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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): March 6, 1998
GETCHELL GOLD CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 0-16484 64-0748908
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(State or other jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification Number)
5460 South Quebec Street, Suite 240, Englewood, Colorado 80111
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(Address of principal executive offices) (Zip Code)
(303) 771-9000
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(Registrants' telephone number, including area code)
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(former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On March 6, 1998, Getchell Gold Corporation (the "Company")
completed an underwritten offering of 3,480,000 shares of the Company's
common stock, par value $.0001 per share, pursuant to its registration
statement on Form S-3 (Registration No. 333-30241). The sale was underwritten
by Nesbitt Burns Securities Inc., Nesbitt Burns Inc., Smith Barney Inc.,
Salomon Smith Barney Canada Inc., Scotia Capital Markets (USA) Inc.,
ScotiaMcLeod Inc., First Marathon (U.S.A.) Inc and First Marathon Securities
Limited pursuant to an Underwriting Agreement attached as Exhibit 1 hereto.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) Exhibits
1 Underwriting Agreement, dated as of March 2, 1998, among Getchell Gold
Corporation and Nesbitt Burns Securities Inc., Nesbitt Burns Inc., Smith
Barney Inc., Salomon Smith Barney Canada Inc., Scotia Capital Markets (USA)
Inc., ScotiaMcLeod Inc., First Marathon (U.S.A.) Inc and First Marathon
Securities Limited.
3
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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 hereunto duly authorized.
GETCHELL GOLD CORPORATION
(Registrant)
By: /s/ Donald S. Robson
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Donald S. Robson
Vice President, Chief Financial Officer &
Secretary
Dated: March 12, 1998
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EXHIBIT INDEX
1 Underwriting Agreement, dated as of March 2, 1998, among Getchell Gold
Corporation and Nesbitt Burns Securities Inc., Nesbitt Burns Inc., Smith
Barney Inc., Salomon Smith Barney Canada Inc., Scotia Capital Markets (USA)
Inc., ScotiaMcLeod Inc., First Marathon (U.S.A.) Inc and First Marathon
Securities Limited.
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Exhibit 1
Getchell Gold Corporation March 2, 1998
5460 South Quebec Street
Suite 240
Englewood, Colorado 80111
Attention: Donald S. Robson
Vice-President and Chief Financial Officer
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Dear Sirs:
The undersigned, Nesbitt Burns Securities Inc., Nesbitt Burns Inc.,
Smith Barney Inc., Salomon Smith Barney Canada Inc., Scotia Capital Markets
(USA) Inc., ScotiaMcLeod Inc., First Marathon (U.S.A.) Inc and First Marathon
Securities Limited (collectively, the "Underwriters" and individually, an
"Underwriter"), understand that Getchell Gold Corporation, a Delaware
corporation (the "Company"), proposes to issue and sell to the Underwriters
3,480,000 shares of common stock of the Company (the "Firm Shares") and, for the
sole purpose of covering over allotments in connection with the sale of the Firm
Shares, at the option of the Underwriters, up to an additional 522,000 shares of
common stock of the Company (the "Option Shares"). The Firm Shares and any
Option Shares purchased by the Underwriters are collectively referred to herein
as the "Subject Shares."
We understand that the Company has filed with the Securities and
Exchange Commission (the "SEC") pursuant to Rule 415 under the UNITED STATES
SECURITIES ACT OF 1933, as amended (the "1933 Act"), a registration statement on
Form S-3 (No. 333-30241) (such registration statement, as amended at the time it
became effective on July 9, 1997 under the 1933 Act, including the exhibits
thereto and the documents incorporated by reference therein, being hereafter
referred to as the "Shelf Registration Statement") and a related prospectus
dated July 9, 1997 (the "U.S. Shelf Prospectus") and has filed with the Canadian
Securities Authorities (as defined below) a Canadian shelf prospectus dated
September 5, 1997 (the "Canadian Shelf Prospectus") under the applicable laws of
each of the Provinces of Canada other than the Province of Quebec (collectively,
the "Canadian Jurisdictions") under the provisions of the rule of the Ontario
Securities Commission entitled In the Matter of Regulation 910, R.R.O. 1980, as
amended and In the Matter of The Multijurisdictional Disclosure System (1991),
14 OSCB 2863 including National Policy Statement 45 (1991), 14 OSCB 2899 and the
related rules and policies applicable in the other Canadian Jurisdictions (the
"MJDS Rule") to register and qualify the offering and sale of, among other
securities, the Subject Shares.
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We understand that the Company wishes to distribute to the public in
the United States and in the Provinces of Canada (other than in Quebec) the
Subject Shares and to have such shares listed on the American Stock Exchange.
To that end, the Company has filed with the SEC pursuant to Rule 424 under the
1933 Act a U.S. preliminary prospectus supplement dated February 24, 1998 (the
"U.S. Preliminary Prospectus Supplement") to the U.S. Shelf Prospectus and has
filed under the MJDS Rule with the Canadian Securities Authorities (as defined
below) in each of the Canadian Jurisdictions a Canadian preliminary prospectus
supplement dated February 24, 1998 (the "Canadian Preliminary Prospectus
Supplement") to the Canadian Shelf Prospectus in respect of the distribution of
the Subject Shares.
We understand that the Company will prepare and file, without delay,
with the SEC pursuant to Rule 424 under the 1933 Act a U.S. final prospectus
supplement (the "U.S. Final Prospectus Supplement") to the U.S. Shelf Prospectus
in respect of the distribution of the Subject Shares in the United States and
will prepare and file, without delay, in each of the Canadian Jurisdictions
pursuant to the MJDS Rule a Canadian final prospectus supplement (the "Canadian
Final Prospectus Supplement") in order to qualify the Subject Shares for
distribution (or distribution to the public, as the case may be) in each of the
Canadian Jurisdictions.
On the basis of the representations and warranties and upon and
subject to the terms and conditions contained herein, the Underwriters hereby
agree to purchase from the Company, in the respective percentages hereinafter
mentioned, and the Company hereby agrees to sell to the Underwriters on the
Closing Date, the Firm Shares for a price of U.S.$18.25 per share or an
aggregate purchase price of U.S.$63,510,000.
In addition, the Company hereby grants to the Underwriters a non-
assignable option to purchase up to 522,000 Option Shares at the same purchase
price per share to be paid by the Underwriters to the Company for the Firm
Shares as set forth in the preceding paragraph, for the sole purpose of covering
over-allotments in the sale of Firm Shares by the Underwriters. This option may
be exercised at any time, in whole or in part, on or before the thirtieth day
following the date of the Prospectuses, by written notice by the Underwriters to
the Company. Such notice shall set forth the aggregate number of Option Shares
as to which the option is being exercised and the date and time, as reasonably
determined by the Underwriters, when the Option Shares are to be delivered (such
date and time being herein sometimes referred to as the "Option Closing Date");
provided, however, that the Option Closing Date shall not be earlier than the
Closing Date or earlier than the third full Business Day after the date on which
the option shall have been exercised nor later than the fourth full Business Day
after the date on which the option shall have been exercised. Certificates for
the Option Shares shall be registered in such name or names and in such
authorized denominations as the Underwriters may request in writing at least two
full Business Days prior to the Option Closing Date.
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The portion of Option Shares to be sold to each Underwriter and its
Affiliated Underwriter shall be the same portion of the Firm Shares being
purchased by such Underwriter as set forth opposite the name of such Underwriter
and its Affiliated Underwriter in Section 17 hereof.
In this Agreement all dollar references are to United States dollars
unless otherwise specifically indicated, and the following terms shall have the
following meanings ascribed to them:
"Affiliated Underwriter" has the meaning set forth in Section 17;
"Business Day" means any day other than a Saturday or a Sunday on
which banks in Toronto, Ontario and in New York, New York, are open for the
conduct of business;
"Canadian Preliminary Prospectus" means the Canadian Shelf
Prospectus, including the documents incorporated by reference therein, as
modified and supplemented by the Canadian Preliminary Prospectus Supplement, and
as amended by any Prospectus Amendment prior to the date of the Canadian Final
Prospectus Supplement;
"Canadian Prospectus" means the Canadian Shelf Prospectus, including
the documents incorporated by reference therein, as modified and supplemented by
the Canadian Final Prospectus Supplement, and as the same may be amended by any
Prospectus Amendment;
"Canadian Securities Authorities" means the securities commission or
a similar securities regulatory authority or administrator established pursuant
to Canadian securities laws in each of the Canadian Jurisdictions;
"Canadian securities laws" means, collectively, the applicable
securities laws of each of the Canadian Jurisdictions, the respective
regulations, rules, rulings and orders made thereunder and the applicable
published policy statements issued by the Canadian Securities Authorities
thereunder;
"Canadian Underwriters" means Nesbitt Burns Inc., Salomon Smith
Barney Canada Inc., ScotiaMcLeod Inc. and First Marathon Securities Limited;
"Effective Date" means the date as of which the Registration
Statement became effective;
"Preliminary Prospectus Supplements" means, collectively, the
Canadian Preliminary Prospectus Supplement and the U.S. Preliminary Prospectus
Supplement;
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"Prospectuses" means the Canadian Prospectus and the U.S.
