Exhibit 10.1

 

Execution Version

 

AT THE MARKET OFFERING AGREEMENT

 

December 20, 2016

 

Golden Minerals Company

 

Ladies and Gentlemen:

 

Golden Minerals Company, a corporation organized under the laws of Delaware (the
“Company”), confirms its agreement (this “Agreement”) with H. C. Wainwright &
Co., LLC (the “Manager”) as follows:

 

1.                                      Definitions. The terms that follow, when
used in this Agreement and any Terms Agreement, shall have the meanings
indicated.

 

“Accountants”   shall have the meaning ascribed to such term in Section 4(m).

 

“Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations of the Commission promulgated thereunder.

 

“Action” shall have the meaning ascribed to such term in Section 3(q).

 

“Affiliate” shall have the meaning ascribed to such term in Section 3(p).

 

“Applicable Time” shall mean, with respect to any Shares, the time of sale of
such Shares pursuant to this Agreement or any relevant Terms Agreement.

 

“Base Prospectus” shall mean the base prospectus contained in the Registration
Statement at the Execution Time.

 

“Board” shall have the meaning ascribed to such term in Section 2(b)(iii).

 

“Broker Fee” shall have the meaning ascribed to such term in Section 2(b)(v).

 

“Business Day” shall mean any day other than a Saturday, a Sunday or a legal
holiday or a day on which banking institutions or trust companies are authorized
or obligated by law to close in New York City.

 

“Commission” shall mean the United States Securities and Exchange Commission.

 

“Common Stock” shall have the meaning ascribed to such term in Section 2.

 

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“Common Stock Equivalents” shall have the meaning ascribed to such term in
Section 3(g).

 

“Company U.S. Counsel” shall have the meaning ascribed to such term in
Section 4(l).

 

“Disclosure Schedules” means the Disclosure Schedules of the Company delivered
concurrently herewith.

 

“DTC” shall have the meaning ascribed to such term in Section 2(b)(vii).

 

“Effective Date” shall mean each date and time that the Registration Statement
and any post-effective amendment or amendments thereto became or becomes
effective.

 

“Evaluation Date” shall have the meaning ascribed to such term in Section 3(z).

 

“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the Commission promulgated thereunder.

 

“Execution Time” shall mean the date and time that this Agreement is executed
and delivered by the parties hereto.

 

“Free Writing Prospectus” shall mean a free writing prospectus, as defined in
Rule 405.

 

“GAAP” shall have the meaning ascribed to such term in Section 3(n).

 

“Incorporated Documents” shall mean the documents or portions thereof filed with
the Commission on or before the Effective Date that are incorporated by
reference in the Registration Statement or the Prospectus and any documents or
portions thereof filed with the Commission after the Effective Date that are
deemed to be incorporated by reference in the Registration Statement or the
Prospectus.

 

“Intellectual Property Rights” shall have the meaning ascribed to such term in
Section 3(w).

 

“Issuer Free Writing Prospectus” shall mean an issuer free writing prospectus,
as defined in Rule 433.

 

“Losses” shall have the meaning ascribed to such term in Section 7(d).

 

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“Material Adverse Effect” shall have the meaning ascribed to such term in
Section 3(b).

 

“Mining Claims” shall have the meaning ascribed to such term in Section 3(v).

 

“Material Permits” shall have the meaning ascribed to such term in Section 3(t).

 

“Net Proceeds” shall have the meaning ascribed to such term in Section 2(b)(v).

 

“Permitted Free Writing Prospectus” shall have the meaning ascribed to such term
in Section 4(g).

 

“Placement” shall have the meaning ascribed to such term in Section 2(c).

 

“Proceeding” shall have the meaning ascribed to such term in Section 3(b).

 

“Prospectus” shall mean the Base Prospectus, as supplemented by the most
recently filed Prospectus Supplement (if any).

 

“Prospectus Supplement” shall mean the prospectus supplement relating to the
Shares prepared and filed pursuant to Rule 424(b) from time to time.

 

“Registration Statement” shall mean the shelf registration statement (File
Number 333-199026) on Form S-3, including exhibits and financial statements and
any prospectus supplement relating to the Shares that is filed with the
Commission pursuant to Rule 424(b) and deemed part of such registration
statement pursuant to Rule 430B, as amended on each Effective Date and, in the
event any post-effective amendment thereto becomes effective, shall also mean
such registration statement as so amended.

 

“Reliance Letter” shall have the meaning ascribed to such term in Section 4(l).

 

“Representation Date” shall have the meaning ascribed to such term in
Section 4(k).

 

“Required Approvals” shall have the meaning ascribed to such term in
Section 3(e).

 

“Rule 158”, “Rule 163”, “Rule 164”, “Rule 172”, “Rule 173”, “Rule 405”,
“Rule 415”, “Rule 424”, “Rule 430B” and “Rule 433” refer to such rules under the
Act.

 

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“Sales Notice” shall have the meaning ascribed to such term in Section 2(b)(i).

 

“SEC Reports” shall have the meaning ascribed to such term in Section 3(m).

 

“Settlement Date” shall have the meaning ascribed to such term in
Section 2(b)(vii).

 

“Shares” shall have the meaning ascribed to such term in Section 2.

 

“Subsidiary” shall have the meaning ascribed to such term in Section 3(a).

 

“Terms Agreement” shall have the meaning ascribed to such term in Section 2(a).

 

“Time of Delivery” shall have the meaning ascribed to such term in Section 2(c).

 

“Trading Market” means NYSE MKT.

 

2.                                      Sale and Delivery of Shares. The Company
proposes to issue and sell through or to the Manager, as sales agent and/or
principal, up to $5,000,000 of shares (the “Shares”) of the Company’s common
stock, $0.01 par value (“Common Stock”), from time to time during the term of
this Agreement and on the terms set forth herein;  provided, however, that in no
event shall the Company issue or sell through the Manager such number of Shares
that (a) exceeds the number or dollar amount of shares of Common Stock
registered on the Registration Statement, pursuant to which the offering is
being made, (b) exceeds the number of authorized but unissued shares of Common
Stock or (c) would cause the Company or the offering of the Shares to not
satisfy the eligibility and transaction requirements for use of Form S-3
(including, if applicable, General Instruction I.B.6 of Registration Statement
on Form S-3 (the lesser of (a), (b) and (c), the “Maximum Amount”)). 
Notwithstanding anything to the contrary contained herein, the parties hereto
agree that compliance with the limitations set forth in this Section 2 on the
number and aggregate sales price of Shares issued and sold under this Agreement
shall be the sole responsibility of the Company and that Manager shall have no
obligation in connection with such compliance.

 

(a)                                 Appointment of Manager as Selling Agent;
Terms Agreement.  For purposes of selling the Shares through the Manager, the
Company hereby appoints the Manager as exclusive agent of the Company for the
purpose of selling the Shares of the Company pursuant to this Agreement and the
Manager agrees to use its commercially reasonable efforts to sell the Shares on
the terms and subject to the conditions stated herein. The Company agrees that,
whenever it determines to sell the Shares directly to the Manager as principal,
it will enter into

 

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a separate agreement (each, a “Terms Agreement”) in substantially the form of
Annex I hereto, relating to such sale in accordance with Section 2 of this
Agreement.

 

(b)                                 Agent Sales.  Subject to the terms and
conditions and in reliance upon the representations and warranties herein set
forth, the Company will issue and agrees to sell the Shares from time to time
through the Manager, acting as sales agent, and the Manager agrees to use its
commercially reasonable efforts to sell the Shares, as sales agent for the
Company, on the following terms:

 

(i)                                     The Shares are to be sold on a daily
basis or otherwise as shall be agreed to by the Company and the Manager on any
day that (A) is a trading day for the Trading Market, (B) the Company has
instructed the Manager by telephone (confirmed promptly by electronic mail) to
make such sales (“Sales Notice”) and (C) the Company has satisfied its
obligations under Section 6 of this Agreement, provided that the deliveries
required under Section 6 shall only be required to be made on the Execution Time
and on a Representation Date on which a material amendment to the Registration
Statement or Prospectus is made or the Company files its Annual Report on
Form 10-K or a material amendment thereto under the Exchange Act.  The Company
will designate the maximum amount of the Shares to be sold by the Manager daily
(subject to the limitations set forth in Section 2(d)) and the minimum price per
Share at which such Shares may be sold.  Subject to the terms and conditions
hereof, the Manager shall use its commercially reasonable efforts to sell on a
particular day all of the Shares designated for the sale by the Company on such
day. The gross sales price of the Shares sold under this Section 2(b) shall be
the market price for shares of the Company’s Common Stock sold by the Manager
under this Section 2(b) on the Trading Market at the time of sale of such
Shares.

 

(ii)                                  The Company acknowledges and agrees that
(A) there can be no assurance that the Manager will be successful in selling the
Shares, (B) the Manager will incur no liability or obligation to the Company or
any other person or entity if it does not sell the Shares for any reason other
than a failure by the Manager to use commercially reasonable efforts consistent
with its normal trading and sales practices and applicable law and regulations
to sell such Shares as required under this Agreement, and (C) the Manager shall
be under no obligation to purchase Shares on a principal basis pursuant to this
Agreement, except as otherwise specifically agreed by the Manager and the
Company pursuant to a Terms Agreement.

 

(iii)                               The Company shall not authorize the issuance
and sale of, and the Manager shall not be obligated to use its commercially
reasonable efforts to sell, any Share at a price lower than the minimum price
therefor

 

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designated from time to time by the Company’s Board of Directors (the “Board”),
or a duly authorized committee thereof, or such duly authorized officers of the
Company, and notified to the Manager in writing. The Company or the Manager may,
upon notice to the other party hereto by telephone (confirmed promptly by
electronic mail), suspend the offering of the Shares for any reason and at any
time; provided, however, that such suspension or termination shall not affect or
impair the parties’ respective obligations with respect to the Shares sold
hereunder prior to the giving of such notice.

 

(iv)                              The Manager may sell Shares by any method
permitted by law deemed to be an “at the market offering” as defined in Rule 415
under the Act, including without limitation sales made directly on the Trading
Market, on any other existing United States trading market for the Common Stock
or to or through a market maker.  The Manager may also sell Shares in privately
negotiated transactions in the United States, provided that the Manager receives
the Company’s prior written approval for any sales in privately negotiated
transactions and if so provided in the “Plan of Distribution” section of the
Prospectus Supplement or as described in a further prospectus supplement.

