Exhibit 10.1

 

SUBSCRIPTION AGREEMENT

 

This Subscription Agreement (this “Agreement”) is made and entered into this
13th day of March, 2018, by and between International Tower Hill Mines Ltd., a
company organized under the laws of the Province of British Columbia (the
“Corporation”), and the purchaser set forth on the signature page hereof (the
“Purchaser”).

 

Recitals:

 

A.       The Corporation desires to sell an aggregate of 24,000,000 common
shares without par value in its capital stock (the “Common Shares”) in a private
placement offering (the “Private Placement”).

 

B.       Pursuant to terms and conditions set forth in this Agreement, the
Purchaser desires to irrevocably subscribe for the number of Common Shares set
forth on the signature page hereto.

 

C.       The Common Shares subscribed for pursuant to this Agreement have not
been registered under the Securities Act of 1933, as amended (the “Securities
Act”), and the Corporation is offering Common Shares only to “accredited
investors” (as defined in Rule 501 of Regulation D under the Securities Act) in
reliance upon the exemption from securities registration afforded by Section
4(a)(2) of the Securities Act.

 

Agreement:

 

In consideration of the mutual covenants and agreements set forth herein and for
good and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, the parties hereby agree as follows:

 

1.       Subscription.

 

(a)       Subject to the terms and conditions hereof, the undersigned Purchaser
hereby irrevocably subscribes for and agrees to purchase, and the Corporation
agrees to sell and issue to such Purchaser, that number of Common Shares set
forth on the signature page hereto (the “Purchased Securities”), at a
subscription price equal to US$0.50 per Common Share, for an aggregate purchase
price as set forth on the signature page hereto (the aggregate purchase price,
the “Purchase Price”).

 

(b)       The Purchaser acknowledges that the Purchased Securities will be
subject to certain restrictions on transfer. The Purchaser further acknowledges
that the Private Placement is being made without registration of the Purchased
Securities under the Securities Act or any securities law of any state of the
United States or of any other jurisdiction.

 

(c)       Subject to the terms and conditions hereof, the issue of the Purchased
Securities will not restrict or prevent the Corporation from obtaining any other
financing, or from issuing additional securities, options, warrants or rights.

 

2.       The Closing. The closing of the purchase and sale of the Purchased
Securities (the “Closing”) shall take place on the date hereof at the offices of
the Corporation, Suite 2300, 1177 West Hastings Street, Vancouver, British
Columbia V6E 2K3, or at such other time and place as the Corporation and
Purchaser may agree.

 

3.       Payment for Securities. Payment for the Purchased Securities shall be
in United States dollars, in an amount equal to US$0.50 per Common Share
multiplied by the number of Purchased Securities, and received by the
Corporation from the Purchaser by wire transfer of immediately available funds
to an account specified by the Corporation in writing at or prior to the
Closing, in the amount of the aggregate Purchase Price set forth on the
signature page hereto. As soon as reasonably practical following the Closing,
the Corporation shall deliver certificates representing the Purchased Securities
and bearing the legend referred to in Section 7 of this Agreement to the
Purchaser’s custodian at the address set forth on the signature page hereto.

 

 

 

  

4.       Representations and Warranties of the Corporation. The Corporation
represents, warrants, covenants and certifies to and with the Purchaser that, as
of the date of this Agreement and at the Closing:

 

(a)       The Corporation is a valid and subsisting company incorporated and in
good standing under the laws of the Province of British Columbia with full power
and authority to own or lease its properties, as the case may be, and to conduct
its business, and each of the Corporation’s subsidiaries is a valid and
subsisting corporation organized and in good standing under the laws of its
respective jurisdiction of organization.

 

(b)       This Agreement has been or will be at the Closing duly authorized by
all necessary corporate action on the part of the Corporation, and the
Corporation has full corporate power and authority to undertake the Private
Placement and to issue, sell and deliver the Purchased Securities.

 

(c)       Upon issuance of the Purchased Securities pursuant to the terms of
this Agreement, such Purchased Securities will be validly issued, fully paid and
non-assessable and free from all preemptive or similar rights, taxes, liens, and
charges with respect to the issue thereof, with the holders being entitled to
all rights accorded to a holder of Common Shares.

 

(d)       The Corporation and each of its subsidiaries is duly registered and
licensed to carry on business in each jurisdiction in which it carries on
business or owns property where required under the laws of that jurisdiction,
except for those jurisdictions where the failure to be so registered and
licensed would not have a material adverse effect on the business, prospects,
properties or operations of the Corporation and its subsidiaries, taken as a
whole.

 

(e)       All annual and quarterly reports, financial statements, proxy
statements/information circulars, press releases, material change reports and
other documents filed by or on behalf of the Corporation within the past 12
months (the “Disclosure Record”) with The Toronto Stock Exchange (the “TSX”) and
the NYSE American LLC (together with the TSX, the “Exchanges”) and any
regulatory authority in the United States and such other jurisdictions as may be
agreed to by the Corporation, including, without limitation, the securities
regulator in the Provinces of British Columbia, Alberta and Ontario (the
“Canadian Securities Regulators”) and the U.S. Securities and Exchange
Commission (the “SEC” and, together with the Canadian Securities Regulators,
the “Commissions”) were true and correct in all material respects and did not
contain any misrepresentation (as defined in the Securities Act (British
Columbia)) as at the respective dates of such filings. There is not presently
any material change, as defined in the Securities Laws, relating to the
Corporation or change in any material fact, as defined in the Securities Laws,
relating to any of the Purchased Securities, which has not been fully disclosed
in accordance with the requirements of the Securities Laws and the policies of
the Exchanges. The Corporation has no liabilities, obligations or commitments of
any nature whatsoever, asserted or unasserted, known or unknown, absolute or
contingent, accrued or unaccrued, matured or unmatured or otherwise, except (i)
those which are adequately reflected or reserved against in the balance sheet as
of September 30, 2017 (the “Balance Sheet Date”) and included in the
Corporation’s Quarterly Report on Form 10-Q filed with the SEC on November 6,
2017, and (ii) those which have been incurred in the ordinary course of business
consistent with past practice since the Balance Sheet Date and which are not,
individually or in the aggregate, material in amount. Except as set forth in the
Disclosure Record, there is no transaction, arrangement or other relationship
between the Corporation and an unconsolidated or other off balance sheet entity
that is required to be disclosed by the Corporation in its filings under the
Securities and Exchange Act of 1934, as amended (the “Exchange Act”), and is not
so disclosed.

