Document:

Exhibit 4.01

              Form of Common Share Subscription Agreement - CENCAN
              ----------------------------------------------------

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.

<PAGE>

2.   Closing

     The  closing  of this  transaction  (the  "Closing")  shall  take  place on
December  19,  2002 (the  "Closing  Date") at the  offices  of Fasken  Martineau
DuMoulin LLP, 10 Arthur Street, Fifth Floor, London, England, 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:

                                       2
<PAGE>

          (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).

                                       3
<PAGE>

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;

                                       4
<PAGE>

     (i)  the  Company  owns 40% of the common  shares in the  capital  stock of
          Almazny Berg, 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 Suite 205-10920 West Alameda Avenue, Lakewood, Colorado
          80226, USA;

     (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 Suite  205-10920  West  Alameda  Avenue,
          Lakewood,  Colorado 80226, USA (the "Colorado Office") and all persons
          working in the Colorado Office except for Timothy J. Haddon and Gerald
          E. Davis 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;

                                       5
<PAGE>

     (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;

                                       6
<PAGE>

     (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;

                                       7
<PAGE>

     (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 Timothy J.  Haddon and Gerald E.
          Davis 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;

                                       8
<PAGE>

          (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

                                       9
<PAGE>

          (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;

                                       10
<PAGE>

     (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 Timothy J. Haddon and Gerald
          E. Davis of his  resignation  as a director and officer of the Company
          and by Richard  Wake-Walker  of his  resignation  as a director of the
          Company;

     (g)  the delivery to the  Purchaser by each of Timothy J. Haddon and Gerald
          E.  Davis 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 Timothy J. Haddon and
          Gerald  E.  Davis  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

                                       11
<PAGE>

     (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;

                                       12
<PAGE>

     (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.

                                       13
<PAGE>

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.
                  9 Rue Sainte Zilte
                  L-2763 Luxembourg
                  Fax No: (+352) 264-871-301
                  Attention: Mr. A.R. Attwood

                  and to:

                  Fasken Martineau DuMoulin LLP
                  66 Wellington Street West
                  Suite 4200, Toronto Dominion Bank Tower
                  Box 20, Toronto Dominion Centre
                  Fax No: 416 364-7813
                  Attention: Robert L. Shirriff or Christopher A. Bent

               and in the case of notice to the Company shall be addressed to:

                  Archangel Diamond Corporation
                  c/o 204 Lambert Street
                  Whitehorse, Yukon Territory
                  Y1A 3T2
                  Fax:  (867) 667-7600
                  Attention:  President and CEO

                  and to:

                  Getz Prince Wells
                  Suite 1810, 1111 West Georgia Street
                  Vancouver, British Columbia
                  V6E 4M3
                  Fax No: (604) 685-9798
                  Attention: D. Jeff Larkins

                                       14
<PAGE>

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.

                                       15
<PAGE>

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:    Timothy J. Haddon
                                Title:   President and Chief Executive Officer

                                       16EXHIBIT 4.02 - FORM OF SUBSCRIPTION AGREEMENT - VARIOUS PLACEES

THE COMMON  SHARES  SUBSCRIBED  FOR HEREIN  HAVE NOT BEEN  REGISTERED  UNDER THE
UNITED STATES  SECURITIES  ACT OF 1933,  AS AMENDED,  OR ANY UNITED STATES STATE
SECURITIES  LAWS  AND  MAY NOT BE SOLD OR  TRANSFERRED  IN THE  ABSENCE  OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER THE UNITED STATES SECURITIES ACT OF
1933, AS AMENDED, AND APPLICABLE UNITED STATES STATE SECURITIES LAWS.

                         SUBSCRIPTION FOR COMMON SHARES
                         ------------------------------

TO:      Archangel Diamond Corporation             Subscription Agreement #_____
         #1440 - 717 Seventeenth Street
         Denver, Colorado U.S.A                                 Date: __________
         80202
         Attention:  Gary Davis, Chief Financial Officer
         -----------------------------------------------

The undersigned (hereinafter referred to as the "Subscriber") hereby irrevocably
tenders this offer which,  upon  acceptance in its sole  discretion by Archangel
Diamond Corporation (the "Company"),  shall constitute a subscription  agreement
on the part of the  Subscriber  to  subscribe,  purchase and pay for, and on the
part of the Company, to issue and sell to the Subscriber,  such number of Common
shares of the Company (the  "Common  Shares")  for such  aggregate  subscription
amount as set out below, at a price of $0.10 per Common Shares, all on the terms
and  subject  to the  conditions  set  forth in the  "Terms  and  Conditions  of
Subscription  for Common  Shares"  attached  hereto,  which  forms a part hereof
(collectively, the "Subscription Agreement").

_______________________________________________________
Name of Subscriber (please print)

By:____________________________________________________
    Signature of Subscriber or authorised signatory

_______________________________________________________
Official Capacity or Title (if applicable, please print)

_______________________________________________________
(Please print name of individual whose signature appears
above if different than the name of the subscriber
printed above.)

_______________________________________________________
Subscriber's Address

_______________________________________________________

_______________________________________________________

(    )
_______________________________________________________
Telephone Number

 Number of Common Shares: _____________________________
                         (to be completed by Subscriber)

 Subscription Amount: $________________________________

                         (to be completed by Subscriber)

 Social Insurance No. or Federal Corporate/Business
 Account No.: _________________________________________

If the Subscriber is signing as agent for a principal and is not a trust company
or, in British  Columbia  or  Alberta,  a  portfolio  manager,  in either  case,
purchasing as trustee or agent for accounts  fully  managed by it,  complete the
following:

_______________________________________________________
Name of Principal (please print)

_______________________________________________________
Principal's Address

         SPECIAL REGISTRATION INSTRUCTIONS SPECIAL DELIVERY INSTRUCTIONS
         ---------------------------------------------------------------

To be completed ONLY if the  certificates for the Common To be completed ONLY if
the  certificates  for the Common Shares are to be issued in the name of someone
other  than  Shares  are to be sent to  someone  other  than the the  persons(s)
indicated above under "Name of Subscriber)".  Subscriber or to the Subscriber at
an address other than o Register certificates as follows: that appearing above.

[ ] Mail certificates as follows:
    -----------------------------

_______________________________________________________
Name

_______________________________________________________
Address

(          )

_______________________________________________________
Telephone

[ ] Hold certificates for pick-up at the offices of the Company.