 

(v)                                 The compensation to the Manager for sales of
the Shares under this Section 2(b) shall be a placement fee of 2.0% of the gross
sales price of the Shares sold pursuant to this Section 2(b) (“Broker Fee”). The
foregoing rate of compensation shall not apply when the Manager acts as
principal, in which case the Company may sell Shares to the Manager as principal
at a price agreed upon at the relevant Applicable Time pursuant to a Terms
Agreement. The remaining proceeds, after deduction of the Broker Fee and
deduction for any transaction fees imposed by any clearing firm, execution
broker, or governmental or self-regulatory organization in respect of such
sales, shall constitute the net proceeds to the Company for such Shares (the
“Net Proceeds”).

 

(vi)                              The Manager shall provide written confirmation
(which may be by facsimile or electronic mail) to the Company following the
close of trading on the Trading Market each day in which the Shares are sold
under this Section 2(b) setting forth the number of the Shares sold on such day,
the aggregate gross sales proceeds and the Net Proceeds to the Company, and the
compensation payable by the Company to the Manager with respect to such sales.

 

(vii)                           Unless otherwise specified in the applicable
Sales Notice, settlement for sales of Shares will occur on the third (3rd)
Business Day (or such earlier day as is industry practice for regular-way
trading) following the date on which such sales are made (each, a “Settlement
Date”). On or before each Settlement Date, the Company will, or will cause its
transfer

 

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agent to, electronically transfer the Shares being sold by crediting the
Manager’s account at The Depository Trust Company (“DTC”) through its Deposit
and Withdrawal at Custodian System or by such other means of delivery as may be
mutually agreed upon by the parties hereto.  On each Settlement Date, the
Manager shall deliver the related Net Proceeds in same day funds to an account
designated by the Company on, or prior to, the Settlement Date.

 

(viii)                        At each Applicable Time, Settlement Date,
Representation Date and Filing Date, the Company shall be deemed to have
affirmed each representation and warranty contained in this Agreement as if such
representation and warranty were made as of such date, modified as necessary to
relate to the Registration Statement and the Prospectus as amended as of such
date. Any obligation of the Manager to use its commercially reasonable efforts
to sell the Shares on behalf of the Company shall be subject to the continuing
accuracy of the representations and warranties of the Company herein, to the
performance by the Company of its obligations hereunder and to the continuing
satisfaction of the additional conditions specified in Section 6 of this
Agreement.

 

(c)                                  Term Sales.  If the Company wishes to sell
the Shares pursuant to this Agreement but other than as set forth in
Section 2(b) of this Agreement (each, a “Placement”), it will notify the Manager
of the proposed terms of such Placement. If the Manager, acting as principal,
wishes to accept such proposed terms (which it may decline to do for any reason
in its sole discretion) or, following discussions with the Company wishes to
accept amended terms, the Manager and the Company will enter into a Terms
Agreement setting forth the terms of such Placement. The terms set forth in a
Terms Agreement will not be binding on the Company or the Manager unless and
until the Company and the Manager have each executed such Terms Agreement
accepting all of the terms of such Terms Agreement. In the event of a conflict
between the terms of this Agreement and the terms of a Terms Agreement, the
terms of such Terms Agreement will control.  A Terms Agreement may also specify
certain provisions relating to the reoffering of such Shares by the Manager,
including any restrictions in respect of reoffering such Shares in Canada,
whether through the Toronto Stock Exchange, any other trading markets in Canada
or otherwise. The commitment of the Manager to purchase the Shares pursuant to
any Terms Agreement shall be deemed to have been made on the basis of the
representations and warranties of the Company herein contained and shall be
subject to the terms and conditions herein set forth. Each Terms Agreement shall
specify the number of the Shares to be purchased by the Manager pursuant
thereto, the price to be paid to the Company for such Shares, any provisions
relating to rights of, and default by, underwriters acting together with the
Manager in the reoffering of the Shares, and the time and date (each such time
and date being referred to herein as a “Time of Delivery”) and place of delivery
of and payment for such Shares. Such Terms Agreement shall also specify any
requirements for opinions of counsel,

 

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accountants’ letters and officers’ certificates pursuant to Section 6 of this
Agreement and any other information or documents required by the Manager.

 

(d)                                 Maximum Number of Shares.  Under no
circumstances shall the Company cause or request the offer or sale of any Shares
if, after giving effect to the sale of such Shares, the aggregate amount of
Shares sold pursuant to this Agreement would exceed the lesser of (A) together
with all sales of Shares under this Agreement, the Maximum Amount, (B) the
amount available for offer and sale under the currently effective Registration
Statement (including, to the extent applicable, any limitation imposed by
instruction I.B.6 to Form S-3) and (C) the amount authorized from time to time
to be issued and sold under this Agreement by the Company’s board of directors,
a duly authorized committee thereof or a duly authorized executive committee,
and notified to the Manager in writing.  Under no circumstances shall the
Company cause or request the offer or sale of any Placement Shares pursuant to
this Agreement at a price lower than the minimum price authorized from time to
time by the Company’s board of directors, a duly authorized committee thereof or
a duly authorized executive committee, and notified to the Manager in writing.
Further, under no circumstances shall the Company cause or permit the aggregate
offering amount of Placement Shares sold pursuant to this Agreement to exceed
the Maximum Amount.

 

(e)                                  Regulation M Notice.  Unless the exceptive
provisions set forth in Rule 101(c)(1) of Regulation M under the Exchange Act
are satisfied with respect to the Shares, the Company shall give the Manager at
least one Business Day’s prior notice of its intent to sell any Shares in order
to allow the Manager time to comply with Regulation M.

 

(f)                                   Restrictions on Sales in Canada.  The
Manager acknowledges that the Shares have not been registered or qualified for
distribution in any Province or Territory of Canada, and are not eligible for
resale in Canada for a period ending four (4) months plus one day from the
Settlement Date relating to the issuance of such Shares. The Manager agrees that
it will not sell, offer to sell or solicit offers to purchase Shares in Canada,
including through the Toronto Stock Exchange or any other trading markets in
Canada, or to or from persons resident in any Province or Territory of Canada or
to or from any person acquiring such Shares for the benefit of another person
resident in any Province or Territory of Canada  The Manager shall not sell,
offer to sell or solicit offers to purchase Shares so as to require registration
thereof or the filing of a prospectus or similar document with respect thereto
under the laws of any jurisdiction other than the United States.

 

3.                                      Representations and Warranties.  Except
as set forth in the Disclosure Schedules, which Disclosure Schedules shall be
deemed a part hereof and shall qualify any representation or warranty made
herein to the extent of the disclosure contained in

 

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the corresponding section of the Disclosure Schedules, the Company represents
and warrants to, and agrees with, the Manager at the Execution Time and on each
such time the following representations and warranties are repeated or deemed to
be made pursuant to this Agreement, as set forth below or in the Registration
Statement, the Prospectus or the Incorporated Documents.

 

(a)                                 Subsidiaries.  All of the direct and
indirect “significant subsidiaries” as such term is defined in Section 1-02 of
Regulation S-X (individually, a “Subsidiary”) of the Company are set forth on
Exhibit 21.1 to the Company’s most recent Annual Report on Form 10-K filed with
the Commission.  The Company owns, directly or indirectly, all of the capital
stock or other equity interests of each Subsidiary free and clear of any “Liens”
(which for purposes of this Agreement shall mean a lien, charge, security
interest, encumbrance, right of first refusal, preemptive right or other
restriction), and all the issued and outstanding shares of capital stock of each
Subsidiary are validly issued and are fully paid, non-assessable and free of
preemptive and similar rights to subscribe for or purchase securities.

 

(b)                                 Organization and Qualification.  The Company
and each of the 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 (as applicable), with the
requisite 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
Subsidiary 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 the 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, could not
reasonably be expected to result in (i) a material adverse effect on the
legality, validity or enforceability of this Agreement, (ii) a material adverse
change in the results of operations, assets, business, prospects or condition
(financial or otherwise) of the Company and the Subsidiaries, taken as a whole,
from that set forth in the Registration Statement, the Prospectus or the
Incorporated Documents, or (iii) a material adverse effect on the Company’s
ability to perform in any material respect on a timely basis its obligations
under this Agreement (any of (i), (ii) or (iii), a “Material Adverse Effect”)
and no “Proceeding” (which for purposes of this Agreement shall mean any action,
claim, suit, investigation or proceeding (including, without limitation, an
investigation or partial proceeding, such as a deposition), whether commenced or
threatened) has been instituted in any such jurisdiction revoking, limiting or
curtailing or seeking to revoke, limit or curtail such power and authority or
qualification.

 

(c)                                  Authorization and Enforcement.  The Company
has the requisite corporate power and authority to enter into and to consummate
the transactions

 

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contemplated by this Agreement and otherwise to carry out its obligations
hereunder.  The execution and delivery of this Agreement by the Company and the
consummation by it of the transactions contemplated hereby have been duly
authorized by all necessary action on the part of the Company and no further
action is required by the Company, the Board or its stockholders in connection
herewith other than in connection with the Required Approvals.  This Agreement
has been duly executed and delivered by the Company and constitutes the valid
and binding obligation of the Company enforceable against the Company in
accordance with its terms except (i) as limited by general equitable principles
and applicable bankruptcy, insolvency, reorganization, moratorium and other laws
of general application affecting enforcement of creditors’ rights generally,
(ii) as limited by laws relating to the availability of specific performance,
injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable law.

