SUBSCRIPTION AGREEMENT
Exhibit 99.1
February 9, 2009
TO:
Xxxxxx X. XxXxxx
x/x 0xx Xxxxx
00 Xxxxxx Xxxxxx
Xxxxxxx, XX X0X 0X0
Dear Sirs:
Re: Sale of Common Shares
This subscription agreement is to confirm the agreement between the Subscriber (as hereinafter defined) and Minera Andes Inc. (the “Corporation”), subject to the terms and conditions set forth herein, whereby the Subscriber will subscribe for 121,212,121 Common Shares from treasury of the Corporation (the “Purchased Common Shares”) at the price of $0.33 per Purchased Common Share (the “Purchase Price”).
The Subscriber agrees to be bound by the terms and conditions set forth in this Agreement (as hereinafter defined), including without limitation, the representations, warranties and covenants set forth in this Agreement. The Subscriber further agrees, without limitation, that the Corporation may rely upon the Subscriber’s representations, warranties and covenants contained in this Agreement.
The Subscriber expressly acknowledges and confirms that, as disclosed in the news release of the Corporation dated February 2, 2009, the Corporation intends to file (but has not filed as of the date of this Agreement) substantially revised management discussion and analysis of financial condition and results of operations for the nine and three month periods ended September 30, 2008 and annual information form for the financial year ended December 31, 2007, and the nature and substance of such revised disclosure include amendments to comply with the form requirements of National Instrument 51-102 – Continuous Disclosure Obligations and to provide additional information regarding the Corporation’s joint venture interest in the San Xxxx Project and update the Corporation’s financial position.
1.
Definitions
(a)
In this Agreement, unless the context otherwise requires:
(i)
“Agreement” means this subscription agreement as the same may be amended, supplemented or restated from time to time;
(ii)
“Agreements in Default” means, collectively, the agreements listed in Schedule C attached hereto;
(iii)
“Business Day” means a day on which Canadian chartered banks are open for the transaction of regular business in the City of Toronto, Ontario;
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(iv)
“Closing” means the closing of the purchase and sale of the Purchased Common Shares;
(v)
“Closing Date” means February 16, 2009 or such other date as the Corporation and the Subscriber may mutually agree upon in writing;
(vi)
“Common Shares” means the common shares of the Corporation as constituted on the date hereof;
(vii)
“Corporation” means Minera Andes Inc., a corporation governed by the laws of the Governing Jurisdiction and includes any successor corporation thereto;
(viii)
“Dollar” or “$” means a dollar of lawful money of Canada;
(ix)
“Governing Jurisdiction” means the Province of Alberta;
(x)
“Information” means all information that is, or has been, filed by the Corporation under the Securities Laws or with the Stock Exchange, and includes, but is not limited to, all of the documents filed by the Corporation on the System for Electronic Document Analysis and Retrieval (SEDAR);
(xi)
“Joint Venture Interest” means the interest of the Corporation in the joint venture in respect of the San Xxxx Project located in Argentina;
(xii)
“NI 45-106” means National Instrument 45-106 – Prospectus and Registration Exemptions;
(xiii)
“Person” means an individual, a firm, a corporation, a syndicate, a partnership, a trust, an association, an unincorporated organization, a joint venture, an investment club, a government or an agency or political subdivision thereof and every other form of legal or business entity of whatsoever nature or kind;
(xiv)
“Purchase Price” means $0.33 per Purchased Common Share, being approximately $40,000,000 in the aggregate;
(xv)
“Purchased Common Shares” means the 121,212,121 Common Shares purchased by the Subscriber;
(xvi)
“Reporting Jurisdictions” means, collectively, the Provinces of British Columbia, Alberta, Saskatchewan, Ontario and Nova Scotia;
(xvii)
“Securities Laws” means the securities legislation and regulations of, and the instruments, policies, rules, orders, codes, notices and interpretation notes of the Stock Exchange and the applicable securities regulatory authority or applicable securities regulatory authorities of, the applicable jurisdiction or jurisdictions collectively;
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(xviii)
“Share Certificate” means the certificate or certificates representing the Purchased Common Shares;
(xix)
“Stock Exchange” means the Toronto Stock Exchange;
(xx)
“Subscriber” means Xxxxxx X. XxXxxx or any Person designated by Xxxxxx X. XxXxxx; and
(xxi)
“Subsidiary” or “Subsidiaries” means the subsidiaries of the Corporation.
2.
Conditions of Sale in favour of the Corporation
In connection with the purchase of the Purchased Common Shares, the Subscriber shall, after the Closing, complete, sign as indicated and return to the Corporation any applicable documents required by the Stock Exchange.