Prospectus;
"Prospectus Amendment" means any amendment or supplement to any or
all of the Preliminary Prospectuses, the Prospectuses or the Registration
Statement, as the case may be;
"Registration Statement" means the Shelf Registration Statement,
including the documents incorporated by reference therein, and if amended, as
amended at the time such amendment becomes effective, and when supplemented, as
supplemented at the time such supplement is first filed with the SEC or
delivered to the Underwriter for use in offering the Subject Shares in the
United States (unless the context indicates otherwise);
"Specified Agreements" means the FirstMiss Loan Agreement and the
Company's Euro-Nevada Royalty Agreement;
"Subsidiary" means FMG Inc., a Nevada corporation;
"Underwriters' Canadian Representative" means Nesbitt Burns Inc.;
"Underwriters' U.S. Representative" means Nesbitt Burns Securities
Inc.;
"U.S. Preliminary Prospectus" means the U.S. Shelf Prospectus as
modified and supplemented by the U.S. Preliminary Prospectus Supplement, and as
the same may be amended by any Prospectus Amendment prior to the date of the
U.S. Final Prospectus Supplement;
"U.S. Prospectus" means the U.S. Shelf Prospectus including the
documents incorporated by reference therein, as modified and supplemented by the
U.S. Final Prospectus Supplement and as the same may be amended by any
Prospectus Amendment;
"U.S. Underwriters" means Nesbitt Burns Securities Inc., Smith
Barney Inc., Scotia Capital Markets (USA) Inc. and First Marathon (U.S.A.) Inc;
"1933 Act Regulations" mean the rules and regulations of the SEC
under the 1933 Act; and
"1934 Act" means the UNITED STATES SECURITIES EXCHANGE ACT OF 1934,
as amended.
The following are the terms and conditions of the agreement between
the Company and the Underwriters:
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1. The Company shall not later than March 3, 1998 have prepared and
filed with the SEC pursuant to Rule 424(b) of the 1933 Act Regulations the U.S.
Final Prospectus Supplement.
2. The Company shall have prepared and filed with the Canadian
Securities Authorities under applicable Canadian securities laws pursuant to the
MJDS Rule not later than March 3, 1998 in the province of Ontario and March 4,
1998 in each of the other Canadian Jurisdictions the Canadian Final Prospectus
Supplement and shall have taken all other steps and proceedings that may be
necessary in order to qualify the Subject Shares for distribution (or
distribution to the public, as the case may be) in each of the Canadian
Jurisdictions by the Canadian Underwriters under the provisions of Canadian
securities laws.
3. Prior to the filing of the U.S. Final Prospectus Supplement and the
Canadian Final Prospectus Supplement and, if applicable, prior to the filing
thereafter of any Prospectus Amendment, including on the intervening weekends,
the Company shall have allowed the Underwriters to participate fully in the
preparation of such documents and shall have allowed the Underwriters to conduct
all due diligence which the Underwriters may reasonably require to conduct in
order to fulfil their obligations as underwriters and in order to enable the
Canadian Underwriters responsibly to execute the certificate required to be
executed by the Canadian Underwriters in the Canadian Prospectus Supplement and
in any Prospectus Amendment.
4. (a) On the Closing Date and the Option Closing Date, as applicable, the
Company shall have caused a favourable legal opinion to be delivered to the
Underwriters by Marshall, Hill, Cassas & de Lipkau to the effect that:
(i) The Company is duly qualified as a foreign corporation for the
transaction of business and is in good standing in the State of Nevada;
(ii) The Subsidiary is a corporation duly organized, validly
existing and in good standing under the laws of the state of Nevada, with
full corporate power and corporate authority to own, lease, and operate its
properties and assets and to conduct its business as described in the
Registration Statement and the Prospectuses; and all the outstanding shares
of capital stock of the Subsidiary have been duly authorized and validly
issued, are fully paid and nonassessable; and the Company is the registered
and beneficial owner of all the outstanding shares of capital stock of the
Subsidiary;
(b) On the Closing Date and the Option Closing Date, as applicable, the
Company shall have caused a favourable legal opinion to be delivered to the
Underwriters by Latham & Watkins, U.S. counsel to the Company, to the effect
that:
(i) The Company has been duly incorporated and is validly existing
and in good standing existing under the laws of the State of Delaware with
corporate power and
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corporate authority to own, lease and operate its properties and assets
and to conduct its business as described in the Registration Statement and
the Prospectuses;
(ii) This Agreement has been duly authorized, executed and delivered
by the Company;
(iii) The Company has 100,000,000 authorized shares of common stock
and 10,000,000 authorized shares of preferred stock;
(iv) The Subject Shares have been duly authorized and, when issued
and delivered to the Underwriters against payment therefor in accordance
with the terms hereof, will be validly issued, fully paid and non-
assessable and free of any preemptive or, to the knowledge of such counsel,
similar rights that entitle or will entitle any person to acquire any
Subject Shares upon the issuance of the Subject Shares by the Company;
(v) To the knowledge of such counsel, neither the Company nor the
Subsidiary is (A) in violation of its certificate of incorporation or in
material violation of its bylaws or (B) in default in the performance of
any material obligation, agreement or condition contained in any bond,
debenture, note or other evidence of indebtedness specifically identified
to such counsel (collectively, "Material Agreements"), except as has been
disclosed in the U.S. Prospectus or where any such default or defaults in
the aggregate would not have a material adverse effect on the Company and
the Subsidiary, taken as a whole;
(vi) The issuance, sale and delivery of the Subject Shares by the
Company pursuant to this Agreement, the execution, delivery or performance
of this Agreement, the compliance by the Company with all provisions of
this Agreement and the consummation by the Company of the transactions
contemplated hereby will not result in a violation of the certificate or
bylaws of the Company or any federal or New York statute (other than
federal or state securities laws, which are specifically addressed
elsewhere herein), or in the breach of or default under any Specified
Agreement or Material Agreement, nor will any such action result in any
violation of any judgment, injunction, order or decree known to such
counsel without having made any investigation, and applicable to the
Company or any of its properties, which violation would have a material
adverse effect on the Company and the Subsidiary, taken as a whole;
(vii) Based upon laws which are normally applicable to transactions
of the type contemplated by this Agreement, to the knowledge of such
counsel, no consent, approval, authorization or order of or filing with any
federal or New York court or governmental agency or body is required for
the consummation of the issuance and sale of the Subject Shares by the
Company pursuant to this Agreement except as have been
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obtained under the 1933 Act and such as may be required
under state securities laws in connection with the purchase and
distribution of the Subject Shares by the Underwriters;
(viii) The Registration Statement has become effective under the
1933 Act, and to the knowledge of such counsel, no stop order suspending
the effectiveness of the Registration Statement has been issued under the
1933 Act and, no proceedings therefor have been instituted or are
threatened by the SEC. Any filing of the U.S. Prospectus in connection
with the offering of the Subject Shares on a delayed basis pursuant to Rule
415 under the 1933 Act as required pursuant to Rule 424(b) under the 1933
Act has been made in accordance with Rule 424(b) under the 1933 Act;
(ix) The Registration Statement and the U.S. Prospectus comply as to
form in all material respects with the requirements for registration
statements on Form S-3 under the 1933 Act and the rules and regulations of
the SEC thereunder; it being understood, however, that such counsel need
express no opinion with respect to the financial statements, schedules and
other financial and statistical data included or incorporated by reference
in the Registration Statement or the U.S. Prospectus. In passing upon the
compliance as to form of the Registration Statement and the U.S.
Prospectus, such counsel may assume that the statements made or
incorporated by reference therein are correct and complete;
(x) To the knowledge of such counsel, (A) other than as described or
contemplated in the U.S. Prospectus, there are no legal or governmental
proceedings pending or threatened against the Company or the Subsidiary
which are material to the Company and the Subsidiary taken as a whole, or
to which the Company or the Subsidiary, or any of their respective
properties is subject which are material to the Company and the Subsidiary
taken as a whole, that are required to be described in the U.S. Prospectus
and (B) there are no agreements, contracts, indentures, leases or other
documents relating to the Company of a character that are required to be
described in the U.S. Prospectus that are not described as required, as the
case may be;
(xi) The statements made in the Canadian Prospectus relating to
United States federal income tax laws and regulations under "Certain United
States Federal Tax Consequences to Canadian Holders", to the extent that
the foregoing statements constitute matters of law or legal conclusions,
fairly present the information disclosed therein in all material respects;
In addition, such counsel shall state that it has participated in
conferences with officers and other representatives of the Company,
representatives of the independent public accountants for the Company,
representatives of the United States and Canadian counsel to the Company, and
the Underwriters' representatives at which the contents of the Registration
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Statement and the U.S. Prospectus and related matters were discussed, and,
although such counsel is not passing upon and does not assume any responsibility
for the accuracy, completeness or fairness of the statements contained in the
Registration Statement and the U.S. Prospectus and have not made an independent
check or verification thereof (subject to subparagraph (xi) above), during the
course of such participation (relying as to materiality to the extent such
counsel deemed appropriate upon the statements of officers and other
representatives of the Company), no facts have come to such counsel's attention
that cause it to believe that the Registration Statement at the time it became
effective, contained an untrue statement of a material fact or omitted to state
a material fact required to be stated therein or necessary to make the
statements therein not misleading or that the U.S. Prospectus, as of its date
contained an untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading; it being understood that such
counsel need express no belief with respect to the financial statements,
schedules and other financial and statistical data included or incorporated by
reference in the Registration Statement or the U.S. Prospectus.