 

(d)                                 No Conflicts.  The execution, delivery and
performance of this Agreement by the Company, the issuance and sale of the
Shares and the consummation by the Company of the other transactions
contemplated herein do not and will not (i) conflict with or violate any
provision of the Company’s or any Subsidiary’s certificate or articles of
incorporation, bylaws or other organizational or charter documents, or
(ii) conflict with, or constitute a default (or an event that with notice or
lapse of time or both would become a default) under, result in the creation of
any Lien upon any of the properties or assets of the Company or any Subsidiary,
or give to others any rights of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) of, any agreement,
credit facility, debt or other instrument (evidencing a Company or Subsidiary
debt or otherwise) or other understanding to which the Company or any Subsidiary
is a party or by which any property or asset of the Company or any Subsidiary is
bound or affected, or (iii) subject to the Required Approvals, conflict with or
result in a violation of any law, rule, regulation, order, judgment, injunction,
decree or other restriction of any court or governmental authority to which the
Company or a Subsidiary is subject (including federal and state securities laws
and regulations), or by which any property or asset of the Company or a
Subsidiary is bound or affected, except in the case of each of clauses (ii) and
(iii), such as could not reasonably be expected to result in a Material Adverse
Effect.

 

(e)                                  Filings, Consents and Approvals.  The
Company is not required to obtain any consent, waiver, authorization or order
of, give any notice to, or make any filing or registration with, any court or
other federal, state, local or other governmental authority or other “Person”
(defined as an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind, including the Trading Market and the Toronto Stock Exchange) in
connection with the execution, delivery and performance by the Company of this
Agreement, other than (i) the filings required by this Agreement, (ii) the
filing with the Commission of the Prospectus

 

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Supplement, (iii) the filing of application(s) to and approval by the Trading
Market and conditional approval of the Toronto Stock Exchange for the listing of
the Shares for trading thereon in the time and manner required thereby, and
(iv) such filings as are required to be made under applicable state securities
laws and the rules and regulations of the Financial Industry Regulatory
Authority, Inc. (“FINRA”) (collectively, the “Required Approvals”).

 

(f)                                   Issuance of Shares.  The Shares are duly
authorized and, when issued and paid for in accordance with this Agreement, will
be duly and validly issued, fully paid and nonassessable, free and clear of all
Liens imposed by the Company.  The Company has reserved from its duly authorized
capital stock the maximum number of shares of Common Stock issuable pursuant to
this Agreement as designated from time to time by the Company’s Board.  The
Shares are being issued pursuant to the Registration Statement and the issuance
by the Company of the Shares has been registered under the Act and all of the
Shares are freely transferable and tradable by the purchasers thereof without
restriction (other than any restrictions arising solely from an act or omission
of such a purchaser).  The “Plan of Distribution” section within the
Registration Statement permits the issuance and sale of the Shares as
contemplated by this Agreement.  Upon receipt of the Shares, the purchasers of
such Shares will have good and marketable title to such Shares and the Shares
will be freely tradable on the Trading Market.

 

(g)                                  Capitalization.  The capitalization of the
Company is as set forth in the Registration Statement and the Prospectus as of
the dates reflected therein.  The Company has not issued any capital stock since
its most recently filed periodic report under the Exchange Act, other than
pursuant to this Agreement or pursuant to the issuance of shares of Common Stock
to employees, directors or consultants pursuant to the Company’s equity
incentive plan and pursuant to the conversion or exercise of securities
exercisable, exchangeable or convertible into Common Stock (“Common Stock
Equivalents”).  No Person has any right of first refusal, preemptive right,
right of participation, or any similar right to participate in the transactions
contemplated by this Agreement.  Except (i) pursuant to the Company’s equity
incentive plan and (ii) pursuant to agreements or instruments filed as exhibits
to Incorporated Documents, there are no outstanding options, warrants, script
rights to subscribe to, calls or commitments of any character whatsoever
relating to, or securities, rights or obligations convertible into or
exercisable or exchangeable for, or giving any Person any right to subscribe for
or acquire, any shares of Common Stock, or contracts, commitments,
understandings or arrangements by which the Company or any Subsidiary is or may
become bound to issue additional shares of Common Stock or Common Stock
Equivalents.  Except as set forth in the Registration Statement and the
Prospectus, the issuance and sale of the Shares will not obligate the Company to
issue shares of Common Stock or other securities to any Person and will not
result in a right of any holder of Company securities to adjust the exercise,
conversion, exchange or reset price under such securities. All of the
outstanding shares of capital stock of

 

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the Company are validly issued, fully paid and nonassessable, have been issued
in compliance with all federal and state securities laws, and none of such
outstanding shares was issued in violation of any preemptive rights or similar
rights to subscribe for or purchase securities.  There are no stockholders
agreements, voting agreements or other similar agreements with respect to the
Company’s capital stock to which the Company is a party or, to the knowledge of
the Company, between or among any of the Company’s stockholders.

 

(h)                                 Registration Statement.  The Company meets
the requirements for use of Form S-3 under the Act and has prepared and filed
with the Commission the Registration Statement, including a related Base
Prospectus, for registration under the Act of the offering and sale of the
Shares.  Such Registration Statement is effective and available for the offer
and sale of the Shares as of the date hereof. As filed, the Base Prospectus
contains all information required by the Act and the rules thereunder, and,
except to the extent the Manager shall agree in writing to a modification, shall
be in all substantive respects in the form furnished to the Manager prior to the
Execution Time or prior to any such time this representation is repeated or
deemed to be made. The Registration Statement, at the Execution Time, each such
time this representation is repeated or deemed to be made, and at all times
during which a prospectus is required by the Act to be delivered (whether
physically or through compliance with Rule 172, 173 or any similar rule) in
connection with any offer or sale of the Shares, meets the requirements set
forth in Rule 415(a)(1)(x). The initial Effective Date of the Registration
Statement was not earlier than the date three years before the Execution Time.

 

(i)                                     Accuracy of Incorporated Documents.  The
Incorporated Documents, when they were filed with the Commission, conformed in
all material respects to the requirements of the Exchange Act and the
rules thereunder, and none of the Incorporated Documents, when they were filed
with the Commission, contained any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements therein, in
light of the circumstances under which they were made not misleading; and any
further documents so filed and incorporated by reference in the Registration
Statement or the Prospectus, when such documents are filed with the Commission,
will conform in all material respects to the requirements of the Exchange Act
and the rules thereunder, as applicable, and will not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements therein, in light of the circumstances under which they were
made, not misleading.

 

(j)                                    Ineligible Issuer.  (i) 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 Shares and (ii) as of the Execution Time and on each such
time this representation is repeated or deemed to be made (with such date being
used as the determination date for purposes of this clause (ii)), the Company
was not and is not an Ineligible Issuer (as defined in Rule 405), without taking
account of any determination by the

 

12

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Commission pursuant to Rule 405 that it is not necessary that the Company be
considered an Ineligible Issuer.

 

(k)                                 Free Writing Prospectus.  The Company is
eligible to use Issuer Free Writing Prospectuses.  Each Issuer Free Writing
Prospectus does not include any information the substance of which conflicts
with the information contained in the Registration Statement, including any
Incorporated Documents and any prospectus supplement deemed to be a part thereof
that has not been superseded or modified; and each Issuer Free Writing
Prospectus does not contain any untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading. The
foregoing sentence does not apply to statements in or omissions from any Issuer
Free Writing Prospectus based upon and in conformity with written information
furnished to the Company by the Manager specifically for use therein.  Any
Issuer Free Writing Prospectus that the Company is required to file pursuant to
Rule 433(d) has been, or will be, filed with the Commission in accordance with
the requirements of the Act and the rules thereunder.  Each Issuer Free Writing
Prospectus that the Company has filed, or is required to file, pursuant to
Rule 433(d) or that was prepared by or behalf of or used by the Company complies
or will comply in all material respects with the requirements of the Act and the
rules thereunder.  The Company will not, without the prior consent of the
Manager, prepare, use or refer to, any Issuer Free Writing Prospectuses.

 

(l)                                     Proceedings Related to Registration
Statement.  The Registration Statement is not the subject of a pending
proceeding or examination under Section 8(d) or 8(e) of the Act, and the Company
is not the subject of a pending proceeding under Section 8A of the Act in
connection with the offering of the Shares. The Company has not received any
notice that the Commission has issued or intends to issue a stop-order with
respect to the Registration Statement or that the Commission otherwise has
suspended or withdrawn the effectiveness of the Registration Statement, either
temporarily or permanently, or intends or has threatened in writing to do so.

 

(m)                             SEC Reports.  The Company has complied in all
material respects with requirements to file all reports, schedules, forms,
statements and other documents required to be filed by it under the Act and the
Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two
years preceding the date hereof (or such shorter period as the Company was
required by law 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 Reports”) on a timely basis or has
received a valid extension of such time of filing and has filed any such SEC
Reports prior to the expiration of any such extension.

 

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(n)                                 Financial Statements.  The consolidated
financial statements incorporated by reference in the Registration Statement,
the Prospectus or the Incorporated Documents and any amendments thereof or
supplements thereto comply in all material respects with applicable accounting
requirements and the rules and regulations of the Commission with respect
thereto as in effect at the time of filing or as amended or corrected in a
subsequent 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, year-end audit
adjustments.

 

(o)                                 Accountants.  The Company’s accountants are
EKS&H LLLP.  To the knowledge of the Company, such accountants, who the Company
expects will express their opinion with respect to the financial statements to
be included in the Company’s next Annual Report on Form 10-K, are a registered
public accounting firm as required by the Act.

 

(p)                                 Material Adverse Events.  Since the date of
the latest audited financial statements included within the SEC Reports, except
as specifically disclosed in a subsequent SEC Reports or Prospectus Supplement
filed prior to the date hereof, (i) there has been no event, occurrence or
development that has had or that could reasonably be expected to result in a
Material Adverse Effect, (ii) the Company has not incurred any liabilities
(contingent or otherwise) other than (A) trade payables and accrued expenses
incurred in the ordinary course of business consistent with past practice and
(B) liabilities not required to be reflected in the Company’s financial
statements pursuant to GAAP or required to be disclosed in filings made with the
Commission, (iii) the Company has not altered its method of accounting, (iv) the
Company has not declared or made any dividend or distribution of cash or other
property to its stockholders or purchased, redeemed or made any agreements to
purchase or redeem any shares of its capital stock and (v) the Company has not
issued any equity securities to any officer, director or “Affiliate” (defined as
any Person that, directly or indirectly through one or more intermediaries,
controls or is controlled by or is under common control with a Person, as such
terms are used in and construed under Rule 144 under the Act), except pursuant
to existing Company equity incentive plans.  The Company does not have pending
before the Commission any request for confidential treatment of information.  No
event, liability or development has occurred or exists with respect to the
Company or its Subsidiaries or their respective business, properties, operations
or financial condition, that would be required to be disclosed by the Company
under applicable securities laws at the time this representation is deemed made
that has not been publicly disclosed at

 

14

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least one (1) Trading Day prior to the date that this representation is deemed
made.

