<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) February 26, 1999
--------------------------------
GLAMIS GOLD LTD.
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(Exact name of registrant as specified in its charter)
British Columbia, Canada
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(State or other jurisdiction of incorporation)
0-31986 (86-689) None
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(Commission File Number) (IRS Employer Identification No.)
5190 Neil Road, Suite 310, Reno, Nevada 89502
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(Address of principal executive officers) (Zip Code)
Registrant's telephone number, including area code (775) 827-4600
-----------------------------
n/a
(Former name or former address, if changed since last report)
Exhibits follow Page 5
Page 1 of 43 Pages
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ITEM 2: Issuance of Securities
On February 26, 1999, the Registrant completed the documents required for the
acquisition (the "Acquisition) of 100% of the issued and outstanding common
shares of Rayrock Resources Inc. ("Rayrock"), an Ontario corporation the shares
of which were listed on The Toronto Stock Exchange. On March 2, 1999, the last
of the regulatory requirements were completed and the Acquisition was effected.
The consideration paid by the Registrant for the Acquisition was the issuance of
29,277,820 common shares of the Registrant (the "Shares") and the payment of
Cdn.$52,883,007 in cash to the shareholders of Rayrock. The cash portion of the
consideration paid came from the Registrant's working capital. As part of the
Acquisition, share purchase options in respect of 1,649,500 common shares of
Rayrock were exchanged for share purchase options (the "Replacement Options")
providing for the right to acquire 4,470,145 common shares of the Registrant.
Also as part of the Acquisition, the Registrant issued 857,780 share
appreciation rights in exchange for 316,524 Rayrock share appreciation rights.
The Acquisition was carried out through an arrangement pursuant to section 182
of the Business Corporations Act (Ontario) (the "Arrangement"). Under the
Arrangement, shareholders of Rayrock were entitled to receive in exchange for
each common share of Rayrock held, either:
(a) 2.4 Shares (the "All Share Consideration"); or
(b) 1.6 Shares and Cdn.$3.00 (the "Cash/Share Consideration").
Each holder of Rayrock common shares was deemed to elect to receive the All
Share Consideration unless they made a proper election to receive the Cash/Share
Consideration. No fractional Shares were issued under the Acquisition. A holder
of common shares of Rayrock who was entitled to receive a fractional Share
received cash in lieu thereof based on a whole Share being valued at Cdn.$3.75.
The Acquisition was made pursuant to a letter agreement dated November 19, 1998,
as amended by the Amending Agreement dated January 23, 1999, both of which were
superseded by an Arrangement Agreement made as of January 25, 1999. The terms of
the Acquisition were determined through negotiations between the Registrant and
Rayrock. Prior to the closing of the Acquisition the companies had no common
directors, officers or controlling shareholders. The fairness of the terms of
the Acquisition to the Rayrock security holders was ruled upon by the Ontario
Court (General Division). The acquisition has been accounted for as an
acquisition of Rayrock by the Registrant.
The Shares and Replacement Options were not registered under the United States
Securities Act of 1933, as amended (the "Securities Act"), in reliance upon the
exemption from the registration requirements of the Securities Act provided by
Section 3(a)(10) thereof.
Rayrock has interests in three open-pit gold mines in Nevada. As well, Rayrock
has interests in the exploration, mining, production and sale of copper in
Northern Chile through a wholly-owned subsidiary that currently holds the
producing Ivan Copper Mine and the Sierra Valenzula copper property. The
Registrant intends to continue the exploration and development of the mineral
interests held by Rayrock.
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ITEM 7: Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of the Business Acquired
The required financial information with respect to Rayrock is
not available as of the date of this Current Report on Form
8-K. The financial information will be filed as soon as
practicable and not later than 60 days from the date on which
this Form 8-K must be filed in accordance with paragraph 4 of
Item 7(a) of Form 8-K.
(b) Pro Forma Financial Information
The required pro forma financial information with respect to
the Acquisition is not available at the date of this Current
Report on Form 8-K. The financial information will be filed as
soon as practicable and not later than 60 days from the date
on which this Form 8-K must be filed in accordance with
paragraph 4 of Item 7(b) of Form 8-K.
(c) Exhibits
10.51 Arrangement Agreement between the registrant and
Rayrock Resources Inc. made as of January 25, 1999.
99.1 Press Release dated March 1, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
GLAMIS GOLD LTD.
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(Registrant)
March 10, 1999 /s/ Daniel J. Forbush
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Daniel J. Forbush
Secretary, Treasurer and Chief Financial
Officer
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EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
- -------
<S> <C>
10.51 Arrangement Agreement between
the Registrant and Rayrock Resources Inc. made
as of January 25, 1999.
99.1 Press Release dated March 1, 1999.
</TABLE>
<PAGE> 1
EXHIBIT 10.51
ARRANGEMENT AGREEMENT
MADE BETWEEN
GLAMIS GOLD LTD.
AND
RAYROCK RESOURCES INC.
DATED AS OF JANUARY 25, 1999
<PAGE> 2
ARRANGEMENT AGREEMENT
THIS ARRANGEMENT AGREEMENT is made as of the 25th day of January, 1999.
BETWEEN:
GLAMIS GOLD LTD, a company incorporated under the laws of the
Province of British Columbia
("Glamis")
-- and --
RAYROCK RESOURCES INC., a corporation amalgamated under the laws
of the Province of Ontario
("Rayrock")
WHEREAS Rayrock intends to propose to the holders of its Multiple Voting
Shares and Subordinate Voting Shares an arrangement under Section 182 of the
Business Corporations Act (Ontario) (the "OBCA") on the terms of the Plan of
Arrangement annexed hereto as Exhibit 1;
AND WHEREAS each of the parties to this Agreement has agreed to participate
in the Arrangement (as hereinafter defined);
NOW THEREFORE THIS AGREEMENT WITNESSES THAT, in consideration of the
respective covenants and agreements hereinafter contained and other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto agree as follows:
ARTICLE I
INTERPRETATION
1.1 DEFINITIONS
In this Agreement and in the recitals hereto, unless there is something in
the context or subject matter inconsistent therewith, the following words and
phrases shall have the meanings hereinafter set out:
"AMENDING AGREEMENT" means the amending agreement dated January 23, 1999
between Rayrock and Glamis, amending the Original Glamis Agreement;
"APPLICABLE LAW" means any domestic or foreign statute, law (including the
common law), ordinance, rule, regulation, restriction, published regulatory
policy or guideline, by-law (zoning or otherwise), or order or any consent,
exemption, approval or licence of any domestic or foreign government
(whether federal, provincial, state or municipal and any governmental
agency, governmental authority, governmental tribunal or governmental
commission of any kind whatever) that applies in whole or in part to
Rayrock or Glamis, as the context requires, or to its respective business,
undertaking, property or securities and, for further certainty, includes
Applicable Securities Laws;
"APPLICABLE SECURITIES LAWS" has the meaning ascribed thereto in section
3.1.5 of this Agreement;
"ARRANGEMENT" means the arrangement under section 182 of the OBCA
involving, among other things, the issuance and/or distribution, as
applicable, of Glamis Shares, Magin Shares and cash in exchange for Rayrock
Shares, the exchange of Rayrock Stock Options for Glamis Stock Options and
the exchange of Rayrock Share Appreciation Rights for Glamis Share
Appreciation Rights, all as more particularly described in the Plan of
Arrangement attached hereto as Exhibit 1;
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of Rayrock
relating to the Arrangement;
"BLACKROCK" means BlackRock Ventures Inc., a corporation governed by the
Canada Business Corporations Act;
"BLACKROCK/GLAMIS AGREEMENT" means the agreement dated January 23, 1999
between BlackRock and Glamis which, among other things, establishes the
terms and conditions pursuant to which BlackRock
<PAGE> 3
will vote at the Meeting its Rayrock Shares in favour of the special
resolution of Rayrock Shareholders to approve the Arrangement;
"BLACKROCK/GLAMIS SHARE EXCHANGE" means the acquisition by BlackRock
pursuant to the terms of the Plan of Arrangement, in partial consideration
for the exchange of its Rayrock Shares, of the Magin Shares in lieu of
3,088,652 Glamis Shares to which BlackRock otherwise would be entitled
pursuant to the terms of the Plan of Arrangement;
"BLACKROCK/GLAMIS SHARE EXCHANGE APPROVALS" means all necessary regulatory
and shareholder approvals of the BlackRock/Glamis Share Exchange;
"BLACKROCK/GLAMIS SHARE EXCHANGE RESOLUTION" means the ordinary resolution
approving the BlackRock/Glamis Share Exchange;
"BUSINESS DAY" means a day which is not a Saturday, Sunday or a civic or
statutory holiday, within the meaning of the Interpretation Act (Canada),
in Toronto, Ontario or Vancouver, British Columbia;
"CANADIAN SECURITIES LAWS" means the Securities Act (Ontario) and the
equivalent legislation in the other provinces and in the territories of
Canada, as amended from time to time, the rules, regulations and forms made
or promulgated under any such statute, the published policies, bulletins
and notices of the regulatory authorities administering such statutes, and
the by-laws, rules and published policies of the TSE;
"CASH/SHARE CONSIDERATION" means 1.6 Glamis Shares and $3.00 cash to be
issued to a Rayrock Shareholder in exchange for each Rayrock Share pursuant
to an Election;
"CERTIFICATE OF ARRANGEMENT" means the certificate of arrangement giving
effect to the Arrangement, endorsed by the Director pursuant to subsection
183(2) of the OBCA on the Articles of Arrangement;
"CIBC MELLON" means CIBC Mellon Trust Company, Rayrock's registrar and
transfer agent;
"COMPANY ACT" means the Company Act (British Columbia), as now enacted or
as may be amended from time to time;
"COMPETING PROPOSAL" means a bona fide offer, proposal for amalgamation or
other transaction which is proposed, offered or made to the Rayrock
Shareholders or Rayrock to acquire the Rayrock Shares or substantially all
of the assets and undertaking of Rayrock, whether by amalgamation, plan of
arrangement or otherwise;
"CONSIDERATION ELECTION FORM" means the form delivered to Rayrock
Shareholders pursuant to section 8.5 of this Agreement whereby they may
elect to receive the Cash/Share Consideration in exchange for Rayrock
Shares;
"COURT" means the Ontario Court (General Division);
"DIRECTOR" means the Director appointed under section 278 of the OBCA;
"DISSENT RIGHT" means the right to dissent to the Arrangement described in
Article IV of the Plan of Arrangement;
"EFFECTIVE DATE" means the date shown on the Certificate of Arrangement;
"ELECTION" means the election duly and properly made by a Rayrock
Shareholder pursuant to the Consideration Election Form to receive the
Cash/Share Consideration in exchange for Rayrock Shares;
"ELECTION DEADLINE" means, with respect to the delivery of the
Consideration Election Form, the Business Day immediately preceding the day
of the Meeting or any adjournment thereof;
"EXCHANGE RATIO" means 2.71;
"FINAL ORDER" means the final order made by the Court pursuant to
subsection 182(5) of the OBCA, if issued, approving the Arrangement;
"GLAMIS AGREEMENT" means the Original Glamis Agreement, as amended by the
Amending Agreement;
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"GLAMIS DISCLOSURE DOCUMENTS" means:
(a) its Form 10-K/A for the year ended December 31, 1997 which has been
filed with Canadian securities regulatory authorities as its Annual
Information Form, together with all documents and financial statements
incorporated therein by reference;
(b) its Management Information Circular dated March 2, 1998;
(c) its unaudited consolidated financial statements for the quarters ended
March 31, June 30 and September 30, 1998;
(d) all material change reports filed by Glamis with Canadian securities
regulatory authorities from and after January 1, 1998 to but excluding
the date hereof; and
(e) all press releases issued by Glamis from and after January 1, 1998 to
but excluding the date hereof;
"GLAMIS SHARE APPRECIATION RIGHTS" means share appreciation rights which
are to be granted by Glamis in replacement of Rayrock Share Appreciation
Rights, in accordance with the Plan of Arrangement;
"GLAMIS SHARES" means the common shares without par value in the capital of
Glamis;
"GLAMIS STOCK OPTIONS" means options to acquire Glamis Shares which are to
be issued in replacement of Rayrock Stock Options in accordance with the
Plan of Arrangement;
"GLAMIS SUBSIDIARIES" means the subsidiaries (as that term is defined in
the OBCA) of Glamis which are depicted on the chart attached hereto as
Exhibit 2;
"INFORMATION CIRCULAR" means the information circular, notice of meeting,
Consideration Election Form and proxy form to be sent by Rayrock to Rayrock
Shareholders soliciting, among other things, approval of the Arrangement;
"INTERIM ORDER" means the order of the Court made pursuant to the
application therefor contemplated by section 8.1 of this Agreement;
"MAGIN" means Magin Energy Inc., a company governed by the Business
Corporations Act (Alberta);
"MAGIN SHARES" means the 3,285,800 common shares in the capital of Magin
owned by Rayrock;
"MATERIAL ADVERSE EFFECT" means, with respect to Rayrock or Glamis, as the
case may be, a material adverse effect on its business, assets, properties,
condition (financial or otherwise), results of operations or prospects, on
a consolidated basis;
"MEETING" means the special meeting of Rayrock Shareholders to be held
pursuant to the Interim Order for the purpose of considering, among other
things, the Arrangement Resolution and the BlackRock/ Glamis Share Exchange
Resolution, including any adjournment or adjournments thereof;
"NYSE" means the New York Stock Exchange;
"OBCA" means the Business Corporations Act (Ontario), as now enacted or as
may be amended from time to time;
"ORIGINAL GLAMIS AGREEMENT" means the letter agreement between Rayrock and
Glamis dated November 19, 1998, in which it was proposed that Glamis would
acquire all of the Rayrock Shares pursuant to a statutory plan of
arrangement;
"PLAN OF ARRANGEMENT" means the formal plan of arrangement attached as
Exhibit 1 to this Agreement, and any amendment or variation thereto made in
accordance with section 9.2 of this Agreement;
"RAYROCK DISCLOSURE DOCUMENTS" means:
(a) its Annual Information Form for the year ended December 31, 1997,
together with all documents and financial statements incorporated therein
by reference;
(b) its management information circulars dated May 15, 1998 and October
26, 1998;
(c) its unaudited interim consolidated financial statements for the
quarters ended March 31, June 30 and September 30, 1998;
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(d) all material change reports filed by Rayrock with Canadian securities
regulatory authorities from and after January 1, 1998 to but excluding the
date hereof; and
(e) all press releases issued by Rayrock from and after January 1, 1998 to
but excluding the date hereof;
"RAYROCK MULTIPLE VOTING SHARES" means the multiple voting shares in the
capital of Rayrock;
"RAYROCK NEW COMMON SHARES" means shares in the new class of common shares
in the capital of Rayrock which is to be created pursuant to the Articles
of Arrangement;
"RAYROCK SHARE APPRECIATION RIGHTS" means outstanding share appreciation
rights granted by Rayrock prior to the date hereof;
"RAYROCK SHAREHOLDER" means a holder of Rayrock Shares;
"RAYROCK SHARES" means the issued and outstanding Rayrock Multiple Voting
Shares and Rayrock Subordinate Voting Shares, collectively;
"RAYROCK STOCK OPTIONS" means outstanding options to acquire Rayrock
Subordinate Voting Shares granted by Rayrock prior to the date hereof;
"RAYROCK SUBORDINATE VOTING SHARES" means the subordinate voting shares in
the capital of Rayrock;
"RAYROCK SUBSIDIARIES" means the subsidiaries (as that term is defined in
the OBCA) of Rayrock, which are depicted on the chart attached hereto as
Exhibit 3;
"STOCK EXCHANGES" means the TSE and the NYSE, collectively;
"SUPERIOR PROPOSAL" means a Competing Proposal which the board of directors
of Rayrock determines in good faith (after consultation with its financial
advisers) would, if completed in accordance with its terms, result in a
transaction more favourable to the Rayrock Shareholders than the
Arrangement provided such Competing Proposal contains a cash component of
at least Cdn$3.25 per share;
"TRUSTEE" means Montreal Trust Company of Canada;
"TSE" means The Toronto Stock Exchange;
"U.S. SECURITIES ACT" means the United States Securities Act of 1933, as
amended;
"U.S. SECURITIES EXCHANGE ACT" means the United States Securities Exchange
Act of 1934, as amended;
"U.S. COMMISSION" means the United States Securities and Exchange
Commission;
"VICEROY" means Viceroy Resource Corporation, a company governed by the
Company Act;
"VICEROY PROPOSAL" means the proposed arrangement between Rayrock and
Viceroy described in an agreement dated January 11, 1999 between Rayrock
and Viceroy;
and words and phrases used but not defined herein that are defined in the OBCA
shall have the same meaning herein as in the OBCA unless the context otherwise
requires.