The obligation of the Corporation to sell the Purchased Common Shares to the Subscriber is subject to the conditions that:
(a)
the Subscriber executes and returns all documents required by the Securities Laws and the policies of the Stock Exchange, including the forms set out in schedules attached hereto, as applicable, to the Corporation as the sale of the Purchased Common Shares by the Corporation will not be qualified by a prospectus;
(b)
the representations and warranties made by the Subscriber herein are true and correct when made and are true and correct on the Closing Date with the same force and effect as if they had been made on and as of such date;
(c)
all covenants, agreements and conditions contained in this Agreement to be performed by the Subscriber on or prior to the Closing Date shall have been performed or complied with in all material respects; and
(d)
all necessary corporate and regulatory approvals being obtained prior to the Closing Date.
By signing and returning this Agreement to the Corporation, the Subscriber consents to the filing by the Corporation of all documents required by the Securities Laws and the policies of the Stock Exchange.
The Subscriber agrees to comply with all Securities Laws and with the policies of the Stock Exchange concerning the purchase of, the holding of, and the resale restrictions applicable to, the Purchased Common Shares.
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3.
Conditions of Purchase in favour of the Subscriber
The obligation of the Subscriber to purchase the Purchased Common Shares from the Corporation is subject to the conditions that:
(a)
the Corporation executes and returns all documents required by the Securities Laws and the policies of the Stock Exchange, including the forms set out in schedules attached hereto, as applicable;
(b)
the Subscriber shall have received a certificate, dated the date of delivery and signed by any officer of the Corporation certifying that to the best of the knowledge, information and belief of the officer signing such certificate: (i) the Corporation has complied with all terms and conditions of this Agreement to be complied with by the Corporation at or prior to the Closing Date; (ii) no order, ruling or determination having the effect of suspending the sale or ceasing or suspending trading in the Purchased Common Shares of the Corporation or any other securities of the Corporation has been issued and is continuing in effect and no proceedings for such purpose have been instituted and are continuing or are pending or, to the best of the knowledge, information and belief of the officer signing such certificate, are contemplated or threatened; (iii) the representations and warranties made by the Corporation herein are true and correct when made and are true and correct on the Closing Date with the same force and effect as if they had been made on and as of the Closing Date; (iv) there has been no adverse material change (actual, contemplated or threatened whether financial or otherwise) in the business, affairs, operations, assets, liabilities (contingent or otherwise) or capital of the Corporation from the date of execution of this Agreement to the Closing Date;
(c)
the Subscriber shall have received at the Closing Date favourable legal opinions from counsel for the Corporation addressed to the Subscriber dated the Closing Date, in a form acceptable to the Subscriber and customary for private placements;
(d)
the Subscriber shall have received at the Closing Date favourable legal opinions from counsel for the Corporation addressed to the Subscriber dated the Closing Date in a form acceptable to the Subscriber, with respect to the incorporation and ownership of the Subsidiaries confirming and that no consent or approvals are required in the applicable jurisdictions of the Subsidiaries in respect of the transactions contemplated by this Agreement; and
(e)
all necessary corporate and regulatory approvals being obtained prior to the Closing Date.
4.
Closing
Delivery and payment for the Purchased Common Shares will be completed at the Closing at the offices of Xxxxxx Xxxxxxx LLP, Suite 1600, 000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxxx, Xxxxxxx Xxxxxxxx at 10:00 a.m. Vancouver time on the Closing Date if, at the Closing, the terms and conditions contained herein have been complied with to the satisfaction of each party or waived by the parties and evidenced as necessary by documentation satisfactory to each of the parties delivered at the Closing.
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One or more Share Certificates representing the Purchased Common Shares registered as follows (or as the Subscriber may otherwise direct):
Xxxxxx X. XxXxxx
00 Xxxxxxxx Xxxxxx
Xxxxxxx, XX X0X 0X0
will be available for delivery against payment to the Corporation of the amount of the Purchase Price for the Purchased Common Shares in freely transferable Canadian funds.
Such payment is to be made by wire transfer or other immediately available funds payable in favour of the Corporation in accordance with the wire instructions set out below or as otherwise directed in writing by the Corporation at Closing, and the Corporation shall timely fund an amount of not less than US$11.3 million (the “Cash Call Funds”) to satisfy the cash call on the Corporation in respect of the Joint Venture Interest:
HSBC Bank Canada
000 X. Xxxxxxx Xxxxxx
Xxxxxxxxx, X.X. X0X 0X0
Phone: (000) 000-0000
Name of Account: Minera Andes Inc.
Account Number: 000-000000-000
Transit Number: 10020
ABA/Routing Number: 000000000
Institution Number: 016
Swift Code: HKBC CATT
For wire transfers, a copy of the transfer instructions should also be faxed to the attention of Xxxxx Xxxxxxx at (000) 000-0000.
5.
Exemptions under Applicable Securities Laws
The sale of the Purchased Common Shares by the Corporation is conditional upon such sale being exempt from the requirements as to the filing of a prospectus and as to the delivery of an offering memorandum or similar document contained in any Securities Laws applicable to the sale of the Purchased Common Shares or upon the issue of such orders, consents or approvals as may be required to permit such sale without the requirement of the filing of a prospectus or the delivering of an offering memorandum or similar document.
