Document:

Exhibit 10.1

COMMON SHARES

VISTA GOLD CORP.

AGENCY AGREEMENT

October
30, 2006

SPROTT SECURITIES (USA) LIMITED

on behalf of the several
Agents

named in Schedule E hereto

c/o Sprott Securities Inc.

Royal Bank Plaza, South Tower

Suite 2750

200 Bay Street

Toronto, ON

M5J 2J2

Ladies/Gentlemen:

In furtherance of a letter agreement dated October
4, 2006 (the “Letter Agreement”)
between Vista Gold Corp. (the “Company”)
and Sprott Securities (USA) Limited (“Sprott”),
the Company agreed to, among other things, appoint Sprott as lead agent of the
Company for the purpose of offering for sale, on a best efforts basis (the “Offering”), of up to 3,764,705 of its
common shares (the “Shares”).
Accordingly, subject to the terms and conditions herein contained, the Company
hereby appoints Sprott together with the other agents named in Schedule E to
this agreement (the “Agents”) as
agents of the Company for the Offering. 
Sprott is acting as lead agent (the “Lead
Agent”) in connection
with the Offering.

The Company has prepared and filed a preliminary
short form base shelf prospectus dated September 11, 2006 (the “Preliminary Base Shelf Prospectus”) and a final short form base shelf
prospectus dated October 2, 2006 (the “Final
Base Shelf Prospectus”) in
respect of up to US$32,000,000 of the Company’s common shares with the British
Columbia Securities Commission (the “Reviewing
Authority”) and the Canadian securities regulatory authorities
(collectively, the “Qualifying Authorities”)
in each of Alberta, British Columbia, Manitoba and Ontario (the “Qualifying Provinces”); and the Reviewing
Authority has issued an MRRS decision document under National Policy 43-201-Mutual Reliance Review System for Prospectuses and
Annual Information Forms (an “MRRS
Decision Document”) on behalf
of the Qualifying Authorities for each of the Preliminary Base Shelf Prospectus
and the Final Base Shelf Prospectus.  The
term “Canadian Base Prospectus” means the Final Base Shelf Prospectus,
including documents incorporated therein by reference, at the time the
Reviewing Authority issued an MRRS Decision Document with respect thereto in
accordance with the rules and procedures established under all applicable
securities laws in each of the Qualifying Provinces and the respective
regulations and rules under such laws together with applicable published policy
statements and instruments of the securities regulatory authorities in the
Qualifying Provinces (“Canadian Securities
Laws”), including
National Instrument 44-101 - Short Form
Prospectus Distributions and National Instrument 44-102 - Shelf Distributions (together, the “Shelf Procedures”).  The term “Canadian
Preliminary Prospectus” means the prospectus supplement (the “Canadian Preliminary Prospectus Supplement”) relating to the Offering, which excluded certain
pricing information, filed with the

 

Canadian Qualifying
Authorities on October 17, 2006, together with the Canadian Base Prospectus,
including all documents incorporated therein by reference. The term “Canadian Prospectus” means the prospectus supplement (the “Canadian Prospectus Supplement”) relating to the Offering, which includes
the pricing information omitted from the Canadian Preliminary Prospectus, to be
dated the date hereof and filed with the Qualifying Authorities in accordance
with the Shelf Procedures, together with the Canadian Base Prospectus.

