Document:

avino_ex419.htm

EXHIBIT 4.19
  
 AGENCY AGREEMENT
  
 April 27, 2018
  
 Avino Silver & Gold Mines Ltd.
 900-570 Granville St.
 Vancouver, BC
 V6C 3P1 
  
  	Attention:	Mr. David Wolfin 
	  
	 President and Chief Executive Officer

  
 Ladies and Gentlemen:
  
 The undersigned, Cantor Fitzgerald Canada Corporation (“Cantor Fitzgerald” or the “Agent”) understands that Avino Silver & Gold Mines Ltd. (the “Company”) proposes to issue on a “best efforts” private placement basis at the Closing Time (as defined herein), 2,500,000 common shares in the capital of the Company to be issued as “flow-through shares” (the “Offered Shares”) within the meaning of the Tax Act (as hereinafter defined) at a purchase price of $2.00 per Offered Share, for aggregate gross proceeds of up to $5,000,000. The offering by the Corporation of the Offered Shares is referred to in this Agreement as the “Offering”.
  
 The Company also grants the Agent an option (the “Agent’s Option”), exercisable in whole or in part at the sole discretion of the Agent at any time and from time to time for a period of up to two (2) days prior to any Closing Date, to arrange for the sale of up to an additional 500,000 Offered Shares at a purchase price of $2.00 per Offered Share (the “Additional Shares”), representing up to 20% of the Offering, for additional gross proceeds of up to $1,000,000. The Agent’s Option shall be exercisable by the Agent at any time for a period of up to two (2) days prior to any Closing Date by delivery of written notice to the Company, which notice shall specify the number of Additional Shares to be issued and sold. The Additional Shares shall have the same attributes as the Offered Shares. All references in this Agreement to the Offered Shares shall include any Additional Shares. 
  
 The following are the terms and conditions of the agreement between the Company and the Agent:
  
 ARTICLE 1
 INTERPRETATION
  
 Section 1.1 Definitions
  
 In this Agreement, in addition to the terms defined above, the following terms shall have the following meanings:
  
 “Aggregate Subscription Price” means the aggregate subscription proceeds from the sale and issue of the Offered Shares of up to $5,000,000;
  
 “Agreement” means this agency agreement, being the agreement resulting from the acceptance by the Company of the offer made by the Agent hereby;
  
  	 
	- 1 -
	 
 
	 

  
 “BCBCA” means the Business Corporations Act (British Columbia);
  
 “Business Day” means a day other than a Saturday, Sunday or any other day on which the principal chartered banks located in the cities of Toronto, Ontario and Vancouver, British Columbia are not open for business;
  
 “Canadian Exploration Expense” or “CEE” means an expense or expenses as described in paragraph (f) of the definition of “Canadian exploration expense” in subsection 66.1(6) of the Tax Act, or would be described in paragraph (h) of that definition if the reference therein to paragraphs (a) to (d) and (f) to (g.4) was a reference to paragraph (f), excluding amounts which are prescribed to be “Canadian exploration and development overhead expenses” (as defined in the Regulations for purposes of paragraph 66(12.6)(b) of the Tax Act) of the Company, the amount of any assistance described in paragraph 66(12.6)(a) of the Tax Act or amounts which constitute specified expenses for seismic data described in paragraph 66(12.6)(b.1) of the Tax Act or any expenses for prepaid services or rent that do not qualify as outlays and expenses for the period as described in the definition of “expense” in subsection 66(15) of the Tax Act;
  
 “Cantor Fitzgerald” or “Agent” has the meaning ascribed to such term on the face page of this Agreement;
  
 “Closing” means, on any Closing Date, the completion of the purchase and sale of the Offered Shares as contemplated by this Agreement and the Subscription Agreements;
  
 “Closing Date” means April 27, 2018 or other date or dates as the Company and the Agent may agree upon in writing and in the event of two or more Closings means the date on which the applicable Closing occurs;
  
 “Closing Time” means 8:00 a.m. (Toronto time) on the Closing Date or such other time on any Closing Date as the Company and the Agent may determine;
  
 “Commitment Amount” means the amount equal to the Aggregate Subscription Price;
  
 “Common Share” means a common share in the capital of the Company;
  
 “Company” has the meaning ascribed to such term on the face page of this Agreement;
  
 “CRA” means the Canada Revenue Agency;
  
 “Environmental Laws” has the meaning ascribed to such term in Section 4.1(1)(w); 
  
 “Expenditure Period” means the period commencing on the date the first Subscription Agreement is signed and ending on the earlier of (i) the date on which the Commitment Amount has been fully expended in accordance with the terms thereof; and (ii) December 31, 2019;
  
 “Financial Statements” means the audited consolidated financial statements of the Company for the fiscal year ended December 31, 2017 and December 31, 2016 and the unaudited condensed interim financial statements for the nine months ended September 30, 2017 and September 30, 2016; 
   	 
	- 2 -
	 
 
	 

  
 “Flow-Through Mining Expenditures” means CEE that qualifies as a “flow-through mining expenditure” as defined in subsection 127(9) of the Tax Act;
  
 “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 stock exchange or self-regulatory organization; or (iii) any political subdivision of any of the foregoing;
  
 “Governmental Licences” has the meaning ascribed to such term in Section 4.1(1)(r); 
  
 “Hazardous Materials” has the meaning ascribed to such term in Section 4.1(1)(v);
  
 “Indemnified Party” and “Indemnified Parties” have the meanings ascribed to such terms in Section 7.2;
  
 “Law” means any and all laws, including all federal, provincial, state and local statutes, codes, ordinances, guidelines, decrees, rules, regulations and municipal 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;
  
 “Letter Agreement” means the letter agreement dated April 5, 2018 between the Company and the Agent;
  
 “Liens” means any encumbrance or title defect of whatever kind or nature, regardless of form, whether or not registered or registrable and whether or not consensual or arising by law (statutory or otherwise), including any mortgage, lien, charge, hypothec, pledge or security interest, whether fixed or floating, or any assignment, lease, option, right of pre-emption, privilege, encumbrance, easement, servitude, right of way, restrictive covenant, right of use or any other right of claim or claim of any kind or nature whatsoever which affects ownership or possession of, or title to, any interest in, or the right to use or occupy such property or assets; 
  
 “Losses” has the meaning ascribed to that term in Section 7.2; 
  
 “Material Adverse Effect” means any fact, change, event, violation, circumstance or effect which is or could reasonably be expected to have a material adverse effect on the Company’s business, affairs, liabilities (absolute, accrued, contingent or otherwise), capital, operations, financial condition, properties, assets or prospects, in all cases, considered on a consolidated basis;
  
 “Material Properties” means the Avino Mine and San Gonzalo Mine located in Mexico and Bralorne Mine in the province of British Columbia;
  
 “Material Subsidiaries” means, collectively, Oniva Silver and Gold Mines S.A. de C.V., Promotora Avino, S.A. de C.V., Compañía Minera Mexicana de Avino, S.A. de C.V. and Bralorne Gold Mines Ltd.;
   	 
	- 3 -
	 
 
	 

  
 “Mining Claims” has the meaning ascribed to that term in Section 4.1(1)(t)(ii); 
  
 “misrepresentation”, “material fact”, “material change”, “affiliate”, “associate”, and “distribution” have the respective meanings ascribed thereto in the Securities Act (Ontario) in effect on the date hereof;
  
 “NI 43-101” means National Instrument 43-101 – Standards of Disclosure for Mineral Projects; 
  
 “NI 45-106” means National Instrument 45-106 — Prospectus Exemptions;
  
 “NI 52-109” means National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings; 
  
 “notice” has the meaning ascribed to such term in Section 7.6;
  
 “NYSE American” means NYSE American LLC;
  
 “Offered Shares” has the meaning ascribed to such term on the face page of this Agreement;
  
 “Offering” means the issuance and sale of the Offered Shares pursuant to this Agreement; 
  
 “Person” includes any individual (whether acting as an executor, trustee administrator, legal representative or otherwise), corporation, firm, partnership, sole proprietorship, syndicate, joint venture, trustee, trust, unincorporated organization or association, and pronouns have a similar extended meaning;
  
 “Prescribed Share” has the meaning set forth in subsection 6202.1 of the Regulations;
  
 “Principal-Business Corporation” has the meaning set forth in subsection 66(15) of the Tax Act;
  
 “Private Placement Exemption” means the “accredited investor” exemption under Section 2.3 of NI 45-106 or the “minimum investment amount” exemption under Section 2.10 of NI 45-106, as applicable; 
  
 “Public Disclosure Documents” means, collectively, all of the documents which have been filed on SEDAR by or on behalf of the Company since January 1, 2016 to the Closing Time with the relevant Securities Regulators pursuant to the requirements of Securities Laws;
  
 “Purchasers” mean, collectively, those persons who are purchasing the Offered Shares as contemplated herein;
  
 “Qualified Expenditures” means Resource Expenses (i) incurred by the Company on properties of the Company located in British Columbia, (ii) that qualify as Flow-Through Mining Expenditures, and (iii) that qualify as a “BC flow-through mining expenditure” within the meaning of subsection 4.721(1) of the Income Tax Act (British Columbia);
   	 
	- 4 -
	 
 
	 

  
 “Regulations” refers to the Income Tax Regulations, as amended from time to time, promulgated under the Tax Act from time to time including any specific proposals to amend the Regulations that is publicly announced by the Minister of Finance (Canada) to have effect prior to the date hereof;
  
 “Resource Expenses” means expenses, each of which is a CEE and which are incurred on or after the Closing Date and on or before December 31, 2019 which may, provided that the subscriber (and if the subscriber is a partnership, each partner thereof) deals with the Company on an arm’s length basis for purposes of the Tax Act at all relevant times, be renounced by the Company pursuant to subsections 66(12.6) and 66(12.66) of the Tax Act with an effective date not later than December 31, 2018 and in respect of which, but for the renunciation, the Company would be entitled to a deduction from income for income tax purposes.
  
 “Securities Laws” means all applicable securities Laws in each of the Selling Jurisdictions, together with applicable published fee schedules, prescribed forms, policy statements, notices, orders, blanket rulings and other regulatory instruments of the Securities Regulators in such provinces and all rules and requirements of the TSX;
  
 “Securities Regulators” means, collectively, the securities commissions, regulators or other securities regulatory authorities in the Selling Jurisdictions;
  
 “SEDAR” means the System for Electronic Document Analysis and Retrieval of the Canadian Securities Administrators available electronically at www.sedar.com; 
  
 “Selling Jurisdictions” has the meaning ascribed to such term in Section 2.1(1);
  
 “Standard Listing Conditions” means the customary post-closing conditions imposed by the TSX and NYSE American LLC in similar circumstances to the Offering; 
  
 “Subscription Agreements” means, the subscription agreements for the Offered Shares in the form agreed upon by the Agent and the Company pursuant to which Subscribers agree to subscribe for and purchase Offered Shares pursuant to the Offering as herein contemplated and shall include, for greater certainty, all schedules thereto; and “Subscription Agreement” means any one of them, as the context requires;
  
 “Tax Act” means the Income Tax Act (Canada), as amended from time to time including any specific proposals to amend the Tax Act that are publicly announced by the Minister of Finance (Canada) to have effect prior to the date hereof;
  
 “Transaction Documents” has the meaning ascribed to such term in Section 5.2(f)(iii); 
  
 “Transfer Agent” means Computershare Trust Company of Canada, in its capacity as transfer agent and registrar of the Company, at its office in the City of Vancouver, British Columbia;
  
 “TSX” means the Toronto Stock Exchange; 
  
 “Agent’s Fee” has the meaning ascribed to such term in Section 2.2;
   	 
	- 5 -
	 
 
	 

  
 “United States” and “U.S.” means the United States of America, its territories and possessions, any state of the United States and the District of Columbia; and
  
 “U.S. Securities Act” means the United States Securities Act of 1933, as amended.
  
 Section 1.2 Construction. 
  
  	(1)	In this Agreement a reference to “knowledge” of the Company means to the actual knowledge of Gary Robertson, David Wolfin, Carlos Rodriguez, Malcolm Davidson and Dorothy Chin, in all cases after reasonable inquiry.
	  
	  

	(2)	The words “hereof,” “hereto,” “herein” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement.
	  
	  

	(3)	Words defined in the singular shall have a comparable meaning when used in the plural, and vice versa.
	  
	  

	(4)	The words “Dollars” and “$” mean Canadian dollars.
	  
	  

	(5)	Wherever the word “include,” “includes” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”.
	  
	  

	(6)	References herein to any Law shall be deemed to refer to such Law as amended, re-enacted, supplemented or superseded in whole or in part and in effect from time to time and also to all rules and regulations promulgated thereunder together with all applicable policy statements, multilateral instruments or national instruments, published blanket orders and rulings issued or adopted by any Governmental Authority enforcing such Law.
	  
	  

	(7)	The headings contained in this Agreement are intended solely for convenience and shall not affect the construction or interpretation of this Agreement or the rights or obligations of the parties.
	  
	  

	(8)	If the last day for the giving of any notice or the performance of any act required or permitted under this Agreement is a day that is not a Business Day, then the time for the giving of such notice or the performance of such action shall be extended to the next succeeding Business Day.
	  
	  

	(9)	References in this Agreement to “agreement” refers to any contract, agreement, obligation, right, promise, undertaking, commitment, understanding or other arrangement (in each case, whether written or oral).

  
 ARTICLE 2
 TERMS AND CONDITIONS
  
 Section 2.1 Offering
  
  	(1)	Subject to the terms and conditions of this Agreement, the Company hereby appoints the Agent, and the Agent hereby agrees to act as the exclusive agent of the Company, to offer the Offered Shares for sale on a private placement basis in each of the provinces of Canada (the “Selling Jurisdictions”) and to solicit and procure, on a reasonable “best efforts” basis, Purchasers of Offered Shares on behalf of the Company in compliance with all applicable Securities Laws and the laws of such other jurisdictions such that the offer and sale of the Offered Shares does not obligate the Company to file a prospectus or an offering memorandum in Canada under the applicable Securities Laws or a comparable document elsewhere under the laws of such other jurisdictions.

  
  	 
	- 6 -
	 
 
	 

  
  	(2)	Each Purchaser shall purchase the Offered Shares under a Private Placement Exemption. The Agent will notify the Company with respect to the identity of any Purchaser as soon as practicable and with a view to leaving sufficient time to allow the Company to secure compliance with all relevant regulatory requirements of the Selling Jurisdictions and in such other jurisdictions as the Agent and the Company shall determine relating to the sale of the Offered Shares. The Company undertakes to file, or cause to be filed, all forms or undertakings required to be filed by the Company and to pay all filing fees in connection with the issue and sale of the Offered Shares so that the distribution of such securities may lawfully occur without the necessity of filing a prospectus or an offering memorandum in Canada or a comparable document elsewhere.
	  
	  

	(3)	The Agent covenants to the Company that it shall: (a) take reasonable steps to confirm that each Purchaser meets the terms and conditions of the Private Placement Exemption, obtain, as necessary, and retain relevant information and documentation to evidence the steps taken to verify compliance with the Private Placement Exemption in accordance with its document retention policies and procedures in compliance with applicable Laws, and provide to the Company forthwith, upon request and upon reasonable notice and subject to obligations of confidentiality, all such information or documentation obtained from the Purchaser as the Company may reasonably request in good faith and solely for the purpose of verifying compliance with the Private Placement Exemption and any other applicable Laws and in connection with a review by any of the Securities Regulators or other Governmental Authorities (including the CRA) of the Company’s compliance with the Private Placement Exemption or other applicable Laws, including obtaining from each Purchaser a duly completed and executed Subscription Agreement, together with all other subscription documents (including documents required by the TSX and NYSE American, if any) as may be necessary in connection with subscriptions for Offered Shares to ensure compliance with applicable Laws; (b) use commercially reasonable efforts to ensure that any selling agent appointed by the Agent in connection with sales of the Offered Shares agrees with the Agent to comply with the covenants and obligations of the Agent contained herein; and (c) execute and deliver to the Company, subject to the terms and conditions of this Agreement, any certificate required to be executed by them under Securities Laws or other applicable Laws in connection with the Offering provided that the Agent is satisfied, acting reasonably, that it is appropriate and responsible to do so.
	  
	  

	(4)	Any certificates representing the Offered Shares delivered at Closing shall contain such restrictive legends regarding resale of such securities as are set forth in the Subscription Agreements.
	  
	  

	Section 2.2 Agent’s Compensation
	  
	  

	(1)	In consideration for the performance of its obligations hereunder, the Company shall pay to the Agent a cash payment equal to 7.00% of the gross proceeds of the Offering (the “Agent’s Fee”). The obligation of the Company to pay the Agent’s Fee shall arise at the Closing Time and the Agent’s Fee shall be fully earned by the Agent upon the completion of the Offering. The Company shall pay any goods and services tax and harmonized sales tax imposed by the Excise Tax Act (Canada) and any other applicable sales tax applicable in respect of the Agent’s Fee.

  
  	 
	- 7 -
	 
 
	 

  
  	(2)	The Agent shall be entitled to appoint a soliciting dealer group consisting of other registered dealers acceptable to the Company acting reasonably for the purposes of arranging for Purchasers of Offered Shares.
	  
	  

	(3)	The Agent may retain one or more registered securities brokers or investment dealers to act as selling agent in connection with the sale of the Offered Shares but the compensation payable to such selling agent shall be the sole responsibility of the Agent, and only as permitted by and in compliance with applicable Securities Laws, upon the terms and conditions set forth in this Agreement, and the Agent will require each such selling agent to so agree.

  
 ARTICLE 3
 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE AGENT
  
 Section 3.1 Representations and Warranties of the Agent. 
  
 The Agent represents and warrants to the Company and acknowledges that the Company is relying upon such representations and warranties, as of the date of this Agreement and as of the Closing Date, that:
  
  	  
	(a)	it has been duly created and is validly existing under the laws of its jurisdiction of incorporation, continuation, amalgamation or organization;
	  
	  
	  

	  
	(b)	it has all requisite corporate power and authority to enter into, deliver and carry out its obligations under this Agreement and complete the transactions contemplated under this Agreement on the terms and conditions set forth herein;
	  
	  
	  

	  
	(c)	it is duly registered and in good standing as a broker-dealer under applicable Securities Laws in each of the Selling Jurisdictions where it has solicited offers to purchase Offered Shares; and
	  
	  
	  

	  
	(d)	to its knowledge, the Company is not a “connected issuer” (as such term is defined in National Instrument 33-105 – Underwriting Conflicts) to such Agent.

  
 Section 3.2 Covenants of the Agent. 
  
 The Agent covenants to the Company and acknowledges that the Company is relying on such covenants, that it shall:
  
  	  
	(a)	offer the Offered Shares on a private placement basis in accordance with the terms and conditions of this Agreement and in compliance with applicable Securities Laws and only solicit offers to purchase Offered Shares from such Persons and in such manner that, pursuant to applicable Securities Laws, no prospectus or similar document need be delivered or filed, other than any prescribed reports of the issue and sale of the Offered Shares;

  
  	 
	- 8 -
	 
 
	 

  
  	  
	(b)	not deliver to any prospective Purchaser any document or material which constitutes an offering memorandum as defined under applicable Securities Laws and other applicable securities laws of other jurisdictions;
	  
	  
	  

	  
	(c)	not directly or indirectly solicit offers to purchase or sell the Offered Shares in any jurisdiction other than the Selling Jurisdictions and in such other jurisdictions as the Agent and the Company shall agree;
	  
	  
	  

	  
	(d)	refrain from any form of general advertising or any form of general solicitation in connection with the Offering in: (i) printed media of general and regular circulation or any similar medium; (ii) radio; (iii) television; or (iv) electronic media, nor shall it conduct any seminar or meeting concerning the offer and sale of the Offered Shares whose attendees have been invited by any form of general solicitation or general advertising; and
	  
	  
	  

	  
	(e)	obtain from each Purchaser an executed Subscription Agreement and shall deliver copies of such agreements to the Company at least two (2) Business Days prior to the date scheduled for Closing, together with all documentation (as supplied to the Agent by the Company) as may be necessary under applicable Securities Laws in connection with the distribution of the Offered Shares and as may be reasonably required by the Company in order to confirm the availability of a Private Placement Exemption, in form acceptable to the Company and the Agent.

  
 ARTICLE 4
 REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE COMPANY
  
 Section 4.1 Representations and Warranties of the Company. 
  
