Exhibit 4.01
Form of Common Share Subscription Agreement - CENCAN
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THIS AGREEMENT made on December 19, 2002
BETWEEN:
ARCHANGEL DIAMOND CORPORATION
a corporation continued under the laws of the Yukon Territory,
Canada
(the "Company")
AND:
CENCAN S.A.,
a Luxembourg company
(the "Purchaser")
WHEREAS:
A. The Purchaser wishes to subscribe for common shares in the capital stock of
the Company (collectively, the "Shares");
B. It is the intention of the parties to this Agreement that this subscription
will be made pursuant to appropriate exemptions (the "Exemptions") from the
registration and prospectus or equivalent requirements of all rules, policies,
notices, orders and legislation of any kind whatsoever (collectively, the
"Securities Laws") of all jurisdictions applicable to this subscription;
NOW THEREFORE THIS AGREEMENT WITNESSES that in consideration of the mutual
covenants and agreements herein contained, the receipt of which is hereby
acknowledged, the parties covenant and agree with each other (the "Agreement")
as follows:
1. Purchase and Sale of Shares
Subject to the terms and conditions of this Agreement, the Purchaser will
subscribe for and purchase from the Company and the Company will issue and sell
to the Purchaser 28,000,000 Shares at a price of Cdn$0.10 per Share representing
a total purchase price of Cdn$2,800,000 (the "Purchase Price"). The Purchaser
acknowledges that the Shares will be issued in connection with the offer and
sale (the "Offering") of a total of up to 30,000,000 Shares, for aggregate gross
proceeds of up to Cdn$3,000,000, all of which are to be sold by the Company by
way of private placement pursuant to the Exemptions.
2. Closing
The closing of this transaction (the "Closing") shall take place on
December 19, 2002 (the "Closing Date") at the offices of Fasken Xxxxxxxxx
XxXxxxxx LLP, 00 Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxx, Xxxxxxx, at 9:00 a.m. local
time (or such other date, location or time as may be agreed to by the parties).
3. Representations and Warranties of the Purchaser
The Purchaser represents and warrants to the Company, and acknowledges that
the Company is relying on these representations and warranties in entering into
this Agreement, that:
(a) The Purchaser has net assets of at least Cdn$5,000,000 as shown on its
most recently prepared financial statements;
(b) the Shares are not being subscribed for by the Purchaser as a result
of any material information about the Company's affairs that has not
been publicly disclosed;
(c) the offer and sale of the Shares was not accompanied by an
advertisement and the Purchaser was not induced to purchase the Shares
as a result of any advertisement made by the Company;
(d) the Purchaser has not received an offering memorandum (as such term is
defined under applicable Securities Laws) or similar document in
connection with the purchase of the Shares;
(e) the Purchaser is a valid and subsisting corporation under the laws of
Luxembourg, has the necessary corporate capacity and authority to
execute and deliver this Agreement and to observe and perform its
covenants and obligations hereunder and has taken all necessary
corporate action in respect thereof and, upon the Company executing
and delivering this Agreement, this Agreement will constitute a legal,
valid and binding contract of the Purchaser enforceable against the
Purchaser in accordance with its terms except as such enforceability
may be limited by (i) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and (ii) general principles
of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law);
(f) neither the agreement resulting from such acceptance nor the
completion of the transactions contemplated hereby conflicts with, or
will conflict with, or results, or will result, in a breach or
obligation of any law applicable to the Purchaser, any constating
document of the Purchaser or any agreement to which the Purchaser is a
party or by which the Purchaser is bound;
(g) the Purchaser is a resident of Luxembourg (the "Purchaser
Jurisdiction") and the Purchaser is knowledgeable of, or has been
independently advised as to, the applicable securities laws of the
Purchaser Jurisdiction which would apply to this subscription, if
there are any; and:
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(i) the Purchaser is purchasing the Shares pursuant to exemptions
from the prospectus and registration requirements under the
applicable securities laws of that Purchaser Jurisdiction or, if
such is not applicable, the Purchaser is permitted to purchase
the Shares under the applicable securities laws of the Purchaser
Jurisdiction without the need to rely on such exemptions;