 

(q)                                 Litigation.  There is no action, suit,
inquiry, notice of violation, Proceeding or investigation pending or, to the
knowledge of the Company, threatened against or affecting the Company, any
Subsidiary or any of their respective properties before or by any court,
arbitrator, governmental or administrative agency or regulatory authority
(federal, state, county, local or foreign) (collectively, an “Action”) which
(i) adversely affects or challenges the legality, validity or enforceability of
this Agreement or the Shares or (ii) could, if there were an unfavorable
decision, reasonably be expected to result in a Material Adverse Effect.  Except
as previously disclosed in the Company’s SEC Reports, neither the Company nor
any Subsidiary, nor, to the knowledge of the Company, any director or officer
thereof, is or has been the subject of any Action involving a claim of violation
of or liability under federal or state securities laws or a claim of breach of
fiduciary duty.  Except as previously disclosed in the Company’s SEC Reports,
there has not been, and to the knowledge of the Company, there is not pending or
contemplated, any investigation by the Commission involving the Company or any
current or former director or officer of the Company.  To the knowledge of the
Company, the Commission has not issued any stop order or other order suspending
the effectiveness of any registration statement filed by the Company or any
Subsidiary under the Exchange Act or the Act.

 

(r)                                    Labor Relations.  No material labor
dispute exists or, to the knowledge of the Company, is imminent with respect to
any of the employees of the Company which could reasonably be expected to result
in a Material Adverse Effect. Except as set forth on Schedule 3.1(r) of the
Disclosure Schedules, none of the Company’s or its Subsidiaries’ employees is a
member of a union that relates to such employee’s relationship with the Company,
and neither the Company nor any of its Subsidiaries is a party to a collective
bargaining agreement, and the Company and its Subsidiaries believe that their
relationships with their employees are good.  No executive officer, to the
knowledge of the Company, is, or is now expected to be, in violation of any
material term of any employment contract, confidentiality, disclosure or
proprietary information agreement or non-competition agreement, or any other
contract or agreement or any restrictive covenant, and the continued employment
of each such executive officer does not subject the Company or any of its
Subsidiaries to any liability with respect to any of the foregoing matters.  The
Company and its Subsidiaries are in compliance with all applicable U.S. federal,
state, local and foreign laws and regulations relating to employment and
employment practices, terms and conditions of employment and wages and hours,
except where the failure to be in compliance could not, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.

 

(s)                                   No Existing Defaults.  Neither the Company
nor any Subsidiary (i) is in default under or in violation of (and no event has
occurred that has not been

 

15

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waived that, with notice or lapse of time or both, would result in a default by
the Company or any Subsidiary under), nor has the Company or any Subsidiary
received notice of a claim that it is in default under or that it is in
violation of, any indenture, loan or credit agreement or any other agreement or
instrument to which it is a party or by which it or any of its properties is
bound (whether or not such default or violation has been waived), (ii) is in
violation of any order of any court, arbitrator or governmental body, or
(iii) is or has been in violation of any statute, rule or regulation of any
governmental authority, including without limitation all foreign, federal, state
and local laws relating to taxes, environmental protection, occupational health
and safety, product quality and safety and employment and labor matters, except
in each case as could not reasonably be expected to result in a Material Adverse
Effect.

 

(t)                                    Regulatory Permits.  The Company and the
Subsidiaries possess all certificates, authorizations and permits issued by the
appropriate federal, state, local or foreign regulatory authorities necessary to
conduct their respective businesses as described in the Registration Statement
or the Prospectus, except where the failure to possess such permits could not
reasonably be expected to result in a Material Adverse Effect (“Material
Permits”), and neither the Company nor any Subsidiary has received any notice of
proceedings relating to the revocation or modification of any Material Permit

 

(u)                                 Title to Assets.  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, 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, (iii) Liens for the payment of federal, state or
other taxes, the payment of which is neither delinquent nor subject to
penalties, (iv) as set forth on Schedule 3.1(u) of the Disclosure Schedules,.
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.

 

(v)                                 Mining Claims. 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.

 

16

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(w)                               Intellectual Property.  The Company and the
Subsidiaries have, or have rights to use, all patents, patent applications,
trademarks, trademark applications, service marks, trade names, trade secrets,
inventions, copyrights, licenses and other similar intellectual property rights
necessary or material for use in connection with their respective businesses as
described in the Registration Statement or the Prospectus and which the failure
to so have could reasonably be expected to have a Material Adverse Effect
(collectively, the “Intellectual Property Rights”).  Neither the Company nor any
Subsidiary has received, since the date of the latest audited financial
statements included within the SEC Reports, a notice (written or otherwise) that
the Intellectual Property Rights violate or infringe upon the rights of any
Person, except as would not have a Material Adverse Effect.  To the knowledge of
the Company, all such Intellectual Property Rights are enforceable (other than
patent and trademark applications) and there is no existing infringement by
another Person of any of the Intellectual Property Rights.  The Company and its
Subsidiaries have taken reasonable security measures to protect the secrecy,
confidentiality and value of all of their Intellectual Property Rights, except
where failure to do so could not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.

 

(x)                                 Insurance.  The Company and the Subsidiaries
are insured by insurers of recognized financial responsibility against such
losses and risks and in such amounts as are prudent and customary for companies
of similar size as the Company in the businesses in which the Company and the
Subsidiaries are engaged, including, but not limited to, directors and officers
insurance coverage.  To the knowledge of the Company, such insurance contracts
and policies are accurate and complete.  Neither the Company nor any 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
without a significant increase in cost.

 

(y)                                 Affiliate Transactions.  Except as set forth
in the Registration Statement or the Prospectus, 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 (i) for payment of salary or consulting or directors’ fees for
services rendered, (ii) reimbursement for expenses incurred on behalf of the
Company and (iii) for other employee benefits, including equity incentive
agreements under any equity incentive plan of the Company.

 

17

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(z)                                  Sarbanes Oxley Compliance.  Except as
disclosed in the Registration Statement, the Base Prospectus, any Prospectus
Supplement or the Prospectus, the Company is in material compliance with all
provisions of the Sarbanes-Oxley Act of 2002 which are applicable to it as of
the Effective Date. The Company and the Subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that:
(i) transactions are executed in accordance with management’s general or
specific authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with GAAP and to maintain
asset accountability, (iii) access to assets is permitted only in accordance
with management’s general or specific authorization, and (iv) the recorded
accountability for assets is compared with the existing assets at reasonable
intervals and appropriate action is taken with respect to any differences. The
Company has established disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and designed such
disclosure controls and procedures to ensure that information required to be
disclosed by the Company in the reports it files or submits under the Exchange
Act is recorded, processed, summarized and reported, within the time periods
specified in the Commission’s rules and forms.  The Company’s certifying
officers have evaluated the effectiveness of the Company’s disclosure controls
and procedures as of the end of the period covered by the Company’s most
recently filed periodic report under the Exchange Act (such date, the
“Evaluation Date”).  The Company presented in its most recently filed periodic
report under the Exchange Act the conclusions of the certifying officers about
the effectiveness of the disclosure controls and procedures based on their
evaluations as of the Evaluation Date.  Since the Evaluation Date, there have
been no changes in the Company’s internal control over financial reporting (as
such term is defined in the Exchange Act) that has materially affected, or is
reasonably likely to materially affect, the Company’s internal control over
financial reporting.

 

(aa)                          Finder’s Fees.  Other than payments to be made to
the Manager, 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 this Agreement.  The Manager shall have no 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 that may be due in
connection with the transactions contemplated by this Agreement.

 

(bb)                          No Other Sales Agency Agreement.  The Company has
not entered into any other sales agency agreements or other similar arrangements
with any agent or any other representative in respect of at the market offerings
of the Shares.

 

(cc)                            Regulation M Compliance.  The Company has not,
and to its knowledge no one acting on its behalf has, (i) taken, directly or
indirectly, any

 

18

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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 Shares, (ii) sold, bid for, purchased, or paid any compensation for
soliciting purchases of, any of the Shares or (iii) paid or agreed to pay to any
person any compensation for soliciting another to purchase any other securities
of the Company, other than, in the case of clauses (ii) and (iii), compensation
paid to the Manager in connection with the placement of the Shares.

 

(dd)                          Listing and Maintenance Requirements.  The
issuance and sale of the Shares as contemplated in this Agreement does not
contravene the rules and regulations of the Trading Market and the Toronto Stock
Exchange (provided that the approval and conditional approval of the Trading
Exchange and Toronto Stock Exchange, respectively, for the listing of the Shares
thereon has been obtained by the Company). 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 Commission 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 Trading Market or the
Toronto Stock Exchange 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 Trading Market or the
Toronto Stock Exchange or any other trading market on which the Common Stock is
or has been listed or quoted.

 

(ee)                            Application of Takeover Protections.  Except as
set forth in the Registration Statement or the Prospectus, the Company and its
Board have taken 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 Company’s Certificate of Incorporation (or similar charter documents)
or the laws of its state of incorporation that is or could become applicable to
the purchasers of the Shares.

 

(ff)                              Investment Company. Neither the Company nor
any Subsidiary is or, after giving effect to the offering and sale of the
Shares, will be required to register as an “investment company” or an entity
“controlled” by an “investment company,” as such terms are defined in the
Investment Company Act of 1940, as amended.