 

2 

 

  

(f)       Except as qualified by the disclosure in the Disclosure Record, the
Corporation is the beneficial owner of the properties, business and assets or
the interests in the properties, business or assets referred to in the
Disclosure Record as being beneficially owned by the Corporation. The
Corporation and each of its subsidiaries is in all material respects conducting
its business in material compliance with all applicable laws, rules and
regulations of each jurisdiction in which its business is carried on.

 

(g)       Subject to the representations, warranties and certifications of the
Purchaser herein contained being accurate and truthful in all material respects
and the Purchaser fulfilling all of its covenants and obligations herein
contained, the Corporation has complied and will comply fully with the
requirements of all applicable corporate and securities laws and administrative
policies and directions, including, without limitation, the securities
legislation and regulations of, and the instruments, policies, rules, orders,
codes, notices and interpretation notes of, each of the Commissions
(collectively, and together with any state securities laws and the Securities
Act, the “Securities Laws”) and the Business Corporations Act (British Columbia)
in relation to the Private Placement.

 

(h)       The issue and sale of the Purchased Securities by the Corporation does
not and will not conflict with, and does not and will not (including, without
limitation, with the giving of notice, the lapse of time or the happening of any
other event or condition or any combination of the foregoing) result in a
material breach of, any of the terms of the Corporation’s constating documents
or any material agreement or instrument to which the Corporation is a party or
by which it is bound.

 

(i)       The issue and sale of the Purchased Securities by the Corporation
qualifies as an “Exempt Acquisition” under the Amended & Restated Shareholder
Rights Plan Agreement dated August 26, 2009 (as amended and restated on
September 19, 2012) among the Corporation and Computershare Investor Services
Inc.

 

(j)       The authorized capital of the Corporation consists of 500,000,000
Common Shares without par value, of which, immediately prior to the Closing,
162,392,996 Common Shares are issued and outstanding. Except as provided in the
Disclosure Record, no person has any right, agreement or option, present or
future, contingent or absolute, or any right capable of becoming such a right,
agreement or option, for the issue or allotment of any unissued shares in the
capital of the Corporation, or any other security convertible into or
exchangeable for any such shares, or to require the Corporation to purchase,
redeem or otherwise acquire any of the issued and outstanding shares in its
capital.

 

(k)       The Purchased Securities, when issued, sold, and delivered in
accordance with the terms of this Agreement for the consideration expressed
herein, will be validly issued and outstanding.

 

(l)       No person, firm or corporation has, or will have, as a result of any
action taken by the Corporation or any of its representatives, in the context of
the transaction specifically contemplated by this Agreement, any rights,
interest or valid claim against or upon the Corporation or the Purchaser for any
commission, fee or other compensation as a finder or broker or in any similar
capacity.

 

(m)       No approval, authorization, consent or other order of, and no filing,
registration or recording with, any governmental authority is required to be
obtained or made by the Corporation in connection with the execution and
delivery by the Corporation of this Agreement or the performance by the
Corporation of its obligations hereunder, except such approvals, authorizations,
consents, orders, filing, registrations or recordings required under the
Securities Laws and the rules of the Exchanges, which shall be obtained or made
by the Corporation prior to the Closing or otherwise within the periods
prescribed thereunder.

 

3 

 

  

(n)       The Corporation has not relied upon the Purchaser for investment,
legal or tax advice, or other professional advice, and has in all cases sought
or elected not to seek the advice of its own personal investment advisers, legal
counsel and tax advisers.

 

(o)       The Corporation acknowledges (i) that the Purchaser has not been asked
by the Corporation to agree, nor has the Purchaser agreed with the Corporation,
to desist from purchasing or selling, long and/or short, securities of the
Corporation, or “derivative” securities based on securities issued by the
Corporation or to hold the Purchased Securities for any specified term, and (ii)
that the Purchaser, and counter parties in “derivative” transactions to which
the Purchaser is a party, directly or indirectly, presently may have a “short”
position in the Common Shares which were established prior to the Purchaser’s
knowledge of the transactions contemplated by this Agreement. The Corporation
further understands and acknowledges that following the public disclosure of the
transactions contemplated by this Agreement, the Purchaser may engage in hedging
and/or trading activities at various times during the period that the Purchased
Securities are outstanding, and that such hedging and/or trading activities, if
any, can reduce the value of the existing shareholders’ equity interest in the
Corporation both at and after the time the hedging and/or trading activities are
being conducted.

 

(p)       The Corporation has not disclosed to the Purchaser or any of its
officers, directors, employees, affiliates, representatives or agents any
material information, which has not been generally disclosed to the public,
regarding the Corporation or its subsidiaries or affiliates in connection with
the transactions contemplated by this Agreement.

 

(q)       No “bad actor” disqualifying event described in Rule
506(d)(1)(i)-(viii) of the Securities Act (a “Disqualification Event”) is
applicable to the Corporation or, to the Corporation’s knowledge, any person
having a relationship with the Corporation listed in the first paragraph of Rule
506(d)(1), except for a Disqualification Event as to which Rule 506(d)(2)(ii–iv)
or (d)(3), is applicable.