(c) On the Closing Date and the Option Closing Date, as applicable, the
Company shall have caused a favourable legal opinion to be delivered to the
Underwriters by McCarthy Tetrault, special Canadian counsel to the Company (who
may rely on the opinions of local counsel acceptable to counsel to the
Underwriters as to the qualification of the Subject Shares for sale to the
public and as to other matters governed by the laws of jurisdictions other than
the provinces in which they are qualified to practice and may rely, to the
extent appropriate in the circumstances, as to matters of fact on certificates
of officers, public officials or of the auditors of the Company) to the effect
that:
(i) the statements in the Canadian Prospectus under "Eligibility for
Investment" are accurate in all material respects;
(ii) to the knowledge of such counsel, no order having the effect of
ceasing or suspending the distribution of the Subject Shares has been
issued by any Canadian Securities Authority or stock exchange in Canada and
no proceedings for that purpose have been instituted or threatened by any
Canadian Securities Authority or stock exchange in Canada;
(iii) assuming that the Registration Statement and the U.S.
Prospectus comply as to form in all material respects with the requirements
for registration statements on Form S-3 under the 1933 Act and the rules
and regulations of the SEC thereunder, the Canadian Prospectus and any
supplements or amendments thereto (except for the financial statements or
any notes or schedules thereto or any other financial or statistical data
included or incorporated by reference therein, and the information included
on the authority of geological experts, as to which such counsel need not
express any opinion)
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comply as to form in all material respects with the applicable form
requirements of the Canadian securities laws;
(iv) assuming that the Registration Statement and the U.S.
Prospectus comply as to form in all material respects with the requirements
for registration statements on Form S-3 under the 1933 Act and the rules
and regulations of the SEC thereunder, compliance with Rule 415 and Rule
424(b) under the 1933 Act and that marketing materials in connection with
the distribution of the Subject Shares were not used or circulated in
Canada, all necessary documents have been filed and proceedings taken under
the laws of each of the Canadian Jurisdictions to qualify the Subject
Shares for distribution and distribution to the public, as the case may be,
in such jurisdictions, through registrants registered under the applicable
Canadian securities laws in such provinces who comply with the relevant
provisions of such laws;
(v) the statements made in the Canadian Prospectus relating to
Canadian federal income tax laws and regulations under "Certain Canadian
Federal Income Tax Considerations", to the extent that the foregoing
statements constitute matters of law or legal conclusions, have been
reviewed by such counsel and fairly present the information disclosed
therein in all material respects;
(vi) the choice of the laws of the State of New York as the
governing law of the Underwriting Agreement is a valid choice of law and in
an action brought before a court of competent jurisdiction in the Province
of Ontario, the substantive laws of the State of New York would, to the
extent specifically pleaded and proved as a fact by expert evidence, be
recognized and applied by such court to all issues which under the conflict
of laws rules of the Province of Ontario are to be determined in accordance
with the proper or governing law of the Underwriting Agreement, which
issues would include those relating to the enforceability of the
Underwriting Agreement provided that:
(a) such choice is legal under the laws of the State of New
York; and
(b) such choice is made BONA FIDE and is not made to avoid the
mandatory provisions of the law of the jurisdiction that an
Ontario court would, in the absence of such choice, have
applied; and
except that any such court will not apply:
(c) those laws of the State of New York which it characterizes
as being of a revenue, penal or public law nature, nor
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(d) those laws of the State of New York, the application of
which would be inconsistent with "public policy" as such
term is applied by the courts in Ontario.
In any such action, an Ontario court would apply the administrative
and procedural laws of the Province of Ontario (including those administrative
and procedural laws relating to the enforceability of the Underwriting
Agreement) and not the administrative or procedural laws of the State of New
York.
(vii) The laws of the Province of Ontario would permit an action to
be brought in the appropriate courts of the Province of Ontario on a final
and conclusive foreign judgment in PERSONAM in respect of the Underwriting
Agreement, which is not impeachable as void or voidable under the internal
laws of the foreign jurisdiction, for a definite sum of money provided
that:
(a) the court rendering such judgment had jurisdiction according
to Ontario conflicts of laws rules over the judgment debtor;
(b) such judgment was not obtained by fraud or in a manner
contrary to "natural justice" and the enforcement thereof
would not be inconsistent with "public policy", as such
terms are applied by the courts in Ontario or contrary to
any order made by the Attorney General of Canada under the
FOREIGN EXTRATERRITORIAL MEASURES ACT (Canada);
(c) no new admissible evidence relevant to the action is
discovered prior to the rendering of a judgment by a court
of the Province of Ontario;
(d) the procedural rules of commencement and maintenance of the
enforcement proceedings in the Province of Ontario are
observed;
(e) the enforcement of such a judgment does not constitute,
directly or indirectly, the enforcement of foreign revenue,
penal or public laws; and
(f) there has been compliance with the LIMITATIONS ACT
(Ontario), which provides that an action to enforce a
foreign judgment must be commenced within six years of the
date of the foreign judgment.
In addition, such counsel shall state that it has participated in
conferences and meetings with representatives of the Underwriters, their counsel
and representatives of the Company, its United States counsel and its auditors
at which the Canadian Preliminary Prospectus Supplement, the Annual Report of
the Company on Form 10-K for the year ended
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December 31, 1997 and the Canadian Final Prospectus Supplement were discussed,
and that such counsel has not participated in the preparation of the
Registration Statement, the U.S. Shelf Prospectus, the Canadian Shelf
Prospectus or any of the documents incorporated by reference therein other
than the Canadian Preliminary Prospectus Supplement, the Annual Report of the
Company on Form 10-K for the year ended December 31, 1997 and the Canadian
Final Prospectus Supplement. Such counsel shall also state that because the
primary purpose of its professional engagement was not to establish or confirm
factual matters and because many determinations involved in the preparation of
the Canadian Prospectus and the documents incorporated by reference therein
are of a wholly or partially non-legal character or relate to legal matters
outside the scope of such counsel's opinion letter to the Underwriters as of
the Closing Date or the Option Closing Date, as the case may be, such counsel
is not passing upon and will not be liable or responsible in any way for the
accuracy, completeness or fairness of the statements contained in the Canadian
Prospectus or the documents incorporated by reference therein (except to the
extent that such statements constitute conclusions of Canadian law in respect
of which such counsel has given its express opinion) and such counsel will
make no representation that it has independently verified the accuracy,
completeness or fairness of such statements (except as aforesaid). Such
counsel is not being requested to and will not make any comment with respect
to the financial statements or any notes or schedules thereto or any other
financial or statistical data included or incorporated by reference in the
Canadian Prospectus.
Such counsel will further state that based on and subject to the
foregoing, nothing has come to its attention in the course of its review that
has caused it to believe that the Canadian Prospectus on the date thereof or on
the Closing Date or the Option Closing Date, as the case may be, contained or
contains any untrue statement of a material fact or omitted or omits to state
any material fact required to be stated in the Canadian Prospectus or that is
necessary to make the statements therein not misleading, in the light of the
circumstances under which they were made. For the purposes of the foregoing,
the term "material fact" has the meaning ascribed thereto in the SECURITIES ACT
(Ontario).
(d) On the Closing Date and the Option Closing Date, as the case may be,
the Underwriters shall have received from Skadden, Arps, Slate, Meagher & Flom
LLP, U.S. counsel to the Underwriters as to the matters set forth in paragraphs
4(b) (ii), (ix) and (x) and from Davies, Ward & Beck, Canadian counsel to the
Underwriters, as to the matters set forth in paragraphs 4(c) (i), (iii), (iv)
and (v);
5. The Company shall cause to be delivered to the Underwriters by its
auditors comfort letters dated the date of this Agreement and the Closing Date
and the Option Closing Date, as the case may be, respectively, and addressed to
the Underwriters and the directors of the Company, in form and substance
reasonably satisfactory to the Underwriters, relating to the verification of
financial information and accounting data contained in the Prospectuses
(including information incorporated therein by reference) relating to the
Company and matters involving
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changes or developments since the respective dates as of which specified
financial information is given in the Prospectuses to a date not more than two
business days prior to the date of such letters. Such letter shall further
state that such auditors are independent public accountants within the meaning
of the 1933 Act and the 1933 Act Regulations, and that in their opinion the
audited financial statements of the Company included or incorporated in the
Registration Statement and the U.S. Prospectus comply as to form in all
material respects with the applicable accounting requirements of the 1933 Act
and the 1933 Act Regulations. A similar letter shall be delivered to the
Underwriters with respect to any Prospectus Amendment.