 

(gg)                            Solvency.  Based on the financial condition of
the Company as of the Effective Date, (i) the Company’s fair saleable value of
its assets exceeds the amount that will be required to be paid on or in respect
of the Company’s existing debts and other liabilities (including known
contingent liabilities) as they mature,

 

19

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(ii) the Company’s assets do not constitute unreasonably small capital to carry
on its business as now conducted and as proposed to be conducted including its
capital needs taking into account the particular capital requirements of the
business conducted by the Company, and projected capital requirements and
capital availability thereof, and (iii) the current cash flow of the Company,
together with the proceeds the Company would receive, were it to liquidate all
of its assets, after taking into account all anticipated uses of the cash, would
be sufficient to pay all amounts on or in respect of its debt when such amounts
are required to be paid.  Within one year of the Effective Date, the Company
does not intend to incur debts beyond its ability to pay such debts as they
mature (taking into account the timing and amounts of cash to be payable on or
in respect of its debt).    The SEC Reports set forth as of the dates thereof
all outstanding secured and unsecured Indebtedness of the Company or any
Subsidiary, or for which the Company or any Subsidiary has commitments.  For the
purposes of this Agreement, “Indebtedness” shall mean (a) any liabilities for
borrowed money or amounts owed in excess of $250,000 (other than accrued
liabilities and trade accounts payable incurred in the ordinary course of
business), (b) all guaranties, endorsements and other contingent obligations in
respect of indebtedness of others, whether or not the same are or should be
reflected in the Company’s balance sheet (or the notes thereto), except
guaranties by endorsement of negotiable instruments for deposit or collection or
similar transactions in the ordinary course of business; and (c) the present
value of any lease payments in excess of $250,000 due under leases required to
be capitalized in accordance with GAAP.  Neither the Company nor any Subsidiary
is in default with respect to any Indebtedness.

 

(hh)                          Tax Status. Except for matters that would not,
individually or in the aggregate, have or reasonably be expected to result in a
Material Adverse Effect, 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 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.

 

(ii)                                  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
unlawful contributions, gifts, entertainment or other unlawful expenses related
to foreign or domestic

 

20

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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.

 

(jj)                                FINRA Member Shareholders.  There are no
affiliations with any FINRA member firm among the Company’s officers, directors
or, to the actual knowledge of the Company without investigation, any five
percent (5%) or greater stockholder of the Company, except as set forth in the
Registration Statement or the Prospectus.

 

4.                                      Agreements. The Company agrees with the
Manager that:

 

(a)                                 Right to Review Amendments and Supplements
to Registration Statement and Prospectus.  During any period when the delivery
of a prospectus relating to the Shares is required (including in circumstances
where such requirement may be satisfied pursuant to Rule 172, 173 or any similar
rule) to be delivered under the Act in connection with the offering or the sale
of Shares, the Company will not file any amendment to the Registration Statement
or supplement (including any Prospectus Supplement) to the Base Prospectus
unless the Company has furnished to the Manager a copy for its review prior to
filing and will not file any such proposed amendment or supplement to which the
Manager reasonably objects. The Company has properly completed the Prospectus,
in a form approved by the Manager, and filed such Prospectus, as amended at the
Execution Time, with the Commission pursuant to the applicable paragraph of
Rule 424(b) by the Execution Time and will cause any supplement to the
Prospectus to be properly completed, in a form approved by the Manager, and will
file such supplement with the Commission pursuant to the applicable paragraph of
Rule 424(b) within the time period prescribed thereby and will provide evidence
reasonably satisfactory to the Manager of such timely filing. The Company will
promptly advise the Manager (i) when the Prospectus, and any supplement thereto,
shall have been filed (if required) with the Commission pursuant to Rule 424(b),
(ii) when, during any period when the delivery of a prospectus (whether
physically or through compliance with Rule 172, 173 or any similar rule) is
required under the Act in connection with the offering or sale of the Shares,
any amendment to the Registration Statement shall have been filed or become
effective (other than any annual report of the Company filed pursuant to
Section 13(a) or 15(d) of the Exchange Act), (iii) of any request by the
Commission or its staff for any amendment of the Registration Statement, or any
Rule 462(b) Registration Statement, or for any supplement to the Prospectus or
for any additional information, (iv) of the issuance by the Commission of any
stop order suspending the effectiveness of the Registration Statement or of any
notice objecting to its use or the institution or threatening of any proceeding
for that purpose and (v) of the receipt by the Company of any notification with
respect to

 

21

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the suspension of the qualification of the Shares for sale in any jurisdiction
or the institution or threatening of any proceeding for such purpose. The
Company will use its best efforts to prevent the issuance of any such stop order
or the occurrence of any such suspension or objection to the use of the
Registration Statement and, upon such issuance, occurrence or notice of
objection, to obtain as soon as possible the withdrawal of such stop order or
relief from such occurrence or objection, including, if necessary, by filing an
amendment to the Registration Statement or a new registration statement and
using its best efforts to have such amendment or new registration statement
declared effective as soon as practicable.

 

(b)                                 Subsequent Events.  If, at any time on or
after an Applicable Time but prior to the related Settlement Date, any event
occurs as a result of which the Registration Statement or Prospectus would
include any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein in the light of the circumstances
under which they were made or the circumstances then prevailing not misleading,
the Company will (i) notify promptly the Manager so that any use of the
Registration Statement or Prospectus may cease until such are amended or
supplemented; (ii) amend or supplement the Registration Statement or Prospectus
to correct such statement or omission; and (iii) supply any amendment or
supplement to the Manager in such quantities as the Manager may reasonably
request.

 

(c)                                  Notification of Subsequent Filings.  During
any period when the delivery of a prospectus relating to the Shares is required
(including in circumstances where such requirement may be satisfied pursuant to
Rule 172, 173 or any similar rule) to be delivered under the Act, any event
occurs as a result of which the Prospectus as then supplemented would include
any untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein in the light of the circumstances under
which they were made at such time not misleading, or if it shall be necessary to
amend the Registration Statement, file a new registration statement or
supplement the Prospectus to comply with the Act or the Exchange Act or the
respective rules thereunder, including in connection with use or delivery of the
Prospectus, the Company promptly will (i) notify the Manager of any such event,
(ii) subject to Section 4(a), prepare and file with the Commission an amendment
or supplement or new registration statement which will correct such statement or
omission or effect such compliance, (iii) use its best efforts to have any
amendment to the Registration Statement or new registration statement declared
effective as soon as practicable in order to avoid any disruption in use of the
Prospectus and (iv) supply any supplemented Prospectus to the Manager in such
quantities as the Manager may reasonably request.

 

(d)                                 Earnings Statements.  As soon as
practicable, the Company will make generally available to its security holders
and to the Manager an earnings

 

22

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statement or statements of the Company and its Subsidiaries which will satisfy
the provisions of Section 11(a) of the Act and Rule 158.

 

(e)                                  Delivery of Registration Statement.  Upon
the request of the Manager, the Company will furnish to the Manager and counsel
for the Manager, without charge, signed copies of the Registration Statement
(including exhibits thereto) and, so long as delivery of a prospectus by the
Manager or dealer may be required by the Act (including in circumstances where
such requirement may be satisfied pursuant to Rule 172, 173 or any similar
rule), as many copies of the Prospectus and each Issuer Free Writing Prospectus
and any supplement thereto as the Manager may reasonably request. The Company
will pay the expenses of printing or other production of all documents relating
to the offering.

 

(f)                                   Qualification of Shares.  The Company will
arrange, if necessary, for the qualification of the Shares for sale under the
laws of such jurisdictions as the Manager may designate and will maintain such
qualifications in effect so long as required for the distribution of the Shares;
provided that in no event shall the Company be obligated to qualify to do
business in any jurisdiction where it is not now so qualified or to take any
action that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Shares, in any jurisdiction where it
is not now so subject.

 

(g)                                  Free Writing Prospectus.  The Company
agrees that, unless it has or shall have obtained the prior written consent of
the Manager (such consent not to be unreasonably withheld or delayed), and the
Manager agrees with the Company that, unless it has or shall have obtained, as
the case may be, the prior written consent of the Company, it has not made and
will not make any offer relating to the Shares that would constitute an Issuer
Free Writing Prospectus or that would otherwise constitute a “free writing
prospectus” (as defined in Rule 405) required to be filed by the Company with
the Commission or retained by the Company under Rule 433. Any such free writing
prospectus consented to by the Manager or the Company is hereinafter referred to
as a “Permitted Free Writing Prospectus.” The Company agrees that (i) it has
treated and will treat, as the case may be, each Permitted Free Writing
Prospectus as an Issuer Free Writing Prospectus and (ii) it has complied and
will comply, as the case may be, with the requirements of Rules 164 and 433
applicable to any Permitted Free Writing Prospectus, including in respect of
timely filing with the Commission, legending and record keeping.

 

(h)                                 Subsequent Equity Issuances.  Neither the
Company nor any Subsidiary will offer, sell, issue, contract to sell, contract
to issue or otherwise dispose of, directly or indirectly, any other shares of
Common Stock or any Common Stock Equivalents (other than the Shares) during the
term of this Agreement while any Sales Notice is outstanding and unfulfilled,
without the prior written consent of the Manager;  provided, however, that the
Company may issue and sell Common Stock pursuant to any equity incentive plan,
stock

 

23

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ownership plan or dividend reinvestment plan of the Company in effect at the
Execution Time and, with as much notice as reasonably practicable, the Company
may issue Common Stock issuable upon the conversion or exercise of Common Stock
Equivalents outstanding at the Execution Time.

 

(i)                                     Market Manipulation.  Until the
termination of this Agreement, the Company will not take, directly or
indirectly, any action designed to or that would constitute or that might
reasonably be expected to cause or result in, under the Exchange Act or
otherwise, stabilization or manipulation in violation of the Act, Exchange Act
or the rules and regulations thereunder of the price of any security of the
Company to facilitate the sale or resale of the Shares or otherwise violate any
provision of Regulation M under the Exchange Act.

 

(j)                                    Notification of Incorrect Certificate. 
The Company will, at any time during the term of this Agreement, as supplemented
from time to time, advise the Manager immediately after it shall have received
notice or obtained knowledge thereof, of any information or fact that would
alter or affect any opinion, certificate, letter and other document provided to
the Manager pursuant to Section 6 herein.

