Exhibit 10.1

 

SECURITIES PURCHASE AGREEMENT

 

This Securities Purchase Agreement (this “Agreement”) is dated as of July 31,
2020, between Ur-Energy Inc., a corporation continued under the Canada Business
Corporations Act (the “Company”), and each purchaser identified on the signature
pages hereto (each, including its successors and assigns, a “Purchaser” and
collectively the “Purchasers”).

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and
pursuant to an effective registration statement under the Securities Act (as
defined below), the Company desires to issue and sell to each Purchaser, and
each Purchaser, severally and not jointly, desires to purchase from the Company,
securities of the Company as more fully described in this Agreement.

 

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

 

ARTICLE I.
DEFINITIONS

 

1.1           Definitions. In addition to the terms defined elsewhere in this
Agreement, for all purposes of this Agreement, the following terms have the
meanings set forth in this Section 1.1:

 

“Accountant” means Pricewaterhouse Coopers LLP.

 

“Acquiring Person” shall have the meaning ascribed to such term in Section 4.3.

 

“Affiliate” means any Person that, directly or indirectly through one or more
intermediaries, controls or is controlled by or is under common control with a
Person as such terms are used in and construed under Rule 405 under the
Securities Act.

 

“Agreement” shall have the meaning ascribed to such term in the first paragraph
of this Agreement.

 

“Annual Report” shall have the meaning ascribed to such term in Section 3.1(a).

 

“Anti-Corruption Laws” shall have the meaning ascribed to such term in
Section 3.1(xx).

 

“Base Prospectus” has the meaning set forth in the definition of “Registration
Statement”.

 

“Board of Directors” means the board of directors of the Company.

 

“Business Day” means any day except any Saturday, any Sunday, any day which is a
federal legal holiday in the United States or any day on which banking
institutions in the State of New York are authorized or required by law or other
governmental action to close.

 

 

 

“Canadian Securities Laws” shall have the meaning ascribed to such term in
Section 3.1(a).

 

“Canadian Transfer Restriction” shall have the meaning ascribed to such term in
Section 3.2(d).

 

“Closing” means the closing of the purchase and sale of the Securities pursuant
to Section 2.1.

 

“Closing Date” means the Trading Day on which all of the Transaction Documents
have been executed and delivered by the applicable parties thereto, and all
conditions precedent to (i) the Purchasers’ obligations to pay the Subscription
Amount, and (ii) the Company’s obligations to deliver the Securities, in each
case, have been satisfied or waived, but in no event later than the 2nd Trading
Day following the date hereof.

 

“Code” shall have the meaning ascribed to such term in Section 3.1(tt).

 

“Commission” means the United States Securities and Exchange Commission.

 

“Common Shares” means the common shares of the Company, no par value, and any
other class of securities into which such securities may hereafter be
reclassified or changed.

 

“Common Share Equivalents” means any securities of the Company or the
Subsidiaries which would entitle the holder thereof to acquire at any time
Common Shares, including, without limitation, any debt, preferred stock, right,
option, warrant or other instrument that is at any time convertible into or
exercisable or exchangeable for, or otherwise entitles the holder thereof to
receive, Common Shares.

 

“Company” shall have the meaning ascribed to such term in the first paragraph of
this Agreement.

 

“Company Counsel” means Davis Graham & Stubbs LLP, with offices located at 1550
Seventeenth Street, Suite 500, Denver, Colorado 80202.

 

“Cooley” means Cooley LLP, with offices located at 55 Hudson Yards, New York,
New York 10001-2157.

 

“Disclosure Time” means, (i) if this Agreement is signed on a day that is not a
Trading Day or after 9:00 a.m. (New York City time) and before midnight (New
York City time) on any Trading Day, 9:01 a.m. (New York City time) on the
Trading Day immediately following the date hereof, unless otherwise instructed
as to an earlier time by the Placement Agent, and (ii) if this Agreement is
signed between midnight (New York City time) and 9:00 a.m. (New York City time)
on any Trading Day, no later than 9:01 a.m. (New York City time) on the date
hereof, unless otherwise instructed as to an earlier time by the Placement
Agent.

 

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“DVP” shall have the meaning ascribed to such term in Section 2.1.

 

“DWAC” shall have the meaning ascribed to such term in Section 2.2(a)(iv).

 

“Entity” shall have the meaning ascribed to such term in Section 3.1(zz)(i).

 

“Environmental Laws” shall have the meaning ascribed to such term in
Section 3.1(kk).

 

“ERISA” shall have the meaning ascribed to such term in Section 3.1(tt).

 

“Evaluation Date” shall have the meaning ascribed to such term in
Section 3.1(mm).

 

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

 

“eXtensible Business Reporting Language” is an XML standard for tagging business
and financial reports to increase the transparency and accessibility of
information by using a uniform format.

 

“Exempt Issuance” means the issuance of (a) Common Shares or options to
employees, officers or directors of the Company pursuant to any stock or option
plan duly adopted for such purpose, by a majority of the non-employee members of
the Board of Directors or a majority of the members of a committee of
non-employee directors established for such purpose for services rendered to the
Company, (b) securities upon the exercise or exchange of or conversion of any
Securities issued hereunder and/or other securities exercisable or exchangeable
for or convertible into Common Shares issued and outstanding on the date of this
Agreement, provided that such securities have not been amended since the date of
this Agreement to increase the number of such securities or to decrease the
exercise price, exchange price or conversion price of such securities (other
than in connection with stock splits or combinations) or to extend the term of
such securities and (c) securities issued pursuant to acquisitions or strategic
transactions approved by a majority of the disinterested directors of the
Company, provided that such securities are issued as “restricted securities” (as
defined in Rule 144) and carry no registration rights that require or permit the
filing of any registration statement in connection therewith during the
prohibition period in Section 4.9(a) herein, and provided that any such issuance
shall only be to a Person (or to the equityholders of a Person) which is, itself
or through its subsidiaries, an operating company or an owner of an asset in a
business synergistic with the business of the Company and shall provide to the
Company additional benefits in addition to the investment of funds, but shall
not include a transaction in which the Company is issuing securities primarily
for the purpose of raising capital or to an entity whose primary business is
investing in securities.

 

“FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.

 

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“FINRA” shall have the meaning ascribed to such term in Section 3.1(o).

 

“GAAP” shall have the meaning ascribed to such term in Section 3.1(f).

 

“Governmental Authority” means (i) any federal, provincial, state, local,
municipal, national or international government or governmental authority,
regulatory or administrative agency, governmental commission, department, board,
bureau, agency or instrumentality, court, tribunal, arbitrator or arbitral body
(public or private); (ii) any self-regulatory organization; or (iii) any
political subdivision of any of the foregoing.

 

“Intellectual Property” shall have the meaning ascribed to such term in
Section 3.1(u).

 

“Investment Company Act” shall have the meaning ascribed to such term in
Section 3.1(qq).

 

“knowledge” means, as it pertains to the Company, the actual knowledge of the
officers and directors of the Company, together with the knowledge which they
would have had if they had conducted a reasonable inquiry of the relevant
persons into the relevant subject matter.

 

“Law” means any and all laws, including all federal, state, local, municipal,
national or foreign statutes, codes, ordinances, guidelines, decrees, rules,
regulations and by-laws and all judicial, arbitral, administrative, ministerial,
departmental or regulatory judgments, orders, directives, decisions, rulings or
awards or other requirements of any Governmental Authority, binding on or
affecting the person referred to in the context in which the term is used and
rules, regulations and policies of any stock exchange on which securities of the
Company are listed for trading.

 

“Liens” means a lien, charge, pledge, security interest, encumbrance, right of
first refusal, preemptive right or other restriction.

 

“Lock-up Agreement” shall have the meaning ascribed to such term in
Section 3.1(fff).

 

“Material Adverse Effect” shall have the meaning ascribed to such term in
Section 3.1(h).

 

“Material Properties” means, collectively, (a) the Lost Creek Property, located
in Sweetwater County, Wyoming, and (b) the Shirley Basin project, located in
Carbon County, Wyoming, as described in the Registration Statement and
Prospectus.

 

“Mining Rights” means, without limitation, freehold title, fee title, leases,
concessions, patented mining claims and millsites, unpatented mining claims and
millsites, prospecting and exploration rights, mining and mineral rights, in
respect of the Material Properties, or other conventional property or
proprietary interests or rights, recognized in the jurisdiction in which the
Material Properties are located.

 

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“Money Laundering Laws” shall have the meaning ascribed to such term in Section
3.1(rr).

 

“NI 43-101” shall have the meaning ascribed to such term in Section 3.1(ff).

 

“NYSE American” shall have the meaning ascribed to such term in
Section 3.1(ccc).

 

“OFAC” shall have the meaning ascribed to such term in Section 3.1(zz)(i)(A).

 

“Off-Balance Sheet Transaction” shall have the meaning ascribed to such term in
Section 3.1(ss).

 

“Per Unit Purchase Price” equals $0.52, subject to adjustment for reverse and
forward stock splits, stock dividends, stock combinations and other similar
transactions of the Common Shares that occur after the date of this Agreement.

 

“Permitted Section 5(d) Communications” means communications permitted by
Section 5(d) of the Securities Act.

 

“Person” means an individual or corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or subdivision thereof) or other entity
of any kind.

 

“Placement Agent” means Cantor Fitzgerald & Co.

 

“Proceeding” means an action, claim, suit, investigation or proceeding
(including, without limitation, an informal investigation or partial proceeding,
such as a deposition), whether commenced or threatened.

 

“Prospectus” means the prospectus supplement to the Base Prospectus that
describes the Securities and the offering thereof (the “Prospectus Supplement”),
together with the Base Prospectus.

 

“Purchaser” or “Purchasers” shall have the meaning ascribed to such term in the
first paragraph of this Agreement.

 

“Purchaser Party” shall have the meaning ascribed to such term in Section 4.6.

 

“Registration Statement” means the shelf registration statement on Form S-3,
File No. 333-238324, including a base prospectus (the “Base Prospectus”) to be
used in connection with the public offering and sale of the Securities,
including the financial statements, exhibits and schedules thereto, in the form
in which it became effective under the Securities Act, including all documents
incorporated or deemed to be incorporated by reference therein and any
information deemed to be a part thereof at the time of effectiveness pursuant to
Rule 430A or 430B under the Securities Act.

 

“Regulation M” shall have the meaning ascribed to such term in Section 3.1(w).

 

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“Regulation S-T” means the general rules and regulations for electronic filings
as defined by 17 CFR 232.

 

“Road Show” means a road show as defined in Rule 433 under the Securities Act
relating to the offering of the Securities contemplated hereby that is a
“written communication” (as defined in Rule 405 under the Securities Act).

 

“Rule 144” means Rule 144 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

 

“Rule 424” means Rule 424 promulgated by the Commission pursuant to the
Securities Act, as such Rule may be amended or interpreted from time to time, or
any similar rule or regulation hereafter adopted by the Commission having
substantially the same purpose and effect as such Rule.

 

“Sanctioned Countries” shall have the meaning ascribed to such term in
Section 3.1(zz)(i)(B).

 

“Sanctions” shall have the meaning ascribed to such term in
Section 3.1(zz)(i)(A).

 

“Sarbanes-Oxley Act” shall have the meaning ascribed to such term in
Section 3.1(q).

 

“SEC Reports” means all reports, schedules, forms, statements and other
documents filed by the Company under the Securities Act and the Exchange Act for
the two years preceding the date hereof.

 

“Securities” means the Shares, the Warrants and the Warrant Shares.

 

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

 

“Shares” means the Common Shares issued or issuable to each Purchaser pursuant
to this Agreement.

 

“Short Sales” means all “short sales” as defined in Rule 200 of Regulation SHO
under the Exchange Act (but shall not be deemed to include locating and/or
borrowing Common Shares).

 

“Subscription Amount” means, as to each Purchaser, the aggregate amount to be
paid for Shares and associated Warrants purchased hereunder as specified below
such Purchaser’s name on the signature page of this Agreement and next to the
heading “Subscription Amount,” in United States dollars and in immediately
available funds.

 

“Subsidiaries” shall have the meaning ascribed to such term in Section 3.1(h).

 

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“Technical Reports” means, collectively, (i) the preliminary economic assessment
titled “Amended Preliminary Economic Assessment of the Lost Creek Property,
Sweetwater County, Wyoming” dated February 8, 2016 and (ii) the preliminary
economic assessment titled “Preliminary Economic Assessment Shirley Basin
Uranium Project Carbon County, Wyoming” dated January 27, 2015.

 

“Time of Sale Prospectus” means the Base Prospectus, as amended or supplemented
immediately prior to execution of this Agreement, together with the free writing
prospectuses, if any, identified on Schedule A-1 hereto and the pricing
information set forth herein.

 

“Trading Day” means a day on which the principal Trading Market is open for
trading.