6. The closing of the purchase and sale of the Firm Shares herein
provided for shall be completed at the offices of Latham & Watkins, 505
Montgomery Street, Suite 1900, San Francisco, California, at 6:00 a.m. (local
time) on March 6, 1998 (the "Time of Closing" and "Closing Date" respectively)
or at such other time and/or on such other date, not later than March 13, 1998,
as the Company and the Underwriters may agree upon. At the Time of Closing on
the Closing Date, the Company shall deliver to the Underwriters:
(i) one share certificate representing the Firm Shares. The share
certificate shall be registered in the name of and delivered to Nesbitt
Burns Securities Inc. or in such other name or names as shall be designated
by Nesbitt Burns Securities Inc. in writing by 10:00 a.m., New York time on
March 4, 1998; and
(ii) the requisite legal opinions and comfort letters as
contemplated above and such further documentation as may be contemplated
herein or as counsel to the Underwriters may reasonably require;
against payment of the aggregate purchase price as set out on page 2, which
payment shall be made to the Company in U.S. dollars by wire transfer in same
day funds payable to the order of the Company.
7. The Company covenants and agrees with the Underwriters that:
(i) the Company shall use its reasonable best efforts, in
cooperation with the Underwriters, to register or qualify the Subject
Shares for offering and sale under the applicable securities or Blue Sky
laws of such states of the United States as the Underwriters may reasonably
designate and to maintain such qualifications in effect for so long as
required for the distribution of the Subject Shares and will file such
consents to service of process or other documents necessary or appropriate
in order to effect such registration or qualification; provided, however,
that the Company shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject
<PAGE>
- 13 -
itself to taxation in respect of doing business in any jurisdiction in
which it is not otherwise so subject;
(ii) the Company will advise the Underwriters promptly of (A) the
filing of the Prospectuses and of any amendment of or supplement thereto,
(B) any request by any Canadian Securities Authority or the SEC for any
amendment of or supplement to the Registration Statement or the
Prospectuses or for additional information and (C) the institution or, to
the extent known by the Company, threatening by the SEC or any Canadian
Securities Authority of any stop order proceedings in respect of the
Registration Statement or the Prospectuses, or any proceedings, with
respect to the suspension of the qualification of the Subject Shares for
distribution in any jurisdiction or with respect to any order to cease
trade any securities of the Company in any jurisdiction;
(iii) the Company will use its reasonable best efforts to prevent
the issuance of any stop order, cease trading order or suspension referred
to in (ii) above and to obtain as soon as possible the lifting of any such
stop order, cease trading order or suspension, if issued;
(iv) the Company will not (A) file any amendment to the Registration
Statement or make or file any amendment or supplement to the Prospectuses
of which the Underwriters shall not previously have been advised or to
which the Underwriters shall reasonably object in writing after being so
advised or (B) so long as, in the written opinion of counsel for the
Underwriters (a copy of which shall be delivered to the Company), a
prospectus is required to be delivered in connection with sales by any
Underwriter or dealer, file any information, documents or reports pursuant
to the Canadian Securities Laws or the 1934 Act, without delivering a copy
of such information, documents or reports to the Underwriters, prior to or
concurrently with such filing;
(v) the Company will promptly inform the Underwriters in writing
during the period of distribution of the Subject Shares of the full
particulars of any change (including, without limitation, any material
change (as defined in the SECURITIES ACT (Ontario)), whether actual,
anticipated or threatened, in the condition (financial or otherwise),
assets, liabilities, business or operations of the Company and the
Subsidiary taken as a whole or of the happening of any event which (A)
insofar as the Canadian Securities Laws are concerned, is, or may be, of
such a nature as to render the Canadian Prospectus untrue, false or
misleading in a material respect, or would result in such document
containing a misrepresentation (as defined in the SECURITIES ACT (Ontario))
or not complying with the Canadian Securities Laws or which change or event
would reasonably be expected to have a significant effect on the market
price or value of the Subject Shares and (B) insofar as the 1933 Act is
concerned, makes any statement of a material fact made in the Registration
Statement or the U.S. Prospectus untrue or which
<PAGE>
- 14 -
requires the making of any additions to or changes in the Registration
Statement or the U.S. Prospectus in order to state a material fact required
by the 1933 Act or the 1933 Act Regulations to be stated therein or
necessary in order to make the statements therein (1) in the case of the
Registration Statement, not misleading and (2) in the case of the U.S.
Prospectus, in light of the circumstances under which they were made, not
misleading;
(vi) the Company will furnish to the Underwriters and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and will use its reasonable best
efforts to promptly deliver after the execution hereof and for so long as
delivery of a prospectus by an Underwriter may be required by the 1933 Act
or Canadian Securities Laws, as many copies of the U.S. Preliminary
Prospectus and the U.S. Prospectus and any Prospectus Amendment as the U.S.
Underwriters may reasonably request in the City of New York, and as many
commercial copies of each of the Canadian Preliminary Prospectus and the
Canadian Prospectus and any Prospectus Amendment as the Canadian
Underwriters may reasonably request in the city of Toronto for the purposes
contemplated by Canadian Securities Law. If during such period of time any
event of the type described in paragraph 7(v) hereof shall occur, or if it
is necessary to supplement or amend the Prospectuses to comply with the
1933 Act, the Canadian Securities Laws or any other law, the Company will
forthwith prepare and, subject to the provisions of paragraph 7(iv) above,
file with the SEC and the Canadian Securities Authorities, as applicable,
an appropriate supplement or amendment thereto and will expeditiously
furnish to the Underwriters and dealers such number of copies thereof as
the Underwriters may reasonably request. In the event that the Company and
the Underwriters agree that the Prospectuses should be amended or
supplemented, the Company, if reasonably requested by the Underwriters,
will promptly issue a press release announcing or disclosing the matters to
be covered by the proposed amendment or supplement. Alternatively, in the
event that the material change is adverse and is not related solely to the
Underwriters (and in the reasonable opinion of the Underwriters would be
expected to have a significant adverse effect on the market price or value
of the Subject Shares) and such change occurs prior to the Time of Closing,
the Underwriters may, within 48 hours from the time of notice of such
change, advise the Company that the Underwriters will decline to
participate in the filing of any such amendment and thereupon the parties
hereto shall be relieved of their respective obligations under this
Agreement. The Company shall in good faith discuss with the Underwriters
any change in circumstances (actual, anticipated, contemplated or
threatened) which is of such a nature that there may be a reasonable doubt
as to whether written notice need be given to the Underwriters under the
provisions of this Section 7; each delivery to the Underwriters made
pursuant to this paragraph 7(vi) shall constitute consent by the Company to
the use by the Underwriters and other investment dealers and brokers of
such documents in connection with the offering of the Subject Shares for
sale
<PAGE>
- 15 -
in the United States and in all of the Canadian Jurisdictions, subject
to the provisions of the 1933 Act, the 1933 Act Regulations and all
relevant Canadian Securities Laws;
(vii) the Company will apply the net proceeds from the sale of the
Subject Shares to be sold by it hereunder substantially in accordance with
the description set forth under "Use of Proceeds" in the Prospectuses;
(viii) the Company will make generally available to its security
holders (within the meaning of Rule 158 of the 1933 Act Regulations) a
consolidated earnings statement, which need not be audited, covering a
twelve-month period commencing after the effective date of the Registration
Statement and ending not later than 15 months thereafter, as soon as
reasonably practicable after the end of such period, which consolidated
earnings statement shall satisfy the provisions of Section 11(a) of the
1933 Act;
(ix) for a period of 90 days after the date of this Agreement, the
Company will not, without the prior written consent of the Underwriters,
offer, sell, contract to sell or otherwise dispose of any shares of common
stock (or any securities convertible into or exercisable or exchangeable
for shares of common stock) or grant any options or warrants to purchase
shares of common stock, provided, however, that the Company may grant
options to purchase shares of common stock pursuant to the Company's equity
incentive plans for employees, officers, directors and consultants and may
issue shares of common stock pursuant to the exercise of options granted
under the Company's stock option plan;
(x) the Company will indemnify the Underwriters for registration,
issue, stamp, documentary, transfer or sales taxes that they or any of them
might be required to pay in respect of the issue, sale or delivery of the
Subject Shares to the Underwriters;
(xi) the Company has not taken and will not take, directly or
indirectly, any action designed to or that might reasonably be expected to
cause or result in stabilization or manipulation of the price of the
Subject Shares; and
(xii) the Company will use its best efforts to have the Subject
Shares listed, subject to notice of issuance, on the American Stock
Exchange as soon as practicable.
8. The Company represents and warrants to the Underwriters that:
(i) the Company meets the requirements for use of Form S-3 under the
1933 Act Regulations. The Registration Statement as of the Effective Date
complied, and the U.S. Preliminary Prospectus complies and the U.S.
Prospectus as of its date and on the
<PAGE>
- 16 -
Closing Date will comply, in all material respects with the applicable
requirements of the 1933 Act, the 1933 Act Regulations and the 1934 Act and
the rules thereunder; the Registration Statement does not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; and each of the U.S. Preliminary Prospectus and the U.S.