 

(k)                                 Certification of Accuracy of Disclosure. 
Upon commencement of the offering of the Shares under this Agreement (and upon
the recommencement of the offering of the Shares under this Agreement following
the termination of a suspension of sales hereunder lasting more than 30 trading
days), and each time that (i) the Registration Statement or Prospectus shall be
amended or supplemented, other than by means of Incorporated Documents, (ii) the
Company files its Annual Report on Form 10-K under the Exchange Act, (iii) the
Company files its quarterly reports on Form 10-Q under the Exchange Act,
(iv) the Company files a Current Report on Form 8-K containing amended financial
information (other than information that is furnished and not filed), if the
Manager reasonably determines that the information in such Form 8-K is material,
or (v) the Shares are delivered to the Manager as principal at the Time of
Delivery pursuant to a Terms Agreement (such commencement or recommencement date
and each such date referred to in (i), (ii), (iii), (iv) and (v) above, a
“Representation Date”), unless waived by the Manager, the Company shall furnish
or cause to be furnished to the Manager forthwith a certificate dated and
delivered on the Representation Date, in form reasonably satisfactory to the
Manager to the effect that the statements contained in the certificate referred
to in Section 6 of this Agreement which were last furnished to the Manager are
true and correct at the Representation Date, as though made at and as of such
date (except that such statements shall be deemed to relate to the Registration
Statement and the Prospectus as amended and supplemented to such date) or, in
lieu of such certificate, a certificate of the same tenor as the certificate
referred to in said Section 6, modified as necessary to relate to the
Registration Statement and the Prospectus as amended and supplemented to the
date of delivery of such certificate. The requirement to provide a certificate
under this Section 4(k) shall

 

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be waived for any Representation Date occurring at a time at which no Sales
Notice is pending, which waiver shall continue until the earlier to occur of the
date the Company delivers a Sales Notice hereunder (which for such calendar
quarter shall be considered a Representation Date) and the next occurring
Representation Date on which the Company files its annual report on Form 10-K.
Notwithstanding the foregoing, (i) upon the delivery of the first Sales Notice
hereunder and (ii) if the Company subsequently decides to sell Shares following
a Representation Date when the Company relied on such waiver and did not provide
the Manager with a certificate under this Section 4(k), then before the Manager
sells any Shares, the Company shall provide the Manager with a certificate
pursuant to the requirements of this Section 4(k), dated the date of the Sales
Notice.

 

(l)                                     Bring Down Opinions; Negative
Assurance.  At each Representation Date, unless waived by the Manager, the
Company shall furnish or cause to be furnished forthwith to the Manager a
written opinion of Company U.S. Counsel, addressed to the Manager and dated and
delivered on such Representation Date, in form and substance reasonably
satisfactory to the Manager, including a negative assurance representation,
provided that, in lieu of such opinion for subsequent periodic filings under the
Exchange Act, U.S. Counsel may furnish the Manager with a letter (a “Reliance
Letter”) to the effect that the Manager may rely on the opinion previously
delivered under this Section 4(1) to the same extent as if it were dated the
date of such letter (except that statements in such prior letter shall be deemed
to relate to the Registration Statement and the Prospectus as amended or
supplemented as of the date of the Reliance Letter).

 

(m)                             Auditor Bring Down “Comfort” Letter.  At each
Representation Date, other  than pursuant to Section 4(k)(iii), or unless waived
by the Manager, the Company shall cause (1) the Company’s auditors (the
“Accountants”), or other independent accountants satisfactory to the Manager
forthwith to furnish the Manager a letter, and (2) the Chief Financial Officer
of the Company forthwith to furnish the Manager a certificate, in each case
dated on such Representation Date, in form satisfactory to the Manager, of the
same tenor as the letters and certificate referred to in Section 6 of this
Agreement but modified to relate to the Registration Statement and the
Prospectus, as amended and supplemented to the date of such letters and
certificate; provided, however, that the Company will not be required to cause
the Accountants to furnish such letters to the Manager in connection with the
filing of a Current Report on Form 8-K unless (i) such Current Report on
Form 8-K is filed at any time during which a prospectus relating to the Shares
is required to be delivered under the Act and (ii) the Manager has requested
such letter based upon the event or events reported in such Current Report on
Form 8-K.

 

(n)                                 Due Diligence Session.  Upon commencement of
the offering of the Shares under this Agreement (and upon the recommencement of
the offering

 

25

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of the Shares under this Agreement following the termination of a suspension of
sales hereunder lasting more than 30 trading days), and at each Representation
Date, the Company will conduct a due diligence session, in form and substance,
reasonably satisfactory to the Manager, which shall include representatives of
management and Accountants. The Company shall cooperate timely with any
reasonable due diligence request from or review conducted by the Manager or its
agents from time to time in connection with the transactions contemplated by
this Agreement, including, without limitation, providing information and
available documents and access to appropriate corporate officers and the
Company’s agents during regular business hours and at the Company’s principal
offices, and timely furnishing or causing to be furnished such certificates,
letters and opinions from the Company, its officers and its agents, as the
Manager may reasonably request. The Company shall reimburse the Manager for
Manager’s counsel’s time in each such due diligence update session, up to a
maximum of $2,500 per update, plus any incidental expense incurred by the
Manager in connection therewith.

 

(o)                                 Acknowledgment of Trading.  The Company
consents to the Manager trading in the Common Stock for the Manager’s own
account and for the account of its clients at the same time as sales of the
Shares occur pursuant to this Agreement or pursuant to a Terms Agreement.

 

(p)                                 Disclosure of Shares Sold.  The Company will
disclose in its Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q,
as applicable, the number of Shares sold through the Manager under this
Agreement, the Net Proceeds to the Company and the compensation paid by the
Company with respect to sales of Shares pursuant to this Agreement during the
relevant quarter; and, if required by any subsequent change in Commission policy
or request, more frequently by means of a Current Report on Form 8-K or a
further Prospectus Supplement.

 

(q)                                 Rescission Right.  If to the knowledge of
the Company, the conditions set forth in Section 6 shall not have been satisfied
as of the applicable Settlement Date, the Company will, upon request of the
Manager prior to the Settlement Date, offer to any person who has agreed to
purchase Shares from the Company as the result of an offer to purchase solicited
by the Manager the right to refuse to purchase and pay for such Shares.

 

(r)                                    Bring Down of Representations and
Warranties.  Each acceptance by the Company of an offer to purchase the Shares
hereunder, and each execution and delivery by the Company of a Terms Agreement,
shall be deemed to be an affirmation to the Manager that the representations and
warranties of the Company contained in or made pursuant to this Agreement are
true and correct as of the date of such acceptance or of such Terms Agreement as
though made at and as of such date, and an undertaking that such representations
and warranties will be true and correct as of the Settlement Date for the Shares
relating to such acceptance or as of the Time of Delivery relating to such sale,
as the case may be,

 

26

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as though made at and as of such date (except that such representations and
warranties shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented relating to such Shares).

 

(s)                                   Reservation of Shares.  The Company shall
ensure that there are at all times sufficient shares of Common Stock to provide
for the issuance, free of any preemptive rights, out of its authorized but
unissued shares of Common Stock or shares of Common Stock held in treasury, of
the maximum aggregate number of Shares authorized for issuance by the Board
pursuant to the terms of this Agreement. The Company will use its commercially
reasonable efforts to cause the Shares to be listed for trading on the Trading
Market and the Toronto Stock Exchange and to maintain such listing.

 

(t)                                    Obligation Under Exchange Act.  During
any period when the delivery of a prospectus relating to the Shares is required
(including in circumstances where such requirement may be satisfied pursuant to
Rule 172, 173 or any similar rule) to be delivered under the Act, the Company
will file all documents required to be filed with the Commission pursuant to the
Exchange Act within the time periods required by the Exchange Act and the
regulations thereunder.

 

(u)                                 DTC Facility.  The Company shall cooperate
with the Manager and use its reasonable efforts to permit the Shares to be
eligible for clearance and settlement through the facilities of DTC.

 

(v)                                 Use of Proceeds.  The Company will apply the
Net Proceeds from the sale of the Shares in the manner set forth in the
Prospectus.

 

(w)                               Filing of Prospectus Supplement.  On or prior
to the earlier of (i) the date on which the Company shall file a Quarterly
Report on Form 10-Q or an Annual Report on Form 10-K in respect of any fiscal
quarter in which sales of Shares were made by the Manager pursuant to
Section 2(b) of this Agreement and (ii) the date on which the Company shall be
obligated to file such document referred to in clause (i) in respect of such
quarter (each such date, and any date on which an amendment to any such document
is filed, a “Filing Date”), the Company will, to the extent such information in
not reported in a Form 10-Q or Form 10-K which is incorporated by reference into
the Registration Statement,  file a prospectus supplement with the Commission
under the applicable paragraph of Rule 424(b), which prospectus supplement will
set forth, with regard to such quarter, the number of the Shares sold through
the Manager as agent pursuant to Section 2(b) of this Agreement, the Net
Proceeds to the Company and the compensation paid by the Company with respect to
such sales of the Shares pursuant to Section 2(b) of this Agreement and deliver
such number of copies of each such prospectus supplement to the Trading Market
and the Toronto Stock Exchange as are required by such exchange. In the event
any sales are made pursuant to this Agreement which are NOT made in “at the
market” offerings as

 

27

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defined in Rule 415, including, without limitation, any Placement pursuant to a
Terms Agreement, the Company shall file a Prospectus Supplement describing the
terms of such transaction, the amount of Shares sold, the price thereof, the
Manager’s compensation, and such other information as may be required pursuant
to Rule 424 and Rule 430B, as applicable, within the time required by Rule 424.

 

(x)                                 Additional Registration Statement.  To the
extent that the Registration Statement is not available for the sales of the
Shares as contemplated by this Agreement, the Company shall file a new
registration statement with respect to any additional shares of Common Stock
necessary to complete such sales of the Shares and shall cause such registration
statement to become effective as promptly as practicable. After the
effectiveness of any such registration statement, all references to
“Registration Statement” included in this Agreement shall be deemed to include
such new registration statement, including all documents incorporated by
reference therein pursuant to Item 12 of Form S-3, and all references to “Base
Prospectus” included in this Agreement shall be deemed to include the final form
of prospectus, including all documents incorporated therein by reference,
included in any such registration statement at the time such registration
statement became effective.