The Subscriber acknowledges and agrees that: (i) it has been independently advised as to or is aware of the restrictions with respect to trading in, and the restricted period or statutory hold period applicable to, the Purchased Common Shares imposed by the Securities Laws to which it is subject and by the policies of the Stock Exchange, that a suitable legend or legends will be placed on the Share Certificates to reflect the applicable restricted period and hold period to which the Purchased Common Shares are subject; and (ii) it has not received or been provided with a prospectus, offering memorandum (within the meaning of the Securities Laws) or similar document.
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The Subscriber represents and warrants to the Corporation (which representations and warranties shall survive the Closing) and acknowledges that the Corporation is relying on such representations and warranties in connection with the transactions contemplated herein that:
(a)
the Subscriber is resident, or has a head office, in Xxxxxxx, Xxxxxxx, and such address was not created and is not used solely for the purpose of acquiring the Purchased Common Shares and the Subscriber was solicited to purchase in its jurisdiction of residence;
(b)
the Subscriber has the legal capacity to authorize, execute and deliver this Agreement and the individual signing this Agreement has been duly authorized to execute and deliver this Agreement;
(c)
the Subscriber is acquiring the Purchased Common Shares as principal for his own account and not for the benefit of any other person, in a sufficient amount so that the aggregate acquisition cost for the Purchased Common Shares is not less than $150,000, pursuant to and in compliance with an exemption from the prospectus requirements of the Securities Laws of its jurisdiction of residence;
(d)
pursuant to section 2.10 of NI 45-106, the aggregate Purchase Price for the Purchased Common Shares will be paid for by the Subscriber in cash;
(e)
the Subscriber is not an entity that was created, or is being used, solely for the purpose of acquiring the Purchased Common Shares pursuant to the exemptions from the prospectus and registration requirements provided for in section 2.10 of NI 45-106;
(f)
the Purchased Common Shares to be issued hereunder are not being purchased with knowledge of any material fact about the Corporation that has not been generally disclosed;
(g)
the Subscriber acknowledges that no agency, governmental authority, securities commission or similar regulatory body, stock exchange or other entity has reviewed, passed on or made any finding or determination as to the merit for investment of the Purchased Common Shares nor have any such agencies or governmental authorities made any recommendation or endorsement with respect to the Purchased Common Shares;
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(h)
this Agreement has been duly executed and delivered and, when accepted by the Corporation, will constitute a legal, valid and binding obligation enforceable against the Subscriber in accordance with the terms hereof;
(i)
the execution and delivery of this Agreement, the performance and compliance with the terms hereof, the purchase of the Purchased Common Shares and the completion of the transactions described herein will not result in any material breach of, or be in conflict with or constitute a material default under, or create a state of facts which, after notice or lapse of time, or both, would constitute a material default under, where applicable, any term or provision of the Subscriber’s constating documents, by-laws or resolutions, the Securities Laws or any other laws applicable to the Subscriber, any agreement to which the Subscriber is a party, or any judgment, decree, order, statute, rule or regulation;
(j)
the offer and sale of the Purchased Common Shares to the Subscriber is being made in an “offshore transaction”, as that term is defined in Rule 902(h) of Regulation S under the United States Securities Act of 1933, as amended (the “1933 Act”), in that the Subscriber was outside of the United States both at the time when the offer to sell the Purchased Common Shares was made to the Subscriber and also when the Subscriber signed this Agreement;
(k)
the Subscriber has knowledge in financial and business affairs, is capable of evaluating the merits and risks of an investment in the Purchased Common Shares and is able to bear the economic risk of such investment even if the entire investment is lost;
(l)
none of the funds being used to purchase the Purchased Common Shares are, to the knowledge of the subscriber, proceeds obtained or derived directly or indirectly as a result of illegal activities;
(m)
the Subscriber has not received or been provided with a prospectus, offering memorandum, within the meaning of the Securities Laws, or any sales or advertising literature in connection with the sale of the Purchased Common Shares and the Subscriber’s decision to subscribe for the Purchased Common Shares was not based upon, and the Subscriber has not relied upon, any verbal or written representations as to facts made by or on behalf of the Corporation. The Subscriber acknowledges that the Corporation’s counsel is acting as counsel to the Corporation, and not as counsel to the Subscriber and, without limiting the generality of the foregoing, the Subscriber acknowledges that the independent auditors of the Corporation have not participated in any independent due diligence investigation or verification of such publicly available information nor have such independent auditors provided any additional or supplemental comfort in connection with the Corporation, its financial statements or the sale of the Purchased Common Shares;
(n)
no person has made any written or oral representations to the Subscriber:
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(i)
that any person will resell or repurchase the Purchased Common Shares,
(ii)
that any person will refund the purchase price for the Purchased Common Shares, or
(iii)
as to the future price or value of the Purchased Common Shares;
(o)
the subscription for the Purchased Common Shares has not been made through or as a result of, and is not being accompanied by any advertisement including, without limitation, in printed public media, radio, television or telecommunications, including electronic display, or as part of a general solicitation;
