Exhibit 10.1

 

4,000 Units

 

Each Unit Consisting of

 

One Share of Preferred Stock and

 

A Warrant to Purchase Approximately 636 Shares of Common Stock

 

MINES MANAGEMENT, INC.

 

PLACEMENT AGENT AGREEMENT

 

July 25, 2014

 

Roth Capital Partners, LLC

888 San Clemente Drive

Newport Beach, CA  92660

 

Ladies and Gentlemen:

 

Mines Management, Inc., an Idaho corporation (the “Company”), proposes, to issue
and sell to the purchasers, pursuant to the terms and conditions of this
Placement Agent Agreement (this “Agreement”) and the Securities Purchase
Agreements in the form of Exhibit A attached hereto (the “Subscription
Agreements”) entered into with the purchasers identified therein (each a
“Purchaser” and, collectively, the “Purchasers”), up to an aggregate of 4,000
units (the “Units”), each Unit consisting of (i) one share (the “Shares”) of
authorized but unissued  preferred stock, no par value per share (the “Preferred
Stock”), of the Company, which shares of Preferred Stock shall be convertible
into shares of common stock, par value $0.001 per share, of the Company (the
“Common Stock”) and (ii) a warrant (the “Warrants”) to purchase approximately
636 shares of Common Stock (the “Warrant Shares”).  The Units, the Shares, the
shares of Common Stock underlying the Preferred Stock (the “Conversion Shares”),
the Warrants and the Warrant Shares are collectively referred to as the
“Securities”.  The Shares and the Warrants shall be immediately separable and
transferable upon issuance.  The terms of (i) the Preferred Stock are set forth
in the form of the Certificate of Designation (the “Certificate of Designation”)
to be filed with the Secretary of State of the State of Idaho and (ii) the
Warrants are set forth in the form of Warrant attached as Exhibit B hereto.  The
Company hereby confirms its agreement with Roth Capital Partners, LLC (the
“Placement Agent”) to act as Placement Agent in accordance with the terms and
conditions hereof.

 

The Company and the Placement Agent hereby confirm their agreement as follows:

 

1.             Registration Statement and Prospectus.  The Company has prepared
and filed with the Securities and Exchange Commission (the “Commission”) a
registration statement on Form S-3 (File No. 333-190838) under the Securities
Act of 1933, as amended (the “Securities Act”) and the rules and regulations
(the “Rules and Regulations”) of the Commission thereunder, and such amendments
to such registration statement (including post effective amendments) as

 

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may have been required to the date of this Agreement and a preliminary
prospectus supplement or “red herring” pursuant to Rule 424(b) under the
Securities Act relating to the Securities.  Such registration statement, as
amended (including any post effective amendments) has been declared effective by
the Commission.  Such registration statement, including amendments thereto
(including post effective amendments thereto) at the time of effectiveness
thereof (the “Effective Time”), the exhibits and any schedules thereto at the
Effective Time or thereafter during the period of effectiveness and the
documents and information otherwise deemed to be a part thereof or included
therein by the Securities Act or otherwise pursuant to the Rules and Regulations
at the Effective Time or thereafter during the period of effectiveness, is
herein called the “Registration Statement.”  If the Company has filed or files
an abbreviated registration statement pursuant to Rule 462(b) under the
Securities Act (the “Rule 462 Registration Statement”), then any reference
herein to the term Registration Statement shall include such Rule 462
Registration Statement.  Any preliminary prospectus included in the Registration
Statement or filed with the Commission pursuant to Rule 424(a) under the
Securities Act is hereinafter called a “Preliminary Prospectus.”  The
Preliminary Prospectus relating to the Securities that was included in the
Registration Statement immediately prior to the pricing of the offering
contemplated hereby is hereinafter called the “Pricing Prospectus.”

 

The Company is filing with the Commission pursuant to Rule 424 under the
Securities Act a final prospectus supplement relating to the Securities to a
form of prospectus included in the Registration Statement.  The form of
prospectus included in the Registration Statement at the time it was declared
effective is hereinafter called the “Base Prospectus,” and such final prospectus
supplement, as filed, along with the Base Prospectus, is hereinafter called the
“Final Prospectus.”  Such Final Prospectus, the Pricing Prospectus and any
preliminary prospectus supplement or “red herring” relating to the Securities in
the form in which they shall be filed with the Commission pursuant to
Rule 424(b) under the Securities Act (including the Base Prospectus as so
supplemented) is hereinafter called a “Prospectus.”

 

For purposes of this Agreement, all references to the Registration Statement,
the Rule 462 Registration Statement, the Base Prospectus, the Final Prospectus,
the Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Interactive
Data Electronic Applications system.  All references in this Agreement to
amendments or supplements to the Registration Statement, the Rule 462
Registration Statement, the Base Prospectus, the Final Prospectus or the
Prospectus shall be deemed to mean and include the subsequent filing of any
document under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”), that is deemed to be incorporated therein by reference therein or
otherwise deemed by the Rules and Regulations to be a part thereof.

 

2.             Agreement to Act as Placement Agent; Placement of the Units.  On
the basis of the representations, warranties and agreements of the Company
herein contained, and subject to all the terms and conditions of this Agreement:

 

(a)           The Company hereby authorizes the Placement Agent to act as its
exclusive agent to solicit offers for the purchase of all or part of the Units
from the Company in connection with the proposed offering of the Units (the
“Offering”).  Until the Closing Date (as defined in Section 4 below) or earlier
upon termination of this Agreement pursuant to Section 9

 

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the Company shall not, without the prior written consent of the Placement Agent,
solicit or accept offers to purchase the Units otherwise than through the
Placement Agent.

 

(b)           The Company hereby acknowledges that the Placement Agent has
agreed, as agent of the Company, to use its reasonable efforts to solicit offers
to purchase the Units from the Company on the terms and subject to the
conditions set forth in the Prospectus (as defined below).  The Placement Agent
shall use reasonable efforts to assist the Company in obtaining performance by
each Purchaser whose offer to purchase the Units has been solicited by the
Placement Agent and accepted by the Company, but the Placement Agent shall not,
except as otherwise provided in this Agreement, be obligated to disclose the
identity of any potential purchaser or have any liability to the Company in the
event any such purchase is not consummated for any reason.  Under no
circumstances will the Placement Agent be obligated to underwrite or purchase
any Units for its own account and, in soliciting purchases of the Units, the
Placement Agent shall act solely as the Company’s agent and not as principal.

 

(c)           Subject to the provisions of this Section 2, offers for the
purchase of the Units may be solicited by the Placement Agent as agent for the
Company at such times and in such amounts as the Placement Agent deems
advisable.  The Placement Agent shall communicate to the Company, orally or in
writing, each reasonable offer to purchase the Units received by it as agent of
the Company.  The Company shall have the sole right to accept offers to purchase
the Units and may reject any such offer, in whole or in part.  The Placement
Agent shall have the right, in its discretion reasonably exercised, without
notice to the Company, to reject any offer to purchase the Units received by it,
in whole or in part, and any such rejection shall not be deemed a breach of this
Agreement.

 

(d)           The Units are being sold to the Purchasers at an offering price of
$1,000.00 per Unit.  The purchases of the Units by the Purchasers shall be
evidenced by the execution of Subscription Agreements by each of the Purchasers
and the Company.

 

(e)           As compensation for services rendered, on the Closing Date (as
defined in Section 4 below), the Company shall pay to the Placement Agent by
wire transfer of immediately available funds to an account or accounts
designated by the Placement Agent, an aggregate amount equal to six percent (6%)
of the gross proceeds received by the Company (the “Placement Fee”) from the
sale of the Units on such Closing Date. The Placement Agent may retain other
brokers or dealers to act as sub-agents on its behalf in connection with the
Offering, the fees of which shall be paid out of the Placement Fee.

 

(f)            No Units which the Company has agreed to sell pursuant to this
Agreement and the Subscription Agreements shall be deemed to have been purchased
and paid for, or sold by the Company, until such Units shall have been delivered
to the Purchaser thereof against payment by such Purchaser.  If the Company
shall default in its obligations to deliver the Units to a Purchaser whose offer
it has accepted, the Company shall indemnify and hold the Placement Agent
harmless against any loss, claim, damage or expense arising from or as a result
of such default by the Company in accordance with the procedures set forth in
Section 7(c) herein.

 

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2a.          Representations and Warranties of the Company Regarding the
Offering.

 

(a)     The Company represents and warrants to, and agrees with, the Placement
Agent, as of the date hereof and as of the Closing Date (as defined in Section 4
below), except as otherwise indicated, as follows that:

 

(i)            At each time of effectiveness, at the date hereof, at the Closing
Date, the Registration Statement and any post-effective amendment thereto
complied or will comply in all material respects with the requirements of the
Securities Act and the Rules and Regulations and did not, does not and will not
contain any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading.  The Time of Sale Disclosure Package (as defined in
Section 2a(a)(iii)(A)(1) below) as of the date hereof, at the Closing Date, and
the Final Prospectus, as amended or supplemented, as of its date, at the time of
filing pursuant to Rule 424(b) under the Securities Act, at the Closing Date,
does not and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.  The representations and warranties set forth in the two
immediately preceding sentences shall not apply to statements in or omissions
from the Registration Statement or any Prospectus in reliance upon, and in
conformity with, written information furnished to the Company by the Placement
Agent specifically for use in the preparation thereof, which written information
is described in Section 7(f).  The Registration Statement contains all exhibits
and schedules required to be filed by the Securities Act or the Rules and
Regulations.  No order preventing or suspending the effectiveness or use of the
Registration Statement or any Prospectus is in effect and no proceedings for
such purpose have been instituted or are pending, or, to the knowledge of the
Company, are contemplated or threatened by the Commission.