 

5.                                      Payment of Expenses. The Company agrees
to pay the costs and expenses incident to the performance of its obligations
under this Agreement, whether or not the transactions contemplated hereby are
consummated, including without limitation: (i) the preparation, printing or
reproduction and filing with the Commission of the Registration Statement
(including financial statements and exhibits thereto), the Prospectus and each
Issuer Free Writing Prospectus, and each amendment or supplement to any of them;
(ii) the printing (or reproduction) and delivery (including postage, air freight
charges and charges for counting and packaging) of such copies of the
Registration Statement, the Prospectus, and each Issuer Free Writing Prospectus,
and all amendments or supplements to any of them, as may, in each case, be
reasonably requested for use in connection with the offering and sale of the
Shares; (iii) the preparation, printing, authentication, issuance and delivery
of certificates for the Shares, including any stamp or transfer taxes in
connection with the original issuance and sale of the Shares; (iv) the printing
(or reproduction) and delivery of this Agreement, any blue sky memorandum and
all other agreements or documents printed (or reproduced) and delivered in
connection with the offering of the Shares; (v) the registration of the Shares
under the Exchange Act, if applicable, and the listing of the Shares on the
Trading Market and the Toronto Stock Exchange; (vi) any registration or
qualification of the Shares for offer and sale under the securities or blue sky
laws of the several states (including filing fees and the reasonable fees and
expenses of counsel for the Manager relating to such registration and
qualification); (vii) the transportation and other expenses incurred by or on
behalf of Company representatives in connection with presentations to
prospective purchasers of the Shares; (viii) the fees and expenses of the
Company’s accountants and the fees and expenses of counsel (including local and
special counsel) for the Company; (ix) the filing fee under FINRA Rule 5110;
(x) the fees and expenses of the Manager’s U.S. and Canadian counsel, equal to
$50,000  (excluding any periodic due diligence fees provided

 

28

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for under Section 4(n), which shall be paid at the Execution Time; and (xi) all
other costs and expenses incident to the performance by the Company of its
obligations hereunder.

 

6.                                      Conditions to the Obligations of the
Manager. The obligations of the Manager under this Agreement and any Terms
Agreement shall be subject to (i) the accuracy of the representations and
warranties on the part of the Company contained herein as of the Execution Time,
each Representation Date, and as of each Applicable Time, Settlement Date and
Time of Delivery, (ii) to the performance by the Company of its obligations
hereunder and (iii) the following additional conditions:

 

(a)                                 Filing of Prospectus Supplement.  The
Prospectus, and any supplement thereto, required by Rule 424 to be filed with
the Commission have been filed in the manner and within the time period required
by Rule 424(b) with respect to any sale of Shares; each Prospectus Supplement
shall have been filed in the manner required by Rule 424(b) within the time
period required hereunder and under the Act; any other material required to be
filed by the Company pursuant to Rule 433(d) under the Act, shall have been
filed with the Commission within the applicable time periods prescribed for such
filings by Rule 433; and no stop order suspending the effectiveness of the
Registration Statement or any notice objecting to its use shall have been issued
and no proceedings for that purpose shall have been instituted or threatened.

 

(b)                                 Delivery of Opinion.  The Company shall have
caused the Company U.S. Counsel to furnish to the Manager, to the extent
requested by the Manager and upon reasonable advance notice in connection with
any offering of the Shares, its opinion and negative assurance statement, dated
as of the relevant date and addressed to the Manager in form and substance
acceptable to the Manager.

 

(c)                                  Delivery of Officer’s Certificate.  The
Company shall have furnished or caused to be furnished to the Manager, to the
extent requested by the Manager and upon reasonable advance notice in connection
with any offering of the Shares, a certificate of the Company signed by the
Chief Executive Officer or the President and the principal financial or
accounting officer of the Company, dated as of the relevant date, to the effect
that the signers of such certificate have carefully examined the Registration
Statement, the Prospectus, any Prospectus Supplement and any documents
incorporated by reference therein and any supplements or amendments thereto and
this Agreement and that:

 

(i)                                     the representations and warranties of
the Company in this Agreement are true and correct on and as of such date with
the same effect as if made on such date and the Company has complied with all
the agreements and satisfied all the conditions on its part to be performed or
satisfied at or prior to such date;

 

(ii)                                  no stop order suspending the effectiveness
of the Registration Statement or any notice objecting to its use has been issued

 

29

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and no proceedings for that purpose have been instituted or, to the Company’s
knowledge, threatened; and

 

(iii)                               since the date of the most recent financial
statements included in the Registration Statement, the Prospectus and the
Incorporated Documents, there has been no Material Adverse Effect on the
condition (financial or otherwise), earnings, business or properties of the
Company and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Registration Statement and the Prospectus.

 

(d)                                 Delivery of Accountants’ “Comfort” Letter. 
The Company shall have requested and caused the Accountants to have furnished to
the Manager, to the extent requested by the Manager and upon reasonable advance
notice in connection with any offering of the Shares, letters (which may refer
to letters previously delivered to the Manager), dated as of the relevant date,
in form and substance satisfactory to the Manager, confirming that they are
independent accountants within the meaning of the Act and the Exchange Act and
the respective applicable rules and regulations adopted by the Commission
thereunder and that they have performed a review of any unaudited interim
financial information of the Company and included or incorporated by reference
in the Registration Statement and the Prospectus and provide customary “comfort”
as to such review in form and substance satisfactory to the Manager.

 

(e)                                  No Material Adverse Event.  Since the
respective dates as of which information is disclosed in the Registration
Statement, the Prospectus and the Incorporated Documents, except as otherwise
stated therein, there shall not have been (i) any change or decrease in
previously reported results specified in the letter or letters referred to in
paragraph (d) of this Section 6 or (ii) any change, or any development involving
a prospective change, in or affecting the condition (financial or otherwise),
earnings, business or properties of the Company and its subsidiaries taken as a
whole, whether or not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Registration Statement,
the Prospectus and the Incorporated Documents (exclusive of any amendment or
supplement thereto) the effect of which, in any case referred to in
clause (i) or (ii) above, is, in the sole judgment of the Manager, so material
and adverse as to make it impractical or inadvisable to proceed with the
offering or delivery of the Shares as contemplated by the Registration Statement
(exclusive of any amendment thereof), the Incorporated Documents and the
Prospectus (exclusive of any amendment or supplement thereto).

 

(f)                                   Payment of All Fees.  The Company shall
have paid the required Commission filing fees relating to the Shares within the
time period required by Rule 456(b)(1)(i) of the Act without regard to the
proviso therein and otherwise in accordance with Rules 456(b) and 457(r) of the
Act and, if applicable, shall have updated the “Calculation of Registration Fee”
table in accordance with

 

30

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Rule 456(b)(1)(ii) either in a post-effective amendment to the Registration
Statement or on the cover page of a prospectus filed pursuant to Rule 424(b).

 

(g)           No FINRA Objections.  FINRA shall not have raised any objection
with respect to the fairness and reasonableness of the terms and arrangements
under this Agreement.

 

(h)           Shares Listed on Trading Market.  The Shares shall have been
listed and admitted and authorized for trading on the Trading Market and
conditionally approved for listing on the Toronto Stock Exchange, and
satisfactory evidence of such actions shall have been provided to the Manager.

 

(i)            Other Assurances.  Prior to each Settlement Date and Time of
Delivery, as applicable, the Company shall have furnished to the Manager such
further information, certificates and documents as the Manager may reasonably
request.

 

If any of the conditions specified in this Section 6 shall not have been
fulfilled when and as provided in this Agreement, or if any of the opinions and
certificates mentioned above or elsewhere in this Agreement shall not be
reasonably satisfactory in form and substance to the Manager and counsel for the
Manager, this Agreement and all obligations of the Manager hereunder may be
canceled at, or at any time prior to, any Settlement Date or Time of Delivery,
as applicable, by the Manager. Notice of such cancellation shall be given to the
Company in writing or by telephone or facsimile confirmed in writing.

 

The documents required to be delivered by this Section 6 shall be delivered at
the office of  Ellenoff Grossman & Schole LLP, counsel for the Manager, at 1345
Avenue of the Americas, New York, New York 10105, on each such date as provided
in this Agreement.

 

7.             Indemnification and Contribution.

 

(a)           Indemnification by Company.  The Company agrees to indemnify and
hold harmless the Manager, the directors, officers, employees and agents of the
Manager and each person who controls the Manager within the meaning of either
the Act or the Exchange Act against any and all losses, claims, damages or
liabilities, joint or several, to which they or any of them may become subject
under the Act, the Exchange Act or other Federal or state statutory law or
regulation, at common law or otherwise, insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement for the registration of the Shares as originally
filed or in any amendment thereof, or in the Prospectus, any Issuer Free Writing
Prospectus, or in any amendment thereof or supplement thereto, or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to

 

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be stated therein or necessary to make the statements therein not misleading,
and agrees to reimburse each such indemnified party for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by the Manager specifically for inclusion therein. The
indemnification obligations of the Company under this Agreement will cease to
apply to the extent that a court of competent jurisdiction in a final judgment
that has become non-appealable shall determine that such losses, claims, damages
or liabilities (or actions in respect thereof) were solely caused by the gross
negligence, willful misconduct or fraud of the Manager. This indemnity agreement
will be in addition to any liability that the Company may otherwise have.

 

(b)           Indemnification by Manager.  The Manager agrees to indemnify and
hold harmless the Company, each of its directors, each of its officers who signs
the Registration Statement, and each person who controls the Company within the
meaning of either the Act or the Exchange Act, to the same extent as the
foregoing indemnity from the Company to the Manager, but only with reference to
written information relating to the Manager furnished to the Company by the
Manager specifically for inclusion in the documents referred to in the foregoing
indemnity; provided, however, that in no case shall the Manager be responsible
for any amount in excess of the Broker Fee applicable to the Shares and paid
hereunder except to the extent that a court of competent jurisdiction in a final
judgment that has become non-appealable shall determine that such losses,
claims, damages or liabilities (or actions in respect thereof) were solely
caused by the gross negligence, willful misconduct, or fraud of the Manager.
This indemnity agreement will be in addition to any liability which the Manager
may otherwise have.