  	(1)	The Company represents and warrants to the Agent, and acknowledges that it is relying upon such representations and warranties in acting as the exclusive agent of the Company, to offer the Offered Shares for sale on a private placement basis in the Selling Jurisdictions, as of the date of this Agreement and as of the Closing Date, that:
	  
	  

  	  
	(a)	Good Standing of the Company. The Company has been incorporated and is validly existing under the BCBCA, and has all requisite corporate capacity, power and authority to carry on its business as now conducted, to own, lease and operate its properties and assets, and to carry out the transactions contemplated by this Agreement including executing and delivering the Transaction Documents (as defined herein) and carrying out its obligations thereunder; and the Company is duly qualified or authorized to transact business and is in good standing (in respect of the filing of annual returns where required or other information filings under applicable corporations information legislation) in each jurisdiction in which such qualification is required, whether by reason of the ownership or leasing of property or the conduct of business;
	  
	  
	  

	  
	(b)	Subsidiaries. The Material Subsidiaries of the Company are all of the Company’s significant subsidiaries (as such term is defined in Rule 1-02 of Regulation S-X promulgated by the U.S. Securities and Exchange Commission). With the exception that a portion of the share capital of each of the Company’s Mexican subsidiaries is held by a nominee for the benefit of the Company in order to comply with the laws of Mexico, the Company owns, directly or indirectly, all of the equity interests of the Material 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 Material Subsidiaries are validly issued and are fully paid, non-assessable and free of pre-emptive and similar rights;

  
  	 
	- 9 -
	 
 
	 

  
  	  
	(c)	Authorization of Transaction Documents and Securities. At the Closing Time, (i) the Transaction Documents will have been duly authorized, executed and delivered by the Company and in each case, will be a legal, valid and binding obligation of, and is enforceable against, the Company in accordance with its terms (subject to bankruptcy, insolvency or other laws affecting the rights of creditors generally, the availability of equitable remedies and the qualification that rights to indemnity and waiver of contribution may be contrary to public policy or limited by applicable Laws); and (ii) the Offered Shares will have been duly authorized for sale and issuance to the Purchasers will have been duly authorized for issuance, all pursuant to the Transaction Documents and when issued and delivered by the Company pursuant to the Transaction Documents against payment of the consideration set forth therein, the Offered Shares will be validly issued as fully paid and non-assessable Common Shares. All corporate action required to be taken by the Company for the authorization, issuance, sale and delivery of the Offered Shares has been validly taken at the date hereof;
	  
	  
	  

	  
	(d)	No Default. None of the execution and delivery of the Transaction Documents, the performance by the Company of its obligations thereunder including, without limitation, the sale or issuance of the Offered Shares;
	  
	  
	  

  	  
	(i)	require the consent, approval, authorization, registration or qualification of or with any Governmental Authority or other third party, except: (A) such as have been or will be obtained by the Closing Date; or (B) such as may be required under the applicable rules or requirements of the TSX and NYSE American or the Tax Act;
	  
	  
	  

	  
	(ii)	will violate, conflict with or result in any breach of (A) any of the constating documents of the Company; (B) any resolutions of the directors or shareholders of the Company; (C) any contracts to which the Company is a party or by which it is bound or to which any of its properties or assets is subject (each, a “Contract”); or (D) any Securities Laws (including the Securities Act (British Columbia)) to which the Company is subject; or
	  
	  
	  

	  
	(iii)	give rise to any Lien in or with respect to the properties or assets now owned by the Company, the termination of any Contracts, or the acceleration of or the maturity of any debt under any indenture, mortgage, lease, agreement or instrument binding or affecting the Company or any of its properties;
	  
	  
	  

  	  
	(e)	Bankruptcy and Insolvency. The Company has not committed an act of bankruptcy and it is not insolvent, and it has not proposed a compromise or arrangement to its creditors generally, had a petition or a receiving order in bankruptcy filed against it, made a voluntary assignment in bankruptcy, taken any proceedings with respect to a compromise or arrangement, taken any proceedings to have itself declared bankrupt or wound-up or to have a receiver appointed for any of its property, had any person holding any Lien or receiver take possession of any of the property thereof, or had any execution or distress become enforceable or become levied upon any of its property or assets;

  
  	 
	- 10 -
	 
 
	 

  
  	  
	(f)	Dissolution or Liquidation. No act or proceeding has been taken, instituted or, to the knowledge of the Company, is pending for or relating to the dissolution, liquidation, winding up, or reorganization of the Company;
	  
	  
	  

	  
	(g)	Books and Records. The minute books and records of the Company contain all records of the meetings and proceedings of its directors, shareholders, and committees of directors, if any, since incorporation; the minute books and records of the Company made available to counsel for the Agent in connection with its due diligence investigation of the Company are all of the minute books and records of the Company, contain all the materials required to be contained therein pursuant to all applicable Laws and are true and correct in all material respects;
	  
	  
	  

	  
	(h)	Share Capital. As of the date hereof, the authorized capital of the Company consists of an unlimited number of Common Shares. As of the close of business on the Business Day immediately preceding the date hereof, 52,805,653 Common Shares, 3,126,000 options to acquire Common Shares, 3,602,215 Common Share purchase warrants to acquire Common Shares and 592,172 restricted share units to acquire Common Shares of the Company are issued and outstanding, and there are no other securities of the Company issued and outstanding;
	  
	  
	  

	  
	(i)	Absence of Rights. The Offering is not subject to any pre-emptive right or other contractual right or obligation to purchase securities granted by the Company or to which the Company is subject, and there is no other right, agreement or option, present or future, contingent or absolute, or any right capable of becoming a right, agreement or option, for the issue or allotment of any unissued Common Shares or any other agreement or option, for the issue or allotment of any unissued Common Shares or any other security convertible into or exchangeable for any such Common Shares or to require the Company to purchase, redeem or otherwise acquire any of the issued and outstanding common shares, except for those options, warrants and restricted share units to acquire Common Shares listed in Section 4.1(1)(h);
	  
	  
	  

	  
	(j)	Listed Securities. The Common Shares are listed and posted for trading on the TSX and NYSE American and the Company has not taken any action which would be reasonably expected to result in the delisting or suspension of such securities on or from the TSX and NYSE American; the TSX and NYSE American has prior to the Closing Time on the Closing Date conditionally approved the Offering;
	  
	  
	  

	  
	(k)	Disclosure. The Company has filed all documents required to be filed by it under applicable Securities Laws, and the Public Disclosure Documents, were as of the date of such documents, true and correct in all material respects, contained no misrepresentation and no material change or material fact or facts were omitted therefrom which would make such information misleading in light of the circumstances in which it was made, as at the date thereof;

  
  	 
	- 11 -
	 
 
	 

  
  	  
	(l)	Financial Statements. The Financial Statements and the notes thereto: (i) have been prepared in conformity with International Financial Reporting Standards (“IFRS”); (ii) contain no misrepresentation and present fairly, in all material respects, the financial position of the Company, on a consolidated basis, and the statements of operations, retained earnings, cash flow from operations and changes in financial information of the Company for the periods specified in such Financial Statements; and (iii) contain and reflect adequate provision or allowance for all reasonably anticipated liabilities, expenses and losses of the Company, and except as disclosed in the Financial Statements, there has been no change in accounting policies or practices of the Company since December 31, 2017. The corporate certifications filed by the Company in connection with the Financial Statements in accordance with NI 52-109, accurately attest that the financial statements together with the other financial information included in the filings fairly present in all material respects the financial condition, financial performance and cash flows of the Company, as of the date of and for the periods presented in the filings, and are in the form required by NI 52-109;
	  
	  
	  

	  
	(m)	Independent Accountants. The accountants who reported on and audited the Financial Statements are independent with respect to the Company within the meaning of the CPA Canada Handbook and its predecessor the Canadian Institute of Chartered Accountants Handbook, as applicable, and there has never been a reportable disagreement (within the meaning of National Instrument 51-102 – Continuous Disclosure) between the Company and such accountants;
	  
	  
	  

	  
	(n)	Audit Committee. The audit committee of the Company is comprised and operates in accordance with the requirements of National Instrument 52-110 - Audit Committees;
	  
	  
	  

	  
	(o)	Internal Accounting Controls. The Company maintains a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS and includes those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets; (ii) are designed to provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS and that receipts and expenditures are being made only in accordance with authorizations of management and directors of the Company; and (iii) are designed to provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets that could have a material effect on the annual or interim financial statements;
	  
	  
	  

	  
	(p)	Liabilities. The Company does not have any material liabilities, obligations, indebtedness or commitments, whether accrued, absolute, contingent or otherwise, which are not disclosed or referred to in the Financial Statements or referred to or disclosed herein or in the Public Disclosure Documents, other than liabilities, obligations, or indebtedness or commitments: (i) incurred in the normal course of business; and (ii) which would not reasonably be expected to have a material adverse effect.

  
  	 
	- 12 -
	 
 
	 

  
  	  
	(q)	Dividends. The Company has not declared or paid any dividends or declared or made any other payments or distributions on or in respect of the Common Shares and has not, directly or indirectly, redeemed, purchased or otherwise acquired any of its shares or agreed to do so or otherwise effected any return of capital with respect to the Common Shares;
	  
	  
	  

	  
	(r)	Possession of Licenses and Permits. The Company has conducted and is conducting the business thereof in compliance in all material respects with all applicable Law of each jurisdiction in which it carries on business. All material permits, certificates, licenses, approvals, consents and other authorizations (collectively, “Governmental Licenses”) issued by the appropriate Governmental Authority necessary to carry on the business currently carried on, or contemplated to be carried on, by it, are in place, or with respect to Government Licenses to conduct future activities, will be in place at the time such activities are commenced. There has been no breach of the material terms and conditions of all such Governmental Licenses. No notice of proceedings relating to the revocation or material modification of any such Governmental Licenses has been issued, threatened or is contemplated;
	  
	  
	  

	  
	(s)	Title to Real Property. At the Closing Time, all of the leases, subleases and agreements with respect to real property interests in the Material Properties (other than Mining Claims) are in full force and effect, and, the Company has not received any notice of any material claim of any sort that has been asserted by anyone adverse to the rights of the Company under any of the leases or subleases mentioned above, or affecting or questioning the rights of the Company to the continued possession of the property under any such lease, sublease or agreement;
	  
	  
	  

	  
	(t)	Mining and Exploration Claims. Except as disclosed in the Public Disclosure Documents:
	  
	  
	  

  	  
	(i)	the Material Properties are the only mineral resource properties currently material to the Company in which the Company has an interest;
	  
	  
	  

	  
	(ii)	except otherwise as set out in the Public Disclosure Documents, all interests in mining, exploration and prospecting claims, authorizations, concessions, patents, exploitation or extraction or similar rights that are held by the Company in respect of the Material Properties (collectively, “Mining Claims”) are in good standing, are valid and enforceable, are free and clear of any material Liens except otherwise as set out in the Public Disclosure Documents;
	  
	  
	  

	  
	(iii)	all assessments or other work required to be performed in relation to the Mining Claims, if any, have been performed to date and, except as disclosed in the Public Disclosure Documents, the Company has complied in all material respects with all applicable Laws in this regard as well as with regard to legal and contractual obligations to third parties in this regard, except in respect of Mining Claims that the Company 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 on the Company;

  
  	 
	- 13 -
	 
 
	 

  
  	  
	(iv)	the Company has all Mining Claims relating to the Material Properties in which the Company has an interest granting the Company the right and ability to explore for and exploit minerals, ore and metals for exploration and development purposes as are appropriate in view of the rights and interest therein of the Company, with only such exceptions as do not materially interfere with the current use made by the Company of the rights or interest so held;
	  
	  
	  

	  
	(v)	except otherwise as set out in the Public Disclosure Documents, the Company does not have any responsibility or obligation to pay any commission, royalty, license, fee or similar payment to any Person with respect to the property rights thereof, except where such fee or payment would not have a Material Adverse Effect on the Company, either individually or in the aggregate; and
	  
	  
	  

	  
	(vi)	all exploration and development activities on the Material Properties have been conducted in all respects in accordance with good mining and engineering practices and all applicable workers’ compensation and health and safety and workplace Laws and policies have been duly complied with;

  	  
	(u)	Mineral Project Information. The technical reports entitled “Resource Estimate Update for the Avino Property Durango, Mexico” dated effective February 21, 2018, “Bralorne Gold Mine, British Columbia, Canada, NI 43-101 Technical Report” dated effective October 20, 2016 and “Technical Report: Tailings Retreatment Process Option Update” dated effective March 12, 2012, all as filed on SEDAR, are the “current” technical reports for the purposes of NI 43-101 at the time of filing thereof, as required by NI 43-101, and the Company believes that these technical reports reasonably present the quantity of mineral resources and mineral reserves attributable to the Material Properties as at the date stated therein based upon information available at the time the technical reports were prepared; the Company is in compliance, in all material respects, with the provisions of NI 43-101 and has filed all technical reports required thereby and there has been no disclosure of a change that would require the filing of a new technical report under NI 43-101;
	  
	  
	  

	  
	(v)	Environmental Laws. (i) To the Company’s knowledge, the Company is in material compliance with all applicable Law, including any judicial or administrative order, consent decree or judgment, relating to pollution or protection of human health, the environment (including ambient air, surface water, groundwater, land surface or subsurface strata) or wildlife, including Laws relating to the release or threatened release of chemicals, pollutants, contaminants, wastes, toxic substances, hazardous substances, petroleum or petroleum products (collectively, “Hazardous Materials”) or to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials (collectively, “Environmental Laws”); (ii) the Company has all material permits, authorizations and approvals required under any applicable Environmental Laws to conduct its business as currently conducted; (iii) there are no pending or, to the knowledge of the Company, threatened actions, suits, orders, demands, demand letters, claims, Liens, notices of non-compliance or violation, investigation or proceedings by any Governmental Authority relating to any Environmental Laws against the Company which if determined adversely, would reasonably be expected to restrict the right or ability of the Company to conduct its business in any material respect as presently conducted or have a Material Adverse Effect; and (iv) the Company is not subject to any contingent or other liability relating to the restoration or rehabilitation of land, water or any other part of the environment (except for those derived from normal exploration or mining activities) or non-compliance with Environmental Laws which would reasonably be expected to have a Material Adverse Effect;

   	 
	- 14 -
	 
 
	 

  
  	  
	(w)	Tribal or Native Authorities and Communities. Other than as disclosed in the Public Disclosure Documents, the Company: (i) is not a party to any arrangement or understanding with local or First Nations or Metis or tribal or native authorities or communities in relation to the environment or development of communities in the vicinity of the Material Properties; or (ii) as of the date hereof, has not received notice of any claim with respect to the Material Properties for which the Company has been served, either from First Nations or Metis or tribal or native authorities or any other Governmental Authority, indicating that any portion of the Material Properties infringe upon or have an adverse effect on aboriginal rights or interests of such First Nations or Metis or tribal or native authorities;
	  
	  
	  

	  
	(x)	Reporting Issuer. The Company is a reporting issuer in each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador and is not in default of any of its obligations under applicable Securities Laws of such provinces;
	  
	  
	  

	  
	(y)	Compliance. The Company is, and will at the Closing Time be, in compliance in all material respects with the rules and requirements of the TSX and NYSE American and no material change relating to the Company has occurred within the past twelve (12) months that has not been disclosed and that in relation thereto the requisite material change report has not been filed under applicable Securities Laws and no such disclosure has been made on a confidential basis that at the date hereof remains confidential;
	  
	  
	  

	  
	(z)	No Material Adverse Effect. Since December 31, 2017, (i) there has been no change in the condition (financial or otherwise), or in the properties, capital, affairs, prospects, operations, assets or liabilities of the Company, whether or not arising in the ordinary course of business, which would reasonably be expected to give rise to a Material Adverse Effect, and (ii) there have been no transactions entered into by the Company, other than those in the ordinary course of business, which are material with respect to the Company, in either case, except as disclosed in the Public Disclosure Documents; and (iii) the Company has not approved, is not contemplating, has not entered into any agreement in respect of, nor has any knowledge of: (A) the purchase of any property material to the Company or assets or any interest therein or the sale, transfer or other disposition of any property material to the Company or assets or any interest therein currently owned, directly or indirectly, by the Company whether by asset sale, transfer of shares or otherwise; or (B) the change of control (by sale or transfer of shares or sale of all or substantially all of the property and assets of the Company or otherwise) of the Company;

    	 
	- 15 -
	 
 
	 

  
  	  
	(aa)	Absence of Proceedings. Other than as disclosed in the Public Disclosure Documents, there is no action, suit, proceeding, inquiry or investigation before or brought by any Governmental Authority, domestic or foreign, now pending or, to the knowledge of the Company, threatened against or affecting the Company, which has not been disclosed to the Agent or its counsel, or which if determined adversely, would reasonably be expected to have a Material Adverse Effect, or which, if determined adversely, would reasonably be expected to materially and adversely affect the consummation of the transactions contemplated in this Agreement or the performance by the Company of its obligations hereunder;
	  
	  
	  

	  
	(bb)	Outstanding Judgments. There is no outstanding judgment, order, decree, arbitral award or decision of any Government Authority against the Company, which, either separately or in the aggregate, may result in a Material Adverse Effect;
	  
	  
	  

	  
	(cc)	No Cease Trade Orders. No order ceasing or suspending trading in securities of the Company or prohibiting the sale of securities by the Company has been issued by an exchange or Securities Regulator, and no proceedings for this purpose have been instituted, or are, to the Company’s knowledge, pending, contemplated or threatened;
	  
	  
	  

	  
	(dd)	Directors and Officers. To the knowledge of the Company, none of the directors or officers of the Company are now, or have ever been, subject to an order or ruling of any securities regulatory authority or stock exchange prohibiting such individual from acting as a director or officer of a public company or of a company listed on a particular stock exchange;
	  
	  
	  

	  
	(ee)	Unlawful Payment. None of the Company or, to the knowledge of the Company, any of its directors, officers, employees or agents has made any unlawful contribution or other payment to any official of, or candidate for, any federal, state, provincial or foreign office, or failed to disclose fully any contribution, in violation of any Law, or made any payment to any foreign, Canadian, United States or provincial or state governmental officer or official, or other Person charged with similar public or quasi-public duties, other than payments required or permitted by applicable Laws;
	  
	  
	  

	  
	(ff)	Anti-Money Laundering. The operations of the Company are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the money laundering Laws of all applicable jurisdictions, and any related or similar Laws 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 or non-Governmental Authority involving the Company with respect to the Money Laundering Laws is, to the knowledge of the Company, pending or threatened;
	  
	  
	  

	  
	(gg)	Brokerage Fees. Other than the Agent, there is no Person, acting or, to the knowledge of the Company, purporting to act, at the request of the Company, who is entitled to any brokerage or finder’s fees in connection with the Offering contemplated herein;

  
  	 
	- 16 -
	 
 
	 

  
  	  
	(hh)	Material Agreements. The Company is not (i) in violation of its articles or similar organizational documents; (ii) in violation or default, and no event has occurred that, with notice or lapse of time or both, would constitute such a violation or 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 material agreement or instrument to which the Company is a party or by which the Company is bound or to which any of the property or assets of the Company is subject; or (iii) in violation of any applicable Law, 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 agreements, contracts, arrangements or understandings (written or oral) to which it is a party is in violation or default in any respect thereunder where such violation or default would have a Material Adverse Effect. All of the current material agreements of the Company not made in the ordinary course of business have been disclosed in the Public Disclosure Documents and, if required under applicable Securities Laws have been filed with the appropriate Securities Regulators;
	  
	  
	  

	  
	(ii)	Filings. All material filings and fees required to be made and paid, respectively, by the Company pursuant to the BCBCA have been made and paid and such filings were true and accurate in all material respects as at the respective dates thereof;
	  
	  
	  

	  
	(jj)	Interest of Insiders. Except as disclosed in the Public Disclosure Documents, to the knowledge of the Company, none of the directors, officers or employees of the Company, any known holder of more than 10% of any class of shares of the Company, or any known associate or affiliate of any of the foregoing persons or companies has had any material interest, direct or indirect, in any material transaction within the previous two (2) years or has any material interest in any proposed material transaction involving the Company which, as the case may be, materially affected, is material to or will materially affect the Company;
	  
	  
	  

	  
	(kk)	Voting Agreements. The Company is not party to any agreement, nor is the Company aware of any agreement, which in any manner affects the voting control of any of the securities of the Company;
	  
	  
	  

	  
	(ll)	Shareholder Agreements. Neither the Company nor, to the knowledge of the Company, any of its shareholders is a party to any shareholders agreement, pooling agreement, voting trust or other similar type of agreements in respect of outstanding securities of the Company;
	  
	  
	  

	  
	(mm)	Interest in Revenues. Except as disclosed in the Public Disclosure Documents, no officer, director, employee or any other Person not dealing at arm’s length with the Company, any associate or affiliate of such Person, owns, has or is entitled to any royalty, net profits interest, carried interest, licensing fee, or any other encumbrances or claims of any nature whatsoever which are based on the revenues of the Company, except for claims in the ordinary and normal course of the business of the Company such as for accrued vacation pay or other amounts or matters which would not be material to the Company;

  
  	 
	- 17 -
	 
 
	 

  
  	  
	(nn)	Employees. All material employment agreements, severance agreements and change of control agreements and all employee plans, currently in place or proposed, have been disclosed to the Agent or in the Public Disclosure Documents. The Company is in material compliance with all Laws respecting employment and employment practices including terms and conditions of employment, occupational health and safety, pay equity and wages and there has not been in the last two (2) years and there is not currently any labour disruption or conflict involving the Company. The Company is not a party to a collective bargaining agreement. To the best of the Company’s knowledge, there are no union organizing efforts being made at the Company;
	  
	  
	  

	  
	(oo)	Interest in Other Companies. The Company does not, directly or indirectly, beneficially own or exercise control or direction over 10% or more of the outstanding voting shares of any Person;
	  
	  
	  

	  
	(pp)	Joint Venture and Partnership. The Company is not party to and has not entered into any joint venture agreement or partnership agreement;
	  
	  
	  

	  
	(qq)	Indebtedness. Except as disclosed in the Public Disclosure Documents, the Company is not a party to any loan, bond, debenture, promissory note or other instrument evidencing indebtedness (demand or otherwise) for borrowed money or any agreement or commitment to create, assume or issue any debt instrument;
	  
	  
	  

	  
	(rr)	Taxes. All taxes of any nature, assessments, duties, levies, imports, charges, withholdings, remittances, including any penalties and interest payable with respect thereto, due and payable have been paid. All tax returns, reports, elections, remittances and payments of the Company required by applicable Law to have been filed or made in any applicable jurisdiction, have been filed or made (as the case may be), and are true, complete and correct in all material respects and all taxes of the Company which are not yet due and payable have been accrued in the Financial Statements; to the best of the knowledge of the Company, no examination of any tax return of the Company is currently in progress and there are no issues or disputes outstanding with any Governmental Authority respecting any taxes that have been paid, or may be payable, by the Company, in any case, except where such examinations, issues or disputes would not have a material adverse effect on the Company;
	  
	  
	  

	  
	(ss)	Transfer Agent. The Transfer Agent has been duly appointed as the transfer agent and registrar for the Common Shares;
	  
	  
	  

	  
	(tt)	Share Certificates. The definitive form of certificate representing the Common Shares is in proper form under the Laws of British Columbia, complies with the rules and requirements of the TSX, and does not conflict with the constating documents of the Company;
	  
	  
	  

	  
	(uu)	Insurance. The Company maintains insurance against loss of, or damage to, its assets by all insurable hazards or risks as are customarily insured against by companies operating or owning similar properties and conducting a business similar to the business of the Company, and the Company is not in default or breach with respect to any of the material provisions contained in any of its insurance policies nor has the Company failed to give any notice or present any material claim under any of its insurance policies in a due and timely fashion. All insurance policies maintained by the Company are in good standing and in full force and effect in all respects as of the date hereof;

    	 
	- 18 -
	 
 
	 

  
  	  
	(vv)	Intellectual Property. The Company owns or has the right to use under license, sub-license or otherwise all material intellectual property used by the Company in its business, including copyrights, industrial designs, trade-marks, trade secrets, know-how and proprietary rights, free and clear of any and all Liens.
	  
	  
	  

	  
	(ww)	Due Diligence Matters. To the knowledge of the Company, all documents and information delivered and provided by or on behalf of the Company to the Agent as a part of its due diligence in connection with the Offering were complete and accurate in all material respects;
	  
	  
	  

	  
	(xx)	Full Disclosure. The representations, warranties and statements of fact of the Company contained in this Agreement or otherwise furnished by or on behalf of the Company to the Agent in connection with the Offering contain a misrepresentation or an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading to a prospective purchaser of equity securities of the Company. The Company does not have knowledge of any facts which should be known to the Company and which, if known by the Agent, might reasonably be expected to deter the Agent from completing the Offering;
	  
	  
	  

	  
	(yy)	Principal-Business Corporation. The Company is and will continue to be a Principal-Business Corporation until such time as all of the Resource Expenses required to be renounced under this Agreement and the Subscription Agreements have been incurred and validly renounced pursuant to the Tax Act;
	  
	  
	  

	  
	(zz)	Qualified Expenditures. The Company has no reason to believe that it will be not be able to incur, within the Expenditure Period, and, provided that the Purchaser (and if the Purchaser is a partnership, each partner thereof) deals with the Company on an arm’s length basis for the purposes of the Tax Act at all relevant times, renounce to the Purchasers effective on or before December 31, 2018, Resource Expenses in an amount equal to the Commitment Amount in accordance with the terms of the Subscription Agreements, at least 75 percent of which will qualify as Qualified Expenditures; and
	  
	  
	  

	  
	(aaa)	Offered Shares. But for any agreement, arrangement, undertaking obligation or understanding to which the Company is not a party and of which it has no knowledge, upon issue, the Offered Shares will be “flow-through shares” as defined in subsection 66(15) of the Tax Act and will not constitute Prescribed Shares for the purposes of Regulation 6202.1. Neither the Company nor any corporation associated with it (as defined in the Tax Act) has been a party to any other agreement for the issuance of flow-through shares for which the required expenditures have not been incurred and renounced.

    	 
	- 19 -
	 
 
	 

  
 Section 4.2 Covenants of the Company.
  