 

(ii)           The Company has not distributed any prospectus or other offering
material in connection with the offering and sale of the Securities other than
the Time of Sale Disclosure Package and any roadshow or investor presentations
delivered to and approved by the Placement Agent for use in connection with the
marketing of the offering of the Securities (collectively, the “Marketing
Materials”).

 

(iii)          (A) The Company has provided a copy to the Placement Agent of
each Issuer Free Writing Prospectus (as defined below) used in the sale of the
Securities.  The Company has filed all Issuer Free Writing Prospectuses required
to be so filed with the Commission, and no order preventing or suspending the
effectiveness or use of any Issuer Free Writing Prospectus is in effect and no
proceedings for such purpose have been instituted or are pending, or, to the
knowledge of the Company, are contemplated or threatened by the Commission. 
When taken together with the rest of the Time of Sale Disclosure Package or the
Final Prospectus, since its first use and at all relevant times since then, no
Issuer Free Writing Prospectus has, does or will include (1) any untrue
statement of a material fact or omission 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, or (2) information that conflicted,
conflicts or will conflict with the information contained in the Registration
Statement or the Final Prospectus.  The representations and warranties set forth
in the immediately preceding sentence shall not

 

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apply to statements in or omissions from the Time of Sale Disclosure Package,
the Final Prospectus or any Issuer Free Writing Prospectus in reliance upon, and
in conformity with, written information furnished to the Company by the
Placement Agent specifically for use in the preparation thereof.  As used in
this paragraph and elsewhere in this Agreement:

 

(1)           “Time of Sale Disclosure Package” means the Base Prospectus, the
Prospectus most recently filed with the Commission before the time of this
Agreement, including any preliminary prospectus supplement deemed to be a part
thereof, each Issuer Free Writing Prospectus, and the description of the
transaction provided by the Placement Agent included on Schedule I.

 

(2)           “Issuer Free Writing Prospectus” means any “issuer free writing
prospectus,” as defined in Rule 433 under the Securities Act, relating to the
Securities that (A) is required to be filed with the Commission by the Company,
or (B) is exempt from filing pursuant to Rule 433(d)(5)(i) under the Securities
Act, in each case in the form filed or required to be filed with the Commission
or, if not required to be filed, in the form retained in the Company’s records
pursuant to Rule 433(g) under the Securities Act.

 

(B)          At the time of filing of the Registration Statement and at the date
hereof, the Company was not and is not an “ineligible issuer,” as defined in
Rule 405 under the Securities Act or an “excluded issuer” as defined in Rule 164
under the Securities Act.

 

(C)          Each Issuer Free Writing Prospectus satisfied, as of its issue date
and at all subsequent times through the Prospectus Delivery Period (as defined
below in Section 4(a)(i)), all other conditions as may be applicable to its use
as set forth in Rules 164 and 433 under the Securities Act, including any
legend, record-keeping or other requirements.

 

(iv)          The financial statements of the Company, together with the related
notes, included or incorporated by reference in the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectus comply in all material
respects with the applicable requirements of the Securities Act and fairly
present the financial condition of the Company as of the dates indicated and the
results of operations and changes in cash flows for the periods therein
specified in conformity with U.S. generally accepted accounting principles
consistently applied throughout the periods involved; and the supporting
schedules included in the Registration Statement present fairly the information
required to be stated therein.  There are no pro forma or as adjusted financial
statements which are required to be included in the Registration Statement, the
Time of Sale Disclosure Package and the Prospectus in accordance with Regulation
S-X which have not been included as so required.  The as adjusted financial
information included in the Registration Statement, the Time of Sale Disclosure
Package and the Final Prospectus has been properly compiled and prepared in
accordance with the applicable requirements of the Securities Act and the
Rules and Regulations and include all adjustments necessary to present fairly in
accordance with generally accepted accounting principles the as

 

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adjusted financial position of the Company presented therein at the respective
dates indicated.

 

(v)           To the Company’s knowledge, Tanner LLC, which has expressed its
opinion with respect to the financial statements and schedules filed as a part
of the Registration Statement and included in the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectus, is an independent
public accounting firm with respect to the Company within the meaning of the
Securities Act and the Rules and Regulations.

 

(vi)          The Company had a reasonable basis for, and made in good faith,
each “forward-looking statement” (within the meaning of Section 27A of the
Securities Act or Section 21E of the Securities Exchange Act of 1934, as amended
(the “Exchange Act”)) contained or incorporated by reference in the Registration
Statement, the Time of Sale Disclosure Package, the Final Prospectus or the
Marketing Materials.

 

(vii)         All statistical or market-related data included or incorporated by
reference in the Registration Statement, the Time of Sale Disclosure Package or
the Final Prospectus are based on or derived from sources that the Company
reasonably believes to be reliable and accurate, and the Company has obtained
the written consent to the use of such data from such sources, to the extent
required.

 

(viii)        The Common Stock is registered pursuant to Section 12(b) of the
Exchange Act and is listed on the NYSE MKT (“NYSE MKT”) and on the Toronto Stock
Exchange (“TSX”). There is no action pending by the Company or, to the Company’s
knowledge, by the NYSE MKT or the TSX to delist the Common Stock from the NYSE
MKT or the TSX, nor has the Company received any notification that the NYSE MKT
or the TSX is contemplating terminating such listing.  When issued, the
Conversion Shares and the Warrant Shares will be listed on the NYSE MKT and the
TSX to the extent that such Conversion Shares and Warrant Shares, in aggregate,
amount to 19.9% of the outstanding Common Stock of the Company as of the date of
this Agreement, with the remainder of such Conversion Shares and Warrant shares
to be approved for listing on the NYSE MKT and the TSX upon stockholder approval
thereof.

 

(ix)          The Company is not the subject of a cease trade order, or
management cease trade order, issued by the Canadian securities regulatory
authorities (the “Canadian Regulatory Authorities”), or any of them, and the
Company is, to the best of its knowledge, not aware of any such order being
contemplated or threatened by the Canadian Regulatory Authorities, or any of
them.

 

(x)             The Company has not taken, directly or indirectly, any action
that is designed to or that has constituted or that would reasonably be expected
to cause or result in the stabilization or manipulation of the price of any
security of the Company to facilitate the sale of the Securities.

 

(xi)          The Company is not and, immediately after giving effect to the
offering and sale of the Securities and the application of the net proceeds
thereof, will not

 

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be an “investment company,” as such term is defined in the Investment Company
Act of 1940, as amended.

 

(b)           Any certificate signed by any officer of the Company and delivered
to the Placement Agent or to the Placement Agent’s counsel shall be deemed a
representation and warranty by the Company to the Placement Agent as to the
matters covered thereby.

 

3.             Representations and Warranties Regarding the Company.

 

(a)           The Company represents and warrants to and agrees with, the
Placement Agent, as of the date hereof and as of the Closing Date (as defined in
Section 4 below), except as set forth in the Registration Statement, the Time of
Sale Disclosure Package and the Final Prospectus, as follows:

 

(i)            Each of the Company and its subsidiaries has been duly organized
and is validly existing as a corporation in good standing under the laws of its
jurisdiction of incorporation or formation. Each of the Company and its
subsidiaries has the power and authority (corporate or otherwise) to own its
properties and conduct its business as currently being carried on and as
described in the Registration Statement, the Time of Sale Disclosure Package and
the Final Prospectus, and is duly qualified to do business as a foreign
corporation in good standing in each jurisdiction in which it owns or leases
real property or in which the conduct of its business makes such qualification
necessary and in which the failure to so qualify would have or is reasonably
likely to result in a material adverse effect upon the business, prospects,
properties, operations, condition (financial or otherwise) or results of
operations of the Company and its subsidiaries, taken as a whole, or in its
ability to perform its obligations under this Agreement (“Material Adverse
Effect”).

 

(ii)           The Company has the power and authority to enter into this
Agreement and the Warrants and each of the Subscription Agreements and to
perform and to discharge its obligations hereunder and thereunder.  This
Agreement and each of the Subscription Agreements have been duly authorized,
executed and delivered by the Company, and constitute a valid, legal and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, except as rights to indemnity hereunder may be limited by federal or
state securities laws and except as such enforceability may be limited by
bankruptcy, insolvency, reorganization or similar laws affecting the rights of
creditors generally and subject to general principles of equity.  The Warrants
have been duly authorized by the Company and, when executed and delivered by the
Company in accordance with the terms of this Agreement, will constitute valid,
legal and binding obligations of the Company, enforceable against the Company in
accordance with their terms.