(p)
no securities commission, agency, governmental authority, regulatory body, stock exchange or other regulatory body has reviewed or passed on the merits of the Purchased Common Shares;
(q)
the Purchased Common Shares shall be subject to statutory resale restrictions under the Securities Laws of the province or jurisdiction in which the Subscriber resides, or is otherwise subject to, and under other applicable Securities Laws, and the Subscriber covenants that it will not resell the Purchased Common Shares except in compliance with such Securities Laws, and the Subscriber acknowledges that it is solely responsible (and the Corporation is not in any way responsible) for such compliance;
(r)
the Subscriber, and each beneficial purchaser for whom it is contracting hereunder, shall execute, deliver, file and otherwise assist the Corporation with filing all documentation required by the applicable Securities Laws in connection with the subscription for, and the issuance of, the Purchased Common Shares;
(s)
the Corporation is relying on the representations, warranties and covenants contained herein to determine the Subscriber’s eligibility to subscribe for the Units under applicable Securities Laws;
(t)
the Subscriber understands that the Purchased Common Shares are being offered for sale only on a “private placement” basis and that the sale and delivery of the Units is conditional upon such sale being exempt from the requirements to provide the Subscriber with a prospectus or the preparation of an offering memorandum or upon the issuance of such orders, consents or approvals as may be required to permit such sale without the requirement for the delivery of a prospectus or offering memorandum under applicable Securities Laws and, as a consequence of acquiring the Purchased Common Shares pursuant to such exemption, certain protections, rights and remedies provided by the Securities Laws, including statutory rights of rescission or damages, will not be available to the Subscriber;
(u)
the Subscriber is responsible for obtaining such legal and tax advice as it considers appropriate in connection with the execution, delivery and performance of this Agreement and the transactions contemplated under this Agreement. The Subscriber, and each such beneficial purchaser, is not relying on the Corporation, or its affiliates or counsel in this regard;
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(v)
there is no governmental or other insurance covering the Purchased Common Shares;
(w)
there are risks associated with the purchase of the Purchased Common Shares and the Subscriber may lose its entire investment;
(x)
the Purchased Common Shares are being purchased for investment only and not with a view to resale or distribution and will not be resold or otherwise transferred or disposed of, except in accordance with the provisions of the applicable securities legislation and the regulations, rules and policies thereunder;
(y)
the acknowledgments contained in any forms or documents delivered by the Subscriber under applicable Securities Laws are true and correct as of the date of execution of this Agreement, and will be true and correct as of the Closing Date and fully and truly state those facts necessary for the Corporation to be entitled to rely on the relevant exemptions from the registration and prospectus requirements within the meaning of the Securities Laws of the jurisdiction of residence of the Subscriber; and
(z)
the Subscriber shall notify the Corporation immediately if it anticipates that any representation or warranty made by the Subscriber in this Agreement will cease to be correct or if it becomes aware that any such representation or warranty has ceased to be correct.
6.
Representations and Warranties
The Corporation hereby represents and warrants to the Subscriber as follows and acknowledges and confirms that the Subscriber is relying upon such representations and warranties in entering into this Agreement and completing the transactions contemplated herein:
(a)
Incorporation and Organization: The Corporation and each Subsidiary has been continued or incorporated and organized and is a valid and subsisting corporation under the laws of its jurisdiction of incorporation and where required, has been duly qualified as an extra-provincial or foreign corporation for the transaction of business and is in good standing under the laws of each other jurisdiction in which it owns or leases properties or conducts any business and has all requisite corporate power and authority to carry on its business as now conducted or proposed to be conducted and to own or lease and operate the property and assets thereof and the Corporation has all requisite corporate power and authority to enter into, execute and deliver this Agreement and to carry out the obligations thereof hereunder.
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(b)
Authorized and Issued Capital: The Corporation is authorized to issue an unlimited number of Common Shares and an unlimited number of preferred shares, of which the number of Common Shares set forth on Schedule A attached hereto were issued and outstanding as fully paid and non-assessable shares and nil preferred shares were issued and outstanding as of the date hereof.
(c)
Listing: The Common Shares are, and at the time of issue of the Purchased Common Shares will be, listed on the Stock Exchange and the Subject Shares will, at the time of issue, have been conditionally listed on the Stock Exchange.
(d)
Certain Securities Law Matters: The Common Shares are listed only on the Stock Exchange, the Corporation is a reporting issuer or the equivalent only in the Reporting Jurisdictions and, other than as disclosed to the Subcriber by the Corporation, the Corporation is not in default of any requirements of the Securities Laws or any of them, and the Purchased Shares are not registered under the 1933 Act. The Common Shares are also quoted in the United States on the OTC Bulletin Board.
(e)
Resale of Securities: As the Subject Shares will not be registered under the 1933 Act, they may not be offered or sold in the United States or to United States Persons unless registered under the 1933 Act or an exemption from the requirements of the 1933 Act is available.