 

(r)       The Corporation has filed all technical reports as required by
National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI
43-101”), and all such reports have been prepared in material compliance with
the requirements of NI 43-101. In addition, with respect to each press release
issued, and any other documents filed, by or on behalf of the Corporation in
respect of which any requirements of NI 43-101 applied, each such press release
and document also complied in all material respects as to form, substance and
otherwise with the requirements of NI 43-101.

 

(s)       None of the Corporation, its subsidiaries or any of their respective
officers, directors or employees acting on behalf of the Corporation or any of
its subsidiaries has taken, committed to take or been alleged to have taken any
action which would cause the Corporation or any of its subsidiaries to be in
violation of the Corruption of Foreign Public Officials Act (Canada) and the
Foreign Corrupt Practices Act of 1977, as amended (and, in each case, the
regulations promulgated thereunder), or any applicable law of similar effect of
another jurisdiction, and to the knowledge of the Corporation no such action has
been taken by any of its agents, representatives or other Persons acting on
behalf of the Corporation or any of its subsidiaries. The operations of the
Corporation and its subsidiaries are and have been conducted at all times in
compliance with applicable financial recordkeeping and reporting requirements of
the Currency and Foreign Transactions Reporting Act of 1970, as amended, the
money laundering statutes of all jurisdictions, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any governmental agency (collectively, the “Money
Laundering Laws”) and no action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving the Issuers,
the Guarantors or any of their respective subsidiaries with respect to the Money
Laundering Laws is pending or, to the knowledge of the Corporation, threatened.

 

(t)       Except as disclosed in the Disclosure Record, as of the date hereof,
none of the officers, directors or employees of the Corporation or any
subsidiary thereof is a party to any transaction with the Corporation or any
subsidiary thereof (other than for ordinary course services as employees,
officers or directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
such officer, director or employee or any corporation, partnership, trust or
other entity in which any such officer, director or employee has a substantial
interest or is an officer, director, trustee or partner.

 

4 

 

  

(u)       The Corporation has its property and assets insured against loss or
damage by insurable hazards or risks on a basis consistent with insurance
obtained by reasonably prudent participants in comparable businesses. Such
insurance coverage is of a type and in an amount typical to the business in
which each of the Corporation and its subsidiaries operates as conducted by a
reasonably prudent Person, based on the advice of insurance brokers consulted by
the Corporation and its subsidiaries. Each of the Corporation and its
subsidiaries has not made any material claim on any policy of insurance or been
refused any insurance coverage sought or applied for. Each of the Corporation
and its subsidiaries 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 be reasonably expected to have a material
adverse effect on the Corporation’s business.

 

(v)       The Corporation has filed in a timely manner all necessary tax returns
and notices and has paid all applicable taxes of whatsoever nature for all tax
years prior to the date hereof to the extent that such taxes have become due or
have been alleged by the Canada Revenue Agency, the United States Internal
Revenue Service or any other taxation authority to be due. There are no
agreements, waivers or other arrangements providing for an extension of time
with respect to the filing of any tax return by the Corporation or the payment
of any material tax, governmental charge, penalty, interest or fine against the
Corporation. The Corporation has no liability for taxes except those arising in
the ordinary course of its business. There are no material actions, suits,
proceedings, audits, investigations or claims in progress, now threatened or
pending against the Corporation which could result in a material liability in
respect of taxes, charges or levies of any governmental authority, penalties,
interest, fines, assessments or reassessments or any matters under discussion
with any governmental authority relating to taxes, governmental charges,
penalties, interest, fines, assessments or reassessments asserted by any such
authority.

 

(w)       The Corporation and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management’s general or specific
authorizations, (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset and liability accountability, (iii)
access to assets or incurrence of liabilities is permitted only in accordance
with management’s general or specific authorization and (iv) the recorded
accountability for assets and liabilities is compared with the existing assets
and liabilities at reasonable intervals and appropriate action is taken with
respect to any difference. The Corporation maintains disclosure controls and
procedures (as such term is defined in Rule 13a-15 under the Exchange Act) that
are effective in ensuring that information required to be disclosed by the
Corporation in the reports that it files or submits under the Exchange Act is
recorded, processed, summarized and reported within the time periods specified
in the applicable rules and forms of the SEC, including controls and procedures
designed to ensure that information required to be disclosed by the Corporation
in the reports that it files or submits under the Exchange Act is accumulated
and communicated to the Corporation’s management, including its principal
executive officer or officers and its principal financial officer or officers,
as appropriate, to allow timely decisions regarding required disclosure. Except
as disclosed in the Disclosure Record, during the twelve months prior to the
date hereof neither the Corporation nor any of its subsidiaries has received any
notice or correspondence from any accountant relating to any material weakness
in any part of the system of internal accounting controls of the Corporation or
any of its subsidiaries.

 

5 

 

  

(x)       The Corporation and each of its subsidiaries has good and marketable
title (or in the case of leased or optioned properties and assets, good and
marketable leasehold or optioned interests) to all real and personal properties
material to its business.

 

(y)       Neither the Corporation nor any of its subsidiaries has and, to the
Corporation’s knowledge, no person acting on its or their behalf has (i) taken,
directly or indirectly, any action designed to cause or to result in the
stabilization or manipulation of the price of any security of the Corporation to
facilitate the sale or resale of the Common Shares, (ii) sold, bid for,
purchased, or paid any compensation for soliciting purchases of, any of the
Common Shares, or (iii) paid or agreed to pay to any person any compensation for
soliciting another to purchase any other securities of the Corporation.