 

(iii)          The execution, delivery and performance of this Agreement, the
Warrants and the Subscription Agreements and the consummation of the
transactions herein contemplated will not (A) result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any law,
order, rule or regulation to which the Company or any subsidiary is subject, or
by which any property or asset of the Company

 

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or any subsidiary is bound or affected, except to the extent that such breach or
violation is not reasonably likely to result in a Material Adverse Effect,
(B) conflict with, result in any violation or breach of, or constitute a default
(or an event that with notice or lapse of time or both would become a default)
under, or give to others any right of termination, amendment, acceleration or
cancellation (with or without notice, lapse of time or both) (a “Default
Acceleration Event”) of, any agreement, lease, credit facility, debt, note,
bond, mortgage, indenture or other instrument (the “Contracts”) or obligation 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, except to the extent that such conflict, default or Default
Acceleration Event is not reasonably likely to result in a Material Adverse
Effect, or (C) result in a breach or violation of any of the terms and
provisions of, or constitute a default under, the Company’s articles of
incorporation, as amended, or by-laws, as amended.

 

(iv)          Neither the Company nor any of its subsidiaries is in violation,
breach or default under its articles of incorporation, as amended, by-laws, as
amended, or other equivalent organizational or governing documents.

 

(v)           No consents, approvals, orders, authorizations or filings are
required on the part of the Company and its subsidiaries in connection with the
execution, delivery or performance of this Agreement, the Warrants and the
Subscription Agreements and the issue and sale of the Securities, except (A) the
registration under the Securities Act of the Securities, (B) such consents,
approvals, authorizations, registrations or qualifications as may be required
under state or foreign securities or Blue Sky laws and the rules of the
Financial Industry Regulatory Authority, Inc. (“FINRA”) in connection with the
placement and distribution of the Securities by the Placement Agent, and (C) the
necessary filings and approvals from the NYSE MKT and TSX to list the Conversion
Shares and the Warrant Shares.

 

(vi)          The Company has an authorized capitalization as set forth in the
Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus.  All of the issued and outstanding shares of capital stock of the
Company are duly authorized and validly issued, fully paid and nonassessable,
and have been issued in compliance with all applicable securities laws, and
conform in all material respects to the description thereof in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus. All of
the issued shares of capital stock of each subsidiary of the Company have been
duly and validly authorized and issued, are fully paid and non-assessable and
are owned directly or indirectly by the Company, free and clear of all liens,
encumbrances, equities or claims.  Except for the issuances of options or
restricted stock in the ordinary course of business, since the respective dates
as of which information is provided in the Registration Statement, the Time of
Sale Disclosure Package or the Final Prospectus, the Company has not entered
into or granted any convertible or exchangeable securities, options, warrants,
agreements, contracts or other rights in existence to purchase or acquire from
the Company any shares of the capital stock of the Company.  The Shares to be
issued and sold by the Company to the Purchasers hereunder and under the
Subscription Agreements have been duly authorized and, when issued, will be
validly issued, fully paid and nonassessable, will be issued in

 

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compliance with all applicable securities laws, and will be free of preemptive
or similar rights and will conform to the description of the capital stock of
the Company contained in the Registration Statement, the Time of Sale Disclosure
Package and the Prospectus.  The Warrant and the Conversion Shares, when issued,
paid for and delivered upon due exercise of the Warrants and the conversion of
the Shares, will be duly authorized and validly issued, fully paid and
nonassessable, will be issued in compliance with all applicable securities laws,
and will be free of preemptive or similar rights.  The Warrant Shares and the
Conversion Shares have been reserved for issuance.  The Securities, when issued,
will conform in all material respects to the descriptions thereof set forth in
the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus.

 

(vii)         Except as would not have a Material Adverse Effect, each of the
Company and its subsidiaries has (A) filed all returns (as hereinafter defined)
required to be filed with taxing authorities prior to the date hereof or has
duly obtained extensions of time for the filing thereof and (B) paid all taxes
(as hereinafter defined) shown as due on such returns that were filed and has
paid all taxes imposed on or assessed against the Company or such respective
subsidiary.  The provisions for taxes payable, if any, shown on the financial
statements filed with or as part of the Registration Statement are sufficient
for all accrued and unpaid taxes, whether or not disputed, and for all periods
to and including the dates of such consolidated financial statements.  No issues
have been raised and are currently pending by any taxing authority in connection
with any of the returns or taxes asserted as due from the Company or its
subsidiaries, and no waivers of statutes of limitation with respect to the
returns or collection of taxes have been given by or requested from the Company
or its subsidiaries.  The term “taxes” mean all federal, state, local, foreign,
and other net income, gross income, gross receipts, sales, use, ad valorem,
transfer, franchise, profits, license, lease, service, service use, withholding,
payroll, employment, excise, severance, stamp, occupation, premium, property,
windfall profits, customs, duties or other taxes, fees, assessments, or charges
of any kind whatever, together with any interest and any penalties, additions to
tax, or additional amounts with respect thereto.  The term “returns” means all
returns, declarations, reports, statements, and other documents required to be
filed in respect to taxes.

 

(viii)        Since the respective dates as of which information is given
(including by incorporation by reference) in the Registration Statement, the
Time of Sale Disclosure Package or the Final Prospectus, (a) neither the Company
nor any of its subsidiaries has incurred any material liabilities or
obligations, direct or contingent, or entered into any material transactions
other than in the ordinary course of business, (b) except as contemplated by
clause (c) immediately below, the Company has not declared or paid any dividends
or made any distribution of any kind with respect to its capital stock,
(c) there has not been any change in the capital stock of the Company or any of
its subsidiaries (other than a change in the number of outstanding shares of
Common Stock due to the issuance of shares upon the exercise of outstanding
options or warrants or the issuance of restricted stock awards or restricted
stock units under the Company’s existing stock awards plan, or any new grants
thereof in the ordinary course of business), (d) there has not been any material
change in the Company’s long-term or short-term debt, and (e) there has not been
the occurrence of any Material Adverse Effect.

 

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(ix)          There is not pending or, to the knowledge of the Company,
threatened, any action, suit or proceeding to which the Company or any of its
subsidiaries is a party or of which any property or assets of the Company or its
subsidiaries is the subject before or by any court or governmental agency,
authority or body, or any arbitrator or mediator, which is reasonably likely to
result in a Material Adverse Effect or adversely affect the consummation of the
transactions contemplated by this Agreement.

 

(x)           The Company and each of its subsidiaries holds, and is in
compliance with, all franchises, grants, authorizations, licenses, permits,
easements, consents, certificates and orders (“Permits”) of any governmental or
self-regulatory agency, authority or body required for the conduct of its
business as currently conducted, and all such Permits are in full force and
effect, in each case except where the failure to hold, or comply with, any of
them is not reasonably likely to result in a Material Adverse Effect.

 

(xi)          Except for patented and unpatented mining claims, millsites and
tunnel sites owned by it (which are the subject of Section 3(a)(xxxv)), the
Company and its subsidiaries have good and marketable title to all property
(whether real or personal) described in the Registration Statement, the Time of
Sale Disclosure Package and the Final Prospectus as being owned by them that is
material to the business of the Company, in each case free and clear of all
liens, claims, security interests, other encumbrances or defects, except those
that are disclosed in the Registration Statement, the Time of Sale Disclosure
Package, the Final Prospectus or that are not reasonably likely to result in a
Material Adverse Effect.  The property held under lease by the Company and its
subsidiaries is held by them under valid, subsisting and enforceable leases with
only such exceptions with respect to any particular lease as do not interfere in
any material respect with the conduct of the business of the Company and its
subsidiaries as described in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectus.

 

(xii)         The Company and each of its subsidiaries owns or possesses or has
valid right to use all patents, patent applications, trademarks, service marks,
trade names, trademark registrations, service mark registrations, copyrights,
licenses, inventions, trade secrets and similar rights (“Intellectual Property”)
necessary for the conduct of the business of the Company and its subsidiaries as
currently carried on and as described in the Registration Statement, the Time of
Sale Disclosure Package and the Final Prospectus.  To the knowledge of the
Company, no action or use by the Company or any of its subsidiaries will involve
or give rise to any infringement of, or license or similar fees for, any
Intellectual Property of others, except where such action, use, license or fee
is not reasonably likely to result in a Material Adverse Effect.  Neither the
Company nor any of its subsidiaries has received any notice alleging any such
infringement or fee.

 

(xiii)        The Company and each of its subsidiaries has complied with, is not
in violation of, and has not received any notice of violation relating to any
law, rule or regulation relating to the conduct of its business, or the
ownership or operation of its property and assets, including, without
limitation, (A) the Currency and Foreign Transactions Reporting Act of 1970, as
amended, or any money laundering laws, rules or regulations, (B) the
Sarbanes-Oxley Act and the rules and regulations of the Commission

 

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thereunder, (C) the Foreign Corrupt Practices Act of 1977 and the rules and
regulations thereunder, and (D) the Employment Retirement Income Security Act of
1974 and the rules and regulations thereunder, in each case except where the
failure to be in compliance is not reasonably likely to result in a Material
Adverse Effect; provided that this representation shall not be deemed to include
compliance with, or violation of, Permits (which is the subject of 3(x) above)
or Environmental Laws (which is the subject of 3(xxvii) below).