1.2 CURRENCY
All sums of money which are referred to in this Agreement and in the Plan
of Arrangement are expressed in Canadian dollars unless otherwise stated.
1.3 HEADINGS
The headings contained in this Agreement are for reference purposes only
and shall not affect in any way the meaning or interpretation of this Agreement.
References to sections and Articles refer to sections and Articles of this
Agreement unless otherwise stated.
1.4 REFERENCES TO AGREEMENT
The terms "Arrangement Agreement", "this Agreement", "hereof", "herein",
"hereunder" and similar expressions refer to this Agreement and not to any
particular section or other portion hereof and include any
<PAGE> 6
agreement or instrument supplementary or ancillary hereto and, unless otherwise
indicated, a reference herein to a section is to the appropriate section of this
Agreement.
1.5 NUMBER AND GENDER
In this Agreement and in the Plan of Arrangement, words importing the
singular number only shall include the plural and vice versa, words importing
the use of any gender shall include all genders and words importing persons
shall include firms and corporations and vice versa.
1.6 ACTIONS TO BE TAKEN ON BUSINESS DAYS
If any date on which any action is required to be taken hereunder by any of
the parties is not a Business Day, such action shall be required to be taken on
the next succeeding day which is a Business Day.
1.7 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the
laws of the Province of Ontario and the federal laws of Canada applicable
therein.
1.8 EXHIBITS
The following exhibits are hereby incorporated in and form part of this
Agreement:
Exhibit 1 -- Plan of Arrangement
Exhibit 2 -- Subsidiaries and Other Corporations in which Glamis has an
Interest
Exhibit 3 -- Subsidiaries and Other Corporations in which Rayrock has an
Interest
Exhibit 4 -- Affiliate Agreement
Exhibit 5 -- Disclosure Exceptions of Rayrock
ARTICLE II
THE ARRANGEMENT
2.1 EFFECTIVE DATE OF ARRANGEMENT
The Arrangement shall become effective on the Effective Date.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
3.1 REPRESENTATIONS AND WARRANTIES OF GLAMIS
Glamis hereby represents and warrants to Rayrock as follows and
acknowledges that Rayrock is relying upon these representations and warranties
in connection with entering into this Agreement.
3.1.1 ORGANIZATION AND QUALIFICATION
Glamis has been duly incorporated and is validly existing as a corporation
under the laws of the Province of British Columbia and has the requisite
corporate power and authority to carry on its business as it is now being
conducted. Glamis is duly qualified to carry on business, and is in good
standing, in each jurisdiction in which the character of its properties, owned
or leased, or the nature of its activities makes such qualification necessary,
except where the failure to be so qualified will not have a Material Adverse
Effect on Glamis.
3.1.2 SUBSIDIARIES
Each Glamis Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to carry on business in each jurisdiction in
which the character of its properties, owned or leased, or the nature of its
activities, makes such qualification necessary, except where the failure to be
so qualified will not have a Material Adverse Effect on Glamis.
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3.1.3 COMPLIANCE WITH LAW
Glamis and each of the Glamis Subsidiaries has complied with and is in
compliance with all Applicable Laws, except where failure so to comply will not
have a Material Adverse Effect on Glamis, and each of them has all licences,
permits, orders or approvals of, and has made all required registrations with,
any governmental or regulatory body that is material to the conduct of its
business.
3.1.4 CAPITALIZATION
The authorized capital of Glamis consists of 200,000,000 common shares
without par value, of which 38,989,612 shares were validly issued and
outstanding as at the date of this Agreement as fully paid and non-assessable
shares and 5,000,000 preferred shares with a par value of $10 of which none were
issued and outstanding as at the date of this Agreement. Not more than 2,535,000
Glamis Shares are issuable upon the exercise of all outstanding agreements,
options, warrants and other rights to acquire shares in the capital of Glamis at
prices ranging from $0.50 to $12.65 per share. Except as described in the
immediately preceding sentence and as contemplated by the Plan of Arrangement,
there are no options, warrants, conversion privileges, calls, or other rights,
agreements, arrangements, commitments or obligations of Glamis or any of the
Glamis Subsidiaries to issue or sell any shares of Glamis or any of the Glamis
Subsidiaries or securities or obligations of any kind convertible into or
exchangeable for any shares of Glamis, any of the Glamis Subsidiaries or any
other person, nor are there outstanding any stock appreciation rights, phantom
equity or similar rights, agreements, arrangements or commitments based upon the
book value, income or any other attribute of Glamis or any of the Glamis
Subsidiaries. The holders of outstanding Glamis Shares are not entitled to any
pre-emptive or other similar rights.
3.1.5 AUTHORITY RELATIVE TO THIS AGREEMENT
Glamis has the requisite corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder. The execution and delivery
of this Agreement by Glamis and the consummation of the transactions
contemplated hereby have been duly authorized by its board of directors and no
other corporate proceedings on the part of Glamis are necessary to authorize
this Agreement and the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Glamis and constitutes a valid and binding
obligation, enforceable by Rayrock against Glamis in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws relating to or affecting creditors' rights generally
and to general principles of equity. Other than in connection with or in
compliance with applicable Canadian Securities Laws, the U.S. Securities
Exchange Act, securities or "blue-sky" laws of the states of the United States,
the rules, regulations and forms made or promulgated under any such statute, the
published policies, bulletins and notices of the regulatory authorities
administering such statutes and the by-laws, rules and published policies of the
NYSE (collectively the "Applicable Securities Laws"), no authorization, consent
or approval of, or filing with, any public body, court or authority is necessary
on the part of Glamis for the consummation of the transactions contemplated by
this Agreement, except for such authorizations, consents, approvals and filings
as to which the failure to obtain or make would not, individually or in the
aggregate, prevent or materially delay consummation of the transactions
contemplated by this Agreement.
3.1.6 MATERIAL AGREEMENTS
Other than as referred to in the Glamis Disclosure Documents or as
previously disclosed in writing to Rayrock, there are no agreements material to
the conduct of Glamis' business. Except as previously disclosed in writing to
Rayrock, no approval or consent of any person is required in order that such
agreements continue in full force and effect following consummation of the
transactions contemplated hereby.
3.1.7 FILINGS
The Glamis Disclosure Documents, when taken together and as at their
respective dates, include all documents that Glamis has been required by
Applicable Securities Laws to file since December 31, 1997, were prepared in
accordance with the requirements of Applicable Securities Laws and did not, when
filed, contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or
<PAGE> 8
necessary in order to make statements made therein not misleading in light of
the circumstances under which they were made and no material fact exists on the
date hereof which has not been disclosed in the Glamis Disclosure Documents
which, if publicly disclosed, would reflect that an adverse material change (or
any event, condition or state of facts which might reasonably be expected to
give rise to any such material change) had occurred in the affairs, capital,
assets, liabilities, financial condition, operations or prospects of Glamis on a
consolidated basis.
3.1.8 FINANCIAL STATEMENTS
Glamis has delivered to Rayrock its audited consolidated financial
statements for each of the fiscal years in the five-year period ended December
31, 1997 and its interim consolidated financial statements for the periods ended
March 31, June 30 and September 30, 1998 (the "Glamis Financial Statements") and
such statements and the notes thereto present fairly in all material respects
the consolidated financial position of Glamis and the results of operations for
the respective periods indicated in such statements and have been prepared in
accordance with Canadian generally accepted accounting principles applied on a
consistent basis except as otherwise stated in the notes to such statements and
Glamis has no liabilities (whether accrued, absolute, contingent or otherwise)
of a nature required to be set out in such statements and the notes thereto in
accordance with Canadian generally accepted accounting principles other than as
set out in the Glamis Financial Statements and the notes thereto.
3.1.9 ABSENCE OF CERTAIN CHANGES OR EVENTS
Since December 31, 1997, except as disclosed in the Glamis Disclosure
Documents:
(a) Glamis and the Glamis Subsidiaries have conducted their respective
businesses only in the usual, ordinary and regular course and consistent
with past practice;
(b) no liability or obligation of any nature (whether absolute, accrued,
contingent or otherwise) which has had or is reasonably likely to have a
Material Adverse Effect on Glamis, has been incurred; and
(c) there has not been any event which has had or is reasonably likely to
have a Material Adverse Effect on Glamis.
3.1.10 LITIGATION
Except as set forth or reflected in the Glamis Disclosure Documents, there
is no claim, action, proceeding or investigation pending or, to the knowledge of
Glamis, threatened against or relating to Glamis or any of the Glamis
Subsidiaries or affecting any of their properties or assets before any court or
governmental or regulatory authority or body which, if adversely determined, is
likely to have a Material Adverse Effect on Glamis or prevent or materially
delay consummation of the transactions contemplated by this Agreement, nor is
Glamis aware of any basis for any such claim, action, proceeding or
investigation. Neither Glamis nor any of the Glamis Subsidiaries is subject to
any outstanding order, writ, injunction or decree which has had or is reasonably
likely to have a Material Adverse Effect on Glamis or prevent or materially
delay consummation of the transactions contemplated by this Agreement.
3.1.11 STATUS
Except as otherwise expressly disclosed in writing to Rayrock or disclosed
in the Glamis Disclosure Documents:
(a) Glamis's corporate structure and shareholdings in the Glamis
Subsidiaries and other corporations in which Glamis has an interest are as
depicted on Exhibit 2 to this Agreement. Glamis owns, directly or
indirectly, that percentage of the issued and outstanding shares in the
capital of each of the Glamis Subsidiaries as is described in Exhibit 2,
free and clear of any liens, pledges, charges or other encumbrances;
(b) Glamis and the Glamis Subsidiaries have those interests, rights and
obligations with respect to mineral properties and other assets as are
described in the Glamis Financial Statements;
(c) Glamis is up-to-date in its applicable corporate filings and
Applicable Securities Laws filings;
<PAGE> 9
(d) the issued and outstanding Glamis Shares are listed on the Stock
Exchanges; and
(e) Glamis is a "reporting issuer" not in default of its obligations under
Canadian Securities Laws in the provinces of British Columbia, Alberta,
Saskatchewan, Ontario, Quebec, Newfoundland and Nova Scotia, is in good
standing with respect to required statutory filings under the securities
legislation of the provinces of Manitoba, New Brunswick and Prince Edward
Island and is a registrant under the U.S. Securities Exchange Act.