(ii) the applicable securities laws, if any, of the Purchaser
Jurisdiction do not require the Company to make any filings or
seek any approvals of any kind whatsoever from any regulatory
authority of any kind whatsoever in the Purchaser Jurisdiction;
and
(iii)the purchase of the Shares by the Purchaser does not trigger
under the laws of the Purchaser Jurisdiction any obligation to
prepare and file a prospectus or similar document, or any other
report with respect to such purchase;
(h) the Purchaser:
(i) is not a "U.S. Person" as defined in Regulation S under the
United States Securities Act of 1933, as amended;
(ii) was not offered the Shares in the United States; and
(iii) did not execute or deliver this Agreement in the United States;
(i) the Purchaser has been independently advised as to the restrictions on
the Purchaser's ability to resell the Shares and, in particular, that
such Shares are subject to a hold period in the relevant jurisdictions
and that the certificates representing the Shares shall bear legends
denoting such re-sale restrictions; and
(j) the Purchaser shall complete, sign and deliver all documentation
required by Securities Laws and the policies of the TSX Venture
Exchange (the "TSXV") in connection with this Agreement, executed as
and when required. The Purchaser is aware that the Company is required
by law to disclose to certain securities regulatory authorities the
identity of each beneficial purchaser of the Shares and
notwithstanding that the Purchaser may be purchasing the Shares as
agent for an undisclosed principal, it shall provide, on request,
particulars as to the identity of such undisclosed principal as may be
required by the Company (in order to comply with the foregoing).
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4. Representations and Warrants of the Company
The Company represents and warrants to the Purchaser, and acknowledges that
the Purchaser is relying on these representations and warranties in entering
into this Agreement, that:
(a) the Company is a valid and subsisting corporation duly continued and
in good standing under the laws of the Yukon Territory;
(b) the Company is a reporting issuer in British Columbia, Alberta,
Manitoba, Ontario and the Yukon Territory, and the Company is not in
default of any of the requirements of the applicable Securities Laws
of those jurisdictions which would reasonably be expected to affect
trading in the Shares;
(c) the authorised and issued capital of the Company consists of an
unlimited number of Shares of which 42,234,558 are issued and
outstanding on the date hereof, all of which are fully paid and
non-assessable;
(d) the common shares of the Company are listed for trading on the TSXV as
a Tier 1 issuer, the Company has received notice from the TSXV that it
currently does not meet Tier 1 status and that evidence of Tier 2
issuer status may be required by March 2003, however any redesignation
has been suspended pending completion of the transactions contemplated
herein, and the Company is not in default of any of the listing
requirements of the TSXV in any material way;
(e) the Company is a "Qualifying Issuer" as defined in Multilateral
Instrument 45-102 - Resale of Securities;
(f) the Company has all requisite corporate power and capacity to issue
the Shares and upon their issuance, the Shares will be validly issued
and outstanding fully paid and non-assessable common shares of the
Company registered as directed by the Purchaser, free and clear of all
trade restrictions (except as may be imposed by operation of the
applicable Securities Laws) and, except as may be created by the
Purchaser, liens, charges or encumbrances of any kind whatsoever;
(g) the forms of certificates representing the Shares have been duly
approved by the directors of the Company and, to the extent
applicable, comply with the provisions of applicable corporate
statutes, the Securities Laws and the rules and policies of the TSVX;
(h) the Company holds all licences and permits that are required for
carrying on its business in the manner in which such business has been
carried on and the Company has the corporate power and capacity to own
the assets owned by it and to carry on the business carried on by it
and it is duly qualified to carry on business in all jurisdictions in
which it carries on business;
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(i) the Company owns 40% of the common shares in the capital stock of
Almazny Xxxx, a Russian Joint Stock Company, and 100% of the shares in
the capital stock of Archangel Overseas Holdings Limited;
(j) the Company has no subsidiaries or affiliates located in or carrying
on business in the United States of America except for the Company's
wholly-owned subsidiary International Natural Resources Management