  	(1)	The Company hereby covenants to the Agent, and acknowledges that it is relying on such covenants in acting as the exclusive agent of the Company, to offer the Offered Shares for sale on a private placement basis in the Selling Jurisdictions with the purchase of the Offered Shares, that:
	  
	  

  	  
	(a)	for a period of 18 months from the Closing Date the Company shall use its commercially reasonable efforts to remain a corporation validly subsisting, licensed, registered or qualified as an extra-provincial or foreign corporation in all jurisdictions where the character of its properties owned or leased or the nature of the activities conducted by it make such licensing, registration or qualification necessary, and the Company shall carry on its business in the ordinary course and in compliance in all material respects with all applicable Laws of each such jurisdiction, provided that, in each case, this covenant shall not prevent the Company from completing any transaction so long as the holders of Common Shares receive securities of a Person that is listed on a recognized stock exchange, or cash, or the holders of the Common Shares have approved the transaction in accordance with the requirements of applicable corporate Laws and the policies of the TSX and NYSE American, or as a result of a takeover bid or similar transaction, nor shall this covenant apply if the directors of the Company determine in good faith that compliance with this covenant would be inconsistent with their fiduciary duties as directors of the Company;
	  
	  
	  

	  
	(b)	the Company shall use commercially reasonable efforts to maintain: (i) its status as a “reporting issuer” (or the equivalent thereof) not in default of the requirements of the Securities Laws in each of the provinces of British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and Labrador for a period of 18 months following the Closing Date; and (ii) the listing of the Common Shares on the TSX and NYSE American to the date which is 18 months following the Closing Date; provided that, in each case, this covenant shall not prevent the Company from completing any transaction so long as the holders of Common Shares receive securities of a Person that is listed on a recognized stock exchange, or cash, or the holders of the Common Shares have approved the transaction in accordance with the requirements of applicable corporate Laws and the policies of the TSX and NYSE American, or as a result of a takeover bid or similar transaction, nor shall this covenant apply if the directors of the Company determine in good faith that compliance with this covenant would be inconsistent with their fiduciary duties as directors of the Company;
	  
	  
	  

	  
	(c)	up until the Closing Time, the Company shall provide the Agent and its legal counsel with timely access to all information reasonably required to permit them to conduct a full due diligence investigation of the Company and its business operations, properties, assets, affairs and financial condition. In particular, the Company will make available to the Agent and its legal counsel, on a timely basis, all corporate and operating records, material agreements, technical and financial information, budgets, key officers, and other relevant information necessary in order to complete the due diligence investigation of the Company and its business operations, properties, assets, affairs and financial condition for this purpose, and without limiting the scope of the due diligence inquiries the Agent may conduct, to participate in one or more due diligence sessions to be held prior to the Closing Time;

    	 
	- 20 -
	 
 
	 

  
  	  
	(d)	the Company shall duly execute and deliver the Subscription Agreements and any other documents required or reasonably requested by the Purchasers to be executed by the Company in connection with the Offering at the Closing Time, and comply with and satisfy all terms, conditions and covenants herein or therein contained to be complied with or satisfied by the Company;
	  
	  
	  

	  
	(e)	the Company shall, as soon as practicable, use its commercially reasonable best efforts to receive all necessary consents to the transactions contemplated herein;
	  
	  
	  

	  
	(f)	the Company shall ensure that the Offered Shares, upon issuance, shall be duly issued as fully paid and non-assessable Common Shares, and shall have the attributes corresponding in all material respects to the description thereof set forth in this Agreement and the Subscription Agreements;
	  
	  
	  

	  
	(g)	the Company shall ensure that the Offered Shares, upon issuance, will be listed and posted for trading on the TSX and NYSE American, subject to Standard Listing Conditions and transfer restrictions under applicable Securities Laws and the rules and requirements of the TSX and NYSE American;
	  
	  
	  

	  
	(h)	the Company shall use commercially reasonable efforts to fulfill or cause to be fulfilled, at or prior to the Closing Date, each of the conditions set out in Section 5.2;
	  
	  
	  

	  
	(i)	the Company shall execute and file with the Securities Regulators and the TSX and NYSE American, as applicable, all forms, notices and certificates required to be filed by the Company pursuant to the Securities Laws and the rules and requirements of the TSX in the time required by the applicable Securities Laws and the rules and requirements of the TSX and NYSE American, as applicable, including, for greater certainty, Form 45-106F1 of NI 45-106 and any other forms, notices and certificates set forth in the opinions delivered to the Agent pursuant to the closing conditions set forth in Section 5.2 hereof, as are required to be filed by the Company;
	  
	  
	  

	  
	(j)	the Company shall provide the Agent with a reasonable opportunity to review and provide comments on a draft of any proposed announcement or press release relating to the Offering and to obtain prior approval of the Agent as to the content and form thereof, such approval not to be unreasonably withheld or delayed;
	  
	  
	  

	  
	(k)	the Company shall not issue, agree to issue, or dispose of in any way Common Shares or any securities convertible or exercisable into Common Shares of the Company, other than: (i) as contemplated herein; (ii) pursuant to the grant of options or other securities in the normal course pursuant to the Company’s employee stock option plan or other equity compensation plans, and the issuance of any Common Shares upon the exercise of such options or vesting of such securities; (iii) the issuance of equity securities pursuant to the exercise or conversion, as the case may be, of any warrants or other convertible securities of the Company outstanding on the date hereof; or (iv) the issuance of equity securities in connection with one or more bona fide acquisitions by the Company, for a period of 120 days following the Closing Date, without the prior written consent of the Agent, such consent not to be unreasonably withheld;

    	 
	- 21 -
	 
 
	 

  
  	  
	(l)	the Company shall cooperate with the Agent in marketing the Offering, including, to the extent reasonable, by making its senior officers available to meet with prospective investors identified by the Agent;
	  
	  
	  

	  
	(m)	the Company shall use the Commitment Amount to incur Resource Expenses;
	  
	  
	  

	  
	(n)	the Company shall keep proper books, records and accounts of all Resource Expenses and all transactions affecting the Commitment Amount and the Resource Expenses and/or Qualified Expenditures, and upon reasonable notice, it will make such books, records and accounts available for inspection and audit by, or on behalf of, any of the Purchasers;
	  
	  
	  

	  
	(o)	the Company shall file the necessary forms, within the time permitted, so as to obtain a flow-through share issue identification number from the CRA in accordance with subsection 66(12.68) of the Tax Act;
	  
	  
	  

	  
	(p)	the Company shall incur, during the Expenditure Period, Resource Expenses in an amount not less than the Commitment Amount, so as to enable the Company to renounce to the Purchasers effective on or before December 31, 2018 (to the extent that the Purchasers (and if a Purchaser is a partnership, each partner thereof) deal with the Company on an arm’s length basis for the purposes of the Tax Act at all relevant times), Resource Expenses in an amount equal to the Commitment Amount, at least 75 percent of which shall qualify as Qualified Expenditures;
	  
	  
	  

	  
	(q)	the Company shall renounce to the Purchasers, effective on or before December 31, 2018 (to the extent that the Purchasers (and if a Purchaser is a partnership, each partner thereof) deal with the Company on an arm’s length basis for the purposes of the Tax Act at all relevant times), Resource Expenses incurred during the Expenditure Period in an amount equal to the Commitment Amount, at least 75 percent of which shall qualify as Qualified Expenditures;
	  
	  
	  

	  
	(r)	the Qualifying Expenditures shall be an expense incurred in respect of mining exploration activity all or substantially all of which is conducted in British Columbia for the purpose of determining the existence, location, extent or quality of a mineral resource (as defined in subsection 248(1) of the Tax Act) in British Columbia;
	  
	  
	  

	  
	(s)	all Resource Expenses renounced to the Purchasers pursuant to the Subscription Agreements will be Resource Expenses incurred by the Company that, but for the renunciation to the Purchasers, the Company would be entitled to deduct in computing its income for the purposes of Part I of the Tax Act, will not include any amount that has previously been renounced by the Company to the Purchasers or to any other Person and will not be subject to any reduction under subsection 66(12.73) of the Tax Act;
	  
	  
	  

	  
	(t)	if the Company receives, or becomes entitled to receive or may reasonably be expected to receive any “assistance”, as defined in subsection 66(15) of the Tax Act, and the receipt of, or entitlement to, receive such assistance has, or will have, the effect of reducing the amount of Resource Expenses validly renounced to the Purchasers under the Subscription Agreements to less than the Commitment Amount, the Company shall incur sufficient additional Resource Expenses during the Expenditure Period to be able to renounce to the Purchasers Resource Expenses in an amount equal to the Commitment Amount, at least 75 percent of which shall qualify as Qualified Expenditures;

    	 
	- 22 -
	 
 
	 

  
  	  
	(u)	the Company shall deliver to each Purchaser, in accordance with the Subscription Agreements, not later than March 1, 2019, a statement (including T-101 forms) setting forth the aggregate amount of Resource Expenses renounced to such Purchaser hereunder with an effective date not later than December 31, 2018 (provided that the Purchaser (and if the Purchaser is a partnership, each partner thereof) deals with the Company on an arm’s length basis for the purposes of the Tax Act at all relevant times), together with any other forms or documentation required under the Tax Act or any corresponding provincial legislation in respect of the renunciation of the Resource Expenses to the Purchasers hereunder, such delivery constituting the authorization of the Company to the Purchasers to file such prescribed forms with the relevant taxation authorities;
	  
	  
	  

	  
	(v)	the Company shall refrain from entering into transactions, taking deductions or making any tax elections or designations which would otherwise reduce its cumulative CEE to an extent which, or for any other reason that, would preclude a renunciation of Resource Expenses hereunder in an amount equal to the Commitment Amount effective on or before December 31, 2018 or which could result in the Company or the Minister of National Revenue (Canada) reducing the Resource Expenses renounced to the Purchasers;
	  
	  
	  

	  
	(w)	the Company shall incur and renounce Resource Expenses pursuant to the Subscription Agreements and all other agreements with other persons providing for the issue of Offered Shares entered into by the Company on the Closing Date (collectively the “Other Agreements”) before incurring and renouncing CEE pursuant to any other agreement which the Company enters into after the Closing Date. If the Company is required under the Tax Act or otherwise to reduce Resource Expenses previously renounced to Purchasers, the reduction shall be made pro rata by the number of Offered Shares issued or to be issued pursuant to the Offering and the Other Agreements only after it has first reduced to the extent possible all CEE renounced to Persons (other than the Purchasers and the subscribers under the Other Agreements) under any agreements entered into after the Closing Date;
	  
	  
	  

	  
	(x)	the Company shall file within the prescribed time all forms and returns required under the Tax Act and any corresponding provincial Law, along with all required supporting documentation and this Agreement, and pay any tax or other amount owing in respect of such form or return as are necessary to effectively renounce Resource Expenses in an amount equal to the Commitment Amount to the Purchasers effective on or before December 31, 2018 (to the extent that the Purchasers (and if a Purchaser is a partnership, each partner thereof) deal with the Company on an arm’s length basis for the purposes of the Tax Act at all relevant times), at least 75 percent of which shall qualify as Qualified Expenditures;

    	 
	- 23 -
	 
 
	 

  
  	  
	(y)	if the Company amalgamates with any one or more companies, any shares issued to or held by the Purchasers as a replacement for the Offered Shares as a result of such amalgamation will qualify, by virtue of subsection 87(4.4) of the Tax Act, as “flow-through shares” and in particular will not be Prescribed Shares;
	  
	  
	  

	  
	(z)	the Company is not and will not become subject to the provisions of subsection 66(12.67) of the Tax Act in a manner which impairs its ability to renounce Resource Expenses to the Purchasers in an amount equal to the Commitment Amount; and
	  
	  
	  

	  
	(aa)	if the Company fails to incur and renounce to the Purchasers, effective on or before December 31, 2018, Resource Expenses (at least 75 percent of which qualify as Qualified Expenditures) in accordance with the terms of the Subscription Agreements, or if the amount of the Resource Expenses renounced to the Purchasers is reduced pursuant to subsection 66(12.73) of the Tax Act, the Company shall indemnify each of the Purchasers, or each of the partners thereof if a Purchaser is a limited partnership (for the purposes of this paragraph, each an “Indemnified Person”), as to, and pay in settlement therefor to the Indemnified Person, an amount equal to the amount of any tax (as referenced in paragraph (c) of the definition of an “excluded obligation” in subparagraph 6202.1(5) of the regulations to the Tax Act) payable under the Tax Act (and any corresponding provincial legislation) by the Indemnified Person as a consequence of such reduction or failure to renounce, such payment to be made within twenty (20) Business Days following the date on which the amount of such tax payable is determined, provided that in the event that the Company has fully satisfied its obligations in respect of the indemnity in accordance with this clause, all obligations of the Company hereunder to renounce to the Purchaser any amount of the Resource Expenses shall immediately thereafter cease. The foregoing indemnity shall have no force or effect and the Purchasers shall not have any recourse or rights of action to the extent that such indemnity, recourse or rights of action would otherwise cause the Offered Shares to be Prescribed Shares. To the extent that any Person entitled to be indemnified hereunder is not a party to this Agreement, the Agent shall obtain and hold the rights and benefits of this Agreement in trust for, and on behalf of, such Person and such Person shall be entitled to enforce the provisions of this paragraph, notwithstanding that such Person is not a party to this Agreement.

  
 ARTICLE 5
 CLOSING
  
 Section 5.1 Closing Deliveries.
  
  	(1)	The purchase and sale of the Offered Shares shall be completed at the Closing Time at the offices of Salley Bowes Harwardt Law Corp. in Vancouver, British Columbia or at such other place as the Agent and the Company may agree upon in writing. At or prior to the Closing Time, the Company shall deliver to Cantor Fitzgerald for and on behalf of the Purchasers certificates or the electronic registration by book-entry of evidence of ownership (as may be agreed upon by Cantor Fitzgerald and the Company) representing the Offered Shares and such further documentation as may be contemplated herein, including the requisite legal opinions and certificates as contemplated in Section 5.2, against payment by the Purchasers of the Aggregate Subscription Price in lawful money of Canada by certified cheque or wire transfer payable to the Company or as otherwise directed by the Company. The Company will, at the Closing Time, make payment in full of (i) the Agent’s Fee, and (ii) the reasonable out-of-pocket costs and expenses of the Agent, including fees and disbursements of counsel to the Agent as specified in Section 7.3 herein. Any certificates delivered to the Agent, on behalf of the Purchasers, representing the Offered Shares shall be registered in the name of “CDS & Co.” or in such other name or names as the Agent, on behalf of the Purchasers, may direct the Company in writing not less than twenty-four (24) hours prior to the Closing Time.

    	 
	- 24 -
	 
 
	 

  
  	(2)	The parties acknowledge that Closings may occur on one or more dates as mutually agreed to by Cantor Fitzgerald and the Company and that the Company shall deliver to Cantor Fitzgerald requisite legal opinions and certificates as contemplated in Section 5.2 prior to the first Closing Date, updated as of each Closing Date, and that Cantor Fitzgerald shall deliver the applicable payment of the purchase price, on behalf of the Purchasers, for the Offered Shares to the Corporation on each Closing Date, less the Agent’s Fee retained by Cantor Fitzgerald in accordance with Section 2.2.
	  
	  

	(3)	If the Company and Cantor Fitzgerald determine to issue any of the Offered Shares as non-certificated securities in accordance with the rules and procedures of CDS Clearing and Depository Services Inc. (“CDS”), then, as an alternative to the Company delivering to the Agent definitive certificates representing such Offered Shares:
	  
	  

  	  
	(a)	the Company shall (a) cause the Transfer Agent, as registrar and transfer agent of the Company, to deliver to CDS, on behalf of the Agent, by way of electronic deposit in the non-certificated inventory system of CDS such Offered Shares to be purchased hereunder, registered in the name of “CDS & Co.” as the nominee of CDS, in accordance with the rules and procedures of CDS; and
	  
	  
	  

	  
	(b)	the Agent shall provide the Company with evidence satisfactory to the Company, acting reasonably, of the delivery of the Offered Shares to the accounts of each of the Purchasers.

  
 Section 5.2 Closing Conditions.
  
 The Agent’s obligations under this Agreement and the obligations of the Purchasers to purchase the Offered Shares under the Subscription Agreements shall be conditional upon the fulfilment at or before the Closing Time of the following conditions:
  
  	  
	(a)	Requisite Approvals. The Agent shall have received at the Closing Time, evidence that any requisite approvals, consents and acceptances of the appropriate Governmental Authorities and the TSX and NYSE American, required to be made or obtained by the Company in order to complete the Offering, have been made or obtained;
	   
	  
	  

	  
	(b)	Board Approval. The board of directors of the Company shall have authorized and approved the execution and delivery of this Agreement and any other Transaction Documents (as defined below) (including the acceptance of the Subscription Agreements), the allotment, issuance and delivery of the Offered Shares, and all matters relating thereto;

    	 
	- 25 -
	 
 
	 

  
  	  
	(c)	Subscription Agreements. The Company shall have accepted one or more subscriptions for Offered Shares from the Purchasers and the Subscription Agreements shall have been executed and delivered by the Company in form and substance satisfactory to the Agent and its counsel, acting reasonably;
	  
	  
	  

	  
	(d)	Officer’s Certificates. The Agent shall have received officers’ certificates, in form and substance satisfactory to the Agent’s counsel acting reasonably, dated the Closing Date, signed by appropriate officers of the Company addressed to the Agent and its counsel, with respect to the constating documents of the Company, all resolutions of the Company’s board of directors relating to this Agreement and the transactions contemplated hereby, the incumbency and specimen signatures of signing officers in the form of a certificate of incumbency, the true and correct nature of the representations and warranties of the Company and the performance of all covenants and conditions in respect of the Offering, there having been no material adverse change in the business, affairs, operations, assets, liabilities or capital of the Company since the date of the Letter Agreement, and no misrepresentation or an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading in the Public Disclosure Documents;
	  
	  
	  

	  
	(e)	Legal Opinions. The Agent shall have received legal opinions, in form and substance satisfactory to the Agent’s counsel acting reasonably, dated the Closing Date, from Salley Bowes Harwardt Law Corp., counsel to the Company or where appropriate, counsel in the other Selling Jurisdictions, which counsel in turn may rely, as to matters of fact, on certificates of auditors, public officials, the Transfer Agent and officers of the Company, with respect to the following matters:
	  
	  
	  

  	  
	(i)	the Company has been incorporated and is existing under the laws of the Province of British Columbia and has not been dissolved and has all requisite corporate power and capacity to carry on business and to own, lease and operate its property and assets;
	  
	  
	  

	  
	(ii)	the Company is authorized to issue an unlimited number of Common Shares, of which, prior to giving effect to the issuance of the Offered Shares, 52,805,653 Common Shares were issued and outstanding; 
	  
	  
	  

	  
	(iii)	the Company has all the necessary corporate power and authority to execute and deliver the Subscription Agreements and this Agreement (collectively referred to as, for the purposes of the opinion, the “Transaction Documents”) and to issue the Offered Shares;
	  
	  
	  

	  
	(iv)	all necessary corporate action has been taken by the Company to duly authorize the issuance of the Offered Shares and execution and delivery of the Transaction Documents and each of the Transaction Documents has been duly authorized, executed and delivered by the Company and constitutes a legal, valid and binding obligation of the Company enforceable against the Company in accordance with its terms (subject to bankruptcy, insolvency or other laws affecting the rights of creditors generally, the availability of equitable remedies and the qualification that rights to indemnity and waiver of contribution may be contrary to public policy or limited by applicable Laws);

    	 
	- 26 -
	 
 
	 

  
  	  
	(v)	none of the execution and delivery of the Transaction Documents, the performance by the Company of its obligations thereunder or the sale or issuance of the Offered Shares will conflict with or result in any breach of: (i) any of the constating documents or articles of the Company; (ii) any resolutions of the directors or shareholders of the Company; or (iii) any securities Laws (including the Securities Act (British Columbia)) to which the Company is subject;
	  
	  
	  

	  
	(vi)	the Offered Shares have been validly issued as fully paid and non-assessable Common Shares;
	  
	  
	  

	  
	(vii)	the issue and sale of the Offered Shares by the Company to those Purchasers resident in the Selling Jurisdictions, if effected in the manner and upon the terms set forth in the Transaction Documents, are exempt from the prospectus requirements of the Securities Laws and no documents are required to be filed, proceedings taken or approvals, permits, consents, orders or authorizations are required to be made, taken or obtained by the Company under the Securities Laws to permit such issuance and sale by the Company;
	  
	  
	  

	  
	(viii)	other than customary resale restrictions (to be described in the opinion), no other documents will be required to be filed, proceedings taken or approvals, permits, consents, orders or authorizations of regulatory authorities required to be obtained under the Securities Laws in connection the first trade of the Offered Shares made through a registrant registered under the Securities Laws who has complied with such applicable Laws;
	  
	  
	  

	  
	(ix)	the Offering is conditionally acceptable to the TSX and NYSE American, subject only to compliance by the Company of the Standard Listing Conditions;
	  
	  
	  

	  
	(x)	the Company is a “reporting issuer” in each of the Selling Jurisdictions and is not included in the list of defaulting issuers maintained by the Securities Regulators in the Selling Jurisdictions, as the case may be, pursuant to the applicable Securities Laws;
	  
	  
	  

	  
	(xi)	the Transfer Agent has been duly appointed as the transfer agent and registrar for the Common Shares;
	  
	  
	  

	  
	(xii)	the form and terms of the certificates representing the Common Shares have been approved by the board of directors of the Company and conform with the provisions of the BCBCA and the constating documents of the Company;

    	 
	- 27 -
	 
 
	 

  
  	  
	(xiii)	the Offered Shares issued to Purchasers are “flow-through” shares as defined in subsection 66(15) of the Tax Act and the Offered Shares do not constitute, as at the Closing Date, “prescribed shares” for the purposes of the definition of “flow-through share” in subsection 66(15) of the Tax Act;
	  
	  
	  

	  
	(xiv)	provided that the expenditures to be renounced in respect of the Offered Shares are fully incurred in the manner and otherwise as covenanted and referenced in the Subscription Agreements and in the relevant officer’s certificate, the expenditures will be Resource Expenses, at least 75 percent of which shall qualify as Qualified Expenditures;
	  
	  
	  

	  
	(xv)	the Company qualifies as a Principal Business Corporation; and
	  
	  
	  

	  
	(xvi)	as to such other matters as the Agent’s legal counsel may reasonably request prior to the Closing Time;
	  
	  
	  

  	  
	(f)	Title Opinions. The Agent shall have received legal opinions, in form and substance satisfactory to the Agent’s counsel acting reasonably, dated the Closing Date, from counsel to the Company as to title matters in respect of the Bralorne Mine;
	  
	  
	  

	  
	(g)	Listing Approval. The Offering shall have been conditionally approved by the TSX and NYSE American, subject only to the Company satisfying the Standard Listing Conditions; and the Company shall not have received any notice from the TSX or NYSE American that the Offered Shares shall not be accepted for listing on such exchange;
	  
	  
	  

	  
	(h)	Lock-Up Agreements. The Agent shall have received at the Closing Time duly executed agreements from each of the directors and officers of the Company, in form and substance reasonably requested by the Agent, in which such persons undertake (subject to certain customary exceptions) for a period ending one-hundred twenty (120) days after the Closing, not to sell, contract to sell, or otherwise dispose of any securities of the Company, without the prior written consent of the Agent;
	  
	  
	  

	  
	(i)	Certificate of Status. The Agent shall have received a certificate of good standing under the BCBCA with respect to the Company;
	  
	  
	  

	  
	(j)	Certificate of Transfer Agent. The Agent shall have received a certificate from the Transfer Agent as to the number of Common Shares issued and outstanding as at a date no more than one Business Day prior to the Closing Date;
	  
	  
	  

	  
	(k)	No Termination. The Agent not having exercised any rights of termination set forth in Article 6; and
	  
	  
	  

	  
	(l)	Other Documentation. The Agent having received at the Closing Time such further certificates, opinions of counsel and other documentation from the Company as the Agent or its counsel may reasonably require, provided, however, that the Agent or its counsel shall request any such certificate, opinion or document within a reasonable period prior to the Closing Time that is sufficient for the Company to obtain and deliver such certificate, opinion or document.

