; and
(h) within 15 days following the Closing Date, the Company will
file with the SEC a Current Report on Form 8-K with respect to Item 9
thereof.
23
-3-
2. The Underwriters severally but not jointly represent and warrant to
and covenant and agree with the Company as follows:
(a) the Underwriters acknowledge that none of the Underwritten
Shares have been or will be registered under the U.S. Securities Act
and that such securities are either:
(i) being offered and sold outside the United States in
reliance upon an exclusion from the registration requirements
stated under the U.S. Securities Act provided by Regulation S
thereof; or
(ii) being offered and sold in the United States in
reliance upon an exemption from registration under the U.S.
Securities Act;
(b) The Underwriters have offered and sold and will offer and sell
Underwritten Shares (i) as part of their distribution at any time and
(ii) otherwise until the conclusion of the Restricted Period, only in
accordance with Rule 903 of Regulation S under the U.S. Securities
Act (or as provided in paragraph 3 below). Accordingly, neither the
Underwriters nor any of their affiliates nor any person acting on
their behalf or on behalf of their affiliates has made or will make,
except to the extent permitted by paragraph 3 hereof:
(i) any offer to sell or any solicitation of an offer to
buy, any Underwritten Shares to any U.S. Person or person in
the United States;
(ii) any sale of Underwritten Shares to any purchaser
unless, at the time the buy order was or will have been
originated, the purchaser was outside the United States, or
such Underwriter; affiliate, or person acting on behalf of
either reasonably believed that such purchaser was outside the
United States; or
(iii) any Directed Selling Efforts in the United States
with respect to the Underwritten Shares.
The Underwriters and such affiliates will comply with the offering
restrictions requirement of Regulation S;
(c) The Underwriters agree that, at or prior to confirmation of
sale of Underwritten Shares, it will have sent to each distributor,
dealer or person receiving a selling concession, fee or other
remuneration that purchases Underwritten Shares prior to the
expiration of the Restricted Period, a confirmation or notice to
substantially the following effect:
"The securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "U.S. Securities Act") and may not be
offered or sold within the United States or to, or for the account or
benefit of, any U.S. Person (i) as part of their distribution at any
time or (ii) otherwise
24
-4-
until the conclusion of the restricted period (as defined in Schedule
A of the Underwriting Agreement). Terms used herein have the meanings
given to them in Regulation S;" and
(d) the Underwriters agree to obtain substantially identical
undertakings from each member of any banking and selling group formed
in connection with the distribution contemplated hereby. Other than
any banking and selling group agreement, the Underwriters have not
entered and will not enter into any contractual arrangement with
respect to the distribution of the Underwritten Shares except with its
affiliates or with the prior written consent of the Company.
3. The Underwriters may offer the Underwritten Shares in the United
States to certain Institutional Accredited Investors and in connection
therewith severally but not jointly represent and warrant to and covenant and
agree with Company as follows:
(a) each Underwriter having a broker-dealer affiliate registered
under the U.S. Exchange Act, acting through such broker-dealer
affiliate, will offer the Underwritten Shares in the United States to
a limited number of Institutional Accredited Investors with which such
Underwriter has a pre-existing relationship;
(b) immediately prior to soliciting such offerees, the
Underwriters had reasonable grounds to believe and did believe that
each offeree is an Institutional Accredited Investor;
(c) the aggregate number of Institutional Accredited Investors to
which such broker-dealer affiliates will make offers shall not exceed
thirty (30);
(d) no form of general solicitation or general advertising has
been or will be used (as those terms are used in Regulation D under
the U.S. Securities Act), including advertisements, articles, notices
or other communications published in any newspaper, magazine or
similar media or broadcast over radio or television, or any seminar or
meeting whose attendees had been invited by general solicitation or
general advertising, in connection with the offer or sale of the
Underwritten Shares in the United States;
(e) the Underwriters shall exercise reasonable care to assure that
the purchasers of the Underwritten Shares are not "underwriters"
within the meaning of Section 2(11) of the U.S. Securities Act by
taking the following actions:
(i) reasonable inquiry to determine if the purchaser is
acquiring the securities for itself or for other persons; and
(ii) written disclosure to each purchaser prior to sale
that the Shares have not been registered under the U.S.