                                Please complete required disclosure on next page

<PAGE>

--------------------------------------------------------------------------------
                              SUBSCRIBER DISCLOSURE

    (Subscribers should ensure that all blanks herein are completed prior to
                            delivery to the Company)

(1)  Ownership of Voting Stock. The Subscriber (select one):
     [ ]      owns  directly or  indirectly,  or exercises  control or direction
              over,  no common  shares in the  capital  stock of the  Company or
              securities  convertible into common shares in the capital stock of
              the Company; or
     [ ]      owns  directly or  indirectly,  or exercises  control or direction
              over,  _______________  common  shares in the capital stock of the
              Company and  convertible  securities  entitling the  Subscriber to
              acquire an additional _______________ common shares in the capital
              stock of the Company.
(2)  Insider Status.  The Subscriber (select one):
     --------------
     Note: For the purposes of this paragraph the term  "Insider"  means:  (a) a
     director or senior officer of the Company; (b) a director or senior officer
     of a company that is itself an insider or subsidiary of the Company;  (c) a
     person that  beneficially  owns or controls,  directly or indirectly voting
     shares of the Company  carrying more than 10% of the voting rights attached
     to all the Company's  outstanding  voting shares, or (d) the Company itself
     if it holds any of its own  securities of its own .
     [ ] is an  Insider  of  the  Company  as  defined  in the  policies  of the
     Exchange; or
     [ ] is not an Insider of the  Company  as  defined in the  policies  of the
     Exchange.

(3)  Pro Group Status.  The Subscriber (select one):
     ----------------
     Note:  For the purposes of this  paragraph  the term "Pro Group"  includes,
     either individually or as a group, (a) the member (i.e. a member of the TSX
     Venture  Exchange  under the Exchange  requirements);  (b) employees of the
     member; (c) partners,  officers and directors of the member; (d) affiliates
     of  the  member;   and  (e)  associates  of  any  parties  referred  to  in
     subparagraphs (a) through (d). The Exchange may, in its discretion, include
     a  person  or party  in the Pro  Group  for the  purposes  of a  particular
     calculation where the Exchange  determines that the person is not acting at
     arm's  length of the member and may,  in its  discretion,  exclude a person
     from the Pro Group for the purposes of a particular  calculation  where the
     Exchange  determines  that the  person  is  acting  at arm's  length of the
     member. The member may deem a person who would otherwise be included in the
     Pro Group to be  excluded  from the Pro Group  where the member  determines
     that:  (a) the person is an affiliate or associate of the member  acting at
     arm's length of the member;  (b) the  associate or affiliate has a separate
     corporate and reporting  structure;  (c) there are  sufficient  controls on
     information flowing between the member and the associate or affiliate;  and
     (d) the member maintains a list of such excluded persons.
     [ ] is a member  of the Pro  Group as  defined  in the  policies  of the
     Exchange;  or
     [ ] is not a member  of the Pro Group as  defined  in the  policies  of the
     Exchange.

(4)  Control Person Status.  The Subscriber (select one):
     ---------------------
     Note: For the purposes of this  paragraph the term "control  person" means:
     (a) a person who holds a sufficient number of voting rights attached to all
     outstanding  voting  securities  of the  Company to affect  materially  the
     control of the Company; (b) each person in a combination of persons, acting
     in  concert  by  virtue  of  an  agreement,   arrangement,   commitment  or
     understanding,  which  holds in total a  sufficient  number  of the  voting
     rights  attached to all  outstanding  voting  securities  of the Company to
     affect  materially the control of the Company or a person or combination of
     persons,  acting  in  concert  by  virtue  of  an  agreement,  arrangement,
     commitment  or  understanding,  holding more than 20% of the voting  rights
     attached to all outstanding  voting securities of the Company.
     [ ] is a "control person" of the Company as defined in the B.C.  Securities
     Act,  or shall  become a control  person by virtue of this  purchase of the
     Common Shares; or
     [ ] is not a  "control  person"  of the  Company  as  defined  in the  B.C.
     Securities  Act,  shall  not  become a  control  person  by  virtue of this
     purchase  of the Common  Shares and does not intend to act in concert  with
     any other person to form a control group.

(5)  Non-Individual  Subscribers.  If the Subscriber or any principal thereof is
     ---------------------------
     not an individual, the Subscriber or such principal has (select one):
     [ ]  previously filed with the TSX Venture Exchange Inc. (the "Exchange") a
          Form 4D or Form 4D1,  Corporate Placee  Registration  Form in the form
          accompanying this Subscription Agreement,  and represents and warrants
          that  there  has  been  no  change  to any of the  information  in the
          Corporate Placee  Registration Form previously filed with the Exchange
          up to the date of this Subscription Agreement; or
     [ ]  delivered a completed Form 4D1, Corporate Placee  Registration Form in
          the form accompanying  this Subscription  Agreement to the Company for
          filing   with  the   Exchange   with  this   Subscription   Agreement.

--------------------------------------------------------------------------------

ACCEPTANCE:  The Company hereby accepts the above subscription as of the ___ day
of December, 2002.

Archangel Diamond Corporation

By:________________________________________

Title______________________________________

<PAGE>

           THE FOLLOWING ARE THE TERMS AND CONDITIONS OF SUBSCRIPTION
              FOR COMMON SHARES REFERRED TO ON THE FACE PAGE HERETO

1.       Subscription Procedure.

1.1. The  Subscriber  shall deliver a certified  cheque or bank draft payable to
Archangel Diamond  Corporation,  by no later than 10:00 a.m. (Denver time) on or
before [*date] to the address of the Company set forth on the first page of this
Subscription  Agreement in an amount equal to the Subscription Amount,  together
with:
(a)  two duly  completed and  originally  executed  copies of this  Subscription
     Agreement;
(b)  if the  Subscriber is an U.S.  Person and an  individual,  a duly completed
     Investor   Questionnaire  in  the  form   accompanying   this  Subscription
     Agreement; and
(c)  if the Subscriber is not an individual, and has not previously filed such a
     form with the Exchange, a Form 4C Corporate Placee Registration Form in the
     form accompanying this Subscription Agreement;

and such other  documents as the Company may reasonably  require to be delivered
in  connection  with  this  Subscription  Agreement.

1.2.  Completion of the transactions  contemplated  hereby (the "Closing") shall
occur at the  offices of the  Company at the address of the Company set forth on
the first page of this  Subscription  Agreement at 10:00 a.m.  (Denver  time) on
[*date],  or such other date as the  Subscriber  and the  Company may agree upon
(the "Time of  Closing").  The  Subscriber's  Subscription  Amount and any other
documents delivered in connection herewith will be held by the Company in escrow
until Closing.