    	 
	- 28 -
	 
 
	 

  
  	(2)	The Company agrees that the aforesaid legal opinions and certificates to be delivered at the Closing Time will also be addressed to the Purchasers and that the Agent may deliver copies thereof to such persons and the Agent’s counsel.

  
 ARTICLE 6
 TERMINATION
  
 Section 6.1 Rights of Termination
  
  	(1)	The Company shall use its best efforts to cause all conditions in this Agreement which relate to it to be satisfied. It is understood that the Agent may waive in whole or in part, or extend the time for compliance with any of such terms and conditions without prejudice to its rights in respect of any other of the foregoing terms and conditions or any other or subsequent breach or non-compliance, provided that to be binding any such waiver or extension must be in writing.
	  
	  

	(2)	In addition to any other remedies which may be available to the Agent, the Agent shall be entitled, at the Agent’s sole option, to terminate and cancel, without any liability on the Agent’s part, its obligations under this Agreement, at any time by written notice to that effect given to the Company if, at any time prior to the Closing Date:
	  
	  

  	  
	(a)	there should be discovered any material fact which existed as of the date hereof but which has not been publicly disclosed which, in the opinion of the Agent, acting reasonably, has or would be expected to have a significant adverse effect on the market price or value of the Offered Shares or the Common Shares;
	  
	  
	  

	  
	(b)	there is, in the opinion of the Agent, acting reasonably, a material change or a change in any material fact or new material fact shall arise which would be expected to have a significant adverse effect on the business, affairs, operations or profitability of the Company or on the market price or the value of the Offered Shares or the Common Shares;
	  
	  
	  

	  
	(c)	there should develop, occur or come into effect or existence any event of any nature, including an act of terrorism, accident, or new or change in Law or other condition of financial occurrence of national or international consequence, which, in the opinion of the Agent, acting reasonably, seriously adversely affects or involves, or would seriously adversely affect and involve, the financial markets in Canada or in the United States or the business, affairs, operations or profitability of the Company or the market price or value of the Offered Shares or the Common Shares;
	  
	  
	  

	  
	(d)	any inquiry, action, suit, proceeding or investigation (whether formal or informal) including matters of regulatory transgression or unlawful conduct, is commenced, announced or threatened in relation to the Company, its subsidiaries or any of their respective officers or directors, or any of its officers or directors, which, in the opinion of the Agent, acting reasonably, operates to prevent or materially restrict the distribution or trading of the Offered Shares or the Common Shares or which has or would be expected to have a material adverse effect on the market price or value of the Offered Shares or the Common Shares;

    	 
	- 29 -
	 
 
	 

  
  	  
	(e)	any order to cease trading in securities of the Company is made or threatened by any Securities Regulator or other Governmental Authority;
	  
	  
	  

	  
	(f)	the Company is in breach of any material term, condition or covenant of this Agreement or any material representation or warranty given by the Company in this Agreement or the Letter Agreement becomes or is false;
	  
	  
	  

	  
	(g)	the state of the financial markets in Canada or elsewhere where it is planned to market the Offered Shares is such that, in the reasonable opinion of the Agent, the Offered Shares cannot be marketed profitably; or
	  
	  
	  

	  
	(h)	the Agent, in its sole discretion, is not satisfied with the results of its due diligence review and investigations in respect of the Company, its business and affairs or otherwise.
	  
	  
	  

  	(3)	The rights of termination contained in the foregoing subsections of this section may be exercised by the Agent and are in addition to, and without prejudice to, any other rights or remedies the Agent may have in respect of any default, act or failure to act or noncompliance by the Company in respect of any of the matters contemplated by this Agreement or otherwise. If the obligations of the Agent are terminated under this Agreement pursuant to these termination rights, the liability of the Company to the Agent shall be limited to the obligations under Section 7.2 and Section 7.3.

  
 ARTICLE 7
 GENERAL
  
 Section 7.1 Survival of Representations, Warranties and Covenants
  
 All representations, warranties, and covenants of the Company and the Agent herein contained or contained in documents submitted or required to be submitted pursuant to this Agreement shall survive the purchase by the Purchasers of the Offered Shares and shall continue in full force and effect for the benefit of the Agent and the Purchasers for a period of two (2) years following the Closing Date.
  
 Section 7.2 Indemnity and Contribution.
  
  	(1)	The Company covenants and agrees to indemnify and save harmless the Agent, its affiliates and each of their respective partners, member, directors, officers, employees, legal counsel, shareholders and agents and each person who controls the Agent or any of its subsidiaries and each shareholder of the Agent (collectively, the “Indemnified Parties” and individually, an “Indemnified Party”), from and against all losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs or expenses, whether joint or several, which the Indemnified Parties may suffer or incur or be subject to, including all amounts paid to settle actions or satisfy judgments or awards and all reasonable legal fees and expenses that may be incurred in advising with respect to investigating or defending any claim (whether or not a party), in any way caused by, or arising directly or indirectly from, or in consequence of, or incurred by reason of or in connection with the transactions contemplated hereby, including the following:

    	 
	- 30 -
	 
 
	 

  
  	  
	(a)	any statement in the Public Disclosure Documents, which at the time and in the light of the circumstances under which it was made contains or is alleged to contain a misrepresentation or an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
	  
	  
	  

	  
	(b)	the omission or alleged omission to state in any certificate of the Company or of any officers of the Company delivered hereunder or pursuant thereto any material fact required to be stated therein where such omission or alleged omission constitutes or is alleged to constitute a misrepresentation or an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
	  
	  
	  

	  
	(c)	any order made or any inquiry, investigation or proceeding commenced or threatened by any Securities Regulators, stock exchange or by any other Governmental Authority based upon any failure or alleged failure to comply with applicable Securities Laws (other than any failure or alleged failure to comply by the Agent) preventing and restricting the trading in or the sale of the Offered Shares;
	  
	  
	  

	  
	(d)	the non-compliance or alleged non-compliance by the Company with any requirement of applicable Securities Laws, including the Company’s non-compliance with any statutory requirement to make any document available for inspection; or
	  
	  
	  

	  
	(e)	any breach of any representation, warranty or covenant of the Company contained herein or the failure of the Company to comply with any of its obligations hereunder,
	  
	  
	  

	  
	 and will reimburse the Agent promptly upon demand for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such losses, claims, damages, liabilities or actions in respect thereof, as incurred.

  
  	(2)	Notwithstanding anything to the contrary contained herein, this indemnity shall not apply to the extent that (i) it causes the Offered Shares to be “prescribed shares” for purposes of the definition of “flow-through share” in subsection 66(15) of the Tax Act, or (ii) it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from the gross negligence or willful misconduct of the Agent.
	  
	  

	(3)	The Company shall not, without the prior written consent of the Agent, which shall not be unreasonably withheld, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action, suit or proceeding in respect of which indemnification may be sought hereunder (whether or not any Indemnified Party is a party to such claim, action, suit or proceeding).
	  
	  

	(4)	Notwithstanding the foregoing, the Company shall not be liable for the settlement of any claim or action in respect of which indemnity may be sought hereunder effected without its written consent, which consent shall not be unreasonably withheld.

    	 
	- 31 -
	 
 
	 

  
  	(5)	If any claim, action suit or proceeding shall be asserted against any Indemnified Party in respect of which indemnification is or might reasonably be considered to be provided, such person will notify the Company as soon as possible and in any event on a timely basis, of the nature of such claim and the Company shall be entitled (but not required) to assume the defence of any suit brought to enforce such claim; provided, however, that the defence shall be through legal counsel acceptable to the Indemnified Party, acting reasonably, and that no settlement may be made by the Company or the Indemnified Party without the prior written consent of the other; and provided that the omission to so notify the Company shall not relieve the Company of any liability which the Company may have to the Agent or any other Indemnified Party except only to the extent that any such delay in or failure to give notice as herein required materially prejudices (through the forfeiture of substantive rights and defenses) the defense of such actions, suit, proceeding, claim or investigation.
	  
	  

	(6)	In any such claim, the Indemnified Party shall have the right to retain other counsel to act on the Indemnified Party’s behalf, provided that the fees and disbursements of such other counsel shall be paid by the Indemnified Party, unless (i) the Company and the Indemnified Party mutually agree to retain such other counsel, (ii) the Company fails to assume the defence of such claim on behalf of the Indemnified Party within a reasonable period after receiving notice thereof or, having assumed such defence, has failed to pursue it diligently or hire counsel acceptable to the Indemnified Party, or (iii) the named parties to any such claim (including any third or implicated party) include both the Indemnified Party, on the one hand, and the Company, on the other hand, and counsel (which may be internal counsel) to the Indemnified Party advises that there are legal defences available to the Indemnified Party that are different or in addition to those available to the Company, that representation of the Indemnified Party by counsel for the Company is inappropriate as a result of the potential or actual conflicting interests of those represented, or where in the Indemnified Party’s reasonable judgment, the claim gives rise to a conflict of interest between the Company and the Indemnified Party, in each which event such fees and disbursements shall be paid by the Company to the extent that they have been reasonably incurred.
	  
	  

	(7)	The Company hereby waives all rights which it may have by statute or common law to recover contribution from the Agent in respect of losses, claims, costs, damages, expenses or liabilities which any of them may suffer or incur directly or indirectly (in this paragraph, “Losses”) by reason of or in consequence of a document containing a misrepresentation.
	  
	  

	(8)	In order to provide for a just and equitable contribution in circumstances in which the indemnity provided in Section 7.2(1) would otherwise be available in accordance with its terms but is, for any reason, held to be unavailable to or unenforceable by the Indemnified Party or enforceable otherwise than in accordance with its terms or is insufficient to hold the Indemnified Party harmless, the Company shall contribute to the aggregate of all Losses, (other than loss of profits in connection with the distribution of the Offered Shares) of the nature contemplated in this Section 7.2 and suffered or incurred by the Indemnified Parties in such proportions as is appropriate to reflect the relative benefits received by the Company on the one hand and the Agent on the other hand from the distribution of the Offered Shares as well as the relative fault of the parties in connection with the statements, acts or omissions which resulted in such Losses, as well as any other equitable considerations determined by a court of competent jurisdiction; provided that: (i) the Agent shall not in any event be liable to contribute, in the aggregate, any amount in excess of the aggregate fee or any portion thereof actually received by the Agent hereunder; and (ii) no party who has been determined by a court of competent jurisdiction in a final judgment that has become non-appealable to have engaged in any fraudulent misrepresentation in connection with the Losses which resulted in such claims, expenses, costs, damages, liabilities or losses shall be entitled to claim contribution from any person who has not been so determined to have engaged in such fraudulent misrepresentation in connection with such Losses.

    	 
	- 32 -
	 
 
	 

  
  	(9)	The rights of contribution and indemnity provided in this Section 7.2 shall be in addition to and not in derogation of any other right to contribution and indemnity which the Agent may have by statute or otherwise at law.
	  
	  

	(10)	In the event that the Company is held to be entitled to contribution from the Agent under the provisions of any applicable Law, the Company shall be limited to contribution in an amount not exceeding the lesser of:
	  
	  

  	  
	(a)	the portion of the full amount of the loss or liability giving rise to such contribution for which the Agent is responsible, as determined above; and
	  
	  
	  

	  
	(b)	the amount of the aggregate fee actually received by the Agent from the Company hereunder, provided that the Agent shall not be required to contribute more than the fee actually received by the Agent.
	  
	  
	  

  	(11)	If the Agent has reason to believe that a claim for contribution may arise, it shall give the Company notice thereof in writing, but failure to notify the Company shall not relieve the Company of any obligation which it may have to the Agent under this Section 7.2, except (and only) to the extent of material prejudice (through the forfeiture of substantive rights and defenses) to the Company therefrom.
	  
	  

	(12)	With respect to this Section 7.2, the Company acknowledges and agrees that the Agent is contracting on their own behalf and as agents for its affiliates and each of their respective partners, members, directors, officers, employees, legal counsel, shareholders and agents, and each person, if any, controlling the Agent or any of its subsidiaries and each shareholder of the Agent. Accordingly, the Company hereby constitutes the Agent as agent for each person who is entitled to the covenants of the Company contained in this Section 7.2 and is not a party hereto and the Agent agrees to accept such agency and to hold in trust for and to enforce such covenants on behalf of such persons.
	  
	  

	(13)	The foregoing provisions shall survive the completion of professional services rendered under this Agreement or any termination of the authorization given by this Agreement.

  
 Section 7.3 Expenses.
  
 Whether or not the Closing occurs, the Company shall pay all reasonable expenses and fees in connection with the Offering, including all expenses of or incidental to the issue, sale and distribution of the Offered Shares, the fees and expenses of the Company’s counsel, all costs incurred in connection with the preparation of documents relating to the Offering, and all reasonable out-of-pocket costs and expenses incurred by the Agent not to exceed $7,000 without the prior approval of the Company (such consent not to be unreasonably withheld) and the reasonable fees and disbursements of the Agent’s counsel to a maximum of $80,000 exclusive of disbursements and taxes. All such fees and expenses incurred by the Agent or on its behalf shall be payable by the Company, as directed by the Agent, immediately upon receiving an invoice therefor from the Agent.
   	 
	- 33 -
	 
 
	 

  
 Section 7.4 Acknowledgement
  
  	(1)	The Company acknowledges that the Agent is a full service securities firm engaged in securities trading and brokerage activities as well as providing investment banking and financial advisory services and that in the ordinary course of its trading and brokerage activities, the Agent and its respective affiliates at any time may hold long and short positions, and may trade or otherwise effect transactions, for their own account or the accounts of their clients, in debt or equity securities of the Company or any other person that may be involved in or related to the use of proceeds of the Offering or related derivative securities.
	  
	  

	(2)	The Company further acknowledges that the Agent is acting solely as agent in connection with the purchase and sale of the Offered Shares. The Company further acknowledges that the Agent is acting pursuant to a contractual relationship created solely by this Agreement entered into on an arm’s length basis, and in no event do the parties intend that the Agent act or be responsible as a fiduciary to the Company, its management, shareholders or creditors or any other person in connection with any activity that the Agent may undertake or have undertaken in furtherance of such purchase and sale of the Company’s securities, either before or after the date hereof. The Agent hereby expressly disclaims any fiduciary or similar obligations to the Company, either in connection with the transactions contemplated by this Agreement or any matters leading up to such transactions, and the Company hereby confirms its understanding and agreement to that effect. The Company and the Agent agree that they are each responsible for making their own independent judgments with respect to any such transactions and that any opinions or views expressed by the Agent to the Company regarding such transactions, including, but not limited to, any opinions or views with respect to the price or market for the Company’s securities, do not constitute advice or recommendations to the Company. The Company and the Agent agree that the Agent is acting as agent and not the fiduciary of the Company and the Agent has not assumed, and the Agent will not assume, any advisory responsibility in favour of the Company with respect to the transactions contemplated hereby or the process leading thereto (irrespective of whether the Agent has advised or is currently advising the Company on other matters).

  
 Section 7.5 Public Announcement
  
 Provided the Offering is completed and has been publicly disclosed by the Company, the Agent shall be permitted to publish, at its own expense, such advertisements or announcements relating to the performance of services provided in respect of the Offering in such newspapers or other publications as the Agent considers appropriate, and shall further be permitted to post such advertisements or announcements on its website.
   	 
	- 34 -
	 
 
	 

  
 Section 7.6 Notices.
  
  	(1)	Unless otherwise expressly provided in this Agreement, any notice or other communication to be given under this Agreement (a “notice”) shall be in writing addressed as follows:
	  
	  

  	  
	(a)	If to the Company, to it at:
	  
	  
	  

	  
	  
	 Avino Silver & Gold Mines Ltd.
 900-570 Granville St.
 Vancouver, BC
 V6C 3P1
     
 Attention: Corporate Secretary
 Fax Number: (604) 682-3600 
    
 with a copy to (which shall not constitute notice):
    
 Salley Bowes Harwardt Law Corp.
 1705-1185 West Georgia Street
 Vancouver, British Columbia V6E 4E6 
    
 Attention: Paul A. Bowes
 Facsimile Number: (604) 688-0788

  
  	  
	(b)	If to the Agent, to it at:
	  
	  
	   

	  
	  
	 Cantor Fitzgerald Canada Corporation
 181 University Avenue, Suite 1500
 Toronto, Ontario M5H 3M7
     
 Attention: Christopher Craib 
 Fax Number: (416) 350-2985

	  
	  
	    

	  
	  
	 and
  
 Cantor Fitzgerald Canada Corporation 
 110 East 59th Street
 New York, NY 10022
    
 Attention: Legal Department 
 Fax Number: (212) 829-4708
  
 with a copy to (which shall not constitute notice): 
  
 Stikeman Elliott LLP
 5300 Commerce Court West
 199 Bay Street
 Toronto, ON M5L 1B9
   
 Attention: Ivan Grbešić and Steven Bennett
 Fax Number: (416) 947-0866

	  
	    

	  
	 or to such other address as any of the parties may designate by notice given to the others.

   	 
	- 35 -
	 
 
	 

  
  	(2)	Each notice shall be personally delivered to the addressee or sent by facsimile transmission to the addressee and (i) a notice which is personally delivered shall, if delivered on a Business Day, be deemed to be given and received on that day and, in any other case, be deemed to be given and received on the first Business Day following the day on which it is delivered; and (ii) a notice which is sent by facsimile transmission shall be deemed to be given and received on the first Business Day following the day on which it is confirmed to have been sent.

  
 Section 7.7 Time of the Essence. 
  
 Time shall, in all respects, be of the essence hereof.
  
 Section 7.8 Canadian Dollars.
  
 All references herein to dollar amounts are to lawful money of Canada.
  
 Section 7.9 Headings.
  
 The headings contained herein are for convenience only and shall not affect the meaning or interpretation hereof.
  
 Section 7.10 Singular and Plural, etc.
  
 Where the context so requires, words importing the singular number include the plural and vice versa, and words importing gender shall include the masculine, feminine and neuter genders.
  
 Section 7.11 Entire Agreement.
  
 Other than the Letter Agreement, this Agreement constitutes the only agreement between the parties with respect to the subject matter hereof and shall supersede any and all prior negotiations and understandings between the parties, including, but not limited to, the Letter Agreement, with respect to the subject matter hereof whether verbal or written. This Agreement may be amended or modified in any respect by written instrument only.
  
 Section 7.12 Severability.
  
 If one or more provisions contained herein shall, for any reason, be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but this Agreement shall be construed as if such invalid, illegal or unenforceable provision or provisions had never been contained herein.
  
 Section 7.13 Governing Law.
  
 This Agreement shall be governed by and construed in accordance with the laws of the province of Ontario, without regard to its conflicts of laws principles, and the laws of Canada applicable therein.
   	 
	- 36 -
	 
 
	 

  
 Section 7.14 Successors and Assigns.
  
 The terms and provisions of this Agreement shall be binding upon and enure to the benefit of the Company, the Agent and the Purchasers and their respective executors, heirs, successors and permitted assigns; provided that, except as provided herein or in the Subscription Agreements, this Agreement shall not be assignable by any party without the written consent of the others.
  
 Section 7.15 Further Assurances.
  
 Each of the parties hereto shall do or cause to be done all such acts and things and shall execute or cause to be executed all such documents, agreements and other instruments as may reasonably be necessary or desirable for the purpose of carrying out the provisions and intent of this Agreement.
  
 Section 7.16 Effective Date.
  
 This Agreement is intended to and shall take effect as of the date first set forth above, notwithstanding its actual date of execution or delivery.
  
 Section 7.17 Counterparts and Facsimile.
  
 This Agreement may be executed in any number of counterparts including by facsimile or portable document format (pdf), each of which so executed shall constitute an original and all of which taken together shall form one and the same agreement.
  
 [Remainder of page left intentionally blank. Signature pages follow.]
   	 
	- 37 -
	 
 
	 

  
 If the Company is in agreement with the foregoing terms and conditions, please so indicate by executing a copy of this Agreement where indicated below and delivering the same to the Agent.
  
  
 	  
	 Yours very truly,
	  

	  
	   
	  
	  

		 CANTOR FITZGERALD CANADA CORPORATION
	  

	  
	   
	  
	  

	  
	 By:
	 /s/ Christopher Craib
	  

	  
	Name: 	 Christopher Craib
	  

	  
	 Title: 
	 President & CEO
	  

  
  	
	- 38 -
	 

	

  
 The foregoing is hereby accepted on the terms and conditions therein set forth. 
  
 DATED as of this 27th day of April, 2018. 
  
 	  
	 AVINO SILVER & GOLD MINES LTD.
	
	  
	    
	  
	  

	  
	 By:
	 /s/ Malcolm Davidson
	
	  
	 Name:
	 Malcolm Davidson
	
	  
	 Title:
	 CFO
	  

  
  
  	- 39 -avino_ex420.htm

EXHIBIT 4.20
  
 Execution Version
  
 AVINO SILVER & GOLD MINES LTD.
 Common Shares
 (no par value)
  
 Amended and Restated Controlled Equity OfferingSM
  
 Sales Agreement
  
 August 21, 2018
  
 Cantor Fitzgerald & Co.
 499 Park Avenue
 New York, NY 10022
  
 Ladies and Gentlemen:
  
 Reference is made to the Amended and Restated Controlled Equity OfferingSM Sales Agreement, dated as of August 4, 2017 (the “Original Agreement”), by and between Avino Silver & Gold Mines Ltd. (the “Company”), a company continued under the Business Corporations Act (British Columbia) (the “BCBCA”), and Cantor Fitzgerald & Co. (the “Agent”), pursuant to which the Company proposed to issue and sell through the Agent, from time to time during the term of the Original Agreement, on the terms and subject to the conditions set forth in the Original Agreement, common shares of the Company, no par value per share (“Common Stock”). The Company and the Agent wish to amend and restate the Original Agreement in its entirety as provided hereby. 
  
 The Company confirms its agreement (as such agreement may be amended from time to time, this “Agreement”) with the Agent as follows:
  
 1. Issuance and Sale of Shares. The Company agrees that, from time to time during the term of this Agreement, on the terms and subject to the conditions set forth herein, it may issue and sell through the Agent Common Stock; provided, however, that in no event shall the Company issue or sell through the Agent such number or dollar amount of shares of Common Stock (the “Placement Shares”) that (a) exceeds the number or dollar amount of shares of Common Stock registered pursuant to the effective Registration Statement (as defined below) pursuant to which the offering will be made, (b) exceeds the number or dollar amount of shares of Common Stock allowed to be sold under Form F-3 (including Instruction I.B.5. thereof), (c) exceeds the number of authorized but unissued shares of Common Stock or (d) exceeds the number or dollar amount of shares of Common Stock for which the Company has filed a Prospectus Supplement (defined below) (the lesser of (a), (b), (c) and (d), the “Maximum Amount”). Notwithstanding anything to the contrary contained herein, the parties hereto agree that compliance with the limitations set forth in this Section 1 on the amount of Placement Shares issued and sold under this Agreement shall be the sole responsibility of the Company and that Agent shall have no obligation in connection with such compliance. The issuance and sale of Placement Shares through Agent will be effected pursuant to the Registration Statement (as defined below) filed by the Company and which will be declared effective by the Securities and Exchange Commission (the “Commission”), although nothing in this Agreement shall be construed as requiring the Company to use the Registration Statement to issue any Placement Shares.
  