(f)
Rights to Acquire Securities: No Person has any agreement, option, right or privilege (whether pre-emptive, contractual or otherwise) capable of becoming an agreement for the purchase, acquisition, subscription for or issue of any of the unissued shares or other securities of the Corporation or the Subsidiaries, except as set forth on Schedule A attached hereto.
(g)
No Pre-emptive Rights: The issue of the Purchased Common Shares will not be subject to any pre-emptive right or other contractual right to purchase securities granted by the Corporation or to which the Corporation is subject.
(h)
Purchased Common Shares: The execution of this Agreement and the issue by the Corporation to the Subscriber of the Purchased Common Shares will be exempt from the registration and prospectus requirements of Securities Laws.
(i)
Issue of Purchased Common Shares: All necessary corporate action has been taken to authorize the issue and sale of, and the delivery of the Share Certificate(s) representing the Purchased Common Shares and, upon payment of the requisite consideration therefor, the Purchased Common Shares will be validly issued as fully paid and non-assessable shares in the capital of the Corporation.
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(j)
Consents, Approvals and Conflicts: None of the offering and sale of the Purchased Common Shares, the execution and delivery of this Agreement, the compliance by the Corporation with the provisions of this Agreement or the consummation of the transactions contemplated herein and therein including, without limitation and the issue of the Purchased Common Shares to the Subscriber for the consideration and upon the terms and conditions as set forth herein do or will: (i) require the consent, approval, or authorization, order or agreement of, or registration or qualification with, any governmental agency, body or authority, court, stock exchange, securities regulatory authority or other Person, except (A) such as have been obtained, or (B) such as may be required under Securities Laws and the policies of the Stock Exchange and will be obtained by the Closing Date; or (ii) conflict with or result in any breach or violation of any of the provisions of, or constitute a default under, any agreement or instrument to which the Corporation or any of its Subsidiaries is a party or by which any of them or any of the properties or assets thereof is bound, or the articles or by-laws or memorandum and articles or any other constating document of the Corporation or any of its Subsidiaries or any resolution passed by the directors (or any committee thereof) or shareholders of the Corporation, or any law, statute or any judgment, decree, order, rule, policy or regulation of any court, governmental authority, arbitrator, stock exchange or securities regulatory authority applicable to the Corporation or any of its Subsidiaries which could have a material adverse effect on the condition (financial or otherwise), business, properties or results of operations of the Corporation or any of its Subsidiaries .
(k)
Authority and Authorization: The Corporation has full corporate power and authority to enter into this Agreement and to do all acts and things and execute and deliver all documents as are required hereunder and thereunder to be done, observed, performed or executed and delivered by it in accordance with the terms hereof and thereof and the Corporation has taken all necessary corporate action to authorize the execution, delivery and performance of this Agreement and to observe and perform the provisions of this Agreement in accordance with the provisions hereof including, without limitation, the issue of the Purchased Common Shares to the Subscriber for the consideration and upon the terms and conditions set forth herein.
(l)
Validity and Enforceability: This Agreement has been authorized, executed and delivered by the Corporation and constitutes a valid and legally binding obligation of the Corporation enforceable against the Corporation in accordance with the terms thereof.
(m)
Public Disclosure: Other than as disclosed by the Corporation to the Subscriber, each of the documents which contains any of the Information is, as of the date thereof, in compliance in all material respects with the Securities Laws of the Reporting Jurisdictions and did not contain any 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, in light of the circumstances under which such statements were made, not misleading. There is no fact known to the Corporation which the Corporation has not disclosed in the Information which materially adversely affects, or so far as the Corporation can reasonably foresee, will materially adversely affect, the assets, liabilities (contingent or otherwise), capital, affairs, business, prospects, operations or condition (financial or otherwise) of the Corporation (taken as a whole) or the ability of the Corporation to perform its obligations under this Agreement or which would otherwise be material to the Subscriber.
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(n)
No Cease Trade Order: No order preventing, ceasing or suspending trading in any securities of the Corporation or prohibiting the issue and sale of securities by the Corporation has been issued and no proceedings for either of such purposes have been instituted.
(o)
Financial Statements: The audited consolidated financial statements of the Corporation for the year ended December 31, 2007, together with the auditors’ report thereon and the notes thereto, and the unaudited interim consolidated financial statements of the Corporation for the period ended September 30, 2008 and the notes thereto, have been prepared in accordance with Canadian generally accepted accounting principles applied on a basis consistent with prior periods (except as disclosed in such consolidated financial statements).
(p)
No Contemplated Changes: None of the Corporation or any Subsidiary has approved, is contemplating, has entered into any agreement in respect of:
(i)
the purchase of any property or assets or any interest therein or the sale, transfer or other disposition of any property or assets or any interest therein currently owned, directly or indirectly, by the Corporation or any Subsidiary whether by asset sale, transfer of shares or otherwise other than in the ordinary course of business; or
(ii)
the change of control (by sale or transfer of shares or sale of all or substantially all of the property and assets of the Corporation or any Subsidiary or otherwise) of the Corporation or any Subsidiary.