 

“Trading Market” means any of the following markets or exchanges on which the
Common Shares are listed or quoted for trading on the date in question: the NYSE
American, the Toronto Stock Exchange, the Nasdaq Capital Market, the Nasdaq
Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange
(or any successors to any of the foregoing).

 

“Transaction Documents” means this Agreement, the Warrants and any other
documents or agreements executed in connection with the transactions
contemplated hereunder.

 

“Transfer Agent” means Computershare Trust Company, N.A., the current transfer
agent of the Company, with a mailing address of 250 Royall Street, Canton,
Massachusetts 02021 and a facsimile number of (781) 575-2916, and any successor
transfer agent of the Company.

 

“TSX” shall have the meaning ascribed to such term in Section 3.1(ccc).

 

“Warrant Shares” means the Common Shares issuable upon exercise of the Warrants.

 

“Warrants” means the Common Share purchase warrants delivered to the Purchasers
at the Closing in accordance with Section 2.2(a) hereof, in the form of
Exhibit A attached hereto.

 

ARTICLE II.
PURCHASE AND SALE; EXCHANGE

 

2.1           Closing. On the Closing Date, upon the terms and subject to the
conditions set forth herein, the Company agrees to sell, and the Purchasers,
severally and not jointly, agree to purchase, up to an aggregate of $4,680,000
of Shares and associated Warrants. The Company shall deliver to each Purchaser
its respective Shares and associated Warrants as determined pursuant to
Section 2.2(a), and the Company and each Purchaser shall deliver the other items
set forth in Section 2.2 deliverable at the Closing. Upon satisfaction of the
covenants and conditions set forth in Sections 2.2 and 2.3, the Closing shall
occur at the offices of Cooley or such other location as the parties shall
mutually agree. Settlement of the Warrants shall occur by delivery by the
Company to the Placement Agent of a physical Warrant certificate for each
Purchaser and the Placement Agent shall promptly deliver such Warrant
certificate to the applicable Purchaser. Unless otherwise directed by the
Placement Agent, settlement of the Shares shall occur via “Delivery Versus
Payment” (“DVP”) (i.e., on the Closing Date, the Company shall issue the Shares
registered in the Purchasers’ names and addresses and released by the Transfer
Agent directly to the account(s) at the Placement Agent identified by each
Purchaser; upon receipt of such Shares, the Placement Agent shall promptly
electronically deliver such Shares to the applicable Purchaser, and payment
therefor shall be made by the Placement Agent (or its clearing firm) by wire
transfer to the Company).

 

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2.2          Deliveries.

 

(a)          On or prior to the Closing Date, the Company shall deliver or cause
to be delivered to each Purchaser the following:

 

(i)              this Agreement duly executed by the Company;

 

(ii)             a legal opinion of Company Counsel, in a form reasonably
acceptable to the Placement Agent;

 

(iii)            subject to the last sentence of Section 2.1, the Company shall
have provided each Purchaser with the Company’s wire instructions, on Company
letterhead and executed by the Chief Executive Officer or Chief Financial
Officer;

 

(iv)            subject to the last sentence of Section 2.1, a copy of the
irrevocable instructions to the Transfer Agent instructing the Transfer Agent to
deliver on an expedited basis via The Depository Trust Company Deposit or
Withdrawal at Custodian system (“DWAC”) the Shares equal to such Purchaser’s
Subscription Amount divided by the Per Unit Purchase Price;

 

(v)              a Warrant certificate registered in the name of such Purchaser
to purchase up to a number of Common Shares equal to 50% of such Purchaser’s
Shares, with an exercise price per share equal to $0.75, subject to adjustment
therein;

 

(vi)             the Time of Sale Prospectus and Prospectus (which may be
delivered in accordance with Rule 172 under the Securities Act).

 

(b)          On or prior to the Closing Date, each Purchaser shall deliver or
cause to be delivered to the Company, the following:

 

(i)               this Agreement duly executed by such Purchaser; and

 

(ii)              such Purchaser’s Subscription Amount, which shall be made
available for DVP settlement with the Company.

 

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2.3          Closing Conditions.

 

(a)          The obligations of the Company hereunder in connection with the
Closing are subject to the following conditions being met:

 

(i)               the accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) on the Closing Date of the representations and
warranties of the Purchasers contained herein (unless as of a specific date
therein in which case they shall be accurate as of such date);

 

(ii)              all obligations, covenants and agreements of each Purchaser
required to be performed at or prior to the Closing Date shall have been
performed; and

 

(iii)             the delivery by each Purchaser of the items set forth in
Section 2.2(b) of this Agreement.

 

(b)          The respective obligations of the Purchasers hereunder in
connection with the Closing are subject to the following conditions being met:

 

(i)               the accuracy in all material respects (or, to the extent
representations or warranties are qualified by materiality or Material Adverse
Effect, in all respects) when made and on the Closing Date of the
representations and warranties of the Company contained herein (unless as of a
specific date therein in which case they shall be accurate as of such date);

 

(ii)              all obligations, covenants and agreements of the Company
required to be performed at or prior to the Closing Date shall have been
performed in all material respects;

 

(iii)             the delivery by the Company of the items set forth in
Section 2.2(a) of this Agreement;

 

(iv)             there shall have been no Material Adverse Effect with respect
to the Company since the date hereof; and

 

(v)              from the date hereof to the Closing Date, trading in the Common
Shares shall not have been suspended by the Commission or the Company’s
principal Trading Market, and, at any time prior to the Closing Date, trading in
securities generally as reported by Bloomberg L.P. shall not have been suspended
or limited, or minimum prices shall not have been established on securities
whose trades are reported by such service, or on any Trading Market, nor shall a
banking moratorium have been declared either by the United States or New York
State authorities nor shall there have occurred any material outbreak or
escalation of hostilities or other national or international calamity of such
magnitude in its effect on, or any material adverse change in, any financial
market which, in each case, in the reasonable judgment of such Purchaser, makes
it impracticable or inadvisable to purchase the Securities at the Closing.

 

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ARTICLE III.
REPRESENTATIONS AND WARRANTIES

 

3.1              Representations and Warranties of the Company. Except as
disclosed in the Registration Statement or Prospectus (including the documents
included or incorporated by reference therein), the Company represents and
warrants to, and agrees with the Agent that as of the date of this Agreement and
as of each Applicable Time (as defined below), unless such representation,
warranty or agreement specifies a different date or time:

 

(a)          Compliance with Registration Requirements. The Registration
Statement has become effective under the Securities Act. The Company has
complied, to the Commission’s satisfaction, with all requests of the Commission
for additional or supplemental information, if any. No stop order suspending the
effectiveness of the Registration Statement is in effect and no proceedings for
such purpose have been instituted or are pending or, to the best knowledge of
the Company, are contemplated or threatened by the Commission. At the time the
Company’s Annual Report on Form 10-K for the year ended December 31, 2019 (the
“Annual Report”) was filed with the Commission, or, if later, at the time the
Registration Statement was originally filed with the Commission, the Company met
the then-applicable requirements for use of Form S-3 under the Securities Act.
The documents incorporated or deemed to be incorporated by reference in the
Registration Statement, the Time of Sale Prospectus and the Prospectus, at the
time they were or hereafter are filed with the Commission, or became effective
under the Exchange Act, as the case may be, complied and will comply in all
material respects with the requirements of the Exchange Act. The Company is a
reporting issuer in British Columbia, Alberta, Saskatchewan, Manitoba, Ontario,
Nova Scotia, New Brunswick, Prince Edward Island, and Newfoundland & Labrador,
and to the knowledge of the Company is in good standing under applicable laws
and regulations in those jurisdictions and the rules and policies of the TSX
(collectively, “Canadian Securities Laws”); is not in default in any material
respect of any requirement of Canadian Securities Laws and is not included in a
list of defaulting reporting issuers maintained by the applicable securities
regulators in Canada. Without limiting the foregoing, to the knowledge of the
Company, the Company is in compliance at the date hereof with its obligations to
make timely disclosure of all material changes to its business.

 

(b)           Disclosure. The Base Prospectus and the Prospectus when filed
complied in all material respects with the Securities Act and, if filed by
electronic transmission pursuant to EDGAR, was identical (except as may be
permitted by Regulation S-T under the Securities Act) to the copy thereof
delivered to the Placement Agent for use in connection with the offer and sale
of the Securities. Each of the Registration Statement and any post-effective
amendment thereto, at the time it became or becomes effective and at all
subsequent times, complied and will comply in all material respects with the
Securities Act and did 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. As of the execution of
this Agreement, the Time of Sale Prospectus did not, and at the Closing Date,
the Time of Sale Prospectus, as then amended or supplemented by the Company, if
applicable, will not, contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading. The
Prospectus, as of its date and (as then amended or supplemented) at all
subsequent times, did not and will not contain any untrue statement of a
material fact or omit to state a material fact necessary in order 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 three
immediately preceding sentences do not apply to statements in or omissions from
the Registration Statement or any post-effective amendment thereto, or the
Prospectus, or any amendments or supplements thereto, made in reliance upon and
in conformity with written information relating to the Placement Agent furnished
to the Company in writing by the Placement Agent expressly for use therein.
There are no contracts or other documents required to be described in the Time
of Sale Prospectus or the Prospectus or to be filed as an exhibit to the
Registration Statement which have not been described or filed as required.

 

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(c)          Free Writing Prospectuses; Road Show. As of the determination date
referenced in Rule 164(h) under the Securities Act, the Company was not, is not
or will not be (as applicable) an “ineligible issuer” in connection with the
offering of the Securities pursuant to Rules 164, 405 and 433 under the
Securities Act. Each free writing prospectus that the Company is required to
file pursuant to Rule 433(d) under the Securities Act has been, or will be,
filed with the Commission in accordance with the requirements of the Securities
Act. Each free writing prospectus that the Company has filed, or is required to
file, pursuant to Rule 433(d) under the Securities Act or that was prepared by
or on behalf of or used or referred to by the Company complies or will comply in
all material respects with the requirements of Rule 433 under the Securities
Act, including timely filing with the Commission or retention where required and
legending, and each such free writing prospectus, as of its issue date and at
all subsequent times through the completion of the public offer and sale of the
Securities did not, does not and will not include any information that
conflicted, conflicts or will conflict with the information contained in the
Registration Statement, the Prospectus and not superseded or modified. Except
for the free writing prospectuses, if any, identified in Schedule A-1, and
electronic road shows, if any, furnished to the Placement Agent before first
use, the Company has not prepared, used or referred to, and will not, without
the Placement Agent’s prior written consent, prepare, use or refer to, any free
writing prospectus. Each Road Show, when considered together with the Time of
Sale Prospectus, does not contain any 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 they were made, not misleading.

 

(d)          Market Capitalization. At the time the Registration Statement was
originally declared effective, and at the time the Company’s most recent Annual
Report on Form 10-K was filed with the Commission, the Company met the then
applicable requirements for the use of Form S-3 under the Securities Act,
including General Instruction I.B.1 of Form S-3. The Company is not a shell
company (as defined in Rule 405 under the Securities Act) and has not been a
shell company for at least 12 calendar months previously and if it has been a
shell company at any time previously, has filed current Form 10 information (as
defined in Instruction I.B.6 of Form S-3) with the Commission at least 12
calendar months previously reflecting its status as an entity that is not a
shell company.

 

(e)           Distribution of Offering Material By the Company. Prior to the
Closing Date, the Company has not distributed and will not distribute any
offering material in connection with the offering and sale of the Securities
other than the Registration Statement, the Time of Sale Prospectus, the
Prospectus, and the free writing prospectuses, if any, identified on Schedule
A-1 hereto.

 

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(f)          Financial Information. The consolidated financial statements of the
Company included or incorporated by reference in the Registration Statement, the
Time of Sale Prospectus, and the Prospectus, if any, together with the related
notes and schedules, present fairly, in all material respects, the consolidated
financial position of the Company and the Subsidiaries (as defined below) as of
the dates indicated and the consolidated results of operations, cash flows and
changes in stockholders’ equity of the Company for the periods specified and
have been prepared in compliance with the requirements of the Securities Act and
Exchange Act and in conformity with United States generally accepted accounting
principles (“GAAP”) applied on a consistent basis during the periods involved;
there are no financial statements (historical or pro forma) that are required to
be included or incorporated by reference in the Registration Statement, the Time
of Sale Prospectus, and the Prospectus that are not included or incorporated by
reference as required; the Company and the Subsidiaries (as defined below) do
not have any material liabilities or obligations, direct or contingent
(including any off-balance sheet obligations), not described in the Registration
Statement (excluding the exhibits thereto), the Time of Sale Prospectus, and the
Prospectus; and all disclosures contained or incorporated by reference in the
Registration Statement, the Time of Sale Prospectus, the Prospectus and the free
writing prospectuses, if any, regarding “non-GAAP financial measures” (as such
term is defined by the rules and regulations of the Commission) comply with
Regulation G of the Exchange Act and Item 10 of Regulation S-K under the
Securities Act, to the extent applicable. The financial data set forth in each
of the Registration Statement, the Time of Sale Prospectus, and the Prospectus
fairly present the information set forth therein on a basis consistent with that
of the audited financial statements contained in the Registration Statement, the
Time of Sale Prospectus and the Prospectus. The interactive data in eXtensible
Business Reporting Language included or incorporated by reference in the
Registration Statement, the Time of Sale Prospectus, and the Prospectus fairly
presents the information called for in all material respects and has been
prepared in accordance with the Commission’s rules and guidelines applicable
thereto.