  	 
	-1-
	 
 
	 

  
 The Company has filed or will file, in accordance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”) and the rules and regulations thereunder (the “Securities Act Regulations”), with the Commission a registration statement on Form F-3, including one or more base prospectuses, relating to certain securities, including the Placement Shares to be issued from time to time by the Company, and which incorporates by reference documents that the Company has filed or will file in accordance with the provisions of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the rules and regulations thereunder. The Company will, if necessary, prepare a prospectus supplement to the base prospectus included as part of the registration statement, which prospectus supplement will specifically relate to the Placement Shares to be issued from time to time by the Company (the “Prospectus Supplement”). The Company will furnish to the Agent, for use by the Agent, copies of the prospectus included as part of such registration statement, as supplemented, if necessary, by the Prospectus Supplement, relating to the Placement Shares to be issued from time to time by the Company. The Company may file one or more additional registration statements from time to time that will contain a base prospectus and related prospectus or prospectus supplement, if applicable (which shall be a Prospectus Supplement), with respect to the Placement Shares. Except where the context otherwise requires, such registration statement(s), including all documents filed as part thereof or incorporated by reference therein, and including any information contained in a Prospectus (as defined below) subsequently filed with the Commission pursuant to Rule 424(b) under the Securities Act Regulations or deemed to be a part of such registration statement pursuant to Rule 430B of the Securities Act Regulations, is herein called the “Registration Statement.” The base prospectus or base prospectuses, including all documents incorporated therein by reference, included in the Registration Statement, as it may be supplemented, if necessary, by the Prospectus Supplement, in the form in which such prospectus or prospectuses and/or Prospectus Supplement have most recently been filed by the Company with the Commission pursuant to Rule 424(b) under the Securities Act Regulations, together with the then issued Issuer Free Writing Prospectus(es), is herein called the “Prospectus.” 
  
 Any reference herein to the Registration Statement, any Prospectus Supplement, Prospectus or any Issuer Free Writing Prospectus (defined below) shall be deemed to refer to and include the documents, if any, incorporated by reference therein (the “Incorporated Documents”), including, unless the context otherwise requires, the documents, if any, filed as exhibits to such Incorporated Documents. Any reference herein to the terms “amend,” “amendment” or “supplement” with respect to the Registration Statement, any Prospectus Supplement, the Prospectus or any Issuer Free Writing Prospectus shall be deemed to refer to and include the filing of any document under the Exchange Act on or after the most-recent effective date of the Registration Statement, or the date of the Prospectus Supplement, Prospectus or such Issuer Free Writing Prospectus, as the case may be, and incorporated therein by reference. For purposes of this Agreement, all references to the Registration Statement, the Prospectus or to any amendment or supplement thereto shall be deemed to include the most recent copy filed with the Commission pursuant to its Electronic Data Gathering Analysis and Retrieval system, or if applicable, the Interactive Data Electronic Application system when used by the Commission (collectively, “EDGAR”).
  
  	 
	-2-
	 
 
	 

  
 2. Placements. Each time that the Company wishes to issue and sell Placement Shares hereunder (each, a “Placement”), it will notify the Agent by email notice (or other method mutually agreed to in writing by the parties) of the number of Placement Shares to be issued, the time period during which sales are requested to be made, any limitation on the number of Placement Shares that may be sold in any one day and any minimum price below which sales may not be made (a “Placement Notice”), the form of which is attached hereto as Schedule 1. The Placement Notice shall originate from any of the individuals from the Company set forth on Schedule 3 (with a copy to each of the other individuals from the Company listed on such schedule), and shall be addressed to each of the individuals from the Agent set forth on Schedule 3, as such Schedule 3 may be amended from time to time. The Placement Notice shall be effective unless and until (i) the Agent declines to accept the terms contained therein for any reason, in its sole discretion, (ii) the entire amount of the Placement Shares thereunder have been sold, (iii) the Company suspends or terminates the Placement Notice or (iv) this Agreement has been terminated under the provisions of Section 12. The amount of any discount, commission or other compensation to be paid by the Company to Agent in connection with the sale of the Placement Shares shall be calculated in accordance with the terms set forth in Schedule 2. It is expressly acknowledged and agreed that neither the Company nor the Agent will have any obligation whatsoever with respect to a Placement or any Placement Shares unless and until the Company delivers a Placement Notice to the Agent and the Agent does not decline such Placement Notice pursuant to the terms set forth above, and then only upon the terms specified therein and herein. In the event of a conflict between the terms of this Agreement and the terms of a Placement Notice, the terms of the Placement Notice will control. 
  
 3. Sale of Placement Shares by Agent. Subject to the provisions of Section 5(a), the Agent, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable state and federal laws, rules and regulations and the rules of the NYSE American or any other applicable exchange within the United States (the “Exchange”), to sell the Placement Shares up to the amount specified, and otherwise in accordance with the terms of such Placement Notice. The Agent will provide written confirmation to the Company no later than the opening of the Trading Day (as defined below) immediately following the Trading Day on which it has made sales of Placement Shares hereunder setting forth the number of Placement Shares sold on such day, the compensation payable by the Company to the Agent pursuant to Section 2 with respect to such sales, and the Net Proceeds (as defined below) payable to the Company, with an itemization of the deductions made by the Agent (as set forth in Section 5(b)) from the gross proceeds that it receives from such sales. Subject to the terms of the Placement Notice, the Agent may sell Placement Shares by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act Regulations, including sales made directly on or through the Exchange or any other existing trading market for the Common Stock, in negotiated transactions at market prices prevailing at the time of sale or at prices related to such prevailing market prices and/or any other method permitted by law. “Trading Day” means any day on which Common Stock is traded on the Exchange.
  
  	 
	-3-
	 
 
	 

  
 4. Suspension of Sales. The Company or the Agent may, upon notice to the other party in writing (including by email correspondence to each of the individuals of the other party set forth on Schedule 3, if receipt of such correspondence is actually acknowledged by any of the individuals to whom the notice is sent, other than via auto-reply) or by telephone (confirmed immediately by verifiable facsimile transmission or email correspondence to each of the individuals of the other party set forth on Schedule 3), suspend any sale of Placement Shares (a “Suspension”); provided, however, that such suspension shall not affect or impair any party’s obligations with respect to any Placement Shares sold hereunder prior to the receipt of such notice. While a Suspension is in effect any obligation under Sections 7(l), 7(m), and 7(n) with respect to the delivery of certificates, opinions, or comfort letters to the Agent, shall be waived, provided, however, that such waiver shall not apply for the Representation Date (defined below) occurring on the date that the Company files its annual report on Form 20-F. Each of the parties agrees that no such notice under this Section 4 shall be effective against any other party unless it is made to one of the individuals named on Schedule 3 hereto, as such Schedule may be amended from time to time.
  
 5. Sale and Delivery to the Agent; Settlement.
  
 (a) Sale of Placement Shares. On the basis of the representations and warranties herein contained and subject to the terms and conditions herein set forth, upon the Agent’s acceptance of the terms of a Placement Notice, and unless the sale of the Placement Shares described therein has been declined, suspended, or otherwise terminated in accordance with the terms of this Agreement, the Agent, for the period specified in the Placement Notice, will use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Placement Shares up to the amount specified, and otherwise in accordance with the terms of such Placement Notice. The Company acknowledges and agrees that (i) there can be no assurance that the Agent will be successful in selling Placement Shares, (ii) the Agent will incur no liability or obligation to the Company or any other person or entity if it does not sell Placement Shares for any reason other than a failure by the Agent to use its commercially reasonable efforts consistent with its normal trading and sales practices and applicable law and regulations to sell such Placement Shares as required under this Agreement and (iii) the Agent shall be under no obligation to purchase Placement Shares on a principal basis pursuant to this Agreement, except as otherwise agreed by the Agent and the Company.
  
 (b) Settlement of Placement Shares. Unless otherwise specified in the applicable Placement Notice, settlement for sales of Placement Shares will occur on the second (2nd) Trading Day (or such earlier day as is industry practice for regular-way trading) following the date on which such sales are made (each, a “Settlement Date”). The Agent shall notify the Company of each sale of Placement Shares no later than the opening of the Trading Day immediately following the Trading Day on which it has made sales of Placement Shares hereunder. The amount of proceeds to be delivered to the Company on a Settlement Date against receipt of the Placement Shares sold (the “Net Proceeds”) will be equal to the aggregate sales price received by the Agent, after deduction for (i) the Agent’s commission, discount or other compensation for such sales payable by the Company pursuant to Section 2 hereof, and (ii) any transaction fees imposed by any Governmental Authority in respect of such sales.
  
  	 
	-4-
	 
 
	 

  
 (c) Delivery of Placement Shares. On or before each Settlement Date, the Company will, or will cause its transfer agent to, electronically transfer the Placement Shares being sold by crediting the Agent’s or its designee’s account (provided the Agent shall have given the Company written notice of such designee at least one Trading Day prior to the Settlement Date) at The Depository Trust Company through its Deposit and Withdrawal at Custodian System or by such other means of delivery as may be mutually agreed upon by the parties hereto which in all cases shall be freely tradable, transferable, registered shares in good deliverable form. On each Settlement Date, the Agent will deliver the related Net Proceeds in same day funds to an account designated by the Company on, or prior to, the Settlement Date. The Company agrees that if the Company, or its transfer agent (if applicable), defaults in its obligation to deliver Placement Shares on a Settlement Date, the Company agrees that in addition to and in no way limiting the rights and obligations set forth in Section 10(a) hereto, it will (i) hold the Agent harmless against any loss, claim, damage, or expense (including reasonable legal fees and expenses), as incurred, arising out of or in connection with such default by the Company or its transfer agent (if applicable) and (ii) pay to the Agent any commission, discount, or other compensation to which it would otherwise have been entitled absent such default.
  
 (d) Denominations; Registration. Certificates for the Placement Shares, if any, shall be in such denominations and registered in such names as the Agent may request in writing at least one full Business Day (as defined below) before the Settlement Date. The certificates for the Placement Shares, if any, will be made available by the Company for examination and packaging by the Agent in The City of New York not later than noon (New York time) on the Business Day prior to the Settlement Date.
  
 (e) Limitations on Offering Size. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares if, after giving effect to the sale of such Placement Shares, the aggregate gross sales proceeds of Placement Shares sold pursuant to this Agreement would exceed the lesser of (A) together with all sales of Placement Shares under this Agreement, the Maximum Amount, (B) the amount available for offer and sale under the currently effective Registration Statement and (C) the amount authorized from time to time to be issued and sold under this Agreement by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent in writing. Under no circumstances shall the Company cause or request the offer or sale of any Placement Shares pursuant to this Agreement at a price lower than the minimum price authorized from time to time by the Company’s board of directors, a duly authorized committee thereof or a duly authorized executive committee, and notified to the Agent in writing. Further, under no circumstances shall the Company cause or permit the aggregate offering amount of Placement Shares sold pursuant to this Agreement to exceed the Maximum Amount. 
  
  	 
	-5-
	 
 
	 

  
 6. Representations and Warranties of the Company. The Company represents and warrants to, and agrees with Agent that as of the date of this Agreement and as of each Applicable Time (as defined below):
  
 (a) Registration Statement and Prospectus. The Company and the transactions contemplated by this Agreement meet the requirements for and comply with the conditions for the use of Form F‐3 under the Securities Act. The Company is a “foreign private issuer,” as such term is defined in Rule 3b-4 under the Exchange Act. The Registration Statement has been or will be filed with the Commission and will be declared effective by the Commission under the Securities Act prior to the issuance of any Placement Notices by the Company. The Prospectus Supplement will name the Agent as the agent in the section entitled “Plan of Distribution.” The Company has not received, and has no notice of, any order of the Commission preventing or suspending the use of the Registration Statement, or threatening or instituting proceedings for that purpose. The Registration Statement and the offer and sale of Placement Shares as contemplated hereby meet the requirements of Rule 415 under the Securities Act and comply in all material respects with said Rule. Any statutes, regulations, contracts or other documents that are required to be described in the Registration Statement or the Prospectus or to be filed as exhibits to the Registration Statement have been so described or filed. Copies of the Registration Statement, the Prospectus, and any such amendments or supplements and all documents incorporated by reference therein that were filed with the Commission on or prior to the date of this Agreement have been delivered, or are available through EDGAR and SEDAR, to Agent and its counsel. The Company has not distributed and, prior to the later to occur of each Settlement Date and completion of the distribution of the Placement Shares, will not distribute any offering material in connection with the offering or sale of the Placement Shares other than the Registration Statement and the Prospectus and any Issuer Free Writing Prospectus (as defined below) to which the Agent has consented. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is currently listed on the Exchange under the trading symbol “ASM.” The Company has taken no action designed to, or likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act, delisting the Common Stock from the Exchange, nor has the Company received any notification that the Commission or the Exchange is contemplating terminating such registration or listing. To the Company’s knowledge, it is in compliance with all applicable listing requirements of the Exchange. The Company has no reason to believe that it will not in the foreseeable future continue to be in compliance with all such listing and maintenance requirements. The currently issued and outstanding Common Stock are also listed and posted for trading on the Toronto Stock Exchange (“TSX”) and no order ceasing or suspending trading in any securities of the Company or prohibiting the trading of any of the Company’s issued securities has been issued and no proceeding for such purpose are pending or, to the knowledge of the Company, threatened;
  
 (b) No Misstatement or Omission. The Registration Statement, when it became or becomes effective, and the Prospectus, and any amendment or supplement thereto, on the date of such Prospectus or amendment or supplement, conformed and will conform in all material respects with the requirements of the Securities Act. At each Settlement Date, the Registration Statement and the Prospectus, as of such date, will conform in all material respects with the requirements of the Securities Act. The Registration Statement, when it became or becomes effective, did not, and will not, contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. The Prospectus and any amendment and supplement thereto, on the date thereof and at each Applicable Time (defined below), did not or will not include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. The documents incorporated by reference in the Prospectus or any Prospectus Supplement did not, and any further documents filed and incorporated by reference therein will not, when filed with the Commission, contain an untrue statement of a material fact or omit to state a material fact required to be stated in such document or necessary to make the statements in such document, in light of the circumstances under which they were made, not misleading. The foregoing shall not apply to statements in, or omissions from, any such document made in reliance upon, and in conformity with, information furnished to the Company by Agent specifically for use in the preparation thereof. 
  
  	 
	-6-
	 
 
	 

  
 (c) Conformity with Securities Act and Exchange Act. The Registration Statement, the Prospectus, any Issuer Free Writing Prospectus or any amendment or supplement thereto, and the documents incorporated by reference in the Registration Statement, the Prospectus or any amendment or supplement thereto, when such documents were or are filed with the Commission under the Securities Act or the Exchange Act or became or become effective under the Securities Act, as the case may be, conformed or will conform in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable. Moreover, 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. In particular, 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.
  
 (d) Financial Information. The consolidated financial statements of the Company included or incorporated by reference in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, together with the related notes and schedules, present fairly, in all material respects, the consolidated financial position of the Company and the Material Subsidiaries (as defined below) as of the dates indicated and the consolidated statements of comprehensive loss, shareholders’ equity and cash flows of the Company for the periods specified. Such financial statements, schedules, and notes conform in all material respects with International Financial Reporting Standards as issued by the International Accounting Standards Board (“IFRS”), or if applicable, United States generally accepted accounting principles (“GAAP”), applied on a consistent basis during the periods involved; the other financial and statistical data with respect to the Company and the Material Subsidiaries (as defined below) contained or incorporated by reference in the Registration Statement, the Prospectus and the Issuer Free Writing Prospectuses, if any, are accurately and fairly presented in all material respects and prepared on a basis consistent with the financial statements and books and records of the Company; there are no financial statements (historical or pro forma) that are required to be included or incorporated by reference in the Registration Statement, or the Prospectus that are not included or incorporated by reference as required; the Company and the Material 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), and the Prospectus; and all disclosures contained or incorporated by reference in the Registration Statement, the Prospectus and the Issuer 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. Moreover, the Company is in compliance with the certification requirements contained in National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings of the Canadian Securities Administrators with respect to the Company’s annual and interim filings with the applicable Canadian securities regulators.
  
  	 
	-7-
	 
 
	 

  
 (e) Statistical, Industry-Related and Market-Related Data. The statistical, industry-related and market-related data included in the Registration Statement and the Prospectus are based on or derived from sources that the Company reasonably believes are reliable and accurate, and such data agrees with the sources from which they are derived. 
  
 (f) Conformity with EDGAR Filing. The Prospectus delivered to Agent for use in connection with the sale of the Placement Shares pursuant to this Agreement will be identical to the versions of the Prospectus created to be transmitted to the Commission for filing via EDGAR and SEDAR, except to the extent permitted by Regulation S‐T.
  
 (g) Organization. The Company and each of its Material Subsidiaries (as defined below) are, and will be, duly organized, validly existing as a corporation and in good standing (where such concept is recognized) under the laws of their respective jurisdictions of organization. The Company and each of the Material Subsidiaries (as defined below) are, and will be, 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 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 Material Subsidiaries (as defined below) taken as a whole, or prevent or materially interfere with consummation of the transactions contemplated hereby (a “Material Adverse Effect”).
  
 (h) Subsidiaries. The subsidiaries set forth on Schedule 4 (collectively, the “Material Subsidiaries”), include all of the Company’s significant subsidiaries (as such term is defined in Rule 1‐02 of Regulation S‐X promulgated by the Commission). Except as set forth in the Registration Statement and in the Prospectus, the Company owns, directly or indirectly, all of the equity interests of the Material 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 Material Subsidiaries are validly issued and are fully paid, non-assessable and free of preemptive and similar rights. No Material Subsidiary is currently prohibited, directly or indirectly, from paying any dividends to the Company, from making any other distribution on such Material Subsidiary’s capital stock, from repaying to the Company any loans or advances to such Material Subsidiary from the Company or from transferring any of such Material Subsidiary’s property or assets to the Company or any other Subsidiary of the Company.
  
 (i) No Violation or Default. Neither the Company nor any of the Material Subsidiaries is (i) in violation of its Memorandum or Articles 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 the Material Subsidiaries is a party or by which the Company or any of the Material Subsidiaries is bound or to which any of the property or assets of the Company or any of the Material Subsidiaries are subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory 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, reasonably be expected to 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 the Material Subsidiaries is a party is in default in any respect thereunder where such default would have a Material Adverse Effect.
  
  	 
	-8-
	 
 
	 

  
 (j) No Material Adverse Change. Subsequent to the respective dates as of which information is given in the Registration Statement, 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 Material 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 Material Subsidiaries taken as a whole, (iv) any material change in the capital stock or outstanding long-term indebtedness of the Company or any of the Material Subsidiaries or (v) any dividend or distribution of any kind declared, paid or made on the capital stock of the Company or any Material 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).
  
 (k) 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 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 under the Company’s existing stock option plans, or changes in the number of outstanding shares of Common Stock of the Company due to the issuance of shares upon the exercise or conversion of securities exercisable for, or convertible into, Common Stock outstanding on the date hereof) and such authorized capital stock conforms to the description thereof set forth in the Registration Statement and the Prospectus. The description of the securities of the Company in the Registration Statement and the Prospectus is complete and accurate in all material respects. Except as disclosed in or contemplated by the Registration Statement 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.
  
 (l) Authorization; Enforceability. The Company has full legal right, power and authority to enter into this Agreement and perform the transactions contemplated hereby. This Agreement has been duly authorized, executed and delivered by the Company and is a legal, valid and binding agreement of the Company enforceable in accordance with its 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.
  
  	 
	-9-
	 
 
	 

  
 (m) Authorization of Placement Shares. The Placement Shares, when issued and delivered pursuant to the terms approved by the board of directors of the Company or a duly authorized committee thereof, or a duly authorized executive committee, against payment therefor as provided herein, will be duly and validly authorized and issued and 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 Placement Shares, when issued, will conform in all material respects to the description thereof set forth in or incorporated into the Prospectus.
  
 (n) 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, the issuance and sale by the Company of the Placement Shares, except for (i) the filing of a prospectus supplement for qualification of the Placement Shares for distribution in the United States with the applicable Canadian securities regulators; and (ii) such consents, approvals, authorizations, orders and registrations or qualifications as may be required under applicable U.S. state securities laws or by the by‐laws and rules of the Financial Industry Regulatory Authority, Inc. (“FINRA”) or the Exchange in connection with the sale of the Placement Shares by the Agent. 
  
 (o) No Preferential Rights. Except as set forth in the Registration Statement and the Prospectus, (i) no person, as such term is defined in Rule 1‐02 of Regulation S‐X promulgated under the Securities Act (each, a “Person”), has the right, contractual or otherwise, to cause the Company to issue or sell to such Person any Common Stock or shares of any other capital stock or other securities of the Company, (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 Stock or shares of any other capital stock 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 Common Stock, and (iv) no Person has the right, contractual or otherwise, to require the Company to register under the Securities Act any Common Stock or shares of any other capital stock 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 Placement Shares as contemplated thereby or otherwise.
  
 (p) Independent Public Accounting Firm. Manning Elliot LLP (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 20-F 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, after due and careful inquiry, 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. Moreover, 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 of the Canadian Securities Administrators, each member of which is “independent” within the meaning of such instrument.
  
  	 
	-10-
	 
 
	 

  
 (q) Enforceability of Agreements. All agreements between the Company and third parties expressly referenced in the Registration Statement and the Prospectus are legal, valid and binding obligations of the Company enforceable in accordance with their respective terms, except to the extent that (i) enforceability may be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors’ rights generally and by general equitable principles and (ii) the indemnification provisions of certain agreements may be limited by federal or state securities laws or public policy considerations in respect thereof.
  
 (r) No Litigation. Except as set forth in the Registration Statement or the Prospectus, there are no legal, governmental or regulatory actions, suits or proceedings pending, nor, to the Company’s knowledge, any legal, governmental or regulatory audits or investigations, to which the Company or a Subsidiary is a party or to which any property of the Company or any of the Material Subsidiaries is the subject that, individually or in the aggregate, if determined adversely to the Company or any of the Material Subsidiaries, would reasonably be expected to have a Material Adverse Effect or materially and adversely affect the ability of the Company to perform its obligations under this Agreement; to the Company’s knowledge, no such actions, suits or proceedings are threatened or contemplated by any Governmental Authority or threatened by others; and (i) there are no current or pending legal, governmental or regulatory audits or investigations, actions, suits or proceedings that are required under the Securities Act to be described in the 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. 
  
 (s) Intellectual Property. Except as disclosed in the Registration Statement and the Prospectus, the Company and the Material 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 and the Prospectus (i) there are no rights of third parties to any such Intellectual Property owned by the Company and the Material 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 the Material 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 the Material 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 Prospectus as being owned by or licensed to the Company; and (vii) the Company and the Material 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, reasonably be expected to result in a Material Adverse Effect.
  
  	 
	-11-
	 
 
	 

  
 (t) Market Capitalization. At the time the Registration Statement will be originally declared effective, and at the time the Company’s most recent Annual Report on Form 20-F was filed with the Commission, the Company met or will meet the then applicable requirements for the use of Form F-3 under the Securities Act, including but not limited to Instruction I.B.5 of Form F-3. As of the date of this Agreement, the aggregate market value of the outstanding voting and non-voting common equity (as defined in Securities Act Rule 405) of the Company held by persons other than affiliates of the Company (pursuant to Securities Act Rule 144, those that directly, or indirectly through one or more intermediaries, control, or are controlled by, or are under common control with, the Company) (the “Non-Affiliate Shares”), was approximately $69,077,000 (calculated by multiplying (x) the highest price at which the common equity of the Company closed on the Exchange within 60 days of the date of this Agreement times (y) the number of Non-Affiliate Shares). 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.5 of Form F-3) with the Commission at least 12 calendar months previously reflecting its status as an entity that is not a shell company.
  
 (u) No Material Defaults. Neither the Company nor any of the Material 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 reasonably be expected to 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 20-F, 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 reasonably be expected to have a Material Adverse Effect.
  
 (v) Certain Market Activities. Neither the Company, nor any of the Material Subsidiaries, nor any of their respective directors, officers or controlling persons has taken, directly or indirectly, any action designed, or that has constituted or might reasonably be expected to cause or result in, under the Exchange Act or otherwise, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Placement Shares.
  