3.1.12 NO CONFLICT
The execution of this Agreement and the performance of the terms hereof
shall not result in any breach of, be in conflict with, constitute a default
under (whether after notice or lapse of time or both) or result in the
acceleration of indebtedness pursuant to any contract, lease, agreement,
instrument or other commitment, written or oral, to which Glamis or any of the
Glamis Subsidiaries is a party or by which Glamis or any of the Glamis
Subsidiaries is bound or any judgement, decree, order, statute, rule, licence or
regulation applicable to Glamis or any of the Glamis Subsidiaries.
3.1.13 NO UNTRUE STATEMENTS
The information contained in the Information Circular and in this Agreement
does not contain an untrue statement of a material fact relating to Glamis and
does not omit to state any material fact relating to Glamis required to be
stated therein or necessary in order to make the statements made therein
relating to Glamis not misleading in light of the circumstances under which they
were made.
3.1.14 BLACKROCK/GLAMIS AGREEMENT
The BlackRock/Glamis Agreement is in good standing and in full force and
effect, unamended as at the date hereof, and is a valid and binding obligation
of Glamis, enforceable by BlackRock against Glamis in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other laws relating to or affecting creditors' rights generally
and to general principles of equity. Glamis has complied with all material terms
of the BlackRock/Glamis Agreement, and has not waived any rights thereunder, and
no default or breach exists in respect thereof on the part of Glamis.
3.2 REPRESENTATIONS AND WARRANTIES OF RAYROCK
Rayrock hereby represents and warrants to Glamis as follows and
acknowledges that Glamis is relying upon these representations and warranties in
entering into this Agreement.
3.2.1 ORGANIZATION AND QUALIFICATION
Rayrock has been duly amalgamated and is validly existing as a corporation
under the OBCA and has full corporate power and authority to own its assets and
conduct its business as now owned and conducted. Rayrock is duly qualified to
carry on business, and is in good standing, in each jurisdiction in which the
character of its properties, owned or leased, or the nature of its activities
makes such qualification necessary, except where the failure to be so qualified
will not have a Material Adverse Effect on Rayrock.
3.2.2 SUBSIDIARIES
Each Rayrock Subsidiary has been duly incorporated and is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation and is duly qualified to carry on business in each jurisdiction in
which the character of its properties, owned or leased, or the nature of its
activities, makes such qualification necessary, except where the failure to be
so qualified will not have a Material Adverse Effect on Rayrock.
3.2.3 COMPLIANCE WITH LAW
Rayrock and each of the Rayrock Subsidiaries has complied with and is in
compliance with all Applicable Laws, except where failure so to comply will not
have a Material Adverse Effect on Rayrock, and each of them has all licences,
permits, orders or approvals of, and has made all required registrations with,
any governmental or regulatory body that is material to the conduct of its
business.
<PAGE> 10
3.2.4 CAPITALIZATION
The authorized capital of Rayrock consists of an unlimited number of
Rayrock Subordinate Voting Shares and an unlimited number of Rayrock Multiple
Voting Shares. As at December 31, 1998, 19,185,920 Rayrock Subordinate Voting
Shares and 176,000 Rayrock Multiple Voting Shares were validly issued and
outstanding as fully paid and non-assessable. As at December 31, 1998, 1,649,500
Rayrock Subordinate Voting Shares were subject to Rayrock Stock Options, and
Rayrock had granted Rayrock Share Appreciation Rights based on 949,571 Rayrock
Subordinate Voting Shares, at prices ranging from $5.40 to $16.00 per share.
Except as described in the immediately preceding sentence, there are no options,
warrants, conversion privileges, calls, or other rights, agreements,
arrangements, commitments or obligations of Rayrock or any of the Rayrock
Subsidiaries to issue or sell any shares of Rayrock or of any of the Rayrock
Subsidiaries or securities or obligations of any kind convertible into or
exchangeable for any shares of Rayrock, any of the Rayrock Subsidiaries or any
other person, nor are there outstanding any stock appreciation rights, phantom
equity or similar rights, agreements, arrangements or commitments based upon the
book value, income or any other attribute of Rayrock or any of the Rayrock
Subsidiaries. The Rayrock Shareholders are not entitled to any pre-emptive or
other similar rights.
3.2.5 AUTHORITY RELATIVE TO THIS AGREEMENT
Rayrock has the requisite corporate power and authority to enter into this
Agreement and to perform its obligations hereunder. The execution and delivery
of this Agreement by Rayrock and the consummation by Rayrock of the transactions
contemplated by this Agreement have been duly authorized by the board of
directors of Rayrock and no other corporate proceedings on the part of Rayrock
(other than all necessary shareholders' approvals) are necessary to authorize
this Agreement and the transactions contemplated hereby. This Agreement has been
duly executed and delivered by Rayrock and constitutes a valid and binding
obligation of Rayrock, enforceable by Glamis against Rayrock in accordance with
its terms, subject to bankruptcy, insolvency, reorganization, fraudulent
transfer, moratorium and other laws relating to or affecting creditors' rights
generally and to general principles of equity. Other than in connection with or
in compliance with the provisions of Applicable Securities Laws, no
authorization, consent or approval of, or filing with, any public body, court or
authority is necessary for the consummation by Rayrock of its obligations under
this Agreement, except for such authorizations, consents, approvals and filings
as to which the failure to obtain or make would not, individually or in the
aggregate, prevent or materially delay consummation of the transactions
contemplated by this Agreement.
3.2.6 MATERIAL AGREEMENTS
Other than as referred to in the Rayrock Disclosure Documents or as
previously disclosed in writing to Glamis, there are no agreements material to
the conduct of Rayrock's business. Except as previously disclosed in writing to
Glamis, no approval or consent of any person is required in order that such
agreements continue in full force and effect following consummation of the
transactions contemplated hereby.
3.2.7 FILINGS
The Rayrock Disclosure Documents, when taken together and as at their
respective dates, include all the documents that Rayrock has been required by
Applicable Securities Laws to file since December 31, 1997, were prepared in
accordance with the requirements of Applicable Securities Laws and did not, when
filed, contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary in order to make
statements made therein not misleading in light of the circumstances under which
they were made and no material fact exists on the date hereof which has not been
disclosed in the Rayrock Disclosure Documents which, if publicly disclosed,
would reflect that an adverse material change (or any event, condition or state
of facts which might reasonably be expected to give rise to any such material
change) had occurred in the affairs, capital, assets, liabilities, financial
condition, operations or prospects of Rayrock on a consolidated basis.
<PAGE> 11
3.2.8 FINANCIAL STATEMENTS
Rayrock has delivered to Glamis its audited consolidated financial
statements for each of the fiscal years in the five-year period ended December
31, 1997 and its interim consolidated financial statements for the periods ended
March 31, June 30 and September 30, 1998 (the "Rayrock Financial Statements")
and such statements and the notes thereto present fairly in all material
respects the consolidated financial position of Rayrock and the results of
operations for the respective periods indicated in such statements and have been
prepared in accordance with Canadian generally accepted accounting principles
applied on a consistent basis except as otherwise stated in the notes to such
statements and Rayrock has no liabilities (whether accrued, absolute, contingent
or otherwise) of a nature required to be set out in such statements and the
notes thereto in accordance with Canadian generally accepted accounting
principles other than as set out in the Rayrock Financial Statements and the
notes thereto.
3.2.9 ABSENCE OF CERTAIN CHANGES OR EVENTS
Since December 31, 1997, except as disclosed in the Rayrock Disclosure
Documents:
(a) Rayrock and the Rayrock Subsidiaries have conducted their respective
businesses only in the usual, ordinary and regular course and consistent
with past practice;
(b) no liability or obligation of any nature (whether absolute, accrued,
contingent or otherwise) which has had or is reasonably likely to have a
Material Adverse Effect on Rayrock has been incurred; and
(c) there has not been any event which has had or is reasonably likely to
have a Material Adverse Effect on Rayrock.
3.2.10 EMPLOYMENT AGREEMENTS
Rayrock and the Rayrock Subsidiaries do not have any employment, management
or service agreements which provide for material lump sum payments upon a change
of control of Rayrock or upon their termination by Rayrock, save and except as
disclosed in Exhibit 5.
3.2.11 LITIGATION
Except as set forth or reflected in the Rayrock Disclosure Documents, or as
disclosed previously in writing to Glamis, there is no claim, action, proceeding
or investigation pending or, to the knowledge of Rayrock, threatened against or
relating to Rayrock or any of the Rayrock Subsidiaries or affecting any of their
properties or assets before any court or governmental or regulatory authority or
body which, if adversely determined, is likely to have a Material Adverse Effect
on Rayrock or prevent or materially delay consummation of the transactions
contemplated by this Agreement, nor is Rayrock aware of any basis for any such
claim, action proceeding or investigation. Neither Rayrock nor any of the
Rayrock Subsidiaries is subject to any outstanding order, writ, injunction or
decree which has had or is reasonably likely to have a Material Adverse Effect
on Rayrock or prevent or materially delay consummation of the transactions
contemplated by this Agreement.
3.2.12 STATUS
Except as otherwise expressly disclosed in writing to Glamis or disclosed
in the Rayrock Disclosure Documents:
(a) Rayrock's corporate structure and shareholdings in the Rayrock
Subsidiaries and other corporations in which Rayrock has an interest are
as depicted on Exhibit 3 to this Agreement. Rayrock owns, directly or
indirectly, that percentage of the issued and outstanding shares as is
described in Exhibit 3 in the capital of each of the Rayrock Subsidiaries,
free and clear of any liens, pledges, charges or other encumbrances;
(b) save and except as described in Exhibit 5, Rayrock and the Rayrock
Subsidiaries have those interests, rights and obligations with respect to
mineral properties and other assets as are described in the Rayrock
Financial Statements;
<PAGE> 12
(c) Rayrock is up-to-date in its applicable corporate filings and
applicable Canadian Securities Laws filings; and
(d) Rayrock is a "reporting issuer" not in default of its obligations
under Canadian Securities Laws in Ontario, Quebec, British Columbia,
Alberta, Saskatchewan and Manitoba.
3.2.13 NO CONFLICT
The execution of this Agreement and the performance of the terms hereof
shall not result in any breach of, be in conflict with, constitute a default
under (whether after notice or lapse of time or both) or result in the
acceleration of indebtedness pursuant to any contract, lease, agreement,
instrument or other commitment, written or oral, to which Rayrock or any of the
Rayrock Subsidiaries is a party or by which Rayrock or any of the Rayrock
Subsidiaries is bound or any judgement, decree, order, statute, rule, licence or
regulation applicable to Rayrock or any of the Rayrock Subsidiaries.
3.2.14 TERMINATION OF VICEROY PROPOSAL
The Board of Directors of Rayrock has determined that the terms of the
Arrangement are more favourable to the Rayrock Shareholders than the Viceroy
Proposal and Rayrock has notified Viceroy that Rayrock has terminated its
agreement with Viceroy relating to the Viceroy Proposal.
3.2.15 NO UNTRUE STATEMENTS
The information contained in the Information Circular and in this Agreement
does not contain an untrue statement of a material fact relating to Rayrock and
does not omit to state any material fact relating to Rayrock required to be
stated therein or necessary in order to make the statements made therein
relating to Rayrock not misleading in light of the circumstances under which
they were made.
3.2.16 MAGIN SHARES
(a) Rayrock has the sole right to sell all of the Magin Shares and all of
the Magin Shares are, and at the Effective Date will be, beneficially
owned by Rayrock with good and marketable title thereto, free and clear of
any and all mortgages, liens, charges, restrictions, security interests,
adverse claims, pledges, encumbrances and demands of any nature or kind
whatsoever, subject to the terms of the BlackRock/Glamis Agreement;
(b) no person, firm or corporation has any agreement or option or any
right or privilege (whether by law, pre-emptive or contractual) capable of
becoming an agreement or option for the purchase, acquisition or transfer
from Rayrock of any Magin Shares or any interest or right thereto, subject
to the terms of the BlackRock/Glamis Agreement; and
(c) none of the execution or delivery by Rayrock of this Agreement or the
completion of the transactions contemplated by this Agreement will,
immediately prior to the Effective Date, result in a breach of any other
agreement or instrument to which Rayrock is a party or by which Rayrock or
the Magin Shares are bound.