 

(g)          Conformity with EDGAR Filing. The Prospectus delivered to the
Placement Agent for use in connection with the sale of the Securities pursuant
to this Agreement will be identical to the versions of the Prospectus created to
be transmitted to the Commission for filing via EDGAR, except to the extent
permitted by Regulation S-T.

 

 12 

 

 

(h)           Organization. The Company and each of its subsidiaries (as defined
in Rule 405 under the Securities Act) (“Subsidiaries”) are duly organized,
validly existing as a corporation and in good standing under the Laws of their
respective jurisdictions of organization. The Company and each of its
Subsidiaries are duly licensed or qualified as a foreign corporation for
transaction of business and in good standing under the Laws of each other
jurisdiction in which their respective ownership or lease of property or the
conduct of their respective businesses requires such license or qualification,
and have all corporate power and authority necessary to own or hold their
respective properties and to conduct their respective businesses as described in
the Registration Statement, the Time of Sale Prospectus and the Prospectus,
except where the failure to be so qualified or in good standing or have such
power or authority would not, individually or in the aggregate, have a material
adverse effect or would reasonably be expected to have a material adverse effect
on or affecting the assets, business, operations, earnings, properties,
condition (financial or otherwise), prospects, stockholders’ equity or results
of operations of the Company and the Subsidiaries taken as a whole, or prevent
or materially interfere with the consummation of the transactions contemplated
hereby (a “Material Adverse Effect”).

 

(i)             Subsidiaries. Except as set forth in the Registration Statement,
the Time of Sale Prospectus and the Prospectus, the Company owns, directly or
indirectly, all of the equity interests of the Subsidiaries free and clear of
any lien, charge, security interest, encumbrance, right of first refusal or
other restriction, and all the equity interests of the Subsidiaries are validly
issued and are fully paid, nonassessable and free of preemptive and similar
rights. Except as set forth or incorporated by reference in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, no Subsidiary is
currently prohibited, directly or indirectly, from paying any dividends to the
Company, from making any other distribution on such Subsidiary’s capital stock,
from repaying to the Company any loans or advances to such Subsidiary from the
Company or from transferring any of such Subsidiary’s property or assets to the
Company or any other Subsidiary of the Company.

 

(j)           No Violation or Default. Neither the Company nor any of its
Subsidiaries is (i) in violation of its charter or by-laws or similar
organizational documents; (ii) in default, and no event has occurred that, with
notice or lapse of time or both, would constitute such a default, in the due
performance or observance of any term, covenant or condition contained in any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Company or any of its Subsidiaries is a party or by
which the Company or any of its Subsidiaries is bound or to which any of the
property or assets of the Company or any of its Subsidiaries are subject; or
(iii) in violation of any Law of any Governmental Authority, except, in the case
of each of clauses (ii) and (iii) above, for any such violation or default that
would not, individually or in the aggregate, have a Material Adverse Effect. To
the Company’s knowledge, no other party under any material contract or other
agreement to which it or any of its Subsidiaries is a party is in default in any
respect thereunder where such default would have a Material Adverse Effect.

 

 13 

 

 

(k)           No Material Adverse Effect. Subsequent to the respective dates as
of which information is given in the Registration Statement, the Time of Sale
Prospectus, the Prospectus and the free writing prospectuses, if any (including
any document deemed incorporated by reference therein), there has not been (i)
any Material Adverse Effect or the occurrence of any development that the
Company reasonably expects will result in a Material Adverse Effect, (ii) any
transaction which is material to the Company and the Subsidiaries taken as a
whole, (iii) any obligation or liability, direct or contingent (including any
off-balance sheet obligations), incurred by the Company or any Subsidiary, which
is material to the Company and the Subsidiaries taken as a whole, (iv) any
material change in the capital stock or outstanding long-term indebtedness of
the Company or any of its Subsidiaries or (v) any dividend or distribution of
any kind declared, paid or made on the capital stock of the Company or any
Subsidiary, other than in each case above in the ordinary course of business or
as otherwise disclosed in the Registration Statement or Prospectus (including
any document deemed incorporated by reference therein).

 

(l)           Capitalization. The issued and outstanding shares of capital stock
of the Company have been validly issued, are fully paid and nonassessable and,
other than as disclosed in the Registration Statement, the Time of Sale
Prospectus or the Prospectus, are not subject to any preemptive rights, rights
of first refusal or similar rights. The Company has an authorized, issued and
outstanding capitalization as set forth in the Registration Statement and the
Prospectus as of the dates referred to therein (other than the grant of
additional options or other awards under the Company’s equity incentive plans,
or changes in the number of outstanding Common Shares of the Company due to the
issuance of shares upon the exercise or conversion of securities exercisable
for, or convertible into, Common Shares outstanding on the date hereof) and such
authorized capital stock conforms to the description thereof set forth in the
Registration Statement, the Time of Sale Prospectus and the Prospectus. The
description of the securities of the Company in the Registration Statement, the
Time of Sale Prospectus and the Prospectus is complete and accurate in all
material respects. Except as disclosed in or contemplated by the Registration
Statement, the Time of Sale Prospectus or the Prospectus, as of the date
referred to therein, the Company does not have outstanding any options to
purchase, or any rights or warrants to subscribe for, or any securities or
obligations convertible into, or exchangeable for, or any contracts or
commitments to issue or sell, any shares of capital stock or other securities.

 

(m)         Authorization; Enforceability. The Company has the corporate power
and authority to enter into this Agreement and the Warrants and to perform the
transactions contemplated hereby. This Agreement and the Warrants have been duly
authorized, executed and delivered by the Company and are legal, valid and
binding agreements of the Company enforceable in accordance with their terms,
except to the extent that enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar Laws affecting creditors’
rights generally and by general equitable principles, and by public policy
limitations relating to indemnification and similar matters.

 

 14 

 

 

(n)           Authorization of the Securities. The Securities have been duly
authorized for issuance and sale pursuant to this Agreement. The Shares when
issued and delivered by the Company against payment therefor pursuant to this
Agreement, will be duly and validly issued, fully paid and nonassessable, free
and clear of any pledge, lien, encumbrance, security interest or other claim,
including any statutory or contractual preemptive rights, resale rights, rights
of first refusal or other similar rights, and will be registered pursuant to
Section 12 of the Exchange Act. The Warrants have been duly authorized by the
Company and, when executed and delivered by the Company, will be valid and
binding agreements of the Company, enforceable against the Company in accordance
with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights and remedies of creditors or by general
equitable principles. The Warrant Shares have been duly authorized and validly
reserved for issuance upon exercise of the Warrants. The Warrant Shares, when
issued and delivered upon exercise of the Warrants in accordance therewith, will
be validly issued, fully paid and nonassessable, and the issuance of the Warrant
Shares is not subject to any preemptive rights, rights of first refusal or other
similar rights to subscribe for or purchase the Warrant Shares. The Securities,
when issued, will conform to the description thereof set forth in or
incorporated into the Registration Statement, the Time of Sale Prospectus and
the Prospectus.

 

(o)          No Consents Required. No consent, approval, authorization, order,
registration or qualification of or with any Governmental Authority is required
for the execution, delivery and performance by the Company of this Agreement or
the Warrants, the issuance and sale by the Company of the Securities, or the
consummation by the Company of the transactions contemplated pursuant to the
Warrants, except for such consents, approvals, authorizations, orders and
registrations or qualifications as may be required under applicable state
securities Laws or Laws of the Financial Industry Regulatory Authority Inc.
(“FINRA”) or the NYSE American in connection with the sale of the Securities.

 

(p)          No Preferential Rights. Except as set forth in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, (i) no person, as
such term is defined in Rule 1-02 of Regulation S-X promulgated under the
Securities Act (in this paragraph (p), a “Person”), has the right, contractual
or otherwise, to cause the Company to issue or sell to such Person any Common
Shares or other securities of the Company other than pursuant to awards made in
the ordinary course of business under the Company’s equity incentive plans,
(ii) no Person has any preemptive rights, resale rights, rights of first
refusal, rights of co-sale, or any other rights (whether pursuant to a “poison
pill” provision or otherwise) to purchase any Common Shares or other securities
of the Company, (iii)  no Person has the right to act as an underwriter or as a
financial advisor to the Company in connection with the offer and sale of the
Securities, and (iv) no Person has the right, contractual or otherwise, to
require the Company to register under the Securities Act any Common Shares or
other securities of the Company, or to include any such shares or other
securities in the Registration Statement or the offering contemplated thereby,
whether as a result of the filing or effectiveness of the Registration Statement
or the sale of the Securities as contemplated thereby or otherwise.

 

 15 

 

 

(q)          Independent Public Accounting Firm. The Accountant, whose report on
the consolidated financial statements of the Company is filed with the
Commission as part of the Company’s most recent Annual Report on Form 10-K filed
with the Commission and incorporated by reference into the Registration
Statement and the Prospectus, are and, during the periods covered by their
report, were an independent registered public accounting firm within the meaning
of the Securities Act and the Public Company Accounting Oversight Board (United
States). To the Company’s knowledge, the Accountant is not in violation of the
auditor independence requirements of the Sarbanes-Oxley Act of 2002 (the
“Sarbanes-Oxley Act”) with respect to the Company. The Accountant is considered
an independent accountant as required under Canadian Securities Laws and there
has never been a reportable disagreement (within the meaning of National
Instrument 51-102 – Continuous Disclosure) with the present or former auditors
of the Company. The Company’s audit committee is comprised and operates in
accordance with the requirements of National Instrument 52-110 – Audit
Committees, each member of which is “independent” within the meaning of such
instrument.

 

(r)           Enforceability of Agreements. All agreements between the Company
and third parties expressly referenced in the Time of Sale Prospectus and
Prospectus are legal, valid and binding obligations of the Company enforceable
in accordance with their respective terms, except (i) to the extent that
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar Laws affecting creditors’ rights generally and by general
equitable principles (ii) to the extent that the indemnification provisions of
certain agreements may be limited by federal or state securities Laws or public
policy considerations in respect thereof; and (iii) for any unenforceability
that, individually or in the aggregate, would not have a Material Adverse
Effect.

 

(s)           No Litigation. Except as set forth in the Registration Statement,
Time of Sale Prospectus or the Prospectus, there are no actions, suits or
proceedings by or before any Governmental Authority pending, nor, to the
Company’s knowledge, any audits or investigations by or before any Governmental
Authority, to which the Company or a Subsidiary is a party or to which any
property of the Company or any of its Subsidiaries is the subject that,
individually or in the aggregate, would have a Material Adverse Effect and, to
the Company’s knowledge, no such actions, suits, proceedings, audits or
investigations are threatened or contemplated by any Governmental Authority or
threatened by others; and (i) there are no current or pending audits,
investigations, actions, suits or proceedings by or before any Governmental
Authority that are required under the Securities Act to be described in the Time
of Sale Prospectus or Prospectus that are not so described; and (ii) there are
no contracts or other documents that are required under the Securities Act to be
filed as exhibits to the Registration Statement that are not so filed.

 

(t)           Consents and Permits. The Company and each Subsidiary possess such
valid and current certificates, authorizations or permits issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses, and neither the Company nor any Subsidiary
has received, or has any reason to believe that it will receive, any notice of
proceedings relating to the revocation or modification of, or non-compliance
with, any such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding, could
result in a Material Adverse Effect.