 (w) Broker/Dealer Relationships. Neither the Company nor any of the Material Subsidiaries or any related entities (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).
  
  	 
	-12-
	 
 
	 

  
 (x) No Reliance. The Company has not relied upon the Agent or legal counsel for the Agent for any legal, tax or accounting advice in connection with the offering and sale of the Placement Shares.
  
 (y) Taxes. The Company and each of the Material Subsidiaries have filed all U.S. federal, Canadian, state, provincial, 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 or the Prospectus, no tax deficiency has been determined adversely to the Company or any of the Material Subsidiaries which has had, or would reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. The Company has no knowledge of any federal, state, provincial 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.
  
 (z) Title to Real and Personal Property. Except as set forth in the Registration Statement or the Prospectus, the Company and the Material Subsidiaries have good and marketable title in fee simple to all items of real property owned by them, good and valid title to all personal property described in the Registration Statement or the Prospectus as being owned by them that are material to the businesses of the Company or such Material Subsidiary, in each case free and clear of all liens, encumbrances and claims, except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and any of the Material Subsidiaries or (ii) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Any real or personal property described in the Registration Statement or the Prospectus as being leased by the Company and any of the Material 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 the Material Subsidiaries or (B) would not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. Each of the properties of the Company and the Material Subsidiaries complies with all applicable codes, laws and regulations (including, without limitation, building and zoning codes, laws and regulations and laws relating to access to such properties), except if and to the extent disclosed in the Registration Statement 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 the Material Subsidiaries or otherwise have a Material Adverse Effect. None of the Company or the Material Subsidiaries has received from any governmental or regulatory authorities any notice of any condemnation of, or zoning change affecting, the properties of the Company and the Material 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 the Material Subsidiaries or otherwise have a Material Adverse Effect, individually or in the aggregate.
  
  	 
	-13-
	 
 
	 

  
 (aa) Environmental Laws. Except as set forth in the Registration Statement or the Prospectus: 
  
 (i) each of the Company and the Material Subsidiaries is in compliance in all material respects with all applicable federal, provincial, state, municipal and local laws, statutes, ordinances, by-laws and regulations and orders, directives and decisions rendered by any ministry, department or administrative or regulatory agency, domestic or foreign (the “Environmental Laws”) relating to the protection of the environment, occupational health and safety or the processing, use, treatment, storage, disposal, discharge, transport or handling of any pollutants, contaminants, chemicals or industrial, toxic or hazardous wastes or substance (the “Hazardous Substances”);
  
 (ii) each of the Company and the Material Subsidiaries has obtained all licenses, permits, approvals, consents, certificates, registrations and other authorizations under all applicable Environmental Laws (the “Environmental Permits”) necessary as at the date hereof for the operation of the businesses carried on or proposed to be commenced by the Company and the Material Subsidiaries and each Environmental Permit is valid, subsisting and in good standing and to the knowledge of the Company neither the Company nor the Material Subsidiaries is in default or breach of any Environmental Permit which would have a Material Adverse Effect, and no proceeding is pending or, to the knowledge of the Company or the Material Subsidiaries, threatened, to revoke or limit any Environmental Permit;
  
 (iii) neither the Company nor the Material Subsidiaries has used, except in compliance with all Environmental Laws and Environmental Permits, and other than as may be incidental to mineral resource exploration, development, mining, recovery, processing or milling, any property or facility which it owns or leases or previously owned or leased, to generate, manufacture, process, distribute, use, treat, store, dispose of, transport or handle any Hazardous Substance;
  
 (iv) neither the Company nor the Material Subsidiaries (including, if applicable, any predecessor companies) has received any notice of, or been prosecuted for an offence alleging, non-compliance with any Environmental Law, and neither the Company nor the Material Subsidiaries (including, if applicable, any predecessor companies) has settled any allegation of non-compliance short of prosecution. There are no orders or directions relating to environmental matters requiring any material work, repairs, construction or capital expenditures to be made with respect to any of the assets of the Company or the Material Subsidiaries, nor has the Company or the Material Subsidiaries received notice of any of the same; and
  
 (v) neither the Company nor the Material Subsidiaries has received any notice wherein it is alleged or stated that the Company or the Material Subsidiaries is potentially responsible for a federal, provincial, state, municipal or local clean-up site or corrective action under any Environmental Laws. Neither the Company nor the Material Subsidiaries has received any request for information in connection with any federal, state, municipal or local inquiries as to disposal sites.
  
  	 
	-14-
	 
 
	 

  
 (bb) Disclosure Controls. The Company and each of the Material Subsidiaries maintain systems of internal accounting controls applicable under IFRS, or if applicable under GAAP, 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 Prospectus). Since the date of the latest audited financial statements of the Company included or incorporated by reference in the Registration Statement and the Prospectus, there has been no change in the Company’s internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting (other than as set forth in 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 the Material 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 20-F is being prepared or during the period in which financial statements will be filed or furnished with the Commission on Form 6-K. The Company’s certifying officers have evaluated the effectiveness of the Company’s controls and procedures as of a date within 90 days prior to the filing date of the Form 20-F for the fiscal year most recently ended (such date, the “Evaluation Date”). The Company presented in its Form 20-F 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.
  
 (cc) 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.
  
  	 
	-15-
	 
 
	 

  
 (dd) Mining Rights. The Avino mine, San Gonzalo mine and Bralorne Gold mine, each as described in the Registration Statement or included or incorporated by reference in the Prospectus (collectively, the “Material Properties”) are the only material resource properties in which the Company or the Material Subsidiaries have an interest; the Company or through the Material Subsidiaries, hold either freehold title, mining leases, mining concessions, mining claims, exploration permits, prospecting permits or participant interests or other conventional property or proprietary interests or rights, recognized in the jurisdiction in which the Material Properties are located, in respect of the ore bodies and minerals located on the Material Properties in which the Company (through the applicable Material Subsidiary) has an interest under valid, subsisting and enforceable title documents or other recognized and enforceable agreements, contracts, arrangements or understandings, sufficient to permit the Company (through the applicable Material Subsidiary) to explore for and exploit the minerals relating thereto; all leases or claims and permits relating to the Material Properties in which the Company (through the applicable Material Subsidiary) has an interest or right have been validly located and recorded in accordance with all applicable laws and are valid and subsisting; the Company (through the applicable Material Subsidiary) has all necessary surface rights, access rights and other necessary rights and interests relating to the Material Property in which the Company (through the applicable Material Subsidiary) has an interest granting the Company (through the applicable Material Subsidiary) the right and ability to explore for and exploit minerals, ore and metals for development and production purposes as are appropriate in view of the rights and interest therein of the Company or the applicable Material Subsidiary, with only such exceptions as do not materially interfere with the current use made by the Company or the applicable Material Subsidiary of the rights or interest so held, and each of the proprietary interests or rights and each of the agreements, contracts, arrangements or understandings and obligations relating thereto referred to above is currently in good standing in all respects in the name of the Company or the applicable Material Subsidiary; except as disclosed in the Prospectus, the Company and the Material Subsidiaries do not have any responsibility or obligation to pay any commission, royalty, license, fee or similar payment to any person with respect to the property rights thereof;
  
 (i) the Company or the applicable Material Subsidiary holds direct interests in the Material Properties, as described in the Registration Statement or the Prospectus (the “Project Rights”), under valid, subsisting and enforceable agreements or instruments, to the knowledge of the Company and all such agreements and instruments in connection with the Project Rights are valid and subsisting and enforceable in accordance with their terms;
  
 (ii) the Company and the Material Subsidiaries have identified all the permits, certificates, and approvals (collectively, the “Permits”) which are or will be required for the exploration, development and eventual or actual operation of the Material Properties, which Permits include but are not limited to environmental assessment certificates, water licenses, land tenures, rezoning or zoning variances and other necessary local, provincial, state and federal approvals; and the appropriate Permits have either been received, applied for, or the processes to obtain such Permits have been or will in due course be initiated by the Company or the applicable Material Subsidiaries; and neither the Company nor the applicable Material Subsidiaries know of any issue or reason why the Permits should not be approved and obtained in the ordinary course;
  
  	 
	-16-
	 
 
	 

  
 (iii) all assessments or other work required to be performed in relation to the material mining claims and the mining rights of the Company and the applicable Material Subsidiary in order to maintain their respective interests therein, if any, have been performed to date and the Company and the applicable Material Subsidiary have complied with all applicable governmental laws, regulations and policies in this regard as well as with regard to legal and contractual obligations to third parties in this regard except in respect of mining claims and mining rights that the Company and the applicable Material Subsidiary intend to abandon or relinquish and except for any non-compliance which would not either individually or in the aggregate have a Material Adverse Effect; all such mining claims and mining rights are in good standing in all respects as of the date of this Agreement;
  
 (iv) all mining operations on the properties of the Company and the Material Subsidiaries (including, without limitation, the Material Properties) have been conducted in all 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; 
  
 (v) there are no environmental audits, evaluations, assessments, studies or tests relating to the Company or the Material Subsidiaries except for ongoing assessments conducted by or on behalf of the Company and the Material Subsidiaries in the ordinary course; 
  
 (vi) the Company made available to the respective authors thereof prior to the issuance of all of the applicable technical reports relating to the Material Properties (the “Reports”), for the purpose of preparing the Reports, as applicable, all information requested, and 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 change in any production, cost, price, reserves or other relevant information provided since the dates that such information was so provided which would have a Material Adverse Effect; and
  
 (vii) the Reports accurately and completely set forth all material facts relating to the Material Properties; and since the date of preparation of the Reports, there has been no change that would disaffirm or materially change any aspect of the Reports.
  
 (ee) Finder’s Fees. Neither the Company nor any of the Material 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 Agent pursuant to this Agreement.
  
 (ff) Labor Disputes. No labor disturbance by or dispute with employees of the Company or any of the Material Subsidiaries exists or, to the knowledge of the Company, is threatened that could reasonably be expected to have resulted in a Material Adverse Effect.
  
  	 
	-17-
	 
 
	 

  
 (gg) Local Disputes. Except as disclosed in the Registration Statement and the Prospectus, no dispute between the Company and any local, native or indigenous group exists, or to the Company’s knowledge, is threatened or imminent with respect to any of the Company’s properties or exploration activities that could reasonably be expected to have a Material Adverse Effect.
  
 (hh) Investment Company Act. Neither the Company nor any of the Material Subsidiaries is or, after giving effect to the offering and sale of the Placement Shares and the application of the proceeds thereof as described in the Registration Statement and the Prospectus, will be an “investment company” or an entity “controlled” by an “investment company,” as such terms are defined in the Investment Company Act of 1940, as amended (the “Investment Company Act”).
  
 (ii) Operations. The operations of the Company and the Material 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, as amended, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada), the Corruption of Foreign Public Officials Act (Canada) and applicable rules and regulations thereunder, and the money laundering statutes of all jurisdictions to which the Company or its Subsidiaries are subject, the rules and regulations thereunder and any related or similar applicable rules, regulations or guidelines, issued, administered or enforced by any Governmental Authority (collectively, the “Money Laundering Laws”), except as would not reasonably be expected to result in a Material Adverse Effect; and no action, suit or proceeding by or before any court or Governmental Authority or any arbitrator involving the Company or any of the Material Subsidiaries with respect to the Money Laundering Laws is pending or, to the knowledge of the Company, threatened.
  
 (jj) Off-Balance Sheet Arrangements. There are no transactions, arrangements and other relationships between and/or among the Company, and/or, to the knowledge of the Company, any of its affiliates and any unconsolidated entity, including, but not limited to, 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.
  
 (kk) Underwriter Agreements. The Company is not a party to any agreement with an agent or underwriter for any other “at the market” or continuous equity or debt transaction.
  
  	 
	-18-
	 
 
	 

  
 (ll) 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, as amended (“ERISA”) or its Canadian or foreign law equivalent, 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 the Material Subsidiaries has been maintained in material compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”) or its Canadian or foreign law equivalent; no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code or its Canadian or foreign law equivalent, 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 or its Canadian or foreign law equivalent, no “accumulated funding deficiency” as defined in Section 412 of the Code or its Canadian or foreign law equivalent 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.
  
 (mm) Forward Looking Statements. No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) (a “Forward Looking Statement”) contained in the Registration Statement and the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith. The Forward Looking Statements incorporated by reference in the Registration Statement and the Prospectus from the Company’s Annual Report on Form 20-F for the fiscal year most recently ended (i) are within the coverage of the safe harbor for forward looking statements set forth in Section 27A of the Securities Act, Rule 175(b) under the Securities Act or Rule 3b-6 under the Exchange Act, as applicable, (ii) were made by the Company with a reasonable basis and in good faith and reflect the Company’s good faith commercially reasonable best estimate of the matters described therein, and (iii) have been prepared in accordance with Item 10 of Regulation S‐K under the Securities Act.
  
 (nn) Agent Purchases. The Company acknowledges and agrees that Agent has informed the Company that the Agent may, to the extent permitted under the Securities Act, the Exchange Act and FINRA, purchase and sell Common Stock for its own account while this Agreement is in effect.
  
 (oo) Margin Rules. Neither the issuance, sale and delivery of the Placement Shares nor the application of the proceeds thereof by the Company as described in the Registration Statement and 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.
  
 (pp) Insurance. The Company and each of the Material Subsidiaries carry, or are covered by, insurance in such amounts and covering such risks as the Company and each of the Material Subsidiaries reasonably believe are adequate for the conduct of their properties and as is customary for companies engaged in similar businesses in similar industries. 
  
  	 
	-19-
	 
 
	 

  
 (qq) No Improper Practices. (i) Neither the Company nor, to the Company’s knowledge, the Material Subsidiaries, nor to the Company’s knowledge, any of their respective executive officers 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 law) or made any contribution or other payment to any official of, or candidate for, any federal, state, provincial, municipal, or foreign office or other person charged with similar public or quasi-public duty in violation of any 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, to the Company’s knowledge, any Material Subsidiary or any affiliate of any of them, on the one hand, and the directors, officers and shareholders of the Company or, to the Company’s knowledge, any Material Subsidiary, on the other hand, that is required by the Securities Act to be described in the Registration Statement and the Prospectus that is not so described; (iii) no relationship, direct or indirect, exists between or among the Company or any Material Subsidiary or any affiliate of them, on the one hand, and the directors, officers, or stockholders of the Company or, to the Company’s knowledge, any Material Subsidiary, on the other hand, that is required by the rules of FINRA (or Canadian equivalent thereof) to be described in the Registration Statement and the Prospectus that is not so described; (iv) except as described in the Prospectus, there are no material outstanding loans or advances or material guarantees of indebtedness by the Company or, to the Company’s knowledge, any Material 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 Stock to any person with the intent to influence unlawfully (A) a customer or supplier of the Company or any Material Subsidiary to alter the customer’s or supplier’s level or type of business with the Company or any Material Subsidiary or (B) a trade journalist or publication to write or publish favorable information about the Company or any Material Subsidiary or any of their respective products or services, and, (vi) neither the Company nor any Material Subsidiary nor, to the Company’s knowledge, any employee or agent of the Company or any Material Subsidiary has made any payment of funds of the Company or any Material Subsidiary or received or retained any funds in violation of any law, rule or regulation (including, without limitation, the Foreign Corrupt Practices Act of 1977) and the Corruption of Foreign Public Officials Act (Canada)), which payment, receipt or retention of funds is of a character required to be disclosed in the Registration Statement or the Prospectus.
  
 (rr) Status Under the Securities Act. The Company was not and is not an ineligible issuer as defined in Rule 405 under the Securities Act at the times specified in Rules 164 and 433 under the Securities Act in connection with the offering of the Placement Shares.
  
 (ss) No Misstatement or Omission in an Issuer Free Writing Prospectus. Each Issuer Free Writing Prospectus, as of its issue date and as of each Applicable Time (as defined in Section 26 below), did not, does not and will not include any information that conflicted, conflicts or will conflict with the information contained in the Registration Statement or the Prospectus, including any incorporated document deemed to be a part thereof that has not been superseded or modified. The foregoing sentence does not apply to statements in or omissions from any Issuer Free Writing Prospectus based upon and in conformity with written information furnished to the Company by the Agent specifically for use therein.
  
  	 
	-20-
	 
 
	 

  
 (tt) No Conflicts. Neither the execution of this Agreement, nor the issuance, offering or sale of the Placement 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 court or of any federal, state or other regulatory authority or other government body having jurisdiction over the Company.
  
 (uu) Sanctions. (i) The Company represents that, neither the Company nor any of the Material Subsidiaries (collectively, the “Entity”) nor to the Company’s knowledge, any director, officer, employee, agent, affiliate or representative of the Entity, is a government, individual, or entity (in this paragraph (uu), “Person”) that is, or is owned or controlled by a Person that is:
  
 (A) the subject of any sanctions administered or enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, 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 authority or relevant statute, rule, or regulation (collectively, “Sanctions”), nor
  
 (B) located, organized or resident in a country or territory that is the subject of Sanctions (including, without limitation, Cuba, Iran, North Korea, Syria, and the Crimea Region of the Ukraine).
  
 (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
  
 (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 knowingly engaged in, is not now knowingly engaged 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.
  
 (vv) Corruption. Neither the Company nor the Subsidiaries, nor to the knowledge of the Company and the Subsidiaries, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or the Subsidiaries has: (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Corruption of Foreign Officials Act (Canada); or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment;
  
  	 
	-21-
	 
 
	 

  
 (ww) Stock Transfer Taxes. On each Settlement Date, all stock transfer or other taxes (other than income taxes) which are required to be paid in connection with the sale and transfer of the Placement Shares to be sold hereunder will be, or will have been, fully paid or provided for by the Company and all laws imposing such taxes will be or will have been fully complied with.
  
 (xx) Compliance with Laws. The Company has not been advised, and has no reason to believe, that it and each of the Material Subsidiaries are not conducting business in compliance with all applicable laws, rules and regulations of the jurisdictions in which it is conducting business, except where failure to be so in compliance would not result in a Material Adverse Effect.
  
 (yy) Exchange Registration. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act and is accepted for trading on the NYSE American under the symbol “ASM” and the TSX under the symbol “ASM,” and the Company has taken no action designed to terminate the registration of the Common Stock under the Exchange Act or delisting the Common Stock from either the NYSE American or the TSX, nor, except as disclosed in the Registration Statement and the Prospectus, has the Company received any notification that the Commission, the applicable Canadian securities regulators or either the NYSE American or the TSX is contemplating terminating such registration or listing. Except as disclosed in the Registration Statement and the Prospectus, the Company has complied in all material respects with the applicable requirements of the NYSE American or the TSX for maintenance of inclusion of the Common Stock thereon. The Company has obtained all necessary consents, approvals, authorizations or orders of, or filing, notification or registration with, the NYSE American or the TSX, the Commission and the applicable Canadian securities regulators, where applicable, required for the listing and trading of the Placement Shares, subject only to satisfying their standard listing and maintenance requirements. The Company has no reason to believe that it will not in the foreseeable future continue to be in compliance with all such listing and maintenance requirements of both the NYSE American or the TSX.
  
 Any certificate signed by an officer of the Company and delivered to the Agent or to counsel for the Agent pursuant to or in connection with this Agreement shall be deemed to be a representation and warranty by the Company, as applicable, to the Agent as to the matters set forth therein.
  
  	 
	-22-
	 
 
	 

  
 7. Covenants of the Company. The Company covenants and agrees with Agent that:
  
 (a) Registration Statement Amendments. After the date of this Agreement and during any period in which a Prospectus relating to any Placement Shares is required to be delivered by Agent under the Securities Act (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act or similar rule), (i) the Company will notify the Agent promptly of the time when any subsequent amendment to the Registration Statement, other than documents incorporated by reference, has been filed with the Commission and/or has become effective or any subsequent supplement to the Prospectus has been filed and of any request by the Commission for any amendment or supplement to the Registration Statement or Prospectus or for additional information, (ii) the Company will prepare and file with the Commission, promptly upon the Agent’s request, any amendments or supplements to the Registration Statement or Prospectus that, in such Agent’s reasonable opinion, may be necessary or advisable in connection with the distribution of the Placement Shares by the Agent (provided, however, that the failure of the Agent to make such request shall not relieve the Company of any obligation or liability hereunder, or affect the Agent’s right to rely on the representations and warranties made by the Company in this Agreement and provided, further, that the only remedy the Agent shall have with respect to the failure to make such filing shall be to cease making sales under this Agreement until such amendment or supplement is filed); (iii) the Company will not file any amendment or supplement to the Registration Statement or Prospectus relating to the Placement Shares or a security convertible into the Placement Shares unless a copy thereof has been submitted to Agent within a reasonable period of time before the filing and the Agent has not objected thereto (provided, however, that the failure of the Agent to make such objection shall not relieve the Company of any obligation or liability hereunder, or affect the Agent’s right to rely on the representations and warranties made by the Company in this Agreement and provided, further, that the only remedy Agent shall have with respect to the failure by the Company to obtain such consent shall be to cease making sales under this Agreement) and the Company will furnish to the Agent at the time of filing thereof a copy of any document that upon filing is deemed to be incorporated by reference into the Registration Statement or Prospectus, except for those documents available via EDGAR; and (iv) the Company will cause each amendment or supplement to the Prospectus to be filed with the Commission as required pursuant to the applicable paragraph of Rule 424(b) of the Securities Act or, in the case of any document to be incorporated therein by reference, to be filed with the Commission as required pursuant to the Exchange Act, within the time period prescribed (the determination to file or not file any amendment or supplement with the Commission under this Section 7(a), based on the Company’s reasonable opinion or reasonable objections, shall be made exclusively by the Company).
  
 (b) Notice of Commission Stop Orders. The Company will advise the Agent, promptly after it receives notice or obtains knowledge thereof, of the issuance or threatened issuance by the Commission of any stop order suspending the effectiveness of the Registration Statement, of the suspension of the qualification of the Placement Shares for offering or sale in any jurisdiction, or of the initiation or threatening of any proceeding for any such purpose; and it will promptly use its commercially reasonable efforts to prevent the issuance of any stop order or to obtain its withdrawal if such a stop order should be issued. The Company will advise the Agent promptly after it receives any request by the Commission for any amendments to the Registration Statement or any amendment or supplements to the Prospectus or any Issuer Free Writing Prospectus or for additional information related to the offering of the Placement Shares or for additional information related to the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus.
  
  	 
	-23-
	 
 
	 

  
 (c) Delivery of Prospectus; Subsequent Changes. During any period in which a Prospectus relating to the Placement Shares is required to be delivered by the Agent under the Securities Act with respect to the offer and sale of the Placement Shares, (including in circumstances where such requirement may be satisfied pursuant to Rule 172 under the Securities Act or similar rule), the Company will comply with all requirements imposed upon it by the Securities Act, as from time to time in force, and to file on or before their respective due dates all reports and any definitive proxy or information statements required to be filed by the Company with the Commission pursuant to Sections 13(a), 13(c), 14, 15(d) or any other provision of or under the Exchange Act. If the Company has omitted any information from the Registration Statement pursuant to Rule 430B under the Securities Act, it will use its best efforts to comply with the provisions of and make all requisite filings with the Commission pursuant to said Rule 430B and to notify the Agent promptly of all such filings. If during such period any event occurs as a result of which the Prospectus as then amended or supplemented would include an untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in the light of the circumstances then existing, not misleading, or if during such period it is necessary to amend or supplement the Registration Statement or Prospectus to comply with the Securities Act, the Company will promptly notify Agent to suspend the offering of Placement Shares during such period and the Company will promptly amend or supplement the Registration Statement or Prospectus (at the expense of the Company) so as to correct such statement or omission or effect such compliance.
  