 

(xiv)        Neither the Company nor any of its subsidiaries nor, to the
knowledge of the Company, any director, officer, employee, representative, agent
or affiliate of the Company or any of its subsidiaries is currently subject to
any U.S. sanctions administered by the Office of Foreign Assets Control of the
U.S. Treasury Department (“OFAC”); and the Company will not directly or
indirectly use the proceeds of the offering of the Securities contemplated
hereby, or lend, contribute or otherwise make available such proceeds to any
person or entity, for the purpose of financing the activities of any person
currently subject to any U.S. sanctions administered by OFAC.

 

(xv)         The Company and each of its subsidiaries carries, or is covered by,
insurance in such amounts and covering such risks as the Company reasonably
considers adequate for the conduct of its business and the value of its
properties and as is customary for companies engaged in similar businesses in
similar industries.  Neither the Company nor any subsidiary has been refused any
coverage under insurance policies sought or applied for; and the Company has no
reason to believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar coverage from
similar insurers as may be necessary to continue its business at a cost that
would not have a Material Adverse Effect.

 

(xvi)        No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is imminent, that is
reasonably likely to result in a Material Adverse Effect.

 

(xvii)       Neither the Company, its subsidiaries nor, to its knowledge, any
other party is in violation, breach or default of any Contract that is
reasonably likely to result in a Material Adverse Effect.

 

(xviii)      No supplier, customer, distributor or sales agent of the Company
has notified the Company that it intends to discontinue or decrease the rate of
business done with the Company, except where such decrease is not reasonably
likely to result in a Material Adverse Effect.

 

(xix)        There are no claims, payments, issuances, arrangements or
understandings for services in the nature of a finder’s, consulting or
origination fee with respect to the introduction of the Company to the Placement
Agent or the sale of the Securities hereunder or any other arrangements,
agreements, understandings, payments or issuances with respect to the Company
that may affect the Placement Agent’s compensation, as determined by FINRA.

 

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(xx)         The Company has not made any direct or indirect payments (in cash,
securities or otherwise) to (i) any person, as a finder’s fee, investing fee or
otherwise, in consideration of such person raising capital for the Company or
introducing to the Company persons who provided capital to the Company, (ii) any
FINRA member, or (iii) any person or entity that has any direct or indirect
affiliation or association with any FINRA member within the 12-month period
prior to the date on which the Prospectus relating to the Securities was most
recently filed with the Commission (“Filing Date”) or thereafter.

 

(xxi)        None of the net proceeds of the offering will be paid by the
Company to any participating FINRA member or any affiliate or associate of any
participating FINRA member, except as specifically authorized herein.

 

(xxii)       To the Company’s knowledge, no (i) officer or director of the
Company or its subsidiaries, (ii) owner of 5% or more of the Company’s
unregistered securities or that of its subsidiaries or (iii) owner of any amount
of the Company’s unregistered securities acquired within the 180-day period
prior to the Filing Date, has any direct or indirect affiliation or association
with any FINRA member.  The Company will advise the Placement Agent and its
counsel if it becomes aware that any officer, director or stockholder of the
Company or its subsidiaries is or becomes an affiliate or associated person of a
FINRA member participating in the offering.

 

(xxiii)      Other than the Placement Agent, no person has the right to act as a
placement agent, an underwriter or as a financial advisor to the Company in
connection with the transactions contemplated hereby.

 

(xxiv)     The statements set forth in the Registration Statement, the Time of
Sale Disclosure Package and the Prospectus under the captions “Description of
Common Stock”, “Description of Preferred Stock” insofar as they purport to
constitute a summary of the terms of the Securities, and under the captions
“Business — Regulation”, “Certain Relationships and Related Transactions, and
Director Independence”, “Material U.S. Federal Income Tax Considerations” and 
“Plan of Distribution”, insofar as they purport to describe the provisions of
the laws and documents referred to therein, are accurate, complete and fair in
all material respects.

 

(xxv)      Except as set forth in the Registration Statement, the Time of Sale
Disclosure Package and the Prospectus, there are no contracts, agreements or
understandings between the Company and any person granting such person the right
(other than rights which have been waived in writing or otherwise satisfied) to
require the Company to file a registration statement under the Securities Act
with respect to any securities of the Company owned or to be owned by such
person or to require the Company to include such securities in the securities
registered pursuant to the Registration Statement or in any securities being
registered pursuant to any other registration statement filed by the Company
under the Securities Act.

 

(xxvi)     The Company has not sold or issued any shares of Common Stock during
the six-month period preceding the date of the Prospectus, including any sales

 

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pursuant to Rule 144A under, or Regulations D or S of, the Securities Act, other
than shares issued pursuant to employee benefit plans, stock option plans or
other employee compensation plans or pursuant to outstanding options, rights or
warrants.

 

(xxvii)    Except where the failure to comply or the potential liability or
obligation would not, individually or in the aggregate, reasonably be expected
to have a Material Adverse Effect, (i) the Company and each of its subsidiaries
are in compliance with all, and, to the knowledge of the Company, have not
violated any, laws, regulations, ordinances, rules, orders, judgments, decrees,
or other legal requirements of any governmental authority, including without
limitation any international, national, state, provincial, regional, or local
authority, relating to the protection of human health or safety, the
environment, or natural resources, or to hazardous or toxic substances or
wastes, pollutants or contaminants (including, without limitation, all health
and safety laws) (“Environmental Laws”) applicable to such entity, (ii) the
Company and each of its subsidiaries have not received notice of any actual or
alleged violation of Environmental Laws, or of any potential liability for or
other obligation concerning the presence, disposal or release of hazardous or
toxic substances or wastes, pollutants or contaminants, (iii) there are no
judicial or enforcement proceedings that are pending, or known to be
contemplated, against the Company or any of its subsidiaries under Environmental
Laws in which a governmental authority is also a party, (iv) the Company and its
subsidiaries are not aware of any existing liabilities concerning hazardous or
toxic substances or wastes, pollutants or contaminants, and (v) to the knowledge
of the Company, no property which is or has been owned, leased, used, operated
or occupied by the Company or its subsidiaries has been designated as a
Superfund site pursuant to the Comprehensive Environmental Response,
Compensation of Liability Act of 1980, as amended (42 U.S.C. Section 9601, et.
seq.), or otherwise designated as a contaminated site under applicable state or
local law.

 

(xxviii)   The Company maintains a system of internal control over financial
reporting (as such term is defined in Rule 13a-15(f) under the Exchange Act)
that complies with the requirements of the Exchange Act and has been designed by
the Company’s principal executive officer and principal financial officer, or
under their supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements
for external purposes in accordance with U.S. generally accepted accounting
principles.  The Company’s internal control over financial reporting is
effective and the Company is not aware of any material weaknesses in its
internal control over financial reporting.

 

(xxix)     Since the date of the latest audited financial statements included in
the Registration Statement, the Time of Sale Disclosure Package and the
Prospectus, there has been no change in the Company’s internal control over
financial reporting that has materially affected, or is reasonably likely to
materially affect, the Company’s internal control over financial reporting.

 

(xxx)      The Company maintains disclosure controls and procedures (as such
term is defined in Rule 13a-15(e) under the Exchange Act) that comply with the
requirements of the Exchange Act; such disclosure controls and procedures have
been

 

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designed to ensure that material information relating to the Company and its
subsidiaries is made known to the Company’s principal executive officer and
principal financial officer by others within those entities; and such disclosure
controls and procedures are effective.

 

(xxxi)     The operations of the Company and its subsidiaries are being
conducted in material compliance with applicable employment laws, the rules and
regulations thereunder and any related or similar rules, regulations or
guidelines, issued, administered or enforced by any governmental agency
(collectively, the “Employee Benefit Laws”) and no action, suit or proceeding by
or before any court or governmental agency, authority or body or any arbitrator
involving the Company or any of its subsidiaries with respect to the Employee
Benefit Laws is pending or, to the knowledge of the Company, threatened.

 

(xxxii)    Neither the Company nor any of its subsidiaries or affiliates, nor
any director, officer, or employee, nor, to the Company’s knowledge, any agent
or representative of the Company or of any of its subsidiaries or affiliates,
has taken any action in furtherance of an offer, payment, promise to pay, or
authorization or approval of the payment or giving of money, property, gifts or
anything else of value, directly or indirectly, to any “government official”
(including any officer or employee of a government or government-owned or
controlled entity or of a public international organization, or any person
acting in an official capacity for or on behalf of any of the foregoing, or any
political party or party official or candidate for political office) to
influence official action or secure an improper advantage; and the Company and
its subsidiaries and affiliates conduct their businesses in compliance with
applicable anti-corruption laws and have instituted and maintain and will
continue to maintain policies and procedures designed to promote and achieve
compliance with such laws and with the representation and warranty contained
herein.

 

(xxxiii)   Mines Development Associates, Inc. (“MDA”) is an independent private
engineering firm from whose non-reserve mineralized materials report information
is contained or incorporated by reference in the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectus, and acts as
independent engineers with respect to the Company.

 

(xxxiv)   The Company’s silver-copper project located in northwestern Montana
(the “Montanore Project”) is the Company’s only material property.