 

 16 

 

 

(u)          Intellectual Property. Except as disclosed in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, the Company and its
Subsidiaries own, possess, license or have other rights to use all foreign and
domestic patents, patent applications, trade and service marks, trade and
service mark registrations, trade names, copyrights, licenses, inventions, trade
secrets, technology, Internet domain names, know-how and other intellectual
property (collectively, the “Intellectual Property”), necessary for the conduct
of their respective businesses as now conducted except to the extent that the
failure to own, possess, license or otherwise hold adequate rights to use such
Intellectual Property would not, individually or in the aggregate, have a
Material Adverse Effect. Except as disclosed in the Registration Statement, the
Time of Sale Prospectus and the Prospectus (i) there are no rights of third
parties to any such Intellectual Property owned by the Company and its
Subsidiaries; (ii) to the Company’s knowledge, there is no infringement by third
parties of any such Intellectual Property; (iii) there is no pending or, to the
Company’s knowledge, threatened action, suit, proceeding or claim by others
challenging the Company’s and its Subsidiaries’ rights in or to any such
Intellectual Property, and the Company is unaware of any facts which could form
a reasonable basis for any such action, suit, proceeding or claim; (iv) there is
no pending or, to the Company’s knowledge, threatened action, suit, proceeding
or claim by others challenging the validity or scope of any such Intellectual
Property; (v) there is no pending or, to the Company’s knowledge, threatened
action, suit, proceeding or claim by others that the Company and its
Subsidiaries infringe or otherwise violate any patent, trademark, copyright,
trade secret or other proprietary rights of others; (vi) to the Company’s
knowledge, there is no third-party U.S. patent or published U.S. patent
application which contains claims for which an Interference Proceeding (as
defined in 35 U.S.C. § 135) has been commenced against any patent or patent
application described in the Registration Statement, the Time of Sale Prospectus
and the Prospectus as being owned by or licensed to the Company; and (vii) the
Company and its Subsidiaries have complied with the terms of each agreement
pursuant to which Intellectual Property has been licensed to the Company or such
Subsidiary, and all such agreements are in full force and effect, except, in the
case of any of clauses (i)-(vii) above, for any such infringement by third
parties or any such pending or threatened suit, action, proceeding or claim as
would not, individually or in the aggregate, result in a Material Adverse
Effect.

 

(v)          No Material Defaults. Neither the Company nor any of the
Subsidiaries has defaulted on any installment on indebtedness for borrowed money
or on any rental on one or more long-term leases, which defaults, individually
or in the aggregate, would have a Material Adverse Effect. The Company has not
filed a report pursuant to Section 13(a) or 15(d) of the Exchange Act since the
filing of its last Annual Report on Form 10-K, indicating that it (i) has failed
to pay any dividend or sinking fund installment on preferred stock or (ii) has
defaulted on any installment on indebtedness for borrowed money or on any rental
on one or more long-term leases, which defaults, individually or in the
aggregate, would have a Material Adverse Effect.

 

(w)          Certain Market Activities. Neither the Company nor any of its
Subsidiaries has taken, directly or indirectly, any action designed to or that
might cause or result in stabilization or manipulation of the price of the
Securities or of any “reference security” (as defined in Rule 100 of Regulation
M under the Exchange Act (“Regulation M”)) with respect to the Securities,
whether to facilitate the sale or resale of the Securities or otherwise, and has
taken no action which would directly or indirectly violate Regulation M.

 

 17 

 

 

(x)           Broker/Dealer Relationships. Neither the Company nor any of the
Subsidiaries (i) is required to register as a “broker” or “dealer” in accordance
with the provisions of the Exchange Act or (ii) directly or indirectly through
one or more intermediaries, controls or is a “person associated with a member”
or “associated person of a member” (within the meaning set forth in the FINRA
Manual).

 

(y)          No Reliance. The Company has not relied upon the Placement Agent or
legal counsel for the Placement Agent for any legal, tax or accounting advice in
connection with the offering and sale of the Securities.

 

(z)           Taxes. The Company and each of its Subsidiaries have filed all
federal, state, local and foreign tax returns which have been required to be
filed and paid all taxes shown thereon through the date hereof, to the extent
that such taxes have become due and are not being contested in good faith,
except where the failure to so file or pay would not have a Material Adverse
Effect. Except as otherwise disclosed in or contemplated by the Registration
Statement, the Time of Sale Prospectus or the Prospectus, no tax deficiency has
been determined adversely to the Company or any of its Subsidiaries which has
had, or would have, individually or in the aggregate, a Material Adverse Effect.
The Company has no knowledge of any federal, state or other governmental tax
deficiency, penalty or assessment which has been or might be asserted or
threatened against it which would have a Material Adverse Effect.

 

(aa)        Title to Real and Personal Property Other than Mining Claims. Except
as set forth in the Registration Statement, the Time of Sale Prospectus or the
Prospectus, the Company and its Subsidiaries have good and marketable title in
fee simple to all items of real property owned by them, other than Mining Claims
(as defined below), good and valid title to all personal property described in
the Registration Statement, the Time of Sale Prospectus or the Prospectus as
being owned by them that are material to the businesses of the Company or such
Subsidiary, in each case free and clear of all liens, encumbrances and claims,
except those matters that (i) do not materially interfere with the use made and
proposed to be made of such property by the Company and any of its Subsidiaries
or (ii) would not, individually or in the aggregate, have a Material Adverse
Effect. Any real or personal property described in the Registration Statement,
the Time of Sale Prospectus or the Prospectus as being leased by the Company and
any of its Subsidiaries is held by them under valid, existing and enforceable
leases, except those that (A) do not materially interfere with the use made or
proposed to be made of such property by the Company or any of its Subsidiaries
or (B) would not be reasonably expected, individually or in the aggregate, to
have a Material Adverse Effect. Each of the properties of the Company and its
Subsidiaries complies with all applicable Laws (including building and zoning
Laws and Laws relating to access to such properties), except if and to the
extent disclosed in the Registration Statement, the Time of Sale Prospectus or
the Prospectus or except for such failures to comply that would not,
individually or in the aggregate, reasonably be expected to interfere in any
material respect with the use made and proposed to be made of such property by
the Company and its Subsidiaries or otherwise have a Material Adverse Effect.
None of the Company or its subsidiaries has received from any Governmental
Authorities any notice of any condemnation of, or zoning change affecting, the
properties of the Company and its Subsidiaries, and the Company knows of no such
condemnation or zoning change which is threatened, except for such that would
not reasonably be expected to interfere in any material respect with the use
made and proposed to be made of such property by the Company and its
Subsidiaries or otherwise have a Material Adverse Effect, individually or in the
aggregate.

 

 18 

 

 

(bb)         Material Properties. The Material Properties are the only material
properties in which the Company or any of the Subsidiaries has an interest; the
Company and each of the Subsidiaries holds Mining Rights in respect of the
minerals located on the Material Properties in which the Company or any of the
Subsidiaries has an interest under valid, subsisting and enforceable title
documents or other recognized and enforceable agreements or instruments,
sufficient to permit the Company or any of the Subsidiaries to explore for and
exploit the minerals relating thereto; the Company and each of the Subsidiaries
has all necessary surface rights, access rights and other necessary rights and
interests relating to the Material Properties in which the Company or any of the
Subsidiaries has an interest granting the Company or any of the Subsidiaries the
right and ability to explore for and exploit minerals and metals for development
purposes as are appropriate in view of the rights and interest therein of the
Company and the Subsidiaries, as applicable, with only such exceptions as do not
materially interfere with the use made by the Company or any of the Subsidiaries
of the rights or interest so held, and each of the proprietary interests or
rights and each of the documents, agreements and instruments and obligations
relating thereto referred to above is currently in good standing in all material
respects in the name of the Company or a Subsidiary, except where the invalidity
of any of the applicable property interests would not have a Material Adverse
Effect (and provided that nothing in this Agreement shall be deemed a
representation (a) that any of the Material Properties contains a discovery of
valuable minerals, (b) as to the validity of any of the Material Properties
comprising unpatented millsites, or (c) that the Company or any subsidiary has
established or is maintaining pedis possessio rights with respect to any of
their unpatented mining claims).

 

(cc)         Mining Rights.  The Mining Rights of the Company in respect of the
Material Properties are in good standing, are valid, subsisting and enforceable,
other than as set out in the Registration Statement, the Time of Sale Prospectus
and the Prospectus, except where the invalidity of any of the applicable Mining
Rights would not have a Material Adverse Effect (and provided that nothing in
this Agreement shall be deemed a representation (a) that any of the Mining
Rights contains a discovery of valuable minerals, (b) as to the validity of any
of Mining Rights comprising unpatented millsites, or (c) that the Company or any
subsidiary has established or is maintaining pedis possessio rights with respect
to any of the Mining Rights), and, other than as set forth in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, are free and clear of
any material Liens or charges.  Other than as set out in the Registration
Statement, the Time of Sale Prospectus and the Prospectus, no material
commission, royalty, license fee or similar payment is payable in respect of any
of them. No other material property rights are necessary for the conduct of the
Company’s business as currently carried on as of the date hereof; and there are
no material restrictions on the ability of the Company to use, transfer or
otherwise exploit any such property rights. The Company is the holder of Mining
Rights necessary to carry on the activities of the Company as currently
conducted. Mining Rights held by the Company cover the areas required by the
Company for such purposes.

 

 19 

 

 

(dd)         Mining Agreements. Any and all of the agreements and other
documents and instruments pursuant to which the Company holds the Material
Properties are valid and subsisting agreements, documents or instruments in full
force and effect, enforceable in accordance with the terms thereof, the Company
is not in default of any of the material provisions of any such agreements,
documents or instruments, nor to the knowledge of the Company has any such
default been alleged, except in each case as would not reasonably be expected to
have a Material Adverse Effect on the Company, and the Material Properties are
not subject to any right of first refusal or similar purchase or acquisition
rights.

 

(ee)         Access to Technical Information. The Company made available to the
respective authors thereof prior to the issuance of the Technical Reports, for
the purpose of preparing the Technical Reports, as applicable, all information
requested, and to the knowledge of the Company, no such information contained
any material misrepresentation as at the relevant time the relevant information
was made available; the Company does not have any knowledge of a material
adverse change in any production, cost, price, reserves or other relevant
information provided since the dates that such information was so provided.

 

(ff)          Technical Reports. The Technical Reports complied in all material
respects with the requirements of National Instrument 43-101 – Standards of
Disclosure for Mineral Projects (“NI 43-101”) as at the date of each such
report; since the date of preparation of the Technical Reports there has been no
change that would disaffirm or change any aspect of the Technical Reports in any
material respect or require the Company to file updated Technical Reports in
accordance with NI 43-101.

 

(gg)        Assessments on Mining Claims. All claim maintenance fees required to
be paid in relation to the material unpatented mining claims and millsites of
the Company and the Subsidiaries in order to maintain their respective interests
therein, if any, have been paid to date and the Company and each of the
Subsidiaries has complied in all material respects with all applicable
governmental Laws, regulations and policies in this regard as well as with
regard to legal, contractual obligations to third parties in this regard, except
in respect of unpatented mining claims and millsites that the Company or any of
the Subsidiaries intends to abandon or relinquish and except for any
non-compliance which would not either individually or in the aggregate have a
Material Adverse Effect.

 

(hh)         Mining Operations. All mining operations on the properties of the
Company and the Subsidiaries have been conducted in all material respects in
accordance with good mining and engineering practices and all applicable
workers’ compensation and health and safety and workplace laws, regulations and
policies have been duly complied with.

 

 20 

 

 

 

(ii)             Title Reports. The Mining Rights or equivalent thereof
described in the Title Reports listed on Schedule B attached hereto constitute
all of the material Mining Rights comprising the Material Properties, and the
Title Reports were correct and complete in all respects on the date they were
issued. Other than as otherwise disclosed herein, in the Registration Statement,
the Time of Sale Prospectus and the Prospectus, the Company is not aware of any
facts or circumstances, and has not taken any act or failed or omitted to take
any act, that would cause any such Title Report to no longer be correct and
complete in all material respects.

 

(jj)              Indigenous Rights. There are no material claims with respect
to aboriginal or indigenous rights currently outstanding or, to the knowledge of
the Company, threatened or pending, with respect to the Material Properties.

 

(kk)            Environmental Laws. Except as set forth in the Registration
Statement, the Time of Sale Prospectus or the Prospectus, the Company and its
Subsidiaries (i) are in compliance with any and all applicable federal, state,
local and foreign Laws relating to the protection of human health and safety,
the environment or hazardous or toxic substances or wastes, pollutants or
contaminants (collectively, “Environmental Laws”); (ii) have received and are in
compliance with all permits, licenses or other approvals required of them under
applicable Environmental Laws to conduct their respective businesses as
described in the Registration Statement, the Time of Sale Prospectus or the
Prospectus; and (iii) have not received notice of any actual or potential
liability for the investigation or remediation of any disposal or release of
hazardous or toxic substances or wastes, pollutants or contaminants, except, in
the case of any of clauses (i), (ii) or (iii) above, for any such failure to
comply or failure to receive required permits, licenses, other approvals or
liability as would not, individually or in the aggregate, have a Material
Adverse Effect.

 

(ll)              Periodic Review of Costs of Environmental Compliance. In the
ordinary course of its business, the Company conducts a periodic review of the
effect of Environmental Laws on the business, operations and properties of the
Company and its subsidiaries, in the course of which it identifies and evaluates
associated costs and liabilities (including any capital or operating
expenditures required for clean-up, closure of properties or compliance with
Environmental Laws or any permit, license or approval, any related constraints
on operating activities and any potential liabilities to third parties). No
facts or circumstances have come to the Company’s attention that could result in
costs or liabilities that could be expected, individually or in the aggregate,
to have a Material Adverse Effect.