1.3. At the Closing,  the Company is hereby irrevocably  authorized and directed
to release this  subscription,  and any other documents  delivered in connection
herewith,  and  pay to the  Company,  in  accordance  with  the  terms  of  this
Subscription  Agreement, an amount equal to the Subscription Amount. The Company
shall  then  issue  and sell the  Common  Shares to the  Subscriber  and cause a
definitive  certificate   representing  the  Common  Shares  to  be  issued  and
registered,  and to be  delivered  to the  Subscriber,  in  accordance  with the
registration  and  delivery  instructions  set forth on the  first  page of this
Subscription Agreement.

1.4. If this  subscription is not accepted by the Company or the Closing has not
occurred by [*date],  this  subscription  and any other  documents  delivered in
connection  herewith shall be returned to the Subscriber in accordance  with the
delivery instructions set forth on the first page of this Subscription Agreement
together with the Subscription Amount without interest or deduction.

1.5.  Unless  designated  to be picked-up by the  Subscriber,  all  certificates
representing  the Common Shares shall be delivered by courier or registered mail
at the option of the Company in accordance  with the  registration  and delivery
instructions  set forth on the first page of this  Subscription  Agreement.  The
Subscriber  acknowledges  that it accepts the risks of such  delivery and waives
any claim against the Company and its directors,  officers, employees and agents
for theft or loss.

2. Representations and Warranties of the Subscriber.  The Subscriber  represents
and warrants to the Company (which  representations and warranties shall survive
the closing of the transactions  contemplated by this Subscription Agreement and
continue indefinitely) as follows:

Note: For the purposes of this Section 2 the term  "individual"  means a natural
person,  but does not  include a  partnership,  unincorporated  organization  or
trust, or a natural person in his capacity as a trustee, executor, administrator
or person or other legal representative.

                                       3
<PAGE>

(a)  Residence.  The Subscriber is resident in the province or jurisdiction  set
     forth in the Subscription Agreement as the "Subscriber's Address" below its
     signature  as set forth on the first page hereof and if the  Subscriber  is
     acting  as  agent  for a  disclosed  principal/beneficial  purchaser,  such
     disclosed  principal/beneficial  purchaser is resident in the  jurisdiction
     set forth in the Subscription Agreement as the "Principal's Address" of the
     principal/beneficial  purchaser  and the  purchase by and sale to it of the
     Common Shares and any act, solicitation, conduct or negotiation directly or
     indirectly  in  furtherance  of such purchase and sale (whether to it or to
     any  beneficial  purchaser  for whom it may be acting) has occurred only in
     such jurisdiction. If other than an individual, the Subscriber has not been
     organized for the purpose of acquiring the Common Shares.

(b)  Canadian  Accredited  Investor.  If the Subscriber is a resident of Canada,
     the  Subscriber  is  purchasing  the Common Shares as principal for its own
     account not for the benefit of any other person and not with a present view
     or intention to the re-sale or  distribution  of such  Securities,  and the
     Subscriber  is  an  "accredited   investor"  as  defined  in   Multilateral
     Instrument   45-103  of  the  Canadian   Securities   Administrators   (the
     "Multilateral Instrument").  Specifically,  the Subscriber satisfies one or
     more of the categories included in the definition  "accredited investor" as
     set out in subsection 1.1 of the  Multilateral  Instrument which is set out
     as Schedule "A" hereto.

(c)  United States Accredited  Investor.  If the Subscriber is a U.S. person (as
     such term is defined in Regulation S under the United States Securities Act
     of 1933, as amended), the offer to subscribe for the Common Shares was made
     to the  Subscriber  when it was in the  United  States  or at the  time the
     Subscriber  entered into this  Subscription  Agreement the  Subscriber  was
     within  the United  States,  the  Subscriber  is  purchasing  the Shares as
     principal  for its own account not for the benefit of any other  person and
     not with a present view or intention to the re-sale or distribution of such
     Securities,  and the  Subscriber  is an  "accredited  investor"  within the
     meaning of Securities and Exchange  Commission Rule 501 of Regulation D, as
     presently in effect.

(d)  International   Securities  Laws.  If  the  Subscriber  is  resident  of  a
     jurisdiction ("International Jurisdiction") other than Canada or the United
     States  then:  (i)  the  Subscriber  is  knowledgeable   of,  or  has  been
     independently  advised  as  to,  the  applicable  securities  laws  of  the
     International Jurisdiction which would apply to this subscription, if there
     are any; (ii) the  Subscriber is purchasing  the Common Shares  pursuant to
     exemptions  from the prospectus  and  registration  requirements  under the
     applicable  securities laws of that International  Jurisdiction or, if such
     is not  applicable,  the  Subscriber  is  permitted  to purchase the Common
     Shares  under  the  applicable   securities   laws  of  the   International
     Jurisdiction  without  the  need  to rely on  such  exemptions;  (iii)  the
     applicable securities laws of the International 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
     International  Jurisdiction;  and (iv) the purchase of the Common Shares by
     the  Subscriber  does  not  trigger  under  the  laws of the  International
     Jurisdiction  any  obligation  to prepare and file a prospectus  or similar
     document, or any other report with respect to such purchase; the Subscriber
     shall, if requested by the Company, deliver to the Company a certificate or
     opinion of local counsel from the  International  Jurisdiction  which shall
     confirm the matters referred to in paragraph (d) to the satisfaction of the
     Company, acting reasonably.

(e)  Offering Memorandum. The Subscriber was not provided an offering memorandum
     in connection with the offering of the Common Shares.

(f)  Disclosure.  The  Subscriber  reasonably  believes it has  received all the
     information it considers  necessary or appropriate for deciding  whether to
     purchase  the  Common  Shares  and  that it has had an  opportunity  to ask
     questions  and receive  answers  from the Company  regarding  the terms and
     conditions  of  the  offering  of  the  Common  Shares  and  the  business,
     properties,  prospects and financial condition of the Company. No documents
     have been  furnished to the  Subscriber in connection  with the offering of
     the Common Shares except for this Subscription Agreement.

                                       4
<PAGE>

(g)  No  Representations.  The  Subscriber's  decision  to tender this offer and
     purchase  the  Common  Shares  has not been made as a result of any oral or
     written  representation as to fact or otherwise made by or on behalf of the
     Company  except as set out in this  Subscription  Agreement.  No person has
     made  to  the  Subscriber  any  written  or  oral  representations  to  the
     Subscriber:  (i) that any  person  shall  resell or  repurchase  the Common
     Shares, (ii) that any person shall refund the Subscription Amount, (iii) as
     to the future price or value of the Common Shares,  or (iv) that the Common
     Shares  shall be listed and posted for trading on a stock  exchange or that
     application has been made to list and post the Common Shares for trading on
     a stock exchange.

(h)  Absence of  Advertising.  The Subscriber is not acquiring the Common Shares
     as a result of, and to the best of the Subscriber's knowledge the offer and
     sale of the Common Shares is not being  accompanied by, an advertisement in
     any medium,  including,  but not limited to, printed  public media,  radio,
     television  or  telecommunications,  including  electronic  display  and no
     selling or  promotional  expenses  have been paid or incurred in connection
     with the offer and sale.

(i)  Re-sale  Restrictions.  The Subscriber has been independently advised as to
     the  restrictions  on the  Subscriber's  ability to transfer or re-sell the
     Common Shares and, in  particular,  that the Common Shares are subject to a
     hold period in  accordance  with  applicable  securities  laws and that the
     certificates  representing  the Common  Shares shall bear legends  denoting
     such re-sale  restrictions.  The  Subscriber is familiar with  Multilateral
     Instrument  45-102 of the Canadian  Securities  Administrators  and, if the
     Subscriber is a U.S. person, Securities and Exchange Commission Rule 144 of
     the SEC, as presently in effect,  and  understands  the resale  limitations
     imposed thereby and by applicable securities legislation and Exchange rules
     and policies.

(j)  Tax Advice.  The Subscriber has consulted the  Subscriber's own independent
     advisors  as  to  the  income  tax  consequences  and  the  suitability  of
     purchasing the Common Shares and is not relying on any  representations  or
     warranties  made by the Company or its advisors  with respect to the income
     tax consequences and suitability of purchasing such Securities.

(k)  Authorization.  The Subscriber has the necessary  capacity and authority to
     execute and deliver  this offer for  subscription  of Common  Shares of the
     Company and,  upon  acceptance  by the Company,  to observe and perform its
     covenants and  obligations  hereunder  and has taken all necessary  action,
     corporate or otherwise, in respect thereof.

(l)  Authorization  of Agent. If the Subscriber has subscribed for Common Shares
     as agent for a disclosed  principal,  the Subscriber is duly  authorized to
     execute and deliver  this offer for  subscription  of Common  Shares of the
     Company  and all other  necessary  documentation  in  connection  with such
     subscription on behalf of such principal and this offer for subscription of
     Common  Shares  of the  Company  has been  duly  authorized,  executed  and
     delivered by or on behalf of, such  principal  and upon  acceptance  by the
     Company  this  offer  for  subscription  of Common  Shares  of the  Company
     constitutes  a  legal,   valid  and  binding   contract  of  the  principal
     enforceable against such principal in accordance with its terms.

(m)  Effectiveness.  Upon acceptance by the Company this offer for  subscription
     of Common  Shares of the  Company  constitutes  a legal,  valid and binding
     contract of the Subscriber enforceable against the Subscriber in accordance
     with its terms.

(n)  Time of Closing.  The  representations and warranties in this Section 2 are
     true, accurate and correct and shall remain so as of the Time of Closing as
     defined herein.

3. Acknowledgements and Covenants of the Subscriber. The Subscriber acknowledges
to and agrees with the Company (which covenants shall survive the closing of the
transactions   contemplated   by  this   Subscription   Agreement  and  continue
indefinitely) that:

                                       5
<PAGE>

(a)  Canadian  Exempt  Distribution.  As the sale of the  Common  Shares  to the
     Subscriber is being completed  pursuant to exemptions from the requirements
     to provide the  Subscriber  with a  prospectus  and to sell the  securities
     subscribed for herein through a person  registered to sell securities under
     applicable securities legislation:

     (i)  certain  protections,  rights  and  remedies  provided  by  applicable
          securities  legislation,  including  statutory rights of rescission or
          damages,  shall not be available to the  Subscriber and the Subscriber
          may not receive  information  that the Subscriber would be entitled to
          under applicable securities legislation if no prospectus exemption was
          available;

     (ii) the Company is relieved of certain  obligations  which would otherwise
          apply under applicable securities legislation;

     (iii) there are risks associated with the purchase of the securities,

     (iv) there are  restrictions  on the  Subscriber's  ability  to resell  the
          securities and it is the  responsibility  of the  Subscriber's to find
          out what those restrictions are and to comply with them before selling
          the securities,

     (v)  various  filings  must  be  completed  and  disclosures  made  to  the
          securities   regulatory   authorities  having  jurisdiction  over  the
          securities of the Company and to the Exchange.

(b)  No  Regulatory  Review.  No  securities  commission  or similar  regulatory
     authority  has  reviewed  or passed  on the  merits  of the  Common  Shares
     subscribed for herein.

(c)  No Insurance. There is no government or other insurance covering the Common
     Shares subscribed for herein.

(d)  Speculative  Investment.  The  Common  Shares  subscribed  for  herein  are
     speculative and represent a high degree of risk, accordingly the Subscriber
     or, where it is not purchasing as principal, each beneficial purchaser, has
     sufficient  knowledge in financial and business affairs as to be capable of
     evaluating  the  merits  and  risks  of the  subscription  herein;  and the
     Subscriber,  or, where it is not purchasing as principal,  each  beneficial
     purchaser, is able to bear the economic risk of loss of its investment.

(e)  Re-sale  in  Canada.  The trade of the  Common  Shares  is being  completed
     pursuant to exemptions from the requirements to provide the Subscriber with
     a prospectus  and to sell the  securities  subscribed  for herein through a
     person registered to sell securities under applicable  Canadian  securities
     legislation, accordingly the Common Shares are characterized as "restricted
     securities" under the applicable  Canadian  provincial  securities laws and
     under such laws such  Securities may be resold without a person  registered
     to sell securities or a prospectus  only in certain limited  circumstances.
     It  is  the   responsibility  of  the  Subscriber  to  find  out  what  the
     restrictions  on the re-sale are and to comply with them before selling any
     Common  Shares  and  the  Subscriber  acknowledges  that  the  certificates
     representing  the  Common  Shares  offered  hereunder  shall  bear  legends
     denoting such re-sale restrictions.

(f)  Re-sale in the United States. The Common 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,  accordingly  the Common Shares are  characterized  as  "restricted
     securities" under the United States federal  securities laws and under such
     laws and  applicable  regulations  such  Securities  may be resold  without
     registration under the United States Securities Act of 1933 only in certain
     limited circumstances.  The Warrants may not exercised in the United States
     or by a U.S.  person  (as such term is defined  in  Regulation  S under the
     United States Securities Act of 1933, as amended) unless the holder, at its
     expense,  provides  the  Company  with  evidence  satisfactory  in form and
     substance  to the Company  (which may  include an opinion of United  States
     counsel  satisfactory  to the Company),  that  registration of the Warrants

                                       6
<PAGE>

     upon  exercise is not required  under the United States  Securities  Act of
     1933,  as  amended  or any  applicable  state  securities  laws.  It is the
     responsibility  of the Subscriber to find out what the  restrictions on the
     re-sale are and to comply with them  before  selling any Common  Shares and
     the Subscriber  acknowledges that each certificate  representing the Common
     Shares  issued  in the  United  States or to such a U.S.  person  (and each
     certificate  issued  in  exchange  for  or  in  substitution  of  any  such
     certificate)  shall  bear such  legends as may be deemed  necessary  by the
     Company in order to comply with  applicable  securities  laws of the United
     States.

(g)  Reliance  of  Representations  and  Warranties.   The  representations  and
     warranties in this Subscription Agreement of the Subscriber shall be relied
     upon by the  Company in  determining,  among  other  things,  whether  this
     Subscription  Agreement  and  the  issuance  of  the  Common  Shares  is in
     compliance with applicable securities laws.

(h)  Ongoing  Professional  Advice.  The Subscriber is responsible for obtaining
     his, her or its own legal,  tax and accounting  advice with respect to this
     Subscription  Agreement  and the  transactions  contemplated  by it and, in
     particular,  the Subscriber has been advised to consult his, her or its own
     legal advisers in connection with any applicable  statutory hold periods or
     re-sale  restrictions  and the Subscriber (or such others on behalf of whom
     it is contracting  hereunder) is solely  responsible  for  compliance  with
     applicable hold periods or re-sale restrictions.

(i)  Documentation.   The  Subscriber  shall  complete,  sign  and  deliver  all
     documentation  required by applicable  securities  laws in connection  with
     this Subscription Agreement,  executed as and when required. The Subscriber
     is aware  that the  Company  is  required  by law to  disclose  to  certain
     securities regulatory authorities the identity of each beneficial purchaser
     of the  Common  Shares  and  notwithstanding  that  the  Subscriber  may be
     purchasing  the Common  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).

(j)  Exchange  Acceptance.  The subscription by the Subscriber is subject to the
     acceptance of the Exchange and the Subscriber agrees to provide the Company
     with such documents and  information as may be required by Exchange  policy
     or  reasonably  requested by the Exchange and agrees that the failure to do
     so,  whether  such  failure  results  in  delays or in the  refusal  of the
     Exchange to accept this subscription, shall not constitute a default of the
     Company under this Subscription Agreement.

(k)  Obligations of the Company.  The  subscription by the Subscriber is subject
     to  the  acceptance  of  the  Company  and  is  effective  only  upon  such
     acceptance,  such  subscription  of the  Subscriber  hereunder is part of a
     larger offering of Common Shares by the Company and the Subscription Amount
     shall be added to the Company's  working capital and used in the discretion
     of the Company for the purposes of its business.

4. Representations and Warranties of the Company.  The Company,  upon acceptance
of this offer for subscription of Common Shares,  represents and warrants to the
Subscriber  (which  representations  and warranties shall survive the closing of
the  transactions  contemplated  by this  Subscription  Agreement  and  continue
indefinitely) as follows:

(a)  Organization,  Good Standing and Capacity. The Company is duly incorporated
     and  validly  existing  under  the  laws of  British  Columbia  and has all
     necessary  corporate  power and  authority  to own or lease its  assets and
     carry on its  business as  presently  carried on and is duly  licensed  and
     qualified  to carry  on its  business  in each  jurisdiction  in which  the
     location of its assets requires such license or qualification.

(b)  Due  Authorization,  etc. The Company has all  necessary  corporate  power,
     authority and capacity to enter into this Subscription  Agreement and to do
     all such acts and things as are required to be done,  observed or performed

                                       7
<PAGE>

     by it, in accordance  with the terms of this  Subscription  Agreement.  The
     Company has taken all necessary action to authorize the execution, delivery
     and performance of this  Subscription  Agreement and to observe and perform
     the provisions of each in accordance with their terms.

(c)  Listing.  The Common  shares of the Company are listed for trading  only on
     the  Exchange,  the  Company  meets  or  exceeds  the  listing  maintenance
     requirements  set  forth  in the  policies  of the  Exchange,  or  order or
     declaration  has been made or requested by the Exchange or the Company that
     the trading in the Common shares of the Company be declared inactive and no
     process or order  ceasing the  trading of the Common  shares of the Company
     has been commenced or issued by the Exchange.

(d)  Reporting Issuer Status. The Company is a reporting issuer, as such term is
     defined in the  applicable  securities  legislation,  only in  Provinces of
     British  Columbia,  Alberta  and  Ontario  and is not in  default of filing
     financial statements required by such applicable securities  legislation or
     paying prescribed fees and charges related thereto.

(e)  Cease Trade Orders. No order ceasing or suspending trading in securities of
     the Company nor  prohibiting the sale of such securities has been issued to
     the  Company  or its  directors,  officers  or  promoters  or to any  other
     companies  that  have  common  directors,  officers  or  promoters  and  no
     investigations or proceedings for such purposes are pending or threatened.

(f)  Valid Allotment and Issue.  Upon receipt of the Subscription  Amount by the
     Company from the Subscriber at the Closing (as defined herein),  the Common
     Shares shall be duly and validly created,  authorized,  and issued and upon
     receipt   of   payment   therefor   shall  be  issued  as  fully  paid  and
     non-assessable   shares,  in  compliance  with  all  securities  laws;  the
     Subscriber shall be the legal and beneficial owner thereof,  free and clear
     of all pre-emptive rights,  mortgages,  liens, charges, security interests,
     adverse  claims,  pledges and demands  whatsoever  arising by reason of the
     acts or omissions of the Company.

(g)  Time of Closing.  The  representations and warranties in this Section 4 are
     true, accurate and correct and shall remain so as of the Time of Closing as
     defined herein.

5.  Acknowledgements  and Covenants of the Company.  The Company acknowledges to
and agrees with the Subscriber that on or before the Closing,  the Company shall
file all documents and take all proceedings required to be taken by it to permit
the Common Shares to be  distributed  to the  Subscriber in compliance  with all
applicable securities and corporate laws.

6.  Indemnity of Company.  The Subscriber  shall defend,  indemnify and hold the
Company  harmless  from and  against  all claims,  actions,  damages,  fines and
expenses   arising  out  of  or   resulting   in  any  way  from  any   material
misrepresentation,  inaccuracy, incorrectness or breach of any representation or
warranty  made by the  Subscriber  contained in this  Subscription  Agreement or
contained  in any  document  or  certificate  given in  order  to carry  out the
transactions contemplated hereby.

7. Notice.  Unless otherwise provided herein, any notice or other  communication
to a party under this  Subscription  Agreement  may be made,  given or served by
registered mail, postage pre-paid, by facsimile or by delivery to the parties at
the addresses as set out on the first page of this Subscription  Agreement.  Any
notice or other communication:

(a)  mail  communication  shall be  deemed to have  been  received  on the fifth
     business day following its mailing;

(b)  facsimile  communication  shall be  deemed  to have  been  received  on the
     business day following the date of transmission; and

(c)  personal  delivery  communication  shall be deemed to have been received on
     the date of delivery.

                                       8
<PAGE>

In the event of a postal strike or delay  affecting mail  delivery,  the date of
receipt  of any  notice by mail is deemed to be  extended  by the length of such
strike or delay.  Each party may change its  address  for service at any time by
providing notice in writing of such change to the other party.

8.       General.

8.1.     In this Subscription Agreement:

     (i)  the  division  into  sections  and the  insertion  of headings are for
          convenience of reference only and shall not affect the construction or
          interpretation  of  this  Subscription  Agreement;   the  terms  "this
          Subscription Agreement", "hereof", "hereunder" and similar expressions
          refer  to  this  Subscription  Agreement  and  not to  any  particular
          section,  paragraph or other portion  hereof and include any agreement
          supplemental  hereto;  and unless  something in the subject  matter or
          context is inconsistent  therewith,  references herein to sections and
          paragraphs  are  to  sections  and  paragraphs  of  this  Subscription
          Agreement;

     (ii) words  importing the singular number only shall include the plural and
          vice versa,  words  importing the  masculine  gender shall include the
          feminine and neuter genders and vice versa and words importing persons
          shall  include  individuals,   partnerships,   associations,   trusts,
          unincorporated organizations and corporations;

     (iii)reference  is made to a  calculation  to be  made in  accordance  with
          generally  accepted  accounting  principles  (referred  to  herein  as
          "GAAP"),  such  reference  shall  be  deemed  to be to  the  generally
          accepted  accounting  principles  from  time to time  approved  by the
          Canadian  Institute  of  Chartered   Accountants,   or  any  successor
          institute, applicable as at the date on which such calculation is made
          or required to be made in accordance with GAAP; and

     (iv) unless otherwise  indicated,  all references to currency herein are to
          lawful money of Canada.

8.2.  The  Subscriber  covenants  and agrees to execute and deliver such further
agreements, documents and writings and provide such further assurances as may be
required  by the  Company to give  effect to this  Subscription  Agreement  and,
without  limiting the  generality of the  foregoing,  to do all acts and things,
execute and deliver all  documents,  agreements  and  writings  and provide such
assurances, undertakings, information, pooling agreements and investment letters
as may be  required  from  time to  time by any  stock  exchange  or  securities
commission having jurisdiction over the securities of the Company.

8.3. This Subscription Agreement is deemed to have been made in Denver, Colorado
and  shall be  governed  by the laws of the State of  Colorado,  and each of the
parties hereby irrevocably  submits to the exclusive  jurisdiction of the courts
of the State of Colorado.

8.4. The rights which accrue to the Company  under this  Subscription  Agreement
shall pass to its successors or assigns. The rights of the Subscriber under this
Subscription  Agreement are not assignable or transferable  in any manner.  This
Subscription   Agreement   shall  be   binding   upon  the   heirs,   executors,
administrators  and legal personal  representatives  of the Subscriber and, when
accepted by the Company,  the  successors  and permitted  assigns of the Company
respectively.

8.5.     Time is of the essence of this Subscription Agreement.

8.6. This Subscription  Agreement  supersedes all prior negotiations between the
parties with respect to the matters  herein  referred to and contains the entire
agreement  between the parties  hereto and may be modified only by an instrument
in writing signed by the party against whom modification is asserted. There have
not been any inducements,  representations  or warranties made by the Company or
by any of its directors, officers, employees or agents upon which the Subscriber
has relied on in entering into this Subscription Agreement.

                                       9
<PAGE>

                                  Schedule "A"

                Subsection 1.1 of Multilateral Instrument 45-103
                ------------------------------------------------

1.1      In this instrument

"accredited investor" means:

(a)  a Canadian financial  institution,  or an authorized foreign bank listed in
     Schedule III of the Bank Act (Canada),

(b)  the Business  Development  Bank of Canada  incorporated  under the Business
     Development Bank of Canada Act (Canada),

(c)  an  association  under the  Cooperative  Credit  Associations  Act (Canada)
     located in Canada,

(d)  a subsidiary of any person or company referred to in paragraphs (a) to (c),
     if  the  person  or  company  owns  all  of the  voting  securities  of the
     subsidiary,  except the voting  securities  required  by law to be owned by
     directors of that subsidiary,

(e)  a person or company registered under the securities  legislation,  or under
     the securities legislation of another jurisdiction of Canada, as an adviser
     or  dealer,  other  than a  limited  market  dealer  registered  under  the
     Securities Act (Ontario),

(f)  an  individual  registered  or  formerly  registered  under the  securities
     legislation, or under the securities legislation of another jurisdiction of
     Canada, as a representative of a person or company referred to in paragraph
     (e),

(g)  the government of Canada or a province,  or any crown corporation or agency
     of the government of Canada or a province,

(h)  a municipality, public board or commission in Canada,

(i)  any  national,   federal,  state,  provincial,   territorial  or  municipal
     government  of or in any  foreign  jurisdiction,  or  any  agency  of  that
     government,

(j)  a pension fund that is regulated by either the Office of the Superintendent
     of Financial  Institutions  (Canada) or a provincial  pension commission or
     similar regulatory authority,

(k)  a registered charity under the Income Tax Act (Canada),

(l)  an  individual  who,  either alone or jointly  with a spouse,  beneficially
     owns,  directly  or  indirectly,   financial  assets  having  an  aggregate
     realizable  value that before  taxes,  but net of any related  liabilities,
     exceeds $1,000,000,

(m)  an individual  whose net income before taxes  exceeded  $200,000 in each of
     the two most recent years or whose net income  before taxes  combined  with
     that of a spouse exceeded $300,000 in each of the two most recent years and
     who, in either case,  reasonably expects to exceed that net income level in
     the current year,

(n)  a corporation, limited partnership, limited liability partnership, trust or
     estate,  other than a mutual fund or  non-redeemable  investment fund, that
     had net  assets  of at least  $5,000,000  as  shown  on its  most  recently
     prepared financial statements,

(o)  a  mutual  fund  or  non-redeemable  investment  fund  that,  in the  local
     jurisdiction,  distributes its securities only to persons or companies that
     are accredited investors,

(p)  a  mutual  fund  or  non-redeemable  investment  fund  that,  in the  local
     jurisdiction,  distributes its securities  under a prospectus for which the
     regulator has issued a receipt,

(q)  an entity organized in a foreign  jurisdiction  that is analogous to any of
     the entities referred to in paragraphs (a) through (e) and paragraph (j) in
     form and function, or

(r)  a person or company  in  respect  of which all of the owners of  interests,
     direct or indirect, legal or beneficial,  are persons or companies that are
     accredited investors;

<PAGE>

                                  Schedule "B"

                                     FORM 4C
                                     -------

                       CORPORATE PLACEE REGISTRATION FORM
                       ----------------------------------

Where  subscribers  to a Private  Placement are not  individuals,  the following
information  about the placee  must be  provided.  This Form will remain on file
with the Exchange.  The corporation,  trust,  portfolio  manager or other entity
(the  "Placee")  need only file it on one time basis,  and it will be referenced
for all subsequent  Private  Placements in which it participates.  If any of the
information  provided in this Form changes,  the Placee must notify the Exchange
prior to participating in further placements with Exchange listed companies.  If
as a result of the  Private  Placement,  the  Placee  becomes  an Insider of the
Issuer,  Insiders  of the  Placee  are  reminded  that they must file a Personal
Information Form (2A) with the Exchange.

1.       Placee Information:

(a)      Name:
                ----------------------------------------------------------------

(b)      Complete Address:
                            ----------------------------------------------------

(c)      Jurisdiction of Incorporation or Creation:
                                                    ----------------------------

2.   (a) Is the Placee purchasing securities as a portfolio manager (Yes/No)?

     (b)  Is the Placee  carrying on business as a portfolio  manager outside of
          Canada (Yes/No)? __________

3.       If the answer to 2(b) above was "Yes", the undersigned certifies that:

     (a)  It is purchasing securities of an Issuer on behalf of managed accounts
          for  which it is  making  the  investment  decision  to  purchase  the
          securities and has full  discretion to purchase or sell securities for
          such  accounts  without  requiring the client's  express  consent to a
          transaction;

     (b)  it carries on the business of managing the  investment  portfolios  of
          clients through  discretionary  authority  granted by those clients (a
          "portfolio manager" business) in ____________________  [jurisdiction],
          and it is permitted by law to carry on a portfolio manager business in
          that jurisdiction;

     (c)  it was not created  solely or primarily  for the purpose of purchasing
          securities of the Issuer;

     (d)  the total  asset  value of the  investment  portfolios  it  manages on
          behalf of clients is not less than $20,000,000; and

     (e)  it has no reasonable  grounds to believe,  that any of the  directors,
          senior officers and other insiders of the Issuer, and the persons that
          carry on investor relations activities for the Issuer has a beneficial
          interest in any of the managed accounts for which it is purchasing

<PAGE>

4.   If the  answer  to 2(a).  above  was  "No",  please  provide  the names and
     addresses of control persons of the Placee:

<TABLE>
<CAPTION>

     ---------------------------------- -------------------------- -------------------------- -----------------------
     Name                               City                       Province or State          Country
     ---------------------------------- -------------------------- -------------------------- -----------------------
     <S>                                <C>                        <C>                        <C>

     ---------------------------------- -------------------------- -------------------------- -----------------------

     ---------------------------------- -------------------------- -------------------------- -----------------------

     ---------------------------------- -------------------------- -------------------------- -----------------------

     ---------------------------------- -------------------------- -------------------------- -----------------------
</TABLE>

The  undersigned  acknowledges  that it is bound by the provisions of applicable
Securities Law,  including  provisions  concerning the filing of insider reports
and  reports  of  acquisitions  (See  for  example,  sections  87 and 111 of the
Securities Act (British Columbia) and sections 176 and 182 of the Securities Act
(Alberta).

Dated at                                              on
         --------------------------------------------    -----------------------

                                             _________________________________
                                            (Name of Purchaser - please print)

                                             _________________________________
                                            (Authorized Signature)

                                             _________________________________
                                            (Official Capacity - please print)

                                             _________________________________
                                            (please print name of individual
                                            whose signature appears above)

                          THIS IS NOT A PUBLIC DOCUMENT

<PAGE>

                                  SCHEDULE "C"

                       INVESTOR SUITABILITY QUESTIONNAIRE
                       ----------------------------------

Archangel Diamond Corporation,  a Yukon corporation,  (the "Company"),  will use
the  responses  to this  questionnaire  to  qualify  prospective  investors  for
purposes of applicable  securities  laws. If the answer to any question below is
"none" or "not applicable", please so indicate.

Your answers will be kept  confidential at all times.  However,  by signing this
Questionnaire, you agree that the Company may present this Questionnaire to such
parties as it deems appropriate to establish the availability of exemptions from
registration under applicable security laws.
<TABLE>
<CAPTION>
<S>    <C>                                     <C>

I.     GENERAL INFORMATION (to be completed by all proposed investors)
                                               ---

1.       Name to appear on stock certificate:
                                               -----------------------------------------------------------

         Name of beneficial owner (if different from above):

     If the beneficial  owner differs from the registered  holder,  describe the
     relationship.

2.       Dollar amount of your proposed investment in this financing:
                                                                       -----------------------------------

II.    INDIVIDUAL INVESTORS (investors other than individuals should turn to Part III)

1.       PERSONAL

         Residence Address
                            ------------------------------------------------------------------------------

         Telephone Number
                           -------------------------------------------------------------------------------

         Social Security Number
                                 -------------------------------------------------------------------------

         Date of Birth
                        ----------------------------------------------------------------------------------

2.       BUSINESS

         Occupation
                     -------------------------------------------------------------------------------------

         Number of Years
                          --------------------------------------------------------------------------------

         Present Employer
                           -------------------------------------------------------------------------------

         Position/Title
                         ---------------------------------------------------------------------------------

         Business Address
                           -------------------------------------------------------------------------------

3.       INCOME

          (a)  Your annual gross income for 2002 is expected to be in excess of:

                  [ ]  $ 50,000.00 U.S.                 [ ]   $200,000.00 U.S.
                  [ ]  $100,000.00 U.S.                 [ ]   $250,000.00 U.S.

          (b)  Your annual  gross  income for each of 2000 and 2001 was not less
               than:

                  [ ]   $ 50,000.00 U.S.                [ ]   $200,000.00 U.S.
                  [ ]   $100,000.00 U.S.                [ ]   $250,000.00 U.S.

4.       NET WORTH

          (a)  Your net worth as of December  31,  2001,  together  with the net
               worth of your spouse, was in excess of:

                   [ ]  $100,000.00 U.S.                 [ ]   $750,000.00 U.S.
                   [ ]   $250,000.00 U.S.
                   [ ]  $500,000.00 U.S.                 [ ]  $1,000,000 U.S.

<PAGE>

          (b)  In the event you may  propose  to  purchase  $150,000  or more of
               securities of the Company,  does your total purchase price exceed
               10% of your net worth,  or joint net worth with your  spouse,  at
               the time of purchase?

                  Not applicable   [ ]    Yes   [ ]               No   [ ]

               If "yes", what percent of net worth does the total purchase price
               represent?

               ________________________________________________________________
               ("Net   worth"   may   include   principal   residence,   net  of
               encumbrances,  at either cost or appraised value, and furnishings
               and automobiles.)

5.       EDUCATION

          Please describe your educational  background and degrees obtained,  if
          any.

6.       INVESTMENT EXPERIENCE

         (a)      Please  describe  briefly  principal jobs held during the last
                  five years. Specific employers need not be identified. What is
                  sought is a sufficient  description to permit a  determination
                  concerning  the extent of your  experience  in  financial  and
                  business matters.

               ________________________________________________________________

               ________________________________________________________________

               ________________________________________________________________

         (b)      Please indicate the frequency of your investment in marketable securities:

                  Often  [ ]          Occasionally   [ ]          Seldom   [ ]             Never   [ ]   .

         (c)      Please indicate the frequency of your investment in securities in which no market is made:

                  Five or more   [ ]            1 or more but fewer than five   [ ]           None   [ ]   .

7.       FINANCIAL ADVISORS

          In evaluating this investment, will you use the services of an advisor
          (if so, please identify):

         Name
               -------------------------------------------------------------------------------------------

         Address
                  ----------------------------------------------------------------------------------------

         City                                           State
               --------------------------------------          -------------------------------------------

         Zip Code                                    Telephone
                   ----------------------------------           ------------------------------------------

                         PLEASE TURN TO THE LAST PAGE AND SIGN AND DATE THIS QUESTIONNAIRE

III. NON-INDIVIDUAL  INVESTORS  (Please  answer Part III only if the purchase is
     proposed to be undertaken by a corporation, partnership or other entity.)

      IF INVESTMENT WILL BE MADE BY MORE THAN ONE AFFILIATED ENTITY, PLEASE
             COMPLETE A COPY OF THIS QUESTIONNAIRE FOR EACH ENTITY.

1.       IDENTIFICATION

         Name of Entity
                         ---------------------------------------------------------------------------------

         Type of Entity (corporation partner-ship, trust, etc.)

         Jurisdiction of Formation or Incorporation
                                                     -----------------------------------------------------

<PAGE>

         Date of Formation
                            ------------------------------------------------------------------------------

         Federal Tax I.D. Number
                                  ------------------------------------------------------------------------

         Was entity formed for the purpose of this investment?

                           Yes   [ ]                  No   [ ]

         If the answer is yes, all shareholders, partners or other equity owners
         must answer Parts I and II of this  Questionnaire.  If the above answer
         is no, please continue completing this form.

         If the undersigned is a partnership,  has such partnership  previously
         carried out other business?

                           Yes  [ ]                  No   [ ]

2.       Name of Officer/Partner/Trustee making investment decision on behalf of
         the Entity:

         _______________________________________________________________________

3.       (a)      The Officer/Partner/Trustee making the investment decision has
                  the degree of knowledge and experience in financial and
                  business matters to enable him to properly evaluate the merits
                  and risks of this investment.

                           Yes   [ ]                  No   [ ]

         (b)      The  Officer/Partner/Trustee  making the  investment  decision
                  understands  the full nature and risk of this  investment  and
                  believes  that the Entity can afford the complete  loss of the
                  investment.

                           Yes   [ ]                  No   [ ]

         (c)      The  Officer/Partner/Trustee  making the  investment  decision
                  believes that the Entity can afford to hold the  securities of
                  the company for an indefinite time.

                           Yes   [ ]                 No   [ ]

4.       Describe  the  prior  investment  experience  of the  Entity  or the
         Officer/Partner/Trustee  making  the investment decision in investing
         in companies such as the Company:

         ______________________________________________________________________

         ______________________________________________________________________

         ______________________________________________________________________

5.       The current net worth of the Entity is $_______________________________

6.       The Entity will have another person review or otherwise assist or
         advise it in evaluating this investment.

                           Yes  [ ]               No  [ ]

         If "Yes," provide the following information:

         Name
               -------------------------------------------------------------------------------------------

         Address
                  ----------------------------------------------------------------------------------------

         City                                           State
               --------------------------------------          -------------------------------------------

         Zip Code                                    Telephone
                   ----------------------------------           ------------------------------------------

         Such person will act as its Representative:

                           Yes  [ ]              No  [ ]

7.       BUSINESS

          Please  briefly  describe the nature of the business  conducted by the
          investing entity:

         ______________________________________________________________________

         ______________________________________________________________________

         ______________________________________________________________________
</TABLE>

<PAGE>

III.   SIGNATURE

The above  information  is true and  correct in all  material  respects  and the
undersigned recognizes that the Company and its counsel are relying on the truth
and accuracy of such information and the  representations  and warranties of the
undersigned  in the  Subscription  Agreement in relying on an exemption from the
registration  requirements  of the  Securities Act and the Securities Act (1933)
(as defined in the Subscription Agreement),  and in determining applicable state
securities  laws and relying on exemptions  contained  therein.  The undersigned
agrees  to  notify  the  Company  promptly  of  any  changes  in  the  foregoing
information which may occur prior to the investment.

Executed at ____________________, on ___________________________ 2002.

                                                    ____________________________
                                                           (Signature)

                                                    ____________________________
                                                     (Title if for Entity)

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