ARTICLE IV
COVENANTS
4.1 COVENANTS OF RAYROCK
Rayrock covenants and agrees with Glamis that, prior to the Effective Date,
unless Glamis shall agree in writing or as otherwise expressly contemplated or
permitted by this Agreement:
(a) Rayrock shall, and shall cause each of the Rayrock Subsidiaries to,
conduct its and their respective business only in, not take any action
except in, and maintain their respective facilities in, the usual,
ordinary and regular course of business and consistent with past practice;
(b) Rayrock shall not directly or indirectly do or permit to occur any of
the following:
<PAGE> 13
(i) issue, sell, pledge, lease, dispose of or encumber or agree to
issue, sell, pledge, lease, dispose of or encumber (or permit any of
the Rayrock Subsidiaries to issue, sell, pledge, lease, dispose of or
encumber or agree to issue, sell, pledge, lease, dispose of or
encumber):
(1) any additional shares of, or any options, warrants, calls,
conversion privileges or rights of any kind to acquire any
shares of, Rayrock or any of the Rayrock Subsidiaries (other
than pursuant to the exercise of the Rayrock Stock Options); or
(2) except in the ordinary course of business, any assets of
Rayrock or any of the Rayrock Subsidiaries;
(ii) amend or propose to amend its articles or by-laws or those of
any of the Rayrock Subsidiaries;
(iii) split, combine or reclassify any outstanding Rayrock Shares,
or declare, set aside or pay any dividend or other distribution
payable in cash, stock, property or otherwise with respect to the
Rayrock Shares;
(iv) redeem, purchase or offer to purchase (or permit any of the
Rayrock Subsidiaries to redeem, purchase or offer to purchase) any
Rayrock Shares or other securities of Rayrock or any shares or other
securities of the Rayrock Subsidiaries;
(v) reorganize, amalgamate or merge Rayrock or any of the Rayrock
Subsidiaries with any other person, corporation, partnership or other
business organization whatsoever; or
(vi) reduce the stated capital of Rayrock or any of the Rayrock
Subsidiaries;
(c) Rayrock shall not enter into or change the terms of any employment,
consulting or severance agreement or other similar arrangement with any of
its directors, officers or any other person or pay any compensation to any
such director, officer or other person other than as explicitly provided
in any such agreement;
(d) Rayrock shall deliver to Glamis, no later than 10 Business Days prior
to the Meeting, a letter identifying all persons who are, or may be deemed
to be, at the time of the Meeting, "affiliates" of Rayrock within the
meaning of Rule 145(c) and Rule 144(a)(1) under the U.S. Securities Act
and shall use its reasonable best efforts to cause each person who is
identified as an "affiliate" to deliver to Glamis, prior to the Effective
Date, a written agreement in substantially the form of Exhibit 4 attached
hereto;
(e) Rayrock shall use its reasonable best efforts, and cause each of the
Rayrock Subsidiaries to use its reasonable best efforts, to preserve
intact their respective business organizations and goodwill, to keep
available the services of its and their officers and employees as a group
and to maintain satisfactory relationships with suppliers, distributors,
customers and others having business relationships with them; not take any
action, or permit any of the Rayrock Subsidiaries to take any action,
which would render, or which reasonably may be expected to render, any
representation or warranty made by it in this Agreement untrue at any time
prior to the Effective Date if then made; and promptly notify Glamis
orally and in writing of any Material Adverse Effect on Rayrock in the
normal course of its or any of the Rayrock Subsidiaries' businesses or in
the operation of its or any of the Rayrock Subsidiaries' properties and of
any material governmental or third party complaints, investigations or
hearings (or communications indicating that the same may be contemplated);
(f) Rayrock shall permit Glamis, its officers, directors, employees,
consultants and advisers, at all reasonable times, access to the books,
records and data, including drill core and other samples, of Rayrock and
the Rayrock Subsidiaries;
(g) Rayrock shall act in good faith:
(i) in using its reasonable best efforts to finalize and mail the
Information Circular for the Meeting on or before January 29, 1999,
which Information Circular shall contain a recommendation of the
Board of Directors of Rayrock that Rayrock Shareholders vote in
favour of the Arrangement at the Meeting;
<PAGE> 14
(ii) in finalizing material for applications to the Ontario Court
(General Division) in respect of the Arrangement for each of the
Interim Order and Final Order and in making an application to the
Court for the Final Order, and shall advise the Court that, if the
Arrangement is approved, the Glamis Shares and Glamis Stock Options
to be issued pursuant to the Arrangement shall not require
registration under the U.S. Securities Act by virtue of Section
3(a)(10) thereof and the Final Order;
(iii) in soliciting shareholder approval for the Arrangement;
(iv) in using its reasonable best efforts to hold the Meeting on or
before February 26, 1999; and
(v) subject to obtaining the Final Order and the satisfaction or
waiver of the other conditions precedent contained herein in favour
of each party, in sending the Articles of Arrangement to the Director
for endorsement thereon of the Certificate of Arrangement by the
Director pursuant to section 183 of the OBCA, and such other
documents as may reasonably be required in connection therewith under
the OBCA to give effect to the Arrangement;
(h) Rayrock shall not enter into any material transaction without the
prior approval of Glamis, such approval not to be unreasonably withheld;
(i) Rayrock shall use all reasonable efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective as promptly as is
practicable the transactions contemplated by this Agreement and the Plan
of Arrangement, including the execution and delivery of such documents as
Glamis may reasonably require and to use its best efforts to obtain all
necessary waivers, consents and approvals and to effect all necessary
registrations and filings, including, but not limited to, approvals and
filings under Applicable Securities Laws and submissions of information
requested by governmental authorities; notwithstanding the foregoing,
however, if a Superior Proposal is made to the Rayrock Shareholders or to
Rayrock, then the Board of Directors of Rayrock may withdraw, modify or
change any recommendation previously given or agreed to be given
respecting the Arrangement;
(j) Rayrock shall use its reasonable best efforts to deliver to Glamis:
(i) certified copies of resolutions duly passed by the Board of
Directors of Rayrock approving this Agreement and the consummation of
the transactions contemplated hereby;
(ii) certified copies of the resolutions of Rayrock Shareholders
duly passed at the Meeting approving the Arrangement and the
consummation of the transactions contemplated thereby; and
(iii) resignations and releases in favour of Rayrock from all of the
directors and officers of Rayrock and from those directors and
officers of the Rayrock Subsidiaries as are designated by Glamis; and
(k) prior to the earlier of (a) the Effective Date and (b) the
termination of the BlackRock/Glamis Agreement, Rayrock shall not, directly
or indirectly, sell, transfer, encumber or otherwise dispose of any of the
Magin Shares or agree to do any of the foregoing.
4.2 COVENANTS OF GLAMIS
Glamis covenants and agrees with Rayrock that, prior to the Effective Date,
unless Rayrock shall otherwise agree in writing or as expressly contemplated or
permitted by this Agreement:
(a) Glamis shall not directly or indirectly do or permit to occur any of
the following which would result in a change in the undertaking or
business of Glamis or which would have a Material Adverse Effect on
Glamis:
(i) issue, sell, pledge, lease, dispose of or encumber or agree to
issue, sell, pledge, lease, dispose of or encumber (or permit any of
the Glamis Subsidiaries to issue, sell, pledge, lease, dispose of or
encumber or agree to issue, sell, pledge, lease, dispose of or
encumber):
<PAGE> 15
(1) any additional shares of, or any options, warrants, calls,
conversion privileges or rights of any kind to acquire any
shares of, Glamis or any of the Glamis Subsidiaries (other than
pursuant to the exercise of any stock options currently
outstanding); or
(2) except in the ordinary course of business, any assets of
Glamis or of any of the Glamis Subsidiaries;
(ii) amend or propose to amend its memorandum or articles or those
of any of the Glamis Subsidiaries;
(iii) split, combine or reclassify any outstanding Glamis Shares, or
declare, set aside or pay any dividend or other distribution payable
in cash, stock, property or otherwise with respect to the Glamis
Shares;
(iv) redeem, purchase or offer to purchase (or permit any of the
Glamis Subsidiaries to redeem, purchase or offer to purchase) any
Glamis Shares or other securities of Glamis or any shares or other
securities of the Glamis Subsidiaries;
(v) reorganize, amalgamate or merge Glamis or any of the Glamis
Subsidiaries with any other person, corporation, partnership or other
business organization whatsoever;
(vi) reduce the stated capital of Glamis or any of the Glamis
Subsidiaries; or
(vii) acquire or agree to acquire (by merger, amalgamation,
acquisition of stock or assets or otherwise) any person, corporation,
partnership or other business organization or division;
(b) Glamis shall use its reasonable best efforts, and cause each of the
Glamis Subsidiaries to use its reasonable best efforts, to preserve intact
their respective business organizations and goodwill, to keep available
the services of its and their officers and employees as a group and to
maintain satisfactory relationships with suppliers, distributors,
customers and others having business relationships with them; not take any
action, or permit any of the Glamis Subsidiaries to take any action, which
would render, or which reasonably may be expected to render, any
representation or warranty made by it in this Agreement untrue at any time
prior to the Effective Date if then made; and promptly notify Rayrock
orally and in writing of any Material Adverse Effect on Glamis in the
normal course of its or any of the Glamis Subsidiaries' businesses or in
the operation of its or any of the Glamis Subsidiaries' properties and of
any material governmental or third party complaints, investigations or
hearings (or communications indicating that the same may be contemplated);
(c) Glamis shall permit Rayrock and its respective officers, directors,
employees, consultants and advisers, at all reasonable times, access to
the books, records and data, including drill core and other samples, of
Glamis and the Glamis Subsidiaries;
(d) Glamis shall act in good faith and co-operate with Rayrock in
assisting in:
(i) the preparation of the Information Circular for the Meeting; and
(ii) the preparation of the applications to the Ontario Court
(General Division) for each of the Interim Order and Final Order;
(e) Glamis shall, on or prior to the Effective Date, conditionally allot
and reserve for issuance a sufficient number of Glamis Shares to meet the
obligations of Glamis under this Agreement and the Plan of Arrangement;
(f) Glamis shall take such action as may be necessary to ensure that
there shall not be any impediment to the general free tradeability of the
Glamis Shares to be issued in connection with the Arrangement or, subject
to subsection 4.2(j), in connection with the exercise of any Glamis Stock
Options issued under the Arrangement to persons who will be an employee of
or consultant to Rayrock or Glamis after the Effective Date:
(i) in Canada by Canadian residents who are not "affiliates" (as
that term is used in the U.S. Securities Act) of Rayrock or Glamis,
subject only to any restrictions imposed under Canadian Securities
Laws relating to sales of securities from holdings of "control
persons", market preparations and consideration payments; and
<PAGE> 16
(ii) in the United States, subject only to any restrictions imposed
by Rules 144 and 145 under the U.S. Securities Act relating to sales
of such Glamis Shares by "affiliates" of Rayrock or Glamis;
(g) Glamis shall take all necessary action to have listed and posted for
trading on the Stock Exchanges the Glamis Shares to be issued under this
Agreement and the Arrangement and upon the exercise of Glamis Stock
Options;
(h) Glamis shall, until the Effective Date, maintain its status as a
registrant under the U.S. Securities Exchange Act and shall file in a
timely manner all documents required to be filed with the U.S. Commission
as a result of such status or as a result of the Arrangement;
(i) use its reasonable best efforts to deliver to Rayrock:
(i) certified copies of resolutions duly passed by the Board of
Directors of Glamis approving this Agreement and the consummation of
the transactions contemplated hereby and conditionally allotting for
issuance the aggregate number of Glamis Shares that may be required
to be issued in accordance with the terms of this Agreement and the
Plan of Arrangement; and
(ii) evidence of the approval or conditional approval of the Stock
Exchanges of the listing on such Stock Exchanges of the Glamis Shares
issuable to Rayrock Shareholders pursuant to the Arrangement and the
listing on the TSE of the Glamis Shares issuable pursuant to the
exercise of the Glamis Stock Options, subject only to compliance with
the usual requirements of such Stock Exchanges;
(j) Glamis shall, within 10 Business Days after the Effective Date, file
a Form S-8 with the U.S. Commission for the purpose of registering under
the U.S. Securities Act the Glamis Shares issuable upon exercise of the
Glamis Stock Options issued to holders of Rayrock Stock Options who will
be employees of or consultants to Rayrock or Glamis after the Effective
Date and shall forthwith thereafter apply to the NYSE for the listing
thereon of the Glamis Shares issuable upon exercise of the Glamis Stock
Options, whether covered by the Form S-8 or not; and
(k) Glamis shall use all reasonable efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things necessary,
proper or advisable to consummate and make effective as promptly as is
practicable the transactions contemplated by this Agreement and the Plan
of Arrangement, including the execution and delivery of such documents as
Rayrock may reasonably require, and to use its best efforts to obtain all
necessary waivers, consents and approvals and to effect all necessary
registrations and filings, including, but not limited to, approvals and
filings under Applicable Securities Laws and submissions of information
requested by governmental authorities.
ARTICLE V
PAYMENT OBLIGATIONS; SUPERIOR PROPOSALS
5.1 PAYMENT OBLIGATIONS
(a) Rayrock and Glamis agree and acknowledge that $2,000,000 (the
"Payment") represents a reasonable estimate of the expenses and costs
incurred and to be incurred by Glamis in connection with the Arrangement
including, without limitation, amounts paid or payable to financial
advisers and their legal counsel, auditors, legal counsel, printers, the
transfer agent and other arm's length third parties that perform services
on behalf of Glamis in connection with the negotiation of this Agreement
and the Arrangement, the due diligence review conducted by Glamis in
connection with the Arrangement, fees relating to financing for the
Arrangement, the preparation of the Information Circular in respect of the
Arrangement and related documents, and other steps to implement the
Arrangement.
(b) If Rayrock fails to complete the Arrangement (other than as a result
of the termination of this Agreement by Rayrock and Glamis under subsection
6.1(a) or by Rayrock or Glamis under subsection 6.1(b) (other than as a
result of a breach of this Agreement by Rayrock) or by Rayrock under any of
subsections 6.1(c), (d) or (e)), and if prior to November 20, 1999, Rayrock
or the Rayrock
<PAGE> 17
Shareholders enter into a transaction which is completed and which is a
merger, amalgamation, arrangement, take-over bid, sale of all or
substantially all of its assets (excluding Rayrock's investment in
BlackRock) or similar transaction involving Rayrock or any one or more of
the Rayrock Subsidiaries (excluding BlackRock's investment in Rayrock) or
whereby 50% or greater of the issued voting rights at meetings of the
holders of Rayrock Subordinate Voting Shares or a similar number of
treasury shares of Rayrock are acquired by one or more persons, Rayrock
shall make the Payment as full reimbursement to Glamis for any and all
expenses paid or required to be paid by Glamis, or other costs incurred by
Glamis, in connection with this Agreement and the transactions contemplated
hereby, it being understood that the Payment shall represent the parties'
genuine pre-estimate of liquidated damages payable to Glamis or otherwise
payable to Glamis as a result of the failure to complete the Arrangement
and Glamis agrees such Payment shall satisfy all amounts due and payable by
Rayrock to Glamis in such case.