 

 21 

 

 

(mm)         Disclosure Controls. The Company and each of its Subsidiaries
maintain systems 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 accountability;
(iii) access to assets is permitted only in accordance with management’s general
or specific authorization; and (iv) the recorded accountability for assets is
compared with the existing assets at reasonable intervals and appropriate action
is taken with respect to any differences. The Company’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 (other than as set
forth in the Registration Statement, the Time of Sale Prospectus or the
Prospectus). Since the date of the latest audited financial statements of the
Company included in 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 (other than as set forth in the Registration Statement, the
Time of Sale Prospectus or the Prospectus). The Company has established
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and
15d-15) for the Company and designed such disclosure controls and procedures to
ensure that material information relating to the Company and each of its
Subsidiaries is made known to the certifying officers by others within those
entities, particularly during the period in which the Company’s Annual Report on
Form 10-K or Quarterly Report on Form 10-Q, as the case may be, is being
prepared. The Company’s certifying officers have evaluated the effectiveness of
the Company’s disclosure controls and procedures as of a date within 90 days
prior to the filing date of the Form 10-K for the fiscal year most recently
ended (such date, the “Evaluation Date”). The Company presented in its Form 10-K
for the fiscal year most recently ended the conclusions of the certifying
officers about the effectiveness of the disclosure controls and procedures based
on their evaluations as of the Evaluation Date and the disclosure controls and
procedures are effective. Since the Evaluation Date, there have been no
significant changes in the Company’s internal controls (as such term is defined
in Item 307(b) of Regulation S-K under the Securities Act) or, to the Company’s
knowledge, in other factors that could significantly affect the Company’s
internal controls.

 

(nn)           Sarbanes-Oxley. There is and has been no failure on the part of
the Company or any of the Company’s directors or officers, in their capacities
as such, to comply in all material respects with any applicable provisions of
the Sarbanes-Oxley Act and the rules and regulations promulgated thereunder.
Each of the principal executive officer and the principal financial officer of
the Company (or each former principal executive officer of the Company and each
former principal financial officer of the Company as applicable) has made all
certifications required by Sections 302 and 906 of the Sarbanes-Oxley Act with
respect to all reports, schedules, forms, statements and other documents
required to be filed by it or furnished by it to the Commission. For purposes of
the preceding sentence, “principal executive officer” and “principal financial
officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act.

 

(oo)           Brokers. Neither the Company nor any of the Subsidiaries has
incurred any liability for any finder’s fees, brokerage commissions or similar
payments in connection with the transactions herein contemplated, except as may
otherwise exist with respect to or pursuant to this Agreement.

 

 22 

 

 

(pp)           Labor Disputes. No labor disturbance by or dispute with employees
of the Company or any of its Subsidiaries exists or, to the knowledge of the
Company, is threatened which would result in a Material Adverse Effect.

 

(qq)           Investment Company Act. Neither the Company nor any of the
Subsidiaries is, or will be, either after receipt of payment for the Securities
or after the application of the proceeds therefrom as described under “Use of
Proceeds” in the Registration Statement, the Time of Sale Prospectus or the
Prospectus , required to register as an “investment company” or an entity
“controlled” by an “investment company,” as such terms are defined in the
Investment Company Act of 1940 (the “Investment Company Act”).

 

(rr)             Operations. The operations of the Company and its Subsidiaries
are and have been conducted at all times in compliance with applicable financial
record keeping and reporting requirements of the Currency and Foreign
Transactions Reporting Act of 1970, the Proceeds of Crime (Money Laundering) and
Terrorist Financing Act (Canada), the money laundering Laws of all jurisdictions
to which the Company or its Subsidiaries are subject, the rules and regulations
thereunder and any related or similar rules, regulations or guidelines, issued,
administered or enforced by any Governmental Authority (collectively, the “Money
Laundering Laws”); and no action, suit or proceeding by or before any
Governmental Authority involving the Company or any of its Subsidiaries with
respect to the Money Laundering Laws is pending or, to the knowledge of the
Company, threatened.

 

(ss)            Off-Balance Sheet Arrangements. There are no transactions,
arrangements and other relationships between and/or among the Company, and/or
any of its affiliates and any unconsolidated entity, including any structural
finance, special purpose or limited purpose entity (each, an “Off-Balance Sheet
Transaction”) that could reasonably be expected to affect materially the
Company’s liquidity or the availability of or requirements for its capital
resources, including those Off-Balance Sheet Transactions described in the
Commission’s Statement about Management’s Discussion and Analysis of Financial
Conditions and Results of Operations (Release Nos. 33-8056; 34-45321; FR-61),
required to be described in the Prospectus which have not been described as
required.

 

(tt)             ERISA. To the knowledge of the Company, each material employee
benefit plan, within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974 (“ERISA”), that is maintained, administered or
contributed to by the Company or any of its affiliates for employees or former
employees of the Company and any of its Subsidiaries has been maintained in
material compliance with its terms and the requirements of any applicable
statutes, orders, rules and regulations, including ERISA and the Internal
Revenue Code of 1986 (the “Code”); no prohibited transaction, within the meaning
of Section 406 of ERISA or Section 4975 of the Code, has occurred which would
result in a material liability to the Company with respect to any such plan
excluding transactions effected pursuant to a statutory or administrative
exemption; and for each such plan that is subject to the funding rules of
Section 412 of the Code or Section 302 of ERISA, no “accumulated funding
deficiency” as defined in Section 412 of the Code has been incurred, whether or
not waived, and the fair market value of the assets of each such plan (excluding
for these purposes accrued but unpaid contributions) exceeds the present value
of all benefits accrued under such plan determined using reasonable actuarial
assumptions.

 

 23 

 

 

(uu)           Forward-Looking Statements. Each financial or operational
projection or other “forward-looking statement” (as defined by Section 27A of
the Securities Act or Section 21E of the Exchange Act) contained in the
Registration Statement, the Time of Sale Prospectus or the Prospectus (i) was so
included by the Company in good faith and with reasonable basis after due
consideration by the Company of the underlying assumptions, estimates and other
applicable facts and circumstances and (ii) is accompanied by meaningful
cautionary statements identifying those factors that could cause actual results
to differ materially from those in such forward-looking statement. No such
statement was made with the knowledge of an executive officer or director of the
Company that is was false or misleading.

 

(vv)           Margin Rules. Neither the issuance, sale and delivery of the
Securities nor the application of the proceeds thereof by the Company as
described in the Registration Statement, the Time of Sale Prospectus, or the
Prospectus will violate Regulation T, U or X of the Board of Governors of the
Federal Reserve System or any other regulation of such Board of Governors.

 

(ww)       Insurance. The Company and each of its Subsidiaries carry, or are
covered by, insurance in such amounts and covering such risks as the Company and
each of its Subsidiaries reasonably believe are adequate for the conduct of
their properties and as is customary for similarly-sized companies engaged in
similar businesses in similar industries.

 

(xx)           No Improper Practices. (i) Neither the Company nor the
Subsidiaries, nor to the knowledge of the Company, any director, officer, or
employee of the Company or any Subsidiary or any agent, affiliate or other
person, in each case acting on behalf of the Company or any Subsidiary has, in
the past five years, made any unlawful contributions to any candidate for any
political office (or failed fully to disclose any contribution in violation of
applicable Law) or made any contribution or other payment to any official of, or
candidate for, any federal, state, municipal, or foreign office or other person
charged with similar public or quasi-public duty in violation of any applicable
Law or of the character required to be disclosed in the Prospectus; (ii) no
relationship, direct or indirect, exists between or among the Company or any
Subsidiary or any affiliate of any of them, on the one hand, and the directors,
officers and stockholders of the Company or any Subsidiary, on the other hand,
that is required by the Securities Act to be described in the Registration
Statement, the Time of Sale Prospectus and the Prospectus that is not so
described; (iii) no relationship, direct or indirect, exists between or among
the Company or any Subsidiary or any affiliate of them, on the one hand, and the
directors, officers, or stockholders of the Company or any Subsidiary, on the
other hand, that is required by the rules of FINRA to be described in the
Registration Statement, the Time of Sale Prospectus and the Prospectus that is
not so described; (iv) except as described in the Registration Statement, the
Time of Sale Prospectus and the Prospectus, there are no material outstanding
loans or advances or material guarantees of indebtedness by the Company or any
Subsidiary to or for the benefit of any of their respective officers or
directors or any of the members of the families of any of them; and (v) the
Company has not offered, or caused any placement agent to offer, Common Shares
to any person with the intent to influence unlawfully (A) a customer or supplier
of the Company or any Subsidiary to alter the customer’s or supplier’s level or
type of business with the Company or any Subsidiary or (B) a trade journalist or
publication to write or publish favorable information about the Company or any
Subsidiary or any of their respective products or services, and, (vi) neither
the Company nor any Subsidiary nor, to the Company’s knowledge, any director,
officer or employee of the Company or any agent, affiliate or other person
acting on behalf of the Company or any Subsidiary has (A) violated or is in
violation of any applicable provision of the U.S. Foreign Corrupt Practices Act
of 1977, the Corruption of Foreign Public Officials Act (Canada) or any other
applicable anti-bribery or anti-corruption Law (collectively, “Anti-Corruption
Laws”), (B) promised, offered, provided, attempted to provide or authorized the
provision of anything of value, directly or indirectly, to any person for the
purpose of obtaining or retaining business, influencing any act or decision of
the recipient or securing any improper advantage, or (C) made any payment of
funds of the Company or any Subsidiary or received or retained any funds in
violation of any Anti-Corruption Laws.

 

 24 

 

 

(yy)           No Conflicts. Neither the execution of this Agreement or the
Warrants, nor the issuance, offering or sale of the Securities or Warrant
Shares, nor the consummation of any of the transactions contemplated herein and
therein, nor the compliance by the Company with the terms and provisions hereof
and thereof will conflict with, or will result in a breach of, any of the terms
and provisions of, or has constituted or will constitute a default under, or has
resulted in or will result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company pursuant to the terms of
any contract or other agreement to which the Company may be bound or to which
any of the property or assets of the Company is subject, except (i) such
conflicts, breaches or defaults as may have been waived and (ii) such conflicts,
breaches and defaults that would not have a Material Adverse Effect; nor will
such action result (x) in any violation of the provisions of the organizational
or governing documents of the Company, or (y) in any material violation of the
provisions of any statute or any order, rule or regulation applicable to the
Company or of any Governmental Authority having jurisdiction over the Company.

 

(zz)            Sanctions.

 

(i)                 The Company represents that, neither the Company nor any of
its Subsidiaries (collectively, the “Entity”) or any director, officer,
employee, or to the Company’s knowledge, any agent, affiliate or representative
of the Entity, is a government, individual, or entity (a “Person”) that is, or
is owned or controlled by a Person that is:

 

 25 

 

 

(A)  the subject of any sanctions administered or enforced by the U.S.
Department of Treasury’s Office of Foreign Assets Control (“OFAC”), the United
Nations Security Council, the European Union, Her Majesty’s Treasury, the Office
of the Superintendent of Financial Institutions (Canada), or pursuant to the
Special Economic Measures Act (Canada), or other relevant sanctions authorities,
including designation on OFAC’s Specially Designated Nationals and Blocked
Persons List or OFAC’s Foreign Sanctions Evaders List (as amended, collectively,
“Sanctions”), nor

 

(B)  located, organized or resident in a country or territory that is the
subject of Sanctions that broadly prohibit dealings with that country or
territory (including Cuba, Iran, North Korea, Syria and the Crimea Region of the
Ukraine) (the “Sanctioned Countries”).

 

(ii)               The Entity represents and covenants that it will not,
directly or indirectly, use the proceeds of the offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner
or other Person:

 

(A)  to fund or facilitate any activities or business of or with any Person or
in any country or territory that, at the time of such funding or facilitation,
is the subject of Sanctions or is a Sanctioned Country; or

 

(B)  in any other manner that will result in a violation of Sanctions by any
Person (including any Person participating in the offering, whether as
underwriter, advisor, investor or otherwise).

 

(iii)              The Entity represents and covenants that, except as detailed
in the Registration Statement and the Prospectus, for the past 5 years, it has
not engaged in, is not now engaging in, and will not engage in, any dealings or
transactions with any Person, or in any country or territory, that at the time
of the dealing or transaction is or was the subject of Sanctions or is or was a
Sanctioned Country.

 

(aaa)         Compliance with Laws. The Company and each of its Subsidiaries are
in compliance with all applicable Laws (including all Environmental Laws) in the
jurisdictions in which it carries on business; the Company has not received a
notice of non-compliance, nor knows of, nor has reasonable grounds to know of,
any facts that could give rise to a notice of non-compliance with any such Laws,
and is not aware of any pending change or contemplated change to any applicable
Law or governmental position, in each case that would materially adversely
affect the business of the Company or the business or legal environment under
which the Company operates.

 

(bbb)         Statistical and Market-Related Data. All statistical, demographic
and market-related data included in the Registration Statement, the Time of Sale
Prospectus or the Prospectus are based on or derived from sources that the
Company believes to be reliable and accurate or represent the Company’s good
faith estimates that are made on the basis of data derived from such sources.