(q)
No Litigation: There are no actions, suits, proceedings, inquiries or investigations existing, pending or, to the knowledge of the Corporation after due inquiry, threatened against or which adversely affect the Corporation or any Subsidiary or to which any of the property or assets thereof is subject, at law or equity, or before or by any court, federal, provincial, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, which may in any way materially adversely affect the condition (financial or otherwise), capital, property, assets, operations or business of the Corporation or any Subsidiary or the ability of any of them to perform the obligations thereof and none of the Corporation or any Subsidiary is subject to any judgment, order, writ, injunction, decree, award, rule, policy or regulation of any governmental authority, which, either separately or in the aggregate, may result in a material adverse effect on the condition (financial or otherwise), capital, property, assets, operations or business of the Corporation or any Subsidiary or the ability of the Corporation to perform its obligations under this Agreement.
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(r)
Non-Arms Length Transactions: Except as disclosed in the Information, neither the Corporation nor any Subsidiary owes any amount to, nor has the Corporation or any Subsidiary any present loans to, or borrowed any amount from or is otherwise indebted to, any officer, director, employee or security holder of any of them or any Person not dealing at “arm’s length” (as such term is defined in the Income Tax Act (Canada)) with any of them except for usual employee reimbursements and compensation paid in the ordinary and normal course of the business of the Corporation or Subsidiary. Except usual employee or consulting arrangements made in the ordinary and normal course of business and normal commercial terms, neither the Corporation nor any Subsidiary is a party to any contract, agreement or understanding with any officer, director, employee or security holder of any of them or any other Person not dealing at arm’s length with the Corporation and the Subsidiaries. No officer, director or employee of the Corporation or any Subsidiary and no Person which is an affiliate or associate of any of the foregoing Persons, owns, directly or indirectly, any interest (except for shares representing less than 5% of the outstanding shares of any class or series of any publicly traded company) in, or is an officer, director, employee or consultant of, any Person which is, or is engaged in, a business competitive with the business of the Corporation or any Subsidiary which could materially adversely impact on the ability to properly perform the services to be performed by such Person for the Corporation or any Subsidiary.
(s)
Conflicting Agreements: The Corporation is not party to any other contract, understanding or agreement that would be inconsistent with or restrict the rights of the Subscriber under this Agreement, in any material respect.
(t)
Joint Venture Interest: Upon delivery of the Cash Call Funds by the Corporation indirectly to Minera Santa Xxxx XX, no amount will be owing by the Corporation in respect of the Joint Venture Interest.
(u)
Expropriation: No part of the property or assets of any of the Corporation has been taken, condemned or expropriated by any governmental entity nor has any notice or proceeding in respect thereof been given or commenced nor is the Corporation or any Subsidiary aware of any intent or proposal to give such notice or commence any such proceedings.
(v)
Compliance with Laws: The Corporation and its Subsidiaries have complied with and are not in violation of any applicable laws, injunctions, orders, arbitral awards, judgments or decrees, except to the extent that non-compliance does not and could not reasonably be expected to have a material adverse effect on the Corporation. Without limiting the generality of the foregoing, to the best of the knowledge of the Corporation, all securities of the Corporation (including all options, rights or other convertible or exchangeable securities) have been issued in compliance with all applicable Securities Laws. Neither the Corporation nor any of its current directors or officers has been charged or has been advised of an active investigation in the past 36 months by any governmental entity in connection with any actual or alleged violation of any law which may directly or indirectly relate to the Corporation or its business and operations (financial or otherwise). To the knowledge of the Corporation and without benefit of specific investigation, neither the Subsidiaries nor any of their respective current or former directors or officers nor the former directors or officers of the Corporation has been charged, or has been advised of an active investigation in the past 36 months by any governmental entity (including any taxing authority in any jurisdiction, including any sales tax authority) in connection with any actual or alleged violation of any law which may directly or indirectly relate to the Corporation or its business and operations (financial or otherwise).
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(w)
No Undisclosed Agreements. The Corporation acknowledges that it has not entered into any agreements which have not been disclosed in the Information with respect to any of its properties nor does it have any present intention to enter into any such agreements. The Corporation is not in default of any agreements with respect to any of its properties, other than the Agreements in Default.
7.
Covenants
The Corporation hereby covenants and agrees with the Subscriber as follows:
(a)
Securities Law and Stock Exchange Filings: Forthwith after the Closing, the Corporation shall file such forms and documents as may be required under the Securities Laws and by the Stock Exchange.