Company ("USSubCo"), which is incorporated under the laws of Colorado,
and situate at Xxxxx 000-00000 Xxxx Xxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx
00000, XXX;
(k) the only office and premises situated in the United States of America
and used by the Company or its officers or employees are those leased
by USSubCo and situate at Xxxxx 000-00000 Xxxx Xxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000, XXX (the "Colorado Office") and all persons
working in the Colorado Office except for Xxxxxxx X. Xxxxxx and Xxxxxx
X. Xxxxx are employed by USSubCo;
(l) all prospectuses, exchange offering prospectuses, offering
memorandums, filing statements, information circulars, proxy
statements, Annual Information Forms, material change reports,
shareholder communications, press releases and other disclosure
documents of the Company including, but not limited to, financial
statements (the "Public Record"), contain no untrue statement of a
material fact as at the date thereof nor do they omit to state a
material fact which, at the date thereof, was required to have been
stated or was necessary to prevent a statement that was made from
being false or misleading in the circumstances in which it was made;
(m) as of the date hereof, there have been no material changes in the
affairs of the Company that have not been publicly disclosed;
(n) the financial statements of the Company as disclosed in the Public
Record accurately and completely state the financial position and
condition of the Company as of the date provided therein and were
prepared in accordance with Canadian generally accepted accounting
principles ("GAAP") save and except for such financial statements
filed with the Securities and Exchange Commission (the "SEC") in the
United States, which are reconciled to U.S. GAAP;
(o) the Company has filed all federal, provincial, state and foreign tax
returns which are required to be filed by it through the date hereof,
or has received valid extensions thereof and has paid all taxes shown
on such returns and all assessments and reassessments received by it
to the extent that the same are material and have become due;
(p) Schedule "A" to this Agreement provides an accurate and complete
summary of (i) all outstanding litigation to which the Company is a
party (the "Litigation") (ii) the estimated legal fees and
disbursements owing by the Company and an estimate of the expected
fees to be incurred in connection with the Litigation and (iii) the
estimated liability, contingent or otherwise that may be incurred by
the Company in connection with the Litigation;
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(q) except as disclosed in Schedule "A" hereto there are no actions,
suits, judgements, investigations or proceedings of any kind
whatsoever outstanding, pending or threatened against or affecting the
Company, at law or in equity or before or by any Federal, Provincial,
State, Municipal or other governmental department, commission, board,
bureau or agency of any kind whatsoever in any jurisdiction and, to
the best of the Company's knowledge, there is no basis therefor;
(r) the Company has good and sufficient right and authority to enter into
this Agreement and complete the transactions contemplated hereunder on
the terms and conditions set forth herein and this Agreement will be
duly authorised, executed and delivered by the Company (including but
not limited to the review and approval of the Company's board of
directors) and will be a legal, valid and binding obligation of the
Company enforceable against the Company on its terms except as such
enforceability may be limited by (i) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and (ii) general
principles of equity (regardless of whether such enforceability is
considered in proceeding in equity or at law);
(s) the unaudited financial statements of USSubCo for the period ended
December 31, 2002 and attached hereto as Schedule "B" accurately and
completely state the financial position and condition of USSubCo as of
the date thereof and was prepared in accordance with U.S. GAAP; and
(t) the execution and delivery of this Agreement, the performance of its
obligations under this Agreement and the completion of the
transactions contemplated under this Agreement will not conflict with,
or result in the breach of or the acceleration of any indebtedness
under, or constitute default under, the constating documents of the
Company or any indenture, mortgage, agreement, lease, licence or other
instrument of any kind whatsoever to which the Company is a party or
by which it is bound, or any judgement or order of any kind whatsoever
of any Court or administrative body of any kind whatsoever by which it
is bound.