 

(ccc)          Stock Exchange Listing. The Common Shares are registered pursuant
to Section 12(b) or 12(g) of the Exchange Act and are listed on the NYSE
American (the “NYSE American”) and the Toronto Stock Exchange (“TSX”), and the
Company has taken no action designed to, or likely to have the effect of,
terminating the registration of Common Shares under the Exchange Act or
delisting the Common Shares from the NYSE American or the TSX, nor has the
Company received any notification that the Commission, the NYSE American or the
TSX is contemplating terminating such registration or listing. To the Company’s
knowledge, it is in material compliance with all applicable listing requirements
of NYSE American and the TSX.

 

 26 

 

 

(ddd)         Related-Party Transactions. There are no business relationships or
related-party transactions involving the Company or any of its subsidiaries or
any other person required to be described in the Registration Statement, the
Time of Sale Prospectus or the Prospectus that have not been described as
required.

 

(eee)          FINRA Matters. All of the information provided to the Placement
Agent or to counsel for the Placement Agent by the Company, its counsel, its
officers and directors and the holders of any securities (debt or equity) or
options to acquire any securities of the Company in connection with the offering
of the Securities is true, complete, correct and compliant with FINRA’s rules
and any letters, filings or other supplemental information provided to FINRA
pursuant to FINRA rules is true, complete and correct.

 

(fff)           Parties to Lock-Up Agreements. The Company has furnished to the
Placement Agent a lock-up agreement in the form attached hereto as Exhibit B
(the “Lock-up Agreement”) from each of the persons listed on Exhibit C. Such
Exhibit C lists under an appropriate caption the directors and officers of the
Company. If any additional persons shall become directors or officers of the
Company prior to the end of the Lock-up Period (as defined in the Lock-Up
Agreement), the Company shall cause each such person, prior to or
contemporaneously with their appointment or election as a director or officer of
the Company, to execute and deliver to the Placement Agent a Lock-up Agreement.

 

(ggg)         No Rights to Purchase Preferred Stock. The issuance and sale of
the Shares as contemplated hereby will not cause any holder of any shares of
capital stock, securities convertible into or exchangeable or exercisable for
capital stock or options, warrants or other rights to purchase capital stock or
any other securities of the Company to have any right to acquire any shares of
preferred stock of the Company.

 

(hhh)        No Contract Terminations. Neither the Company nor any of its
subsidiaries has sent or received any communication regarding termination of, or
intent not to renew, any of the contracts or agreements referred to or described
in the Registration Statement, the Time of Sale Prospectus or the Prospectus ,
and no such termination or non-renewal has been threatened by the Company or any
of its subsidiaries or, to the Company’s knowledge, any other party to any such
contract or agreement, which threat of termination or non-renewal has not been
rescinded as of the date hereof, in each case except as would not result in a
Material Adverse Effect.

 

(iii)             Dividend Restrictions. No subsidiary of the Company is
prohibited or restricted, directly or indirectly, from paying dividends to the
Company, or from making any other distribution with respect to such subsidiary’s
equity securities or from repaying to the Company or any other subsidiary of the
Company any amounts that may from time to time become due under any loans or
advances to such subsidiary from the Company or from transferring any property
or assets to the Company or to any other subsidiary.

 

 27 

 

 

Any certificate signed by any officer of the Company or any of its subsidiaries
and delivered to any Placement Agent or to counsel for the Placement Agent in
connection with the offering, or the purchase and sale, of the Securities shall
be deemed a representation and warranty by the Company to each Placement Agent
as to the matters covered thereby.

 

The Company has a reasonable basis for making each of the representations set
forth in this Section 3.1. The Company acknowledges that the Placement Agent
and, for purposes of the opinions to be delivered, Company Counsel and Cooley,
will rely upon the accuracy and truthfulness of the foregoing representations
and hereby consents to such reliance.

 

3.2              Representations and Warranties of the Purchasers. Each
Purchaser, for itself and for no other Purchaser, hereby represents and warrants
as of the date hereof and as of the Closing Date to the Company as follows
(unless as of a specific date therein, in which case they shall be accurate as
of such date):

 

(a)               Organization; Authority. Such Purchaser is either an
individual or an entity duly incorporated or formed, validly existing and in
good standing under the Laws of the jurisdiction of its incorporation or
formation with full right, corporate, partnership, limited liability company or
similar power and authority to enter into and to consummate the transactions
contemplated by the Transaction Documents and otherwise to carry out its
obligations hereunder and thereunder. The execution and delivery of the
Transaction Documents and performance by such Purchaser of the transactions
contemplated by the Transaction Documents have been duly authorized by all
necessary corporate, partnership, limited liability company or similar action,
as applicable, on the part of such Purchaser. Each Transaction Document to which
it is a party has been duly executed by such Purchaser, and when delivered by
such Purchaser in accordance with the terms hereof, will constitute the valid
and legally binding obligation of such Purchaser, enforceable against it in
accordance with its terms, except: (i) as limited by general equitable
principles and applicable bankruptcy, insolvency, reorganization, moratorium and
other Laws of general application affecting enforcement of creditors’ rights
generally, (ii) as limited by Laws relating to the availability of specific
performance, injunctive relief or other equitable remedies and (iii) insofar as
indemnification and contribution provisions may be limited by applicable Law.

 

(b)               Understandings or Arrangements. Such Purchaser is acquiring
the Securities as principal for its own account and has no direct or indirect
arrangement or understandings with any other persons to distribute or regarding
the distribution of such Securities (this representation and warranty not
limiting such Purchaser’s right to sell the Securities pursuant to the
Registration Statement or otherwise in compliance with applicable federal and
state securities laws). Such Purchaser is acquiring the Securities hereunder in
the ordinary course of its business.

 

 28 

 

 

(c)               Purchaser Status. At the time such Purchaser was offered the
Securities, it was, and as of the date hereof it is, and on the Closing Date and
on each date on which it exercises any Warrants, it will be an “accredited
investor” as defined in Rule 501(a)(1), (a)(2), (a)(3), (a)(7) or (a)(8) under
the Securities Act.

 

(d)               Canadian Private Placement. Purchaser acknowledges that the
Securities have not been registered or qualified for distribution in any
Province or Territory of Canada, and are not eligible for resale in Canada for a
period ending four (4) months plus one day from the Closing Date (the “Canadian
Transfer Restriction”). The Purchaser is acquiring the Securities for its own
account and not with a view toward, or for sale in connection with, any
distribution thereof, or with any intention of distributing or selling the
Securities in any Province or Territory of Canada.

 

(e)               Experience of Such Purchaser. Such Purchaser, either alone or
together with its representatives, has such knowledge, sophistication and
experience in business and financial matters so as to be capable of evaluating
the merits and risks of the prospective investment in the Securities, and has so
evaluated the merits and risks of such investment. Such Purchaser is able to
bear the economic risk of an investment in the Securities and, at the present
time, is able to afford a complete loss of such investment.

 

(f)                Access to Information. Such Purchaser acknowledges that it
has had the opportunity to review the Transaction Documents (including all
exhibits and schedules thereto) and the SEC Reports and has been afforded,
(i) the opportunity to ask such questions as it has deemed necessary of, and to
receive answers from, representatives of the Company concerning the terms and
conditions of the offering of the Securities and the merits and risks of
investing in the Securities; (ii) access to information about the Company and
its financial condition, results of operations, business, properties, management
and prospects sufficient to enable it to evaluate its investment; and (iii) the
opportunity to obtain such additional information that the Company possesses or
can acquire without unreasonable effort or expense that is necessary to make an
informed investment decision with respect to the investment. Such Purchaser
acknowledges and agrees that neither the Placement Agent nor any Affiliate of
the Placement Agent has provided such Purchaser with any information or advice
with respect to the Securities nor is such information or advice necessary or
desired. Neither the Placement Agent nor any Affiliate has made or makes any
representation as to the Company or the quality of the Securities and the
Placement Agent and any Affiliate may have acquired non-public information with
respect to the Company which such Purchaser agrees need not be provided to it.
In connection with the issuance of the Securities to such Purchaser, neither the
Placement Agent nor any of its Affiliates has acted as a financial advisor or
fiduciary to such Purchaser.

 

(g)               Report of Trade. The Purchaser acknowledges that the Company
may be required to file a report with the Canadian securities commissions or
other securities regulatory authorities containing personal information about
the Purchaser. This report will include the full name, address and telephone
number of the Purchaser, the number and type of securities purchased, the total
purchase price paid for the securities, the date of the closing and the
exemption relied upon under applicable securities laws to complete such
purchase.

 

 29 

 

 

(h)               Canadian Legends. The Purchaser acknowledges that the
Securities are not being qualified pursuant to a prospectus for distribution to
the public in Canada under applicable Canadian securities laws and are not
freely tradeable in any Province or Territory of Canada. Any certificate
representing the Shares, the Warrants and the Warrant Shares (if issued prior to
the day that is four months and one day after the Closing Date) will bear, or if
such Shares, Warrants and Warrant Shares are entered into a direct registration
or other electronic book-entry system then the Purchaser acknowledges notice of
such Securities being subject to, the legend set forth below until the day that
is four months and a one day after the Closing Date:

 

UNLESS PERMITTED UNDER APPLICABLE SECURITIES LEGISLATION, THE HOLDER OF THIS
SECURITY MUST NOT TRADE THE SECURITY IN CANADA BEFORE DECEMBER 1, 2020.

 

In addition, the certificates representing the Shares, and if issued before the
day that is four months and one day after the Closing Date, the Warrant Shares,
will bear the following legend:

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE TORONTO STOCK
EXCHANGE (“TSX”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED THROUGH THE
FACILITIES OF THE TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND CONSEQUENTLY
ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD DELIVERY” IN
SETTLEMENT OF TRANSACTIONS ON THE TSX.

 

Notwithstanding anything herein to the contrary, the terms of this Agreement and
the Warrant require the Company to deliver the Shares and Warrant Shares, at the
Closing or upon exercise of the Warrants via the DWAC system and accordingly
such Securities will have no restrictions on resale on any facilities of the
U.S. Trading Market.

 

(i)                 Certain Transactions and Confidentiality. Other than
consummating the transactions contemplated hereunder, such Purchaser has not,
nor has any Person acting on behalf of or pursuant to any understanding with
such Purchaser, directly or indirectly executed any purchases or sales,
including Short Sales, of the securities of the Company during the period
commencing as of the time that such Purchaser first received a term sheet
(written or oral) from the Company or any other Person representing the Company
setting forth the material terms of the transactions contemplated hereunder and
ending immediately prior to the execution hereof. Notwithstanding the foregoing,
in the case of a Purchaser that is a multi-managed investment vehicle whereby
separate portfolio managers manage separate portions of such Purchaser’s assets
and the portfolio managers have no direct knowledge of the investment decisions
made by the portfolio managers managing other portions of such Purchaser’s
assets, the representation set forth above shall only apply with respect to the
portion of assets managed by the portfolio manager that made the investment
decision to purchase the Securities covered by this Agreement. Other than to
other Persons party to this Agreement or to such Purchaser’s representatives,
including, without limitation, its officers, directors, partners, legal and
other advisors, employees, agents and Affiliates, such Purchaser has maintained
the confidentiality of all disclosures made to it in connection with this
transaction (including the existence and terms of this transaction).
Notwithstanding the foregoing, for the avoidance of doubt, nothing contained
herein shall constitute a representation or warranty, or preclude any actions,
with respect to the identification of the availability of, locating of, or
securing of, available shares to borrow in order to effect Short Sales or
similar transactions in the future.

 

 30 

 

 

(j)                General Solicitation. Such Purchaser is not purchasing the
Securities as a result of any advertisement, article, notice or other
communication regarding the Securities published in any newspaper, magazine or
similar media or broadcast over television or radio or presented at any seminar
or, to the knowledge of such Purchaser, any other general solicitation or
general advertisement.

 

The Company acknowledges and agrees that the representations contained in this
Section 3.2 shall not modify, amend or affect such Purchaser’s right to rely on
the Company’s representations and warranties contained in this Agreement or any
representations and warranties contained in any other Transaction Document or
any other document or instrument executed and/or delivered in connection with
this Agreement or the consummation of the transactions contemplated hereby.

 

ARTICLE IV.
OTHER AGREEMENTS OF THE PARTIES

 

4.1          Transfer Restrictions.

 

(a)               The Shares and Warrant Shares shall be issued free of all
legends except that of the Canadian legend referred to in Section 3.2(h) if
applicable. The Securities may only be disposed of in compliance with state and
federal securities Laws.

 

(b)               Each Purchaser, severally and not jointly with the other
Purchasers, agrees with the Company that such Purchaser will sell any Securities
pursuant to either the registration requirements of the Securities Act,
including any applicable prospectus delivery requirements, or an exemption
therefrom, and that if Securities are sold pursuant to a registration statement,
they will be sold in compliance with the plan of distribution set forth therein,
and acknowledges that the removal of the restrictive legend from certificates
representing Securities as set forth in this Section 4.1 is predicated upon the
Company’s reliance upon this understanding.