5.2 NO SOLICITATIONS
(a) Rayrock shall not, prior to the earlier of the Effective Date and the
termination of this Agreement, directly or indirectly solicit, initiate,
knowingly encourage or assist others in making a Competing Proposal,
provided that, notwithstanding the foregoing, nothing shall prevent the
Board of Directors of Rayrock from responding to an unsolicited bona fide
written Competing Proposal that the Board of Directors of Rayrock receives
prior to the date of the Meeting and which is a Superior Proposal.
(b) Rayrock shall promptly notify Glamis in writing of all Competing
Proposals of which Rayrock's directors or senior officers have become
aware, or any request for non-public information of Rayrock or any Rayrock
Subsidiary in connection with a Competing Proposal by any person that
informs Rayrock that it is considering making or has made a Competing
Proposal. Such notice shall include a description of the material terms and
conditions of any proposal and provide such details of the proposal,
inquiry or contact as Glamis may reasonably request, including the identity
of the person making the proposal, inquiry or contact.
ARTICLE VI
TERMINATION AND WAIVER
6.1 TERMINATION
This Agreement may be terminated at any time prior to the Effective Date:
(a) by mutual consent of Glamis and Rayrock;
(b) by either Glamis or Rayrock if the Effective Date of the Arrangement
has not occurred by February 28, 1999;
(c) by either Glamis or Rayrock (providing that the terminating party is
not then in material breach of any representation, warranty, covenant or
agreement contained in this Agreement) if there has been a material breach
of any representation, warranty, covenant or agreement contained in this
Agreement on the part of the other party, and such breach has not been
cured or best efforts are not being employed to cure such breach within ten
days after notice thereof is given to the party committing such breach;
(d) by either Glamis or Rayrock if the Arrangement shall not have received
the required approvals of the Rayrock Shareholders or of the Court on or
before February 28, 1999;
(e) by either Glamis or Rayrock if:
(i) the conditions to such party's obligations to complete the
Arrangement shall have become impossible to satisfy, or
(ii) any permanent injunction or other order of a court or other
competent authority preventing the Arrangement shall become final and
non-appealable; or
(f) by Rayrock in the event of a Superior Proposal.
<PAGE> 18
6.2 WAIVER
At any time prior to the Effective Date, either party hereto may:
(a) extend the time for the performance of any of the obligations or other
acts of the other party hereto; or
(b) waive compliance with any of the agreements of the other party or with
any conditions to its own obligations, in each case only to the extent such
obligations, agreements and conditions are intended for its benefit.
6.3 EFFECT OF TERMINATION
If this Agreement is terminated as provided in section 6.1, this Agreement
shall become void and there shall be no liability or further obligation on the
part of any party hereto or any of their respective shareholders, officers or
directors, except for liability arising from a wilful breach of this Agreement
or common law fraud or any liability of Rayrock arising under section 5.1.
ARTICLE VII
CONDITIONS PRECEDENT
7.1 MUTUAL CONDITIONS PRECEDENT
The respective obligations of Rayrock and Glamis to complete the
transactions contemplated herein shall be subject to the satisfaction, on or
before the Effective Date, of each of the following conditions:
(a) the Arrangement, with or without amendment, and the transactions
contemplated thereby shall have been approved by Rayrock Shareholders at
the Meeting in accordance with the Interim Order;
(b) the Final Order shall have been granted by the Court, which order
shall reflect the intent of the parties hereto as expressed by this
Agreement and shall be in form and substance satisfactory to each of Glamis
and Rayrock, each acting reasonably and having regard to this Agreement;
(c) the Final Order together with the Articles of Arrangement shall have
been accepted by the Director for filing;
(d) there shall not be in force any order or decree of a court of
competent jurisdiction, any federal, provincial, municipal or other
governmental department or any commission, board, agency or regulatory body
restraining, interfering with or enjoining the consummation of the
transactions contemplated by this Agreement including, without limitation,
the Arrangement;
(e) the Stock Exchanges on the part of Glamis and the TSE on the part of
Rayrock shall have approved the transactions contemplated hereby,
including, in particular, the Arrangement;
(f) the Stock Exchanges shall have approved or conditionally approved the
listing thereon of the Glamis Shares issuable to Rayrock Shareholders
pursuant to the Arrangement as of the Effective Date, subject to compliance
with the usual requirements of such Stock Exchanges and the TSE shall have
approved or conditionally approved the listing thereon of the Glamis Shares
issuable pursuant to the Glamis Stock Options;
(g) each person (other than the parties hereto) that is to do any act or
thing contemplated in the Arrangement shall have agreed to do each such act
or thing pursuant to an agreement with the appropriate party or parties
hereto, in form and substance satisfactory to each of Rayrock and Glamis;
and
(h) this Agreement shall not have been terminated pursuant to Article VI.
7.2 CONDITIONS TO OBLIGATIONS OF RAYROCK
The obligation of Rayrock to complete the transactions contemplated herein
is subject to the satisfaction, on or before the Effective Date, of each of the
following conditions, which conditions are for the sole benefit of
<PAGE> 19
Rayrock and may be waived by it in whole or in part by notice in writing to
Glamis without prejudice to the rights of Rayrock to rely on any other
condition:
(a) Rayrock, acting reasonably, shall be satisfied that no adverse
material change has occurred in the business or financial affairs of Glamis
from December 31, 1997 to the Effective Date;
(b) except as affected by the transactions contemplated by this Agreement,
the representations and warranties of Glamis contained in section 3.1 shall
be true and correct in all material respects on the Effective Date with the
same effect as though such representations and warranties had been made at
and as of such date and Rayrock shall have received a certificate to that
effect, dated the Effective Date, of two senior officers of Glamis;
(c) each of the covenants, acts and undertakings of Glamis to be performed
pursuant to the terms of this Agreement shall have been performed in all
material respects by Glamis;
(d) no third party act, action, suit or proceeding shall have been taken
which would prohibit Rayrock from completing the Arrangement or which would
have a Material Adverse Effect on Glamis;
(e) Rayrock shall have received all required regulatory approvals in
respect of the Arrangement; and
(f) Rayrock shall have received all such other documents and certificates
as reasonably may be required by Rayrock in connection with the completion
of the Arrangement, including, without limitation but for greater
certainty, an opinion of Lang Michener Lawrence & Shaw dated the Effective
Date, satisfactory in form and substance in all material respects to
Rayrock and its counsel, acting reasonably, and addressed to Rayrock.
7.3 CONDITIONS TO OBLIGATIONS OF GLAMIS
The obligation of Glamis to complete the transactions contemplated herein
is subject to the satisfaction of each of the following conditions on or before
the Effective Date, which conditions are for the sole benefit of Glamis and may
be waived by it in whole or in part by notice in writing to Rayrock without
prejudice to the rights of Glamis to rely on any other condition:
(a) Glamis, acting reasonably, shall be satisfied that no adverse material
change has occurred in the business or financial affairs of Rayrock from
December 31, 1997 to the Effective Date;
(b) except as affected by transactions contemplated by this Agreement, the
representations and warranties of Rayrock contained in section 3.2 shall be
true and correct in all material respects on the Effective Date with the
same effect as though such representations and warranties had been made at
and as of such time and Glamis shall have received a certificate to that
effect, dated the Effective Date, of two senior officers of Rayrock;
(c) each of the covenants, acts and undertakings of Rayrock to be
performed pursuant to the terms of this Agreement shall have been performed
in all material respects by Rayrock;
(d) all requisite regulatory approvals (including, without limitation, of
any stock exchanges or securities commissions) that are reasonably
necessary to permit the Arrangement to be completed, shall have been
obtained on terms satisfactory to Glamis, acting reasonably;
(e) Rayrock shall not have received notices of the exercise of Dissent
Rights in respect of more than 5% of the number of Rayrock Shares issued
and outstanding as at the date of the Information Circular; and
(f) Glamis shall have received all such other documents and certificates
as reasonably may be required by Glamis in connection with the completion
of the Arrangement, including, without limitation but for greater
certainty, an opinion of Bennett Jones, dated the Effective Date,
satisfactory in form and substance in all material respects to Glamis and
its counsel, acting reasonably, and addressed to Glamis.
<PAGE> 20
ARTICLE VIII
IMPLEMENTATION OF ARRANGEMENT
8.1 INTERIM ORDER
The notice of motion for the application for the Interim Order shall
request that the Interim Order provide:
(a) for the classes of person to whom notice is to be provided in respect
of the Arrangement and the Meeting and for the manner in which such notices
are to be provided;
(b) that holders of outstanding Rayrock Multiple Voting Shares and Rayrock
Subordinate Voting Shares as such shall be entitled to vote on the
Arrangement separately by class and not together and the sole holder of
Rayrock Multiple Voting Shares shall be entitled to vote by consent
resolution;
(c) that the requisite shareholders' approval for the Arrangement shall
be:
(i) 66 2/3% of the votes cast on the Arrangement by holders of Rayrock
Subordinate Voting Shares in person or by proxy at the Meeting and by
the consent of the sole holder of Rayrock Multiple Voting Shares by
consent resolution; and
(ii) if, pursuant to applicable requirements of the OBCA or securities
regulatory authorities in the Provinces of Ontario or Quebec, a vote of
the holders of the Rayrock Subordinate Voting Shares other than
BlackRock is required by such regulatory authorities and Rayrock has not
received relief from such authorities, such vote as may be required by
the OBCA or such securities regulatory authorities;
(d) that the requisite shareholders' approval in respect of the
BlackRock/Glamis Share Exchange shall be the affirmative vote of not less
than a majority of the votes cast in respect thereof by the holders of
Rayrock Subordinate Voting Shares other than BlackRock;
(e) that, in all other respects, the terms, restrictions and conditions of
the by-laws and articles of Rayrock, including quorum requirements, shall
apply in respect of the Meeting; and
(f) for the grant of Dissent Rights.
8.2 ARTICLES OF ARRANGEMENT
The Articles of Arrangement, with such other instruments as are necessary
to effect the Arrangement, and subject to the provisions of the Plan of
Arrangement, shall provide as follows:
(a) the authorized share capital of Rayrock shall be increased by the
creation of an unlimited number of shares designated common shares
("Rayrock New Common Shares") having the attributes described in subsection
22(3) of the OBCA;
(b) the authorized share capital of Rayrock shall be decreased by
cancelling all of the authorized but unissued Rayrock Subordinate Voting
Shares and Rayrock Multiple Voting Shares;
(c) subject to subsection 8.2(e), each holder of Rayrock Shares (other
than Rayrock Shareholders who exercise Dissent Rights and who are
ultimately entitled to be paid the fair value of their Rayrock Shares
("Dissenting Shareholders")) shall transfer to Glamis all of the Rayrock
Shares owned by such holder in exchange for (i) that number of Glamis
Shares or (ii) that number of Glamis Shares and that amount of cash, as is
determined pursuant to the terms of the Plan of Arrangement;
(d) Rayrock shall declare a dividend on the Rayrock Subordinate Voting
Shares of the Magin Shares, which shall be distributed to Glamis as the
sole holder of Rayrock Shares;
(e) subject to receipt of the BlackRock/Glamis Share Exchange Approvals,
BlackRock shall receive from Glamis in lieu of the Glamis Shares to which
it otherwise would be entitled as a Rayrock Shareholder under subsection
8.2(c)(ii):
(i) the Magin Shares; and
<PAGE> 21
(ii) that number of Glamis Shares that is equal to the number of Glamis
Shares which it otherwise would have been entitled to receive under
subsection 8.2(c)(ii) less that number of Glamis Shares that is equal to
the number of Magin Shares multiplied by 0.94;
and, whether or not the BlackRock/Glamis Share Exchange Approvals are
obtained on or before the Effective Date, BlackRock shall be entitled to
receive the cash portion of the Cash/Share Consideration to which it
otherwise is entitled; and
(f) immediately following the exchange as outlined in subsections 8.2(c)
and 8.2(e) above, each issued and outstanding Rayrock Subordinate Voting
Share and Rayrock Multiple Voting Share (all of which shall be held by
Glamis) shall be changed into one Rayrock New Common Share.
8.3 RAYROCK STOCK OPTIONS
On the Effective Date, each of the Rayrock Stock Options outstanding at
that date shall be exchanged for an option (a "Glamis Stock Option") to purchase
that number of Glamis Shares that is equal to the number of Rayrock Subordinate
Voting Shares issuable upon exercise of the Rayrock Stock Option at such time
multiplied by the Exchange Ratio. The exercise price per Glamis Share of a
Glamis Stock Option shall be equal to the exercise price per share of the
related Rayrock Stock Option in effect immediately prior to the Effective Date
divided by the Exchange Ratio. If the foregoing calculation results in the
Glamis Stock Option being exercisable for a fraction of a Glamis Share, the
number of Glamis Shares subject to such Glamis Stock Option shall be rounded
down to the next whole number of Glamis Shares and the total exercise price for
the option shall be reduced by the exercise price of the fractional Glamis
Share. The term to expiry, conditions to and manner of exercising, vesting
schedule, the status under Applicable Laws, and all other terms and conditions
of the Glamis Stock Options shall otherwise be unchanged from those contained in
or otherwise applicable to the related Rayrock Stock Options. Glamis shall
reserve a sufficient number of Glamis Shares for issue upon exercise of the
Glamis Stock Options provided, however, that the right to exercise such options
shall be subject to applicable regulatory and shareholder approvals.