 

5.       Representations and Warranties of the Purchaser. The Purchaser,
severally and not jointly with any other purchaser of Common Shares, represents,
warrants, covenants and certifies to and with the Corporation that, as of the
date of this Agreement and at the Closing:

 

(a)       The Purchaser acknowledges that the Corporation is relying on
exemptions from the requirements under the Securities Laws to provide the
Purchaser with a prospectus or registration statement and no prospectus or
registration statement has been filed by the Corporation with any of the
Commissions in connection with the issuance of the Purchased Securities, and
that the Corporation is relying in part upon the truth and accuracy of, and such
Purchaser’s compliance with, the representations, warranties, agreements,
acknowledgments and understandings of such Purchaser set forth herein in order
to determine the availability of such exemptions and the eligibility of such
Purchaser to acquire the Purchased Securities and, as a consequence, the
Purchaser may not receive information that would otherwise be required to be
provided to the Purchaser under the Securities Laws.

 

(b)       The Purchaser has the knowledge and experience in financial and
business matters necessary to evaluate the merits and risks of its prospective
investment in the Corporation, and has carefully reviewed and understands the
risks of, and other considerations relating to, the purchase of the Purchased
Securities and the tax consequences of the investment and has the ability to
bear the economic risks of the investment. The Purchaser can afford the loss of
its entire investment.

 

(c)       The Corporation has advised the Purchaser that no agency, stock
exchange or governmental agency, securities commission or similar regulatory
authority or other entity has reviewed or passed on or made any finding or
determination as to the merits of or made any recommendation or endorsement with
respect to the Purchased Securities.

 

(d)       The Purchaser is acquiring the Purchased Securities for investment for
its own account and not with the view to, or for resale in connection with, any
distribution thereof. The Purchaser understands and acknowledges that the
Private Placement and sale of the Purchased Securities have not been registered
under the Securities Act or the securities laws of any state or other
jurisdiction, by reason of a specific exemption from the registration provisions
of the Securities Act and applicable state securities laws, which depends upon,
among other things, the bona fide nature of the investment intent as expressed
herein. The Purchaser further represents that it does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to any third person with respect to any of the Purchased
Securities. The Purchaser understands and acknowledges that the Private
Placement of the Purchased Securities will not be registered under the
Securities Act nor under the securities laws of any state or other jurisdiction
on the ground that the sale of the Purchased Securities to the Purchaser as
provided for in this Agreement and the issuance of securities hereunder is
exempt from the registration requirements of the Securities Act and any
applicable state or other securities laws. The Purchaser is an “accredited
investor” as defined in Rule 501 of Regulation D as promulgated by the SEC under
the Securities Act, for the reasons specified in the Accredited Investor
Certification provided by the Purchaser as completed by the Purchaser, and
Purchaser shall submit to the Corporation such further assurances of such status
as may be reasonably requested by the Corporation. The Purchaser resides in the
jurisdiction set forth on the signature page attached hereto. The Purchaser has
not taken any of the actions set forth in, and is not subject to, the
disqualification provisions of Rule 506(d)(1) of the Securities Act.

 

6 

 

  

(e)       The Purchaser represents that it (i) was not formed for the specific
purpose of acquiring the Purchased Securities, (ii) is duly organized, validly
existing and in good standing under the laws of the state or jurisdiction of its
organization, and (iii) has full power and authority to execute and deliver this
Agreement and to carry out the provisions hereof and to purchase and hold the
Purchased Securities, and further the Purchaser represents that the consummation
of the transactions contemplated hereby is authorized by, and will not result in
a violation of state law or its charter or other organizational documents. This
Agreement has been duly executed and delivered and, when accepted by the
Corporation, will constitute a legal, valid and binding obligation enforceable
against the Purchaser in accordance with the terms hereof. The execution and
delivery of this Agreement will not violate or be in conflict with any order,
judgment, injunction, agreement or controlling document to which the Purchaser
is a party or by which it is bound.

 

(f)       The Purchaser has received, reviewed and understood the information
about the Corporation, including as set forth in the Disclosure Record, and has
had an opportunity to discuss the Corporation’s business, management and
financial affairs with the Corporation’s management. The Purchaser understands
that such discussions were intended to describe the aspects of the Corporation’s
business and prospects and the Private Placement which the Corporation believes
to be material, but were not necessarily a thorough or exhaustive description,
and except as expressly set forth in this Agreement, the Corporation makes no
representation or warranty with respect to the completeness of such information
and makes no representation or warranty of any kind with respect to any
information provided by any entity other than the Corporation. The Purchaser
acknowledges that it is not relying upon any person or entity, other than the
Corporation and its officers and directors, in making its investment or decision
to invest in the Corporation. The Purchaser has sought such accounting, legal
and tax advice as the Purchaser has considered necessary to make an informed
investment decision with respect to its acquisition of the Purchased Securities.

 

(g)       The Purchaser has been advised to consult its own legal advisors with
respect to the applicable hold periods imposed in respect of the Purchased
Securities by the applicable Securities Laws and confirms that no representation
by the Corporation has been made respecting the hold periods applicable to the
Purchased Securities and the Purchaser is solely responsible (and the
Corporation is not responsible) for compliance with the applicable resale
restrictions.