(b)
Board of Directors: Following Closing, the Subscriber shall have the right (i) to appoint an individual to fill the current vacancy on the Board of Directors of the Corporation, and (ii) to appoint an individual to fill the vacancy which will be created by the resignation, at Closing, of one of the existing directors of the Corporation (such individuals to be collectively referred to herein as the “Subscriber Appointees”) to the seven-member board of directors of the Corporation, and the Corporation shall use all reasonable efforts to (y) cause the Subscriber Appointees to be appointed as directors of the Corporation and (z) pass such resolutions and to take such other actions as may be required in order that the Subscriber Appointees become members of the board of directors of the Corporation. The Corporation shall use all reasonable efforts to cause its board of directors to pass such resolutions and to take such other actions as may be required in order to maintain the number of members of the board of directors of the Corporation at not more than seven (7).
(c)
Use of Proceeds: The Corporation shall use the gross proceeds from the sale of the Purchased Common Shares in accordance with Schedule B attached hereto.
(d)
Access to Information: The Corporation, subject to its obligations to comply with the Securities Laws of the Reporting Jurisdictions, shall advise the Subscriber at its request from time to time of matters relating to the properties of the Corporation, relations with local communities and landowners and all governmental liaisons related initiatives, actions, accommodations and to material past or current environmental issues.
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(e)
Performance of Acts: The Corporation shall perform and carry out all of the acts and things to be completed by it as provided in this Agreement.
(f)
Conflicting Agreements: The Corporation shall not enter into any contract, understanding or agreement that would be inconsistent with this Agreement in any material respect.
(g)
Expenses: The Corporation shall be responsible for all reasonable expenses, including the reasonable fees and disbursements of legal counsel to the Subscriber, incurred by the Subscriber in connection with the subscription for the Purchased Common Shares.
8.
Collection of Personal Information
The Subscriber consents to the disclosure by the Corporation to the Stock Exchange of all information contained herein relating to the Subscriber, including, without limitation, its name and residential address, the name and residential address of any beneficial holder, the number of Purchased Common Shares, the number of securities of the Corporation held before and after completion of the Offering and whether such Subscriber is an individual or a member of the Pro Group (as defined in the Corporate Finance Manual of the Stock Exchange) (collectively, the “Personal Information”).
The Subscriber (on its own behalf and, if applicable, on behalf of any person for whose benefit the Subscriber is contracting) acknowledges and consents to the fact the Corporation is collecting the Personal Information for the purpose of completing the purchase by the Subscriber of the Purchased Common Shares. The Subscriber (on its own behalf and, if applicable, on behalf of any person for whose benefit the Subscriber is contracting) acknowledges and consents to the Corporation retaining the Personal Information for as long as permitted or required by applicable law or business practices. The Subscriber (on its own behalf and, if applicable, on behalf of any person for whose benefit the Subscriber is contracting) further acknowledges and consents to the fact that the Corporation may be required by applicable Securities Laws, Stock Exchange rules and Investment Dealers Association of Canada rules to provide to such regulatory authorities any Personal Information provided by the Subscriber respecting itself (and any beneficial purchaser).
The Subscriber represents and warrants that it has the authority to provide the consents and acknowledgements set out in this paragraph on behalf of all beneficial purchasers.
The Corporation hereby notifies the Subscriber that:
(a)
pursuant to NI 45-106, delivery of the information pertaining to the Subscriber to the Ontario Securities Commission (the “OSC”) is required, as set out in Schedule I of Form 45-106F1 – Report of Exempt Distribution (“Form 45-106F1”), comprising the full name, residential address and telephone number of the Subscriber, the number and type of securities of the Corporation purchased by the Subscriber, the total purchase price of such securities, the exemption relied upon in connection with such purchase, and the date of such distribution (collectively, the “Ontario Personal Information”);
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(b)
the Ontario Personal Information is being collected indirectly by the OSC under the authority granted to it in securities legislation;
(c)
the Ontario Personal Information is being collected for the purposes of the administration and enforcement of the securities legislation of the Province of Ontario;
(d)
the title, business address and business telephone number of the public official in Ontario, as set out in Form 45-106F1, who can answer questions about the OSC’s indirect collection of Ontario Personal Information is as follows: Ontario Securities Commission, Suite 1903, Box 0000 Xxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx X0X 0X0, 000-000-0000, Administrative Assistant to the Director of Corporate Finance;
and the Subscriber hereby authorizes the indirect collection of Ontario Personal Information by the OSC.
9.
General
(a)
Headings: The division of this Agreement into articles and sections and the insertion of headings are for convenience of reference only and shall not affect the construction or interpretation of this Agreement. The terms “this Agreement,” “hereof,” “hereunder”, “herein” and similar expressions refer to this Agreement and not to any particular article, section or other portion hereof and include any agreement supplemental thereto and any exhibits attached hereto. Unless something in the subject matter or context is inconsistent therewith, reference herein to articles, sections and paragraphs are to articles, sections, subsections and paragraphs of this Agreement.
(b)
Number and Gender: Words importing the singular number only shall include the plural and vice versa, words importing the masculine gender shall include the feminine gender and neuter and vice versa.