8.4 RAYROCK SHARE APPRECIATION RIGHTS
On the Effective Date, each of the Rayrock Share Appreciation Rights shall
be exchanged for that number of Glamis Share Appreciation Rights which is equal
to the number of Rayrock Share Appreciation Rights in effect at such time
multiplied by the Exchange Ratio. The base price for the Glamis Share
Appreciation Rights shall be equal to the base price of the relevant Rayrock
Share Appreciation Rights in effect immediately prior to the Effective Date
divided by the Exchange Ratio. The calculation of benefits under the Glamis
Share Appreciation Rights and the term to expiry, conditions to and manner of
exercising, vesting schedule, the status under Applicable Laws, and all other
terms and conditions of the Glamis Share Appreciation Rights shall otherwise be
unchanged from those contained in or otherwise applicable to the related Rayrock
Share Appreciation Rights.
8.5 RAYROCK SHAREHOLDER ELECTIONS
Rayrock shall forward to Rayrock Shareholders, with the proxy material for
the Meeting, Consideration Election Forms allowing Rayrock Shareholders to elect
to receive Cash/Share Consideration in exchange for their Rayrock Shares. If a
Rayrock Shareholder has not returned a Consideration Election Form to Rayrock
prior to the Election Deadline, such Rayrock Shareholder shall be deemed to have
elected to receive 2.4 Glamis Shares for each Rayrock Share held.
8.6 DELIVERY OF GLAMIS SHARES AND CASH TO THE TRUSTEE
In order to facilitate the exchange of Rayrock Shares for Glamis Shares or
a combination of Glamis Shares and cash (or, in the case of BlackRock, a
combination of Magin Shares, Glamis Shares and cash, if the BlackRock/Glamis
Share Exchange Approvals are obtained) under the Arrangement, the Glamis Shares,
Magin Shares and cash to which Rayrock Shareholders would be entitled under the
Arrangement and pursuant to the duly completed and returned Consideration
Election Forms shall be delivered by Glamis to the Trustee within one Business
Day after the Effective Date and the Trustee shall hold such for Rayrock
Shareholders in accordance with their entitlements under the Arrangement and
pursuant to duly completed and returned Consideration Election Forms.
<PAGE> 22
8.7 TRANSMITTAL LETTERS
As soon as possible after the Effective Date, Glamis shall cause CIBC
Mellon to send (by first class mail) to each person who was a holder of Rayrock
Shares immediately prior to the Effective Date at his address shown on Rayrock
register of shareholders, a transmittal letter specifying the consideration the
person is entitled to receive pursuant to the Arrangement, if any, and shall
request those persons to, and they shall, surrender for cancellation the share
certificates representing their Rayrock Shares held immediately prior to the
Effective Date. CIBC Mellon shall, upon receipt of properly completed
transmittal letters give notice of such to Glamis and Glamis shall cause the
Trustee to mail (by first class mail) the consideration due to the holder
thereof as aforesaid.
8.8 PRE-CLOSING
Unless this Agreement is terminated earlier pursuant to the provisions
hereof, the parties hereto shall meet at the offices of Lang Michener, Suite
2500, BCE Place, 181 Bay Street Toronto, Ontario at 9:00 a.m. on or before the
next Business Date after the Rayrock Shareholders approve the Arrangement (or at
such other time or on such other date as they may agree) and each party shall
deliver to the other party:
(a) the documents, other than legal opinions, required to be delivered by
it hereunder to complete the transactions contemplated hereby, provided
that each such document, whether to be dated the Effective Date or not,
shall be held in escrow to be released upon the issuance of a Certificate
of Arrangement by the Director; and
(b) written confirmation as to the satisfaction or waiver by it of the
conditions in its favour set out herein (other than the acceptance of the
Final Order and Articles of Arrangement for filing by the Director).
8.9 FILING OF FINAL ORDER
As soon as possible after receipt by Rayrock of the Final Order, a
certified copy of the Final Order and Articles of Arrangement shall be sent to
the Director pursuant to subsection 183(1) of the OBCA with the request that a
Certificate of Arrangement be endorsed on the Articles of Amendment.
8.10 CERTIFICATE OF ARRANGEMENT AND CLOSING
Rayrock shall promptly advise Glamis as to the date on which a Certificate
of Arrangement has been issued by the Director and the documents held in escrow
pursuant to subsection 8.8(a) shall, upon such acceptance, be released and the
parties shall exchange such other documents as may be necessary or desirable in
connection with the completion of the transactions contemplated by this
Agreement and the Arrangement, including, without limitation, the delivery of
required legal opinions.
ARTICLE IX
GENERAL
9.1 NOTICE
All notices, requests, demands and other communications hereunder shall be
deemed to have been duly given and made if in writing and if served by personal
delivery upon the party for whom it is intended or delivered by registered or
certified mail, return receipt requested, or if sent by facsimile transmission,
upon receipt of oral confirmation that such transmission has been received, to
the person at the address set forth below, or such other address as may be
designated in writing hereafter, in the same manner, by such person. The date of
receipt of any such notice or other communication if delivered personally shall
be deemed to be the date of delivery thereof, if sent by mail the date of
receipt thereof, or if sent by facsimile transmission the date of such
transmission.
If to Glamis:
Glamis Gold Ltd.
310-5190 Neil Road
Reno, Nevada
89503
<PAGE> 23
Fax: (702) 827-5044
Attention: C. Kevin McArthur, President and Chief Executive Officer
with a copy to:
Lang Michener Lawrence & Shaw
1500 Royal Centre
1055 West Georgia Street
P.O. Box 11117
Vancouver, British Columbia
V6E 4N7
Fax: (604) 685-7084
Attention: G. Barry Finlayson
If to Rayrock:
Rayrock Resources Inc.
30 Soudan Avenue
Suite 500
Toronto, Ontario
M4S 1V6
Fax: (416) 489-0096
Attention: James E. Askew
With a copy to:
Bennett Jones
Suite 3400, 1 First Canadian Place
P. O. Box 130
Toronto, Ontario
M5X 1A4
Fax: (416) 863-1716
Attention: John W. Sabine
Any such notice, direction or other instrument, whether delivered or transmitted
by facsimile transmission, shall be deemed to have been given at the time and on
the date on which it was delivered to or received in the office of the
addressee, as the case may be, if delivered or transmitted prior to 5:00 p.m.
(at the place of the addressee) on a Business Day or, if transmitted later than
that time, at 9:00 a.m. (at the place of the addressee) on the subsequent
Business Day. Either party hereto may change its address for service from time
to time by notice given to the other party hereto in accordance with the
foregoing. Any notice, direction or other instrument delivered under this
Agreement shall be signed by one or more duly authorized officers of the party
delivering it.
The delivery of any notice, direction or other instrument or a copy thereof, to
a party hereunder shall be deemed to constitute the representation and warranty
of the party who has delivered it to the other party that such delivering party
is authorized to deliver such notice, direction or other instrument at such time
under this Agreement (unless the receiving party has actual knowledge to the
contrary) and the receiving party shall not be required to make any inquiry to
confirm such authority.
9.2 AMENDMENT
This Agreement may, at any time, and from time to time before and after the
holding of the Meeting but not later than the Effective Date, be amended by
written agreement of Glamis and Rayrock (or, in the case of a waiver, by written
instrument of the party given the waiver) without, subject to Applicable Laws
and the BlackRock/Glamis Agreement, further notice to or authorization on the
part of Rayrock Shareholders or the Court. Without limiting the generality of
the foregoing, any such amendment may:
(a) change the time for performance of any of the obligations or acts of
the parties hereto;
<PAGE> 24
(b) waive any inaccuracies or modify any representation contained herein
or in any documents to be delivered pursuant hereto; and
(c) waive compliance with or modify any of the covenants herein contained
or waive or modify performance of any of the obligations of the parties
hereto;
provided that, notwithstanding the foregoing, the terms of the Arrangement and
this Agreement shall not be amended in a manner prejudicial to Rayrock
Shareholders without the approval of such shareholders given in the same manner
as required for the approval of the Arrangement or as may be ordered by the
Court.
9.3 AMENDMENT RESULTING FROM FINAL ORDER
This Agreement and the Arrangement may be amended in accordance with the
Final Order by written agreement of Glamis and Rayrock, provided that if the
terms of the Final Order require any such amendment, the rights of the parties
hereto under sections 4.1, 4.2 and 9.2 shall remain unaffected.
9.4 BINDING EFFECT
This Agreement shall be binding upon and enure to the benefit of the
parties hereto and their respective successors.
9.5 EQUITABLE REMEDIES
All covenants herein as to the enforceability of any covenant, agreement or
document shall be qualified as to applicable bankruptcy and other laws affecting
the enforcement of creditors' rights generally and to the effect that specific
performance, being an equitable remedy, may not be ordered by a court in any
particular circumstances.
9.6 PUBLIC STATEMENTS
Except as required by Applicable Laws, neither Glamis nor Rayrock shall
make any public announcement or statement with respect to the Arrangement or
this Agreement without the approval of the other party. Moreover, in any event,
each party agrees to give prior notice to the other party of any public
announcement relating to the Arrangement or its affairs and agrees to consult
with the other party prior to issuing any such public announcement.
9.7 ENTIRE AGREEMENT
This Agreement:
(a) constitutes the entire agreement and supersedes all other prior
agreements and undertakings, both written and oral, between Rayrock and
Glamis relating to the subject matter hereof;
(b) is not intended to confer upon any other person any rights or
remedies; and
(c) shall not be assigned by operation of law or otherwise hereunder.
9.8 TIME OF ESSENCE
Time shall be of the essence of this Agreement.
9.9 SEVERABILITY
If any provision of this Agreement, or the application thereof, is
determined for any reason and to any extent to be invalid or unenforceable, the
remainder of this Agreement and the application of such provision to other
persons and circumstances shall remain in full force and effect, provided that
the legal or economic substance of the transactions contemplated hereby is not
thereby affected in a manner adverse to either party.
9.10 COUNTERPART EXECUTIONS AND FACSIMILE TRANSMISSIONS
This Agreement may be executed in counterparts, each of which when
delivered (whether in originally executed form or by facsimile transmission)
shall be deemed to be an original and all of which together shall constitute one
and the same document.
<PAGE> 25
9.11 COMMISSIONS
Glamis and Rayrock represent and warrant to each other that, except for
Merrill Lynch and Loewen, Ondatje, McCutcheon Limited in the case of Glamis and
N M Rothschild & Sons Canada Limited and Griffiths McBurney & Partners in the
case of Rayrock, no broker, finder or investment banker is entitled to any
brokerage, finder's or other fee or commission, or to the reimbursement of any
of its expenses, in connection with the Arrangement.
9.12 EXPENSES
Each party shall be responsible for its own expenses relating to the
Arrangement including, without limitation, regulatory fees and fees of
professional advisers, including legal counsel and auditors.
9.13 NOTIFICATION OF CERTAIN MATTERS
Each party shall give prompt notice to the other of:
(a) the occurrence or failure to occur of any event, which occurrence or
failure would cause or may cause any representation or warranty on its part
contained in this Agreement to be untrue or incorrect in any respect at any
time from the date of this Agreement to the Effective Date; and
(b) any failure of such party, or any officer, director, employee or agent
thereof, to comply with or satisfy any covenant, condition or agreement to
be complied with or satisfied by it hereunder.
9.14 INVESTIGATION
Any investigation by a party and its advisers shall not mitigate, diminish
or effect the representations and warranties of the other party contained in
this Agreement or any document or certificate given pursuant thereto.
IN WITNESS WHEREOF the parties have executed this Agreement as of the date
first above written.
RAYROCK RESOURCES INC.
By: (signed) JAMES E. ASKEW
By: (signed) JOHN W. W. HICK
GLAMIS GOLD LTD.
By: (signed) C. KEVIN MCARTHUR
By: (signed) DANIEL J. FORBUSH
<PAGE> 26
EXHIBIT 1 TO EXHIBIT 10.51
PLAN OF ARRANGEMENT
IN THE MATTER OF AN ARRANGEMENT between Rayrock Resources Inc., the holders
from time to time of the issued and outstanding shares in the capital of
Rayrock Resources Inc., and Glamis Gold Ltd. pursuant to section 182 of the
Business Corporations Act (Ontario).