 

(xxxv)    Except as disclosed in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectus, the Company and its subsidiaries
have good and defensible record title to all of the patented mining claims and
millsites owned by them, in each case free from liens, encumbrances and defects
that would materially affect the value thereof or materially interfere with the
use made or to be made thereof by them.  With respect to each of the unpatented
mining claims, millsites and tunnel sites (collectively, the “Claims”) owned by
the Company or any of its subsidiaries and material to the development of the
Montanore Project: (i) subject to the paramount title of the United States of
America and the rights of third parties to use of the surface, the

 

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Company or its subsidiaries hold the possessory interest therein; (ii) to the
Company’s knowledge, the Claims were properly laid out and monumented on
available public domain land open to appropriation by mineral location;
(iii) for each of the Claims, location notices and certificates were timely and
properly recorded and filed with appropriate governmental agencies, and all
payments required in connection therewith were timely and properly made;
(iv) all claim maintenance and related fees have been timely paid as required by
law in order to maintain the Claims; and (v) all affidavits of assessment work,
notices of intent to hold, evidence of payment of claim maintenance fees, and
other filings required to maintain the Claims in good standing have been
properly and timely recorded or filed with appropriate governmental agencies. 
Notwithstanding the foregoing, the Company makes no representation or warranty
as to (i) whether any of the unpatented mining claims contains a discovery of
valuable minerals, (ii) the absence of any conflicting patented or unpatented
mining claims, (iii) whether its current uses of or activities on the unpatented
mining claims, millsites and tunnel sites are sufficient to maintain those
claims and millsites, (iv) the nature or sufficiency of its right to use the
surface of the Claims, or (v) the rights to minerals within the tunnel sites
vis-a-vis third party surface locators.  Except as disclosed in the Registration
Statement, the Time of Sale Disclosure Package and the Final Prospectus, the
Company and its subsidiaries hold any leased real or personal property under
valid and enforceable leases with no exceptions that would materially interfere
with the use made or to be made thereof by them.

 

(xxxvi)   [Intentionally Omitted].

 

(xxxvii)  With respect to the information set forth or incorporated by reference
in the Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus:  (i) information relating to the estimates of mineralized material
has been reviewed and verified by the Company or independent consultants to the
Company; (ii) the mineralized material estimate has been prepared in accordance
with Industry Guide 7 of the Rules and Regulations; (iii) information developed
by the Company and provided for use in preparation of estimates of mineralized
material was, at the time of the delivery thereof, complete and accurate in all
material respects.

 

(xxxviii) Except as disclosed in the Registration Statement, the Time of Sale
Disclosure Package and the Final Prospectus and subject to the limitations and
exceptions set forth therein and except as described in clause (xxxv) of this
Section 3, the Company and its subsidiaries (A) hold either mining claims or
other property, proprietary or contractual interests or rights, recognized in
the jurisdiction in which a particular property is located in respect of the ore
bodies and minerals located in properties in which the Company and its
subsidiaries have an interest as described in the Registration Statement, the
Time of Sale Disclosure Package and the Final Prospectus under valid, subsisting
and enforceable title documents or other recognized and enforceable agreements
or instruments, sufficient to permit the Company and its subsidiaries to explore
the minerals relating thereto; and (B) have all necessary surface rights, access
rights and other necessary rights and interests relating to the properties in
which the Company and its subsidiaries have an interest as described in the
Registration Statement, the Time of Sale Disclosure Package and the Final
Prospectus granting the Company and

 

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its subsidiaries the right and ability to explore for minerals, ore and metals
as are appropriate in view of their respective rights and interests therein,
with only such exceptions as do not materially interfere with the use made by
the Company and its subsidiaries of the rights or interests so held.

 

4.             The Closing. The time and date of closing and delivery of the
documents required to be delivered to the Placement Agent pursuant to Sections 5
and 6 hereof shall be at 10:00 A.M., New York time, on July 30, 2014 (the
“Closing Date”) at the office of Lowenstein Sandler LLP, 1251 Avenue of the
Americas, New York, New York 10020.

 

5.                                      Covenants.

 

(a)           The Company covenants and agrees with the Placement Agent as
follows:

 

(i)            To prepare the Prospectus in a form approved by the Placement
Agent and to file such Prospectus pursuant to Rule 424(b) under the Securities
Act not later than the Commission’s close of business on the second business day
following the execution and delivery of this Agreement, or, if applicable, such
earlier time as may be required by Rule 430A(a)(3) under the Securities Act.

 

(ii)           During the period beginning on the date hereof and ending on the
later of the Closing Date or such date as determined by the Placement Agent that
the Prospectus is no longer required by law to be delivered in connection with
sales of the Units (the “Prospectus Delivery Period”), prior to amending or
supplementing the Registration Statement, including any Rule 462 Registration
Statement, the Time of Sale Disclosure Package or the Prospectus, the Company
shall furnish to the Placement Agent for review and comment a copy of each such
proposed amendment or supplement, and the Company shall not file any such
proposed amendment or supplement to which the Placement Agent reasonably
objects.

 

(iii)          From the date of this Agreement until the end of the Prospectus
Delivery Period, the Company shall promptly advise the Placement Agent in
writing (A) of the receipt of any comments of, or requests for additional or
supplemental information from, the Commission, (B) of the time and date of any
filing of any post-effective amendment to the Registration Statement or any
amendment or supplement to the Time of Sale Disclosure Package, the Prospectus
or any Issuer Free Writing Prospectus, (C) of the time and date that any
post-effective amendment to the Registration Statement becomes effective and
(D) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or of any order preventing or
suspending its use or the use of the Time of Sale Disclosure Package or any
Issuer Free Writing Prospectus, or of any proceedings to remove, suspend or
terminate from listing or quotation the Common Stock from any securities
exchange upon which it is listed for trading or included or designated for
quotation, or of the threatening or initiation of any proceedings for any of
such purposes.  If the Commission shall enter any such stop order at any time
during the Prospectus Delivery Period, the Company will use its reasonable
efforts to obtain the lifting of such order at the earliest possible moment. 
Additionally, the Company agrees that it shall comply with the provisions of
Rules 424(b), 430A and 430B, as applicable, under the Securities Act and will
use its reasonable efforts to confirm

 

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that any filings made by the Company under Rule 424(b) or Rule 433 were received
in a timely manner by the Commission (without reliance on Rule 424(b)(8) or
164(b) of the Securities Act).

 

(iv)          (A) During the Prospectus Delivery Period, the Company will comply
with all requirements imposed upon it by the Securities Act, as now and
hereafter amended, and by the Rules and Regulations, as from time to time in
force, and by the Exchange Act, as now and hereafter amended, so far as
necessary to permit the continuance of sales of or dealings in the Securities as
contemplated by the provisions hereof, the Time of Sale Disclosure Package, the
Registration Statement and the Prospectus.  If during such period any event
occurs as the result of which the Prospectus (or if the Prospectus is not yet
available to prospective purchasers, the Time of Sale Disclosure Package) would
include an untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which such statement was made, not misleading, or if during such period it
is necessary or appropriate in the opinion of the Company or its counsel or the
Placement Agent or its counsel to amend the Registration Statement or supplement
the Prospectus (or if the Prospectus is not yet available to prospective
purchasers, the Time of Sale Disclosure Package ) to comply with the Securities
Act, the Company will promptly notify the Placement Agent, allow the Placement
Agent the opportunity to provide reasonable comments on such amendment,
Prospectus supplement or document, and will amend the Registration Statement or
supplement the Prospectus (or if the Prospectus is not yet available to
prospective purchasers, the Time of Sale Disclosure Package) so as to correct
such statement or omission or effect such compliance.

 

(B)          If at any time following the issuance of an Issuer Free Writing
Prospectus there occurred or occurs an event or development as the result of
which such Issuer Free Writing Prospectus conflicted or would conflict with the
information contained in the Registration Statement or any Prospectus or
included or would include an untrue statement of a material fact or omitted or
would omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances prevailing at that subsequent time,
not misleading, the Company has promptly notified or promptly will notify the
Placement Agent and has promptly amended or will promptly amend or supplement,
at its own expense, such Issuer Free Writing Prospectus to eliminate or correct
such conflict, untrue statement or omission.

 

(v)           The Company shall use its reasonable best efforts to qualify the
Securities for sale under the securities laws of such jurisdictions as the
Placement Agent reasonably designates and to continue such qualifications in
effect so long as required for the distribution of the Securities, except that
the Company shall not be required in connection therewith to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified, to file a prospectus in such jurisdiction or subject itself
to ongoing reporting requirements in such jurisdiction, to execute a general
consent to service of process in any state or to subject itself to taxation in
respect of doing business in any jurisdiction in which it is not otherwise
subject.

 

(vi)          The Company will furnish to the Placement Agent and counsel for
the Placement Agent copies of the Registration Statement, each Prospectus, any
Issuer Free Writing Prospectus, and all amendments and supplements to such
documents, in each case as

 

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soon as available and in such quantities as the Placement Agent may from time to
time reasonably request.

 

(vii)         The Company will make generally available to its security holders
as soon as practicable, but in any event not later than 15 months after the end
of the Company’s current fiscal quarter, an earnings statement (which need not
be audited) covering a 12-month period that shall satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 of the Rules and Regulations.