 

(h)       The Purchaser acknowledges and consents to the fact that the
Corporation is collecting Personal Information of the Purchaser for the purpose
of completing this Agreement. For purposes of this Agreement, “Personal
Information” means any personal information as that term is defined under
applicable privacy legislation, including, without limitation, the Personal
Information Protection and Electronic Documents Act (Canada) and any other
applicable similar, replacement or supplemental provincial or federal
legislation or laws in effect from time to time and without limiting the
foregoing, but for greater clarity in this Agreement, means information about an
identifiable individual, including but not limited to any information about the
Purchaser and includes information provided by the Purchaser in this Agreement.
The Purchaser acknowledges and consents to the Corporation retaining such
Personal Information for as long as permitted or required by law or business
practices, and the Purchaser agrees and acknowledges that the Corporation may
use and disclose such Personal Information exclusively:

 

(i)       for internal use with respect to managing the relationships between
and contractual obligations of the Corporation and the Purchaser;

 

(ii)       for use and disclosure for income tax-related purposes;

 

(iii)       to professional advisers of the Corporation;

 

7 

 

  

(iv)       to securities regulatory authorities and other regulatory bodies with
jurisdiction with respect to reports of trade or similar regulatory filings;

 

(v)       to a governmental or other authority to which the disclosure is
required by court order or subpoena compelling such disclosure and where there
is no reasonable alternative to such disclosure;

 

(vi)       to any person where such disclosure is necessary for legitimate
business reasons and is made with the Purchaser’s prior written consent;

 

(vii)       to a court determining the rights of the parties under this
Agreement; and

 

(viii)       for use and disclosure as otherwise required or permitted by law.

 

In addition, the Purchaser further acknowledges and consents to the fact that
the Corporation may be required to provide any one or more of the Canadian
securities regulators, stock exchanges, the Investment Industry Regulatory
Organization of Canada, other regulatory agencies or the Corporation’s registrar
and transfer agent with any Personal Information provided by the Purchaser in
this Agreement, and may make any other filings of such Personal Information as
the Corporation’s counsel deems appropriate, and the Purchaser acknowledges
receipt of notification of the disclosure of Personal Information by the
Corporation to the Exchanges and the Purchaser hereby consents to and authorizes
the foregoing use and disclosure of such Personal Information and agrees to
provide, on request, all particulars required by the Corporation in order to
comply with the foregoing.

 

(i)       The Purchaser further acknowledges and expressly consents to the
disclosure of Personal Information by the Corporation to the Exchanges and other
applicable regulatory authorities, as required, and the collection, use and
disclosure of Personal Information by the Exchanges for such purposes as may be
identified by the Exchanges from time to time.]

 

(j)       The funds representing the aggregate Purchase Price in respect of the
Purchased Securities which will be advanced by the Purchaser to the Corporation
hereunder will not represent proceeds of crime for the purpose of the Proceeds
of Crime (Money Laundering) and Terrorist Financing Act (Canada) (the “PCMLTF
Act”) or the United States Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism Act (as amended,
the “PATRIOT Act”) and the Purchaser acknowledges that the Corporation may in
the future be required by law to disclose the Purchaser’s name and other
information relating to this Agreement and the Purchaser’s subscription
hereunder, on a confidential basis, pursuant to the PCMLTF Act, PATRIOT Act or
other “know your customer” and anti-money laundering rules and regulations. To
the best of the Purchaser’s knowledge, none of the subscription funds to be
provided hereunder:

 

(i)       have been or will be obtained or derived, directly or indirectly, from
or related to any activity that is deemed illegal under the laws of Canada or
the United States or any other jurisdiction, or

 

(ii)       are being tendered on behalf of a person or entity who has not been
identified to the Purchaser.

 

The Purchaser will promptly notify the Corporation if it discovers that any such
representation ceases to be true and will provide the Corporation with
appropriate information in connection therewith.

 

8 

 

  

(k)       No person has made any written or oral representations to the
Purchaser:

 

(i)       that any Person will resell or repurchase any of the Purchased
Securities;

 

(ii)       that any Person will refund the Purchase Price of any of the
Purchased Securities;

 

(iii)       as to the future price or value of any of the Purchased Securities;
or

 

(iv)       other than as set forth in this Agreement, that any of the Purchased
Securities will be listed and posted for trading on a stock exchange or that
application has been made to list and post any of the Purchased Securities for
trading on a stock exchange.

 

(l)       The Purchaser acknowledges that the Purchaser has not received an
offering memorandum, prospectus or other disclosure document in respect of the
Purchased Securities or the Corporation describing the business and affairs of
the Corporation in order to assist the Purchaser in making an investment
decision in respect of the Purchased Securities, that the Purchaser has had
access to the Corporation’s public filings on the Internet at www.sedar.com and
www.sec.gov and that the Purchaser has not become aware of any advertisement in
printed media of general and regular paid circulation, radio or television with
respect to the distribution of the Purchased Securities.

 

(m)       The Purchaser’s decision to tender this offer and purchase the
Purchased Securities has not been made as a result of any non-public oral or
written representation as to fact made by or on behalf of the Corporation or any
other Person and is based entirely upon the representations, warranties and
covenants of the Corporation provided to the Purchaser in this Agreement and on
currently available public information concerning the Corporation.

 

(n)       If required by applicable Securities Laws, policy or order or by any
Commission or Exchange, the Purchaser will reasonably assist the Corporation in
filing, such reports, undertakings and other documents with respect to the issue
of the Purchased Securities as may be required.

 

(o)       The Purchaser acknowledges that legal counsel retained by the
Corporation is acting as counsel to the Corporation and not as counsel to the
Purchaser and the Purchaser may not rely upon such counsel in any respect.

 

6.       Conditions to Obligations of the Purchaser and the Corporation. The
obligations of the Purchaser to purchase and pay for the Purchased Securities
and of the Corporation to sell the Purchased Securities are subject to the
representations and warranties of the Corporation contained in Section 4 hereof
and of the Purchaser contained in Section 5 hereof being true and correct as of
the Closing in all respects, with respect to those representations and
warranties qualified by materiality, and in all material respects, with respect
to those representations and warranties not qualified by materiality.