Prospectus (together with any amendment or supplement thereto) will not
contain an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of the
circumstances under which they are made, not misleading; provided, however,
that the Company makes no representations or warranties as to the
information in such documents relating solely to or provided in writing by
the Underwriters;
(ii) the Company has complied and will comply, in each case in all
material respects, with all requirements of the 1933 Act and the 1933 Act
Regulations with respect to the preparation and filing of the Registration
Statement;
(iii) the Company is eligible to use the Multijurisdictional
Disclosure System provided for in the MJDS Rule and at the respective times
of filing and at all times subsequent to the filing thereof during the
distribution of the Subject Shares, each of the Canadian Preliminary
Prospectus and the Canadian Prospectus complied or will comply with the
requirements of the MJDS Rule and will not contain any misrepresentation
(as defined in the SECURITIES ACT (Ontario)); provided, however, that the
Company makes no representations or warranties as to the information in
such documents relating solely to or provided in writing by the
Underwriters;
(iv) the delivery by the Company to the Underwriters of each of the
Registration Statement, the U.S. Preliminary Prospectus, the U.S.
Prospectus and any Prospectus Amendment pursuant to paragraph 7(vi) shall
constitute the Company's representation and warranty to the Underwriters
that, at the respective times of such delivery, the information and
statements contained therein (except information relating solely to or
provided in writing by the Underwriters) are true and correct in all
material respects and do not omit to state any material fact which is
necessary to make the statements therein not misleading; and the delivery
by the Company to the Underwriters of each of the Canadian Preliminary
Prospectus, the Canadian Prospectus and any Prospectus Amendment pursuant
to paragraph 7(vi) shall constitute the Company's representation and
warranty to the Underwriters that, at the respective times of such
delivery, the information and statements contained and incorporated by
reference therein (except information and statements relating solely to the
Underwriters or provided in writing to the Company by the Underwriters) are
true and correct in all material respects, contain no misrepresentation (as
defined in the SECURITIES ACT (Ontario)) and constitute full, true and
plain disclosure of all material facts relating to the Company and the
Subsidiary
<PAGE>
- 17 -
taken as a whole and to the Subject Shares and that no material fact has
been omitted therefrom which is necessary to make the statements therein
not misleading in light of the circumstances in which they were made;
(v) the Company has an authorized and, as at the date indicated,
outstanding share capital as set forth in the Prospectuses; all the
outstanding shares of common stock of the Company have been duly authorized
and validly issued, are fully paid and nonassessable and are free of any
preemptive or similar rights; the Subject Shares to be issued and sold by
the Company have been duly authorized and, when issued and delivered to the
Underwriters against payment therefor in accordance with the terms hereof,
will be validly issued, fully paid and non-assessable and free of any
preemptive or similar rights; and the capital stock of the Company conforms
to the description thereof in the Registration Statement and the
Prospectuses;
(vi) except as disclosed in the Registration Statement and the
Prospectuses (or any amendment or supplement thereto), subsequent to the
respective dates as of which such information is given in the Registration
Statement and the Prospectuses (or any amendment or supplement thereto),
there has been no change (actual, proposed or prospective, whether
financial or otherwise) in the business, affairs, operations, assets,
liabilities (contingent or otherwise) or capital of the Company or the
Subsidiary which may reasonably be expected to have a material adverse
effect on the condition (financial or otherwise), assets, liabilities,
business, operations or capital of the Company and the Subsidiary taken as
a whole (a "Material Adverse Effect");
(vii) the Company is a corporation duly organized and existing under
the laws of the state of Delaware with full corporate power and corporate
authority to own, lease and operate its properties and assets and to
conduct its business as presently conducted and as described in the
Registration Statement and the Prospectuses, and is duly registered and
qualified to conduct its business and is in good standing in each
jurisdiction where the nature of its properties or the conduct of its
business requires such registration or qualification, except where the
failure so to register or qualify does not and will not have a Material
Adverse Effect;
(viii) the Subsidiary is a corporation duly organized, validly
existing and in good standing in the jurisdiction of its incorporation,
with full corporate power and corporate authority to own, lease and operate
its properties and to conduct its business as presently conducted and
described in the Registration Statement and the Prospectuses, and is duly
registered and qualified to conduct its business and is in good standing in
each jurisdiction or place where the nature of its properties or assets or
the conduct of its business requires such registration or qualification,
except where the failure so to register or qualify does not and will not
have a Material Adverse Effect; all the outstanding shares
<PAGE>
- 18 -
of capital stock of the Subsidiary have been duly authorized and validly
issued, are fully paid and non-assessable, and are owned by the Company
directly, free and clear of any lien, adverse claim, security interest,
equity or other encumbrance;
(ix) neither the issuance and sale of the Subject Shares, the
execution, delivery or performance of this Agreement by the Company nor the
consummation by the Company of the transactions contemplated hereby (i)
requires any consent, approval, authorization or other order of or
registration or filing with, any court, regulatory body, administrative
agency or other governmental body, agency or official (except such as may
be required for the registration or qualification of the Subject Shares
under the 1933 Act, the 1934 Act or Blue Sky laws of the various states of
the United States and other jurisdictions) or conflicts or will conflict
with or constitutes or will constitute a breach of, or a default under, the
certificate of incorporation or bylaws, or other organizational documents,
of the Company or the Subsidiary or (ii) conflicts or will conflict with or
constitutes or will constitute a breach of, or a default under, any
agreement, indenture, lease or other instrument to which the Company or the
Subsidiary is a party or by which either of them or any of their respective
properties may be bound, or violates or will violate any statute, law,
regulation or filing or judgment, injunction, order or decree applicable to
the Company or the Subsidiary or either of their respective properties, or
will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or the Subsidiary
pursuant to the terms of any agreement or instrument to which any of them
is a party or by which any of them may be bound or to which any of the
property or assets of any of them is subject, in each case in a manner
which would have a Material Adverse Effect;
(x) KPMG Peat Marwick LLP, who have certified the financial
statements of the Company included in the Registration Statement and the
Prospectuses (or any amendment or supplement thereto), are, and during the
periods covered by its report were, auditors of the Company, and are
independent with respect to the Company within the meaning of the Canadian
Securities Laws, and are independent auditors with respect to the Company
as required by the 1933 Act;
(xi) the execution and delivery of, and the performance by the
Company of its obligations under, this Agreement have been duly and validly
authorized by the Company, and this Agreement has been duly executed and
delivered by the Company and constitutes the valid and legally binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except (i) the enforceability hereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
now or hereafter in effect relating to creditors' rights generally, (ii)
the remedy of specific performance and other forms of equitable relief may
be subject to certain equitable defenses and to the discretion of the court
before which the proceedings may be brought
<PAGE>
- 19 -
and (iii) rights to indemnity and contribution hereunder may be limited by
federal, provincial or state securities laws or the public policy
underlying such laws;
(xii) the Company and the Subsidiary each has such permits,
approvals, licenses, franchises and authorizations of governmental or
regulatory authorities ("Permits") as are necessary to own its respective
properties and to conduct its business in the manner described in the
Prospectuses, except where the failure to have any such Permit would not
have a Material Adverse Effect and subject to such qualifications as may be
set forth in the Prospectuses; the Company and the Subsidiary each has
fulfilled and performed all its material obligations with respect to such
Permits and no event has occurred that allows, or after notice or lapse of
time would allow, revocation or termination thereof or results in any other
material impairment of the rights of the holder of any such Permit, subject
in each case to such qualification as may be set forth in the Prospectuses;
and, except as described in the Prospectuses, none of such Permits contains
any restriction that is materially burdensome to the Company or the
Subsidiary in any manner different from other companies in the same
industry as the Company;
(xiii) the Company is not and, upon sale of the Subject Shares to be
issued and sold in accordance with this Agreement and upon application of
the net proceeds to the Company from such sale as described in the
Prospectuses under the caption "Use of Proceeds," will not be an
"investment company" within the meaning of the Investment Company Act of
1940, as amended;
(xiv) the Company has filed in a timely manner each document or
report required to be filed by it pursuant to its continuous reporting
obligations under the 1934 Act and the rules and regulations thereunder;
each such document or report, together with any amendments thereto, at the
time it was filed conformed, as applicable, to the requirements of the 1934
Act and the rules and regulations thereunder; and none of such documents or
reports contained an untrue statement of any material fact or omitted to
state any material fact required to be stated therein or necessary to make
the statements therein not misleading;
(xv) the Company has complied with all provisions of Florida
Statutes, Section 517.075, relating to issuers doing business with Cuba;
and
(xvi) except as disclosed in the Registration Statement and the
Prospectuses (or any amendment or supplement thereto) and except as would
not individually or in the aggregate have a Material Adverse Effect, (i)
the Company and the Subsidiary are each in compliance with all applicable
Environmental Laws (as hereafter defined), (ii) the Company and the
Subsidiary have all Permits required under any applicable Environmental
Laws and are each in compliance with their requirements, (iii) there are no
pending
<PAGE>
- 20 -
or threatened Environmental Claims (as hereafter defined) against the
Company or the Subsidiary, and (iv) there are no circumstances known to
the Company with respect to any property or operations of the Company or
its Subsidiary that could reasonably be anticipated to form the basis of an
Environmental Claim against the Company or the Subsidiary. In addition,
based upon the Company's reviews, conducted in the ordinary course of its
business, of the effect of Environmental Laws on the business and
operations of the Company and the Subsidiary, the Company has reasonably
concluded that, except as disclosed in the Registration Statement and the
Prospectuses (or any amendment or supplement thereto), the costs and
liabilities under Environmental Laws (including, without limitation, any
capital or operating expenditures required for clean-up, closure or
rehabilitation of properties or compliance with Environmental Laws or any
Permit, any related constraints on operating activities and potential
liabilities to third parties) would not, singularly or in the aggregate,
have a Material Adverse Effect.