 

(viii)        The Company, whether or not the transactions contemplated
hereunder are consummated or this Agreement is terminated, will pay or cause to
be paid  (A) all expenses (including transfer taxes allocated to the respective
transferees) incurred in connection with the delivery to the Placement Agent of
the Securities, (B) all expenses and fees (including, without limitation, fees
and expenses of the Company’s counsel) in connection with the preparation,
printing, filing, delivery, and shipping of the Registration Statement
(including the financial statements therein and all amendments, schedules, and
exhibits thereto), the Securities, the Time of Sale Disclosure Package, the
Prospectus, any Issuer Free Writing Prospectus and any amendment thereof or
supplement thereto, (C) all reasonable filing fees incurred in connection with
the qualification of the Securities for offering and sale by the Placement Agent
or by dealers under the securities or blue sky laws of the states and other
jurisdictions that the Placement Agent shall designate, (D) the fees and
expenses of any transfer agent or registrar, (E) the reasonable filing fees
incident to any required review and approval by FINRA of the terms of the sale
of the Securities, (F) listing fees, if any, and (G) all other costs and
expenses incident to the performance of its obligations hereunder that are not
otherwise specifically provided for herein.  In addition to the foregoing, the
Company will reimburse the Placement Agent up to a maximum amount of $100,000
for its reasonable legal fees and disbursements, in each case incurred in
connection with the purchase and sale of the Securities contemplated hereby. In
no event may the maximum compensation payable to FINRA members and independent
broker-dealers exceed 8.0% of the gross proceeds of this offering.  If this
Agreement is terminated by the Placement Agent in accordance with the provisions
of Section 6 or Section 9, the Company will reimburse the Placement Agent up to
a maximum of $20,000 for its non-legal reasonable out-of-pocket disbursements
(including, but not limited to, travel expenses, postage, facsimile and
telephone charges) and up to $50,000 in reasonable legal fees and disbursements
incurred by the Placement Agent in connection with its investigation, preparing
to market and marketing the Securities or in contemplation of performing its
obligations hereunder.

 

(ix)          The Company intends to apply the net proceeds from the sale of the
Units to be sold by it hereunder for the purposes set forth in the Time of Sale
Disclosure Package and in the Final Prospectus.

 

(x)           The Company has not taken and will not take, directly or
indirectly, during the Prospectus Delivery Period, any action designed to or
which might reasonably be expected to cause or result in, or that has
constituted, the stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of the Securities.

 

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(xi)          The Company represents and agrees that, unless it obtains the
prior written consent of the Placement Agent, and the Placement Agent represents
and agrees that, unless it obtains, the prior written consent of the Company, it
has not made and will not make any offer relating to the Securities that would
constitute an Issuer Free Writing Prospectus; provided that the prior written
consent of the parties hereto shall be deemed to have been given in respect of
the free writing prospectuses included in Schedule II.  Any such free writing
prospectus consented to by the Company and the Placement Agent is hereinafter
referred to as a “Permitted Free Writing Prospectus.”  The Company represents
that it has treated or agrees that it will treat each Permitted Free Writing
Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and
has complied or will comply with the requirements of Rule 433 applicable to any
Permitted Free Writing Prospectus, including timely Commission filing where
required, legending and record-keeping.

 

(xii)         The Company hereby agrees that, without the prior written consent
of the Placement Agent, it will not, during the period ending 90 days after the
date hereof (“Lock-Up Period”), (i) offer, pledge, issue, sell, contract to
sell, purchase, contract to purchase, lend, or otherwise transfer or dispose of,
directly or indirectly, any shares of Common Stock or any securities convertible
into or exercisable or exchangeable for Common Stock; or (ii) enter into any
swap or other arrangement that transfers to another, in whole or in part, any of
the economic consequences of ownership of the Common Stock, whether any such
transaction described in clause (i) or (ii) above is to be settled by delivery
of Common Stock or such other securities, in cash or otherwise; or (iii) file
any registration statement with the Commission relating to the offering of any
shares of Common Stock or any securities convertible into or exercisable or
exchangeable for Common Stock.  The restrictions contained in the preceding
sentence shall not apply to (1) the Securities to be sold hereunder, (2) the
issuance of Common Stock upon the exercise of options, warrants or other
exchange rights as disclosed as outstanding in the Registration Statement
(excluding exhibits thereto) or the Prospectus, or (3) the issuance of employee
stock options not exercisable during the Lock-Up Period and the grant of
restricted stock awards or restricted stock units pursuant to equity incentive
plans described in the Registration Statement (excluding exhibits thereto) and
the Prospectus.  Notwithstanding the foregoing, if (x) the Company issues an
earnings release or material news, or a material event relating to the Company
occurs, during the last 17 days of the Lock-Up Period, or (y) prior to the
expiration of the Lock-Up Period, the Company announces that it will release
earnings results during the 16-day period beginning on the last day of the
Lock-Up Period, the restrictions imposed by this clause shall continue to apply
until the expiration of the 18-day period beginning on the issuance of the
earnings release or the occurrence of the material news or material event,
unless the Placement Agent waives such extension in writing.

 

(xiii)        During a period of three years from the effective date of the
Registration Statement, to furnish to the Placement Agent copies of all reports
or other communications (financial or other) furnished to stockholders, and to
deliver to the Placement Agent (i) as soon as they are available, copies of any
reports and financial statements furnished to or filed with the Commission or
any national securities exchange on which any class of securities of the Company
is listed; and (ii) such additional information concerning the business and
financial condition of the Company as the Placement Agent may from time to time
reasonably request (such financial statements to be on a consolidated basis to
the extent the accounts of the Company and its subsidiaries are consolidated in
reports furnished to its stockholders generally

 

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or to the Commission); provided, that any information or documents available on
the Commission’s Electronic Data Gathering, Analysis and Retrieval System shall
be considered furnished for purposes of this Section 5(xiii).

 

(xiv)        To engage and maintain, at its expense, a registrar and transfer
agent for the Common Stock.

 

(xv)         To use its reasonable best efforts to list the Conversion Shares
and the Warrant Shares on the NYSE MKT and the TSX, including obtaining
stockholder approval necessary therefor.

 

(b)           The Placement Agent covenants and agrees with the Company that it
will deliver a certificate to the Company certifying as to the matters set forth
on Schedule III.

 

6.             Conditions of the Placement Agent’s Obligations.  The obligations
of the Placement Agent hereunder, and the closing of the sale of the Securities
are subject to the accuracy, as of the date hereof, and at the Closing Date, of
and compliance with all representations, warranties and agreements of the
Company contained herein, the performance by the Company of its obligations
hereunder and the following additional conditions:

 

(a)           If filing of the Prospectus, or any amendment or supplement
thereto, or any Issuer Free Writing Prospectus, is required under the Securities
Act or the Rules and Regulations, the Company shall have filed the Prospectus
(or such amendment or supplement) or such Issuer Free Writing Prospectus with
the Commission in the manner and within the time period so required (without
reliance on Rule 424(b)(8) or 164(b) under the Securities Act); the Registration
Statement shall remain effective; no stop order suspending the effectiveness of
the Registration Statement or any part thereof, any Rule 462 Registration
Statement, or any amendment thereof, nor suspending or preventing the use of the
Time of Sale Disclosure Package, the Prospectus or any Issuer Free Writing
Prospectus shall have been issued; no proceedings for the issuance of such an
order shall have been initiated or threatened; any request of the Commission or
the Placement Agent for additional information (to be included in the
Registration Statement, the Time of Sale Disclosure Package, the Prospectus, any
Issuer Free Writing Prospectus or otherwise) shall have been complied with to
the Placement Agent’s reasonable satisfaction.

 

(b)           The Conversion Shares and the Warrant Shares shall be qualified
for listing on the NYSE MKT and the TSX to the extent that such Conversion
Shares and Warrant Shares, in aggregate, amount to 19.9% of the outstanding
Common Stock of the Company as of the date of this Agreement (the “Cap Amount”)
with the remainder of such Conversion Shares and Warrant Shares to be qualified
for listing on the NYSE MKT and the TSX upon stockholder approval thereof.

 

(c)           The Company shall have entered into Subscription Agreements with
each of the Purchasers and such agreements shall be in full force and effect.

 

(d)           FINRA shall have raised no objection to the fairness and
reasonableness of the underwriting terms and arrangements.

 

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(e)           The Placement Agent shall not have reasonably determined, and
advised the Company, that the Registration Statement, the Time of Sale
Disclosure Package or the Prospectus, or any amendment thereof or supplement
thereto, or any Issuer Free Writing Prospectus, contains an untrue statement of
fact which, in the Placement Agent’s reasonable opinion, is material, or omits
to state a fact which, in the Placement Agent’s reasonable opinion, is material
and is required to be stated therein or necessary to make the statements therein
not misleading.

 

(f)            On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded any of the Company’s securities by any
“nationally recognized statistical organization,” as that term is defined by the
Commission for purposes of Rule 436(g)(2) under the Securities Act, and (ii) no
such organization shall have publicly announced that it has under surveillance
or review, with possible negative implications, its rating of any of the
Company’s securities.

 

(f)            On the Closing Date, there shall have been furnished to the
Placement Agent (i) the opinion and negative assurance letter of Davis Graham &
Stubbs LLP, outside corporate counsel for the Company, (ii) the opinion of
Patrick J. Kirby Law Office PLLC, Washington counsel for the Company and
(iii) the opinion of Hawley Troxell Ennis & Hawley LLP, Idaho counsel for the
Company, each dated the Closing Date, and addressed to the Placement Agent, in
form and substance reasonably satisfactory to the Placement Agent, substantially
to the effect set forth in Schedule IV.