 

 31 

 

 

4.2          Securities Laws Disclosure; Publicity. The Company shall (a) by the
Disclosure Time, issue a press release disclosing the material terms of the
transactions contemplated hereby, and (b) file a Current Report on Form 8-K,
including the Transaction Documents as exhibits thereto, with the Commission
within the time required by the Exchange Act. From and after the issuance of
such press release, the Company represents to the Purchasers that it shall have
publicly disclosed all material, non-public information delivered to any of the
Purchasers by the Company or any of its Subsidiaries, or any of their respective
officers, directors, employees or agents in connection with the transactions
contemplated by the Transaction Documents. In addition, effective upon the
issuance of such press release, the Company acknowledges and agrees that any and
all confidentiality or similar obligations under any agreement, whether written
or oral, between the Company, any of its Subsidiaries or any of their respective
officers, directors, agents, employees or Affiliates on the one hand, and any of
the Purchasers or any of their Affiliates on the other hand, shall terminate.
The Company and each Purchaser shall consult with each other in issuing any
other press releases with respect to the transactions contemplated hereby, and
neither the Company nor any Purchaser shall issue any such press release nor
otherwise make any such public statement without the prior consent of the
Company, with respect to any press release of any Purchaser, or without the
prior consent of each Purchaser, with respect to any press release of the
Company, which consent shall not unreasonably be withheld or delayed, except if
such disclosure is required by law, in which case the disclosing party shall
promptly provide the other party with prior notice of such public statement or
communication. Notwithstanding the foregoing, the Company shall not publicly
disclose the name of any Purchaser, or include the name of any Purchaser in any
filing with the Commission or any regulatory agency or Trading Market, without
the prior written consent of such Purchaser, except (a) as required by federal
securities law in connection with the filing of final Transaction Documents with
the Commission and (b) to the extent such disclosure is required by law or
Trading Market regulations, in which case the Company shall provide the
Purchasers with prior notice of such disclosure permitted under this clause (b).

 

4.3          Shareholder Rights Plan. No claim will be made or enforced by the
Company or, with the consent of the Company, any other Person, that any
Purchaser is an “Acquiring Person” under any control share acquisition, business
combination, poison pill (including any distribution under a rights agreement)
or similar anti-takeover plan or arrangement in effect or hereafter adopted by
the Company, or that any Purchaser could be deemed to trigger the provisions of
any such plan or arrangement, by virtue of receiving Securities under the
Transaction Documents or under any other agreement between the Company and the
Purchasers.

 

4.4          Non-Public Information. Except with respect to the material terms
and conditions of the transactions contemplated by the Transaction Documents,
which shall be disclosed pursuant to Section 4.2, the Company covenants and
agrees that neither it, nor any other Person acting on its behalf will provide
any Purchaser or its agents or counsel with any information that constitutes, or
the Company reasonably believes constitutes, material non-public information,
unless prior thereto such Purchaser shall have consented to the receipt of such
information and agreed with the Company to keep such information confidential.
The Company understands and confirms that each Purchaser shall be relying on the
foregoing covenant in effecting transactions in securities of the Company. To
the extent that the Company delivers any material, non-public information to a
Purchaser without such Purchaser’s consent, the Company hereby covenants and
agrees that such Purchaser shall not have any duty of confidentiality to the
Company, any of its Subsidiaries, or any of their respective officers,
directors, agents, employees or Affiliates, or a duty to the Company, any of its
Subsidiaries or any of their respective officers, directors, agents, employees
or Affiliates not to trade on the basis of, such material, non-public
information, provided that the Purchaser shall remain subject to applicable law.
To the extent that any notice provided pursuant to any Transaction Document
constitutes, or contains, material, non-public information regarding the Company
or any Subsidiaries, the Company shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K. The Company understands and
confirms that each Purchaser shall be relying on the foregoing covenant in
effecting transactions in securities of the Company.

 

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4.5          Use of Proceeds. The Company shall use the net proceeds from the
sale of the Securities hereunder for working capital purposes and shall not use
such proceeds: (a) for the satisfaction of any portion of the Company’s debt
(other than payment of trade payables in the ordinary course of the Company’s
business and prior practices and scheduled payment of indebtedness disclosed in
the SEC Reports), (b) for the redemption of any Common Shares or Common Share
Equivalents, (c) for the settlement of any outstanding litigation or (d) in
violation of FCPA or OFAC regulations.

 

4.6          Indemnification of Purchasers. Subject to the provisions of this
Section 4.6, the Company will indemnify and hold each 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 such 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 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 (a) any breach of any of the representations,
warranties, covenants or agreements made by the Company in this Agreement or in
the other Transaction Documents or (b) any action instituted against the
Purchaser Parties in any capacity, or any of them or their respective
Affiliates, by any stockholder of the Company who is not an Affiliate of such
Purchaser Party, with respect to any of the transactions contemplated by the
Transaction Documents (unless such action is based upon a breach of such
Purchaser Party’s representations, warranties or covenants under the Transaction
Documents or any agreements or understandings such Purchaser Party may have with
any such stockholder or any violations by such Purchaser Party of state or
federal securities laws or any conduct by such Purchaser Party which constitutes
fraud, gross negligence, willful misconduct or malfeasance). 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 Company in writing, and the Company shall have the right to assume the
defense thereof with counsel of its own choosing reasonably acceptable to the
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 (i) the employment thereof has been specifically
authorized by the Company in writing, (ii) the Company has failed after a
reasonable period of time to assume such defense and to employ counsel or
(iii) in such action there is, in the reasonable opinion of counsel, a material
conflict on any material issue between the position of the Company and the
position of such Purchaser Party, in which case the Company shall be responsible
for the reasonable fees and expenses of no more than one such separate counsel.
The Company will not be liable to any Purchaser Party under this Agreement
(y) for any settlement by a Purchaser Party effected without the Company’s prior
written consent, which shall not be unreasonably withheld or delayed; or (z) to
the extent, but only to the extent that a loss, claim, damage or liability is
attributable to any Purchaser Party’s breach of any of the representations,
warranties, covenants or agreements made by such Purchaser Party in this
Agreement or in the other Transaction Documents. The indemnification required by
this Section 4.6 shall be made by periodic payments of the amount thereof during
the course of the investigation or defense, as and when bills are received or
are incurred. The indemnity agreements contained herein shall be in addition to
any cause of action or similar right of any Purchaser Party against the Company
or others and any liabilities the Company may be subject to pursuant to law.

 

4.7          Reservation of Common Shares. As of the date hereof, the Company
has reserved and the Company shall continue to reserve and keep available at all
times, free of preemptive rights, a sufficient number of Common Shares for the
purpose of enabling the Company to issue Shares pursuant to this Agreement and
Warrant Shares pursuant to any exercise of the Warrants.

 

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4.8          Listing of Common Shares. The Company hereby agrees to use
commercially reasonable best efforts to maintain the listing or quotation of the
Common Shares on the Trading Markets on which it is currently listed, and
concurrently with the Closing, the Company shall apply to list or quote all of
the Shares and the Warrant Shares on such Trading Markets and promptly use
commercially reasonable best efforts to secure the listing of all of the Shares
and the Warrant Shares on such Trading Markets. The Company further agrees, if
the Company applies to have the Common Shares traded on any other Trading
Market, it will then include in such application all of the Shares and Warrant
Shares, and will take such other action as is necessary to cause all of the
Shares and Warrant Shares to be listed or quoted on such other Trading Market as
promptly as possible. The Company will then take all action reasonably necessary
to continue the listing and trading of its Common Shares on a Trading Market and
will comply in all material respects with the Company’s reporting, filing and
other obligations under the bylaws or rules of the Trading Market. The Company
agrees to maintain the eligibility of the Common Shares for electronic transfer
through the Depository Trust Company or another established clearing
corporation, including, without limitation, by timely payment of fees to the
Depository Trust Company or such other established clearing corporation in
connection with such electronic transfer.

 

4.9          Subsequent Equity Sales.

 

(a)               From the date hereof until 90 days after the Closing Date,
neither the Company nor any Subsidiary shall issue, enter into any agreement to
issue or announce the issuance or proposed issuance of any Common Shares or
Common Share Equivalents.

 

(b)               Notwithstanding the foregoing, this Section 4.9 shall not
apply in respect of an Exempt Issuance.

 

4.10        Equal Treatment of Purchasers. No consideration (including any
modification of any Transaction Document) shall be offered or paid to any Person
to amend or consent to a waiver or modification of any provision of the
Transaction Documents unless the same consideration is also offered to all of
the parties to the Transaction Documents. For clarification purposes, this
provision constitutes a separate right granted to each Purchaser by the Company
and negotiated separately by each Purchaser, and is intended for the Company to
treat the Purchasers as a class and shall not in any way be construed as the
Purchasers acting in concert or as a group with respect to the purchase,
disposition or voting of Securities or otherwise.

 

 34 

 

 

4.11        Certain Transactions and Confidentiality. Each Purchaser, severally
and not jointly with the other Purchasers, covenants that neither it nor any
Affiliate acting on its behalf or pursuant to any understanding with it will
execute any purchases or sales, including Short Sales of any of the Company’s
securities during the period commencing with the execution of this Agreement and
ending at such time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in
Section 4.2. Each Purchaser, severally and not jointly with the other
Purchasers, covenants that until such time as the transactions contemplated by
this Agreement are publicly disclosed by the Company pursuant to the initial
press release as described in Section 4.2, such Purchaser will maintain the
confidentiality of the existence and terms of this transaction. Notwithstanding
the foregoing and notwithstanding anything contained in this Agreement to the
contrary, the Company expressly acknowledges and agrees that (i) no Purchaser
makes any representation, warranty or covenant hereby that it will not engage in
effecting transactions in any securities of the Company after the time that the
transactions contemplated by this Agreement are first publicly announced
pursuant to the initial press release as described in Section 4.2, (ii) no
Purchaser shall be restricted or prohibited from effecting any transactions in
any securities of the Company in accordance with applicable securities laws from
and after the time that the transactions contemplated by this Agreement are
first publicly announced pursuant to the initial press release as described in
Section 4.2 and (iii) no Purchaser shall have any duty of confidentiality or
duty not to trade in the securities of the Company to the Company or its
Subsidiaries after the issuance of the initial press release as described in
Section 4.2. Notwithstanding the foregoing, in the case of a Purchaser that is a
multi-managed investment vehicle whereby separate portfolio managers manage
separate portions of such Purchaser’s assets and the portfolio managers have no
direct knowledge of the investment decisions made by the portfolio managers
managing other portions of such Purchaser’s assets, the covenant set forth above
shall only apply with respect to the portion of assets managed by the portfolio
manager that made the investment decision to purchase the Securities covered by
this Agreement.

 

4.12        Exercise Procedures. The form of Notice of Exercise included in the
Warrants set forth the totality of the procedures required of the Purchasers in
order to exercise the Warrants. No additional legal opinion, other information
or instructions shall be required of the Purchasers to exercise their Warrants.
Without limiting the preceding sentences, no ink-original Notice of Exercise
shall be required, nor shall any medallion guarantee (or other type of guarantee
or notarization) of any Notice of Exercise form be required in order to exercise
the Warrants. The Company shall honor exercises of the Warrants and shall
deliver Warrant Shares in accordance with the terms, conditions and time periods
set forth in the Transaction Documents.

 

4.13        Resale Restrictions. Each Purchaser covenants and agrees that it
will not, during the period ending on the date that is four (4) months plus one
(1) day after the Closing Date, sell or otherwise effect a trade of any of the
Shares or Warrants held by such Purchaser, or any Warrant Shares issued to such
Purchaser upon exercise of Warrants, to any person resident in Canada or any
person acquiring such Shares or Warrants or Warrant Shares for the benefit of
another person resident in Canada, other than in a transaction made in
compliance with the prospectus and registration requirements of applicable
Canadian securities laws or which otherwise is made in reliance on any available
exemptions therefrom. Notwithstanding anything herein to the contrary, a sale of
Shares or Warrant Shares through the facilities of any U.S. Trading Market shall
be deemed to be in compliance with this Section 4.13.

 

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ARTICLE V.
MISCELLANEOUS

 

5.1          Termination. This Agreement may be terminated by any Purchaser, as
to such Purchaser’s obligations hereunder only and without any effect whatsoever
on the obligations between the Company and the other Purchasers, by written
notice to the other parties, if the Closing has not been consummated on or
before August 31, 2020; provided, however, that no such termination will affect
the right of any party to sue for any breach by any other party (or parties).