For purposes of this subsection, the following terms have the following
meanings: "Environmental Law" means any United States (or other applicable
jurisdiction's) federal, provincial, state, local or municipal statute,
law, rule, regulation, ordinance, code, policy, guideline or rule of common
law and any judicial or administrative interpretation thereof, including
any judicial or administrative order, consent decree or judgment, relating
to the environment, health, safety or any chemical, material, contaminant,
waste or other substance, exposure to which is prohibited, limited or
regulated by any governmental authority. "Environmental Claim" means any
administrative, regulatory or judicial action, suit, demand, demand letter,
claim, lien, notice of noncompliance or violation, investigation or
proceeding relating in any way to any Environmental Law.
9. Each of the Underwriters represents, warrants, covenants and agrees
to and with the Company that:
(i) each Canadian Underwriter shall offer the Subject Shares for
sale to the public, directly and through other investment dealers and
brokers in Canada or through its affiliated registered broker-dealer in the
United States, and each U.S. Underwriter shall offer the Subject Shares for
sale to the public directly and through other broker dealers in the United
States or through its affiliated investment dealer or broker in Canada, as
the case may be (the "Selling Firms"), only as permitted by applicable law,
and upon the terms and conditions set forth in the Prospectuses and in this
Agreement. The Underwriters agree that they will not distribute the
Prospectuses or publish any prospectus, circular, advertisement or other
offering material in any jurisdiction other than the Canadian Jurisdictions
or the United States, in such manner as to require registration of the
Subject Shares or the filing of a prospectus or any similar document with
respect to the Subject Shares by the Company therein and to require each of
the
<PAGE>
- 21 -
other Selling Firms to agree not to distribute the Subject Shares except
as permitted by this Agreement.
For purposes of this paragraph, the Canadian Underwriters shall be entitled
to assume that the Subject Shares are qualified or registered for
distribution by duly qualified investment dealers and brokers in any
Canadian Jurisdiction where a receipt or similar document for the Canadian
Prospectus shall have been obtained from the applicable securities
regulatory authority following the filing of the Canadian Prospectus.
(ii) The Underwriters agree between themselves and will require each
of the other Selling Firms to agree to comply with all applicable
requirements of Ontario Securities Commission Policy Statement No. 5.1,
Sections 11.11 and 11.26 of the rules of The Toronto Stock Exchange,
Regulation M under the 1934 Act and the rules of the National Association
of Securities Dealers Inc. in connection with the distribution of the
Subject Shares.
(iii) Notwithstanding the foregoing provisions of this Section 9, an
Underwriter will not be liable to the Company under this Section 9 with
respect to a default by another Underwriter or Selling Firm under this
Section 9 if the former Underwriter is not also in default.
10. The Underwriters shall have received at the Time of Closing on the
Closing Date and on the Option Closing Date, as applicable, a certificate dated
the Closing Date or the Option Closing Date, as applicable, addressed to the
Underwriters and signed by any two senior officers of the Company reasonably
acceptable to the Underwriters, certifying for and on behalf of the Company to
the best of the knowledge, information and belief of the persons signing such
certificates after having made reasonable enquiries, to the effect that the
Company has complied with all covenants and satisfied all terms and conditions
of this Agreement on its part to be complied with and satisfied at or prior to
the Time of Closing on the Closing Date or the Option Closing Date, as
applicable; that, except as may have been the subject of a Prospectus Amendment
filed with the Canadian Securities Authorities and/or with the SEC pursuant to
clause 7(vi), there has been no material adverse change (actual, proposed or
prospective, whether financial or otherwise) in the business, affairs,
operations, assets, liabilities (contingent or otherwise) or capital of the
Company and its subsidiaries taken as a whole from the date hereof to the
Closing Date or the Option Closing Date, as applicable; that the representations
and warranties of the Company contained herein are true and correct in all
material respects as of the Time of Closing on the Closing Date or the Option
Closing Date, as applicable, with the same force and effect as if made at and as
of the Time of Closing on the Closing Date or the Option Closing Date, as
applicable, after giving effect to the transactions contemplated hereby; that no
stop order suspending the effectiveness of the Registration Statement or the
U.S. Prospectus, order suspending the qualification for distribution of the
Subject Shares in any
<PAGE>
- 22 -
Canadian Jurisdiction, or order, ruling or determination having the effect of
ceasing or suspending trading in any securities of the Company, has been
issued and no proceedings for such purpose are pending or, to the knowledge of
the signers, contemplated or threatened; and that the representations and
warranties of the Company arising by reason of the delivery of the
Prospectuses are true and correct in all material respects as of the Time of
Closing on the Closing Date or the Option Closing Date, as applicable, as if
the Prospectuses had been delivered to the Underwriters and dated the Closing
Date or the Option Closing Date, as applicable.
11. (a) The Company covenants and agrees to protect and indemnify each
of the Underwriters, their respective directors, officers, employees and agents
and each person who controls any Underwriter within the meaning of Section 15 of
the 1933 Act, against all losses, claims, damages, liabilities, costs or
expenses caused or incurred by reason of:
(i) any statement, other than any statement relating solely to the
Underwriters or provided in writing to the Company by the
Underwriters, contained in either the Canadian Preliminary
Prospectus or the Canadian Prospectus, or in any Prospectus
Amendment in respect thereof which at the time and in the light of
the circumstances under which it was made contains or is alleged to
contain a misrepresentation (as defined in the SECURITIES ACT
(Ontario)); or
(ii) the omission or alleged omission to state in either the Canadian
Preliminary Prospectus or the Canadian Prospectus or any Prospectus
Amendment in respect thereof or any certificate of the Company or
any officer thereof delivered hereunder or pursuant hereto, any
material fact other than a material fact relating solely to the
Underwriters or provided in writing to the Company by the
Underwriters required to be stated therein or necessary to make any
statement therein not misleading in the light of the circumstances
under which it was made; or
(iii) any order made or inquiry, investigation or proceeding commenced or
threatened by any Canadian Securities Authority (not based upon the
activities of the Underwriters or their banking or selling group
members, if any) based upon any untrue statement or omission or
alleged untrue statement or omission or any misrepresentation or
alleged misrepresentation in the Canadian Preliminary Prospectus,
the Canadian Prospectus or any Prospectus Amendment in respect
thereof, which prevents or restricts trading in the Subject Shares
or the distribution or distribution to the public, as the case may
be, of the Subject Shares in any of the Canadian Jurisdictions; or
<PAGE>
- 23 -
(iv) any untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement as originally filed or in
any amendment thereof, or in any U.S. Preliminary Prospectus or U.S.
Prospectus, or in any amendment thereof or supplement thereto, or
the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements
therein not misleading; provided that this indemnity does not apply
to any loss, claim, damage, liability, cost or expense to the extent
arising out of an untrue statement or omission or alleged untrue
statement or omission made in reliance upon and in conformity with
written information furnished to the Company by the Underwriters
expressly for use in the Registration Statement or the U.S.
Prospectus (or any amendment or supplement thereto);
and provided, further, that the foregoing indemnity agreements with respect to
any Preliminary Prospectus shall not inure to the benefit of any Underwriter
from whom the person asserting any such losses, claims, damages or liabilities
bought Subject Shares, or any person controlling such Underwriter, if a copy of
the Prospectus (as then amended or supplemented if the Company shall have
furnished any amendments or supplements thereto) was not sent or given by or on
behalf of such Underwriter to such person, if required by law so to have been
delivered, at or prior to the written confirmation of the sale of the Subject
Shares to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such losses, claims, damages or
liabilities.
(b) If any action, suit or proceeding shall be brought against
any Underwriter or any person controlling any Underwriter in respect of which
indemnity may be sought against the Company, such Underwriter or such
controlling person shall promptly notify the Company, and the Company shall
assume the defense thereof, including the employment of counsel and payment of
all fees and expenses. Such Underwriter or any such controlling person shall
have the right to employ separate counsel in any such action, suit or proceeding
and to participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Underwriter or such controlling person
unless (i) the Company has agreed in writing to pay such fees and expenses, (ii)
the Company has failed to assume the defense and employ counsel, or (iii) the
named parties to any such action, suit or proceeding (including any impleaded
parties) include both such Underwriter or such controlling person and the
Company and such Underwriter or such controlling person shall have been advised
by its counsel in writing that representation of such indemnified party and the
Company by the same counsel would be inappropriate under applicable standards of
professional conduct (whether or not such representation by the same counsel has
been proposed) due to actual or potential differing interests between them (in
which case the Company shall not have the right to assume the defense of such
action, suit or proceeding on behalf of such Underwriter or such controlling
person). It is understood, however, that the Company shall, in connection with
any one such action, suit or proceeding or separate but substantially similar or
related actions, suits or proceedings in the same jurisdiction
<PAGE>
- 24 -
arising out of the same general allegations or circumstances, be liable for
the reasonable fees and expenses of only one separate firm of attorneys (in
addition to any local counsel) at any time for all such Underwriters and
controlling persons not having actual or potential differing interests with
you or among themselves, which firm shall be designated in writing by Nesbitt
Burns Securities Inc., and that all such fees and expenses shall be reimbursed
as they are incurred. The Company shall not be liable for any settlement of
any such action, suit or proceeding effected without its written consent, but
if settled with such written consent, or if there be a final judgment for the
plaintiff in any such action, suit or proceeding, the Company agrees to
indemnify and hold harmless any Underwriter, to the extent provided in the
preceding paragraph, and any such controlling person from and against any
loss, claim, damage, liability or expense by reason of such settlement or
judgment.