 

(g)           On the Closing Date, there shall have been furnished to the
Placement Agent the negative assurance letter of Lowenstein Sandler LLP, counsel
to the Placement Agent, dated the Closing Date, and addressed to the Placement
Agent, in form and substance reasonably satisfactory to the Placement Agent.

 

(h)           The Placement Agent shall have received a letter of Tanner LLC, on
the date hereof, on the Closing Date, addressed to the Placement Agent,
confirming that they are independent public accountants within the meaning of
the Securities Act and are in compliance with the applicable requirements
relating to the qualifications of accountants under Rule 2-01 of Regulation S-X
of the Commission, and confirming, as of the date of each such letter (or, with
respect to matters involving changes or developments since the respective dates
as of which specified financial information is given in the Time of Sale
Disclosure Package, as of a date not prior to the date hereof or more than five
days prior to the date of such letter), the conclusions and findings of said
firm with respect to the financial information and other matters required by the
Placement Agent.

 

(i)            On the Closing Date, there shall have been furnished to the
Placement Agent a certificate, dated the Closing Date, and addressed to the
Placement Agent, signed by the chief executive officer and the principal
financial officer of the Company, in their capacity as officers of the Company,
to the effect that:

 

(i)            The representations and warranties of the Company in this
Agreement that are qualified by materiality or by reference to any Material
Adverse Effect are true and correct in all respects, and all other
representations

 

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and warranties of the Company in this Agreement are true and correct, in all
material respects, as if made at and as of the Closing 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 the Closing Date;

 

(ii)           No stop order or other order (A) suspending the effectiveness of
the Registration Statement or any part thereof or any amendment thereof,
(B) suspending the qualification of the Securities for offering or sale, or
(C) suspending or preventing the use of the Time of Sale Disclosure Package, the
Prospectus or any Issuer Free Writing Prospectus, has been issued, and no
proceeding for that purpose has been instituted or, to their knowledge, is
contemplated by the Commission or any state or regulatory body; and

 

(c)           There has been no occurrence of any event resulting or reasonably
likely to result in a Material Adverse Effect during the period from and after
the date of this Agreement and prior to the Closing Date.

 

(j)            On or before the date hereof, the Placement Agent shall have
received duly executed “lock-up” agreements, in a form set forth on Schedule V,
between the Placement Agent and each of the executive officers and directors of
the Company specified in Schedule VI.

 

(k)           The Company shall have filed the Certificate of Designation with
the Secretary of State of the State of Idaho.

 

(l)            The Company shall have furnished to the Placement Agent and its
counsel such additional documents, certificates and evidence as the Placement
Agent or its counsel may have reasonably requested.

 

If any condition specified in this Section 6 shall not have been fulfilled when
and as required to be fulfilled, this Agreement may be terminated by the
Placement Agent by notice to the Company at any time at or prior to the Closing
Date, and such termination shall be without liability of any party to any other
party, except that Section 5(a)(viii), Section 7 and Section 8 shall survive any
such termination and remain in full force and effect.

 

7.                                      Indemnification and Contribution.

 

(a)           The Company agrees to indemnify, defend and hold harmless the
Placement Agent, its affiliates, directors and officers and employees, and each
person, if any, who controls the Placement Agent within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act, from and
against any losses, claims, damages or liabilities to which the Placement Agent
or such person may become subject, under the Securities Act or otherwise
(including in settlement of any litigation if such settlement is effected with
the written consent of the Company), insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon
(i) an untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, including the information deemed to be a part of
the Registration Statement at the time of effectiveness and at any subsequent
time pursuant to Rules 430A and 430B of the Rules and Regulations, or arise out
of or are based upon the omission from the Registration Statement, or alleged
omission to state therein, a material fact

 

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required to be stated therein or necessary to make the statements therein not
misleading, (ii) an untrue statement or alleged untrue statement of a material
fact contained in the Time of Sale Disclosure Package, the Prospectus, or any
amendment or supplement thereto (including any documents filed under the
Exchange Act and deemed to be incorporated by reference into the Registration
Statement or the Prospectus), any Issuer Free Writing Prospectus or the
Marketing Materials or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading, (iii) in whole or in part, any inaccuracy
in the representations and warranties of the Company contained herein or in the
Subscription Agreements, or (iv) in whole or in part, any failure of the Company
to perform its obligations hereunder, under the Subscription Agreements or under
law, and will reimburse the Placement Agent for any legal or other expenses
reasonably incurred by it in connection with evaluating, investigating or
defending against such loss, claim, damage, liability or action; provided,
however, that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of or is based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in the Registration Statement, the Time of Sale Disclosure
Package, the Prospectus, or any amendment or supplement thereto or any Issuer
Free Writing Prospectus, in reliance upon and in conformity with written
information furnished to the Company by the Placement Agent specifically for use
in the preparation thereof, which written information is described in
Section 7(f).

 

(b)           The Placement Agent will indemnify, defend and hold harmless the
Company, its affiliates, directors, officers and employees, and each person, if
any, who controls the Company within the meaning of Section 15 of the Securities
Act or Section 20 of the Exchange Act, from and against any losses, claims,
damages or liabilities to which the Company may become subject, under the
Securities Act or otherwise (including in settlement of any litigation, if such
settlement is effected with the written consent of the Placement Agent), insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon an untrue statement or alleged untrue statement
of a material fact contained in the Registration Statement, the Time of Sale
Disclosure Package, the Prospectus, or any amendment or supplement thereto or
any Issuer Free Writing Prospectus, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in the
Registration Statement, the Time of Sale Disclosure Package, the Prospectus, or
any amendment or supplement thereto or any Issuer Free Writing Prospectus in
reliance upon and in conformity with written information furnished to the
Company by the Placement Agent specifically for use in the preparation thereof,
and will reimburse the Company for any legal or other expenses reasonably
incurred by the Company in connection with defending against any such loss,
claim, damage, liability or action.

 

(c)           Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the failure to notify the indemnifying
party shall not relieve the indemnifying party from any liability that it may
have to any indemnified party except to the extent such indemnifying party has
been materially

 

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prejudiced by such failure.  In case any such action shall be brought against
any indemnified party, and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
in, and, to the extent that it shall wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party, and after notice from the indemnifying
party to such indemnified party of the indemnifying party’s election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal or other expenses
subsequently incurred by such indemnified party in connection with the defense
thereof; provided, however, that if (i) the indemnified party has reasonably
concluded (based on advice of counsel) that there may be legal defenses
available to it or other indemnified parties that are different from or in
addition to those available to the indemnifying party, (ii) a conflict or
potential conflict exists (based on advice of counsel to the indemnified party)
between the indemnified party and the indemnifying party (in which case the
indemnifying party will not have the right to direct the defense of such action
on behalf of the indemnified party), or (iii) the indemnifying party has not in
fact employed counsel reasonably satisfactory to the indemnified party to assume
the defense of such action within a reasonable time after receiving notice of
the commencement of the action, the indemnified party shall have the right to
employ a single counsel to represent it in any claim in respect of which
indemnity may be sought under subsection (a) or (b) of this Section 7, in which
event the reasonable fees and expenses of such separate counsel shall be borne
by the indemnifying party or parties and reimbursed to the indemnified party as
incurred.

 

The indemnifying party under this Section 7 shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party against any loss,
claim, damage, liability or expense by reason of such settlement or judgment. 
No indemnifying party shall, without the prior written consent of the
indemnified party, effect any settlement, compromise or consent to the entry of
judgment in any pending or threatened action, suit or proceeding in respect of
which any indemnified party is a party or could be named and indemnity was or
would be sought hereunder by such indemnified party, unless such settlement,
compromise or consent (a) includes an unconditional release of such indemnified
party from all liability for claims that are the subject matter of such action,
suit or proceeding and (b) does not include a statement as to or an admission of
fault, culpability or a failure to act by or on behalf of any indemnified party.

 

(d)           If the indemnification provided for in this Section 7 is
unavailable or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above, then each indemnifying party shall contribute to
the amount paid or payable by such indemnified party as a result of the losses,
claims, damages or liabilities referred to in subsection (a) or (b) above,
(i) in such proportion as is appropriate to reflect the relative benefits
received by the Company on the one hand and the Placement Agent on the other
from the offering and sale of the Securities or (ii) if the allocation provided
by clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause
(i) above but also the relative fault of the Company on the one hand and the
Placement Agent on the other in connection with the statements or omissions that
resulted in such losses, claims, damages or liabilities, as well as any other
relevant equitable considerations.  The relative benefits received by the
Company on the one hand and the Placement Agent on the other shall be deemed to
be in

 

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the same proportion as the total net proceeds from the offering (before
deducting expenses) received by the Company bear to the total fees and
commissions received by the Placement Agent, in each case as set forth in the
table on the cover page of the Final Prospectus.  The relative fault shall be
determined by reference to, among other things, whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information supplied by the Company or the Placement
Agent and the parties’ relevant intent, knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission.  The
Company and the Placement Agent agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were to be determined by pro rata
allocation or by any other method of allocation that does not take account of
the equitable considerations referred to in the first sentence of this
subsection (d).  The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
against any action or claim that is the subject of this subsection (d). 
Notwithstanding the provisions of this subsection (d), the Placement Agent shall
not be required to contribute any amount in excess of the amount of the
Placement Agent’s commissions referenced in Section 4(a) actually received by
the Placement Agent pursuant to this Agreement.  No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.