ARTICLE I
INTERPRETATION
1.01 In this Plan of Arrangement, unless the context otherwise requires, the
following words and phrases shall have the meanings hereinafter set out:
"ARRANGEMENT" means the arrangement under the provisions of section 182 of
the OBCA as described herein;
"ARRANGEMENT AGREEMENT" means the agreement made as of the 25th day of
January, 1999 between Glamis and Rayrock entered into for the purpose of
effecting the Arrangement;
"ARTICLES OF ARRANGEMENT" means the articles of arrangement of Rayrock
relating to the Arrangement;
"BLACKROCK" means BlackRock Ventures Inc., a corporation governed by the
Canada Business Corporations Act;
"BLACKROCK/GLAMIS SHARE EXCHANGE" means the acquisition by BlackRock
pursuant to the terms of this Plan of Arrangement, as partial consideration
for the exchange of its Rayrock Shares, of the Magin Shares in lieu of
3,088,652 Glamis Shares to which BlackRock otherwise would be entitled;
"BLACKROCK/GLAMIS SHARE EXCHANGE APPROVALS" means all necessary regulatory
and shareholder approvals of the BlackRock/Glamis Share Exchange;
"BUSINESS DAY" means a day which is not a Saturday, Sunday or a civic or
statutory holiday, within the meaning of the Interpretation Act (Canada),
in Toronto, Ontario or Vancouver, British Columbia;
"CASH/SHARE CONSIDERATION" means 1.6 Glamis Shares and $3.00 cash to be
issued and paid to a Rayrock Shareholder in exchange for each Rayrock Share
pursuant to an Election;
"CERTIFICATE OF ARRANGEMENT" means the certificate of arrangement giving
effect to the Arrangement, endorsed by the Director pursuant to subsection
183(2) of the OBCA on the Articles of Arrangement;
"CIBC MELLON" means CIBC Mellon Trust Company, Rayrock's registrar and
transfer agent;
"CONSIDERATION ELECTION FORM" means a form delivered to Rayrock
Shareholders whereby they may elect to receive Cash/Share Consideration in
exchange for Rayrock Shares;
"COURT" means the Ontario Court (General Division);
"DIRECTOR" means the Director appointed under section 278 of the OBCA;
"DISSENT RIGHT" means the right of dissent and appraisal provided for in
Article IV hereof;
"DISSENTING SHAREHOLDER" means a Rayrock Shareholder who has exercised a
Dissent Right pursuant to Article IV hereof and who is ultimately entitled
to be paid the fair value of the Rayrock Shares held by such Rayrock
Shareholder;
"EFFECTIVE DATE" means the date shown on the Certificate of Arrangement;
"ELECTION" means the election duly and properly made by a Rayrock
Shareholder pursuant to the Consideration Election Form to receive
Cash/Share Consideration in exchange for each Rayrock Share held;
"ELECTION DEADLINE" means, with respect to the delivery of the
Consideration Election Form, the Business Day immediately preceding the day
of the Meeting or any adjournment thereof;
"EXCHANGE RATIO" means 2.71;
<PAGE> 27
"GLAMIS" means Glamis Gold Ltd. a company governed by the Company Act
(British Columbia);
"GLAMIS SHARE APPRECIATION RIGHTS" means share appreciation rights which
are to be granted by Glamis in exchange for Rayrock Share Appreciation
Rights, in accordance with this Plan of Arrangement;
"GLAMIS SHARES" means the common shares without par value in the capital of
Glamis;
"GLAMIS STOCK OPTIONS" means options to acquire Glamis Shares which are to
be granted by Glamis in exchange for Rayrock Stock Options, in accordance
with this Plan of Arrangement;
"ITA" means the Income Tax Act (Canada), R.S.C. 1985, c.1(5th supplement)
as amended and in force on the date of this Plan of Arrangement, including
the regulations promulgated thereunder;
"MAGIN SHARES" means the 3,285,800 common shares in the capital of Magin
Energy Inc. owned by Rayrock;
"MEETING" means the special meeting of Rayrock Shareholders called for the
purpose of considering, among other things, the Arrangement Resolution and
the BlackRock/Glamis Share Exchange Resolution, including any adjournment
or adjournments thereof;
"NYSE" means the New York Stock Exchange;
"OBCA" means the Business Corporations Act (Ontario), as now enacted or as
the same may be amended from time to time;
"RAYROCK" means Rayrock Resources Inc., a corporation governed by the OBCA;
"RAYROCK MULTIPLE VOTING SHARES" means the multiple voting shares in the
capital of Rayrock;
"RAYROCK SHARE APPRECIATION RIGHTS" means share appreciation rights granted
by Rayrock prior to January 25, 1999;
"RAYROCK SHAREHOLDER" means a holder of Rayrock Shares;
"RAYROCK SHARES" means the issued and outstanding Rayrock Multiple Voting
Shares and Rayrock Subordinate Voting Shares, collectively;
"RAYROCK STOCK OPTIONS" means options to acquire Rayrock Subordinate Voting
Shares granted by Rayrock prior to January 25, 1999;
"RAYROCK SUBORDINATE VOTING SHARES" means the subordinate voting shares in
the capital of Rayrock;
"STOCK EXCHANGES" means the TSE and the NYSE, collectively; and
"TSE" means The Toronto Stock Exchange.
ARTICLE II
ARRANGEMENT AGREEMENT
2.1 The Arrangement is made pursuant to and subject to the provisions of the
Arrangement Agreement.
ARTICLE III
THE ARRANGEMENT
3.1 On the Effective Date, subject to the provisions of Articles IV and V
hereof, the following shall occur and shall be deemed to occur in the following
order without any further act or formality:
(a) the authorized share capital of Rayrock shall be increased by the
creation of an unlimited number of shares designated common shares
("Rayrock New Common Shares") having the attributes described in subsection
22(3) of the OBCA;
(b) the authorized share capital of Rayrock shall be decreased by
cancelling all of the authorized but unissued Rayrock Subordinate Voting
Shares and Rayrock Multiple Voting Shares;
<PAGE> 28
(c) each Rayrock Shareholder who does not make the Election by the
Election Deadline shall be deemed not to have made the Election. Each
Rayrock Share held by each such non-electing Rayrock Shareholder (other
than a Dissenting Shareholder) shall be, and be deemed to be, transferred
to Glamis, subject to subsection 3.1(f), in exchange for 2.4 Glamis Shares;
(d) the Rayrock Shares of each Rayrock Shareholder who makes the Election
by the Election Deadline shall be, and be deemed to be, transferred to
Glamis, subject to subsection 3.1(f), in exchange for the Cash/Share
Consideration;
(e) Rayrock shall declare a dividend on the Rayrock Subordinate Voting
Shares of the Magin Shares, which shall be distributed to Glamis as the
sole holder of Rayrock Shares;
(f) provided that the BlackRock/Glamis Share Exchange Approvals are
received on or prior to the Effective Date, BlackRock shall receive in lieu
of the number of Glamis Shares which it otherwise would be entitled to
receive pursuant to subsection 3.1(d):
(i) the Magin Shares; and
(ii) that number of Glamis Shares that is equal to the number of Glamis
Shares which it otherwise would have been entitled to receive pursuant
to subsection 3.1(d) less that number of Glamis Shares that is equal to
the number of Magin Shares multiplied by 0.94;
and, whether or not the BlackRock/Glamis Share Exchange Approvals are
obtained on or before the Effective Date, BlackRock shall receive the cash
portion of the Cash/Share Consideration to which it otherwise is entitled;
provided that if the BlackRock/Glamis Share Exchange Approvals are not
received on or prior to the Effective Date, BlackRock shall receive the
Cash/Share Consideration in exchange for its Rayrock Shares;
(g) no fractional Glamis Shares will be issued in connection with the
foregoing and a Rayrock Shareholder otherwise entitled to receive a
fraction of a Glamis Share shall instead be entitled to receive an amount
in cash determined on the basis of a whole Glamis Share being valued at
$3.75;
(h) each of the Rayrock Stock Options shall, subject to all necessary
regulatory and shareholder approvals, be exchanged for a Glamis Stock
Option to purchase that number of Glamis Shares that is equal to the number
of Rayrock Subordinate Voting Shares issuable upon exercise of the Rayrock
Stock Option at such time multiplied by the Exchange Ratio. The exercise
price per Glamis Share of a Glamis Stock Option shall be equal to the
exercise price per share of the relevant Rayrock Stock Option in effect
immediately prior to the Effective Date divided by the Exchange Ratio. If
the foregoing calculation results in the Glamis Stock Option being
exercisable for a fraction of a Glamis Share, the number of Glamis Shares
subject to such option shall be rounded down to the next whole number of
Glamis Shares and the total exercise price for the option shall be reduced
by the exercise price of the fractional Glamis Share. The term to expiry,
conditions to and manner of exercising, vesting schedule, the status under
applicable laws, and all other terms and conditions of the Glamis Stock
Options otherwise shall be unchanged from those contained in or otherwise
applicable to the related Rayrock Stock Option, provided, however, that the
right to exercise such Glamis Stock Options shall be subject to applicable
regulatory and shareholder approvals;
(i) Rayrock Share Appreciation Rights which are outstanding immediately
prior to the Effective Date shall, subject to all necessary regulatory and
shareholder approvals, be exchanged for such number of Glamis Share
Appreciation Rights as are equal to the number of Rayrock Share
Appreciation Rights in effect at such time multiplied by the Exchange
Ratio. The base price for the Glamis Share Appreciation Rights shall be
equal to the base price of the relevant Rayrock Share Appreciation Rights
in effect immediately prior to the Effective Date divided by the Exchange
Ratio. The calculation of benefits under the Glamis Share Appreciation
Rights thereafter shall relate to the market price from time to time of
Glamis Shares and the term to expiry, conditions to and manner of
exercising, vesting schedule, the status under applicable laws, and all
other terms and conditions of the Glamis Share Appreciation Rights
otherwise shall be unchanged from those contained in or otherwise
applicable to the Rayrock Share Appreciation Rights;
<PAGE> 29
(j) the names of the Rayrock Shareholders shall be removed from the
registers of holders of Rayrock Shares;
(k) Glamis shall become the holder of all Rayrock Shares whether exchanged
for Glamis Shares or Glamis Shares and cash or, in the case of BlackRock,
Glamis Shares, cash and, if applicable, Magin Shares; and
(l) each issued and outstanding Rayrock Subordinate Voting Share and
Rayrock Multiple Voting Share shall be changed into one Rayrock New Common
Share, and the share registers of Rayrock shall be revised accordingly.
3.2 Notwithstanding that the transactions or events set out in section 3.1
shall occur and shall be deemed to occur in the order therein set out without
any further act or formality, each of Rayrock and Glamis agree to make, do and
execute or cause and procure to be made, done and executed all such further
acts, deeds, agreements, transfers, assurances, instruments or documents as may
be required by it in order to further document or evidence any of the
transactions or events set out in subsection 3.1 including, without limitation,
any resolutions of directors authorizing the issue, transfer or purchase for
cancellation of shares, any share transfer powers evidencing the transfer of
shares and any receipt therefor and any necessary additions to or deletions from
share registers.
3.3 For purposes of the OBCA, the aggregate stated capital attributable to
Rayrock New Common Shares shall be equal to the aggregate stated capital
attributable to the Rayrock Subordinate Voting Shares and Rayrock Multiple
Voting Shares changed into Rayrock New Common Shares, as it was immediately
prior to the Effective Date.
ARTICLE IV
RIGHTS OF DISSENT
4.1 Rayrock Shareholders may exercise rights of dissent ("Dissent Rights") in
respect of the Arrangement pursuant to the Interim Order and in the manner set
forth in section 185 of the OBCA and this section 4.1. Shareholders who duly
exercise Dissent Rights with respect to their Rayrock Shares ("Dissenting
Shares") and who:
(a) are ultimately entitled to be paid fair value for their Dissenting
Shares shall be deemed to have transferred their Dissenting Shares to
Rayrock for cancellation immediately before the effective time of the
Arrangement on the Effective Date; or
(b) for any reason are ultimately not entitled to be paid fair value for
their Dissenting Shares, shall be deemed to have participated in the
Arrangement on the same basis as a Rayrock Shareholder who is not a
Dissenting Shareholder and shall receive Glamis Shares on the same basis as
every other Rayrock Shareholder who has not made an Election, as provided
in subsection 3.1(c);
but in no case shall Rayrock be required to recognize such persons as holding
Rayrock Shares on or after the Effective Date.
ARTICLE V
ELECTIONS
5.1 Rayrock Shareholders making the Election must deposit a properly completed
and signed Consideration Election Form with CIBC Mellon by the Election
Deadline. Glamis, acting reasonably, shall have the discretion to determine
whether Consideration Election Forms have been properly completed, signed and
submitted and to disregard immaterial defects in Consideration Election Forms.
The decision of Glamis acting reasonably in such matters shall be conclusive and
binding. Neither Glamis nor CIBC Mellon shall be under any obligation to notify
any person of any defect in a Consideration Election Form submitted. A
Consideration Election Form may not be revoked after receipt thereof by CIBC
Mellon.
<PAGE> 30
5.2 A Rayrock Shareholder of record who holds Rayrock Shares as a nominee,
custodian, depository, trustee or in any other representative capacity for
beneficial owners of Rayrock Shares may submit multiple Consideration Election
Forms.
5.3 A Rayrock Shareholder who does not deposit a Consideration Election Form
with CIBC Mellon by the Election Deadline or whose Election is defective or
incomplete shall be deemed not to have made the Election, and the Rayrock Shares
held by such Rayrock Shareholder (other than a Dissenting Shareholder) shall be
transferred to Glamis on the basis of 2.4 Glamis Shares for each Rayrock Share
held.
5.4 Rayrock shall use all reasonable efforts to mail the Consideration Election
Form to all persons who become Rayrock Shareholders during the period between
the date of mailing of the Rayrock management information circular relating to
the Meeting and the close of business (Toronto time) on the day that is seven
calendar days prior to the date of the Meeting and to make the Consideration
Election Form available to all persons who become Rayrock Shareholders
subsequent to such day and no later than the Election Deadline.
ARTICLE VI
CERTIFICATES
6.1 After the Effective Date, certificates formerly representing Rayrock Shares
which are held by a Rayrock Shareholder shall represent only the right to
receive certificates representing Glamis Shares (or Magin Shares, to the extent
BlackRock is entitled to receive Magin Shares in lieu of Glamis Shares) and the
right, subject to subsection 3.1(d), to receive cash pursuant to valid Elections
so made by the Rayrock Shareholder and cash in lieu of receiving a fractional
Glamis Share, all in accordance with the terms of the Arrangement.
6.2 No dividends or other distributions declared or made after the Effective
Date with respect to the Glamis Shares with a record date after the Effective
Date shall be payable or paid to the holder of any unsurrendered certificate or
certificates which, immediately prior to the Effective Date, represented
outstanding Rayrock Shares.