 (d) Listing of Placement Shares. During any period in which the Prospectus relating to the Placement Shares is required to be delivered by the Agent under the Securities Act with respect to the offer and sale of the Placement Shares, the Company will use its reasonable best efforts to cause the Placement Shares to be listed on the Exchange.
  
 (e) Delivery of Registration Statement and Prospectus. The Company will furnish to the Agent and its counsel (at the expense of the Company) copies of the Registration Statement, the Prospectus (including all documents incorporated by reference therein) and all amendments and supplements to the Registration Statement or Prospectus that are filed with the Commission during any period in which a Prospectus relating to the Placement Shares is required to be delivered under the Securities Act (including all documents filed with the Commission during such period that are deemed to be incorporated by reference therein), in each case as soon as reasonably practicable and in such quantities as the Agent may from time to time reasonably request and, at the Agent’s request, will also furnish copies of the Prospectus to each exchange or market on which sales of the Placement Shares may be made; provided, however, that the Company shall not be required to furnish any document (other than the Prospectus) to the Agent to the extent such document is available on EDGAR.
  
 (f) Earnings Statement. The Company will make generally available to its security holders as soon as practicable, but in any event not later than 15 months after the end of the Company’s current fiscal quarter, an earnings statement covering a 12-month period that satisfies the provisions of Section 11(a) and Rule 158 of the Securities Act.
  
 (g) Use of Proceeds. The Company will use the Net Proceeds as described in the Prospectus in the section entitled “Use of Proceeds.”
  
  	 
	-24-
	 
 
	 

  
 (h) Notice of Other Sales. Without the prior written consent of Agent, the Company will not, directly or indirectly, offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire, Common Stock during the period beginning on the fifth (5th) Trading Day immediately prior to the date on which any Placement Notice is delivered to Agent hereunder and ending on the fifth (5th) Trading Day immediately following the final Settlement Date with respect to Placement Shares sold pursuant to such Placement Notice (or, if the Placement Notice has been terminated or suspended prior to the sale of all Placement Shares covered by a Placement Notice, the date of such suspension or termination); and will not directly or indirectly in any other “at the market” or continuous equity transaction offer to sell, sell, contract to sell, grant any option to sell or otherwise dispose of any Common Stock (other than the Placement Shares offered pursuant to this Agreement) or securities convertible into or exchangeable for Common Stock, warrants or any rights to purchase or acquire, Common Stock prior to the later of the termination of this Agreement and the sixtieth (60th) day immediately following the final Settlement Date with respect to Placement Shares sold pursuant to such Placement Notice; provided, however, that such restrictions will not be required in connection with the Company’s issuance or sale of (i) Common Stock, options to purchase Common Stock or Common Stock issuable upon the exercise of options, pursuant to any employee or director stock option or benefits plan, stock ownership plan or dividend reinvestment plan (but not Common Stock subject to a waiver to exceed plan limits in its dividend reinvestment plan) of the Company whether now in effect or hereafter implemented, (ii) Common Stock issuable upon conversion of securities or the exercise of warrants, options or other rights in effect or outstanding, and disclosed in filings by the Company available on EDGAR or otherwise in writing to the Agent and (iii) Common Stock or securities convertible into or exchangeable for shares of Common Stock as consideration for mergers, acquisitions, other business combinations or strategic alliances occurring after the date of this Agreement which are not issued for capital raising purposes.
  
 (i) Change of Circumstances. The Company will, at any time during the pendency of a Placement Notice advise the Agent promptly after it shall have received notice or obtained knowledge thereof, of any information or fact that would alter or affect in any material respect any opinion, certificate, letter or other document required to be provided to the Agent pursuant to this Agreement.
  
 (j) Due Diligence Cooperation. The Company will cooperate with any reasonable due diligence review conducted by the Agent or its representatives in connection with the transactions contemplated hereby, including, without limitation, providing information and making available documents and senior corporate officers, during regular business hours and at the Company’s principal offices, as the Agent may reasonably request.
  
 (k) Required Filings Relating to Placement of Placement Shares. The Company agrees that on such dates as the Securities Act shall require, the Company will (i) file a prospectus supplement with the Commission under the applicable paragraph of Rule 424(b) under the Securities Act (each and every filing under Rule 424(b), a “Filing Date”), which prospectus supplement will set forth, within the relevant period, the amount of Placement Shares sold through the Agent, the Net Proceeds to the Company and the compensation payable by the Company to the Agent with respect to such Placement Shares, and (ii) deliver such number of copies of each such prospectus supplement to each exchange or market on which such sales were effected as may be required by the rules or regulations of such exchange or market.
  
  	 
	-25-
	 
 
	 

  
 (l) Representation Dates; Certificate. (1) Prior to the date of the first Placement Notice and (2) each time the Company:
  
 (i) files the Prospectus relating to the Placement Shares or amends or supplements (other than a prospectus supplement relating solely to an offering of securities other than the Placement Shares) the Registration Statement or the Prospectus relating to the Placement Shares by means of a post-effective amendment, sticker, or supplement but not by means of incorporation of documents by reference into the Registration Statement or the Prospectus relating to the Placement Shares;
  
 (ii) files an annual report on Form 20-F under the Exchange Act (including any Form 20-F/A containing amended financial information or a material amendment to the previously filed Form 20-F;
  
 (iii) files its quarterly or six-month reports on Form 6-K under the Exchange Act containing financial statements, supporting schedules or other financial data incorporated by reference into the Registration Statement; or 
  
 (iv) files a report on Form 6-K containing amended financial information under the Exchange Act incorporated by reference into the Registration Statement (each date of filing of one or more of the documents referred to in clauses (i) through (iv) shall be a “Representation Date”);
  
 the Company shall furnish the Agent (but in the case of clause (iv) above only if the Agent reasonably determines that the information contained in such Form 6‐K is material) with a certificate in the form and substance satisfactory to the Agent and its counsel, substantially similar to the form previously provided to the Agent and its counsel, modified, as necessary, to relate to the Registration Statement and the Prospectus as amended or supplemented. The requirement to provide a certificate under this Section 7(l) shall be waived for any Representation Date occurring at a time a Suspension is in effect, which waiver shall continue until the earlier to occur of the date the Company delivers instructions for the sale of Placement Shares hereunder (which for such calendar quarter shall be considered a Representation Date) and the next occurring Representation Date. Notwithstanding the foregoing, if the Company subsequently decides to sell Placement Shares following a Representation Date when a Suspension was in effect and did not provide the Agent with a certificate under this Section 7(l), then before the Company delivers the instructions for the sale of Placement Shares or the Agent sells any Placement Shares pursuant to such instructions, the Company shall provide the Agent with a certificate in conformity with this Section 7(l) dated as of the date that the instructions for the sale of Placement Shares are issued. 
  
 (m) Legal Opinions. (1) Prior to the date of the first Placement Notice and (2) within five (5) Trading Days of each Representation Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 7(l) for which no waiver is applicable and excluding the date of this Agreement, the Company shall cause to be furnished to the Agent a written opinion of Lewis Brisbois Bisgaard & Smith LLP and Salley Bowes Harwardt Law Corporation (collectively, “Company Counsel”), or other counsel satisfactory to the Agent, in form and substance satisfactory to Agent and its counsel, substantially similar to the form attached hereto, modified, as necessary, to relate to the Registration Statement and the Prospectus as then amended or supplemented; provided, however, the Company shall be required to furnish to Agent no more than one opinion hereunder per calendar quarter; provided, further, that in lieu of such opinions for subsequent periodic filings under the Exchange Act, counsel may furnish the Agent with a letter (a “Reliance Letter”) to the effect that the Agent may rely on a prior opinion delivered under this Section 7(m) to the same extent as if it were dated the date of such letter (except that statements in such prior opinion shall be deemed to relate to the Registration Statement and the Prospectus as amended or supplemented as of the date of the Reliance Letter).
  
  	 
	-26-
	 
 
	 

  
 (n) Company’s Title Certificate. (1) Prior to the date of the first Placement Notice and (2) within five (5) Trading Days of the date on which the Company files an annual report on Form 20-F, the Company shall cause to be furnished to the Agent certificate stating that no issues exist with respect to the title, surface rights, subsurface rights, exploration and exploitation rights, as applicable on the Material Properties.
  
 (o) Comfort Letter. (1) Prior to the date of the first Placement Notice and (2) within five (5) Trading Days of each Representation Date with respect to which the Company is obligated to deliver a certificate pursuant to Section 7(l) for which no waiver is applicable and excluding the date of this Agreement, the Company shall cause its independent registered public accounting firm to furnish the Agent letters (the “Comfort Letter”), dated the date the Comfort Letter is delivered, which shall meet the requirements set forth in this Section 7(n); provided, that if requested by the Agent, the Company shall cause a Comfort Letter to be furnished to the Agent within ten (10) Trading Days of the date of occurrence of any material transaction or event, including the restatement of the Company’s financial statements. The Comfort Letter from the Company’s independent registered public accounting firm shall be in a form and substance satisfactory to the Agent, (i) confirming that they are an independent registered public accounting firm within the meaning of the Securities Act and the PCAOB, (ii) stating, as of such date, the conclusions and findings of such firm with respect to the financial information and other matters ordinarily covered by accountants’ “comfort letters” to underwriters in connection with registered public offerings (the first such letter, the “Initial Comfort Letter”) and (iii) updating the Initial Comfort Letter with any information that would have been included in the Initial Comfort Letter had it been given on such date and modified as necessary to relate to the Registration Statement and the Prospectus, as amended and supplemented to the date of such letter.
  
 (p) Engineer Comfort Letter. (1) Prior to the date of the first Placement Notice and (2) within five (5) Trading Days of the filing of the Form 20-F, the Company shall cause its independent mining engineer to furnish the Agent letters (the “Engineer Comfort Letter”), dated the date the Comfort Letter is delivered, which shall meet the requirements set forth in this Section 7(p); provided, that if requested by the Agent, the Company shall cause a Comfort Letter to be furnished to the Agent within ten (10) Trading Days of the date of occurrence of any material transaction or event. The Comfort Letter from the Company’s independent mining engineer shall be in a form reasonably acceptable to the Agent.
  
 (q) Market Activities. The Company will not, directly or indirectly, (i) take any action designed to cause or result in, or that constitutes or might reasonably be expected to constitute, the stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of Common Stock or (ii) sell, bid for, or purchase Common Stock, or pay anyone any compensation for soliciting purchases of the Placement Shares other than the Agent.
  
  	 
	-27-
	 
 
	 

  
 (r) Investment Company Act. The Company will conduct its affairs in such a manner so as to reasonably ensure that neither it nor any of the Material Subsidiaries will be or become, at any time prior to the termination of this Agreement, required to register as an “investment company,” as such term is defined in the Investment Company Act. 
  
 (s) No Offer to Sell. Other than an Issuer Free Writing Prospectus approved in advance by the Company and the Agent in its capacity as agent hereunder, neither the Agent nor the Company (including its agents and representatives, other than the Agent in its capacity as such) will make, use, prepare, authorize, approve or refer to any written communication (as defined in Rule 405 under the Securities Act), required to be filed with the Commission, that constitutes an offer to sell or solicitation of an offer to buy Placement Shares hereunder.
  
 (t) Blue Sky and Other Qualifications. The Company will use its commercially reasonable efforts, in cooperation with the Agent, to qualify the Placement Shares for offering and sale, or to obtain an exemption for the Placement Shares to be offered and sold, under the applicable securities laws of such states and other jurisdictions (domestic or foreign) as the Agent may designate and to maintain such qualifications and exemptions in effect for so long as required for the distribution of the Placement Shares (but in no event for less than one year from the date of this Agreement); provided, however, that the Company shall not be obligated to file any general consent to service of process or to qualify as a foreign corporation or as a dealer in securities in any jurisdiction in which it is not so qualified or to subject itself to taxation in respect of doing business in any jurisdiction in which it is not otherwise so subject. In each jurisdiction in which the Placement Shares have been so qualified or exempt, the Company will file such statements and reports as may be required by the laws of such jurisdiction to continue such qualification or exemption, as the case may be, in effect for so long as required for the distribution of the Placement Shares (but in no event for less than one year from the date of this Agreement).
  
 (u) Sarbanes-Oxley Act. The Company and the Material Subsidiaries will maintain and keep accurate books and records reflecting their assets and maintain internal accounting controls and procedures in a manner designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and including those policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit the preparation of the Company’s consolidated financial statements in accordance with IFRS or GAAP as may then be applicable, (iii) that receipts and expenditures of the Company are being made only in accordance with management’s and the Company’s directors’ authorization, and (iv) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company’s assets that could have a material effect on its financial statements. The Company and the Material Subsidiaries will maintain such controls and other procedures, including, without limitation, those required by Sections 302 and 906 of the Sarbanes-Oxley Act and those required by applicable Canadian securities laws, and the applicable regulations thereunder that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, including, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure and to ensure that material information relating to the Company or the Material Subsidiaries is made known to them by others within those entities, particularly during the period in which such periodic reports are being prepared.
  
  	 
	-28-
	 
 
	 

  
 (v) Secretary’s Certificate; Further Documentation. Prior to the date of the first Placement Notice, the Company shall deliver to the Agent a certificate of the Secretary of the Company and attested to by an executive officer of the Company, dated as of such date, certifying as to (i) the Memorandum of the Company, (ii) the Articles of the Company, (iii) the resolutions of the Board of Directors of the Company authorizing the execution, delivery and performance of this Agreement and the issuance of the Placement Shares and (iv) the incumbency of the officers duly authorized to execute this Agreement and the other documents contemplated by this Agreement. Within five (5) Trading Days of each Representation Date, the Company shall have furnished to the Agent such further information, certificates and documents as the Agent may reasonably request.
  
 8. Payment of Expenses. The Company will pay all expenses incident to the performance of its obligations under this Agreement, including (i) the preparation and filing of the Registration Statement, including any fees required by the Commission, and the printing or electronic delivery of the Prospectus as originally filed and of each amendment and supplement thereto, in such number as the Agent shall deem necessary, (ii) the printing and delivery to the Agent of this Agreement and such other documents as may be required in connection with the offering, purchase, sale, issuance or delivery of the Placement Shares, (iii) the preparation, issuance and delivery of the certificates, if any, for the Placement Shares to the Agent, including any stock or other transfer taxes and any capital duties, stamp duties or other duties or taxes payable upon the sale, issuance or delivery of the Placement Shares to the Agent, (iv) the fees and disbursements of the counsel, accountants and other advisors to the Company, (v) the reasonable fees and expenses of the Agent, including but not limited to the fees and expenses of the counsel to the Agent, payable upon the execution of this Agreement, in an amount not to exceed US$50,000; (vi) the qualification or exemption of the Placement Shares under state securities laws in accordance with the provisions of Section 7(r) hereof, including filing fees, but excluding fees of the Agent’s counsel, (vii) the printing and delivery to the Agent of copies of any Permitted Issuer Free Writing Prospectus and the Prospectus and any amendments or supplements thereto in such number as the Agent shall deem necessary, (viii) the preparation, printing and delivery to the Agent of copies of the blue sky survey, (ix) the fees and expenses of the transfer agent and registrar for the Common Stock, (x) the filing and other fees incident to any review by FINRA of the terms of the sale of the Placement Shares including the fees of the Agent’s counsel (subject to the cap, set forth in clause (v) above), and (xi) the fees and expenses incurred in connection with the listing of the Placement Shares on the Exchange.
  
  	 
	-29-
	 
 
	 

  
 9. Conditions to Agent’s Obligations. The obligations of the Agent hereunder with respect to a Placement will be subject to the continuing accuracy and completeness of the representations and warranties made by the Company herein, to the due performance by the Company of its obligations hereunder, to the completion by the Agent of a due diligence review satisfactory to it in its reasonable judgment, and to the continuing satisfaction (or waiver by the Agent in its sole discretion) of the following additional conditions:
  
 (a) Registration Statement Effective. The Registration Statement shall have become effective and shall be available for the (i) resale of all Placement Shares issued to the Agent and not yet sold by the Agent and (ii) sale of all Placement Shares contemplated to be issued by any Placement Notice.
  
 (b) No Material Notices. None of the following events shall have occurred and be continuing: (i) receipt by the Company of any request for additional information from the Commission or any other federal or state Governmental Authority during the period of effectiveness of the Registration Statement, the response to which would require any post-effective amendments or supplements to the Registration Statement or the Prospectus; (ii) the issuance by the Commission or any other federal or state Governmental Authority of any stop order suspending the effectiveness of the Registration Statement or the initiation of any proceedings for that purpose; (iii) receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Placement Shares for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; or (iv) the occurrence of any event that makes any statement of a material fact made in the Registration Statement or the Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue or that requires the making of any changes in the Registration Statement, the Prospectus or documents so that, in the case of the Registration Statement, it will not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading and, that in the case of the Prospectus, it will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading.
  
 (c) No Misstatement or Material Omission. Agent shall not have advised the Company that the Registration Statement or Prospectus, or any amendment or supplement thereto, contains an untrue statement of fact that in the Agent’s reasonable opinion is material, or omits to state a fact that in the Agent’s reasonable opinion is material and is required to be stated therein or is necessary to make the statements therein not misleading.
  
 (d) Material Changes. Except as contemplated in the Prospectus, or disclosed in the Company’s reports filed with the Commission, there shall not have been any material adverse change in the authorized capital stock of the Company or any Material Adverse Effect or any development that could reasonably be expected to cause a Material Adverse Effect, or a downgrading in or withdrawal of the rating assigned to any of the Company’s securities (other than asset backed securities) by any rating organization or a public announcement by any rating organization that it has under surveillance or review its rating of any of the Company’s securities (other than asset backed securities), the effect of which, in the case of any such action by a rating organization described above, in the reasonable judgment of the Agent (without relieving the Company of any obligation or liability it may otherwise have), is so material as to make it impracticable or inadvisable to proceed with the offering of the Placement Shares on the terms and in the manner contemplated in the Prospectus.
  
  	 
	-30-
	 
 
	 

  
 (e) Legal Opinions. The Agent shall have received the opinions of Company Counsel required to be delivered pursuant to Section 7(m) on or before the date on which such delivery of such opinion is required pursuant to Section 7(m).
  
 (f) Comfort Letters. The Agent shall have received the Comfort Letter and Engineer Comfort Letter required to be delivered pursuant to Section 7(o) and Section 7(p) on or before the date on which such delivery of such Comfort Letters is required pursuant to Section 7(o) and Section 7(p).
  
 (g) Representation Certificate. The Agent shall have received the certificate required to be delivered pursuant to Section 7(l) on or before the date on which delivery of such certificate is required pursuant to Section 7(l).
  
 (h) No Suspension. Trading in the Common Stock shall not have been suspended on the Exchange or the TSX and the Common Stock shall not have been delisted from the Exchange.
  
 (i) Other Materials. On each date on which the Company is required to deliver a certificate pursuant to Section 7(l) and Section 7(n), the Company shall have furnished to the Agent such appropriate further information, opinions, certificates, letters and other as the Agent may reasonably request. All such opinions, certificates, letters and other documents will be in compliance with the provisions hereof.
  
 (j) Securities Act Filings Made. All filings with the Commission required by Rule 424 under the Securities Act to have been filed prior to the issuance of any Placement Notice hereunder shall have been made within the applicable time period prescribed for such filing by Rule 424.
  
 (k) Approval for Listing. The Placement Shares shall either have been approved for listing on the Exchange and the TSX, subject only to notice of issuance, or the Company shall have filed an application for listing of the Placement Shares on the Exchange or the TSX at, or prior to, the issuance of any Placement Notice.
  
 (l) FINRA. FINRA shall not have raised any objection to the terms of this offering and the amount of compensation allowable or payable to the Agent as described in the Prospectus. 
  
 (m) No Termination Event. There shall not have occurred any event that would permit the Agent to terminate this Agreement pursuant to Section 12(a).
  
 10. Indemnification and Contribution.
  
 (a) Company Indemnification. The Company agrees to indemnify and hold harmless the Agent, its affiliates and their respective partners, members, directors, officers, employees and agents and each person, if any, who controls the Agent or any affiliate within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act as follows: 
  
  	 
	-31-
	 
 
	 

  
 (i) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement (or any amendment thereto), or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein not misleading, or arising out of any untrue statement or alleged untrue statement of a material fact included in any related Issuer Free Writing Prospectus or the Prospectus (or any amendment or supplement thereto), or the omission or alleged omission therefrom of a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading;
  
 (ii) against any and all loss, liability, claim, damage and expense whatsoever, as incurred, joint or several, to the extent of the aggregate amount paid in settlement of any litigation, or any investigation or proceeding by any Governmental Authority, commenced or threatened, or of any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission; provided that (subject to Section 10(d) below) any such settlement is effected with the written consent of the Company, which consent shall not unreasonably be delayed or withheld; and
  
 (iii) against any and all expense whatsoever, as incurred (including the fees and disbursements of counsel), reasonably incurred in investigating, preparing or defending against any litigation, or any investigation or proceeding by any Governmental Authority, commenced or threatened, or any claim whatsoever based upon any such untrue statement or omission, or any such alleged untrue statement or omission, to the extent that any such expense is not paid under (i) or (ii) above,
  
 provided, however, that this indemnity agreement shall not apply to any loss, liability, claim, damage or expense to the extent arising out of any untrue statement or omission or alleged untrue statement or omission made solely in reliance upon and in conformity with the Agent Information (as defined below).
  
 (b) Agent Indemnification. Agent agrees to indemnify and hold harmless the Company and its directors and each officer and director of the Company who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the indemnity contained in Section 10(a), as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions, made in the Registration Statement (or any amendments thereto) or the Prospectus (or any amendment or supplement thereto) in reliance upon and in conformity with information relating to the Agent and furnished to the Company in writing by the Agent expressly for use therein. The Company hereby acknowledges that the only information that the Agent has furnished to the Company expressly for use in the Registration Statement, the Prospectus or any Issuer Free Writing Prospectus (or any amendment or supplement thereto) are the statements set forth in the seventh and eighth paragraphs under the caption “Plan of Distribution” in the Prospectus (the “Agent Information”).
  
  	 
	-32-
	 
 
	 

  
 (c) Procedure. Any party that proposes to assert the right to be indemnified under this Section 10 will, promptly after receipt of notice of commencement of any action against such party in respect of which a claim is to be made against an indemnifying party or parties under this Section 10, notify each such indemnifying party of the commencement of such action, enclosing a copy of all papers served, but the omission so to notify such indemnifying party will not relieve the indemnifying party from (i) any liability that it might have to any indemnified party otherwise than under this Section 10 and (ii) any liability that it may have to any indemnified party under the foregoing provision of this Section 10 unless, and only to the extent that, such omission results in the forfeiture of substantive rights or defenses by the indemnifying party. If any such action is brought against any indemnified party and it notifies the indemnifying party of its commencement, the indemnifying party will be entitled to participate in and, to the extent that it elects by delivering written notice to the indemnified party promptly after receiving notice of the commencement of the action from the indemnified party, jointly with any other indemnifying party similarly notified, to assume the defense of the action, with counsel reasonably satisfactory to the indemnified party, and after notice from the indemnifying party to the indemnified party of its election to assume the defense, the indemnifying party will not be liable to the indemnified party for any other legal expenses except as provided below and except for the reasonable costs of investigation subsequently incurred by the indemnified party in connection with the defense. The indemnified party will have the right to employ its own counsel in any such action, but the fees, expenses and other charges of such counsel will be at the expense of such indemnified party unless (1) the employment of counsel by the indemnified party has been authorized in writing by the indemnifying party, (2) the indemnified party has reasonably concluded (based on advice of counsel) that there may be legal defenses available to it or other indemnified parties that are different from or in addition to those available to the indemnifying party, (3) a conflict or potential conflict exists (based on advice of counsel to the indemnified party) between the indemnified party and the indemnifying party (in which case the indemnifying party will not have the right to direct the defense of such action on behalf of the indemnified party) or (4) the indemnifying party has not in fact employed counsel to assume the defense of such action within a reasonable time after receiving notice of the commencement of the action or counsel reasonably satisfactory to the indemnified party, in each of which cases the reasonable fees, disbursements and other charges of counsel will be at the expense of the indemnifying party or parties. It is understood that the indemnifying party or parties shall not, in connection with any proceeding or related proceedings in the same jurisdiction, be liable for the reasonable fees, disbursements and other charges of more than one separate firm (plus local counsel) admitted to practice in such jurisdiction at any one time for all such indemnified party or parties. All such fees, disbursements and other charges will be reimbursed by the indemnifying party promptly as they are incurred. An indemnifying party will not, in any event, be liable for any settlement of any action or claim effected without its written consent. No indemnifying party shall, without the prior written consent of each indemnified party, settle or compromise or consent to the entry of any judgment in any pending or threatened claim, action or proceeding relating to the matters contemplated by this Section 10 (whether or not any indemnified party is a party thereto), unless such settlement, compromise or consent (1) includes an express and unconditional release of each indemnified party, in form and substance reasonably satisfactory to such indemnified party, from all liability arising out of such litigation, investigation, proceeding or claim and (2) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.
  