 

7.       Legend. The certificates representing the Purchased Securities will be
imprinted with a legend in substantially the following form:

 

“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED
UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), OR
ANY APPLICABLE STATE SECURITIES LAWS. THE HOLDER HEREOF, BY PURCHASING SUCH
SECURITIES, AGREES FOR THE BENEFIT OF INTERNATIONAL TOWER HILL MINES LTD. (THE
“CORPORATION”) THAT SUCH SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED, DIRECTLY OR INDIRECTLY, ONLY (A) TO THE CORPORATION, (B) OUTSIDE
THE UNITED STATES IN COMPLIANCE WITH RULE 904 OF REGULATION S UNDER THE 1933 ACT
AND IN COMPLIANCE WITH LOCAL LAWS AND REGULATIONS, (C) IN COMPLIANCE WITH THE
EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER,
IF AVAILABLE, AND IN COMPLIANCE WITH ANY APPLICABLE STATE SECURITIES OR “BLUE
SKY” LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE
1933 ACT OR ANY APPLICABLE STATE SECURITIES LAWS, AND, IN THE CASE OF
SUBPARAGRAPH (C) OR (D), THE SELLER FURNISHES TO THE CORPORATION AN OPINION OF
COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE REASONABLY SATISFACTORY TO
THE CORPORATION TO SUCH EFFECT. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE
“GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA.

 

UNLESS PERMITTED UNDER CANADIAN SECURITIES LEGISLATION. THE HOLDER OF THE
SECURITIES REPRESENTED HEREBY MUST NOT TRADE THE SECURITIES BEFORE [INSERT THE
DATE THAT IS 4 MONTHS AND A DAY AFTER THE CLOSING DATE].”

 

9 

 

  

8.       Participation Right

 

(a)       For purposes of this Section 8, the following terms shall have the
following meanings:

 

(i)       “Business Day” means a day other than a Saturday, Sunday or statutory
holiday in the Province of British Columbia;

 

(ii)       “Equity Securities” shall mean: (A) any Common Shares, preferred
shares or other equity security of the Corporation; (B) any security convertible
or exchangeable, with or without consideration, into any Common Shares,
preferred shares or other equity security (including any option to purchase such
a convertible security); (C) any warrant or right to subscribe for or purchase
any Common Shares, preferred shares or other equity security; or (D) any
security including or comprising such a warrant or right; and

 

(iii)       “Excluded Securities” shall mean (A) Common Shares issuable pursuant
to stock option plans or other similar employee equity incentive plans, the
adoption of which have been approved by the board of directors of the
Corporation; (B) Common Shares issued by the Corporation directly to a third
party as consideration for the bona fide acquisition of any property (including
securities) from such third party; and (C) Common Shares issued in connection
with any stock split, stock dividend or recapitalization by the Corporation.

 

(b)       So long as the Purchaser owns in the aggregate at least 10% of the
issued and outstanding Common Shares, the Purchaser shall have a right (the
“Participation Right”), subject to applicable laws or stock exchange
requirements, to subscribe for its pro rata share (as defined below) of any
Equity Securities (other than Excluded Securities) that the Corporation may,
from time to time, sell and issue after the Effective Date, whether pursuant to
a public offering, private placement or otherwise (each, a “Proposed Offering”).
For purposes of this Section 8(b), the Purchaser’s pro rata share of any Equity
Securities issued pursuant to a Proposed Offering is equal to the ratio of (i)
the number of Common Shares owned by the Purchaser, or over which the Purchaser
exercises control or direction, immediately prior to the issuance of such Equity
Securities under the Proposed Offering to (ii) the total number of issued and
outstanding Common Shares immediately prior to the issuance of such Equity
Securities under the Proposed Offering.

 

(c)       At least ten Business Days prior to any Proposed Offering, the
Corporation shall send a written notice to the Purchaser (the “Participation
Right Offer Notice”) of any Proposed Offering specifying: (i) the number and
type of Equity Securities to be issued under the Proposed Offering; (ii) the
price per Equity Security to be issued under the Proposed Offering; (iii) the
expected use of proceeds and closing date of the Proposed Offering; (iv) the
total number of the then issued and outstanding Common Shares; and (v) all other
material terms and conditions of the Proposed Offering.

 

10 

 

  

(d)       Subject to Section 8(f), the Purchaser shall have a period of five
Business Days from the date of the Participation Right Offer Notice (the
“Participation Right Notice Period”) to notify the Corporation in writing (the
“Participation Right Acceptance Notice”) of the exercise of its Participation
Right. Such Participation Right Acceptance Notice shall specify (i) the number
of Equity Securities the Purchaser wishes to acquire under the Proposed
Offering, which may be fewer than the Purchaser’s full pro rata share as
calculated pursuant to Section 8(b), and (ii) the number of Common Shares owned
by the Purchaser, or over which the Purchaser exercises control or direction,
immediately prior to the issuance of such Equity Securities under the Proposed
Offering. If the Purchaser fails to deliver a Participation Right Acceptance
Notice in respect of a Proposed Offering within the applicable Participation
Right Notice Period, then any right of the Purchaser to subscribe for any of the
Equity Securities issued under the Proposed Offering is extinguished. If the
Purchaser gives a Participation Right Acceptance Notice in respect of a Proposed
Offering, the sale of Equity Securities to the Purchaser shall be completed
within 30 Business Days of the expiry of the Participation Right Notice Period
or such shorter period required by applicable laws or stock exchange
requirements.

 

(e)       If the Corporation has not issued the debt or Equity Securities under
a Proposed Offering within 90 Business Days following the expiry of the
Participation Right Notice Period, the Corporation shall not thereafter proceed
with such Proposed Offering without providing the Purchaser with another
opportunity to exercise its Participation Right in respect of such Proposed
Offering.