The Company has filed with the Securities and
Exchange Commission (the “Commission”) a registration statement under the United
States Securities Act of 1933, as
amended (the “1933 Act”), and the rules and regulations promulgated
thereunder (the “1933 Act Regulations”), on Form S-3 (Registration No. 333-136980)
on August 29, 2006, as amended by Amendment No. 1 thereto filed with the
Commission on September 27, 2006, providing for the registration of up to
4,000,000 of the Company’s common shares. 
Such registration statement, as amended on September 27, 2006, in the
form previously delivered to you, including exhibits to such registration
statement and all documents incorporated by reference in the prospectus
contained therein, became effective pursuant to Rule 461 under the 1933 Act on
October 4, 2006.  Such registration
statement at any given time, as amended to such time, including any exhibits
and all documents incorporated therein by reference, and the documents
otherwise deemed to be a part thereof or included therein by 1933 Act
Regulations, is referred to herein as the “Registration
Statement”.  The Registration Statement at the
time it originally became effective is referred to herein as the “Original Registration Statement”.  The
prospectus included in the Original Registration Statement is referred to
herein as the “U.S. Base Prospectus”.  The
preliminary prospectus supplement relating to the Shares filed with the
Commission on October 17, 2006 pursuant to Rule 424(b) of the 1933 Act (the “U.S.  Preliminary
Prospectus Supplement”) together
with the U.S. Base Prospectus is hereafter referred to as the “U.S.  Preliminary
Prospectus”.  The prospectus supplement relating
to the Shares, to be filed with the Commission on or about October 31, 2006
pursuant to Rule 424(b) of the 1933 Act (the “U.S.
Prospectus Supplement”) together with the U.S. Base Prospectus is
hereafter referred to as the “U.S.
Prospectus”.  The
U.S. Preliminary Prospectus relating to the Shares, as amended or supplemented
immediately prior to the Applicable Time (as defined below), is hereafter
referred to as the “Pricing Prospectus”.  Any
Issuer General Use Free Writing Prospectus (as defined below) issued at or
prior to the Applicable Time and the Pricing Prospectus, taken together, are
hereafter referred to collectively as the “Pricing
Disclosure Package”.  Any reference herein to any U.S.
Preliminary Prospectus or the U.S. Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Form S-3
that were filed with the Commission on or before the date of such U.S.
Preliminary Prospectus or U.S. Prospectus, as the case may be and the documents
otherwise deemed to be a part thereof or included therein by 1933 Act
Regulations; and any reference herein to any “amendment” or “supplement” to any U.S. Preliminary Prospectus or the
U.S. Prospectus shall be deemed to refer to and include (i) the filing of any
document with the Commission after the date of such U.S. Preliminary Prospectus
or U.S. Prospectus, as the case may be, which is incorporated therein by
reference or is otherwise deemed to be a part thereof or included therein by
1933 Act Regulations and (ii) any such document so filed.

All
references in this agreement to the Registration Statement, any U.S.
Preliminary Prospectus or the U.S. Prospectus, or any amendments or supplements
to any of the foregoing, shall be deemed to include any copy thereof filed with
the Commission pursuant to its Electronic Data Gathering, Analysis and
Retrieval System (“EDGAR”).

In
this agreement:

(a)                                  “Agents”
means the agents named in Schedule E to this agreement;

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(b)                                 “Agents’
Personnel” has the meaning ascribed thereto in paragraph 7(a) of
this agreement;

(c)                                  “Agent
Warrants” has the meaning ascribed thereto in paragraph 4(b) of this
agreement;

(d)                                 “Agreements
and Instruments” has the meaning ascribed thereto in paragraph 2(s)
of this agreement;

(e)                                  “amendment”
has the meaning ascribed thereto in the third paragraph of this agreement;

(f)                                    “Applicable
Time” means 5:00 p.m. (Toronto time) on the date of this agreement
or such other time as agreed to by the Company and the Lead Agent;

(g)                                 “Arrangement”
means the proposed plan of arrangement to be carried out under the provisions
of the Business Corporations Act
(Yukon) pursuant to an arrangement and merger agreement dated September 22,
2006 among the Company, Allied Nevada Gold Corp., Carl Pescio and Janet Pescio;

(h)                                 “Business
Day” means a day which is not a Saturday, a Sunday or a statutory or
civic holiday in the City of Toronto;

(i)                                     “Canadian
Base Prospectus” has the meaning ascribed thereto in the second
paragraph of this agreement;

(j)                                     “Canadian
GAAP” has the meaning ascribed thereto in Section 2(j) of this agreement;

(k)                                  “Canadian
Preliminary Prospectus” has the meaning ascribed thereto in the
second paragraph of this agreement;

(l)                                     “Canadian
Preliminary Prospectus Supplement” has the meaning ascribed thereto
in the second paragraph of this agreement;

(m)                               “Canadian
Prospectus” has the meaning ascribed thereto in the second paragraph
of this agreement;

(n)                                 “Canadian
Prospectus Supplement” has the meaning ascribed thereto in the
second paragraph of this agreement;

(o)                                 “Canadian
Securities Laws” has the meaning ascribed thereto in the second
paragraph of this agreement;

(p)                                 “Closing”
means the completion of the issue and sale by the Company of Shares pursuant to
this agreement;

(q)                                 “Closing
Date” means November 7, 2006 or such later date as the Company and
the Agents may agree upon in writing, provided that in no event shall the
Closing Date be later than November 30, 2006;

(r)                                    “Closing
Time” means 8:30 a.m. (Toronto time) on the Closing Date or such
other time on the Closing Date as the Company and the Agents may agree;

(s)                                  “Commission”
has the meaning ascribed thereto in the third paragraph of this agreement;

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(t)                                    “Common
Shares” means the common shares in the capital of the Company;

(u)                                 “Communication”
has the meaning ascribed thereto in paragraph 17(a) of this agreement;

(v)                                 “Company”
means Vista Gold Corp.;