Securities Act and, therefore, cannot be resold unless
registered under the U.S. Securities Act or an exemption or
exclusion from registration is available;
25
-5-
(f) All offers and sales of the Underwritten Shares in the United
States will be effected by Midland ▇▇▇▇▇▇ Capital Corporation and RBC
Dominion Securities Corporation (the "Placement Agents") in accordance
with all applicable U.S. broker-dealer requirements;
(g) Any offer or sale, or solicitation of an offer to buy
Underwritten Shares that has been made or will be made in the United
States will be made only in transactions that are exempt from
registration under applicable "blue sky" securities laws;
(h) each offeree will be provided with a copy of the Final
Prospectus relating to the Underwritten Shares, together with a U.S.
Offering Memorandum, and no other written material other than the
Preliminary Prospectus relating to the Underwritten Shares, together
with a U.S. Offering Memorandum, will be used in connection with the
offer and sale of the Underwritten Shares in the United States; and
(i) prior to any resale of Underwritten Shares in the United
States, it shall cause each purchaser thereof (a "U.S. Purchaser") to
represent, warrant and agree in writing to the Placement Agent as set
forth in the U.S. Purchaser's Letter attached hereto as Exhibit A.
26
-6-
EXHIBIT A
U.S. PURCHASER'S LETTER
Glamis Gold Ltd. Underwriters' U.S. Affiliates
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
---------------------------------- ---------------------------------
PURCHASE OF UNDERWRITTEN SHARES OF GLAMIS GOLD LTD.
Gentlemen and Ladies:
In connection with its agreement to purchase the number of Common Shares (the
"Offered Securities") of Glamis Gold Ltd. (the "Company") indicated herein, the
undersigned represents, warrants and covenants to you as follows:
(a) it is authorized to consummate the purchase of the Offered
Securities;
(b) it understands that the Offered Securities have not been and
will not be registered under the United States Securities Act of 1933,
as amended (the "Securities Act") or any applicable state securities
laws and that the contemplated sale is being made in reliance on a
private placement exemption from such registration only to
institutional accredited investors (as such term is defined on Annex A
hereto, "Institutional Accredited Investors");
(c) it has received a copy, for its information, of the Canadian
Final Prospectus of the Company together with a U.S. covering
memorandum relating to the offering of the Offered Securities and it
has had access to such additional information, if any, concerning the
Company as it has considered necessary in connection with its
investment decision to acquire the Offered Securities;
27
-7-
(d) it is purchasing Offered Securities in an amount exceeding
US$400,000;
(e) it has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of its
investment in the Offered Securities and is able to bear the economic
risks of such investment;
(f) it and any account for which it is purchasing Offered
Securities are resident in the United States;
(g) it is an Institutional Accredited Investor and is acquiring
the Offered Securities for its own account or for the account of an
Institutional Accredited Investor as to which it exercises sole
investment discretion, and not with a view to any resale, distribution
or other disposition of the Offered Securities in violation of the
United States securities laws or applicable state securities laws;
(h) it acknowledges that it has not purchased Offered Securities
as a result of any general solicitation or general advertising,
including advertisements, articles, notices or other communications
published in any newspaper, magazine or similar media or broadcast
over radio or television, or any seminar or meeting whose attendees
have been invited by general solicitation or general advertising;
(i) it agrees that if it decides to offer, sell or otherwise
transfer any of the Offered Securities, it will not offer, sell or
otherwise transfer any of such securities, directly or indirectly,
unless (i) the sale is to the Company; (ii) the sale is made outside
the United States in compliance with the requirements of Rule 904 of
Regulation S, if applicable (or such successor rule or regulation as
then in effect); (iii) the sale is made pursuant to an exemption from
registration under the U.S. Securities Act provided by Rule 144