 

(f)       Notwithstanding the foregoing, if any Proposed Offering to which this
Section 8 applies is to be conducted or marketed on a “bought deal” or
“overnight” basis, then (i) the period for the Corporation to deliver a
Participation Right Offer Notice under Section 8(c) shall be “as soon as
reasonably practicable and without undue delay” by the Corporation acting
reasonably and in good faith and (ii) the period for the Purchaser to deliver a
Participation Right Acceptance Notice under Section 8(d) shall be “as soon as
reasonably practicable and without undue delay” by the Purchaser acting
reasonably and in good faith, in each case having regard to the specific
circumstances surrounding such Proposed Offering and so as not to jeopardize the
Corporation’s ability to complete such transaction.

 

9.       Tax Matters.

 

(a)       The Corporation shall reasonably cooperate with the Purchaser in order
to permit the Purchaser to determine whether the Corporation is at any time a
“passive foreign investment company” (as defined in Section 1297(a) of the
United States Internal Revenue Code of 1986, as amended) (a “PFIC”). In
furtherance of the foregoing, the Corporation shall notify the Purchaser if, in
good faith, the Corporation reasonably believes the Corporation or any of its
controlled subsidiaries was a PFIC during the prior taxable year, provided that
the publication of a PFIC Annual Information Statement by the Corporation on the
Corporation’s website shall be deemed to satisfy such notification requirement.
If the Corporation determines that the Corporation or any of its controlled
subsidiaries is a PFIC, the Corporation shall use commercially reasonable
efforts to (i) provide such information to the Purchaser as the Purchaser may
reasonably request to enable the Purchaser to complete its U.S. Internal Revenue
Service Form 8621 with respect to such entity and (ii) provide such statements,
information and documentation as the Purchaser reasonably believes is necessary
for it to make an election to treat such subsidiary as a “qualified electing
fund” under Section 1295 of the United States Internal Revenue Code of 1986, as
amended.

 

(b)       At the Purchaser’s written request, the Corporation will provide any
information reasonably available to it or its affiliates in order for the
Purchaser (a) to determine whether the Corporation or any of its subsidiaries is
a “controlled foreign corporation” (“CFC”) within the meaning of Section 957 of
the Code and (b) to satisfy its (and its direct and indirect owners’) tax
reporting obligations and to make any required tax filings, including (without
limitation) U.S. Internal Revenue Service Form 5471. At the Purchaser’s written
request, the Corporation will notify the Purchaser whether the Corporation has
determined that it or any of its subsidiaries is a CFC.

 

11 

 

  

10.       Indemnification. The Corporation will indemnify and hold the Purchaser
and its directors, officers, shareholders, members, partners, employees and
agents (and any other persons with a functionally equivalent role of a person
holding such titles notwithstanding a lack of such title or any other title),
each person who controls the Purchaser (within the meaning of Section 15 of the
Securities Act and Section 20 of the Exchange Act), and the directors, officers,
shareholders, agents, members, partners or employees (and any other persons with
a functionally equivalent role of a person holding such titles notwithstanding a
lack of such title or any other title) of such controlling persons (each, a
“Purchaser Party”) harmless from any and all actions, suits, proceedings
(including any investigations, litigation or inquiries), demands, and causes of
action, and, in connection therewith, and promptly upon demand, pay or reimburse
each of them for all losses, liabilities, obligations, claims, contingencies,
damages, costs and expenses, including all judgments, amounts paid in
settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result of
or relating to any breach of any of the representations, warranties, covenants
or agreements made by the Corporation in this Agreement or in the other
Transaction Documents; provided, that no Purchaser Party shall be entitled to
recover special, consequential or punitive damages under this Section 10; and
provided further, that in no event shall the aggregate liability of the
Corporation to the Purchaser Parties pursuant to this Section 10 exceed the
amount of the Purchaser’s Purchase Price. If any action shall be brought against
any Purchaser Party in respect of which indemnity may be sought pursuant to this
Agreement, such Purchaser Party shall promptly notify the Corporation in
writing, and the Corporation shall have the right to assume the defense thereof
with counsel of its own choosing reasonably acceptable to the Purchaser Party.
Any Purchaser Party shall have the right to employ separate counsel in any such
action and participate in the defense thereof, but the fees and expenses of such
counsel shall be at the expense of such Purchaser Party except to the extent
that (a) the employment thereof has been specifically authorized by the
Corporation in writing, (b) the Corporation has failed after a reasonable period
of time to assume such defense and to employ counsel or (c) in such action there
is, in the reasonable opinion of counsel for such Purchaser Party, a material
conflict on any material issue between the position of the Corporation and the
position of such Purchaser Party, in which case the Corporation shall be
responsible for the reasonable fees and expenses of no more than one such
separate counsel. The indemnity agreements contained herein shall be in addition
to any cause of action or similar right of any Purchaser Party against the
Corporation or others and any liabilities the Corporation may be subject to
pursuant to law.

 

11.       Public Disclosure. Neither the Corporation nor the Purchaser shall,
except as required by applicable law, regulation or Exchange rule, issue any
press release that describes the transactions contemplated herein and that
identifies the Corporation, the Purchaser, or any of their respective affiliates
without the prior consent of the Corporation or the Purchaser (as applicable),
which consent shall not be unreasonably withheld. For the avoidance of doubt,
the consent of the Purchaser shall not be required for any press release or
other disclosure in regard to the transactions contemplated herein by the
Corporation that does not identify the Purchaser.

 

12.       Fees and Expenses. Except as otherwise expressly provided in this
Agreement, all fees and expenses, including fees and expenses incurred in
connection with the preparation, execution, and delivery of this Agreement and
the transactions contemplated herein, shall be paid by the party incurring such
fee or expense.

 

13.       Termination.

 

(a)       Notwithstanding anything herein to the contrary, this Agreement shall
automatically terminate at any time at or prior to the Closing if a statute,
rule, order, decree or regulation shall have been enacted or promulgated, or if
any action shall have been taken by any governmental authority of competent
jurisdiction that permanently restrains, precludes, enjoins or otherwise
prohibits the consummation of the transactions contemplated by this Agreement or
makes the transactions contemplated by this Agreement illegal.