(w)                               “Distribution”
means “distribution” of the Shares or “distribution to the public” of the
Shares as those terms are defined in applicable securities legislation;

(x)                                   “EDGAR”
has the meaning ascribed thereto in the fourth paragraph of this agreement;

(y)                                 “Environmental
Laws” has the meaning ascribed thereto in paragraph 2(aa) of this
agreement;

(z)                                   “Exchanges”
means the Toronto Stock Exchange (referred to herein as the “TSX”) and the American Stock Exchange
(referred to herein as the “AMEX”);

(aa)                            “Final Base
Shelf Prospectus” has the meaning ascribed thereto in the second
paragraph of this agreement;

(bb)                          “Final
Filing Time” has the meaning ascribed thereto in paragraph 1(a) of
this agreement;

(cc)                            “Financial
Information” means (1) the consolidated comparative financial
statements of the Company for (i) the year ended December 31, 2005, the notes
thereto and the auditors’ report thereon, and (ii) the six months ended June
30, 2006 and the notes thereto, (2) the Company’s Management’s Discussion and
Analysis of Financial Condition and Results of Operations (i) for the year
ended December 31, 2005 and (ii) for the six months ended June 30, 2006, and
(3) any other financial statements, incorporated or deemed to be incorporated
by reference in the Canadian Prospectus, the U.S. Prospectus or the Pricing
Disclosure Package and any financial data derived from the foregoing and
disclosed in the Canadian Prospectus, the U.S. Prospectus or the Pricing
Disclosure Package;

(dd)                          “Form 10-K”
means the Annual Report of the Company for the year ended December 31, 2005 on
Form 10-K filed pursuant to the 1934 Act with the Commission on March 31, 2006,
as amended by Amendment No. 1 to the Company’s Annual Report on Form 10-K filed
with the Commission on June 13, 2006 (including the documents incorporated by
reference therein);

(ee)                            “Governmental
Licenses” has the meaning ascribed thereto in paragraph 2(ff) of
this agreement;

(ff)                                “Hazardous
Materials” has the meaning ascribed thereto in paragraph 2(aa) of
this agreement;

(gg)                          “Indemnified
Party” means a person or company who has the benefit of the
indemnity provisions of Section 7 of this agreement;

(hh)                          “Indemnifying
Party” means a party to this agreement which is under an obligation
to indemnify an Indemnified Party under the indemnity provisions of Section 7
of this agreement;

(ii)                                  “Internal
Revenue Code” means the United States Internal Revenue Code of 1986, as amended;

(jj)                                  “Issuer
Free Writing Prospectus” means any “issuer free writing prospectus,”
as defined in Rule 433 of the 1933 Act Regulations (“Rule 433”), relating to the Shares that (i) is required to 

 4
 

 

be filed with the Commission
by the Company, (ii) 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 (iii) is exempt from filing pursuant to Rule 433(d)(5)(i) because
it contains a description of the 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);

(kk)                            “Issuer
General Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is intended for general distribution to prospective investors
which is specified in Schedule F hereto;

(ll)                                  “Issuer
Limited Use Free Writing Prospectus” means any Issuer Free Writing
Prospectus that is not an Issuer General Use Free Writing Prospectus;

(mm)                      “Lead Agent”
means Sprott Securities (USA) Limited;

(nn)                          “Letter
Agreement” has the meaning ascribed thereto in the first paragraph
of this agreement;

(oo)                          “MRRS
Decision Document” has the meaning ascribed thereto in the second
paragraph of this agreement;

(pp)                          “Material
Adverse Effect” has the meaning ascribed thereto in paragraph 2(k)
of this agreement;

(qq)                          “misrepresentation”,
“material fact” and “material change” have the respective
meanings ascribed thereto in the Securities
Act (British Columbia);

(rr)                                “Money
Laundering Laws” has the meaning ascribed thereto in paragraph 2(bb)
of this agreement;

(ss)                            “NASD”
means the National Association of Securities Dealers, Inc.;

(tt)                                “OFAC”
has the meaning ascribed thereto in paragraph 2(bb) of this agreement;

(uu)                          “Offering”
has the meaning ascribed thereto in the first paragraph of this agreement;

(vv)                          “Original
Registration Statement” has the meaning ascribed thereto in the
third paragraph of this agreement;

(ww)                      “Permitted
Free Writing Prospectus” has the meaning ascribed thereto in
paragraph 3(f) of this agreement;

(xx)                              “Preliminary
Base Shelf Prospectus” has the meaning ascribed thereto in the
second paragraph of this agreement;

(yy)                          “Pricing
Disclosure Package” has the meaning ascribed thereto in the third
paragraph of this agreement;