 

(c)           Indemnification Procedures.  Promptly after receipt by an
indemnified party under this Section 7 of notice of the commencement of any
action, such indemnified party will, if a claim in respect thereof is to be made
against the indemnifying party under this Section 7, notify the indemnifying
party in writing of the commencement thereof; but the failure so to notify the
indemnifying party (i) will not relieve it from liability under
paragraph (a) or (b) above unless and to the extent it did not otherwise learn
of such action and such failure results in the forfeiture by the indemnifying
party of substantial rights and defenses and (ii) will not, in any event,
relieve the indemnifying party from any obligations to any indemnified party
other than the indemnification obligation provided in paragraph (a) or
(b) above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party’s choice at the indemnifying party’s expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not

 

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thereafter be responsible for the fees and expenses of any separate counsel
retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party’s election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ separate counsel (including local counsel), and
the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.

 

(d)           Contribution.  In the event that the indemnity provided in
paragraph (a), (b) or (c) of this Section 7 is unavailable to or insufficient to
hold harmless an indemnified party for any reason, the Company and the Manager
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending the same) (collectively “Losses”) to which the
Company and the Manager may be subject in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and by the
Manager on the other from the offering of the Shares; provided, however, that in
no case shall the Manager be responsible for any amount in excess of the Broker
Fee applicable to the Shares and paid hereunder except to the extent that a
court of competent jurisdiction in a final judgment that has become
non-appealable shall determine that such losses, claims, damages or liabilities
(or actions in respect thereof) were solely caused by the gross negligence,
willful misconduct, or fraud of the Manager. If the allocation provided by the
immediately preceding sentence is unavailable for any reason, the Company and
the Manager severally shall contribute in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and of the Manager on the other in connection with the
statements or omissions which

 

33

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resulted in such Losses as well as any other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total Net
Proceeds from the offering (before deducting expenses) of the Shares received by
it, and benefits received by the Manager shall be deemed to be equal to the
Broker Fee applicable to the Shares and paid hereunder as determined by this
Agreement. Relative fault shall be determined by reference to, among other
things, whether any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or the Manager on the other, the intent
of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Company
and the Manager agree that it would not be just and equitable if contribution
were determined by pro rata allocation or any other method of allocation which
does not take account of the equitable considerations referred to above.
Notwithstanding the provisions of this paragraph (d), no person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 7, each person who
controls the Manager within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of the Manager shall have the
same rights to contribution as the Manager, and each person who controls the
Company within the meaning of either the Act or the Exchange Act, each officer
of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).

 

8.             Termination.

 

(a)           The Company shall have the right, by giving written notice as
hereinafter specified, to terminate the provisions of this Agreement relating to
the solicitation of offers to purchase the Shares in its sole discretion at any
time upon delivery of written notice of termination. Any such termination shall
be without liability of any party to any other party except that (i) with
respect to any pending sale, through the Manager for the Company, the
obligations of the Company, including in respect of compensation of the Manager,
shall remain in full force and effect notwithstanding the termination and
(ii) the provisions of Sections 5, 6, 7, 8, 9, 10, 12 and 14 of this Agreement
shall remain in full force and effect notwithstanding such termination.

 

(b)           The Manager shall have the right, by giving written notice as
hereinafter specified, to terminate the provisions of this Agreement relating to
the solicitation of offers to purchase the Shares in its sole discretion at any
time upon delivery of written notice of termination. Any such termination shall
be without liability of any party to any other party except that the provisions
of Sections 5, 6, 7, 8, 9, 10, 12 and 14 of this Agreement shall remain in full
force and effect notwithstanding such termination.

 

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(c)           This Agreement shall remain in full force and effect until the
earlier of December   , 2018 and such date that this Agreement is terminated
pursuant to Sections 8(a) or (b) above or otherwise by mutual agreement of the
parties; provided that any such termination by mutual agreement shall in all
cases be deemed to provide that Sections 5, 6, 7, 8, 9, 10, 12 and 14 shall
remain in full force and effect.

 

(d)           Any termination of this Agreement shall be effective on the date
specified in such notice of termination; provided that such termination shall
not be effective until the close of business on the date of receipt of such
notice by the Manager or the Company, as the case may be. If such termination
shall occur prior to the Settlement Date or Time of Delivery for any sale of the
Shares, such sale shall settle in accordance with the provisions of
Section 2(b) of this Agreement.

 

(e)           In the case of any purchase of Shares by the Manager pursuant to a
Terms Agreement, the obligations of the Manager pursuant to such Terms Agreement
shall be subject to termination, in the absolute discretion of the Manager, by
prompt oral notice given to the Company prior to the Time of Delivery relating
to such Shares, if any, and confirmed promptly by facsimile or electronic mail,
if since the time of execution of the Terms Agreement and prior to such delivery
and payment, (i) trading in the Company’s Common Stock shall have been suspended
by the Commission or the Trading Market or the Toronto Stock Exchange or trading
in securities generally on the Trading Market or the Toronto Stock Exchange
shall have been suspended or limited or minimum prices shall have been
established on such exchange, (ii) a banking moratorium shall have been declared
either by Federal or New York State authorities or (iii) there shall have
occurred any outbreak or escalation of hostilities, declaration by the United
States of a national emergency or war, or other calamity or crisis the effect of
which on financial markets is such as to make it, in the sole judgment of the
Manager, impractical or inadvisable to proceed with the offering or delivery of
the Shares as contemplated by the Prospectus (exclusive of any amendment or
supplement thereto).

 

9.             Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Manager set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by the Manager or the Company or any of the officers, directors, employees,
agents or controlling persons referred to in Section 7, and will survive
delivery of and payment for the Shares.

 

10.          Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Manager, will be mailed,
delivered or facsimiled to the address set forth on the signature page hereto.

 

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11.          Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
officers, directors, employees, agents and controlling persons referred to in
Section 7, and no other person will have any right or obligation hereunder.

 

12.          No Fiduciary Duty. The Company hereby acknowledges that (a) the
purchase and sale of the Shares pursuant to this Agreement is an arm’s-length
commercial transaction between the Company, on the one hand, and the Manager and
any affiliate through which it may be acting, on the other, (b) the Manager is
acting solely as sales agent and/or principal in connection with the purchase
and sale of the Company’s securities and not as a fiduciary of the Company and
(c) the Company’s engagement of the Manager in connection with the offering and
the process leading up to the offering is as independent contractors and not in
any other capacity. Furthermore, the Company agrees that it is solely
responsible for making its own judgments in connection with the offering
(irrespective of whether the Manager has advised or is currently advising the
Company on related or other matters). The Company agrees that it will not claim
that the Manager has rendered advisory services of any nature or respect, or owe
an agency, fiduciary or similar duty to the Company, in connection with such
transaction or the process leading thereto.

 

13.          Integration. This Agreement and any Terms Agreement supersede all
prior agreements and understandings (whether written or oral) between the
Company and the Manager with respect to the subject matter hereof.

 

14.          Applicable Law. This Agreement and any Terms Agreement will be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts made and to be performed within the State of New York.

 

15.          WAIVER OF JURY TRIAL. THE COMPANY HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY TERMS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

 

16.          Counterparts. This Agreement and any Terms Agreement may be signed
in one or more counterparts, each of which shall constitute an original and all
of which together shall constitute one and the same agreement, which may be
delivered by facsimile or in .pdf file via e-mail.

 

***************************

 

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17.          Headings. The section headings used in this Agreement and any Terms
Agreement are for convenience only and shall not affect the construction hereof.

 

If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and your acceptance shall represent a binding agreement among the Company
and the Manager.

 

Very truly yours,

 

GOLDEN MINERALS COMPANY

 

By:

/s/ Robert P. Vogels

 

Name:

Robert P. Vogels

 

Title:

Senior Vice President and Chief Financial Officer

 

 

The foregoing Agreement is hereby confirmed and accepted as of the date first
written above.

 

Rodman & Renshaw, a unit of H. C. Wainwright & Co., LLC

 

 

By:

/s/ Mark W. Viklund

 

Name:

Mark W. Viklund

 

Title:

Chief Executive Officer

 

 

 

Address for Notice:

 

430 Park Avenue

 

New York, NY 10022

 

Attn: Chief Executive Officer

 

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Form of Terms Agreement

 

ANNEX I

 

GOLDEN MINERALS COMPANY TERMS AGREEMENT

 

Dear Sirs:

 

Golden Minerals Company (the “Company”) proposes, subject to the terms and
conditions stated herein and in the At The Market Offering Agreement, dated
                 (the “At The Market Offering Agreement”), between the Company
and H. C. Wainwright & Co., LLC (“Agent”), to issue and sell to Agent the
securities specified in the Schedule I hereto (the “Purchased Shares”).

 

Each of the provisions of the At The Market Offering Agreement not specifically
related to the solicitation by Agent, as agent of the Company, of offers to
purchase securities is incorporated herein by reference in its entirety, and
shall be deemed to be part of this Terms Agreement to the same extent as if such
provisions had been set forth in full herein. Each of the representations and
warranties set forth therein shall be deemed to have been made at and as of the
date of this Terms Agreement and the Time of Delivery, except that each
representation and warranty in Section 3 of the At The Market Offering Agreement
which makes reference to the Prospectus (as therein defined) shall be deemed to
be a representation and warranty as of the date of the At The Market Offering
Agreement in relation to the Prospectus, and also a representation and warranty
as of the date of this Terms Agreement and the Time of Delivery in relation to
the Prospectus as amended and supplemented to relate to the Purchased Shares.

 

An amendment to the Registration Statement (as defined in the At The Market
Offering Agreement), or a supplement to the Prospectus, as the case may be,
relating to the Purchased Shares, in the form heretofore delivered to the
Manager is now proposed to be filed with the Securities and Exchange Commission.

 

Subject to the terms and conditions set forth herein and in the At The Market
Offering Agreement which are incorporated herein by reference, the Company
agrees to issue and sell to Agent and the latter agrees to purchase from the
Company the number of shares of the Purchased Shares at the time and place and
at the purchase price set forth in the Schedule I hereto.

 

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If the foregoing is in accordance with your understanding, please sign and
return to us a counterpart hereof, whereupon this Terms Agreement, including
those provisions of the At The Market Offering Agreement incorporated herein by
reference, shall constitute a binding agreement between the Manager and the
Company.

 

GOLDEN MINERALS COMPANY

 

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

ACCEPTED as of the date first written above.

 

 

Rodman & Renshaw, H. C. Wainwright & Co., LLC

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

 

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