 

12 

 

  

(b)       Notwithstanding anything herein to the contrary, this Agreement may be
terminated at any time by the Purchaser or the Corporation, upon written notice
to the other party, if the Closing shall not have occurred on or before April 1,
2018 (the “Outside Date”); provided, however, that the right to terminate this
Agreement under this Section 13(b) shall not be available to any party whose (i)
breach of any provision of this Agreement, (ii) failure to comply with their
obligations under this Agreement or (iii) actions not taken in good faith, shall
have been the cause of, or shall have resulted in, the failure of the Closing to
occur on or prior to the Outside Date.

 

(c)       In the event of the termination of this Agreement as provided in this
Section 13, (i) this Agreement shall forthwith become null and void and (ii)
there shall be no liability on the part of any party hereto, except as set forth
in Section 10 of this Agreement and except with respect to the requirement to
comply with any confidentiality agreement in favor of the Corporation; provided
that nothing herein shall relieve any party from any liability or obligation
with respect to any willful breach of this Agreement.

 

14.       Waiver of Certain Rights. The Purchaser hereby waives any and all
preemptive rights, participation rights, resale rights, rights of first refusal
and similar rights that it may have in connection with the Private Placement,
provided, that for the avoidance of doubt such waiver shall not apply to any
future offerings of the Corporation’s securities.

 

15.       Further Assurances. Subject to the terms and conditions set forth in
this Agreement, each of the parties hereto shall use its commercially reasonable
efforts (subject to, and in accordance with, applicable law) to take, or cause
to be taken, promptly all actions, and to do, or cause to be done, promptly and
to assist and cooperate with the other parties in doing, all things necessary,
proper or advisable under applicable laws to consummate and make effective the
transactions contemplated by this Agreement.

 

16.       General.

 

(a)       Waiver, Amendment. Neither this Agreement nor any provisions hereof
shall be modified, changed, discharged or terminated except by an instrument in
writing, signed by the party against whom any waiver, change, discharge or
termination is sought.

 

(b)       Assignability. Neither this Agreement nor any right, remedy,
obligation or liability arising hereunder or by reason hereof shall be
assignable by either the Corporation or the Purchaser without the prior written
consent of the other party.

 

(c)       Waiver of Jury Trial. THE PURCHASER IRREVOCABLY WAIVES ANY AND ALL
RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT OF THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

 

(d)       Submission to Jurisdiction. With respect to any suit, action or
proceeding relating to any offers, purchases or sales of the Securities by the
Purchaser (“Proceedings”), the Purchaser irrevocably submits to the jurisdiction
of the federal or state courts located in the Borough of Manhattan in New York
City, which submission shall be exclusive unless none of such courts has lawful
jurisdiction over such Proceedings.

 

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

 

(f)       Section and Other Headings. The section and other headings contained
in this Agreement are for reference purposes only and shall not affect the
meaning or interpretation of this Agreement.

 

13 

 

  

(g)       Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which together shall be deemed to be one and the same
agreement.

 

(h)       Notices. All notices and other communications provided for herein
shall be in writing and shall be deemed to have been duly given if delivered
personally or sent by registered or certified mail, return receipt requested,
postage prepaid to the following addresses (or such other address as either
party shall have specified by notice in writing to the other):

 

If to the Corporation:

International Tower Hill Mines Ltd.

Suite 2300, 1177 West Hastings Street

Vancouver, British Columbia V6E 2K3

Facsimile: (604) 408-7499

Attention: Chief Executive Officer

 

If to the Purchaser, at the address set forth on the signature page hereof.

 

(i)       Binding Effect. The provisions of this Agreement shall be binding upon
and accrue to the benefit of the parties hereto and their respective heirs,
legal representatives, successors and assigns.

 

(j)       Survival. Notwithstanding any other provision of this Agreement, the
representations, warranties, covenants and indemnities of or by the Corporation
and the Purchaser contained herein or in any certificate, document or instrument
delivered pursuant hereto shall survive the completion of the transactions
contemplated by this Agreement.

 

(k)       Severability. If any term or provision of this Agreement is invalid,
illegal or unenforceable in any jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other term or provision of this Agreement
or invalidate or render unenforceable such term or provision in any other
jurisdiction.

 

[SIGNATURE PAGE FOLLOWS]

 

14 

 

 

IN WITNESS WHEREOF, the Purchaser has executed this Subscription Agreement as of
March 13, 2018.

 

  PURCHASER:       ELECTRUM STRATEGIC OPPORTUNITIES FUND II L.P.       By:
Electrum Strategic Opportunities Fund II GP L.P., its general partner       By:
ESOF II GP Ltd., its general partner         By: /s/ Andrew M. Shapiro   Name:
Andrew M. Shapiro   Title: Director

 

State/Country of Domicile or Formation: Cayman Islands

 

Address of Principal Offices: 535 Madison Ave., 12th Fl., New York, NY 10022,
Attention: Andrew Shapiro

 

Purchaser’s Custodian: B. Riley & Co., LLC, Attn: Paul Choi, Operations and
Compliance, 11100 Santa Monica Blvd., Suite 800, Los Angeles, CA 90025,
Telephone: (310) 966-1444

 

 

Purchased Securities to Be Acquired: 19,894,528 Common Shares

 

Aggregate Purchase Price to be Paid (expressed in US$): US $9,947,264

 

 

The offer to purchase Purchased Securities as set forth above is confirmed and
accepted by the Corporation as to 19,894,528 Common Shares.

 

INTERNATIONAL TOWER HILL MINES LTD.         By: /s/ Karl Hanneman   Name: Karl
Hanneman   Title: President and CEO

 

 

[Signature Page to Subscription Agreement]