(zz)                              “Pricing
Prospectus” has the meaning ascribed thereto in the third paragraph
of this agreement;

(aaa)                      “Purchasers”
has the meaning ascribed thereto in paragraph 3(b) of this agreement;

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(bbb)                   “Qualifying
Authorities” has the meaning ascribed thereto in the second
paragraph of this agreement;

(ccc)                      “Qualifying
Provinces” has the meaning ascribed thereto in the second paragraph
of this agreement;

(ddd)                   “Repayment
Event” has the meaning ascribed thereto in paragraph 2(s) of this
agreement;

(eee)                      “Registration
Statement” has the meaning ascribed thereto in the third paragraph
of this agreement;

(fff)                            “Reviewing
Authority” means the British Columbia Securities Commission;

(ggg)                   “Sarbanes-Oxley
Act” means the United States Sarbanes-Oxley
Act of 2002;

(hhh)                   “SEDAR”
has the meaning ascribed thereto in paragraph 2(d) of this agreement;

(iii)                               “Shares”
has the meaning ascribed thereto in the first paragraph of this agreement;

(jjj)                               “Shelf
Procedures” has the meaning ascribed thereto in the second paragraph
of this agreement;

(kkk)                      “Sprott”
means Sprott Securities (USA) Limited;

(lll)                               “Subsidiaries”
means the subsidiaries of the Company within the meaning ascribed thereto under
the Business Corporations Act (Yukon);

(mmm)             “supplement”
has the meaning ascribed thereto in the third paragraph of this agreement;

(nnn)                   “Supplementary
Material” means collectively any amendment to the Canadian
Prospectus or Registration Statement, any amended or supplemented prospectus or
auxiliary material, information, evidence, return, report, application,
statement or document that may be filed by or on behalf of the Company under
Canadian Securities Laws, the 1933 Act or the 1934 Act prior to the Closing
Time or, where such documents are deemed to be incorporated by reference into
the Canadian Prospectus, Registration Statement or U.S. Prospectus, prior to
the expiry of the period of distribution of the Shares;

(ooo)                   “this
agreement” or “the agreement”
means the agreement resulting from the acceptance by the Company of the offer
made by the Agents by this letter;

(ppp)                   “U.S. Base
Prospectus” has the meaning ascribed thereto in the third paragraph
of this agreement;

(qqq)                   “U.S. GAAP”
has the meaning ascribed thereto in paragraph 2(j) of this agreement;

(rrr)                            “U.S.
Preliminary Prospectus” has the meaning ascribed thereto in the
third paragraph of this agreement;

(sss)                      “U.S.
Preliminary Prospectus Supplement” has the meaning ascribed thereto
in the third paragraph of this agreement;

(ttt)                            “U.S.
Prospectus” has the meaning ascribed hereto in the third paragraph
of this agreement;

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(uuu)                   “U.S.
Prospectus Supplement” has the meaning ascribed thereto in the third
paragraph of this agreement;

(vvv)                    “United
States” means the United States of America, its territories and
possessions, any state of the United States and the District of Columbia;

(www)             “1933 Act”
has the meaning ascribed in the second paragraph of this agreement;

(xxx)                         “1933 Act
Regulations” has the meaning ascribed thereto in the second
paragraph of this agreement; and

(yyy)                   “1934 Act”
means the United States Securities Exchange
Act of 1934, as amended.

The
following schedules are attached to and form part of this agreement:

	
  Schedule A

  	
  -

  	
  List of Subsidiaries

  
	
  Schedule B

  	
  -

  	
  Form of Opinion of Canadian Counsel

  
	
  Schedule C

  	
  -

  	
  Form of Opinion of U.S. Counsel

  
	
  Schedule D

  	
  -

  	
  Form of Opinion of Nevada Counsel

  
	
  Schedule E

  	
   

  	
  Agents

  
	
  Schedule F

  	
  -

  	
  Issuer General Use Free Writing Prospectus

  

 

TERMS AND
CONDITIONS

SECTION
1.  Covenants of the Company. The
Company covenants with each Agent as follows:

(a)                                  Filing of Canadian
Prospectus Supplement and US. Prospectus Supplement. The Company will (1) as soon as possible and
in any event no later than 5:00 p.m. (Toronto time) on October 31, 2006 (the “Final Filing Time”), prepare and file with each Qualifying
Authority, the Canadian Prospectus Supplement, and (2) prepare and file with
the Commission, the U.S. Prospectus Supplement within the time period
prescribed by Rule 424 under the 1933 Act; provided that the Company will use
commercially reasonable efforts to file the Canadian Prospectus Supplement with
each Qualifying Authority before 9:30 a.m. (Toronto time) on October 31, 2006.