 

5.2          Fees and Expenses. Except as expressly set forth in the Transaction
Documents to the contrary, each party shall pay the fees and expenses of its
advisers, counsel, accountants and other experts, if any, and all other expenses
incurred by such party incident to the negotiation, preparation, execution,
delivery and performance of this Agreement. The Company shall pay all Transfer
Agent fees (including, without limitation, any fees required for same-day
processing of any instruction letter delivered by the Company and any exercise
notice delivered by a Purchaser), stamp taxes and other taxes and duties levied
in connection with the delivery of any Securities to the Purchasers.

 

5.3          Entire Agreement. The Transaction Documents, together with the
exhibits and schedules thereto, the Time of Sale Prospectus and the Prospectus,
contain the entire understanding of the parties with respect to the subject
matter hereof and thereof and supersede all prior agreements and understandings,
oral or written, with respect to such matters, which the parties acknowledge
have been merged into such documents, exhibits and schedules.

 

5.4          Notices. Any and all notices or other communications or deliveries
required or permitted to be provided hereunder shall be in writing and shall be
deemed given and effective on the earliest of: (a) the time of transmission, if
such notice or communication is delivered via facsimile at the facsimile number
or email attachment at the email address as set forth on the signature pages
attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day,
(b) the next Trading Day after the time of transmission, if such notice or
communication is delivered via facsimile at the facsimile number or email
attachment at the email address as set forth on the signature pages attached
hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City
time) on any Trading Day, (c) the second (2nd) Trading Day following the date of
mailing, if sent by U.S. nationally recognized overnight courier service or (d)
upon actual receipt by the party to whom such notice is required to be given.
The address for such notices and communications shall be as set forth on the
signature pages attached hereto. To the extent that any notice provided pursuant
to any Transaction Document constitutes, or contains, material, non-public
information regarding the Company or any Subsidiaries, the Company shall
simultaneously file such notice with the Commission pursuant to a Current Report
on Form 8-K.

 

5.5          Amendments; Waivers. No provision of this Agreement may be waived,
modified, supplemented or amended except in a written instrument signed, in the
case of an amendment, by the Company and Purchasers which purchased at least a
majority in interest of the Shares based on the initial Subscription Amounts
hereunder or, in the case of a waiver, by the party against whom enforcement of
any such waived provision is sought, provided that if any amendment,
modification or waiver disproportionately and adversely impacts a Purchaser (or
group of Purchasers), the consent of such disproportionately impacted Purchaser
(or group of Purchasers) shall also be required. No waiver of any default with
respect to any provision, condition or requirement of this Agreement shall be
deemed to be a continuing waiver in the future or a waiver of any subsequent
default or a waiver of any other provision, condition or requirement hereof, nor
shall any delay or omission of any party to exercise any right hereunder in any
manner impair the exercise of any such right. Any proposed amendment or waiver
that disproportionately, materially and adversely affects the rights and
obligations of any Purchaser relative to the comparable rights and obligations
of the other Purchasers shall require the prior written consent of such
adversely affected Purchaser, Any amendment effected in accordance with
accordance with this Section 5.5 shall be binding upon each Purchaser and holder
of Securities and the Company.

 

 36 

 

 

5.6          Headings. The headings herein are for convenience only, do not
constitute a part of this Agreement and shall not be deemed to limit or affect
any of the provisions hereof.

 

5.7          Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and permitted assigns.
The Company may not assign this Agreement or any rights or obligations hereunder
without the prior written consent of each Purchaser (other than by merger). Any
Purchaser may assign any or all of its rights under this Agreement to any Person
to whom such Purchaser assigns or transfers any Securities, provided that such
transferee agrees in writing to be bound, with respect to the transferred
Securities, by the provisions of the Transaction Documents that apply to the
“Purchasers”.

 

5.8          No Third-Party Beneficiaries. The Placement Agent shall be the
third party beneficiary of the representations and warranties of the Company in
Section 3.1 and the representations and warranties of the Purchasers in
Section 3.2. This Agreement is intended for the benefit of the parties hereto
and their respective successors and permitted assigns and is not for the benefit
of, nor may any provision hereof be enforced by, any other Person, except as
otherwise set forth in Section 4.6 and this Section 5.8.

 

5.9          Governing Law. All questions concerning the construction, validity,
enforcement and interpretation of the Transaction Documents shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal Proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by this Agreement and
any other Transaction Documents (whether brought against a party hereto or its
respective affiliates, directors, officers, shareholders, partners, members,
employees or agents) shall be commenced exclusively in the state and federal
courts sitting in the City of New York. Each party hereby irrevocably submits to
the exclusive jurisdiction of the state and federal courts sitting in the City
of New York, Borough of Manhattan for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or
discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
in any Proceeding, any claim that it is not personally subject to the
jurisdiction of any such court, that such action or Proceeding is improper or is
an inconvenient venue for such action or Proceeding. Each party hereby
irrevocably waives personal service of process and consents to process being
served in any such action or Proceeding by mailing a copy thereof via registered
or certified mail or overnight delivery (with evidence of delivery) to such
party at the address in effect for notices to it under this Agreement and agrees
that such service shall constitute good and sufficient service of process and
notice thereof. Nothing contained herein shall be deemed to limit in any way any
right to serve process in any other manner permitted by law. If any party shall
commence an action or Proceeding to enforce any provisions of the Transaction
Documents, then, in addition to the obligations of the Company under
Section 4.6, the prevailing party in such action or Proceeding shall be
reimbursed by the non-prevailing party for its reasonable attorneys’ fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or Proceeding.

 

5.10        Survival. The representations and warranties contained herein shall
survive the Closing and the delivery of the Securities for the applicable
statute of limitations.

 

 37 

 

 

5.11        Execution. This Agreement may be executed in two or more
counterparts, all of which when taken together shall be considered one and the
same agreement and shall become effective when counterparts have been signed by
each party and delivered to each other party, it being understood that the
parties need not sign the same counterpart. In the event that any signature is
delivered by facsimile transmission or by e-mail delivery of a “.pdf” format
data file, such signature shall create a valid and binding obligation of the
party executing (or on whose behalf such signature is executed) with the same
force and effect as if such facsimile or “.pdf” signature page were an original
thereof.

 

5.12        Severability. If any term, provision, covenant or restriction of
this Agreement is held by a court of competent jurisdiction to be invalid,
illegal, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions set forth herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated, and the parties
hereto shall use their commercially reasonable efforts to find and employ an
alternative means to achieve the same or substantially the same result as that
contemplated by such term, provision, covenant or restriction. It is hereby
stipulated and declared to be the intention of the parties that they would have
executed the remaining terms, provisions, covenants and restrictions without
including any of such that may be hereafter declared invalid, illegal, void or
unenforceable.

 

5.13        Rescission and Withdrawal Right. Notwithstanding anything to the
contrary contained in (and without limiting any similar provisions of) any of
the other Transaction Documents, whenever any Purchaser exercises a right,
election, demand or option under a Transaction Document and the Company does not
timely perform its related obligations within the periods therein provided, then
such Purchaser may rescind or withdraw, in its sole discretion from time to time
upon written notice to the Company, any relevant notice, demand or election in
whole or in part without prejudice to its future actions and rights; provided,
however, that in the case of a rescission of an exercise of a Warrant, the
applicable Purchaser shall be required to return any Common Shares subject to
any such rescinded exercise notice concurrently with the return to such
Purchaser of the aggregate exercise price paid to the Company for such shares
and the restoration of such Purchaser’s right to acquire such shares pursuant to
such Purchaser’s Warrant (including, issuance of a replacement warrant
certificate evidencing such restored right).

 

 38 

 

 

5.14        Replacement of Securities. If any certificate or instrument
evidencing any Securities is mutilated, lost, stolen or destroyed, the Company
shall issue or cause to be issued in exchange and substitution for and upon
cancellation thereof (in the case of mutilation), or in lieu of and substitution
therefor, a new certificate or instrument, but only upon receipt of evidence
reasonably satisfactory to the Company of such loss, theft or destruction. The
applicant for a new certificate or instrument under such circumstances shall
also pay any reasonable third-party costs (including customary indemnity)
associated with the issuance of such replacement Securities.

 

5.15        Remedies. In addition to being entitled to exercise all rights
provided herein or granted by law, including recovery of damages, each of the
Purchasers and the Company will be entitled to specific performance under the
Transaction Documents. The parties agree that monetary damages may not be
adequate compensation for any loss incurred by reason of any breach of
obligations contained in the Transaction Documents and hereby agree to waive and
not to assert in any Proceeding for specific performance of any such obligation
the defense that a remedy at law would be adequate.

 

5.16        Payment Set Aside. To the extent that the Company makes a payment or
payments to any Purchaser pursuant to any Transaction Document or a Purchaser
enforces or exercises its rights thereunder, and such payment or payments or the
proceeds of such enforcement or exercise or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside, recovered
from, disgorged by or are required to be refunded, repaid or otherwise restored
to the Company, a trustee, receiver or any other Person under any law
(including, without limitation, any bankruptcy law, state or federal law, common
law or equitable cause of action), then to the extent of any such restoration
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

 

5.17        Independent Nature of Purchasers’ Obligations and Rights. The
obligations of each Purchaser under any Transaction Document are several and not
joint with the obligations of any other Purchaser, and no Purchaser shall be
responsible in any way for the performance or non-performance of the obligations
of any other Purchaser under any Transaction Document. Nothing contained herein
or in any other Transaction Document, and no action taken by any Purchaser
pursuant hereto or thereto, shall be deemed to constitute the Purchasers as a
partnership, an association, a joint venture or any other kind of entity, or
create a presumption that the Purchasers are in any way acting in concert or as
a group with respect to such obligations or the transactions contemplated by the
Transaction Documents. Each Purchaser shall be entitled to independently protect
and enforce its rights including, without limitation, the rights arising out of
this Agreement or out of the other Transaction Documents, and it shall not be
necessary for any other Purchaser to be joined as an additional party in any
Proceeding for such purpose. Each Purchaser has been represented by its own
separate legal counsel in its review and negotiation of the Transaction
Documents. For reasons of administrative convenience only, each Purchaser and
its respective counsel have chosen to communicate with the Company through
Cooley. Cooley does not represent any of the Purchasers and only represents the
Placement Agent. The Company has elected to provide all Purchasers with the same
terms and Transaction Documents for the convenience of the Company and not
because it was required or requested to do so by any of the Purchasers. It is
expressly understood and agreed that each provision contained in this Agreement
and in each other Transaction Document is between the Company and a Purchaser,
solely, and not between the Company and the Purchasers collectively and not
between and among the Purchasers.

 

 39 

 

 

5.18        Liquidated Damages. The Company’s obligations to pay any amounts
owing under the Transaction Documents is a continuing obligation of the Company
and shall not terminate until all unpaid amounts have been paid notwithstanding
the fact that the instrument or security pursuant to which such partial
liquidated damages or other amounts are due and payable shall have been
canceled.

 

5.19        Saturdays, Sundays, Holidays, etc. If the last or appointed day for
the taking of any action or the expiration of any right required or granted
herein shall not be a Business Day, then such action may be taken or such right
may be exercised on the next succeeding Business Day.

 

5.20        Construction. The parties agree that each of them and/or their
respective counsel have reviewed and had an opportunity to revise the
Transaction Documents and, therefore, the normal rule of construction to the
effect that any ambiguities are to be resolved against the drafting party shall
not be employed in the interpretation of the Transaction Documents or any
amendments thereto. In addition, each and every reference to share prices and
Common Shares in any Transaction Document shall be subject to adjustment for
reverse and forward stock splits, stock dividends, stock combinations and other
similar transactions of the Common Shares that occur after the date of this
Agreement.

 

5.21        WAIVER OF JURY TRIAL. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY
JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY, THE PARTIES EACH
KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW,
HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVES FOREVER
TRIAL BY JURY.

 

(Signature Pages Follow)

 

 40 

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

Ur-Energy Inc.   Address for Notice:       By:     Telephone:   Name:   Fax:  
Title:    

 

With a copy to (which shall not constitute notice):

 

Telephone:

Email:    

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK

SIGNATURE PAGE FOR PURCHASER FOLLOWS]

 

 

 

[PURCHASER SIGNATURE PAGES TO SECURITIES PURCHASE AGREEMENT]

 

IN WITNESS WHEREOF, the undersigned have caused this Securities Purchase
Agreement to be duly executed by their respective authorized signatories as of
the date first indicated above.

 

Name of Purchaser: ________________________________________________________

 

Signature of Authorized Signatory of Purchaser:
_________________________________

 

Name of Authorized Signatory: _______________________________________________

 

Title of Authorized Signatory: ________________________________________________

 

Email Address of Authorized Signatory:_________________________________________

 

Facsimile Number of Authorized Signatory:
__________________________________________

 

Address for Notice to Purchaser:

 

 

Address for Delivery of Warrants to Purchaser (if not same as address for
notice):

 

 

DWAC for Shares:

 

 

Subscription Amount: $_________________

 

Shares: _________________

 

Warrants: _________________

 

 

EIN Number: _______________________

 

 

[SIGNATURE PAGES CONTINUE]