6.3 As soon as reasonably practicable after the Effective Date, CIBC Mellon
shall forward to each Rayrock Shareholder, at the address of such Rayrock
Shareholder as it appears on the appropriate register for such securities, a
letter of transmittal and instructions for obtaining delivery of the certificate
or certificates representing the Glamis Shares (or Magin Shares, to the extent
BlackRock is entitled to receive Magin Shares in lieu of Glamis Shares) allotted
and issued to such holder pursuant to the Arrangement and any cash due to the
Rayrock Shareholder under the Arrangement pursuant to a properly made Election.
Rayrock Shareholders may take delivery of the certificate or certificates
representing the Glamis Shares (or Magin Shares to the extent BlackRock is
entitled to receive Margin Shares in lieu of Glamis Shares) allotted and issued
to them and cash to which they may be entitled pursuant to the Arrangement by
delivering the certificates representing the Rayrock Shares formerly held by
them to CIBC Mellon at the offices indicated in the letter of transmittal. Such
certificates shall be accompanied by a duly completed letter of transmittal
together with such other documents as CIBC Mellon and the Trustee may require
and the certificates representing the Glamis Shares (or Magin Shares, in the
case of BlackRock) issued to and a cheque for any cash due to such Rayrock
Shareholder shall be registered in, or made payable to such name or names and
delivered to such address or addresses as such Rayrock Shareholder may direct in
such letter of transmittal as soon as reasonably practicable after receipt by
CIBC Mellon of the required certificates and documents.
6.4 Any certificate which immediately prior to the Effective Date represented
outstanding Rayrock Shares which has not been surrendered, with all other
instruments required by this Article VI, on or prior to the sixth anniversary of
the Effective Date, shall cease to represent any claim against or interest of
any kind or nature in Rayrock, Glamis, Magin, CIBC Mellon or the Trustee.
<PAGE> 31
ARTICLE VII
TAX ELECTION FORMS UNDER SECTION 85 OF THE INCOME TAX ACT
7.1 Each Rayrock Shareholder who wishes to avail himself of the elective
provisions of section 85 of the ITA in respect of the exchange of property
described in subsections 3.1(c) and 3.1(d) hereof shall provide to Glamis, on or
before December 31, 1999, a properly-completed T2058, for partnerships, or T2057
election form (or such other form which is prescribed for the purposes of
section 85 of the ITA from time to time) and Glamis shall execute such form as
transferee, provided such form is received by Glamis on or before December 31,
1999, and shall return such form, duly executed, to such Rayrock Shareholder at
the address provided on the form for filing by such Rayrock Shareholder. Glamis
shall not be responsible for any loss or damage resulting from such an election
being incomplete or invalid or from the late filing of such form, and proper
completion, timely filing and validity of the election shall be the sole
responsibility of the Rayrock Shareholder.
<PAGE> 32
EXHIBIT 2 TO EXHIBIT 10.51
SUBSIDIARIES AND OTHER CORPORATIONS
IN WHICH GLAMIS HAS AN INTEREST
NOVEMBER 18, 1998
(LOGO)
<PAGE> 33
EXHIBIT 3 TO EXHIBIT 10.51
SUBSIDIARIES AND OTHER CORPORATIONS
IN WHICH RAYROCK HAS AN INTEREST
(LOGO)
<PAGE> 34
EXHIBIT 4 TO EXHIBIT 10.51
AFFILIATE AGREEMENT
Glamis Gold Ltd.
310 - 5190 Neil Road
Reno, Nevada
89502
Gentlemen:
Pursuant to the terms of the Arrangement Agreement dated as of January 25,
1999 (the "Agreement") between Glamis Gold Ltd., a company incorporated under
the laws of the Province of British Columbia ("Glamis") and Rayrock Resources
Inc., a corporation amalgamated under the laws of the Province of Ontario
("Rayrock"), Glamis shall acquire Rayrock through a statutory arrangement with
Rayrock and its shareholders pursuant to provisions of the Business Corporations
Act (Ontario) (the "Arrangement"). Certain capitalized terms used but not
defined herein shall, unless the context requires otherwise, have the respective
meanings ascribed to them in the Agreement.
The undersigned has been advised that as of the date hereof it may be
deemed to be an "affiliate" of Rayrock, as the term "affiliate" is (i) defined
for purposes of paragraphs (c) and (d) of Rule 145 of the Rules and Regulations
(the "Rules and Regulations") of the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act").
The undersigned understands that the representations, warranties and
covenants set forth herein shall be relied upon by Glamis, shareholders of
Glamis, Rayrock, other shareholders of Rayrock and their respective counsel.
The undersigned represents and warrants to and agrees with Glamis that:
1. The undersigned has full power to execute and deliver this Affiliate
Agreement and to make the representations and warranties herein and to
perform its obligations hereunder.
2. The undersigned has carefully read this Affiliate Agreement and the
Agreement and discussed its requirements and other applicable
limitations upon its ability to sell, transfer or otherwise dispose of
Glamis Shares, to the extent the undersigned felt necessary, with its
counsel or counsel for Rayrock.
3. The undersigned shall not make any sale, transfer or other disposition
of Glamis Shares in violation of the Act or the Rules and Regulations.
4. The undersigned has been advised that the issuance of Glamis Shares to
the undersigned in connection with the Arrangement is exempt from
registration under the Act. However, the undersigned has also been
advised that, since, at the time the Arrangement was submitted for a
vote of the Rayrock Shareholders, the undersigned may be deemed to have
been an affiliate of Rayrock and the distribution by the undersigned of
any Glamis Shares has not been registered under the Act, the undersigned
may not sell, transfer or otherwise dispose of Glamis Shares issued to
the undersigned in the Arrangement unless (i) such sale, transfer or
other disposition has been registered under the Act, or (ii) such sale,
transfer or other disposition is made in conformity with the
requirements of Rule 145 or (if the undersigned is not an affiliate of
Glamis or if an affiliate of Glamis, solely by virtue of holding a
position as a director or officer of Glamis) Rule 904 promulgated by the
Commission under the Act, or (iii) in the opinion of counsel reasonably
acceptable to Glamis, such sale, transfer or other disposition is
otherwise exempt from registration under the Act.
5. The Undersigned understands that persons who shall be an affiliate of
Glamis after the Arrangement and persons who are an affiliate of either
Rayrock or Glamis prior to the Arrangement may not resell the Glamis
Shares received by them under the Arrangement in the absence of
registration under the Act, unless an exemption from registration is
available, such as the exemption contained in Rule 145(d) under the Act,
or unless registration is not required pursuant to the exclusion from
registration provided by Regulation S under the Act.
The undersigned also understands that in general under Rule 145(d) as
currently in effect, persons who shall be an affiliate of Glamis after
the Arrangement and persons who are affiliates of either Glamis or
Rayrock prior to the Arrangement shall be entitled to resell during any
three-month period that number of Glamis Shares that does not exceed the
greater of one percent of the then outstanding securities of such class,
or, if such securities are listed on a United States securities
exchange, the average weekly trading volume of such securities during
the four-week period preceding the date of
<PAGE> 35
sale, subject to certain restrictions on manner of sale, notice
requirements, aggregation rules and the availability of public
information about Glamis. Former affiliates of Glamis or Rayrock who are
not affiliates of Glamis after the Arrangement and who hold their Glamis
Shares for a period of one year after the Arrangement, may resell their
Glamis Shares without regard to the volume and manner of sale
limitations set forth in the preceding sentence, subject to the
availability of certain public information about Glamis. Former
affiliates of Glamis or Rayrock who hold their Glamis Shares for a
period of two years after the Arrangement may freely resell such Glamis
Shares provided that such persons have not been an affiliate of Glamis
during the three-month period preceding the resale.
Glamis is under no obligation to register the sale, transfer or other
disposition of Glamis Shares by the undersigned or on its behalf under
the Act or to take any other action necessary in order to make
compliance with an exemption from such registration available. Glamis
agrees that it shall make available adequate current public information
as required by Rule 144(c) promulgated by the Commission under the Act.
6. The undersigned is the beneficial owner of (has sole or shared voting or
investment power with respect to) all the Rayrock Shares and options to
purchase Rayrock Shares indicated below (the "Rayrock Securities").
Except for the Rayrock Securities, the undersigned does not beneficially
own any Rayrock Shares or any other equity securities of Rayrock or any
options, warrants or other rights to acquire any equity securities of
Rayrock.
Number of Rayrock Shares beneficially owned by the undersigned:
-----------------------------
Number of Rayrock Shares subject to options beneficially owned by the
undersigned:
- ---------------
Very truly yours,
--------------------------------------
(print name of shareholder above)
By:
Title:
Accepted this
- ----------------------------------------------
day of
- ------------------------------------------------------------ ,
1999 by
GLAMIS GOLD LTD.
By:
Name:
Title:
<PAGE> 36
EXHIBIT 5 TO EXHIBIT 10.51
DISCLOSURE EXCEPTIONS OF RAYROCK
LIST OF PERSONS ASSOCIATED WITH RAYROCK
OR ITS SUBSIDIARIES WHO ARE ENTITLED TO LUMP SUM SEVERANCE PAYMENTS
UPON TERMINATION OF THEIR EMPLOYMENT OR OFFICE
The following officers and employees of Rayrock and subsidiary companies
(including Cordex) have employment contracts or benefits which fall under the
above description:
James E. Askew
Keith M. Belingheri
C. Bruce Burton
Joan I. Conway
Michael B. Crombie
David A. Hutton
Andy B. Wallace
Morris T. Worley
Employment contracts may exist with certain employees in Chile, including:
Jerry Spencer
Charles Suffredini
Fixed term contracts exist with:
John W. W. Hick Consultants Inc.
Walter Steuerman
Contracts with the following may provide for residual payments upon early
termination:
John P. Hunt
Francis S. O'Kelly
Charles Ronkos
SUBSIDIARY REORGANIZATION
Rayrock is engaged in a reorganization of its subsidiaries in connection
with the migration of Rayrock Finance Company, a wholly-owned subsidiary, from
Ireland to Barbados.
<PAGE> 1
EXHIBIT 99.1
NEWS RELEASE
GLAMIS GOLD LTD.
FOR IMMEDIATE RELEASE
TRADING SYMBOL: TSE NYSE - GLG MARCH 1, 1999
GLAMIS COMPLETES RAYROCK ACQUISITION
Reno, NV, USA - Glamis Gold Ltd. announces that, effective February 26, it has
completed the acquisition of Rayrock Resources Inc. Glamis issued approximately
29,277,820 common shares and paid CDN$ 52,883,007 to consummate the transaction.
The resulting Glamis has 66,267,432 common shares outstanding and approximately
$US 40.0 million in cash available for exploration, development and other
capital programs.
"The completion of this amalgamation provides the financial strength and
critical mass for growth, and enables us to internally finance our near-term
development projects," said Kevin McArthur, President and CEO of Glamis. "The
new combination of human resources, solid balance sheet, low-cost mines with
reserves in the southwestern U.S., and our quality exploration and development
programs will serve to lift Glamis into position as a premier intermediate gold
producer. We thank and welcome our new shareholders, and we pledge to continue
delivering value."
Work is currently underway to combine company assets. The Toronto office
functions are being moved to Reno, Nevada and the office building will be sold.
Early 1999 will see simplification of the company's business, optimization of
future gold production, and evaluation of the Ivan copper property in Chile.
Meanwhile, considerable effort will focus on consolidating the company's very
successful gold exploration programs:
- - Drilling continues at the Marigold Mine in Nevada in an effort to further
grow reserves for future expansion plans.
- - The oxide resource at the San Martin Project in Honduras remains
open-ended, with continued expansion through step-out drilling.
- - Core drilling at the Cerro Blanco Project in Guatemala has provided samples
for metallurgical testing of this new discovery.
- - Diamond drilling has commenced at the Viento Frio project in Panama.
The Glamis Board of Directors has approved continued feasibility and development
work at the San Martin project in Honduras. An internal feasibility report is
expected by August, to be followed by approval for construction expected by
November, 1999. Pre-feasibility work indicates that an investment of $US 15
million will be adequate for
<PAGE> 2
development of an open-pit run-of-mine operation capable of producing 60,000
ounces of gold per year at a cash cost of less than $150 per ounce.
Glamis Gold Ltd. is a quality intermediate gold producer with a focus on cost
effective operations in the Americas. Each Glamis mine is a showplace, with
emphasis on long-term, responsible operations benefiting our shareholders,
employees and communities. Glamis ended the year on December 31, 1998 in a
strong, debt-free position.
Safe Harbor Statement under the United States Private Securities Litigation
Reform Act of 1995: Except for the statements of historical fact contained
herein, the information presented constitutes "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995. Such
forward-looking statements, including but not limited to those with respect to
the price of gold, estimated future production, the Company's hedging policy and
permitting time lines, involve known and unknown risks, uncertainties, and other
factors which may cause the actual results, performance or achievements of the
Company to be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements. Such
factors include, among others, the factual results of current exploration
activities, conclusions of feasibility studies now underway, changes in project
parameters as plans continue to be refined, future prices of gold, as well as
those factors discussed in the section entitled "Other Considerations" in the
Company's Annual Report on Form 10-K.
On behalf of the Board;
/s/ DANIEL J. FORBUSH
- --------------------------------------
Daniel J. Forbush,
C.P.A.
Chief Financial Officer, Treasurer & Secretary
For further information contact:
Daniel J. Forbush Website: www.glamis.com
Glamis Gold Ltd. email to : [email protected]
5190 Neil Road, Suite 310
Reno, NV 89502
Tel: (775)827-4600 ext. 103 Fax (775)827-5044