 

(e)           The obligations of the Company under this Section 7 shall be in
addition to any liability that the Company may otherwise have and the benefits
of such obligations shall extend, upon the same terms and conditions, to each
person, if any, who controls the Placement Agent within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act; and the
obligations of the Placement Agent under this Section 7 shall be in addition to
any liability that the Placement Agent may otherwise have and the benefits of
such obligations shall extend, upon the same terms and conditions, to the
Company, and its officers, directors and each person who controls the Company
within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act.

 

(f)            For purposes of this Agreement, the Placement Agent confirms, and
the Company acknowledges, that there is no information concerning the Placement
Agent furnished in writing to the Company by the Placement Agent specifically
for preparation of or inclusion in the Registration Statement, the Time of Sale
Disclosure Package, the Prospectus or any Issuer Free Writing Prospectus, other
than the statements set forth in the “Plan of Distribution” section of the
Prospectus and Time of Sale Disclosure Package under the subheadings “Regulation
M Restrictions” .

 

8.             Representations and Agreements to Survive Delivery.  All
representations, warranties, and agreements of the Company herein or in
certificates delivered pursuant hereto, including, but not limited to, the
agreements of the Placement Agent and the Company contained in
Section 5(a)(viii) and Section 7 hereof, shall remain operative and in full
force and effect regardless of any investigation made by or on behalf of the
Placement Agent or any controlling person thereof, or the Company or any of its
officers, directors, or controlling persons, and shall survive delivery of, and
payment for, the Securities to and by the Placement Agent hereunder.

 

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9.                                      Termination of this Agreement.

 

(a)           The Placement Agent shall have the right to terminate this
Agreement by giving notice to the Company as hereinafter specified at any time
at or prior to the Closing Date, if in the discretion of the Placement Agent,
(i) there has occurred any material adverse change in the securities markets or
any event, act or occurrence that has materially disrupted, or in the opinion of
the Placement Agent, will in the future materially disrupt, the securities
markets or there shall be such a material adverse change in general financial,
political or economic conditions or the effect of international conditions on
the financial markets in the United States is such as to make it, in the
judgment of the Placement Agent, inadvisable or impracticable to market the
Securities or enforce contracts for the sale of the Securities, (ii) trading in
the Company’s Common Stock shall have been suspended by the Commission or the
NYSE MKT or the TSX or trading in securities generally on the NASDAQ Global
Market, New York Stock Exchange, NYSE MKT or TSX shall have been suspended,
(iii) minimum or maximum prices for trading shall have been fixed, or maximum
ranges for prices for securities shall have been required, on the NASDAQ Global
Market, New York Stock Exchange, NYSE MKT or TSX, by such exchange or by order
of the Commission or any other governmental authority having jurisdiction,
(iv) a banking moratorium shall have been declared by federal or state
authorities, (v) there shall have occurred any attack on, outbreak or escalation
of hostilities or act of terrorism involving the United States, any declaration
by the United States of a national emergency or war, any substantial change or
development involving a prospective substantial change in United States or
international political, financial or economic conditions or any other calamity
or crisis, (vi) the Company suffers any material loss by strike, fire, flood,
earthquake, accident or other calamity, whether or not covered by insurance,
(vii) in the judgment of the Placement Agent, there has been, since the time of
execution of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
assets, properties, condition, financial or otherwise, or in the results of
operations, business affairs or business prospects of the Company and its
subsidiaries considered as a whole, whether or not arising in the ordinary
course of business, or (viii) the Purchasers shall decline to purchase the
Securities for any reason permitted under this Agreement or the Subscription
Agreements.  Any such termination shall be without liability of any party to any
other party except that the provisions of Section 5(a)(viii) and Section 7
hereof shall at all times be effective and shall survive such termination.

 

(b)           If the Placement Agent elects to terminate this Agreement as
provided in this Section, the Company shall be notified promptly by the
Placement Agent by telephone, confirmed by letter.

 

10.          Notices.  Except as otherwise provided herein, all communications
hereunder shall be in writing and, if to the Placement Agent, shall be mailed,
delivered or telecopied to Roth Capital Partners, LLC, 888 San Clemente Drive,
Newport Beach, California, 92660, telecopy number: (949) 720-7227, Attention: 
Managing Director; and if to the Company, shall be mailed, delivered or
telecopied to it at Mines Management, Inc., 905 W. Riverside Avenue, Suite 311,
Spokane, Washington, 99201, telecopy number: (509) 838-0486, Attention: Glenn M.
Dobbs; or in each case to such other address as the person to be notified may
have requested in writing.  Any party to this Agreement may change such address
for notices by sending to the parties to this Agreement written notice of a new
address for such purpose.

 

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11.          Persons Entitled to Benefit of Agreement.  This Agreement shall
inure to the benefit of and be binding upon the parties hereto and their
respective successors and assigns and the controlling persons, officers and
directors referred to in Section 7.  Nothing in this Agreement is intended or
shall be construed to give to any other person, firm or corporation any legal or
equitable remedy or claim under or in respect of this Agreement or any provision
herein contained.

 

12.          Absence of Fiduciary Relationship.  The Company acknowledges and
agrees that: (a) the Placement Agent has been retained solely to act as the
placement agent in connection with the Offering and no fiduciary, advisory or
agency relationship between the Company and the Placement Agent has been created
in respect of any of the transactions contemplated by this Agreement,
irrespective of whether the Placement Agent has advised or is advising the
Company on other matters; (b) the price and other terms of the Securities set
forth in this Agreement were established by the Company following discussions
and arms-length negotiations with the Placement Agent and the Company is capable
of evaluating and understanding and understands and accepts the terms, risks and
conditions of the transactions contemplated by this Agreement; (c) it has been
advised that the Placement Agent and its affiliates are engaged in a broad range
of transactions that may involve interests that differ from those of the Company
and that the Placement Agent does not have any obligation to disclose such
interest and transactions to the Company by virtue of any fiduciary, advisory or
agency relationship; (d) it has been advised that the Placement Agent is acting,
in respect of the transactions contemplated by this Agreement, solely for the
benefit of the Placement Agent, and not on behalf of the Company.

 

13.          Amendments and Waivers.  No supplement, modification or waiver of
this Agreement shall be binding unless executed in writing by the party to be
bound thereby.  The failure of a party to exercise any right or remedy shall not
be deemed or constitute a waiver of such right or remedy in the future.  No
waiver of any of the provisions of this Agreement shall be deemed or shall
constitute a waiver of any other provision hereof (regardless of whether
similar), nor shall any such waiver be deemed or constitute a continuing waiver
unless otherwise expressly provided.

 

14.          Partial Unenforceability.  The invalidity or unenforceability of
any section, paragraph, clause or provision of this Agreement shall not affect
the validity or enforceability of any other section, paragraph, clause or
provision.

 

15.          Governing Law.  This Agreement shall be governed by and construed
in accordance with the laws of the State of New York.

 

16.          Submission to Jurisdiction.  The Company irrevocably (a) submits to
the jurisdiction of any court of the State of California for the purpose of any
suit, action, or other proceeding arising out of this Agreement, or any of the
agreements or transactions contemplated by this Agreement, the Registration
Statement and the Prospectus (each a “Proceeding”), (b) agrees that all claims
in respect of any Proceeding may be heard and determined in any such court,
(c) waives, to the fullest extent permitted by law, any immunity from
jurisdiction of any such court or from any legal process therein, (d) agrees not
to commence any Proceeding other than in such courts, and (e) waives, to the
fullest extent permitted by law, any claim that such Proceeding is brought in an
inconvenient forum.  EACH OF THE COMPANY (ON BEHALF

 

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OF ITSELF AND, TO THE FULLEST EXTENT PERMITTED BY LAW, ON BEHALF OF ITS
RESPECTIVE EQUITY HOLDERS AND CREDITORS) HEREBY WAIVES ANY RIGHT IT MAY HAVE TO
A TRIAL BY JURY IN RESPECT OF ANY CLAIM BASED UPON, ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS
AGREEMENT, THE REGISTRATION STATEMENT, AND THE PROSPECTUS.

 

17.          Counterparts.  This Agreement may be executed in one or more
counterparts and, if executed in more than one counterpart, the executed
counterparts shall each be deemed to be an original and all such counterparts
shall together constitute one and the same instrument.

 

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Please sign and return to the Company the enclosed duplicates of this letter
whereupon this letter will become a binding agreement between the Company and
the Placement Agent in accordance with its terms.

 

 

Very truly yours,

 

 

 

MINES MANAGEMENT, INC.

 

 

 

 

 

By:

/s/ Douglas Dobbs

 

Name:

Douglas Dobbs

 

Title:

President

 

 

 

 

 

 

Confirmed as of the date first above-

 

 

mentioned by the Placement Agent

 

 

 

 

 

ROTH CAPITAL PARTNERS, LLC

 

 

 

 

 

 

 

 

By:

/s/ Aaron Gurewitz

 

 

Name:

Aaron Gurewitz

 

 

Title:

Head of Equity Capital Markets

 

 

 

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