thereunder, if available, and in compliance with any applicable state
securities laws or (iv) in a transaction that does not require
registration under the Securities Act and any applicable state
securities laws, and with respect to subparagraphs (iii) and (iv), it
has prior to such sales, furnished to the Company an opinion of
counsel of recognized standing reasonably satisfactory to the Company;
(i) it understands and acknowledges that upon the original
issuance thereof, and until such time as the same is no longer
required under applicable requirements of the Securities Act or
applicable state securities laws, certificates representing Offered
Securities, and all certificates issued in exchange therefor or in
substitution thereof, shall bear the following legend:
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND MAY BE OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO
THE COMPANY, (B) OUTSIDE THE UNITED STATES IN ACCORDANCE WITH RULE 904
OF REGULATIONS UNDER THE SECURITIES ACT, IF APPLICABLE, (C) PURSUANT
TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
28
-3-
ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE
WITH ANY APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION
THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT AND ANY
APPLICABLE STATE SECURITIES LAWS. DELIVERY OF THIS CERTIFICATE MAY
NOT CONSTITUTE GOOD DELIVERY IN SETTLEMENT OF TRANSACTIONS ON STOCK
EXCHANGES IN CANADA. A NEW CERTIFICATE BEARING NO LEGEND MAY BE
OBTAINED FROM THE REGISTRAR AND TRANSFER AGENT UPON DELIVERY OF THIS
CERTIFICATE AND A DULY EXECUTED DECLARATION, IN A FORM SATISFACTORY TO
THE REGISTRAR AND TRANSFER AGENT AND THE COMPANY, TO THE EFFECT THAT
SUCH SALE IS BEING MADE IN ACCORDANCE WITH RULE 904 OF REGULATION S
UNDER THE SECURITIES ACT.";
provided, that if securities are being sold outside the United States
in compliance with the requirements of Rule 904 of Regulation S, any
such legend may be removed by providing a declaration to the registrar
and transfer agent, to the effect set forth on Annex B hereto (or as
the Company may prescribe from time to time);
(j) it consents to the Company making a notation on its records or
giving instructions to any transfer agent of the Offered Securities in
order to implement the restrictions on transfer set forth and
described herein;
(k) if required by applicable securities legislation, regulatory
policy or order or by any securities commission, stock exchange or
other regulatory authority, it will execute, deliver and file and
otherwise assist the Company in filing reports, questionnaires,
undertakings and other documents with respect to the issue of the
Offered Securities.
The undersigned acknowledges that the representations and warranties and
agreements contained herein are made by it with the intent that they may be
relied upon by you in determining its eligibility to purchase the Offered
Securities. By this letter the undersigned represents and warrants that the
foregoing representations and warranties are true and that they shall survive
the purchase by it of the Offered Securities and shall continue in full force
and effect notwithstanding any subsequent disposition by the undersigned of
Offered Securities.
You are irrevocably authorized to produce this letter or a copy hereof to any
interested party in any administrative or legal proceeding or official inquiry
with respect to the matters covered hereby.
Registration of made as follows (if space is the certificate(s) representing
the Offered Securities should be insufficient, attach a list):
29
-4-
Name:
--------------------------------
Address:
--------------------------------
--------------------------------
--------------------------------
Number of Offered Securities
Purchased:
Total Purchase Price:
A check in the amount set forth above accompanies this letter.
The certificate(s) representing the Offered Securities should:
[ ] be mailed by registered mail to the registered holder(s) at the
address set forth in the prior paragraph; or
[ ] be made available to be picked up at the principal office of the
Company's Registrar and Transfer Agent in the City of Toronto,
Ontario.
Please check one box, failing which such certificate will be mailed by
registered mail to the registered holder(s) as described above.
Dated: __________________________ ______________________________
Name of Purchaser
By: ______________________________
Name:
Title:
AGREED AND ACCEPTED
GLAMIS GOLD LTD.