5. Covenants of the Company
The Company hereby covenants to and with the Purchaser that:
(a) the Shares to be issued will be duly and validly created and issued;
(b) the Company will use its reasonable commercial efforts to obtain all
necessary approvals of the TSXV for the issuance of the Shares
pursuant to this Agreement subject only to the filing of required
documents which cannot reasonably be filed until after the Closing
Date;
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(c) the Company will continue to be a Qualifying Issuer as of the Closing
Date;
(d) the Company will duly, punctually and faithfully perform all of the
obligations to be performed by it under this Agreement;
(e) as soon as is reasonably practicable, and in any event on or before
the Closing Date, the Company shall take all such steps, if any, as
may reasonably be necessary to enable the Shares to be offered for
sale and sold on a private placement basis, as the case may be, by way
of the Exemptions;
(f) the Company will use its reasonable commercial efforts to ensure the
Shares will be listed for trading on the TSXV;
(g) during the period commencing with the date hereof and ending on the
day after the Closing Date, the Company will promptly inform the
Purchaser and the Purchaser's counsel in writing of:
(i) any request of the securities regulatory bodies in the
jurisdiction in which the Company is a reporting issuer (the
"Securities Commissions") for any amendment to the Public Record;
(ii) the issuance by the Securities Commissions or any other
securities commission or similar regulatory authority of any
other jurisdiction, the TSXV or by any other competent authority
of any order to cease or suspend trading of any securities of the
Company or of the institution or threat of institution of any
proceedings for that purpose; or
(iii)the receipt by the Company of any communication from the
Securities Commissions or any other securities commission or
similar regulatory authority of any other jurisdiction, the TSXV
or any other competent authority relating to the Public Record or
the distribution of the Shares;
(h) the Company will promptly comply, to the reasonable satisfaction of
the Purchaser and the Purchaser's counsel, with the Securities Laws
with respect to any change or occurrence of the nature referred to in
paragraph 5(g) above;
(i) the Company will use its reasonable commercial efforts to maintain its
status as a reporting issuer in British Columbia, Alberta, Manitoba,
Ontario and the Yukon Territory not in default of any requirement
under the Securities Laws which would reasonably be expected to affect
trading in the Company's securities;
(j) the Company will use its reasonable commercial efforts to maintain its
listed status on the TSXV;
(k) the Company will issue, as required by the Securities Laws, press
releases regarding the issuance of the Shares;
(l) the Company agrees to make available to the Purchaser, the Purchaser's
counsel and the Purchaser's other professional advisors all books and
records of the Company necessary, in the Purchaser's opinion, for the
Purchaser to complete a due diligence review of the Company and its
business and affairs, financial or otherwise, in accordance with
industry practice in the context of a private placement of securities,
and, in furtherance thereof, the Purchaser, the Purchaser's counsel
and the Purchaser's other professional advisors shall have the right,
acting reasonably and upon written request, to meet with the senior
management and the auditors of the Company;
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(m) the Company shall continue to operate its business and affairs in the
normal course and shall not, without the Purchaser's consent, as of
the date hereof and until the Closing Date, reserve, allot, create or
issue any Shares or other securities convertible into Shares, or
rights to purchase the foregoing, except in connection with the
Offering, or for Shares issued and options issued under the Company's
Stock Option Plans;
(n) the Company shall take all necessary steps to sell all of the shares
in the capital stock of USSubCo to Xxxxxxx X. Xxxxxx and Xxxxxx X.
Xxxxx for the consideration of US$10 (the "USSubCo Sale"); and
(o) at the time of the USSubCo Sale, the Company shall obtain a release by
USSubCo of all claims it may have at present or in the future against
the Company in a form satisfactory to the Purchaser acting reasonably
for consideration paid by the Company of US$60,000.