  	 
	-33-
	 
 
	 

  
 (d) Settlement Without Consent if Failure to Reimburse. If an indemnified party shall have requested an indemnifying party to reimburse the indemnified party for reasonable fees and expenses of counsel, such indemnifying party agrees that it shall be liable for any settlement of the nature contemplated by Section 10(a)(ii) effected without its written consent if (1) such settlement is entered into more than 45 days after receipt by such indemnifying party of the aforesaid request, (2) such indemnifying party shall have received notice of the terms of such settlement at least 30 days prior to such settlement being entered into and (3) such indemnifying party shall not have reimbursed such indemnified party in accordance with such request prior to the date of such settlement.
  
 (e) Contribution. In order to provide for just and equitable contribution in circumstances in which the indemnification provided for in the foregoing paragraphs of this Section 10 is applicable in accordance with its terms but for any reason is held to be unavailable or insufficient from the Company or the Agent, the Company and the Agent will contribute to the total losses, claims, liabilities, expenses and damages (including any investigative, legal and other expenses reasonably incurred in connection with, and any amount paid in settlement of, any action, suit or proceeding or any claim asserted) to which the Company and the Agent may be subject in such proportion as shall be appropriate to reflect the relative benefits received by the Company on the one hand and the Agent on the other hand. The relative benefits received by the Company on the one hand and the Agent on the other hand shall be deemed to be in the same proportion as the total net proceeds from the sale of the Placement Shares (before deducting expenses) received by the Company bear to the total compensation received by the Agent from the sale of Placement Shares on behalf of the Company. If, but only if, the allocation provided by the foregoing sentence is not permitted by applicable law, the allocation of contribution shall be made in such proportion as is appropriate to reflect not only the relative benefits referred to in the foregoing sentence but also the relative fault of the Company, on the one hand, and the Agent, on the other hand, with respect to the statements or omission that resulted in such loss, claim, liability, expense or damage, or action in respect thereof, as well as any other relevant equitable considerations with respect to such offering. Such relative fault shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by the Company or the Agent, the intent of the parties and their relative knowledge, access to information and opportunity to correct or prevent such statement or omission. The Company and the Agent agree that it would not be just and equitable if contributions pursuant to this Section 10(e) were to be determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to herein. The amount paid or payable by an indemnified party as a result of the loss, claim, liability, expense, or damage, or action in respect thereof, referred to above in this Section 10(e) shall be deemed to include, for the purpose of this Section 10(e), any legal or other expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim to the extent consistent with Section 10(c) hereof. Notwithstanding the foregoing provisions of this Section 10(e), the Agent shall not be required to contribute any amount in excess of the commissions received by it under this Agreement and no person found guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) will be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. For purposes of this Section 10(e), any person who controls a party to this Agreement within the meaning of the Securities Act, any affiliates of the Agent and any officers, directors, partners, employees or agents of the Agent or any of its affiliates, will have the same rights to contribution as that party, and each director of the Company and each officer of the Company who signed the Registration Statement will have the same rights to contribution as the Company, subject in each case to the provisions hereof. Any party entitled to contribution, promptly after receipt of notice of commencement of any action against such party in respect of which a claim for contribution may be made under this Section 10(e), will notify any such party or parties from whom contribution may be sought, but the omission to so notify will not relieve that party or parties from whom contribution may be sought from any other obligation it or they may have under this Section 10(e) except to the extent that the failure to so notify such other party materially prejudiced the substantive rights or defenses of the party from whom contribution is sought. Except for a settlement entered into pursuant to the last sentence of Section 10(c) hereof, no party will be liable for contribution with respect to any action or claim settled without its written consent if such consent is required pursuant to Section 10(c) hereof.
  
  	 
	-34-
	 
 
	 

  
 11. Representations and Agreements to Survive Delivery. The indemnity and contribution agreements contained in Section 10 of this Agreement and all representations and warranties of the Company herein or in certificates delivered pursuant hereto shall survive, as of their respective dates, regardless of (i) any investigation made by or on behalf of the Agent, any controlling persons, or the Company (or any of their respective officers, directors or controlling persons), (ii) delivery and acceptance of the Placement Shares and payment therefor or (iii) any termination of this Agreement.
  
 12. Termination.
  
 (a) The Agent may terminate this Agreement, by notice to the Company, as hereinafter specified at any time (1) if there has been, since the time of execution of this Agreement or since the date as of which information is given in the Prospectus, any change, or any development or event involving a prospective change, in the condition, financial or otherwise, or in the business, properties, earnings, results of operations or prospects of the Company and the Material Subsidiaries considered as one enterprise, whether or not arising in the ordinary course of business, which individually or in the aggregate, in the sole judgment of the Agent has or could reasonably be expected to have a Material Adverse Effect and makes it impractical or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (2) if there has occurred any material adverse change in the financial markets in the United States or Canada or the international financial markets, any outbreak of hostilities or escalation thereof or other calamity or crisis or any change or development involving a prospective change in national or international political, financial or economic conditions, in each case the effect of which is such as to make it, in the judgment of the Agent, impracticable or inadvisable to market the Placement Shares or to enforce contracts for the sale of the Placement Shares, (3) if trading in the Common Stock has been suspended or limited by the Commission or the Exchange, or if trading generally on the Exchange has been suspended or limited, or minimum prices for trading have been fixed on the Exchange, (4) if any suspension of trading of any securities of the Company on any exchange or in the over-the-counter market shall have occurred and be continuing, (5) if a major disruption of securities settlements or clearance services in the United States or Canada shall have occurred and be continuing, or (6) if a banking moratorium has been declared by U.S. Federal, Canada or New York authorities. Any such termination shall be without liability of any party to any other party except that the provisions of Section 8 (Payment of Expenses), Section 10 (Indemnification and Contribution), Section 11 (Representations and Agreements to Survive Delivery), Section 13 (Notices), Section 14 (Successors and Assigns), Section 16 (Entire Agreement; Amendment; Severability) Section 17 (Governing Law and Time; Waiver of Jury Trial), Section 18 (Consent to Jurisdiction), Section 19 (Appointment of Agent for Service), Section 20 (Judgment Currency), Section 24 (Absence of Fiduciary Relationship) and Section 25 (Definitions) hereof shall remain in full force and effect notwithstanding such termination. If the Agent elects to terminate this Agreement as provided in this Section 12(a), the Agent shall provide the required notice as specified in Section 13 (Notices).
  
  	 
	-35-
	 
 
	 

  
 (b) The Company shall have the right, by giving ten (10) days’ notice as hereinafter specified to terminate this Agreement in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 8, Section 10, Section 11, Section 13, Section 14, Section 16, Section 17, Section 18, Section 19, Section 20, Section 24 and Section 25 hereof shall remain in full force and effect notwithstanding such termination.
  
 (c) The Agent shall have the right, by giving ten (10) days’ notice as hereinafter specified to terminate this Agreement in its sole discretion at any time after the date of this Agreement. Any such termination shall be without liability of any party to any other party except that the provisions of Section 8, Section 10, Section 11, Section 13, Section 14, Section 16, Section 17, Section 18, Section 19, Section 20, Section 24 and Section 25 hereof shall remain in full force and effect notwithstanding such termination.
  
 (d) This Agreement shall remain in full force and effect unless terminated pursuant to Sections 12(a), (b) or (c) above or otherwise by mutual agreement of the parties; provided, however, that any such termination by mutual agreement shall in all cases be deemed to provide that Section 8, Section 10, Section 11, Section 13, Section 14, Section 16, Section 17, Section 18, Section 19, Section 20, Section 24 and Section 25 shall remain in full force and effect.
  
 (e) Any termination of this Agreement shall be effective on the date specified in such notice of termination; provided, however, that such termination shall not be effective until the close of business on the date of receipt of such notice by the Agent or the Company, as the case may be. If such termination shall occur prior to the Settlement Date for any sale of Placement Shares, such Placement Shares shall settle in accordance with the provisions of this Agreement.
  
 13. Notices. All notices or other communications required or permitted to be given by any party to any other party pursuant to the terms of this Agreement shall be in writing, unless otherwise specified, and if sent to the Agent, shall be delivered to: 
  
 Cantor Fitzgerald & Co. 
 499 Park Avenue
 New York, NY 10022
 Attention: Capital Markets
 Facsimile: (212) 307-3730
  
  	 
	-36-
	 
 
	 

  
 with a copy to
  
 Cantor Fitzgerald & Co. 
 499 Park Avenue
 New York, NY 10022
 Attention: General Counsel
 Facsimile: (212) 829-4708
  
 and with a copy to:
  
 Cooley LLP
 1114 Avenue of the Americas
 New York, NY 10036
 Attention: Daniel I. Goldberg, Esq.
 Facsimile: (212) 479-6275
  
 and with a copy to:
  
 Stikeman Elliott LLP
 5300 Commerce Court West
 199 Bay Street
 Toronto, ON M5L 1B9
 Canada
 Attention: Martin Langlois or Steven Bennett
 Facsimile: (416) 947-0866
  
 and if to the Company, shall be delivered to:
  
 Avino Silver & Gold Mines Ltd.
 Suite 900, 570 Granville Street
 Vancouver, BC V6C 3P1
 Attention: David Wolfin
 Facsimile: (604) 682-3600
  
 and with a copy to:
  
 Lewis Brisbois Bisgaard & Smith LLP 
 333 Bush Street, Suite 1100
 San Francisco, CA 94104 
 Attention: Daniel B. Eng
 Facsimile: 415-434-0882
  
 and:
  
 Salley Bowes Harwardt Law Corp.
 1750-1185 West Georgia Street
 Vancouver, BC V6E 4E6
 Attention: Paul Bowes
 Facsimile: (604) 688-0778
  
  	 
	-37-
	 
 
	 

  
 Each party to this Agreement may change such address for notices by sending to the parties to this Agreement written notice of a new address for such purpose. Each such notice or other communication shall be deemed given (i) when delivered personally or by verifiable facsimile transmission (with an original to follow) on or before 4:30 p.m., New York City time, on a Business Day or, if such day is not a Business Day, on the next succeeding Business Day, (ii) on the next Business Day after timely delivery to a nationally-recognized overnight courier and (iii) on the Business Day actually received if deposited in the U.S. mail (certified or registered mail, return receipt requested, postage prepaid). For purposes of this Agreement, “Business Day” shall mean any day on which the Exchange and commercial banks in the City of New York are open for business. 
  
 An electronic communication (“Electronic Notice”) shall be deemed written notice for purposes of this Section 13 if sent to the electronic mail address specified by the receiving party under separate cover. Electronic Notice shall be deemed received at the time the party sending Electronic Notice receives verification of receipt by the receiving party. Any party receiving Electronic Notice may request and shall be entitled to receive the notice on paper, in a nonelectronic form (“Nonelectronic Notice”) which shall be sent to the requesting party within ten (10) days of receipt of the written request for Nonelectronic Notice.
  
 14. Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and the Agent and their respective successors and the affiliates, controlling persons, officers and directors referred to in Section 10 hereof. References to any of the parties contained in this Agreement shall be deemed to include the successors and permitted assigns of such party. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and permitted assigns any rights, remedies, obligations or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement. Neither party may assign its rights or obligations under this Agreement without the prior written consent of the other party; provided, however, that the Agent may assign its rights and obligations hereunder to an affiliate thereof without obtaining the Company’s consent.
  
 15. Adjustments for Stock Splits. The parties acknowledge and agree that all share-related numbers contained in this Agreement shall be adjusted to take into account any stock split, stock consolidation, stock dividend or similar event effected with respect to the Placement Shares.
  
 16. Entire Agreement; Amendment; Severability; Waiver. This Agreement (including all schedules and exhibits attached hereto and Placement Notices issued pursuant hereto) constitutes the entire agreement and supersedes all other prior and contemporaneous agreements and undertakings, both written and oral, among the parties hereto with regard to the subject matter hereof including the Original Agreement. Neither this Agreement nor any term hereof may be amended except pursuant to a written instrument executed by the Company and the Agent. In the event that any one or more of the provisions contained herein, or the application thereof in any circumstance, is held invalid, illegal or unenforceable as written by a court of competent jurisdiction, then such provision shall be given full force and effect to the fullest possible extent that it is valid, legal and enforceable, and the remainder of the terms and provisions herein shall be construed as if such invalid, illegal or unenforceable term or provision was not contained herein, but only to the extent that giving effect to such provision and the remainder of the terms and provisions hereof shall be in accordance with the intent of the parties as reflected in this Agreement. No implied waiver by a party shall arise in the absence of a waiver in writing signed by such party. No failure or delay in exercising any right, power, or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any right, power, or privilege hereunder.
  
  	 
	-38-
	 
 
	 

  
 17. GOVERNING LAW AND TIME; WAIVER OF JURY TRIAL. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. SPECIFIED TIMES OF DAY REFER TO NEW YORK CITY TIME. EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
  
 18. CONSENT TO JURISDICTION. 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 WITH ANY TRANSACTION CONTEMPLATED HEREBY, AND HEREBY IRREVOCABLY WAIVES, AND AGREES NOT TO ASSERT IN ANY SUIT, ACTION OR PROCEEDING, ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, THAT SUCH SUIT, ACTION OR PROCEEDING IS BROUGHT IN AN INCONVENIENT FORUM OR THAT THE VENUE OF SUCH SUIT, ACTION OR PROCEEDING IS IMPROPER. EACH PARTY HEREBY IRREVOCABLY WAIVES PERSONAL SERVICE OF PROCESS AND CONSENTS TO PROCESS BEING SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING BY MAILING A COPY THEREOF (CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT REQUESTED) 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 MANNER PERMITTED BY LAW. TO THE EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY (ON THE GROUNDS OF SOVEREIGNTY OR OTHERWISE) FROM THE JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS WITH RESPECT TO ITSELF OR ITS PROPERTY, THE COMPANY IRREVOCABLY WAIVES, AS AGENTS FOR SUITS, ACTIONS OR PROCEEDINGS HEREUNDER, TO THE FULLEST EXTENT PERMITTED BY LAW, SUCH IMMUNITY IN RESPECT OF ANY SUCH SUIT, ACTION OR PROCEEDING.
  
 19. Appointment of Agent for Service. The Company has filed with the Commission a Form F-X appointing Paracorp Incorporated (or any successor) as its agent for service of process in any suit, action or proceeding described in Section 18 and agrees that service of process in any such suit, action or proceeding may be made upon it at the office of such agent. The Company waives, to the fullest extent permitted by law, any other requirements of or objections to personal jurisdiction with respect thereto. The Company represents and warrants that such agent has agreed to act as the Company’s agent for service of process, and the Company agrees to take any and all action, including the filing of any and all documents and instruments, that may be necessary to continue such appointment in full force and effect.
  
  	 
	-39-
	 
 
	 

  
 20. Judgment Currency. If for the purposes of obtaining judgment in any court it is necessary to convert a sum due hereunder into any currency other than United States dollars, the parties hereto agree, to the fullest extent permitted by law, that the rate of exchange used shall be the rate at which in accordance with normal banking procedures the Agent could purchase United States dollars with such other currency in The City of New York on the Business Day preceding that on which final judgment is given. The obligation of the Company with respect to any sum due from it to the Agent or any person controlling the Agent shall, notwithstanding any judgment in a currency other than United States dollars, not be discharged until the first Business Day following receipt by the Agent or any person controlling the Agent of any sum in such other currency, and only to the extent that the Agent or controlling person may in accordance with normal banking procedures purchase United States dollars with such other currency. If the United States dollars so purchased are less than the sum originally due to the Agent or controlling person hereunder, the Company agrees as a separate obligation and notwithstanding any such judgment, to indemnify the Agent or controlling person against such loss. If the United States dollars so purchased are greater than the sum originally due to the Agent or controlling person hereunder, the Agent or controlling person agrees to pay to the Company an amount equal to the excess of the dollars so purchased over the sum originally due to the Agent or controlling person hereunder.
  
 21. Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Delivery of an executed Agreement by one party to the other may be made by facsimile or electronic transmission.
  
 22. Effect of Headings. 
  
 The section and exhibit headings herein are for convenience only and shall not affect the construction hereof. References herein to any law, statute, ordinance, code, regulation, rule or other requirement of any Governmental Authority shall be deemed to refer to such law, statute, ordinance, code, regulation, rule or other requirement of any Governmental Authority as amended, reenacted, supplemented or superseded in whole or in part and in effect from time to time and also to all rules and regulations promulgated thereunder.
  
  	 
	-40-
	 
 
	 

  
 23. Permitted Free Writing Prospectuses. 
  
 The Company represents, warrants and agrees that, unless it obtains the prior written consent of the Agent, and the Agent represents, warrants and agrees that, unless it obtains the prior written consent of the Company, it has not made and will not make any offer relating to the Placement Shares that would constitute an Issuer Free Writing Prospectus, or that would otherwise constitute a “free writing prospectus,” as defined in Rule 405, required to be filed with the Commission. Any such free writing prospectus consented to by the Agent or by the Company, as the case may be, is hereinafter referred to as a “Permitted Free Writing Prospectus.” The Company represents and warrants that it has treated and agrees that it will treat each Permitted Free Writing Prospectus as an “issuer free writing prospectus,” as defined in Rule 433, and has complied and will comply with the requirements of Rule 433 applicable to any Permitted Free Writing Prospectus, including timely filing with the Commission where required, legending and record keeping. For the purposes of clarity, the parties hereto agree that all free writing prospectuses, if any, listed in Exhibit 23 hereto are Permitted Free Writing Prospectuses.
  
 24. Absence of Fiduciary Relationship. 
  
 The Company acknowledges and agrees that:
  
 (a) the Agent is acting solely as agent in connection with the public offering of the Placement Shares and in connection with each transaction contemplated by this Agreement and the process leading to such transactions, and no fiduciary or advisory relationship between the Company or any of its respective affiliates, shareholders (or other equity holders), creditors or employees or any other party, on the one hand, and the Agent, on the other hand, has been or will be created in respect of any of the transactions contemplated by this Agreement, irrespective of whether or not the Agent has advised or is advising the Company on other matters, and the Agent has no obligation to the Company with respect to the transactions contemplated by this Agreement except the obligations expressly set forth in this Agreement; 
  
 (b) it is capable of evaluating and understanding, and understands and accepts, the terms, risks and conditions of the transactions contemplated by this Agreement;
  
 (c) neither the Agent nor any of its affiliates have provided any legal, accounting, regulatory or tax advice with respect to the transactions contemplated by this Agreement and it has consulted its own legal, accounting, regulatory and tax advisors to the extent it has deemed appropriate;
  
 (d) it is aware that the Agent and its affiliates are engaged in a broad range of transactions which may involve interests that differ from those of the Company and the Agent and its affiliates have no obligation to disclose such interests and transactions to the Company by virtue of any fiduciary, advisory or agency relationship or otherwise; and
  
 (e) it waives, to the fullest extent permitted by law, any claims it may have against the Agent or its affiliates for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the sale of Placement Shares under this Agreement and agrees that the Agent and its affiliates shall not have any liability (whether direct or indirect, in contract, tort or otherwise) to it in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on its behalf or in right of it or the Company, employees or creditors of Company, other than in respect of the Agent’s obligations under this Agreement and to keep information provided by the Company to the Agent and the Agent’s counsel confidential to the extent not otherwise publicly-available.
  
  	 
	-41-
	 
 
	 

  
 25. Definitions. 
  
 As used in this Agreement, the following terms have the respective meanings set forth below:
  
 “Applicable Time” means (i) each Representation Date, (ii) the time of each sale of any Placement Shares pursuant to this Agreement and (iii) each Settlement Date.
  
 “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.
  
 “Issuer Free Writing Prospectus” means any “issuer free writing prospectus,” as defined in Rule 433, relating to the Placement Shares that (1) is required to be filed with the Commission by the Company, (2) is a “road show” that is a “written communication” within the meaning of Rule 433(d)(8)(i) whether or not required to be filed with the Commission, or (3) is exempt from filing pursuant to Rule 433(d)(5)(i) because it contains a description of the Placement Shares or of the offering that does not reflect the final terms, in each case in the form filed or required to be filed with the Commission or, if not required to be filed, in the form retained in the Company’s records pursuant to Rule 433(g) under the Securities Act Regulations. 
  
 “Rule 164,” “Rule 172,” “Rule 405,” “Rule 415,” “Rule 424,” “Rule 424(b),” “Rule 430B,” and “Rule 433” refer to such rules under the Securities Act Regulations.
  
 All references in this Agreement to financial statements and schedules and other information that is “contained,” “included” or “stated” in the Registration Statement or the Prospectus (and all other references of like import) shall be deemed to mean and include all such financial statements and schedules and other information that is incorporated by reference in the Registration Statement or the Prospectus, as the case may be.
  
 All references in this Agreement to the Registration Statement, the Prospectus or any amendment or supplement to any of the foregoing shall be deemed to include the copy filed with the Commission pursuant to EDGAR; all references in this Agreement to any Issuer Free Writing Prospectus (other than any Issuer Free Writing Prospectuses that, pursuant to Rule 433, are not required to be filed with the Commission) shall be deemed to include the copy thereof filed with the Commission pursuant to EDGAR; and all references in this Agreement to “supplements” to the Prospectus shall include, without limitation, any supplements, “wrappers” or similar materials prepared in connection with any offering, sale or private placement of any Placement Shares by the Agent outside of the United States.
  
 26. Supersedes Prior Agreement. (i) This Agreement supersedes all prior agreements entered into between the parties, including but not limited to the Original Agreement. 
  
 [Signature Page Follows]
  
  	 
	-42-
	 
 
	 

  
 If the foregoing correctly sets forth the understanding between the Company and the Agent, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement between the Company and the Agent.
  
 	  
	 Very truly yours,

	  
	  
	  
	  

		 AVINO SILVER & GOLD MINES LTD.
	  

			  
	  

	  
	 By:
	/s/ David Wolfin	  

	  
	  
	 Name: David Wolfin
	  

	  
	  
	 Title: President and Chief Executive Officer
	  

  
 	  
	 ACCEPTED as of the date first-above written:

	  
	  
	  

		 CANTOR FITZGERALD & CO.
	  

			  
	  

	  
	 By:
	/s/ Mark Kaplan	  

	  
	  
	 Name: Mark Kaplan
	  

	  
	  
	 Title: Chief Operating Officer

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00293-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00293-of-00352.parquet"}]]