(c) Each Underwriter and its Affiliated Underwriter covenants
and agrees, severally and not jointly, to protect and indemnify the Company, its
directors, officers, employees and agents and each person who controls the
Company within the meaning of Section 15 of the 1933 Act, to the same extent as
the foregoing indemnity from the Company to each Underwriter, but only with
respect to information relating solely to the Underwriter or furnished in
writing by or on behalf of such Underwriter through Nesbitt Burns Securities
Inc. expressly for use in the Registration Statement, any Prospectus or any
Preliminary Prospectus, or any amendment or supplement thereto. If any action,
suit or proceeding shall be brought against the Company, any of its directors,
any such officer, or any such controlling person based on the Registration
Statement, any Prospectus or any Preliminary Prospectus, or any amendment or
supplement thereto, and in respect of which indemnity may be sought against any
Underwriter pursuant to this paragraph (c), such Underwriter shall have the
rights and duties given to the Company by paragraph (b) above (except that if
the Company shall have assumed the defense thereof such Underwriter shall not be
required to do so, but may employ separate counsel therein and participate in
the defense thereof, but the fees and expenses of such counsel shall be at such
Underwriter's expense), and the Company, its directors, any such officer, and
any such controlling person shall have the rights and duties given to the
Underwriters by paragraph (b) above.
(d) If the indemnification provided for in this Section 11 is
unavailable to an indemnified party under paragraphs (a) or (c) hereof in
respect of any losses, claims, damages, liabilities or expenses referred to
therein, then an indemnifying party, in lieu of indemnifying such indemnified
party, shall contribute to the amount paid or payable by such indemnified party
as a result of such losses, claims, damages, liabilities or expenses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Company on the one hand and the Underwriters on the other hand from the offering
of the Subject Shares, or (ii) if the allocation provided by clause (i) above is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and the Underwriters on the other
hand in connection with the statements or omissions that resulted in such
losses, claims, damages, liabili-
<PAGE>
- 25 -
ties or expenses, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Underwriters
on the other hand shall be deemed to be in the same proportion as the total
net proceeds from the offering (before deducting expenses) received by the
Company bear to the total underwriting discounts and commissions received by
the Underwriters, in each case as set forth in the table on the cover page of
the Prospectus; provided that, in the event that the Underwriters shall have
purchased any Option Shares hereunder, any determination of the relative
benefits received by the Company and the Underwriters from the offering of the
Subject Shares shall include the net proceeds (before deducting expenses)
received by the Company, and the underwriting discounts and commissions
received by the Underwriters, from the sale of such Option Shares, in each
case computed on the basis of the respective amounts set forth in the notes to
the table on the cover page of the U.S. Prospectus. The relative fault of the
Company on the one hand and the Underwriters on the other hand shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to
state a material fact relates to information supplied by the Company on the
one hand or by the Underwriters on the other hand and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) The Company and the Underwriters agree that it would not be
just and equitable if contribution pursuant to this Section 11 were determined
by a pro rata allocation (even if the Underwriters were treated as one entity
for such purpose) or by any other method of allocation that does not take
account of the equitable considerations referred to in paragraph (d) above. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages, liabilities and expenses referred to in paragraph (d) above
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating any claim or defending any such action, suit or
proceeding. Notwithstanding the provisions of this Section 11, no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price of the Subject Shares underwritten by it and distributed to the
public exceeds the amount of any damages which such Underwriter has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission. No person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the 1933 Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. The Underwriters' obligations to contribute pursuant to this
Section 11 are several in proportion to the respective number of Subject Shares
set forth opposite their names in Section 17 herein and not joint.
(f) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action, suit or proceeding in respect of which any indemnified party
is or could have been a party and indemnity could have been sought hereunder by
such indemnified party, unless such settlement includes an
<PAGE>
- 26 -
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such action, suit or proceeding.
(g) Any losses, claims, damages, liabilities or expenses for
which an indemnified party is entitled to indemnification or contribution under
this Section 11 shall be paid by the indemnifying party to the indemnified party
as such losses, claims, damages, liabilities or expenses are incurred. The
indemnity and contribution agreements contained in this Section 11 and the
representations and warranties of the Company set forth in this Agreement shall
remain operative and in full force and effect, regardless of (i) any
investigation made by or on behalf of any Underwriter or any person controlling
any Underwriter, the Company, its directors or officers or any person
controlling the Company, (ii) acceptance of any Subject Shares and payment
therefor hereunder, and (iii) any termination of this Agreement. A successor to
any Underwriter or any person controlling any Underwriter, or to the Company,
its directors or officers or any person controlling the Company, shall be
entitled to the benefits of the indemnity, contribution and reimbursement
agreements contained in this Section 11.
12. The Company agrees to pay the following costs and expenses and all
other costs and expenses incident to the performance by it of its obligations
hereunder: (i) the preparation, printing or reproduction, and filing with the
Canadian Securities Authorities and the SEC of the registration statement
(including financial statements and exhibits thereto), each of the Preliminary
Prospectuses, the Prospectuses, and each amendment or supplement to any of them;
(ii) the printing (or reproduction) and delivery (including postage, air freight
and delivery (including postage, air freight charges and charges for counting
and packaging)) of such copies of the Registration Statement, the Preliminary
Prospectuses, the Prospectuses, and all amendments or supplements to any of them
as may be reasonably requested for use in connection with the offering and sale
of the Subject Shares; (iii) the preparation, printing, authentication, issuance
and delivery of certificates for the Subject Shares, including any stamp taxes
in connection with the original issuance and sale of the Subject Shares; (iv)
the printing (or reproduction) and delivery of this Agreement, the preliminary
and supplemental Blue Sky Memoranda and all other agreements or documents
printed (or reproduced) and delivered in connection with the original issuance
and sale of the Subject Shares; (v) the listing of the Subject Shares on the
American Stock Exchange; (vi) the registration or qualification of the Subject
Shares for offer and sale under the securities or Blue Sky laws of the several
states as provided in Section 7(i) hereof (including the reasonable fees,
expenses and disbursements of counsel for the Underwriters relating to the
preparation, printing or reproduction, and delivery of the preliminary and
supplemental Blue Sky Memoranda and such registration and qualification); (vii)
the filing fees and the fees and expenses of counsel for the Underwriters in
connection with any filings required to be made with the National Association of
Securities Dealers, Inc.; (viii) the transportation and other expenses incurred
by or on behalf of representatives of the Company in connection with
presentations to prospective purchasers of the Subject Shares; and (ix) the fees
and expenses of the Company's accountants and the fees and expenses of counsel
(including local and special
<PAGE>
- 27 -
counsel) for the Company. Except as provided in Section 11 and this Section
12, the Underwriters shall pay all of their own expenses, including the fees
and disbursements of their counsel (excluding fees related to items (iv), (vi)
and (vii) of this Section 12).
If this Agreement shall terminate or shall be terminated pursuant to any
provisions hereof (otherwise than pursuant to Section 15(b) hereof) or if this
Agreement shall be terminated by the Underwriters because of any failure or
refusal on the part of the Company to comply, in any material respect, with the
terms or fulfill any of the conditions of this Agreement other than by reason of
a default by the Underwriters, the Company agrees to reimburse the Underwriters
for all reasonable out-of-pocket expenses (including reasonable fees and
expenses of counsel for the Underwriters) incurred by you in connection
herewith. The Company shall not in any event be liable to any of the
Underwriters for the loss of anticipated profits from the transactions covered
by this Agreement.
13. The obligation of the Underwriters to purchase the Subject Shares
shall be subject to the accuracy of the representations and warranties of the
Company herein as of the Time of Closing on the Closing Date and the Option
Closing Date, as applicable, and to the due fulfillment and compliance in all
material respects by the Company with its covenants herein contained and to the
condition that no stop order suspending the effectiveness of the Registration
Statement and no order ceasing trading in the Subject Shares shall have been
issued and no proceedings for either such purpose shall have been instituted or
threatened.
14. All warranties, representations, covenants and agreements of the
Company herein contained or contained in documents submitted pursuant to this
Agreement and in connection with the transaction of purchase and sale herein
contemplated shall survive the purchase of the Subject Shares and continue in
full force and effect unaffected by any subsequent disposition of the Subject
Shares or any of them.