6. Conditions to Closing in Favour of the Purchaser
The obligations of the Purchaser to complete and close the share purchase
contemplated by this Agreement shall be subject to the satisfaction of each of
the following conditions on or before the Closing Date:
(a) the Company shall provide to the Purchaser a legal opinion of the
Company's counsel addressed to the Purchaser and the Purchaser's
counsel in form and substance satisfactory to the Purchaser and the
Purchaser's counsel, with respect to such matters as the Purchaser and
the Purchaser's counsel may reasonably request relating to this
transaction including, without limitation, that:
(i) the Company has been duly continued and is validly subsisting and
in good standing under the laws of its jurisdiction of
incorporation, and has all requisite corporate power and capacity
to carry on its business as now conducted and as presently
proposed to be conducted by it and to own its assets;
(ii) the Company is duly registered or licensed to carry on business
in the jurisdictions in Canada in which it owns assets or carries
on business;
(iii)the Company has full corporate power and capacity to enter into
this Agreement and to issue the Shares, and to perform its
obligations set out herein;
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(iv) all necessary corporate action has been taken by the Company to
authorise the execution and delivery of this Agreement and all
other documents created in connection with the Offering (as
applicable) and to authorise the issuance and delivery of the
Shares;
(v) this Agreement has been duly executed and delivered by the
Company and constitutes a legal, valid and binding obligation of
the Company enforceable against the Company in accordance with
its terms except as such enforceability may be limited by (i)
applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditor' rights
generally and (ii) general principles of equity (regardless of
whether such enforceability is considered in proceeding in equity
or at law);
(vi) the execution and delivery of this Agreement by the Company do
not and will not result in a breach of, or constitute a default
under, and do not and will not create a state of facts which,
after notice or lapse of time or both, will result in a breach of
or constitute a default under, any applicable laws or of any term
or provision of the constating documents of the Company or
resolutions of the directors or of the shareholders of the
Company;
(vii)the board of directors of the Company (including no less than
2/3 of the independent directors) has duly and properly approved
a resolution determining that:
(A) the Company is insolvent or in serious financial difficulty;
(B) the Offering is designed to improve the financial position
of the Company; and
(C) the terms of the Offering are reasonable in the
circumstances of the Company;
(viii) the Shares to be issued under this Agreement have been duly and
validly authorised, issued, executed and delivered by the
Company;
(ix) the form and terms of the definitive certificates representing
the Shares have been approved by the directors of the Company;
(x) the offering, sale, issue and delivery of the Shares by the
Company to the Purchaser under this Agreement is exempt from the
prospectus and registration requirements under the applicable
Securities Laws of Ontario, British Columbia or Yukon Territory
and, except for those that have already been obtained, no filing,
proceeding, approval, consent or authorisation is required to be
made, taken or obtained by the Company to permit the offering,
sale, issue and delivery of the Shares under this Agreement in
those jurisdictions other than the execution and filing by or on
behalf of the Company with the applicable Securities Commissions
within prescribed time periods of (i) a report of exempt
distribution as may be prescribed by such Securities Laws,
together with the appropriate fees; and (ii) a report on Form
45-102F2 prepared and executed in accordance with Multilateral
Instrument 45-102; and
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(xi) as to the issued capital of the Company, the distribution of the
Shares (pursuant to applicable prospectus exemptions), and as to
all other legal matters, including compliance with the Securities
Laws, in any way connected with the creation, issuance, sale and
delivery of the Shares and the transactions contemplated hereby,
as the Purchaser's counsel may reasonably request.
It is understood that the Company's counsel may rely on certificates
of officers of the Company, the auditors of the Company, opinions of
other counsel to the Company, and public officials but only as to
relevant matters of fact and opinion on Securities Laws of
jurisdictions other than the Yukon Territory, including as to the
agreements and instruments to which the Company is party or by which
it is bound. It is further understood that the Company's counsel may
rely on a certificate of the Company's transfer agent as to the issued
share capital of the Company;
(b) the Company shall represent and warrant to the Purchaser that:
(i) the Company shall have complied with and satisfied all terms and
conditions of this agreement on its part to be complied with or
satisfied at or prior to the Closing Date;
(ii) the representations and warranties of the Company set forth in
this agreement including those relating to the Litigation
referred to in Schedule "A" shall be true and correct at the
Closing Date, as if made at such time; and
(iii)the Company shall have filed all documents that it is required
to file under the continuous disclosure provisions of the
Securities Laws, including annual and interim financial
information and annual reports, press releases disclosing
material changes and material change reports;
and the Company shall provide to the Purchaser a certificate dated the
Closing Date, addressed to the Purchaser and signed on the Company's
behalf by the Chief Executive Officer, the Chief Financial Officer or
by such other officers or directors as the Purchaser may accept,
certifying its compliance with this condition;
(c) the Company shall provide evidence satisfactory to the Purchaser
acting reasonably that the Company is a "reporting issuer" in British
Columbia, Alberta, Manitoba, Ontario and the Yukon Territory and is
not in default of any requirement under the Securities Laws of those
jurisdictions with respect to its obligations as a reporting issuer;
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(d) the Company shall provide to the Purchaser evidence satisfactory to
the Purchaser acting reasonably, that the Company has obtained all
necessary approvals for the Offering from applicable Securities
Commissions or the TSXV, subject only to the filing of required
documents which cannot reasonably be filed prior to the Closing Date
and that the Shares have been accepted and listed for trading on the
TSXV;
(e) the Company shall provide definitive certificates representing, in the
aggregate, all of the Shares subscribed for under this Agreement
registered in such name or names as the Purchaser shall direct the
Company in writing prior to the Closing Date;
(f) the delivery to the Purchaser by each of Xxxxxxx X. Xxxxxx and Xxxxxx
X. Xxxxx of his resignation as a director and officer of the Company
and by Xxxxxxx Wake-Xxxxxx of his resignation as a director of the
Company;
(g) the delivery to the Purchaser by each of Xxxxxxx X. Xxxxxx and Xxxxxx
X. Xxxxx of the termination of his employment agreement with the
Company and a release of all claims against the Company under such
employment agreements or otherwise in form satisfactory to the
Purchaser acting reasonably;
(h) the USSubCo Sale shall have been completed;
(i) the Company shall provide evidence reasonably satisfactory to the
Purchaser that it has terminated its use of the Colorado Office;
(j) the Company shall obtain written assurance from Xxxxxxx X. Xxxxxx and
Xxxxxx X. Xxxxx in form satisfactory to the Purchaser acting
reasonably that USSubCo will cease the use of the name "Archangel
Diamond Corporation" in all ways or manners including but not limited
to, letterhead, business cards or signage and remove all reference to
Company anywhere in the Colorado Office forthwith at the time of the
USSubCo Sale; and
(k) the Company shall provide a true and complete copy certified by an
officer of the Company of an Order dated November 22, 2002 dismissing
a motion filed by the Company in Colorado State Court for the City and
County of Denver seeking the courts reconsideration of its October 15,
2002 Order dismissing the Company's action against LUKoil and
Ackhangelskgeoldobycha, as described in Schedule "A" hereto;
(l) the Company shall have terminated the engagement letter with Marks &
Sokolov LLC ("M&S") dated February 22, 2002 and entered into a new
agreement with M&S regarding the payment of legal costs for services
rendered by M&S to the Company, all in form and terms satisfactory to
the Purchaser;
(m) the purchase from Task Holdings Inc. ("Task") of 17,305,226 common
shares in the capital of the Company by the Purchaser which is to
close concurrently with the transactions contemplated in this
Agreement shall have been completed and closed; and
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(n) the Company shall have received at least conditional acceptance of
documentation with respect to the transactions contemplated by this
Agreement from the TSXV and the listing for trading of the Shares on
the TSXV.
These conditions are for the sole benefit of the Purchaser and the
Purchaser may, in its discretion, waive in whole or in part any conditions
hereof or extend the time for compliance therewith, without prejudice to any of
its rights in respect of any other condition hereof.
7. Acknowledgements and Covenants of the Purchaser
The Purchaser hereby acknowledges and covenants to and with the Company
that:
(a) as the sale of the Shares to the Purchaser is being completed pursuant
to exemptions from the requirements to provide the Purchaser with a
prospectus and to sell the securities subscribed for herein through a
person registered to sell securities under applicable securities
legislation:
(i) there is no government or other insurance covering the Shares
subscribed;
(ii) certain protections, rights and remedies provided by applicable
securities legislation, including statutory rights of rescission
or damages, shall not be available to the Purchaser and the
Purchaser may not receive information that the Purchaser would be
entitled to under applicable securities legislation if no
prospectus exemption was available;
(iii)the Company is relieved of certain obligations which would
otherwise apply under applicable securities legislation; and
(iv) no securities commission or similar regulatory authority has
reviewed or passed on the merits of the Shares subscribed for
herein;
(b) the distribution and trade of the Shares is being completed pursuant
to exemptions from the prospectus and registrations requirements.
Accordingly the Shares are characterized as "restricted securities"
under Securities Laws and under such laws such Shares may be resold
without a person registered to sell securities or a prospectus only in
certain limited circumstances. It is the responsibility of the
Purchaser to find out what the restrictions on the re-sale are and to
comply with them before selling any Shares and the Purchaser
acknowledges that the certificates representing the Shares offered
hereunder shall bear legends denoting such re-sale restrictions. The
Shares have not been and shall not be registered under the United
States Securities Act of 1933, as amended or under the state
securities "blue sky" laws of any state in the United States;
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(c) the subscription by the Purchaser is subject to the acceptance of the
TSXV and the Purchaser agrees to provide the Company with such
documents and information as may be required by TSXV policy or
reasonably requested by the TSXV and agrees that the failure to do so,
whether such failure results in delays or in the refusal of the TSXV
to accept this subscription, shall not constitute a default of the
Company under this Agreement; and
(d) upon receipt of the Shares from the Company under this Agreement, the
Shares will be kept in a location outside of Canada and the United
States.
8. Conditions of Closing in Favour of the Company
The obligations of the Company to complete and close the share purchase
contemplated by this agreement shall be subject to the satisfaction of each of
the following conditions on or before the Closing Date:
(a) the Purchaser shall have delivered to the Company payment of the
Purchase Price in accordance with this Agreement;
(b) the Company shall have received at least conditional acceptance of
documentation with respect to the transactions contemplated by this
Agreement from the TSXV and the listing for trading of the Shares on
the TSXV; and
(c) all representations and warranties of the Purchaser contained in this
Agreement shall be true and correct as at the time of closing on the
Closing Date.
These conditions are for the sole benefit of the Company and the Company
may, at its discretion waive in whole or in part any condition hereof, or extend
the time for compliance therewith, without prejudice to any of its rights in
respect of any other condition hereof.
9. Survival
Each of the parties agree that all representations and warranties made by
such party herein or contained in any certificate or documents submitted
pursuant to or in connection with the transactions contemplated herein shall
survive the Closing Date for a period of three (3) years except for the
representations and warranties of the Company made under 4(m) above, which shall
survive for a period of six (6) years after the Closing Date, and except for any
representations or warranties in respect of which a claim has been made against
such party within such three (3) year or six (6) year period, as the case may
be.
10. Indemnity
Each party shall indemnify and save the other and its directors, officers,
employees and agents harmless against and from all liabilities, claims, demands,
losses (other than a loss of profits in connection with the distribution of
Shares), costs, damages and expenses to which such first party or any of its
directors, officers, employees or agents may be subject, may suffer or incur,
whether under the provision of any statute or otherwise, in any way caused by or
arising directly or indirectly from or in consequence of any misrepresentation
or breach of warrant, covenant or term of condition of the other party in this
Agreement.
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11. Payment of Purchase Price
On satisfaction or waiver of the Conditions provided for in Section 6 or
Section 7 of this Agreement, the Purchaser shall deliver the Purchase Price to
the Company on the Closing Date against the delivery of the certificate(s)
representing the Shares. The Purchase Price shall be payable in cash, certified
cheque or bank draft.
12. Notices
Any notice or other communication required or permitted hereunder shall, in
the case of notice to the Purchaser, be addressed to:
Cencan S.A.
0 Xxx Xxxxxx Xxxxx
X-0000 Xxxxxxxxxx
Fax No: (x000) 000-000-000
Attention: Mr. A.R. Attwood
and to:
Fasken Xxxxxxxxx XxXxxxxx LLP
00 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxx 0000, Xxxxxxx Xxxxxxxx Xxxx Xxxxx
Xxx 00, Xxxxxxx Xxxxxxxx Xxxxxx
Fax No: 000 000-0000
Attention: Xxxxxx X. Xxxxxxxx or Xxxxxxxxxxx X. Bent
and in the case of notice to the Company shall be addressed to:
Archangel Diamond Corporation
c/o 000 Xxxxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxxx
X0X 0X0
Fax: (000) 000-0000
Attention: President and CEO
and to:
Xxxx Prince Xxxxx
Suite 1810, 0000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx Xxxxxxxx
X0X 0X0
Fax No: (000) 000-0000
Attention: D. Xxxx Xxxxxxx
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Any such notice or other communication shall be given in writing and may be
given by telefax or delivery, and shall be deemed to have been given on the next
business day after being telefaxed or upon receipt by a responsible officer of
the addressee if delivered.
13. Entire Agreement
This Agreement relating to its subject matter supersedes all prior
agreements with respect thereto and may not be changed orally, but only by an
agreement in writing signed by the Purchaser and the Company.
14. News Releases
Neither party hereto shall, without the prior consent of the other, make
any disclosure regarding the existence, purpose, scope, content, terms or
conditions of this Agreement or other agreements relating thereto save to the
extent such disclosure comprises information substantially already publicly
available or unless it is necessary for that party to make such disclosure in
order to comply with Securities Laws or applicable TSXV policy or the
requirements of a competent government or statutory agency; provided that, where
practicable, a copy of any proposed announcement or statement shall be furnished
to the other parties hereto in advance of the proposed date of publication.
Nothing herein shall prevent disclosure of the terms of this Agreement to a
corporate party's directors, officers, employees or agents or its financial,
legal, accounting or other advisors.
15. General
15.1 For the purposes of this Agreement, time is of the essence.
15.2 The parties hereto shall execute and deliver all such further documents and
instruments and do all such acts and things, either before or after the
execution of this Agreement, as may be reasonably required to carry out the full
intent and meaning of this Agreement.
15.3 Except as otherwise expressly provided herein, the parties hereto each
agree to pay the fees and out-of-pocket expenses of its own solicitors and other
professional advisors and consultants in connection with the transactions
contemplated in this Agreement.
15.4 Except as otherwise expressly provided herein, all dollar amounts stated
herein are in lawful money of Canada.
15.5 Unless the context otherwise requires, words importing the singular include
the plural and vice versa and words importing gender include all genders.
15.6 This Agreement shall be subject to, governed by and construed in accordance
with the laws of the Province of Ontario and the federal laws of Canada
applicable therein.
15.7 This Agreement shall be binding upon and shall enure to the benefit of the
parties hereto and their respective successors and assigns, provided that the
party hereto may assign any rights hereunder without the prior written consent
of the other parties hereto.
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15.8 This Agreement may be executed by the parties in as many counterparts as
may be deemed necessary, each of which when so executed shall be deemed to be an
original and all such counterparts together shall constitute one and the same
instrument and receipt of a facsimile version of an executed signature page of
this Agreement by a party shall constitute satisfactory evidence of execution of
this Agreement by such party.
IN WITNESS WHEREOF the parties have executed this Agreement effective as of
the date first above written.
CENCAN S.A.
By:
-------------------------------------
Name:
Title:
ARCHANGEL DIAMOND CORPORATION
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
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