Exhibit 2.1
SUBSCRIPTION AGREEMENT FOR COMMON SHARES
TO: Acadian Mining Corporation (the "Corporation")
The undersigned (the "Subscriber") hereby irrevocably subscribes for and agrees
to purchase the number of common shares (the "Shares") of the Corporation for
the aggregate subscription price set forth below, representing a subscription
price of $0.026 per Share, upon and subject to the terms and conditions set
forth in "Terms and Conditions of Subscription for Common Shares of Acadian
Mining Corporation" attached hereto (the "Terms and Conditions"), including
without limitation, the representations, warranties and covenants of the
Subscriber set forth in the Terms and Conditions.
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Number of Shares @ $0.0262389 per Share:
Golden River Resources Corporation
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(Name of Subscriber - please print) 38,111,334
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By: /s/ J.I. Gutnick
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Authorized Signature Aggregate Subscription Price:
PRESIDENT & CEO
- ------------------------------------------------------- -------------------------------------------------------
(Official Capacity or Title - please print) $1,000,000.00
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JOSEPH I GUTNICK
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(Please print name of individual whose signature
appears above if different than the name of the
subscriber printed above.)
LEVEL 8
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(Subscriber's Address, including postal code)
580 ST KILDA ROAD
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MELBOURNE VICTORIA 3004
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AUSTRALIA
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(Telephone Number)
+613 8532 2860
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(E-mail Address)
josephg@axis.com.au
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- ------------------------------------------------------- -------------------------------------------------------
Register the Shares as set forth below: Deliver the Shares as set forth below:
GOLDEN RIVER RESOURCES CORPORATION GOLDEN RIVER RESOURCES CORPORATION
- ------------------------------------------------------- -------------------------------------------------------
(Name) (Name)
- ------------------------------------------------------- -------------------------------------------------------
(Account Reference, if applicable) (Account Reference, if applicable)
PO BOX 6315 JOSEPH GUTNICK
- ------------------------------------------------------- -------------------------------------------------------
(Address, including postal code) (Contact Name)
ST KILDA ROAD CENTRAL +613 8532 2860
- ------------------------------------------------------- -------------------------------------------------------
(Telephone Number)
MELBOURNE VICTORIA 8008
- -------------------------------------------------------
PO BOX 6315, ST KILDA ROAD CENTRAL
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AUSTRALIA (Address, including postal code)
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MELBOURNE VICTORIA 8008
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AUSTRALIA
- -------------------------------------------------------
- ------------------------------------------------------- -------------------------------------------------------
ACCEPTANCE: The Corporation hereby accepts the subscription as set forth above
on the Terms and Conditions and confirms that the representations and warranties
made by the Corporation in the Terms and Conditions are true and correct in all
material respects as of the Closing Date (as defined in Section 7 of the Terms
and Conditions) and that the Subscriber is entitled to rely thereon.
ACADIAN MINING CORPORATION
Per: /s/ G.W. Felderhof
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Name: G.W. Felderhof
Title: President & CEO
Date: March 31, 2009
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TERMS AND CONDITIONS OF SUBSCRIPTION FOR
COMMON SHARES OF ACADIAN MINING CORPORATION
Subscription for Shares
1. The Subscriber hereby confirms its irrevocable subscription for and offers
to purchase the Shares of the Corporation set out on page 1 hereof at a
price of $0.0262389 per Share (the "Subscription Price"), all on the terms
and subject to the conditions set forth in these Terms and Conditions
forming part of the Subscription Agreement.
Conditions to Closing and Completion of Transactions in Tranches
2. The Subscriber acknowledges and agrees that the completion of the
transactions contemplated hereby and the issue of the Shares to the
Subscriber is subject to and conditional on the Toronto Stock Exchange (the
"TSX") granting approval for the issuance of the Shares and the listing of
and posting for trading of such Shares. Without limiting the generality of
the foregoing, the Subscriber acknowledges that the TSX may permit the
Corporation to initially issue to the Subscriber only that portion of the
Shares representing 9.9% of the issued and outstanding capital of the
Corporation (after giving effect to such issuance) and that the remaining
balance of the Shares may, if required by the TSX, be issued only upon a
person or persons associated with the Subscriber having filed with the TSX
personal information form(s) satisfactory to the TSX (in order to permit
the Corporation to issue to the Subscriber the balance of the Shares
representing in aggregate 19.9% of the issued and outstanding capital of
the Corporation, after giving effect to such issuance). The Subscriber
agrees that the issue of the Shares (and corresponding release of the
aggregate Subscription Price from escrow) may therefore be required to be
structured in tranches in order to comply with the terms of such TSX
approvals and policies. The parties agree that from and after the Closing
Time the Corporation will issue from time to time that portion of the
Shares that may be validly issued in compliance with such TSX approvals and
policies (against the release from escrow of a corresponding portion of the
aggregate Subscription Price) and that if the Corporation cannot with
respect to any portion of the Shares fulfill such approvals and comply with
such policies on commercially reasonable terms, that portion of the
aggregate Subscription Price so affected will be returned to the Subscriber
without interest or deduction and the Corporation shall have no further
obligation to issue the affected Shares to the Subscriber.
Representations, Warranties and Covenants by Subscriber
3. By executing this Subscription Agreement, the Subscriber (on its own behalf
and, if applicable, on behalf of the others for whom it is contracting
hereunder) represents and warrants to and covenants with the Corporation
(and acknowledges that the Corporation and its counsel are relying thereon)
that:
(a) No Prospectus. It understands and acknowledges that the Shares are
being issued pursuant to exemptions from the prospectus requirements
under applicable securities legislation on the basis of
representations made by the Subscriber hereunder and that no
prospectus has been filed by the Corporation with any securities
commission or similar regulatory authority in any jurisdiction, and as
a result:
(i) it is restricted from using certain of the protections, rights,
remedies otherwise available under applicable securities laws,
including statutory rights of rescission or damages;
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(ii) it may not receive information that might otherwise be required
to be provided to the Subscriber under the applicable securities
laws if the exemptions were not being used;
(iii) the Corporation is relieved from certain obligations that would
otherwise apply under the applicable securities laws if the
exemptions were not being used; and
(iv) the Subscriber hereby expressly waives any and all rights of
withdrawal or rescission to which the Subscriber might otherwise
be entitled under applicable securities legislation;
(b) No Offering Material. It has not received, nor has it requested, nor
does it have any need to receive, any prospectus, sales or advertising
literature, offering memorandum or any other document describing the
business and affairs of the Corporation which has been prepared for
delivery to, and review by, prospective purchasers in order to assist
them in making an investment decision in respect of the purchase of
the Shares and it has not become aware of any advertisement in printed
public media, radio, television or telecommunications, including
electronic display such as the internet with respect to the
distribution of the Shares;
(c) No Oral or Written Representations. It has relied solely upon publicly
available information relating to the Corporation and not upon any
oral or written representation as to fact or otherwise made by or on
behalf of the Corporation except as expressly set forth herein and
agrees that the Corporation assumes no responsibility or liability of
any nature whatsoever for the accuracy, adequacy or completeness of
any such information;
(d) Residence. It is resident in the jurisdiction set forth in the
"Subscriber's Address" on page 1 of this Subscription Agreement;
(e) Purchasing as Principal. It is purchasing the Shares as principal for
its own account, not for the benefit of any other person, for
investment only, and not with a view to the resale or distribution of
all or any of the Shares and, unless paragraph (f) or subparagraph
(h)(iv) applies, or unless the transaction contemplated by this
Agreement is exempted by an order of the securities commission or
similar regulatory authority of the province in which it resides:
(i) the Subscriber is an "accredited investor" (as that term is as
defined in National Instrument 45-106 - Prospectus and
Registration Exemptions), has not been created or used solely to
purchase or hold the Shares as an accredited investor, and has
completed and executed the Certification of Accredited Investor
attached hereto as Schedule B and hereby confirms the truth and
accuracy of all statements made therein by the Subscriber; or
(ii) the Shares have an acquisition cost to the Subscriber of not less
than $150,000 which will be paid in cash on Closing;
(f) Offshore Subscribers. If it is not a Canadian resident, nor resident
in or otherwise subject to the securities laws of the United States ,
the Subscriber, and any beneficial owner on whose behalf it is acting,
is subject to the securities legislation of a jurisdiction other than
Canada or the United States and:
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(i) the Subscriber is, and (if applicable) any beneficial purchaser
for whom it is acting is:
(A) a purchaser that is recognized as an exempt purchaser by the
securities regulatory authority in the jurisdiction in which
it is and (if applicable) any other such purchaser for whom
it is acting hereunder is resident or otherwise subject and
is purchasing the Shares as principal for its or (if
applicable) each other such purchaser's own account, and not
for the benefit of any other person, for investment only and
not with a view to resale or distribution; or
(B) a purchaser which is purchasing Shares pursuant to an
exemption from any prospectus or securities registration
requirements available to the Corporation, the Subscriber
and any other such purchaser under applicable securities
laws of their jurisdiction of residence or to which the
Subscriber and any other such purchaser are otherwise
subject, and the Subscriber and any other such purchaser
shall deliver to the Corporation such further particulars of
the exemption and their qualification thereunder as the
Corporation may reasonably request;
(ii) the purchase of Shares by the Subscriber, and (if applicable) any
other beneficial purchaser for whom it is acting hereunder, does
not contravene any of the applicable securities laws in such
jurisdiction and does not trigger: (i) any obligation to prepare
and file a prospectus, an offering memorandum or similar
document, or any other ongoing reporting requirements with
respect to such purchase or otherwise; or (ii) any registration
or other obligation on the part of the Corporation; and
(iii) the Subscriber, and (if applicable) any other beneficial
purchaser for whom it is acting hereunder, will not sell or
otherwise dispose of any of the Shares except in accordance with
applicable securities laws, and if the Subscriber or (if
applicable) such beneficial purchaser sells or otherwise disposes
of any the Shares to a person other than a resident of Canada,
the Subscriber and (if applicable) such beneficial purchaser will
obtain from such purchaser representations, warranties and
covenants in the same form as provided in this Subscription
Agreement and shall comply with such other requirements as the
Corporation may reasonably require;
(g) Shares Not Registered Under U.S. Securities Act. It is aware and
accepts that the Shares have not been and will not be registered under
the United States Securities Act of 1933, as amended (the "U.S.
Securities Act"), or the securities laws of any state of the United
States and, subject to certain exceptions, may not be offered or sold
in the United States or to, or for the benefit or account of, any
person in the United States or any U.S. Person. "U.S. Person" has the
meaning set forth in Rule 902 of Regulation S promulgated under the
U.S. Securities Act;
(h) U.S. Registration Exemption. The Subscriber represents and warrants
that the Subscriber either:
(i) is not, and is not purchasing the Shares for the account or
benefit of, a U.S. Person;
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(ii) was not offered the Shares in the United States; and
(iii) did not execute or deliver this Agreement in the United States;
OR
(iv) has completed and executed the Certification of U.S. Purchaser
attached hereto as Schedule C and hereby confirms the truth and
accuracy of all statements made therein by the Subscriber.
(i) Resale Restrictions. The Shares will be subject to statutory resale
restrictions under applicable Canadian securities law and the
Subscriber covenants that it will not resell the Shares except in
compliance with such laws and the Subscriber acknowledges that it is
solely responsible (and the Corporation is in no way responsible) for
such compliance. The Subscriber also acknowledges that the
certificates representing the Shares will bear a legend substantially
in the following form and with the necessary information inserted:
"UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY BEFORE [INSERT DATE THAT IS FOUR
(4) MONTHS AND ONE (1) DAY AFTER THE CLOSING DATE]"
In addition, Subscribers resident in or otherwise subject to the
securities laws of the United States acknowledge that the certificates
representing the Subscriber's Shares will be endorsed with the legend
contemplated by the Certification of U.S. Purchaser attached hereto as
Schedule C.
(j) Authorization and Effectiveness. It has the legal capacity and
competence to enter into and be bound by this Subscription Agreement
and further certifies that all necessary approvals of directors,
shareholders or otherwise have been given and obtained;
(k) No Violation. The entering into of this Subscription Agreement and the
transactions contemplated hereby will not result in a violation of any
of the terms and provisions of any law applicable to it, or any of its
constating documents, or of any agreement to which the Subscriber is a
party or by which it is bound;
(l) Investment Suitability. It has such knowledge in financial and
business affairs as to be capable of evaluating the merits and risks
of its investment or as a result of advice received from a registered
person other than the Corporation or any affiliates thereof or, where
it is not purchasing as principal, each beneficial purchaser, is able
to bear the economic risk of loss of its investment;
(m) Additional Financings. The Subscriber acknowledges that the
Corporation may complete additional financings in the future in order
to develop the business of the Corporation and to fund its ongoing
development; that there is no assurance that such financings will be
available and, if available, on reasonable terms; any such future
financings may have a dilutive effect on current securityholders,
including the Subscriber; that if such future financings are not
available, the Corporation may be unable to fund its ongoing
development and the lack of capital resources may result in the
failure of its business venture;
(n) Filings. If required by applicable securities legislation,
regulations, rules, instruments, policies or orders or by any
securities commission, or other regulatory authority, the Subscriber
will execute, deliver, file and otherwise assist the Corporation in
filing, such reports, undertakings and other documents with respect to
the issue of the Shares as may be required;
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(o) Insider or Control Person. The Subscriber is not, with respect to the
Corporation or any of its affiliates, an insider or control person (as
those terms are used in Canadian securities laws);
(p) No Illegal Activities Proceeds. None of the funds representing the
aggregate Subscription Price which will be advanced by or on behalf of
the Subscriber to the Corporation hereunder are, to the knowledge of
the Subscriber, proceeds obtained or derived, directly or indirectly,
as a result of illegal activities. The funds being used to purchase
the Shares which will be advanced by or on behalf of the Subscriber
hereunder will not represent proceeds of crime for the purposes of the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act
(Canada) ("PCMLTFA") and the Subscriber acknowledges that the
Corporation may in the future be required by law to disclose the
Subscriber's name and other information relating to this Subscription
Agreement and the Subscriber's subscription hereunder, on a
confidential basis, pursuant to the PCMLTFA. To the best of the
Subscriber's knowledge, none of the funds to be provided by the
Subscriber are being tendered on behalf of the person who has not been
identified to the Subscriber. The Subscriber covenants that it shall
promptly notify the Corporation if the Subscriber discovers that any
of such representations cease to be true and to provide the
Corporation with appropriate information in connection therewith; and
The Subscriber agrees (on its own behalf and, if applicable, on behalf of
each person on whose behalf the Subscriber is acting) that the above
representations, warranties and covenants will be true and correct both as
of the execution of this Subscription Agreement and as of the Closing Time
(as defined in Section 8 below) and will survive the completion of the
issuance of the Shares.
Representations and Warranties of the Corporation
4. The Corporation represents and warrants to the Subscriber, and acknowledges
that it is relying upon such representations and warranties in entering
into this Subscription Agreement or purchasing the Shares, as the case may
be, that:
(a) Incorporation and Organization. The Corporation is a valid and
subsisting corporation under the laws of its jurisdiction of
incorporation 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 properties and assets thereof;
(b) Extra-provincial Registration. The Corporation is licensed, registered
or qualified as an extra-provincial or foreign corporation in all
jurisdictions where the character of the property or assets thereof
owned or leased or the nature of the activities conducted by it make
licensing, registration or qualification necessary and is carrying on
the business thereof in compliance with all applicable laws, rules and
regulations of each such jurisdiction;
(c) Authorized Capital. The Corporation is authorized to issue, an
unlimited number of common shares and an unlimited number of
preference shares, of which, as of March 13, 2009, 153,495,907 common
shares were issued and outstanding as fully paid and non-assessable
shares, excluding any securities issued on Closing;
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(d) Issue of Shares. All necessary corporate action has been taken to
authorize the issue and sale of, and the delivery of certificates
representing, the Shares and, (subject to the provisions of Section 2
hereof) upon payment of the Subscription Price, the Shares will be
issued as fully paid and non-assessable common shares of the
Corporation;
(e) No Conflicts. None of the offering and sale of the Shares, the
execution and delivery of this Subscription Agreement, compliance by
the Corporation with the provisions of this Subscription Agreement or
the consummation of the transactions contemplated herein and therein
and the issue of the Shares to the Subscriber for the consideration
and upon the terms and conditions as set forth herein do or will: (i)
conflict with or result in any breach or violation of any of the
provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, lease or other agreement or instrument to which the
Corporation is a party or by which it or any of the properties or
assets thereof is bound; or (ii) conflict with or result in any breach
or violation of any provisions or, constitute a default under the
articles or by-laws of the Corporation or any resolution passed by the
directors (or any committee thereof) or shareholders of the
Corporation, or (subject to compliance with TSX policies) any statute
or any judgment, decree, order, rule, policy or regulation of any
court, governmental authority, any arbitrator, or securities
regulatory authority applicable to the Corporation or any of the
properties or assets thereof;
(f) Authority and Authorization. The Corporation has full corporate power
and authority to enter into this Subscription Agreement and to do all
acts and things and execute and deliver all documents as are required
hereunder to be done, observed, performed or executed and delivered by
it in accordance with the terms hereof and the Corporation has taken
all necessary corporate action to authorize the creation, execution,
delivery and performance of this Subscription Agreement, and to
observe and perform the provisions of this Subscription Agreement, in
accordance with the provisions hereof;
(g) Validity and Enforceability. This Subscription 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 its terms;
(h) Issuance of Common Shares. Save and except as disclosed in the
Company's public disclosure, common shares to be issued to the
Subscriber or its nominee pursuant to the agreement entered into
between the Subscriber and the Corporation dated March 16, 2009, and
common shares issued under the Corporation's incentive stock option
plan or pursuant to the exercise of share purchase warrants, the
Corporation has not issued, or agreed to issue, any shares or any
securities exchangeable or exercisable for, or convertible into,
common shares of the Corporation at an effective price per share which
is less than the Subscription Price during the 60 day period
immediately preceding the date hereof;
(i) Certain Securities Law Matters. The common shares of the Corporation
are listed only on the TSX and the Frankfurt Exchange, the Corporation
is a reporting issuer or the equivalent only in the Provinces of
British Columbia, Alberta, Manitoba, Ontario, New Brunswick, Nova
Scotia and Newfoundland and Labrador ("Reporting Provinces") and is
not in default of any requirement of the securities laws of any of
such provinces;
(j) 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, except for as at March 19, 2009, an
aggregate of 6,855,000 common shares were reserved for issue pursuant
to outstanding options, warrants, share incentive plans, convertible,
exercisable and exchangeable securities and other rights to acquire
common shares;
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(k) No Pre-emptive Rights. Other than as disclosed in the Corporation's
public record, the issue of the 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;
(l) Purchased Securities. Provided that the Subscriber's represent ations
and warranties herein are accurate, the execution of this Agreement
and the issue by the Corporation to the Subscriber of the Shares will
be exempt from the registration and prospectus requirements of
applicable securities laws;
(m) Capital of Subsidiaries. All of the outstanding shares of the
Corporation's subsidiaries are issued and outstanding as fully paid
and non-assessable shares and such shares are beneficially owned by
the Corporation and 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 any of
the subsidiaries or for the purchase or acquisition of any of the
outstanding shares or other securities of any of the subsidiaries. The
Corporation owns 100% of the outstanding shares of each of ScoZinc
Limited, 6927692 Canada Corp., Annapolis Properties Corp. and
Goldenville Mining Corporation and Annapolis Properties Corp. owns 50%
of the issued and outstanding shares of 6179053 Canada Inc.
(collectively, "Subsidiaries") and, in addition, the Corporation owns
29% of the outstanding shares of Royal Roads Corp.;
(n) Public Disclosure. Each of the documents which contains any of the
Corporation's public record is, as of the date thereof, in compliance
in all material respects with the securities laws of the Reporting
Provinces 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 they were made, not misleading and such
documents collectively constitute full, true and plain disclosure of
all material facts relating to the Corporation and do 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 they were made, not
misleading, as of the date hereof. There is no fact known to the
Corporation which the Corporation has not publicly disclosed 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 or the ability of the Corporation to perform its
obligations under this Agreement or which would otherwise be material
to any person intending to make an equity investment in the
Corporation, it being acknowledged that the Corporation's wholly-owned
subsidiary, ScoZinc Limited, was granted an order by the Nova Scotia
Supreme Court under the Companies Creditors' Arrangement Act and that
documents filed in connection with such proceeding form part of the
Corporation's public record;
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(o) Timely Disclosure. The Corporation is in compliance with all timely
disclosure obligations under the securities laws of the Reporting
Provinces and, without limiting the generality of the foregoing, there
has not occurred any material adverse change in the assets,
liabilities (contingent or otherwise), capital, affairs, business,
prospects, operations or condition (financial or otherwise) of the
Corporation or any Subsidiary which has not been publicly disclosed
and none of the documents filed by or on behalf of the Corporation
pursuant to the securities laws of the Reporting Provinces contain a
misrepresentation (as such term is defined in the Securities Act (Nova
Scotia)) at the date of the filing thereof;
(p) Accounting Controls. The Corporation now maintains a system of
internal accounting controls sufficient to provide reasonable
assurance that in all material respects: (i) transactions are
completed in accordance with the general or a specific authorization
of management of the Corporation; (ii) transactions are recorded as
necessary to permit the preparation of consolidated financial
statements for the Corporation in conformity with Canadian generally
accepted accounting principles and to maintain asset accountability;
(iii) access to assets of the Corporation and the subsidiaries is
permitted only in accordance with the general or a specific
authorization of management of the Corporation; and (iv) the recorded
accountability for assets of the Corporation and the Subsidiaries is
compared with the existing assets of the Corporation and the
Subsidiaries at reasonable intervals and appropriate action is taken
with respect to any differences therein;
(q) 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 or, to
the best of the knowledge of the Corporation, are pending,
contemplated or threatened;
(r) 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 (as amended on December 1, 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), are substantially correct in every particular and present
fairly the financial condition and position of the Corporation on a
consolidated basis as at the dates thereof and such consolidated
financial statements contain no direct or implied statement of a
material fact which is untrue on the date of such consolidated
financial statements and do not omit to state any material fact which
is required by Canadian generally accepted accounting principles or by
applicable law to be stated or reflected therein or which is necessary
to make the statements contained therein not misleading;
(s) No Contemplated Changes. Except as disclosed in the Corporation's
public documents or pursuant to the transaction contemplated hereby,
none of the Corporation or any Subsidiary has approved, is
contemplating, has entered into any agreement in respect of, or has
any knowledge of:
(i) the purchase of any property or assets or any interest therein or
the sale, transfer or other disposition of any material property
or material assets or any material interest therein currently
owned, directly or indirectly, by the Corporation or any
Subsidiary whether by asset sale, transfer of shares or
otherwise;
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(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; or
(iii) a proposed or planned disposition of shares by any shareholder
who owns, directly or indirectly, 10% or more of the outstanding
shares of the Corporation or any Subsidiary;
(t) Insurance. The assets of the Corporation and of each Subsidiary and
the business and operations thereof are insured against loss or damage
with responsible insurers on a basis consistent with insurance
obtained by reasonably prudent participants in a comparable business
in comparable circumstances, such coverage is in full force and effect
and the Corporation and each Subsidiary has not failed to promptly
give any notice or present any material claim thereunder;
(u) Taxes and Tax Returns. The Corporation and each Subsidiary has filed
in a timely manner all necessary tax returns and notices and has paid
all applicable taxes of whatsoever nature for all tax years prior to
the date hereof to the extent that such taxes have become due or have
been alleged to be due (unless being contested in good faith) and none
of the Corporation or any Subsidiary is aware of any tax deficiencies
or interest or penalties accrued or accruing, or alleged to be accrued
or accruing, thereon where, in any of the above cases, it might
reasonably be expected to result in any material adverse change in the
condition (financial or otherwise) or in the earnings, business,
affairs or prospects of the Corporation or any Subsidiary, and there
are no agreements, waivers or other arrangements providing for an
extension of time with respect to the filing of any tax return by any
of them or the payment of any material tax, governmental charge,
penalty, interest or fine against any of them. To the knowledge of
management of the Corporation, there are no material actions, suits,
proceedings, investigations or claims now threatened or pending
against the Corporation or any Subsidiary which could result in a
material liability in respect of taxes, charges or levies of any
governmental authority, penalties, interest, fines, assessments or
reassessments or any matters under discussion with any governmental
authority relating to taxes, governmental charges, penalties,
interest, fines, assessments or reassessments asserted by any such
authority and the Corporation and each Subsidiary has withheld (where
applicable) from each payment to each of the present and former
officers, directors, employees and consultants thereof the amount of
all taxes and other amounts, including, but not limited to, income tax
and other deductions, required to be withheld therefrom, and has paid
the same or will pay the same when due to the proper tax or other
receiving authority within the time required under applicable tax
legislation;
(v) Compliance with Laws, Licenses and Permits. The Corporation and each
Subsidiary has conducted and is conducting the business thereof in
compliance in all material respects with all applicable laws, rules,
regulations, tariffs, orders and directives of each jurisdiction in
which it carries on business and possesses all material approvals,
consents, certificates, registrations, authorizations, permits and
licenses issued by the appropriate provincial, state, municipal,
federal or other regulatory agency or body necessary to carry on the
business currently carried on, or contemplated to be carried on, by
it, is in compliance in all material respects with the terms and
conditions of all such approvals, consents, certificates,
authorizations, permits and licenses and with all laws, regulations,
tariffs, rules, orders and directives material to the operations
thereof, and none of the Corporation or any Subsidiary has received
any notice of the modification, revocation or cancellation of, or any
intention to modify, revoke or cancel or any proceeding relating to
the modification, revocation or cancellation of any such approval,
consent, certificate, authorization, permit or license which, singly
or in the aggregate, if the subject of an unfavourable decision,
order, ruling or finding, would materially adversely affect the
conduct of the business or operations of, or the assets, liabilities
(contingent or otherwise), condition (financial or otherwise) or
prospects of, the Corporation or any Subsidiary;
32
(w) Agreements and Actions. Neither the Corporation nor any Subsidiary is
in violation of any term of the articles or by-laws or any constating
document thereof. Neither the Corporation nor any Subsidiary is in
violation of any term or provision of any agreement, indenture or
other instrument applicable to it which would, or could, result in any
material adverse effect on the business, condition (financial or
otherwise), capital, affairs or operations of the Corporation or any
Subsidiary, neither the Corporation nor any Subsidiary is in default
in the payment of any obligation owed which is now due and there is no
action, suit, proceeding or investigation commenced, pending or, to
the knowledge of the Corporation, threatened which, either in any case
or in the aggregate, might result in any material adverse effect on
the business, condition (financial or otherwise), capital, affairs,
prospects or operations of the Corporation on a consolidated basis or
in any of the material properties or assets thereof or in any material
liability on the part of the Corporation or any Subsidiary or which
places, or could place, in question the validity or enforceability of
this Agreement, or any document or instrument delivered, or to be
delivered, by the Corporation pursuant hereto or thereto;
(x) Owner of Property. The Corporation and the Subsidiaries are the
absolute legal and beneficial owner of, and have good and marketable
title to, all of the interest in and to the material property or
assets thereof as described in the Corporation's pubic disclosure,
free of all mortgages, liens, charges, pledges, security interests,
encumbrances, claims or demands whatsoever, other than those described
in the Corporation's pubic disclosure, and no other property rights
are necessary for the conduct of the business of the Corporation or
any Subsidiary as currently conducted or contemplated to be conducted,
none of the Corporation or any Subsidiary knows of any claim or the
basis for any claim that might or could adversely affect the right
thereof to use, transfer or otherwise exploit such property rights
and, except as disclosed in the Corporation's pubic disclosure, none
of the Corporation or any Subsidiary has any responsibility or
obligation to pay any commission, royalty, licence fee or similar
payment to any Person with respect to the property rights thereof;
(y) Mineral Rights. The Corporation and the Subsidiaries hold either
freehold title, mining leases, mining claims or participating
interests or other conventional property, proprietary or contractual
interests or rights, or has applied for such, recognized in the
jurisdiction in which a particular property is located, in respect of
the ore bodies and minerals located in properties in which the
Corporation and the Subsidiaries have an interest as described in the
Corporation's pubic disclosure under valid, subsisting and enforceable
title documents or other recognized and enforceable agreements or
instruments, or has applied for such, sufficient to permit the
Corporation or applicable Subsidiary to explore the minerals relating
thereto, all such property, leases or claims, and all property, mining
leases or mining claims in which the Corporation or any Subsidiary has
an interest or right have been validly located and recorded or are in
the process of being recorded, in accordance with all applicable laws
and are valid and subsisting, the Corporation and the Subsidiaries
have all necessary surface rights, access rights and other necessary
rights and interests in the properties in which the Corporation and
the Subsidiaries have an interest as described in the Information as
are necessary to permit the Corporation or Subsidiary to explore for
minerals, ore and metals for development purposes as are appropriate
in view of the rights and interest therein of the Corporation or
applicable Subsidiary and the state of development of the property,
with only such exceptions as do not materially interfere with the use
made by the Corporation or applicable Subsidiary of the rights or
interests so held and each of the proprietary interests or rights and
each of the documents, agreements and instruments and obligations
relating thereto referred to above is currently in good standing in
the name of the Corporation or a Subsidiary;
33
(z) No Defaults. Except as disclosed in the Corporation's pubic disclosure
record, none of the Corporation or any Subsidiary is in default of any
material term, covenant or condition under or in respect of any
judgment, order, agreement or instrument to which it is a party or to
which it or any of the property or assets thereof are or may be
subject, and no event has occurred and is continuing, and no
circumstance exists which has not been waived, which constitutes a
default in respect of any commitment, agreement, document or other
instrument to which the Corporation or any Subsidiary is a party or by
which it is otherwise bound entitling any other party thereto to
accelerate the maturity of any amount owing thereunder or which could
have a material adverse effect upon the condition (financial or
otherwise), capital, property, assets, operations or business of the
Corporation or any Subsidiary;
(aa) Compliance with Employment Laws. Except as disclosed in the
Corporation's pubic disclosure record, the Corporation and each
Subsidiary is to its knowledge in compliance with all laws and
regulations respecting employment and employment practices, terms and
conditions of employment, pay equity and wages, except where such
non-compliance would not constitute an adverse material fact
concerning the Corporation on a consolidated basis or result in an
adverse material change to the Corporation on a consolidated basis,
and has not and is not engaged in any unfair labour practice, there is
no labour strike, dispute, slowdown, stoppage, complaint or grievance
pending or, to the knowledge of the Corporation, threatened against
the Corporation or any Subsidiary, no union representation question
exists respecting the employees of the Corporation or any Subsidiary
and no collective bargaining agreement is in place or currently being
negotiated by the Corporation or any Subsidiary, neither the
Corporation nor any Subsidiary has received any notice of any
unresolved matter and there are no outstanding orders under any
employment or human rights legislation in any jurisdiction in which
the Corporation or any Subsidiary carries on business or has
employees, and, except as disclosed in the Information, no employee
has any agreement as to the length of notice required to terminate his
or her employment with the Corporation or any Subsidiary in excess of
twelve months or equivalent compensation and all benefit and pension
plans of the Corporation or any Subsidiary are funded in accordance
with applicable laws and no past service funding liability exist
thereunder;
(bb) Employee Plans. To its knowledge, each material plan for retirement,
bonus, stock purchase, profit sharing, stock option, deferred
compensation, severance or termination pay, insurance, medical,
hospital, dental, vision care, drug, sick leave, disability, salary
continuation, legal benefits, unemployment benefits, vacation,
pension, incentive or otherwise contributed to, or required to be
contributed to, by the Corporation or any Subsidiary for the benefit
of any current or former officer, director, employee or consultant of
the Corporation or any Subsidiary has been maintained in material
compliance with the terms thereof and with the requirements prescribed
by any and all statutes, orders, rules, policies and regulations that
are applicable to any such plan;
34
(cc) Accruals. All material accruals for unpaid vacation pay, premiums for
unemployment insurance, health premiums, federal or provincial pension
plan premiums, accrued wages, salaries and commissions and payments
for any plan for any officer, director, employee or consultant of the
Corporation or any Subsidiary have been accurately reflected in the
books and records of the Corporation;
(dd) Work Stoppage. There has not been, and there is not currently, any
labour trouble which is adversely effecting or could adversely effect,
in a material manner, the conduct of the business of the Corporation
or any Subsidiary;
(ee) Environmental Compliance. Except as disclosed in the Information, the
Corporation and the Subsidiaries:
(i) and the property, assets and operations thereof comply, to their
knowledge, in all material respects with all applicable
Environmental Laws (which term means and includes, without
limitation, any and all applicable international, federal,
provincial, state, municipal or local laws, statutes,
regulations, treaties, orders, judgments, decrees, ordinances,
official directives and all authorizations relating to the
environment, occupational health and safety, or any Environmental
Activity (which term means and includes, without limitation, any
past, present or future activity, event or circumstance in
respect of a Contaminant (which term means and includes, without
limitation, any pollutants, dangerous substances, liquid wastes,
hazardous wastes, hazardous materials, hazardous substances or
contaminants or any other matter including any of the foregoing,
as defined or described as such pursuant to any Environmental
Law), including, without limitation, the storage, use, holding,
collection, purchase, accumulation, assessment, generation,
manufacture, construction, processing, treatment, stabilization,
disposition, handling or transportation thereof, or the release,
escape, leaching, dispersal or migration thereof into the natural
environment, including the movement through or in the air, soil,
surface water or groundwater));
(ii) do not have any knowledge of, and have not received any notice
of, any material claim, judicial or administrative proceeding,
pending or threatened against, or which may affect, either the
Corporation or any Subsidiary or any of the property, assets or
operations thereof, relating to, or alleging any violation of any
Environmental Laws, the Corporation is not aware of any facts
which could give rise to any such claim or judicial or
administrative proceeding and neither the Corporation nor any
Subsidiary nor any of the property, assets or operations thereof
is the subject of any investigation, evaluation, audit or review
by any Governmental Authority (which term means and includes,
without limitation, any national, federal government, province,
state, municipality or other political subdivision of any of the
foregoing, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining
to government and any corporation or other entity owned or
controlled (through stock or capital ownership or otherwise) by
any of the foregoing) to determine whether any violation of any
Environmental Laws has occurred or is occurring or whether any
remedial action is needed in connection with a release of any
Contaminant into the environment, except for compliance
investigations conducted in the normal course by any Governmental
Authority;
35
(iii) have not given or filed any notice under any federal, state,
provincial or local law with respect to any Environmental
Activity, the Corporation and the Subsidiaries do not have any
liability (whether contingent or otherwise) in connection with
any Environmental Activity and the Corporation is not aware of
any notice being given under any federal, state, provincial or
local law or of any liability (whether contingent or otherwise)
with respect to any Environmental Activity relating to or
affecting the Corporation or any Subsidiary or the property,
assets, business or operations thereof;
(iv) do not store any hazardous or toxic waste or substance on the
property thereof and have not disposed of any hazardous or toxic
waste, in each case in a manner contrary to any applicable
Environmental Laws or permits, and there are no Contaminants on
any of the premises at which the Corporation or any Subsidiary
carries on business, in each case other than in compliance with
applicable Environmental Laws and permits; and
(v) are not, except as disclosed in the Information, subject to any
material contingent or other material liability relating to the
restoration or rehabilitation of land, water or any other part of
the environment or non-compliance with Environmental Law;
(ff) No Litigation. Except as disclosed in the Corporation's pubic
disclosure, there are no actions, suits, proceedings, inquiries or
investigations existing, pending or, to the knowledge of the
Corporation, 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 on a consolidated basis or the ability of the Corporation
to perform its obligations under this Agreement and
(gg) Non-Arm's-Length Transactions. Except as disclosed in the
Corporation's pubic disclosure and except with respect to Will
Felderhof's interest in 6179053 Canada Inc., 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
securityholder 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 or as
disclosed in the Corporation's pubic disclosure, neither the
Corporation nor any Subsidiary is a party to any contract, agreement
or understanding with any officer, director, employee or
36
securityholder 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. No officer, director, employee or
securityholder of the Corporation or any Subsidiary has any cause of
action or other claim whatsoever against, or owes any amount to, the
Corporation or any Subsidiary except for claims in the ordinary and
normal course of the business of the Corporation or any Subsidiary
such as for accrued vacation pay or other amounts or matters which
would not be material to the Corporation.
5. The Corporation hereby covenants and agrees with the Subscriber as follows:
(a) Reporting Issuer. The Corporation shall maintain its status as a
"reporting issuer" in, and will not be in default of any requirement
of the securities laws of, the Reporting Provinces for a period of at
least 12 months after the Closing Date unless the Corporation ceases
to be a reporting issuer as a result of a merger with, or take over
bid by, another corporation;
(b) Corporate Status. For a period of at least 12 months after the Closing
Date, the Corporation shall remain a corporation validly subsisting
under the laws of its jurisdiction of continuance, licensed,
registered or qualified as an extra-provincial or foreign corporation
in all jurisdictions where the character of its properties owned or
leased or the nature of the activities conducted by it make such
licensing, registration or qualification necessary and shall carry on
its business in the ordinary course and in compliance in all material
respects with all applicable laws, rules and regulations of each such
jurisdiction unless the Corporation ceases to exist as a result of a
merger with, or take-over bid by, another corporation;
(c) Listing on Stock Exchanges. The Corporation shall maintain the listing
on the TSX of its common of shares for a period of at least 12 months
after the Closing Date unless such listing is terminated as a result
of a merger with, or take over bid by, another corporation. The
Corporation shall forthwith obtain from the TSX approval to issue the
Shares;
(d) Securities Filings. Forthwith after the Closing the Corporation shall
file such forms and documents as may be required under applicable
securities laws relating to the offering of the Shares which, without
limiting the generality of the foregoing, shall include a Form
45-106F1 as prescribed by the Canadian Securities Administrators;
(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; and
(f) Use of Proceeds. The Corporation shall use the proceeds of the as set
out in the agreement entered into between the Subscriber and the
Corporation dated March 16, 2009.
37
COLLECTION OF PERSONAL INFORMATION
6. The Subscriber (on its own behalf and, if applicable, on behalf of each
beneficial purchaser for whose benefit the Subscriber is acting):
(a) acknowledges, consents and authorizes the Corporation to collect the
Subscriber's (and any beneficial purchaser's) personal information for
the purpose of completing the Subscriber's subscription;
(b) acknowledges and consents to the Corporation retaining the personal
information for as long as permitted or required by applicable law or
business practices;
(c) acknowledges, consents and authorizes the Corporation to deliver to
the Ontario Securities Commission personal information (such as full
name, residential address and telephone number) pertaining to the
Subscriber (and any beneficial purchaser) if the Subscriber is
resident in Ontario or otherwise subject to the securities legislation
of Ontario;
(d) acknowledges and consents to the fact that the Corporation may be
required by applicable securities laws, or regulatory authorities to
provide regulatory authorities any personal information provided by
the Subscriber respecting itself (and any beneficial purchaser);
(e) acknowledges that this information is being collected indirectly by
the Ontario Securities Commission (as applicable), and may be
collected by other securities regulators (as applicable), under the
authority granted to it in applicable securities laws;
(f) if resident in Ontario or otherwise subject to the securities
legislation of Ontario acknowledges that this information is being
collected for the purposes of the administration and enforcement of
the securities legislation of Ontario;
(g) acknowledges that the public official in Ontario who can answer
questions about the Ontario Securities Commission's indirect
collection of such information is the Administrative Assistant to the
Director of Corporate Finance, Suite 1903, Box 55, 20 Queen Street
West, Toronto, Ontario M5H 3S8, who may be contacted at (416)
593-8086; and
(h) represents and warrants that it has the authority to provide the
consents, acknowledgements and authorizations set out in this
paragraph on behalf of all beneficial purchasers.
Deliveries on Closing
7. (a) The Subscriber agrees to deliver to McInnes Cooper, counsel for the
Corporation, as soon as possible and, in any event, not later than
10:00 a.m. (Atlantic time) on March 20, 2009 (the "Closing Date"):
(i) this duly completed and executed Subscription Agreement; and
(ii) a certified cheque or bank draft payable to "McInnes Cooper in
Trust" or wire transfer (in accordance with Schedule "A" attached
hereto) for the aggregate Subscription Price or payment of the
same amount in such other manner as is acceptable to the
Corporation.
38
(b) The Corporation acknowledges and agrees that the obligations of the
Subscriber hereunder are conditional on the accuracy of the
representations and warranties of the Corporation contained in this
Subscription Agreement as of the date of this Subscription Agreement
and as of the Closing Date, and the fulfillment of the following
additional conditions as soon as possible after the Closing Date:
(i) all covenants, agreements and conditions contained in this
Subscription Agreement to be performed by the Corporation on or
prior to the Closing Date shall have been performed or complied
with in all material respects, and
(ii) the Corporation shall have sent to the Subscriber or the
Subscriber's counsel a copy of this Subscription Agreement, duly
executed. Closing Time
8. The purchase and sale of the Shares will be completed at the offices of
McInnes Cooper at 10:00 a.m. (Halifax time) or such other time as the
Corporation may determine (the "Closing Time") on the Closing Date or as
soon thereafter as the Shares are conditionally listed on the TSX and
subject to the provisions of Section 2 hereof.
Facsimile Subscriptions, Counterparts
9. The Corporation shall be entitled to rely on delivery of an executed copy
of this Subscription Agreement sent by facsimile or other electronic means,
and acceptance by the Corporation of such agreement shall be legally
effective to create a valid and binding agreement between the Subscriber
and the Corporation in accordance with the terms hereof. In addition, this
Subscription Agreement may be executed in counterparts, each of which shall
be deemed an original and all of which shall constitute one and the same
document.
Indemnity
10. The Subscriber acknowledges that the representations, warranties and
covenants contained herein including, without limitation, those set forth
in Section 3 are made with the intent that they may be relied upon by the
Corporation and its counsel in determining the Subscriber's eligibility to
purchase the Shares under the relevant securities legislation including,
without limitation, the availability of exemptions from the registration
and prospectus requirements of applicable securities legislation in
connection with the issuance of the Shares to the Subscriber hereunder. The
Subscriber further covenants that by the acceptance of the Shares, he or
she shall be representing and warranting that such representations and
warranties are true as at the Closing Time as if made at that time. The
Subscriber hereby agrees to indemnify the Corporation and its directors,
officers, employees, advisers, affiliates, shareholders and agents
(including its legal counsel) against all losses, claims, costs, expenses
and damages or liabilities which any of them may suffer or incur caused or
arising from reliance thereon. The Subscriber undertakes to immediately
notify the Corporation in writing of any change in any statement or other
information relating to the Subscriber set forth herein which takes place
prior to the Closing Time on the Closing Date.
39
Governing Law
11. This Subscription Agreement shall be governed by and construed in
accordance with the laws of the Province of Nova Scotia and the laws of
Canada applicable therein and the Subscriber on its own behalf and, if
applicable, of others whom it is contracting hereunder, and the Corporation
each irrevocably attorns to the exclusive jurisdiction of the courts of the
Province of Nova Scotia with respect to any matters arising out of this
Subscription Agreement.
Time of Essence
12. Time shall be of the essence hereof.
Entire Agreement and Headings
13. This Subscription Agreement represents the entire agreement of the parties
hereto relating to the subject matter hereof and there are no
representations, covenants or other agreements relating to the subject
matter hereof except as stated or referred to herein. The headings
contained are for convenience only and shall not affect the meanings or
interpretation hereof.
Subscriber's Expenses
14. The Subscriber acknowledges and agrees that all costs incurred by the
Subscriber (including any fees and disbursements of any counsel retained by
the Subscriber) relating to the purchase of the Shares by the Subscriber
shall be borne by the Subscriber.
Assignment
15. The terms and provisions of this Subscription Agreement shall be binding
upon and enure to the benefit of the Subscriber and the Corporation and
their respective heirs, executors, administrators, successors and assigns;
provided that this Subscription Agreement shall not be assignable by either
party without the prior written consent of the other.
Acceptance of Subscription
16. The Subscriber acknowledges and agrees that the acceptance of this
Subscription Agreement will be conditional among other things upon the sale
of the Shares to the Subscriber being exempt from any prospectus and
offering memorandum requirements of applicable securities laws. The
Corporation will be deemed to have accepted this Subscription Agreement
upon the delivery at closing of the certificates representing the Shares to
or upon the direction of the Subscriber in accordance with the provisions
hereof.
Board Representation
17. The Corporation agrees that, upon completion of the transactions
contemplated by this Subscription Agreement and upon approval of the TSX to
such appointment, the Corporation shall take all such action necessary or
advisable to facilitate the appointment to the Board of Directors of the
Corporation one nominee of the Subscriber as a non-executive Director of
the Corporation. The Subscriber acknowledges and agrees that the
Corporation shall have no obligation to facilitate the appointment to the
Board of Directors of any person who does not provide a personal
information form satisfactory to the TSX, or who is otherwise not approved
by the TSX, or who is otherwise ineligible to serve as a Director under
applicable law.
40
Modification
18. Neither this Subscription Agreement nor any provision hereof shall be
modified, changed, discharged or terminated except by an instrument in
writing signed by the party against whom any waiver, change, discharge or
termination is sought.
Miscellaneous
19. All covenants, representations, warranties and agreements contained herein
shall survive the closing of the transactions contemplated hereby.
Currency
20. All references herein to "$" means, unless otherwise specified, Canadian
dollars.
Legal and Tax Advice
21. The Subscriber acknowledges and agrees that it is solely responsible for
obtaining such legal advice and tax advice as it considers appropriate in
connection with the execution, delivery and performance by it of this
Subscription Agreement and the completion of the transaction contemplated
hereby.
* * * * * * * * * *
41
SCHEDULE "A" TO THE SUBSCRIPTION AGREEMENT
WIRE TRANSFER INSTRUCTIONS
If paying by wire transfer, wire funds as follows:
- ----------------------------------------------|-----------------------------------------------
Intermediary Bank: |Bank of Montreal, 5151 George Street, Halifax,
|N.S., B3J 1M5, Canada
- ----------------------------------------------|-----------------------------------------------
Swift Code of Bank of Montreal: |BOFMCAM2
|
- ---------------------------------------------- -----------------------------------------------
For Credit of: |McInnes Cooper, In Trust
|
- ----------------------------------------------|-----------------------------------------------
Bank No.: |001
- ----------------------------------------------|-----------------------------------------------
Transit No.: |00093
- ----------------------------------------------|-----------------------------------------------
Canadian Dollar Account Name: |McInnes Cooper - Trust Account
- ----------------------------------------------|-----------------------------------------------
Canadian Dollar Account No.: |1008-576
- ----------------------------------------------|-----------------------------------------------
Reference: |Acadian Mining Corporation Private Placement
- ----------------------------------------------|-----------------------------------------------
42
SCHEDULE "B" TO THE SUBSCRIPTION AGREEMENT
CERTIFICATE OF ACCREDITED INVESTOR
TO: ACADIAN MINING CORPORATION (the "Corporation")
RE: SUBSCRIPTION FOR SECURITIES OF THE CORPORATION
The undersigned Subscriber/duly authorized representative of the Subscriber (or
in the case of a trust, the trustee or an officer of the trustee of the trust)
hereby certifies that:
1. he/she has read the Subscription Agreement to which this Schedule B is
attached and understands that the offering of the Securities is being made
on a prospectus exempt basis; and
2. the Subscriber and, if applicable, the disclosed principal on whose behalf
the Subscriber is purchasing the Securities, is an "accredited investor" as
defined in National Instrument 45-106, by virtue of being:
[please check one]
a. _____ a Canadian financial institution, or a Schedule III bank,
b. _____ the Business Development Bank of Canada incorporated under the
Business Development Bank of Canada Act (Canada),
c. _____ a subsidiary of any person referred to in paragraphs (a) or (b),
if the person owns all of the voting securities of the
subsidiary, except the voting securities required by law to be
owned by directors of that subsidiary,
d. _____ a person registered under the securities legislation of a
jurisdiction of Canada as an adviser or dealer, other than a
person registered solely as a limited market dealer under one or
both of the Securities Act (Ontario) or the Securities Act
(Newfoundland and Labrador),
e. _____ an individual registered or formerly registered under the
securities legislation of a jurisdiction of Canada as a
representative of a person referred to in paragraph (d),
f. _____ the Government of Canada or a jurisdiction of Canada, or any
crown corporation, agency or wholly owned entity of the
Government of Canada or a jurisdiction of Canada,
g. _____ a municipality, public board or commission in Canada and a
metropolitan community, school board, the Comite de gestion de la
taxe scolaire de l'ile de Montreal or an intermunicipal
management board in Quebec,,
h. _____ any national, federal, state, provincial, territorial or
municipal government of or in any foreign jurisdiction, or any
agency of that government,
i. _____ a pension fund that is regulated by either the Office of the
Superintendent of Financial Institutions (Canada) or a pension
commission or similar regulatory authority of a jurisdiction of
Canada,
43
j. _____ an individual who, either alone or with a spouse, beneficially
owns, directly or indirectly, financial assets(1) having an
aggregate realizable value that before taxes, but net of any
related liabilities(2), exceeds Cdn$1,000,000,
k. _____ an individual whose net income before taxes exceeded Cdn$200,000
in each of the two most recent calendar years or whose net income
before taxes combined with that of a spouse exceeded Cdn$300,000
in each of the two most recent calendar years and who, in either
case, reasonably expects to exceed that net income level in the
current calendar year,
l. _____ an individual who, either alone or with a spouse, has net assets
of at least Cdn$5,000,000,
m. _____ a person (including a corporate entity), other than an individual
or investment fund, that has net assets of at least Cdn$5,000,000
as shown on its most recently prepared financial statements,
n. _____ an investment fund that distributes or has distributed its
securities only to:
(i) a person that is or was an accredited investor at the time of the
distribution,
(ii) a person that acquires or acquired securities in the
circumstances referred to in sections 2.10 [Minimum amount
investment], and 2.19 [Additional investment in investment funds]
of National Instrument 45-106, or
(iii) a person described in paragraph (i) or (ii) that acquires or
acquired securities under section 2.18 [Investment fund
reinvestment] of National Instrument 45-106,
o. _____ an investment fund that distributes or has distributed securities
under a prospectus in a jurisdiction of Canada for which the
regulator or, in Quebec, the securities regulatory authority, has
issued a receipt,
p. _____ a trust company or trust corporation registered or authorized to
carry on business under the Trust and Loan Companies Act (Canada)
or under comparable legislation in a jurisdiction of Canada or a
foreign jurisdiction, acting on behalf of a fully managed account
managed by the trust company or trust corporation, as the case
may be,
q. _____ a person (including a corporate entity) acting on behalf of a
fully managed account managed by that person, if that person is
registered or authorized to carry on business as an adviser or
the equivalent under the securities legislation of a jurisdiction
of Canada or a foreign jurisdiction and in Ontario, is purchasing
a security that is not a security of an investment fund,
r. _____ a registered charity under the Income Tax Act (Canada) that, in
regard to the trade, has obtained advice from an eligibility
adviser or an adviser registered under the securities legislation
of the jurisdiction of the registered charity to give advice on
the securities being traded,
s. _____ an entity organized in a foreign jurisdiction that is analogous
to any of the entities referred to in paragraphs (a) to (d) or
paragraph (i) in form and function, or
44
t. _____ a person (including a corporate entity) in respect of which all
of the owners of interests, direct, indirect or beneficial,
except the voting securities required by law to be owned by
directors, are persons that are accredited investors,
u. _____ an investment fund that is advised by a person registered as an
adviser or a person that is exempt from registration as an
adviser, or
v. _____ a person (including a corporate entity) that is recognized or
designated by the securities regulatory authority or, except in
Ontario and Quebec, the regulator as:
(i) an accredited investor, or
(ii) an exempt purchaser in Alberta or British Columbia after National
Instrument 45-106 came into force.
(1) For the purposes of National Instrument 45-106 and this Certificate the
term "financial assets" means (a) cash; (b) securities or (c) a contract of
insurance, a deposit or an evidence of a deposit that is not a security for
the purposes of securities legislation.
(2) For the purposes of National Instrument 45-106 and this Certificate the
term "related liabilities" means (a) liabilities incurred or assumed for
the purpose of financing the acquisition or ownership of financial assets,
or (b) liabilities that are secured by financial assets.
The statements made in this Schedule are true and will be true on the Closing
Date.
DATED ___________________________, 2009.
- -----------------------------------------------------
Signature of Subscriber
- -----------------------------------------------------
Name of Subscriber
- -----------------------------------------------------
- -----------------------------------------------------
Address Of The Subscriber
45
SCHEDULE "C" TO THE SUBSCRIPTION AGREEMENT
CERTIFICATION OF U.S. PURCHASER
TO: ACADIAN MINING CORPORATION (the "Corporation")
RE: SUBSCRIPTION FOR SECURITIES OF THE CORPORATION
Capitalized terms not specifically defined in this certification have the
meaning ascribed to them in the Subscription Agreement to which this Schedule C
is attached. In the event of a conflict between the terms of this certification
and such Subscription Agreement, the terms of this certification shall prevail.
In addition to the covenants, representations and warranties contained in the
Subscription Agreement to which this Schedule C is attached, the undersigned
Subscriber covenants, represents and warrants to the Corporation that:
(a) It is (i) a U.S. Person or a person in the United States and (ii)
authorized to consummate the purchase of the Shares.
(b) It has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of an investment in the
Shares and it is able to bear the economic risk of loss of its entire
investment.
(c) The Corporation has provided to it the opportunity to ask questions and
receive answers concerning the terms and conditions of the Offering and it
has had access to such information concerning the Corporation as it has
considered necessary or appropriate in connection with its investment
decision to acquire the Shares, including access to the Corporation's
public filings available on the Internet at www.sedar.com, and that any
answers to questions and any request for information have been complied
with to the Subscriber's satisfaction.
(d) It is acquiring the Shares for its own account, for investment purposes
only and not with a view to any resale, distribution or other disposition
of the Shares in violation of the United States securities laws.
(e) The address of the Subscriber set out on the front page of the Subscription
Agreement is the true and correct principal address of the Subscriber and
can be relied on by the Corporation for the purposes of state blue-sky laws
and the Subscriber has not been formed for the specific purpose of
purchasing the Shares.
(f) It understands (i) the Shares have not been and will not be registered
under the United States Securities Act of 1933, as amended (the "U.S.
Securities Act") or the securities laws of any state of the United States
and will be "restricted securities", as defined in Rule 144 under the U.S.
Securities Act; (ii) the sale contemplated hereby is being made in reliance
on an exemption from such registration requirements; (iii) subject to
certain exceptions provided under the U.S. Securities Act, the Shares may
not be offered, sold or otherwise transferred in the United States or to,
by or on behalf of a U.S. Person unless such Shares are registered under
the U.S. Securities Act and applicable state securities laws, or unless an
exemption from such registration requirements is available; and (iv) as a
consequence, the Subscriber may be required to bear the economic risks of
the investment in the Shares for an indefinite period of time.
46
(g) The Subscriber is an "accredited investor" as defined in Rule 501(a) of
Regulation D of the U.S. Securities Act by virtue of meeting one of the
following criteria (please hand-write your initials on the appropriate
lines):
1. A bank, as defined in Section 3(a)(2) of the U.S. Securities
Initials _______ Act, whether acting in its individual or fiduciary
capacity; or
2. A savings and loan association or other institution as
Initials _______ defined in Section 3(a)(5)(A) of the U.S. Securities Act,
whether acting in its individual or fiduciary capacity; or
3. A broker or dealer registered pursuant to Section 15 of the
Initials _______ United States Securities Exchange Act of 1934; or
4. An insurance company as defined in Section 2(a)(13) of the
Initials _______ U.S. Securities Act; or
5. An investment company registered under the United States
Initials _______ Investment Company Act of 1940; or
6. A business development company as defined in Section
Initials _______ 2(a)(48) of the United States Investment Company Act of
1940; or
7. A small business investment company licensed by the U.S.
Initials _______ Small Business Administration under Section 301 (c) or (d)
of the United States Small Business Investment Act of 1958;
or
8. A plan established and maintained by a state, its political
Initials _______ subdivisions or any agency or instrumentality of a state or
its political subdivisions, for the benefit of its
employees, with total assets in excess of US$5,000,000; or
9. An employee benefit plan within the meaning of the United
Initials _______ States Employee Retirement Income Security Act of 1974 in
which the investment decision is made by a plan fiduciary,
as defined in Section 3(21) of such Act, which is either a
bank, savings and loan association, insurance company or
registered investment adviser, or an employee benefit plan
with total assets in excess of US$5,000,000 or, if a self-
directed plan, with investment decisions made solely by
persons who are Accredited Investors; or
10. A private business development company as defined in Section
Initials _______ 202(a)(22) of the United States Investment Advisers Act of
1940; or
11. An organization described in Section 501(c)(3) of the United
Initials _______ States Internal Revenue Code, a corporation, a
Massachusetts or similar business trust, or a partnership,
not formed for the specific purpose of acquiring the Shares
offered, with total assets in excess of US$5,000,000; or
12. Any director or executive officer of the Corporation; or
Initials _______
13. A natural person whose individual net worth, or joint net
Initials _______ worth with that person's spouse, at the date hereof exceeds
US$1,000,000; or
14. A natural person who had an individual income in excess of
Initials _______ US$200,000 in each of the two most recent years or joint
income with that person's spouse in excess of US$300,000 in
each of those years and has a reasonable expectation of
reaching the same income level in the current year; or
47
15. A trust, with total assets in excess of US$5,000,000, not
Initials _______ formed for the specific purpose of acquiring the Shares
offered, whose purchase is directed by a sophisticated
person as described in Rule 506(b)(2)(ii) under the U.S.
Securities Act; or
16. Any entity in which all of the equity owners meet the
Initials _______ requirements of at least one of the above categories.
(h) The Subscriber has not purchased the Shares as a result of any form of
general solicitation or general advertising (as those terms are used in
Regulation D under the U.S. Securities Act), including advertisements,
articles, notices or other communications published in any newspaper,
magazine or similar media or broadcast over radio or television, or other
form of telecommunications, including electronic display, or any seminar or
meeting whose attendees have been invited by general solicitation or
general advertising.
(i) If the Subscriber decides to offer, sell or otherwise transfer any of the
Shares it will not offer, sell or otherwise transfer any of such Shares
directly or indirectly, unless:
(i) the sale is to the Corporation;
(ii) the sale is made outside the United States in a transaction meeting
the requirements of Rule 904 of Regulation S under the U.S. Securities
Act and in compliance with applicable local laws and regulations;
(iii) the sale is made pursuant to the exemption from the registration
requirements under the U.S. Securities Act provided by Rule 144
thereunder, if available, and in accordance with any applicable state
securities or "blue sky" laws; or
(iv) the securities are sold in a transaction that does not require
registration under the U.S. Securities Act or any applicable state
laws and regulations governing the offer and sale of securities,
and, in the case of each of (iii) and (iv) it has prior to such sale
furnished to the Corporation an opinion of counsel reasonably satisfactory
to the Corporation stating that such transaction is exempt from
registration under applicable securities laws and that the legends referred
to in paragraph (1) below may be removed.
(j) It understands and agrees that the Shares may not be acquired in the United
States by or on behalf of a U.S. Person or a person in the United States
unless registered under the U.S. Securities Act and any applicable state
securities laws or unless an exemption from such registration requirements
is available.
(k) It acknowledges that it has not purchased the Shares as a result of, and
will not itself engage in, any "directed selling efforts" (as defined in
Regulation S under the U.S. Securities Act) in the United States in respect
of the Shares which would include any activities undertaken for the purpose
of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for the resale of the Shares.
(l) The certificates representing the Shares, as well as all certificates
issued in exchange for or in substitution of the foregoing, until such time
as is no longer required under the applicable requirements of the U.S.
Securities Act or applicable state securities laws, will bear, on the face
of such certificate, the following legends:
48
"THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "U.S. SECURITIES
ACT") OR THE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE
HOLDER HEREOF, BY PURCHASING SUCH SECURITIES, AGREES FOR THE BENEFIT
OF THE COMPANY THAT SUCH SECURITIES MAY BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED ONLY (A) TO THE COMPANY; (B) OUTSIDE THE UNITED STATES IN
ACCORDANCE WITH RULE 904 OF REGULATION S UNDER THE U.S. SECURITIES
ACT; (C) IN ACCORDANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE
U.S. SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND
IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES LAWS; OR (D) IN A
TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE U.S.
SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE
CASE OF PARAGRAPH (C) OR (D), THE SELLER FURNISHES TO THE COMPANY AN
OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE
SATISFACTORY TO THE COMPANY TO SUCH EFFECT."
"THE PRESENCE OF THIS LEGEND MAY IMPAIR THE ABILITY OF THE HOLDER
HEREOF TO EFFECT "GOOD DELIVERY" OF THE SECURITIES REPRESENTED HEREBY
ON A CANADIAN STOCK EXCHANGE. A CERTIFICATE WITHOUT A LEGEND MAY BE
OBTAINED FROM THE REGISTRAR AND TRANSFER AGENT OF THE CORPORATION IN
CONNECTION WITH A SALE OF THE SECURITIES REPRESENTED HEREBY AT A TIME
WHEN THE CORPORATION IS A "FOREIGN ISSUER" AS DEFINED IN REGULATION S
UNDER THE U.S. SECURITIES ACT, UPON DELIVERY OF THIS CERTIFICATE, AN
EXECUTED DECLARATION AND, IF REQUESTED BY THE CORPORATION OR THE
TRANSFER AGENT, AN OPINION OF COUNSEL OF RECOGNIZED STANDING, EACH IN
FORM SATISFACTORY TO THE TRANSFER AGENT OF THE CORPORATION AND THE
CORPORATION, TO THE EFFECT THAT SUCH SALE OF THE SECURITIES
REPRESENTED HEREBY IS BEING MADE IN COMPLIANCE WITH RULE 904 OF
REGULATION S UNDER THE U.S. SECURITIES ACT.";
provided, that if the Shares are being sold outside the United States in
compliance with the requirements of Rule 904 of Regulation S at a time
when:
(i) the Corporation is a "foreign issuer" as defined in Regulation S at
the time of sale, and
(ii) the seller of the Shares is not an "affiliate" of the Corporation, as
that term is defined in Rule 405 under the U.S. Securities Act (other
than an officer or director who is an affiliate of the Corporation
solely by virtue of holding such position),
the legends set forth above may be removed by providing an executed
declaration to the registrar and transfer agent of the Corporation, in
substantially the form set forth as Appendix A attached hereto (or in such
other forms as the Corporation may prescribe from time to time) and, if
requested by the Corporation or the transfer agent, an opinion of counsel
of recognized standing in form and substance satisfactory to the
Corporation and the transfer agent to the effect that such sale is being
made in compliance with Rule 904 of Regulation S; and provided, further,
that, if any Shares are being sold otherwise than in accordance with
Regulation S and other than to the Corporation, the legends may be removed
by delivery to the registrar and transfer agent and the Corporation of an
opinion of counsel, of recognized standing reasonably satisfactory to the
Corporation, that such legends are no longer required under applicable
requirements of the U.S. Securities Act or state securities laws.
49
(m) It understands and acknowledges that the Corporation is not obligated to
remain a "foreign issuer".
(n) It understands and acknowledges that, for the purposes of the U.S.
Securities Act, any person will be presumed to be an "affiliate" of the
Corporation if such person beneficially owns or directly or indirectly
controls more than 10% of the Corporation's outstanding voting securities.
(o) It understands and agrees that there may be material tax consequences to
the Subscriber of an acquisition or disposition of the Shares. The
Corporation gives no opinion and makes no representation with respect to
the tax consequences to the Subscriber under United States, state, local or
foreign tax law of the undersigned's acquisition or disposition of such
Shares.
(p) It understands and agrees that the financial statements of the Corporation
have been prepared in accordance with Canadian generally accepted
accounting principles and therefore may be materially different from
financial statements prepared under U.S. generally accepted accounting
principles and therefore may not be comparable to financial statements of
United States companies.
(q) It consents to the Corporation making a notation on its records or giving
instructions to any transfer agent of the Corporation in order to implement
the restrictions on transfer set forth and described in this certification
and the Subscription Agreement.
ONLY U.S. PURCHASERS NEED COMPLETE AND SIGN
Dated _______________ 2009.
X-------------------------------------------------------
Signature of individual (if Subscriber is an individual)
X /s/ J.I. Gutnick
---------------------------------------------------------
Authorized signatory (if Subscriber is not an individual)
GOLDEN RIVER RESOURCES CORPORATION
----------------------------------
Name of Subscriber (please print)
JOSEPH GUTNICK
-------------------------------------------
Name of authorized signatory (please print)
PRESIDENT & CEO
--------------------------------------------------------
Official capacity of authorized signatory (please print)
50
Appendix "A" to
CERTIFICATE OF U.S. PERSON
Form of Declaration for Removal of Legend
TO: Acadian Mining Corporation (the "Corporation")
AND TO: Registrar and transfer agent for the Common Shares of the Corporation
The undersigned (A) acknowledges that the sale of the securities of the
Corporation to which this declaration relates is being made in reliance on Rule
904 of Regulation S under the United States Securities Act of 1933, as amended
(the "U.S. Securities Act"), and (B) certifies that (1) the undersigned is not
(a) an "affiliate" of the Corporation (as that term is defined in Rule 405 under
the U.S. Securities Act), except any officer or director who is an affiliate of
the Corporation solely by virtue of holding such position (b) a "distributor" as
defined in Regulation S or (c) an affiliate of a distributor; (2) the offer of
such securities was not made to a person in the United States and either (a) at
the time the buy order was originated, the buyer was outside the United States,
or the seller and any person acting on its behalf reasonably believed that the
buyer was outside the United States, or (b) the transaction was executed on or
through the facilities of the Toronto Stock Exchange (or another designated
offshore securities market) and neither the seller nor any person acting on its
behalf knows that the transaction has been prearranged with a buyer in the
United States; (3) neither the seller nor any affiliate of the seller nor any
person acting on their behalf has engaged or will engage in any directed selling
efforts in the United States in connection with the offer and sale of such
securities; (4) the sale is bona fide and not for the purpose of "washing off"
the resale restrictions imposed because the securities are "restricted
securities" (as that term is defined in Rule 144(a)(3) under the U. S.
Securities Act); (5) the seller does not intend to replace such securities with
fungible unrestricted securities; and (6) the contemplated sale is not a
transaction, or part of a series of transactions, which, although in technical
compliance with Regulation S, is part of a plan or scheme to evade the
registration provisions of the U. S. Securities Act. Terms used herein have the
meanings given to them by Regulation S under the U.S. Securities Act.
Dated _______________ 200_.
X------------------------------------------------------
Signature of individual (if Purchaser is an individual)
X-------------------------------------------------------
Authorized signatory (if Purchaser is not an individual)
--------------------------------------------------------
Name of Purchaser (please print)
--------------------------------------------------------
Name of authorized signatory (please print)
--------------------------------------------------------
Official capacity of authorized signatory (please print)
51
Affirmation by Seller's Broker-Dealer
We have read the foregoing representations of our customer,
_________________________ (the "Seller") dated _______________________, with
regard to the sale, for such Seller's account, of the _________________
represented by certificate number ______________ of the Corporation described
therein, and we hereby affirm that, to the best of our knowledge and belief, the
facts set forth therein are full, true and correct.
---------------------------------
Name of Firm
By:
---------------------------------
Authorized Officer
Dated: 200_.
52