15. (a) All terms and conditions of this Agreement shall be construed as
conditions, and any material breach or failure by the Company to comply with any
such term or condition shall entitle the Underwriters to terminate their
obligation to purchase the Subject Shares by written notice to that effect given
to the Company prior to the Time of Closing on the Closing Date or the Option
Closing Date, as applicable. It is understood that the Underwriters may waive,
in whole or in part, or extend the time for, compliance with any of such terms
and conditions without prejudice to the rights of the Underwriters in respect of
any other such term or condition or any other or subsequent breach or non-
compliance with that or any other term or condition, provided that to be binding
on the Underwriters any such waiver or extension must be in writing.
<PAGE>
- 28 -
(b) The obligations of each Underwriter contained in this Agreement may
also be terminated by such Underwriter in the event that prior to the Time of
Closing on the Closing Date or the Option Closing Date, as applicable:
(i) there should develop, occur or come into effect any occurrence
of national or international consequence or any action, government
regulation or inquiry which, in the reasonable opinion of such Underwriter,
seriously adversely affects, or will seriously adversely affect, the
financial markets in Canada or the United States generally or the business
of the Company; or
(ii) a banking moratorium is declared by any federal, provincial or
state authority in either Canada or the United States or trading in
securities generally on the American Stock Exchange is suspended; or
(iii) the state of the financial markets in the United States or
Canada is such that, in the reasonable opinion of the Underwriters, or any
of them, it would be impracticable to proceed with a public offering of the
Subject Shares;
then in either case the Underwriters (or any of them) may terminate their or its
obligations under this Agreement to purchase Subject Shares by written notice to
that effect (which notice shall specify the particular reason for the
termination) given to the Company prior to the Time of Closing on the Closing
Date or the Option Closing Date, as applicable.
(c) If any inquiry, investigation or other proceeding should be made,
threatened or announced or any order should be issued under or pursuant to any
statute of Canada or of any of the provinces comprising the Canadian
Jurisdictions or of the United States or by any official of any stock exchange
in Canada or the United States or by any other regulatory authority having
jurisdiction over a material portion of the business and affairs of the
Company or otherwise except for any such inquiry, investigation, proceeding or
order based upon the activities or the alleged activities of the Underwriters
or their banking or selling group and not of the Company, which in the
reasonable opinion of the Underwriters will prevent the distribution of the
Subject Shares in the Canadian Jurisdictions or in the United States or
operate to prevent or adversely restrict trading in common shares of the
Company, Nesbitt Burns Securities Inc., on behalf of the Underwriters shall be
entitled, at its option and in addition to any other remedies it might have,
to terminate the obligations of the Underwriters under this Agreement by
written notice to that effect given to the Company at or at any time prior to
the Time of Closing on the Closing Date or the Option Closing Date, as
applicable.
16. If the Underwriters shall elect to terminate their obligation to
purchase the Subject Shares as aforesaid, whether the reason for such
termination is within or beyond the control of the Company, the liability of the
Company hereunder shall be limited to the indemnity referred
<PAGE>
- 29 -
to in Section 11 and the payment of expenses referred to in Section 12 to the
extent provided therein.
17. The obligation of each Underwriter to purchase the Subject Shares at
the Time of Closing shall be joint with the obligation of its affiliated
Underwriter, if any, set forth beside its name below (the "Affiliated
Underwriter") but shall be several and not joint with respect to every other
Underwriter and shall be as to the following percentages of the Subject Shares
to be purchased at that time:
<TABLE>
<CAPTION>
Affiliated Affiliated
U.S. Underwriter Canadian Underwriter
---------------- --------------------
<S> <C> <C>
Nesbitt Burns Securities Inc. Nesbitt Burns Inc. 37.5%
Smith Barney Inc. Salomon Smith Barney Canada Inc. 25%
Scotia Capital Markets (U.S.A.) Inc. ScotiaMcLeod Inc. 25%
First Marathon (U.S.A.) Inc First Marathon Securities 12.5%
Limited
</TABLE>
No Underwriter shall be obligated to take up and pay for any of the
Subject Shares to be purchased by it unless the other Underwriters
simultaneously take up and pay for the percentage of Subject Shares set out
opposite their names above.
If an Underwriter or its Affiliated Underwriter shall fail to
purchase their joint applicable percentage of the total number of Subject Shares
at the Time of Closing and such failure shall constitute a default in its
obligations under this Agreement, each of the Underwriters which shall be
willing and able to purchase its own applicable percentage of the total number
of Subject Shares shall be relieved of its obligations hereunder on submission
to the Company of reasonable evidence of ability and willingness to fulfil its
obligations hereunder at the Time of Closing, provided that, notwithstanding the
provisions of this Section 17, the Underwriters which shall be willing and able
to purchase their respective applicable percentage of the total number of
Subject Shares may, but shall not be obligated to, purchase the total number of
Subject Shares in such proportion as may be agreed upon by the Underwriters
which are so willing and able.
18. The Underwriters and any members of their banking or their selling
groups may resell the Subject Shares to the public in compliance with applicable
laws and shall offer the Subject Shares only in those jurisdictions where they
may lawfully be offered for sale at prices not exceeding the initial offering
price. The Underwriters shall, after the Time of Closing, use their reasonable
best efforts (taking into account the respective interest of both the Company
and the Underwriters) to complete and to cause members of any banking or selling
group to complete, distribution of the Subject Shares as promptly as possible
after the Closing Date. The
<PAGE>
- 30 -
Underwriters shall give prompt notice to the Company when, in the opinion of
the Underwriters, distribution has ceased, and shall also give notice to the
Company of the amount of Subject Shares distributed in each province. The
Underwriters will allow the Company to review any sales memoranda for use by
their employee, in connection with the marketing of the Subject Shares prior
to any use thereof and prior to such memoranda being filed with any Canadian
regulatory authority.
19. In all dealings hereunder, the parties hereto shall be entitled to
act and rely upon any statement, request, notice or agreement on behalf of any
Underwriter made or given by the Underwriters jointly or by Nesbitt Burns
Securities Inc. on behalf of the Underwriters.
20. Any notice or other communication required or permitted to be given
hereunder shall be in writing and shall be delivered in the case of the Company
at its address on page 1 hereof with a copy to Latham & Watkins, 505 Montgomery
Street, San Francisco, California 94111, Attention: Tad J. Freese, and in the
case of the Underwriters as follows:
(i) if to Nesbitt Burns Securities Inc. and/or Nesbitt Burns Inc.
To: Nesbitt Burns Inc.
4th Floor
1 First Canadian Place
Toronto, Ontario
M5X 1H3
Attention: Carl Renzoni
(ii) if to Smith Barney Inc. and/or Salomon Smith Barney Canada Inc.
To: Smith Barney Inc.
388 Greenwich Street
New York, New York 10013
Attention: Daniel Sell
(iii) if to Scotia Capital Markets (U.S.A.) Inc. and/or ScotiaMcLeod Inc.
To: ScotiaMcLeod Inc.
40 King Street West
66th Floor
Toronto, Ontario
M5W 2X6
Attention: Cynthia Thomas
<PAGE>
- 31 -
(iv) if to First Marathon (U.S.A.) Inc and/or First Marathon Securities
Limited
To: First Marathon Securities Limited
The Exchange Tower
2 First Canadian Place
Suite 3100
Toronto, Ontario
M5X 1J9
Attention: Richard S. Hallisey
21. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK AND TIME SHALL BE OF THE ESSENCE HEREOF.
22. The invalidity or unenforceability of any Section, paragraph or
provision of this Agreement shall not affect the validity or enforceability of
any other Section, paragraph or provision hereof. If any Section, paragraph or
provision of this Agreement is for any reason determined to be invalid or
unenforceable, there shall be deemed to be made such minor changes (and only
such minor changes) as are necessary to make it valid and enforceable.
23. This Agreement may be executed in several counterparts which, taken
together, shall constitute one and the same instrument.
If this letter accurately reflects the terms of the transaction
which we are to enter into and if such terms are agreed to by the Company,
please communicate acceptance of the Company by executing and returning 6 copies
of this letter where indicated below.
Yours very truly,
NESBITT BURNS INC. NESBITT BURNS SECURITIES INC.
by /s/ Stephen A. Burleton by /s/ Michael A. Vitton
----------------------------------- -------------------------------------
SALOMON SMITH BARNEY SMITH BARNEY INC.
CANADA INC.
by /s/ Donald G. Allan by /s/ Daniel E. Sell
----------------------------------- -------------------------------------
<PAGE>
- 32 -
SCOTIAMCLEOD INC. SCOTIA CAPITAL MARKETS (USA)
INC.
by /s/ Cynthia P. Thomas by /s/ W. David Wilson
----------------------------------- -------------------------------------
FIRST MARATHON SECURITIES FIRST MARATHON (U.S.A.) INC
LIMITED
by /s/ Richard S. Hallisey by /s/ Stuart W. Henry
----------------------------------- -------------------------------------
The foregoing accurately reflects the terms of the transaction which
we are to enter into and such terms are agreed to by Getchell Gold Corporation.
DATED the 2nd day of March, 1998.
GETCHELL GOLD CORPORATION
by /s/ Donald S. Robson
-------------------------------------