By: __________________________________________
Name:
Title:
30
-5-
ANNEX A
DEFINITION OF INSTITUTIONAL ACCREDITED INVESTOR
"Institutional Accredited Investor" means any entity which comes within any of
the following categories:
1. Any bank as defined in Section 3(a)(2) of the Securities Act or any
savings and loan association or other institution as defined in
Section 3(a)(5)(A) of the Securities Act whether acting in its
individual or fiduciary capacity; any broker dealer registered
pursuant to Section 15 of the Securities Exchange Act of 1934; any
insurance company as defined in Section 2(13) of the Securities Act;
any investment company registered under the Investment Company Act of
1940 or a business development company as defined in Section 2(a)(48)
of that Act; any Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958; any plan established and
maintained by a state, its political subdivisions, or any agency or
instrumentality of a state or its political subdivisions, for the
benefit of its employees, if such plan has total assets in excess of
U.S.$5,000,000; any employee benefit plan within the meaning of the
Employee Retirement Income Security Act of 1974, if the investment
decision is made, by a plan fiduciary, as defined in Section 3(21) of
such Act, which is either a bank, savings and loan association,
insurance company, or registered investment adviser, or if the
employee benefit plan has total assets in excess of U.S.$5,000,000,
or, if a self-directed plan, with investment decisions made solely by
persons that are accredited investors;
2. Any private business development company as defined in Section
202(a)(22) of the Investment Advisers Act of 1940;
3. Any organization described in Section 501(c)(3) of the internal
Revenue Code, corporation, Massachusetts or similar business trust, or
partnership, not formed for the specific purposes of acquiring the
securities offered, with total assets in excess of U.S.$5,000,000;
4. Any trust with total assets in excess of U.S.$5,000,000, not formed
for the specific purpose of acquiring the securities offered, whose
purchase is directed by a sophisticated person, being defined as a
person who has such knowledge and experience in financial and business
matters that he or she is capable of evaluating the merits, and risks
of the prospective investment.
31
-2-
ANNEX B
FORM OF DECLARATION FOR REMOVAL OF LEGEND
TO: Montreal Trust Company of Canada
as registrar and transfer agent
for Underwritten Shares of
Glamis Gold Ltd.
The undersigned (a) acknowledges that the sale of the securities of Glamis Gold
Ltd. (the "Company") to which this declaration relates is being made in
reliance on Rule 904 of Regulation S under the United States Securities Act of
1933, as amended (the "Securities Act") and (1)) certifies that (1) the
undersigned is not an affiliate of the Company as that term is defined in the
Securities Act, (2) the offer of such securities was not made to a person in
the United States and either (A) at the time the buy order was originated, the
buyer was outside the United States, or the seller and any person acting on its
behalf reasonably believe that the buyer was outside the United States or (B)
the transaction was executed on or through the facilities of The Toronto Stock
Exchange, The Montreal Exchange or the Vancouver Stock Exchange and neither the
seller nor any person acting on its behalf knows that the transaction has been
prearranged with a buyer in the United States, (3) neither the seller nor any
affiliate of the seller nor any person acting on any of their behalf has
engaged or will engage in any directed selling efforts in the United States in
connection with the offer and sale of such securities, (4) the sale is bona
fide and not for the purpose of "washing off" the resale restrictions imposed
because the securities are "restricted securities" (as such term is defined in
Rule 144(a)(3) under the Securities Act), (5) the seller does not intend to
replace the securities sold in reliance on Rule 904 of the Securities Act with
fungible unrestricted securities and (6) the contemplated sale is not a
transaction, or part of a series of transactions which, although in technical
compliance with Regulation S, is part of a plan or scheme to evade the
registration provisions of the Securities Act. Terms used herein have the
meanings given to them by Regulation S.
Dated: ______________________ ______________________________
Name of Seller
By: _____________________________
Name:
Title: