Exhibit 10.1

 

PURCHASE AGREEMENT

 

PURCHASE AGREEMENT (the “Agreement”), dated as of May 9, 2018, by and between
GOLDEN MINERALS COMPANY, a Delaware corporation, (the “Company”), LINCOLN PARK
CAPITAL FUND, LLC, an Illinois limited liability company (the “Investor”).

 

WHEREAS:

 

Subject to the terms and conditions set forth in this Agreement, the Company
wishes to sell to the Investor, and the Investor wishes to buy from the Company,
3,153,808 shares (the “Purchase Shares”) of the Company’s common stock, $0.01
par value per share (the “Common Stock”), for a total purchase price of One
Million Three Hundred Thousand Dollars ($1,300,000).

 

NOW THEREFORE, in consideration of the mutual covenants contained in this
Agreement, and for other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the Company and the Investor hereby
agree as follows:

 

1.                                      CERTAIN DEFINITIONS.

 

For purposes of this Agreement, the following terms shall have the following
meanings:

 

(a)                                 “Bankruptcy Law” means Title 11, U.S. Code,
or any similar federal or state law for the relief of debtors.

 

(b)                                 “Base Prospectus” means the Company’s final
base prospectus, dated September 29, 2017, a preliminary form of which is
included in the Registration Statement, including the documents incorporated by
reference therein.

 

(c)                                  “Business Day” means any day on which the
Principal Market is open for trading, including any day on which the Principal
Market is open for trading for a period of time less than the customary time.

 

(d)                                 “Canadian Commissions” means, collectively,
each of the Canadian provincial securities regulatory authorities.

 

(e)                                  “Canadian Securities Laws” shall mean the
applicable securities laws of each of the Provinces of Canada, and the
respective applicable rules and regulations under such laws, together with
applicable published national, multilateral and local policy statements,
instruments, notices and blanket orders of the Canadian Commissions.

 

(f)                                   “Confidential Information” means any
information disclosed by either party to the other party, either directly or
indirectly, in writing, orally or by inspection of tangible objects (including,
without limitation, documents, prototypes, samples, plant and equipment), which
is designated as “Confidential,” “Proprietary” or some similar designation.
Information communicated orally shall be considered Confidential Information if
such information is confirmed in writing as being Confidential Information
within ten (10) Business Days after the initial disclosure. Confidential
Information may also include information disclosed to a disclosing party by
third parties. Confidential Information shall not, however, include any
information which (i) was publicly known and made generally available in the
public domain prior to the time of disclosure by the disclosing party;
(ii) becomes publicly known and made generally available after disclosure by the
disclosing party to the receiving party through no action or inaction of the
receiving party; (iii) is already in the possession of the receiving party
without restrictions as to

 

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confidentiality at the time of disclosure by the disclosing party as shown by
the receiving party’s files and records immediately prior to the time of
disclosure; (iv) is obtained by the receiving party from a third party without a
breach of such third party’s obligations of confidentiality; (v) is
independently developed by the receiving party without use of or reference to
the disclosing party’s Confidential Information, as shown by documents and other
competent evidence in the receiving party’s possession; or (vi) is required by
law to be disclosed by the receiving party, provided that the receiving party
gives the disclosing party prompt written notice of such requirement prior to
such disclosure and assistance in obtaining an order protecting the information
from public disclosure.

 

(g)                                  “Custodian” means any receiver, trustee,
assignee, liquidator or similar official under any Bankruptcy Law.

 

(h)                                 “DTC” means The Depository Trust Company, or
any successor performing substantially the same function for the Company.

 

(i)                                     “DWAC Shares” means shares of Common
Stock that are (i) issued in electronic form, (ii) freely tradable and
transferable and without restriction on resale in the United States and
(iii) timely credited by the Company to the Investor or its designee’s specified
Deposit/Withdrawal at Custodian (DWAC) account with DTC under its Fast Automated
Securities Transfer (FAST) Program or any similar program hereafter adopted by
DTC performing substantially the same function.

 

(j)                                    “Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations promulgated
thereunder.

 

(k)                                 “Initial Prospectus Supplement” means the
prospectus supplement of the Company dated May 9, 2018 relating to the Purchase
Shares, including the accompanying Base Prospectus, to be prepared and filed by
the Company with the SEC pursuant to Rule 424(b)(5) under the Securities Act and
in accordance with Section 5(a) hereof, together with all documents and
information incorporated therein by reference.

 

(l)                                     “Material Adverse Effect” means any
material adverse effect on (i) the enforceability of any Transaction Document,
(ii) the results of operations, assets, business or financial condition of the
Company and its Subsidiaries, taken as a whole, other than any material adverse
effect that resulted primarily from (A) any change in the United States or
foreign economies or securities or financial markets in general that does not
have a disproportionate effect on the Company and its Subsidiaries, taken as a
whole, (B) any change that generally affects the industry in which the Company
and its Subsidiaries operate that does not have a disproportionate effect on the
Company and its Subsidiaries, taken as a whole, (C) any change arising in
connection with earthquakes, hostilities, acts of war, sabotage or terrorism or
military actions or any escalation or material worsening of any such
hostilities, acts of war, sabotage or terrorism or military actions existing as
of the date hereof, (D) any action taken by the Investor, its affiliates or its
successors and assigns with respect to the transactions contemplated by this
Agreement, (E) the effect of any change in applicable laws or accounting
rules that does not have a disproportionate effect on the Company and its
Subsidiaries, taken as a whole, or (F) any change resulting from compliance with
terms of this Agreement or the consummation of the transactions contemplated by
this Agreement, or (iii) the Company’s ability to perform in any material
respect on a timely basis its obligations under any Transaction Document to be
performed as of the date of determination.

 

(m)                             “Person” means an individual or entity including
but not limited to any limited liability company, a partnership, a joint
venture, a corporation, a trust, an unincorporated organization and a government
or any department or agency thereof.

 

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(n)                                 “Principal Market” means the U.S. Trading
Market (it being hereby acknowledged and agreed that the term “Principal Market”
for all purposes of this Agreement and the transactions contemplated hereby
shall not include the TSX or any other Canadian stock exchange or quotation
system).

 

(o)                                 “Prospectus” means the Base Prospectus, as
supplemented by any Prospectus Supplement (including the Initial Prospectus
Supplement), including the documents and information incorporated by reference
therein.

 

(p)                                 “Prospectus Supplement” means any prospectus
supplement to the Base Prospectus (including the Initial Prospectus Supplement)
filed with the SEC pursuant to Rule 424(b) under the Securities Act in
connection with the transactions contemplated by this Agreement, including the
documents and information incorporated by reference therein.

 

(q)                                 “Registration Statement” means the effective
registration statement on Form S-3 (Commission File No. 333-220461) filed by the
Company with the SEC pursuant to the Securities Act for the registration of
shares of its Common Stock, including the Purchase Shares, and certain other
securities, as such Registration Statement has been or may be amended and
supplemented from time to time, including all documents filed as part thereof or
incorporated by reference therein, and including all information deemed to be a
part thereof at the time of effectiveness pursuant to Rule 430B of the
Securities Act, including any comparable successor registration statement filed
by the Company with the SEC pursuant to the Securities Act for the registration
of shares of its Common Stock, including the Purchase Shares.

 

(r)                                    “SEC” means the U.S. Securities and
Exchange Commission.

 

(s)                                   “Securities Act” means the Securities Act
of 1933, as amended, and the rules and regulations promulgated thereunder.

 

(t)                                    “Subsidiary” means any Person the Company
wholly-owns or controls, or in which the Company, directly or indirectly, owns a
majority of the voting stock or similar voting interest, in each case that would
be disclosable pursuant to Item 601(b)(21) of Regulation S-K promulgated under
the Securities Act.

 

(u)                                 Transaction Documents” means, collectively,
this Agreement and the schedules and exhibits hereto, and each of the other
agreements, documents, certificates and instruments entered into or furnished by
the parties hereto in connection with the transactions contemplated hereby and
thereby.

 

(v)                                 “Transfer Agent” means Computershare Trust
Company, N.A., or such other Person who is then serving as the transfer agent
for the Company in respect of the Common Stock.

 

(w)                               “TSX” means the Toronto Stock Exchange (or any
successor thereto).

 

(x)                                 “U.S. Trading Market” means the NYSE
American (or any nationally recognized successor thereto); provided however,
that in the event the Company’s Common Stock is ever listed or traded on The
Nasdaq Capital Market, The Nasdaq Global Market, The Nasdaq Global Select
Market, the New York Stock Exchange, the NYSE Arca or the OTC Bulletin Board (it
being understood that as used herein “OTC Bulletin Board” shall also mean any
successor or comparable market quotation system or exchange to the OTC Bulletin
Board such as the OTCQB operated by the OTC Markets Group, Inc.), then the “U.S.
Trading Market” shall mean such other market or exchange on which the Company’s
Common Stock is then listed or traded or any successor thereto.

 

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2.  PURCHASE OF PURCHASE SHARES.

 

Subject to the terms and conditions set forth in this Agreement, the Company
desires to sell to the Investor, and the Investor desires to purchase from the
Company, the Purchase Shares, as follows:

 

(a)                                                           Purchase of Common
Stock.  Upon the satisfaction of the conditions set forth in Sections 7 and 8
hereof (the “Closing” and the date of satisfaction of such conditions the
“Closing Date”), the Investor shall purchase from the Company, and the Company
shall issue or cause to be issued and sell to the Investor, for a total purchase
price of One Million Three Hundred Thousand Dollars ($1,300,000) (the “Purchase
Price”), 3,153,808 Purchase Shares, at a price of $0.4122 per Purchase Share.

 

(b)                                 Payment of Purchase Price.   The Investor
shall pay the Purchase Price to the Company as full payment for all of the
Purchase Shares to be purchased by it hereunder by wire transfer of immediately
available funds on the same Business Day that the Investor receives all of the
Purchase Shares as DWAC Shares, if all of the Purchase Shares are so received by
the Investor before 1:00 p.m., Eastern time, or, if any of the Purchase Shares
are received by the Investor after 1:00 p.m., Eastern time, the next Business
Day.  All payments made under this Agreement shall be made in lawful money of
the United States of America or wire transfer of immediately available funds to
the account designated by the Company by written notice to the Investor prior to
the date of this Agreement.

 

(c)                                  Compliance with Securities Laws and
Rules of Principal Market and TSX.

 

(i)                                     Maximum Share Cap.  The Company hereby
confirms that the issuance of the Purchase Shares to the Investor pursuant to
this Agreement shall not result in (i) the issuance of a number of shares of
Common Stock that would exceed the maximum number of shares of Common Stock that
the Company may issue (taking into account all shares of Common Stock issued or
issuable pursuant to any transaction or series of transactions that may be
aggregated with the transactions contemplated by this Agreement under applicable
rules of the Principal Market) without (A) breaching the Company’s obligations
under the applicable rules of the Principal Market or (B) obtaining stockholder
approval under the applicable rules of the Principal Market, or (ii) the
issuance of a number or dollar amount of securities of the Company, including
the Purchase Shares, that would exceed the maximum amount of securities of the
Company permitted to be offered and sold by the Company under General
Instruction I.B.6. of Form S-3 (the lesser of clause (i) and (ii), the “Maximum
Share Cap”).

 

(ii)                                  Restrictions on Sales in Canada.  The
Investor acknowledges that the Purchase Shares have not been and shall not be
qualified for distribution in any Province or Territory of Canada. The Investor
covenants and agrees that, until the date that is four months and one (1) day
after the Closing Date, it shall: (i) not offer or sell any Purchase Shares that
are issued and sold to the Investor pursuant to this Agreement in Canada either
(A) on or through the TSX or any other Canadian stock exchange or quotation
system, or (B) directly to any third Person whom, to the Investor’s knowledge
following reasonable inquiry, is either (1) a Person resident in any Province or
Territory of Canada or (2) a Person acquiring such Purchase Shares for the
benefit of another Person resident in any Province or Territory of Canada; and
(ii) offer and sell all Purchase Shares that are issued and sold to the Investor
pursuant to this Agreement only (A) in transactions executed on the Principal
Market through a registered broker-dealer located in the United States, or
(B) directly to third Persons, none of whom, to the Investor’s knowledge
following reasonable inquiry, is either (1) a Person resident in any Province or
Territory of Canada or (2) a Person acquiring such Purchase Shares for the
benefit of another Person resident in any Province or Territory of Canada.

 

(iii)                               General. The Company shall not issue any
shares of Common Stock pursuant to this Agreement if such issuance would
reasonably be expected to result in (A) a violation of applicable U.S.

 

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federal or state securities laws, including, without limitation, the Securities
Act and the Exchange Act, or applicable Canadian Securities Laws, or (B) a
breach of the Company’s obligations under applicable rules of the Principal
Market or applicable rules of the TSX. The provisions of this Section 2(c) shall
be implemented in a manner otherwise than in strict conformity with the terms
hereof only if necessary to ensure compliance with the Securities Act, the
Exchange Act, Canadian Securities Laws, the rules of the Principal Market, and
the rules, regulations and policies of the TSX.

 

(d)                                              Beneficial Ownership
Limitation.  Notwithstanding anything to the contrary contained in this
Agreement, the Company shall not issue or sell to the Investor, and the Investor
shall not purchase or acquire from the Company, any shares of Common Stock under
this Agreement which, when aggregated with all other shares of Common Stock then
beneficially owned by the Investor and its affiliates (as calculated pursuant to
Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder) would
result in the beneficial ownership by the Investor of more than 9.99% of the
then issued and outstanding shares of Common Stock (the “Beneficial Ownership
Limitation”).

 

3.                                                   INVESTOR’S REPRESENTATIONS
AND WARRANTIES.

 

The Investor represents and warrants to the Company that as of the date hereof
and as of the Closing Date:

 

(a)                                 Accredited Investor Status.  The Investor is
an “accredited investor” as that term is defined in Rule 501(a)(3) of Regulation
D promulgated under the Securities Act.

 

(b)                                 Information.  The Investor understands that
its investment in the Purchase Shares involves a high degree of risk.  The
Investor (i) is able to bear the economic risk of an investment in the Purchase
Shares including a total loss thereof, (ii) has such knowledge and experience in
financial and business matters that it is capable of evaluating the merits and
risks of the proposed investment in the Purchase Shares and (iii) has had an
opportunity to ask questions of and receive answers from the officers of the
Company concerning the financial condition and business of the Company and
others matters related to an investment in the Purchase Shares.  Neither such
inquiries nor any other due diligence investigations conducted by the Investor
or its representatives shall modify, amend or affect the Investor’s right to
rely on the Company’s representations and warranties contained in Section 4
below. The Investor has sought such accounting, legal and tax advice from its
own independent advisors as it has considered necessary to make an informed
investment decision with respect to its acquisition of the Purchase Shares and
is not relying on any accounting, legal, tax or other advice from the Company or
its officers, employees, representatives or advisors.  The Investor acknowledges
and agrees that the Company neither makes nor has made any representations or
warranties with respect to the transactions contemplated hereby other than those
specifically set forth in Section 4 hereof.

 

(c)                                  No Governmental Review.  The Investor
understands that no U.S. federal or state or Canadian provincial agency or any
other government or governmental agency has passed on or made any recommendation
or endorsement of the Purchase Shares or the fairness or suitability of an
investment in the Purchase Shares nor have such authorities passed upon or
endorsed the merits of the offering of the Purchase Shares.

 

(d)                                 Validity; Enforcement.  This Agreement has
been duly and validly authorized, executed and delivered on behalf of the
Investor and is a valid and binding agreement of the Investor enforceable
against the Investor in accordance with its terms, subject as to enforceability
to general principles of equity and to applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation and other similar laws relating to, or
affecting generally, the enforcement of applicable creditors’ rights and
remedies.

 

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(e)                                  Residency.  The Investor is a resident of
the State of Illinois.

 

(f)                                   No Short Selling.  The Investor represents
and warrants to the Company that at no time prior to the date of this Agreement
has the Investor or any of its agents, representatives or affiliates engaged in
or effected, in any manner whatsoever, directly or indirectly, any (i) “short
sale” (as such term is defined in Rule 200 of Regulation SHO of the Exchange
Act) of the Common Stock or (ii) hedging transaction, which establishes a net
short position with respect to the Common Stock.

 

(g)                                  Beneficial Ownership of Common Stock.  The
Investor and its affiliates do not have, and as of the Closing (immediately
prior to the delivery of the Purchase Shares) will not have, beneficial
ownership (as calculated pursuant to Section 13(d) of the Exchange Act and
Rule 13d-3 promulgated thereunder) of any shares of Common Stock.

 

4.                                      REPRESENTATIONS AND WARRANTIES OF THE
COMPANY.

 

The Company represents and warrants to the Investor that, except as set forth in
the disclosure schedules attached hereto, which exceptions shall be deemed to be
a part of the representations and warranties made hereunder, as of the date
hereof and as of the Closing Date:

 

(a)                                 Organization and Qualification. The Company
and each of its Subsidiaries is an entity duly incorporated or otherwise
organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization, with the requisite corporate
power and authority to own and use its properties and assets and to carry on its
business as currently conducted.  Neither the Company nor any of its
Subsidiaries is in violation or default of any of the provisions of its
respective certificate or articles of incorporation, bylaws or other
organizational or charter documents.  Each of the Company and its Subsidiaries
is duly qualified to conduct business and is in good standing as a foreign
corporation or other entity in each jurisdiction in which the nature of the
business conducted or property owned by it makes such qualification necessary,
except where the failure to be so qualified or in good standing, as the case may
be, would result in a Material Adverse Effect and no proceeding has been
instituted in any such jurisdiction revoking, limiting or curtailing or seeking
to revoke, limit or curtail such power and authority or qualification.  The
Company has no Subsidiaries except as set forth in the SEC Documents (as defined
below).

 

(b)                                 Authorization; Enforcement; Validity. 
(i) The Company has the requisite corporate power and authority to enter into
and perform its obligations under this Agreement and each of the other
Transaction Documents, including without limitation, the issuance of the
Purchase Shares in accordance with the terms hereof and thereof, (ii) the
execution and delivery of the Transaction Documents by the Company and the
consummation by it of the transactions contemplated hereby and thereby,
including without limitation, the issuance of the Purchase Shares have been duly
authorized by the Company’s Board of Directors (or a duly authorized committee
thereof) and no further consent or authorization is required by the Company, its
Board of Directors (or a duly authorized committee thereof) or its stockholders,
(iii) each of this Agreement and other Transaction Documents have been duly
executed and delivered by the Company and (iv) each of this Agreement and the
other Transaction Documents upon its execution on behalf of the Company shall
constitute the valid and binding obligations of the Company enforceable against
the Company in accordance with their terms, except as such enforceability may be
limited by general principles of equity or applicable bankruptcy, insolvency,
reorganization, moratorium, liquidation or similar laws relating to, or
affecting generally, the enforcement of creditors’ rights and remedies. The
Board of Directors of the Company (or a duly authorized committee thereof) has
approved the resolutions (the “Signing Resolutions”) substantially in the form
provided to the Investor to authorize this Agreement the other Transaction
Documents and the transactions contemplated hereby and thereby.  The Signing

 

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Resolutions are valid, in full force and effect and have not been materially
modified or supplemented in any respect.  The Company has delivered to the
Investor a true and correct copy of a unanimous written consent adopting the
Signing Resolutions executed by all of the members of the Board of Directors of
the Company (or a duly authorized committee thereof).  Except as set forth in
this Agreement, no other approvals or consents of the Company’s Board of
Directors and/or stockholders is necessary under applicable laws and the
Company’s Certificate of Incorporation and/or Bylaws to authorize the execution
and delivery of this Agreement, the other Transaction Documents or any of the
transactions contemplated hereby or thereby, including, but not limited to, the
issuance of the Purchase Shares.

 

(c)                                  Capitalization.  As of the date hereof, the
authorized capital stock of the Company is set forth in the Company’s Quarterly
Report on Form 10-Q for the quarter ended March 31, 2018.  Except as disclosed
in the SEC Documents, (i) no shares of the Company’s capital stock are subject
to preemptive rights or any other similar rights or any liens or encumbrances
suffered or permitted by the Company, (ii) there are no outstanding debt
securities, (iii) there are no outstanding options, warrants, scrip, rights to
subscribe to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into, any shares of capital stock of the
Company or any of its Subsidiaries, or contracts, commitments, understandings or
arrangements by which the Company or any of its Subsidiaries is or may become
bound to issue additional shares of capital stock of the Company or any of its
Subsidiaries or options, warrants, scrip, rights to subscribe to, calls or
commitments of any character whatsoever relating to, or securities or rights
convertible into, any shares of capital stock of the Company or any of its
Subsidiaries, (iv) there are no agreements or arrangements under which the
Company or any of its Subsidiaries is obligated to register the sale of any of
their securities under the Securities Act, (v) there are no outstanding
securities or instruments of the Company or any of its Subsidiaries which
contain any redemption or similar provisions, and there are no contracts,
commitments, understandings or arrangements by which the Company or any of its
Subsidiaries is or may become bound to redeem a security of the Company or any
of its Subsidiaries, (vi) there are no securities or instruments containing
anti-dilution or similar provisions that will be triggered by the issuance of
the Purchase Shares as described in this Agreement, and (vii) the Company does
not have any stock appreciation rights or “phantom stock” plans or agreements or
any similar plan or agreement.  The Company has furnished to the Investor true
and correct copies of the Company’s Certificate of Incorporation, as amended and
as in effect on the date hereof (the “Certificate of Incorporation”), and the
Company’s Bylaws, as amended and as in effect on the date hereof (the “Bylaws”),
and summaries of the terms of all securities convertible into or exercisable for
Common Stock, if any, and copies of any documents containing the material rights
of the holders thereof in respect thereto that are not otherwise disclosed in
the SEC Documents.

 

(d)                                 Issuance of Purchase Shares.  Upon issuance
and payment therefor in accordance with the terms and conditions of this
Agreement, the Purchase Shares shall be validly issued, fully paid and
nonassessable and free from all taxes, liens, charges, restrictions, rights of
first refusal and preemptive rights with respect to the issue thereof, with the
holders being entitled to all rights accorded to a holder of Common Stock. The
Purchase Shares are being issued pursuant to the Registration Statement and the
issuance of the Purchase Shares has been registered by the Company pursuant to
the Securities Act.  Upon receipt of the Purchase Shares, the Investor will have
good and marketable title to such Purchase Shares and such Purchase Shares will
be immediately freely tradable in the United States in accordance with the
provisions of Section 2(c)(ii) hereof.

 

(e)                                  No Conflicts.  The execution, delivery and
performance by the Company of this Agreement and the other Transaction Documents
to which the Company is a party, and the consummation by the Company of the
transactions contemplated hereby and thereby (including, without limitation, the
issuance of the Purchase Shares), will not (i) result in a violation of the
Certificate of Incorporation, any Certificate of Designations, Preferences and
Rights of any outstanding series of preferred stock of the Company or the Bylaws
or (ii) conflict with, or constitute a default (or an event which with notice or
lapse of time or both

 

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would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, any agreement, indenture or
instrument to which the Company or any of its Subsidiaries is a party, or result
in a violation of any law, rule, regulation, order, judgment or decree
(including, without limitation, U.S. federal and state securities laws and
regulations, Canadian Securities Laws and the rules and regulations of the
Principal Market and the TSX), in each case applicable to the Company or any of
its Subsidiaries or by which any property or asset of the Company or any of its
Subsidiaries is bound or affected, except in the case of conflicts, defaults,
terminations, amendments, accelerations, cancellations and violations under
clause (ii), which would not result in a Material Adverse Effect.  Neither the
Company nor its Subsidiaries is in violation of any term of or in default under
its Certificate of Incorporation, any Certificate of Designation, Preferences
and Rights of any outstanding series of preferred stock of the Company or Bylaws
or their organizational charter or Bylaws, respectively.  Neither the Company
nor any of its Subsidiaries is in violation of any term of or is in default
under any material contract, agreement, mortgage, indebtedness, indenture,
instrument, judgment, decree or order or any statute, rule or regulation
applicable to the Company or its Subsidiaries, except for possible conflicts,
defaults, terminations or amendments that would not have a Material Adverse
Effect.  The business of the Company and its Subsidiaries is not being
conducted, and shall not be conducted, in violation of any law, ordinance,
regulation of any U.S. federal or state, any Canadian federal or provincial, or
any other foreign governmental entity, agency or body, except for possible
violations, the sanctions for which either individually or in the aggregate
would not have a Material Adverse Effect. No consent, approval, authorization,
filing with or order of any U.S. federal or state, any Canadian federal or
provincial, or any other foreign governmental entity, agency or body is required
in connection with the transactions contemplated in the Transaction Documents,
except such as have been or will be obtained under the Securities Act, the
Exchange Act and Canadian Securities Laws, and such as may be required under
applicable U.S. state securities laws, applicable Canadian Securities Laws,
applicable rules of the Principal Market, and applicable rules and regulations
of the TSX in connection with the transactions contemplated by the Transaction
Documents. Except as set forth elsewhere in this Agreement and except for
filings which are permitted to be made following Closing under Canadian
Securities Laws or under the rules and regulations of the TSX, all consents,
authorizations, orders, filings and registrations which the Company is required
to obtain pursuant to the preceding sentence shall be obtained or effected on or
prior to the Closing Date.

 

(f)                                   SEC Documents; Financial Statements. The
Company has filed all reports, schedules, forms, statements and other documents
required to be filed by the Company under the Securities Act and the Exchange
Act, including pursuant to Section 13(a) or 15(d) thereof, for the twelve months
preceding the date hereof (or such shorter period as the Company was required by
law or regulation to file such material) (the foregoing materials, including the
exhibits thereto and documents incorporated by reference therein, being
collectively referred to herein as the “SEC Documents”) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Documents prior to the expiration of any such extension.  As of their respective
dates, the SEC Documents complied in all material respects with the requirements
of the Securities Act and the Exchange Act, as applicable.   None of the SEC
Documents, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading. The financial statements of the Company
included in the SEC Documents comply in all material respects with applicable
accounting requirements and the rules and regulations of the SEC with respect
thereto as in effect at the time of filing.  Such financial statements have been
prepared in accordance with United States generally accepted accounting
principles applied on a consistent basis during the periods involved (“GAAP”),
except as may be otherwise specified in such financial statements or the notes
thereto and except that unaudited financial statements may not contain all
footnotes required by GAAP, and fairly present in all material respects the
financial position of the Company and its consolidated Subsidiaries as of and
for the dates thereof and the results of operations and cash flows for the
periods then ended, subject, in the case of unaudited statements, to normal,
immaterial,

 

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year-end audit adjustments.  Except as set forth in the SEC Documents, the
Company has received no notices or correspondence from the SEC for the one year
preceding the date hereof.  To the Company’s knowledge, the SEC has not
commenced any enforcement proceedings against the Company or any of its
Subsidiaries.

 

(g)                                  Absence of Certain Changes.  Except as
disclosed in the SEC Documents, since December 31, 2017, there has been no
material adverse change in the business, properties, operations, financial
condition or results of operations of the Company or its Subsidiaries.  The
Company has not taken any steps, and does not currently expect to take any
steps, to seek protection pursuant to any Bankruptcy Law nor does the Company or
any of its Subsidiaries have any knowledge or reason to believe that its
creditors intend to initiate involuntary bankruptcy or insolvency proceedings in
the United States. The Company is financially solvent and is generally able to
pay its debts as they become due. The Company is not in nor subject to a
bankruptcy or insolvency proceeding in Canada or in any other foreign
jurisdiction.

 

(h)                                 Absence of Litigation. There is no action,
suit, proceeding, inquiry or investigation before or by any U.S. federal or
state, any Canadian federal or provincial, or any other foreign court, public
board, government agency, self-regulatory organization or body pending or, to
the knowledge of the Company or any of its Subsidiaries, threatened against or
affecting the Company, the Common Stock or any of the Company’s or its
Subsidiaries’ officers or directors in their capacities as such, which could
reasonably be expected to have a Material Adverse Effect.

 

(i)                                     Acknowledgment Regarding Investor’s
Status.  The Company acknowledges and agrees that the Investor is acting solely
in the capacity of an arm’s length purchaser with respect to the Transaction
Documents and the transactions contemplated hereby and thereby.  The Company
further acknowledges that the Investor is not acting as a financial advisor or
fiduciary of the Company (or in any similar capacity) with respect to the
Transaction Documents and the transactions contemplated hereby and thereby and
any advice given by the Investor or any of its representatives or agents in
connection with the Transaction Documents and the transactions contemplated
hereby and thereby is merely incidental to the Investor’s purchase of the
Purchase Shares. The Company further represents to the Investor that the
Company’s decision to enter into the Transaction Documents has been based solely
on the independent evaluation by the Company and its representatives and
advisors.

 

(j)                                    No Integrated Offering.  None of the
Company, any of its affiliates, or any authorized Person acting on its or their
behalf has, directly or indirectly, made any offers or sales of any security or
solicited any offers to buy any security, under circumstances that would cause
this offering of the Securities to be integrated with prior offerings by the
Company in a manner that would require stockholder approval pursuant to the
rules of the Principal Market or pursuant to the rules, regulations and policies
of the TSX.

 

(k)                              Intellectual Property Rights.  The Company and
its Subsidiaries own or possess adequate rights or licenses to use all material
trademarks, trade names, service marks, service mark registrations, service
names, patents, patent rights, copyrights, inventions, licenses, approvals,
governmental authorizations, trade secrets and rights necessary to conduct their
respective businesses as now conducted.  None of the Company’s material
trademarks, trade names, service marks, service mark registrations, service
names, patents, patent rights, copyrights, inventions, licenses, approvals,
government authorizations, trade secrets or other intellectual property rights
have expired or terminated, or, by the terms and conditions thereof, could
expire or terminate within two years from the date of this Agreement.  The
Company and its Subsidiaries do not have any knowledge of any infringement by
the Company or its Subsidiaries of any material trademark, trade name rights,
patents, patent rights, copyrights, inventions, licenses, service names, service
marks, service mark registrations, trade secret or other similar rights of
others, or of any such development of similar or identical trade secrets or
technical information by others, and there is no claim, action or proceeding
being made or brought against, or to the Company’s knowledge, being threatened

 

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against, the Company or its Subsidiaries regarding trademark, trade name,
patents, patent rights, invention, copyright, license, service names, service
marks, service mark registrations, trade secret or other infringement, which
could reasonably be expected to have a Material Adverse Effect.

 

(l)                                     Environmental Laws.  The Company and its
Subsidiaries (i) are in compliance with any and all applicable foreign, federal,
state and local laws and regulations relating to the protection of human health
and safety, the environment or hazardous or toxic substances or wastes,
pollutants or contaminants (“Environmental Laws”), (ii) have received all
permits, licenses or other approvals required of them under applicable
Environmental Laws to conduct their respective businesses as currently
conducted, and (iii) are in compliance with all terms and conditions of any such
permit, license or approval, except where, in each of the three foregoing
clauses, the failure to so comply could not reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.

 

(m)                             Title; Mining Claims.  The Company and the
Subsidiaries have good and marketable title to all real property (other than the
Mining Claims (as defined below)) owned by them that is material to the business
of the Company and the Subsidiaries and good and marketable title in all
personal property owned by them that is material to the business of the Company
and the Subsidiaries, in each case free and clear of all liens, encumbrances and
defects (“Liens”), except for (i) Liens described in the Registration Statement
or Prospectus, (ii) Liens as do not materially affect the value of such property
and do not materially interfere with the use made and proposed to be made of
such property by the Company and the Subsidiaries, and(iii) Liens for the
payment of U.S. federal, state or other taxes, the payment of which is neither
delinquent nor subject to penalties. Except for the Mining Claims, any real
property and facilities held under lease by the Company and the Subsidiaries are
held by them under valid, subsisting and enforceable leases with which the
Company and the Subsidiaries are in compliance. All interests in material mining
claims, concessions, exploitation or extraction rights or similar rights (the
“Mining Claims”) that are held by the Company or any of its Subsidiaries are or
will be fairly and accurately described in the Registration Statement and the
Prospectus in all material respects and are in good standing, are valid and
enforceable, and are free and clear of any material Liens or charges, except as
disclosed in the Registration Statement and the Prospectus.

 

(n)                                 Insurance.  The Company and each of its
Subsidiaries are insured by insurers of recognized financial responsibility
against such losses and risks and in such amounts as management of the Company
believes to be prudent and customary in the businesses in which the Company and
its Subsidiaries are engaged.  Neither the Company nor any such Subsidiary has
been refused any insurance coverage sought or applied for and neither the
Company nor any such Subsidiary has any reason to believe that it will not be
able to renew its existing insurance coverage as and when such coverage expires
or to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely affect
the condition, financial or otherwise, or the earnings, business or operations
of the Company and its Subsidiaries, taken as a whole.

 

(o)                                 Regulatory Permits.  The Company and its
Subsidiaries possess all material certificates, authorizations and permits
issued by the appropriate federal, provincial, state, local or foreign
governmental or regulatory authorities necessary to conduct their respective
businesses as currently conducted, and neither the Company nor any such
Subsidiary has received any notice of proceedings relating to the revocation or
modification of any such material certificate, authorization or permit.

 

(p)                                 Tax Status.  The Company and each Subsidiary
have (i) has made or filed all necessary United States federal, and state income
and all foreign income and franchise tax returns and have paid or accrued all
taxes shown as due thereon, and the Company has no knowledge of a tax deficiency
which has been asserted or threatened against the Company or, reports and
declarations required by any jurisdiction to which it is subject, (ii) has paid
all taxes and other governmental assessments and charges that are

 

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material in amount, shown or determined to be due on such returns, reports and
declarations and (iii) has set aside on its books provision reasonably adequate
for the payment of all material taxes for periods subsequent to the periods to
which such returns, reports or declarations apply.  There are no unpaid taxes in
any material amount claimed to be due by the taxing authority of any
jurisdiction, and the officers of the Company or of any Subsidiary know of no
basis for any such claim. No stamp duty, registration or documentary taxes,
duties or similar charges are payable under the federal laws of Canada or the
laws of any province in connection with the creation, issuance, sale and
delivery by the Company of the Purchase Shares to the Investor under this
Agreement or the authorization, execution, delivery and performance of this
Agreement or any of the other Transaction Documents.

 

(q)                                 Transactions With Affiliates.   Except as
set forth in the SEC Documents, none of the officers or directors of the Company
and, to the knowledge of the Company, none of the employees of the Company is
presently a party to any transaction with the Company or any Subsidiary (other
than for services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, director or such employee or, to the
knowledge of the Company, any entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner, in each case in excess of $120,000 other than for (i) payment of salary
or consulting fees for services rendered, (ii) reimbursement for expenses
incurred on behalf of the Company and (iii) other employee benefits, including
stock option agreements under any stock option plan of the Company.

 

(r)                                    Application of Takeover Protections.  The
Company and its board of directors have taken or will take prior to the Closing
Date all necessary action, if any, in order to render inapplicable any control
share acquisition, business combination, poison pill (including any distribution
under a rights agreement) or other similar anti-takeover provision under the
Certificate of Incorporation or the laws of the state of its incorporation which
is or could become applicable to the Investor as a result of the transactions
contemplated by this Agreement, including, without limitation, the Company’s
issuance of the Purchase Shares and the Investor’s ownership of the Purchase
Shares.

 

(s)                                   Disclosure.  Except with respect to the
material terms and conditions of the transactions contemplated by the
Transaction Documents that will be timely publicly disclosed by the Company, the
Company confirms that neither it nor any other Person acting on its behalf has
provided the Investor or its agents or counsel with any information that it
believes constitutes or might constitute material, non-public information which
is not otherwise disclosed in the Registration Statement or any Prospectus
Supplements thereto.  The Company understands and confirms that the Investor
will rely on the foregoing representation in effecting purchases and sales of
securities of the Company.  All of the disclosure furnished by or on behalf of
the Company to the Investor regarding the Company, its business and the
transactions contemplated hereby, including the disclosure schedules to this
Agreement, is true and correct in all material respects and does not contain any
untrue statement of a material fact or omit to state any material fact necessary
in order to make the statements made therein, in light of the circumstances
under which they were made, not misleading. The press releases disseminated by
the Company during the twelve months preceding the date of this Agreement taken
as a whole did not, as of their issue date, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary in order to make the statements therein, in light of the circumstances
under which they were made and when made, not misleading.  The Company
acknowledges and agrees that the Investor has not made and does not make any
representations or warranties with respect to the transactions contemplated
hereby other than those specifically set forth in Section 3 hereof.

 

(t)                                    Foreign Corrupt Practices.   Neither the
Company, nor to the knowledge of the Company, any agent or other Person acting
on behalf of the Company, has (i) directly or indirectly, used any funds for

 

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unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic political activity, (ii) made any unlawful payment to
foreign or domestic government officials or employees or to any foreign or
domestic political parties or campaigns from corporate funds, (iii) failed to
disclose fully any contribution made by the Company (or made by any Person
acting on its behalf of which the Company is aware) which is in violation of
law, or (iv) violated in any material respect any provision of the Foreign
Corrupt Practices Act of 1977, as amended.

 

(u)                                 Registration Statement.  The Company has
prepared and filed with the SEC in accordance with the provisions of the
Securities Act the Registration Statement. The Registration Statement was
declared effective by order of the SEC on September 28, 2017. The Registration
Statement is effective pursuant to the Securities Act and available for the
issuance of the Purchase Shares thereunder, and the Company has not received any
written notice that the SEC has issued or intends to issue a stop order or other
similar order with respect to the Registration Statement or the Prospectus or
that the SEC otherwise has (i) suspended or withdrawn the effectiveness of the
Registration Statement or (ii) issued any order preventing or suspending the use
of the Prospectus or any Prospectus Supplement, in either case, either
temporarily or permanently or intends or has threatened in writing to do so. The
“Plan of Distribution” section of the Prospectus permits the issuance of the
Purchase Shares under the terms of this Agreement. At the time the Registration
Statement and any amendments thereto became effective, at the date of this
Agreement and at each deemed effective date thereof pursuant to
Rule 430B(f)(2) of the Securities Act, the Registration Statement and any
amendments thereto complied and will comply in all material respects with the
requirements of the Securities Act and did not and will not contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading; and
the Base Prospectus and any Prospectus Supplement thereto, at the time such Base
Prospectus or such Prospectus Supplement thereto was issued and on the Closing
Date, complied and will comply in all material respects with the requirements of
the Securities Act and did not and will not contain an untrue statement of a
material fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading; provided that this representation and warranty does not apply to
statements in or omissions from any Prospectus Supplement made in reliance upon
and in conformity with information relating to the Investor furnished to the
Company in writing by or on behalf of the Investor expressly for use therein.
The Company meets all of the requirements for the use of a registration
statement on Form S-3 pursuant to the Securities Act for the offering and sale
of the Purchase Shares contemplated by this Agreement, in reliance on General
Instruction I.B.6. of Form S-3, and the SEC has not notified the Company of any
objection to the use of the form of the Registration Statement pursuant to
Rule 401(g)(1) of the Securities Act. The Company hereby confirms that the
issuance of the Purchase Shares to the Investor pursuant to this Agreement would
not result in non-compliance with General Instruction I.B.6. of Form S-3. The
Registration Statement, as of its effective date, meets the requirements set
forth in Rule 415(a)(1)(x) pursuant to the Securities Act. At the earliest time
after the filing of the Registration Statement that the Company or another
offering participant made a bona fide offer (within the meaning of
Rule 164(h)(2) of the Securities Act) relating to any of the Purchase Shares,
the Company was not and is not an Ineligible Issuer (as defined in Rule 405 of
the Securities Act).  The Company has not distributed any offering material in
connection with the offering and sale of any of the Purchase Shares, and, until
the Investor does not hold any of the Purchase Shares, shall not distribute any
offering material in connection with the offering and sale of any of the
Purchase Shares, to or by the Investor, in each case, other than the
Registration Statement or any amendment thereto, the Prospectus or any
Prospectus Supplement required pursuant to applicable law or the Transaction
Documents. The Company has not made, and agrees that unless it obtains the prior
written consent of the Investor it will not make, an offer relating to the
Purchase Shares that would constitute a “free writing prospectus” as defined in
Rule 405 under the Securities Act. The Company shall comply with the
requirements of Rules 164 and 433 under the Securities Act applicable to any
such free writing prospectus consented to by the Investor, including in respect
of timely filing with the SEC, legending and record keeping.

 

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(v)                                 DTC Eligibility.  The Company, through the
Transfer Agent, currently participates in the DTC Fast Automated Securities
Transfer (FAST) Program and the Common Stock can be transferred electronically
to third parties via the DTC Fast Automated Securities Transfer (FAST) Program.

 

(w)                               Sarbanes-Oxley. The Company is in compliance
with all provisions of the Sarbanes-Oxley Act of 2002, as amended, which are
applicable to it as of the date hereof.

 

(x)                                 Certain Fees. No brokerage or finder’s fees
or commissions are or will be payable by the Company to any broker, financial
advisor or consultant, finder, placement agent, investment banker, bank or other
Person with respect to the transactions contemplated by the Transaction
Documents. The Investor shall not have any obligation with respect to any fees
or with respect to any claims made by or on behalf of other Persons for fees of
a type contemplated in this Section 4(x) that may be due in connection with the
transactions contemplated by the Transaction Documents.

 

(y)                                 Investment Company. The Company is not
required to be registered as, and immediately after receipt of payment for the
Purchase Shares will not be required to be registered as, an “investment
company” within the meaning of the Investment Company Act of 1940, as amended.

 

(z)                                  Listing and Maintenance Requirements. The
issuance and sale of the Purchase Shares as contemplated in this Agreement does
not contravene the rules of the Principal Market or the rules, regulations and
policies of the TSX. The Common Stock is registered pursuant to Section 12(b) or
12(g) of the Exchange Act, and the Company has taken no action designed to, or
which to its knowledge is likely to have the effect of, terminating the
registration of the Common Stock under the Exchange Act nor has the Company
received any notification that the SEC is contemplating terminating such
registration.  Except as disclosed in the Registration Statement or the
Prospectus, the Company has not, in the 12 months preceding the date hereof,
received notice from the Principal Market or the TSX or any other trading market
on which the Common Stock is or has been listed or quoted to the effect that the
Company is not in compliance with the listing or maintenance requirements of the
Principal Market or the TSX or any other trading market on which the Common
Stock is or has been listed or quoted, respectively. Subject to the Company
maintaining compliance with Section 1003(a) of the NYSE American Company Guide,
the Company is, and has no reason to believe that it will not in the foreseeable
future continue to be, in compliance with all such listing and maintenance
requirements. Neither the Principal Market nor the TSX has commenced any
delisting proceedings against the Company. The Company has filed all documents
or information required to be filed by it as of Closing under the rules,
regulations and policies of the Principal Market and the TSX.

 

(aa)                          Canadian Securities Law Compliance. The Company is
a “reporting issuer” (within the meaning of applicable Canadian Securities Laws)
in each of the Provinces of Canada and is not on the list of defaulting
reporting issuers maintained by the applicable Canadian Commission or other
regulatory authority in each such Province that maintains such a list. The
offer, issue and sale of the Purchase Shares by the Company pursuant to this
Agreement is exempt from or otherwise not subject to the requirement under
Canadian Securities Laws that the Company prepare and file a prospectus with the
applicable Canadian Commission or other regulatory authority in each of the
Provinces of Canada to qualify for distribution in such Province the Purchase
Shares that may be issued to the Investor under this Agreement. The Company has
filed on a timely basis all documents and other information required to be filed
by the Company under Canadian Securities Laws during the twelve months preceding
the date hereof (or such shorter period as the Company was required by law or
regulation to file such material).

 

(bb)                          Accountants.  The Company’s accountants are set
forth in the SEC Documents and, to the knowledge of the Company, such
accountants are an independent registered public accounting firm as required by
the Securities Act.

 

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(cc)                            No Market Manipulation. The Company has not, and
to its knowledge no Person acting on its behalf has, (i) taken, directly or
indirectly, any action designed to cause or to result in the stabilization or
manipulation of the price of any security of the Company to facilitate the sale
or resale of any of the Purchase Shares, (ii) sold, bid for, purchased, or, paid
any compensation for soliciting purchases of, any of the Purchase Shares, or
(iii) paid or agreed to pay to any Person any compensation for soliciting
another to purchase any other securities of the Company.

 

(dd)                          Shell Company Status. The Company is not
currently, and has never been, an issuer identified in Rule 144(i)(1) under the
Securities Act.

 

5.                                      COVENANTS.

 

(a)                                 Filing of Current Report and Initial
Prospectus Supplement.  The Company agrees that it shall, within the time
required under the Exchange Act, file with the SEC a report on Form 8-K relating
to the transactions contemplated by, and describing the material terms and
conditions of, the Transaction Documents (the “Current Report”). The Company
further agrees that it shall, within the time required under Rule 424(b) under
the Securities Act, file with the SEC the Initial Prospectus Supplement pursuant
to Rule 424(b)(5) under the Securities Act, which Initial Prospectus Supplement
shall specifically relate to the Purchase Shares and shall describe the material
terms and conditions of the Transaction Documents, contain information
previously omitted at the time of effectiveness of the Registration Statement in
reliance on Rule 430B under the Securities Act, and disclose all information
relating to the Purchase Shares and the transactions contemplated by the
Transaction Documents required to be disclosed in the Registration Statement and
the Prospectus as of the date of the Initial Prospectus Supplement, including,
without limitation, information required to be disclosed in the section
captioned “Plan of Distribution” in the Prospectus. The Company shall permit the
Investor to review and comment upon the Current Report and the Initial
Prospectus Supplement at least two (2) Business Days prior to their filing with
the SEC, the Company shall give reasonable consideration to all such comments.
The Investor shall use its reasonable best efforts to comment upon the Current
Report and the Initial Prospectus Supplement within one (1) Business Day from
the date the Investor receives the final pre-filing draft version thereof from
the Company. The Investor shall furnish to the Company such information
regarding itself, the Purchase Shares beneficially owned by it and the intended
method of distribution thereof, including any arrangement between the Investor
and any other Person relating to the sale or distribution of the Purchase
Shares, as shall be reasonably requested by the Company in connection with the
preparation and filing of the Current Report and the Initial Prospectus
Supplement, and shall otherwise cooperate with the Company as reasonably
requested by the Company in connection with the preparation and filing of the
Current Report and the Initial Prospectus Supplement with the SEC.

 

(b)                                 Blue Sky. The Company shall take all such
action, if any, as is reasonably necessary in order to obtain an exemption for
or to register or qualify (i) the sale of the Purchase Shares to the Investor
under this Agreement and (ii) any subsequent resale of all Purchase Shares by
the Investor, in each case, under applicable securities or “Blue Sky” laws of
the states of the United States in such states as is reasonably requested by the
Investor from time to time, and shall provide evidence of any such action so
taken to the Investor; provided that the Company shall not be required to
(i) qualify as a foreign corporation or other entity or as a dealer in
securities in any such jurisdiction where it would not otherwise be required to
so qualify, (ii) file any general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any such jurisdiction if it
is not otherwise so subject.

 

(c)                                  Listing/DTC.  The Company shall promptly
cause all of the Purchase Shares to be issued by the Company to the Investor
pursuant to this Agreement to be approved for listing on the Principal Market
and to be conditionally approved for listing on the TSX in accordance with the
applicable rules and regulations of the Principal Market and the TSX,
respectively, subject only to official notice of issuance

 

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and, with respect to TSX listing, any standard TSX listing conditions for
transactions of this nature, and the Company shall provide satisfactory evidence
of such actions to the Investor, and the Company. The Company shall use
commercially reasonable efforts to maintain the listing of the Common Stock,
including all of the Purchase Shares, on the Principal Market and shall comply
in all material respects with the Company’s reporting, filing and other
obligations under the bylaws or rules and regulations of the Principal Market
and the TSX. Neither the Company nor any of its Subsidiaries shall take any
action that would reasonably be expected to result in the delisting or
suspension of the Common Stock, including the Purchase Shares on the Principal
Market.  The Company shall pay all fees and expenses in connection with
satisfying its obligations under this Section 5(c).  The Company shall take all
action necessary to ensure that its Common Stock, including the Purchase Shares
can be transferred electronically as DWAC Shares.

 

(d)                                 Prohibition of Short Sales and Hedging
Transactions.  During the term of this Agreement, neither the Investor nor any
of its agents, representatives or affiliates shall in any manner whatsoever
enter into or effect, directly or indirectly, any (i) “short sale” (as such term
is defined in Rule 200 of Regulation SHO of the Exchange Act) of the Common
Stock or (ii) hedging transaction, which establishes a net short position with
respect to the Common Stock.

 

(e)                                  Compliance with Laws. The Company and each
of its Subsidiaries shall maintain, or cause to be maintained, all material
permits, licenses and other authorizations required by federal, provincial,
state and local law in order to conduct their businesses substantially as
described in the Prospectuses, and the Company and each of its Subsidiaries
shall conduct their businesses, or cause their businesses to be conducted, in
substantial compliance with such permits, licenses and authorizations and with
applicable laws, except where the failure to maintain or be in compliance with
such permits, licenses and authorizations would not reasonably be expected to
have a Material Adverse Effect. The Company shall comply in all material
respects with all requirements imposed upon it by Canadian Securities Laws, the
Securities Act and the Exchange Act as from time to time in force in connection
with the offer, issuance and sale of the Purchase Shares contemplated by the
Transaction Documents. Without limiting the generality of the foregoing, neither
the Company nor any of its officers, directors or affiliates will take, directly
or indirectly, any action designed or intended to stabilize or manipulate the
price of any security of the Company, or which would reasonably be expected to
cause or result in, stabilization or manipulation of the price of any security
of the Company. The Company will conduct its affairs in such a manner so as to
reasonably ensure that neither it nor the Subsidiaries will be or become, at any
time prior to the termination of this Agreement, required to register as an
“investment company,” as such term is defined in the Investment Company Act,
assuming no change in the SEC’s current interpretation as to entities that are
not considered, or required to register as, an investment company. The Company
and the Subsidiaries will use their best efforts to comply with all effective
applicable provisions of the Sarbanes-Oxley Act and The Dodd—Frank Wall Street
Reform and Consumer Protection Act.

 

(f)                                   Non-Public Information.  Each party hereto
agrees not to disclose any Confidential Information of the other party to any
third party and shall not use the Confidential Information for any purpose other
than in connection with, or in furtherance of, the transactions contemplated
hereby.  Each party hereto acknowledges that the Confidential Information shall
remain the property of the disclosing party and agrees that it shall take all
reasonable measures to protect the secrecy of any Confidential Information
disclosed by the other party. The Company confirms that neither it nor any other
Person acting on its behalf shall provide the Investor or its agents or counsel
with any information that constitutes or might constitute material, non-public
information, unless a simultaneous public announcement thereof is made by the
Company in the manner contemplated by Regulation FD. In the event of a breach of
the foregoing covenant by the Company or any Person acting on its behalf, as
determined in the reasonable good faith judgment of the Investor, in addition to
any other remedy provided herein or in the other Transaction Documents, if the
Investor is holding Purchase Shares at the time of the disclosure of material,
non-public information, the Investor shall have the right to make a public
disclosure, in the form of a press

 

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release, public advertisement or otherwise, of such material, non-public
information without the prior approval by the Company; provided the Investor
shall have first provided notice to the Company that it believes it has received
information that constitutes material, non-public information, the Company shall
have at least 48 hours to publicly disclose such material, non-public
information prior to any such disclosure by the Investor or demonstrate to the
Investor in writing why such information does not constitute material,
non-public information, and (assuming the Investor and its counsel disagree with
the Company’s determination) the Company shall have failed to publicly disclose
such material, non-public information within such time period. The Investor
shall not have any liability to the Company, any of its Subsidiaries, or any of
their respective directors, officers, employees, stockholders or agents, for any
such disclosure. The Company understands and confirms that the Investor shall be
relying on the foregoing covenants in effecting transactions in securities of
the Company.

 

(g)                                  Reserved.

 

(h)                                 Taxes.   The Company shall pay any and all
transfer, stamp or similar taxes that may be payable with respect to the
issuance and delivery of any shares of Common Stock to the Investor made under
this Agreement.

 

(i)                                     U.S. Securities Law Compliance. The
Company shall use its reasonable best efforts to keep the Registration Statement
effective pursuant to Rule 415 promulgated under the Securities Act, and to keep
the Registration Statement and the Prospectus current and available for the
offer, issuance, sale and resale of all of the Purchase Shares at all times
until the date on which the Investor shall have sold all the Purchase Shares
(the “Registration Period”). Without limiting the generality of the foregoing,
during the Registration Period, the Company shall (a) take all action necessary
to cause the Common Stock to continue to be registered as a class of securities
under Sections 12(b) or 12(g) of the Exchange Act, shall comply with its
reporting and filing obligations under the Exchange Act, and shall not take any
action or file any document (whether or not permitted by the Exchange Act) to
terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under the Exchange Act, and (b) prepare and file with the
SEC, at the Company’s expense, such amendments (including, without limitation,
post-effective amendments) to the Registration Statement and such Prospectus
Supplements pursuant to Rule 424(b) under the Securities Act, in each case, as
may be necessary to keep the Registration Statement effective pursuant to
Rule 415 promulgated under the Securities Act, and to keep the Registration
Statement and the Prospectus current and available for the offer, issuance, sale
and resale of all of the Purchase Shares at all times during the Registration
Period (it being hereby acknowledged and agreed that, if the Registration Period
has not expired prior to the third anniversary of the initial effective date of
the Registration Statement, the Company shall prepare and file with the SEC, at
the Company’s expense, immediately prior to the third anniversary of the initial
effective date of the Registration Statement (the “Renewal Date”), a new
Registration Statement relating to the Purchase Shares, in a form satisfactory
to the Investor and its counsel, and the Company shall use its reasonable best
efforts to cause such Registration Statement to be declared effective within 180
days after the Renewal Date). The Investor shall furnish to the Company such
information regarding itself, its affiliates, the Purchase Shares beneficially
owned by it and the intended method of distribution thereof as shall be
reasonably requested by the Company in connection with the preparation and
filing of any such amendment to the Registration Statement (or new Registration
Statement) or any such Prospectus Supplement, and shall otherwise cooperate with
the Company as reasonably requested by the Company in connection with the
preparation and filing of any such amendment to the Registration Statement (or
new Registration Statement) or any such Prospectus Supplement. The Company shall
comply in all material respects with all applicable U.S. federal and state
securities laws, applicable Canadian Securities Laws and other applicable
foreign securities laws, and the applicable rules of the Principal Market and
the applicable rules, regulations and policies of the TSX in connection with the
offer, issuance and sale by the Company of the Purchase Shares contemplated by
the Transaction Documents. Without limiting the generality of the foregoing,
neither the Company nor any of its officers, directors or affiliates

 

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will take, directly or indirectly, any action designed or intended to stabilize
or manipulate the price of any security of the Company, or which would
reasonably be expected to cause or result in, stabilization or manipulation of
the price of any security of the Company.

 

(j)                                    Stop Orders.  The Company shall advise
the Investor promptly (but in no event later than 24 hours) and shall confirm
such advice in writing: (i) of the Company’s receipt of notice of any request by
the SEC for amendment of or a supplement to the Registration Statement, the
Prospectus, any Prospectus Supplement or for any additional information; (ii) of
the Company’s receipt of notice of the issuance by the SEC of any stop order
suspending the effectiveness of the Registration Statement or prohibiting or
suspending the use of the Prospectus or any Prospectus Supplement, or of the
Company’s receipt of any notification of the suspension of qualification of the
Purchase Shares for offering or sale in any jurisdiction or the initiation or
contemplated initiation of any proceeding for such purpose; and (iii) of the
Company becoming aware of the happening of any event, which makes any statement
of a material fact made in the Registration Statement, the Prospectus or any
Prospectus Supplement untrue or which requires the making of any additions to or
changes to the statements then made in the Registration Statement, the
Prospectus or any Prospectus Supplement in order to state a material fact
required by the Securities Act to be stated therein or necessary in order to
make the statements then made therein (in the case of the Prospectus or any
Prospectus Supplement, in light of the circumstances under which they were made)
not misleading, or of the necessity to amend the Registration Statement or
supplement the Prospectus or any Prospectus Supplement to comply with the
Securities Act or any other law. The Company shall not be required to disclose
to the Investor the substance or specific reasons of any of the events set forth
in clauses (i) through (iii) of the immediately preceding sentence, but rather,
shall only be required to disclose that the event has occurred. If at any time
the SEC shall issue any stop order suspending the effectiveness of the
Registration Statement or prohibiting or suspending the use of the Prospectus or
any Prospectus Supplement, the Company shall use its reasonable best efforts to
obtain the withdrawal of such order at the earliest possible time. The Company
shall furnish to the Investor, without charge, a copy of any correspondence from
the SEC or the staff of the SEC, or any of the Canadian Commissions or the staff
of any of the Canadian Commissions, to the Company or its representatives
relating to the Registration Statement or the Prospectus, as the case may be.

 

(k)                                 Amendments to Registration Statement;
Prospectus Supplements. Except as provided in this Agreement and other than
periodic and current reports required to be filed pursuant to the Exchange Act,
the Company shall not file with the SEC any amendment to the Registration
Statement or any supplement to the Base Prospectus that refers to the Investor,
the Purchase Shares, the Transaction Documents or the transactions contemplated
thereby (including, without limitation, any Prospectus Supplement filed in
connection with the transactions contemplated by the Transaction Documents), in
each case with respect to which (a) the Investor shall not previously have been
advised and afforded the opportunity to review and comment thereon at least two
(2) Business Days prior to filing with the SEC, as the case may be, (b) the
Company shall not have given due consideration to any comments thereon received
from the Investor or its counsel, or (c) the Investor shall reasonably object,
unless the Company reasonably has determined that it is necessary to amend the
Registration Statement or make any supplement to the Prospectus to comply with
the Securities Act or any other applicable law or regulation, in which case the
Company shall promptly (but in no event later than 24 hours) so inform the
Investor, the Investor shall be provided with a reasonable opportunity to review
and comment upon any disclosure referring to the Investor, the Transaction
Documents or the transactions contemplated thereby, as applicable, and the
Company shall expeditiously furnish to the Investor a copy thereof. In addition,
for so long as, in the reasonable opinion of counsel for the Investor, a
Prospectus is required to be delivered in connection with any acquisition or
sale of Purchase Shares by the Investor, the Company shall not file any
Prospectus Supplement with respect to the Purchase Shares without furnishing to
the Investor as many copies of such Prospectus Supplement, together with the
Prospectus, as the Investor may reasonably request.

 

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(l)                                     Prospectus Delivery.  The Company
consents to the use of the Prospectus (and of each Prospectus Supplement
thereto) in accordance with the provisions of the Securities Act and with the
securities or “blue sky” laws of the jurisdictions in which the Purchase Shares
may be sold by the Investor, in connection with the offering and sale of the
Purchase Shares and for such period of time thereafter as a Prospectus is
required by the Securities Act to be delivered in connection with sales of the
Purchase Shares. The Company will make available to the Investor upon request,
and thereafter from time to time will furnish to the Investor, as many copies of
the Prospectus (and each Prospectus Supplement thereto) as the Investor may
reasonably request for the purposes contemplated by the Securities Act within
the time during which the Prospectus is required by the Securities Act to be
delivered in connection with sales of the Purchase Shares. If during such period
of time any event shall occur that in the reasonable judgment of the Company and
its counsel, or in the reasonable judgment of the Investor and its counsel, is
required to be set forth in the Registration Statement, the Prospectus or any
Prospectus Supplement or should be set forth therein in order to make the
statements made therein (in the case of the Prospectus or any Prospectus
Supplement, in light of the circumstances under which they were made) not
misleading, or if in the reasonable judgment of the Company and its counsel, or
in the reasonable judgment of the Investor and its counsel, it is otherwise
necessary to amend the Registration Statement or supplement the Prospectus or
any Prospectus Supplement to comply with the Securities Act or any other
applicable law or regulation, the Company shall forthwith prepare and, subject
to Section 5(k) above, file with the SEC an appropriate amendment to the
Registration Statement or an appropriate Prospectus Supplement and in each case
shall expeditiously furnish to the Investor, at the Company’s expense, such
amendment to the Registration Statement or such Prospectus Supplement, as
applicable, as may be necessary to reflect any such change or to effect such
compliance. The Company shall have no obligation to separately advise the
Investor of, or deliver copies to the Investor of, the SEC Documents, all of
which the Investor shall be deemed to have notice of.

 

(m)                             Integration. From and after the date of this
Agreement, neither the Company, nor or any of its Subsidiaries or affiliates
will, and the Company shall use its reasonable best efforts to ensure that no
Person acting on their behalf will, directly or indirectly, make any offers or
sales of any security or solicit any offers to buy any security, under
circumstances that would (i) require, under any Canadian Securities Laws, the
filing of a prospectus with the applicable Canadian Commission or other
regulatory authority in each of the Provinces of Canada to qualify, the offer,
sale and issuance of the Purchase Shares to the Investor under this Agreement,
or (ii) cause the offer, sale and issuance of the Purchase Shares to the
Investor under this Agreement to be integrated with other offerings by the
Company in a manner that would require stockholder approval pursuant to the
rules of the Principal Market or pursuant to the rules, regulations and policies
of the TSX, unless stockholder approval is obtained before the closing of such
subsequent transaction in accordance with the rules of such Principal Market and
the rules, regulations and policies of the TSX, respectively.

 

(n)                                 Use of Proceeds. The Company will use the
net proceeds from the offering of the Purchase Shares as described in the
Prospectus.

 

(o)                                 Other Transactions. The Company shall not
enter into, announce or recommend to its stockholders any agreement, plan,
arrangement or transaction in or of which the terms thereof would restrict,
materially delay, conflict with or impair the ability or right of the Company to
perform its obligations under any of the Transaction Documents to which it is a
party, including, without limitation, the obligation of the Company to deliver
the Purchase Shares to the Investor in accordance with the terms of this
Agreement.

 

6.                                      TRANSFER AGENT INSTRUCTIONS.

 

On the Closing Date, the Company shall issue to the Transfer Agent (and any
subsequent transfer agent) irrevocable instructions, in the form heretofore
furnished to the Company, to issue the Purchase

 

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Shares (the “Irrevocable Transfer Agent Instructions”). All Purchase Shares to
be issued to or for the benefit of the Investor pursuant to this Agreement shall
be issued as DWAC Shares. The Company represents and warrants to the Investor
that no instruction other than the Irrevocable Transfer Agent Instructions
referred to in this Section 6 will be given by the Company to the Transfer Agent
with respect to the Purchase Shares, and the Purchase Shares shall otherwise be
freely transferable on the books and records of the Company. Certificates and
any other instruments evidencing the Purchase Shares shall not bear any
restrictive or other legend.  If the Investor effects a sale, assignment or
transfer of the Purchase Shares, the Company shall permit the transfer and shall
promptly instruct the Transfer Agent (and any subsequent transfer agent) to
issue DWAC Shares in such name and in such denominations as specified by the
Investor to effect such sale, transfer or assignment. The Company acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to
the Investor. Accordingly, the Company acknowledges that the remedy at law for a
breach of its obligations under this Section 6 will be inadequate and agrees, in
the event of a breach or threatened breach by the Company of the provisions of
this Section 6, that the Investor shall be entitled, in addition to all other
available remedies, to an order and/or injunction restraining any breach and
requiring immediate issuance and transfer, without the necessity of showing
economic loss and without any bond or other security being required. The Company
shall take all actions to carry out the intent and accomplish the purposes of
this Section 6, including, without limitation, delivering or causing to be
delivered all such legal opinions, consents, certificates, resolutions and
instructions to the Transfer Agent, and any successor transfer agent of the
Company, as may be requested from time to time by the Investor or necessary or
desirable to carry out the intent and accomplish the purposes of this Section 6,
and all fees and costs associated therewith shall be borne by the Company.

 

7.                                      CONDITIONS TO THE COMPANY’S OBLIGATION
TO ISSUE AND SELL THE PURCHASE SHARES.

 

The obligation of the Company hereunder to issue and sell the Purchase Shares to
the Investor on the Closing Date is subject to the satisfaction or, where
legally permissible, the waiver of each of the following conditions:

 

(a)                                 The Investor shall have executed this
Agreement and delivered the same to the Company;

 

(b)                                 No stop order with respect to the
Registration Statement shall be pending or threatened by the SEC; and

 

(c)                                  The representations and warranties of the
Investor shall be true and correct in all material respects as of the date
hereof and as of the Closing Date as though made at that time.

 

8.                                      CONDITIONS TO THE INVESTOR’S OBLIGATION
TO PURCHASE THE PURCHASE SHARES.

 

The obligation of the Investor to purchase the Purchase Shares under this
Agreement is subject to the satisfaction or, where legally permissible, the
waiver of each of the following conditions:

 

(a)                                 The Company shall have executed each of the
Transaction Documents to which it is a party and delivered the same to the
Investor;

 

(b)                                 The Common Stock shall be listed on the
Principal Market and the TSX, trading in the Common Stock shall not have been
within the last 365 days suspended by the SEC, the Canadian Commissions, the
Principal Market or the TSX, and all of the Purchase Shares to be issued by the
Company to the Investor pursuant to this Agreement shall have been approved for
listing on the Principal Market and conditionally approved for listing on the
TSX in accordance with the applicable rules and regulations of the

 

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Principal Market and the TSX, respectively, subject only to official notice of
issuance and, with respect to TSX listing, any standard TSX listing conditions
for transactions of this nature;

 

(c)                                  The Investor shall have received the
opinions of the Company’s legal counsel dated as of the Closing Date
substantially in the form heretofore agreed by the parties hereto;

 

(d)                                 The representations and warranties of the
Company shall be true and correct in all material respects (except to the extent
that any of such representations and warranties is already qualified as to
materiality in Section 4 above, in which case, such representations and
warranties shall be true and correct without further qualification) as of the
date hereof and as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date, which shall be
true and correct as of such date) and the Company shall have performed,
satisfied and complied with the covenants, agreements and conditions required by
the Transaction Documents to be performed, satisfied or complied with by the
Company at or prior to the Closing Date.  The Investor shall have received a
certificate, executed by the CEO, President or CFO of the Company, dated as of
the Closing Date, to the foregoing effect in the form attached hereto as
Exhibit A;

 

(e)                                  The Board of Directors of the Company shall
have adopted resolutions in the form attached hereto as Exhibit B which shall be
in full force and effect without any amendment or supplement thereto as of the
Closing Date;

 

(f)                                   The Irrevocable Transfer Agent
Instructions shall have been delivered to and acknowledged in writing by the
Company and the Company’s Transfer Agent;

 

(g)                                  The Company shall have delivered to the
Investor a certificate evidencing the incorporation and good standing of the
Company in the State of Delaware issued by the Secretary of State of the State
of Delaware as of a date within ten (10) Business Days of the Closing Date;

 

(h)                                 The Company shall have delivered to the
Investor a certified copy of the Certificate of Incorporation as certified by
the Secretary of State of the State of Delaware within ten (10) Business Days of
the Closing Date;

 

(i)                                     The Company shall have delivered to the
Investor a secretary’s certificate executed by the Secretary of the Company,
dated as of the Closing Date, in the form attached hereto as Exhibit C;

 

(j)                                    The Registration Statement shall be
effective and no stop order with respect to the Registration Statement shall be
pending or threatened by the SEC. The Company shall have a maximum dollar amount
certain of securities, including the Purchase Shares, registered under the
Registration Statement which is sufficient to issue to the Investor not less
than all of the Purchase Shares to be purchased under the Purchase Agreement.
The Current Report and the Initial Prospectus Supplement each shall have been
filed with the SEC, as required pursuant to Section 5(a), and copies of the
Prospectus shall have been delivered to the Investor in accordance with
Section 5(l) hereof. The Prospectus shall be current and available for the
issuance and sale of all of the Purchase Shares by the Company to the Investor,
and for the resale of all of the Purchase Shares by the Investor. Any other
Prospectus Supplements required to have been filed by the Company with the SEC
under the Securities Act at or prior to the Closing Date shall have been filed
with the SEC within the applicable time periods prescribed for such filings
under the Securities Act. All reports, schedules, registrations, forms,
statements, information and other documents required to have been filed by the
Company with the SEC or any Canadian Commission at or prior to the Closing Date
pursuant to the reporting requirements of the Exchange Act (taking into account
any applicable extension periods contemplated by the Exchange Act) or Canadian
Securities Laws, as applicable, shall have been

 

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

 

filed with the SEC or such Canadian Commission, as applicable, within the
applicable time periods prescribed for such filings under the Exchange Act or
Canadian Securities Laws, as applicable;

 

(k)                                 The Company shall be eligible to transfer
its Common Stock, including all of the Purchase Shares, electronically as DWAC
Shares;

 

(l)                                     All federal, state, provincial, local
and foreign governmental laws, rules and regulations applicable to the
transactions contemplated by the Transaction Documents and necessary for the
execution, delivery and performance of the Transaction Documents and the
consummation of the transactions contemplated thereby in accordance with the
terms thereof shall have been complied with, and all consents, authorizations
and orders of, and all filings and registrations with, all federal, state,
provincial, local and foreign courts or governmental agencies and all federal,
state, provincial, local and foreign regulatory or self-regulatory agencies
necessary for the execution, delivery and performance of the Transaction
Documents and the consummation of the transactions contemplated thereby in
accordance with the terms thereof shall have been obtained or made, including,
without limitation, in each case those required under the Securities Act, the
Exchange Act, applicable U.S. state securities or “Blue Sky” laws, Canadian
Securities Laws, or applicable rules and regulations of the Principal Market and
the TSX, or otherwise required by the Canadian Commissions, the SEC, the
Principal Market, the TSX or any U.S. state or other Canadian provincial
securities regulators;

 

(m)                             No statute, regulation, order, decree, writ,
ruling or injunction shall have been enacted, entered, promulgated, threatened
or endorsed by any federal, state, provincial, local or foreign court or
governmental authority of competent jurisdiction which prohibits the
consummation of or which would materially modify or delay any of the
transactions contemplated by the Transaction Documents;

 

(n)                                 No action, suit or proceeding before any
federal, state, provincial, local or foreign arbitrator or any court or
governmental authority of competent jurisdiction shall have been commenced or
threatened, and no inquiry or investigation by any federal, state, provincial,
local or foreign governmental authority of competent jurisdiction shall have
been commenced or threatened, against the Company, or any of the officers,
directors or affiliates of the Company, seeking to restrain, prevent or change
the transactions contemplated by the Transaction Documents, or seeking material
damages in connection with such transactions;

 

(o)                                 No Person shall have commenced a proceeding
against the Company pursuant to or within the meaning of any Bankruptcy Law;

 

(p)                                 The Company, pursuant to or within the
meaning of any Bankruptcy Law, shall not have (i) commenced a voluntary case,
(ii) consented to the entry of an order for relief against it in an involuntary
case, (iii) consented to the appointment of a Custodian of it or for all or
substantially all of its property, or (iv) made a general assignment for the
benefit of its creditors or is generally unable to pay its debts as the same
become due;

 

(q)                                 A court of competent jurisdiction shall not
have entered an order or decree under any Bankruptcy Law that (i) is for relief
against the Company in an involuntary case, (ii) appoints a Custodian of the
Company or for all or substantially all of its property, or (iii) orders the
liquidation of the Company or any Subsidiary; and

 

(r)                                    The issuance of all of the Purchase
Shares by the Company hereunder shall not cause the Company to exceed the
Maximum Share Cap.

 

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9.                                      INDEMNIFICATION.

 

In consideration of the Investor’s execution and delivery of this Agreement and
acquiring the Purchase Shares, and in addition to all of the Company’s other
obligations under the Transaction Documents to which it is a party, the Company
shall defend, protect, indemnify and hold harmless the Investor and all of its
affiliates, stockholders, officers, directors, employees and any of the
foregoing Person’s agent or other representatives (including, without
limitation, those retained in connection with the transactions contemplated by
the Transaction Documents) (collectively, the “Indemnitees”) from and against
any and all actions, causes of action, suits, claims, losses, costs, penalties,
fees, liabilities and damages, and expenses in connection therewith
(irrespective of whether any such Indemnitee is a party to the action for which
indemnification hereunder is sought), and including reasonable attorneys’ fees
and disbursements (the “Indemnified Liabilities”), incurred by any Indemnitee as
a result of, or arising out of, or relating to: (a) any misrepresentation or
breach of any representation or warranty made by the Company in any of the
Transaction Documents or any other certificate, instrument or document
contemplated hereby or thereby, (b) any breach of any covenant, agreement or
obligation of the Company contained in any of the Transaction Documents or any
other certificate, instrument or document contemplated hereby or thereby,
(c) any cause of action, suit or claim brought or made against such Indemnitee
and arising out of or resulting from the execution, delivery, performance or
enforcement of any of the Transaction Documents or any other certificate,
instrument or  document contemplated hereby or thereby, (d) any violation of the
Securities Act, the Exchange Act, U.S. state securities or “Blue Sky” laws or
Canadian Securities Laws, or the rules and regulations of the Principal Market
or the TSX in connection with the transactions contemplated by the Transaction
Documents by the Company or any of its Subsidiaries, affiliates, officers,
directors or employees, (e) any untrue statement or alleged untrue statement of
a material fact contained, or incorporated by reference, in the Registration
Statement or any amendment thereto or any omission or alleged omission to state
therein, or in any document incorporated by reference therein, a material fact
required to be stated therein or necessary to make the statements therein not
misleading, or (f) any untrue statement or alleged untrue statement of a
material fact contained, or incorporated by reference, in the Prospectus, or any
omission or alleged omission to state therein, or in any document incorporated
by reference therein, a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading; provided, however, that (I) the indemnity contained
in clause (c) of this Section 9 shall not apply to any Indemnified Liabilities
which directly and primarily result from the fraud, gross negligence or willful
misconduct of an Indemnitee, (II) the indemnity contained in clauses (d),
(e) and (f) of this Section 9 shall not apply to any Indemnified Liabilities to
the extent, but only to the extent, arising out of or based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Investor expressly for use in any Prospectus
Supplement (it being hereby acknowledged and agreed that the written information
set forth on Exhibit D attached hereto is the only written information furnished
to the Company by or on behalf of the Investor expressly for use in the Initial
Prospectus Supplement), if the Prospectus was timely made available by the
Company to the Investor pursuant to Section 5(l), (III) the indemnity contained
in clauses (d), (e) and (f) of this Section 9 shall not inure to the benefit of
the Investor to the extent such Indemnified Liabilities are based on a failure
of the Investor to deliver or to cause to be delivered the Prospectus made
available by the Company, if such Prospectus was timely made available by the
Company pursuant to Section 5(l), and if delivery of the Prospectus by the
Investor was required under the Securities Act with respect to the Purchase
Shares and such delivery by the Investor would have cured the defect giving rise
to such Indemnified Liabilities, and (IV) the indemnity in this Section 9 shall
not apply to amounts paid in settlement of any claim if such settlement is
effected without the prior written consent of the Company, which consent shall
not be unreasonably withheld, conditioned or delayed. To the extent that the
foregoing undertaking by the Company may be unenforceable for any reason, the
Company shall make the maximum contribution to the payment and satisfaction of
each of the Indemnified Liabilities which is permissible under applicable law. 
Payment under this indemnification shall be made within thirty (30) days from
the date the Investor makes a written request for it. A certificate containing
reasonable detail as to the amount of such indemnification

 

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submitted to the Company by the Investor shall be conclusive evidence, absent
manifest error, of the amount due from the Company to the Investor. If any
action shall be brought against any Indemnitee in respect of which indemnity may
be sought pursuant to this Agreement, such Indemnitee shall promptly notify the
Company in writing, and the Company shall have the right to assume the defense
thereof with counsel of its own choosing reasonably acceptable to the
Indemnitee. Any Indemnitee shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel shall be at the expense of such Indemnitee, except to
the extent that (i) the employment thereof has been specifically authorized by
the Company in writing, (ii) the Company has failed after a reasonable period of
time to assume such defense and to employ counsel or (iii) in such action there
is, in the reasonable opinion of such separate counsel, a material conflict on
any material issue between the position of the Company and the position of such
Indemnitee, in which case the Company shall be responsible for the reasonable
fees and expenses of no more than one such separate counsel.

 

10.                               RESERVED.

 

11.                               TERMINATION

 

This Agreement may be terminated only as follows:

 

(a)                                 If pursuant to or within the meaning of any
Bankruptcy Law, the Company commences a voluntary case or any Person commences a
proceeding against the Company, a Custodian is appointed for the Company or for
all or substantially all of its property, or the Company makes a general
assignment for the benefit of its creditors, this Agreement shall automatically
terminate without any liability or payment to the Company (except as set forth
below) without further action or notice by any Person.

 

(b)                                 In the event that the Closing shall not have
occurred on or before May 15, 2018, due to the failure to satisfy the conditions
set forth in Sections 7 and 8 above with respect to the Closing, either the
Company, on the one hand, or the Investor, on the other hand, shall have the
option to terminate this Agreement at the close of business on such date or
thereafter without liability of any party to any other party (except as set
forth below); provided, however, that the right to terminate this Agreement
under this Section 11(b) shall not be available to any party if such party is
then in breach of any covenant or agreement contained in this Agreement or any
representation or warranty of such party contained in this Agreement fails to be
true and correct such that the conditions set forth in Section 7(c) or
Section 8(d), as applicable, could not then be satisfied. Any termination of
this Agreement pursuant to this Section 11(b) shall be effected by written
notice from the Company to the Investor, or the Investor to the Company, as the
case may be, setting forth the basis for the termination hereof.

 

The representations and warranties and covenants of the Company and the Investor
contained in Sections 3, 4, 5, and 6 hereof, the indemnification provisions set
forth in Section 9 hereof and the agreements and covenants set forth in Sections
10, 11 and 12, shall survive the Closing and any termination of this Agreement. 
No termination of this Agreement shall be deemed to release the Company or the
Investor from any liability for intentional misrepresentation or willful breach
of any of the Transaction Documents to which it is a party.

 

12.                               MISCELLANEOUS.

 

(a)                                 Governing Law; Jurisdiction; Jury Trial. 
The corporate laws of the State of Delaware shall govern all issues concerning
the relative rights of the Company and its stockholders. All other questions
concerning the construction, validity, enforcement and interpretation of this
Agreement and the other Transaction Documents shall be governed by the internal
laws of the State of New York, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of New York or any

 

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other jurisdictions) that would cause the application of the laws of any
jurisdictions other than the State of New York. Any legal suit, action or
proceeding arising out, based upon, relating to or in connection with this
Agreement or any of the other Transaction Documents (or any term or provision
thereof), or any of the transactions contemplated hereby or thereby or referred
to herein or therein, including, without limitation, any dispute or any
enforcement of any rights or remedies (at law or in equity) with respect thereto
or in connection therewith (each, a “Related Proceeding” and collectively, the
“Related Proceedings”), may be instituted in any of the federal courts of the
United States of America or any of the state courts of the State of Illinois, in
each case located in the State of Illinois, County of Cook (each, a “Specified
Court” and collectively, the “Specified Courts”), and each party hereto
irrevocably submits to the exclusive jurisdiction (except for proceedings
instituted in regard to the enforcement of a judgment of any Specified Court (a
“Related Judgment”), as to which such jurisdiction is non-exclusive) of any
Specified Court in which any Related Proceeding is instituted or brought. Each
of the parties hereby irrevocably and unconditionally waives any objection to
the laying of venue of any Related Proceeding in any of the Specified Courts and
irrevocably and unconditionally waives and agrees not to plead or claim in any
of the Specified Courts that it is not personally subject to the jurisdiction of
any of the Specified Courts or that any Related Proceeding brought in any of the
Specified Courts has been brought in an inconvenient forum. Service of any
process, summons, notice or document by mail to such party’s address set forth
above shall be effective service of process for any Related Proceeding
instituted or brought in any of the Specified Courts. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE,
AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY RELATED
PROCEEDING OR OTHERWISE IN CONNECTION THEREWITH.

 

(b)                                 Counterparts.  This Agreement may be
executed in two or more identical counterparts, all of which shall be considered
one and the same agreement and shall become effective when counterparts have
been signed by each party and delivered to the other party; provided that a
facsimile signature or signature delivered by e-mail in a “.pdf” format data
file shall be considered due execution and shall be binding upon the signatory
thereto with the same force and effect as if the signature were an original
signature.

 

(c)                                  Headings.  The headings of this Agreement
are for convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

 

(d)                                 Severability.  If any provision of this
Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity
or unenforceability shall not affect the validity or enforceability of the
remainder of this Agreement in that jurisdiction or the validity or
enforceability of any provision of this Agreement in any other jurisdiction.

 

(e)                                  Entire Agreement; Amendment.  This
Agreement and the other Transaction Documents supersede all other prior oral or
written agreements among the Investor, the Company, their respective affiliates
and Persons acting on their behalf with respect to the subject matter hereof,
and this Agreement, the other Transaction Documents and the instruments
referenced herein contain the entire understanding of the parties with respect
to the matters covered herein and therein and, except as specifically set forth
herein or therein, neither the Company nor the Investor makes any
representation, warranty, covenant or undertaking with respect to such matters. 
The Company acknowledges and agrees that is has not relied on, in any manner
whatsoever, any representations or statements, written or oral, other than as
expressly set forth in the Transaction Documents. No provision of this Agreement
or the other Transaction Documents may be amended other than by a written
instrument signed by both parties hereto.

 

(f)                                   Notices.  Any notices, consents or other
communications required or permitted to be given under the terms of this
Agreement must be in writing and will be deemed to have been delivered: (i) upon

 

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receipt when delivered personally; (ii) upon receipt when sent by facsimile or
email (provided confirmation of transmission is mechanically or electronically
generated and kept on file by the sending party); or (iii) one Business Day
after deposit with a nationally recognized overnight delivery service, in each
case properly addressed to the party to receive the same. The addresses for such
communications shall be:

 

If to the Company:

Golden Minerals Company

350 Indiana Street, Suite 800

Golden, Colorado 80401

Telephone:

 

(303) 839-5060

Facsimile:

 

(303) 839-5907

E-mail:

 

bob.vogels@goldenminerals.com

Attention:

 

Robert Vogels

 

With a copy to (which shall not constitute notice or service of process):

Davis Graham & Stubbs LLP

1550 Seventeenth Street, Suite 500

Denver, Colorado 80202

Telephone:

 

(303) 892-9400

Facsimile:

 

(303) 893-1379

E-mail:

 

brian.boonstra@dgslaw.com

Attention:

 

Brian Boonstra

 

If to the Investor:

Lincoln Park Capital Fund, LLC

440 North Wells, Suite 410

Chicago, IL 60654

Telephone:

 

312-822-9300

Facsimile:

 

312-822-9301

E-mail:

 

jscheinfeld@lpcfunds.com/jcope@lpcfunds.com

Attention:

 

Josh Scheinfeld/Jonathan Cope

 

With a copy to (which shall not constitute notice or service of process):

Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.

666 Third Avenue

New York, NY 10017

Telephone:

 

(212) 692-6267

Facsimile:

 

(212) 983-3115

E-mail:

 

ajmarsico@mintz.com

Attention:

 

Anthony J. Marsico, Esq.

 

If to the Transfer Agent:

Computershare Trust Company N.A.

Telephone:

Facsimile:

Attention:

 

or at such other address and/or facsimile number and/or to the attention of such
other Person as the recipient party has specified by written notice given to
each other party three (3) Business Days prior to the effectiveness of such
change.  Written confirmation of receipt (A) given by the recipient of such
notice, consent or other communication, (B) mechanically or electronically
generated by the sender’s facsimile

 

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machine or email account containing the time, date, and recipient facsimile
number or email address, as applicable, and an image of the first page of such
transmission or (C) provided by a nationally recognized overnight delivery
service, shall be rebuttable evidence of personal service, receipt by facsimile
or receipt from a nationally recognized overnight delivery service in accordance
with clause (i), (ii) or (iii) above, respectively.

 

(g)                                  Successors and Assigns.  This Agreement
shall be binding upon and inure to the benefit of the parties and any permitted
successors and assigns of the Company.  The Company shall not assign this
Agreement or any rights or obligations hereunder without the prior written
consent of the Investor, including by merger or consolidation.  The Investor may
not assign its rights or obligations under this Agreement.

 

(h)                                 No Third Party Beneficiaries.  This
Agreement is intended for the benefit of the parties hereto and any permitted
successors and assigns of the Company and, except as set forth in Section 9, is
not for the benefit of, nor may any provision hereof be enforced by, any other
Person.

 

(i)                                     Publicity.  The Company shall afford the
Investor and its counsel with the opportunity to review and comment upon the
form and substance of, and shall give reasonable consideration to all such
comments from the Investor or its counsel on, any press release, SEC filing or
any other public disclosure by or on behalf of the Company relating to the
Investor, its purchases hereunder or any aspect of the Purchase Shares, any of
the Transaction Documents or the transactions contemplated thereby, not less
than 18 hours prior to the issuance, filing or public disclosure thereof. The
Investor must be provided with a final version of any such press release, SEC
filing or other public disclosure at least 18 hours prior to any release, filing
or use by the Company thereof. The Company agrees and acknowledges that its
failure to fully comply with this provision constitutes a Material Adverse
Effect.

 

(j)                                    Further Assurances.  Each party shall do
and perform, or cause to be done and performed, all such further acts and
things, and shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request in order to
carry out the intent and accomplish the purposes of this Agreement and the
consummation of the transactions contemplated hereby.

 

(k)                                 No Financial Advisor, Placement Agent,
Broker or Finder.    The Company represents and warrants to the Investor that it
has not engaged any financial advisor, placement agent, broker or finder in
connection with the transactions contemplated hereby.  The Investor represents
and warrants to the Company that it has not engaged any financial advisor,
placement agent, broker or finder in connection with the transactions
contemplated hereby.  The Company shall be responsible for the payment of any
fees or commissions, if any, of any financial advisor, placement agent, broker
or finder relating to or arising out of the transactions contemplated hereby. 
The Company shall pay, and hold the Investor harmless against, any liability,
loss or expense (including, without limitation, attorneys’ fees and out of
pocket expenses) arising in connection with any such claim.

 

(l)                                     No Strict Construction.  The language
used in this Agreement will be deemed to be the language chosen by the parties
to express their mutual intent, and no rules of strict construction will be
applied against any party.

 

(m)                             Remedies, Other Obligations, Breaches and
Injunctive Relief.  The Investor’s remedies provided in this Agreement,
including, without limitation, the Investor’s remedies provided in Section 9,
shall be cumulative and in addition to all other remedies available to the
Investor under this Agreement, at law or in equity (including a decree of
specific performance and/or other injunctive relief), no remedy of the Investor
contained herein shall be deemed a waiver of compliance with the provisions
giving rise to such remedy and nothing herein shall limit the Investor’s right
to pursue actual damages for any failure by

 

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the Company to comply with the terms of this Agreement.  The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable harm to the Investor and that the remedy at law for any such breach
may be inadequate.  The Company therefore agrees that, in the event of any such
breach or threatened breach, the Investor shall be entitled, in addition to all
other available remedies, to an injunction restraining any breach, without the
necessity of showing economic loss and without any bond or other security being
required.

 

(n)                                Enforcement Costs.  If: (i) this Agreement or
any other Transaction Document is placed by the Investor in the hands of an
attorney for enforcement or is enforced by the Investor through any legal
proceeding; (ii) an attorney is retained to represent the Investor in any
bankruptcy, reorganization, receivership or other proceedings affecting
creditors’ rights and involving a claim under this Agreement or any other
Transaction Document; or (iii) an attorney is retained to represent the Investor
in any other proceedings whatsoever in connection with this Agreement or any
other Transaction Document, then the Company shall pay to the Investor, as
incurred by the Investor, all reasonable, documented, out-of-pocket costs and
expenses including attorneys’ fees incurred in connection therewith, in addition
to all other amounts due hereunder.  If this Agreement is placed by the Company
in the hands of an attorney for enforcement or is enforced by the Company
through any legal proceedings, then the Investor shall pay to the Company, as
incurred by the Company, all reasonable costs and expenses including reasonable
attorneys’ fees incurred in connection therewith, in addition to all other
amounts due hereunder.

 

(o)                                Waivers.  No provision of this Agreement may
be waived other than in a written instrument signed by the party against whom
enforcement of such waiver is sought.  No failure or delay in the exercise of
any power, right or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other right, power or
privilege.

 

(p)                                Currency. Unless otherwise expressly
indicated, all dollar amounts referred to in this Agreement and the other
Transaction Documents are in United States Dollars (“U.S. Dollars”), and all
amounts owing under this Agreement and all other Transaction Documents shall be
paid in U.S. Dollars.

 

*     *     *     *     *

 

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IN WITNESS WHEREOF, the Investor and the Company have caused this Agreement to
be duly executed as of the date first written above.

 

 

THE COMPANY:

 

 

 

GOLDEN MINERALS COMPANY

 

 

 

By:

/s/ Robert P. Vogels

 

Name:

Robert P. Vogels

 

Title:

Senior Vice President and Chief Financial Officer

 

 

 

INVESTOR:

 

 

 

LINCOLN PARK CAPITAL FUND, LLC

 

BY: LINCOLN PARK CAPITAL, LLC

 

BY: ROCKLEDGE CAPITAL CORPORATION

 

 

 

By:

/s/ Josh Scheinfeld

 

Name:

Josh Scheinfeld

 

Title:

President

 

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