(c)
Severability: If one or more of the provisions contained in this Agreement shall be invalid, illegal or unenforceable in any respect under any applicable law, the validity, legality or enforceability of the remaining provisions hereof shall not be affected or impaired thereby. Each of the provisions of this Agreement is hereby declared to be separate and distinct.
(d)
Notices: All notices or other communications to be given hereunder shall be delivered by hand or by telecopier, and if delivered by hand, shall be deemed to have been given on the date of delivery or, if sent by telecopier, on the date of transmission if sent before 5:00 p.m. (local time) and such day is a Business Day or, if not, on the first Business Day following the date of transmission.
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(e)
Notices to the Corporation shall be addressed to:
Minera Andes Inc.
Suite A
000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
Telecopier: (000) 000-0000
Notices to the Subscriber shall be addressed to:
Xxxxxx X. XxXxxx
x/x 0xx Xxxxx
00 Xxxxxx Xxxxxx
Xxxxxxx, XX X0X 0X0
Telecopier: (000) 000-0000
Either the Corporation or the Subscriber may change its address for service aforesaid by notice in writing to the other party hereto specifying its new address for service hereunder.
(f)
Further Assurances: Each party hereto shall from time to time at the request of the other party hereto do such further acts and execute and deliver such further instruments, deeds and documents as shall be reasonably required in order to fully perform and carry out the provisions of this Agreement. The parties hereto agree to act honestly and in good faith in the performance of their respective obligations hereunder.
(g)
Successors and Assigns: Except as otherwise provided, this Agreement shall enure to the benefit of and shall be binding upon the parties hereto and their respective successors and permitted assigns.
(h)
Entire Agreement: The terms of this Agreement express and constitute the entire agreement between the parties hereto with respect to the subject matter hereof and no implied term or liability of any kind is created or shall arise by reason of anything in this Agreement.
(i)
Time of Essence: Time is of the essence of this Agreement.
(j)
Amendments: The provisions of this Agreement may only be amended with the written consent of all of the parties hereto.
(k)
Survival: Notwithstanding any other provision of this Agreement, the representations, warranties, covenants and indemnities of or by the Corporation contained herein or in any certificate, document or instrument delivered pursuant hereto shall survive the completion of the transactions contemplated by this Agreement.
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(l)
Governing Law: This Agreement shall be governed by and construed in accordance with the laws of the Province of Ontario and the federal laws of Canada applicable therein and the parties hereto irrevocably attorn to the jurisdiction of the courts of the Province of Ontario.
(m)
Counterparts: This Agreement may be executed in two or more counterparts which when taken together shall constitute one and the same agreement. Delivery of counterparts may be effected by facsimile transmission thereof.
(n)
Facsimile Copies: The Corporation shall be entitled to rely on a facsimile copy of an executed subscription agreement and acceptance by the Corporation of such facsimile subscription shall be legally effective to create a valid and binding agreement between the Subscriber and the Corporation in accordance with the terms thereof.
If the foregoing is in accordance with your understanding, please sign and return this Agreement together with the other required documents signifying your agreement to purchase the Purchased Common Shares.
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The undersigned hereby accepts the foregoing and agrees to be bound by the terms set forth herein and, without limitation, agrees that you may rely upon the covenants, representations and warranties of the undersigned contained herein.
DATED as of this 9th day of February, 2009.
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| (signed) “Xxxxxx X. XxXxxx” |
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The above-mentioned subscription is hereby accepted by Minera Andes Inc.
DATED as of this 9th day of February, 2009.
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| MINERA ANDES INC. |
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| By: | (signed) “Xxxxx X. Xxxxxx” |
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| Authorized Signing Officer |
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SCHEDULE A
Capital Structure of the Corporation
1.
Common Shares
Authorized:
Unlimited
Issued:
190,158,851
2.
Preferred Shares
Authorized:
Unlimited
Issued:
None
3.
Rights to Acquire Securities
(a)
Options:
Directors, officers, employees and consultants of the Corporation collectively hold options to acquire up to 9,620,000 Common Shares.
(b)
Warrants:
Outstanding warrants to acquire up to 21,039,665 Common Shares.
SCHEDULE B
Use of Proceeds
| $ (in millions)* |
|
San Xxxx / MSC Cash Call | US$11.3 | 35% |
Macquarie Facility Repayment | US$17.5 | 54% |
General corporate purposes | C$4.3 | 11% |
Gross proceeds | C$40.0 | 100% |
(*)
United States dollar amounts based on estimated exchange rate of $C1.00 = US$0.8072
SCHEDULE C
Agreements in Default
The Corporation is not in compliance with the following agreements and instruments:
(a)
the loan agreement (the “Macquarie Loan Agreement”) between the Corporation and Macquarie Bank Limited (“Macquarie”) whereby the Corporation is not in compliance with the cash position covenant under the Macquarie Loan Agreement. The Corporation advises that Macquarie is aware of the Corporation’s cash position and that the Corporation has not been notified by Macquarie of any default under the Macquarie Loan Agreement.