(b)                                 Compliance with Securities
Regulations and Commission Requests. During the period of the distribution of the Shares, the Company will
notify the Agents promptly, and confirm the notice in writing, (i) when any
post-effective amendment to the Registration Statement shall have been filed
with the Commission or shall have become effective, and when any supplement to
the U.S. Base Prospectus or the Canadian Base Prospectus or any amended U.S.
Prospectus, amended Canadian Prospectus or any Supplementary Material shall
have been filed, (ii) of any request by any Qualifying Authority to amend or
supplement the Canadian Prospectus, or for additional information, or of any
request by the Commission to amend the Registration Statement or to amend or
supplement the U.S. Preliminary Prospectus or the U.S. Prospectus or for
additional information, (iii) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or of any
order preventing or suspending the use of any of the U.S. Base Prospectus, the
Canadian Base Prospectus, the U.S. Preliminary Prospectus, the U.S. Prospectus
or the Canadian Prospectus, or the suspension of the qualification of the
Shares or the offering or sale in any jurisdiction, or the institution or, to
the knowledge of the Company, threatening of any proceedings for any such
purpose, and (iv) of the issuance by any

 7
 

 

Qualifying Authority or
either Exchange of any order having the effect of ceasing or suspending the
distribution of the Shares or the trading in the Common Shares, or of the institution
or, to the knowledge of the Company, threatening of any proceedings for any
such purpose. The Company will use every reasonable effort to prevent the
issuance of any such stop order or of any order preventing or suspending such
use or such order ceasing or suspending the distribution of the Shares or the
trading in the Common Shares and, if any such order is issued, to obtain the
lifting thereof at the earliest possible time.

(c)                                  Filing of Amendments. The Company will not at any time file or make
any amendment or supplement to the Registration Statement, the U.S. Preliminary
Prospectus, the U.S. Prospectus or the Canadian Prospectus, any Supplementary
Material or Issuer Free Writing Prospectus, of which the Agents shall not have
previously been advised and furnished a copy or to which the Agents shall have
objected promptly after reasonable notice thereof.

(d)                                 Delivery of Filed
Documents. The Company has
furnished or will deliver to each of the Agents a copy of the Canadian
Prospectus, and any Supplementary Material, approved, signed and certified as
required by Canadian Securities Laws and signed and conformed copies of the
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein or
otherwise deemed to be a part thereof) and signed copies of all consents and
certificates of experts.

(e)                                  Delivery of Prospectuses. The Company has furnished or will deliver to
each Agent, without charge, as many copies of each U.S. Preliminary Prospectus
Supplement, the Canadian Preliminary Prospectus Supplement, the U.S. Base
Prospectus and the Canadian Base Prospectus as such Agents have reasonably
requested, and the Company hereby consents to the use of such copies for the
purposes permitted by the 1933 Act. The Company will deliver to each Agent,
without charge, during the period when the U.S. Prospectus is required to be
delivered under the 1933 Act or the 1934 Act and during the period when the
Canadian Prospectus is required to be delivered under Canadian Securities Laws
such number of copies of the U.S. Prospectus and Canadian Prospectus,
respectively (each as supplemented or amended), as such Agent may reasonably
request.

(f)                                    Continued Compliance with
Securities Laws. The Company
will comply with the 1933 Act, 1933 Act Regulations and Canadian Securities
Laws so as to permit the completion of the distribution of the Shares as
contemplated in this agreement and in the U.S. Prospectus and the Canadian
Prospectus. If at any time when a prospectus is required by the 1933 Act to be
delivered in connection with sales of the Shares any event shall occur or
condition shall exist as a result of which it is necessary, in the opinion of
counsel for the Agents or for the Company, to amend the Registration Statement,
amend or supplement the U.S. Base Prospectus or the Canadian Base Prospectus or
amend the U.S. Prospectus or the Canadian Prospectus in order that the U.S.
Preliminary Prospectus, the U.S. Prospectus or the Canadian Prospectus will not
include any untrue statements of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading in the
light of the circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of such counsel, at any such time
to amend the Registration Statement or amend or supplement the U.S. Base
Prospectus or the Canadian Base Prospectus or amend or supplement the U.S.
Preliminary Prospectus, the U.S. Prospectus or the Canadian Prospectus in order
to comply with the requirements of the 1933 Act, 1933 Act Regulations or
Canadian Securities Laws, the Company will promptly prepare and file with the
Commission and with the Qualifying Authorities, subject to paragraph 1(c) of
this agreement, such amendment or supplement as may be necessary to correct
such statement or

 8
 

 

omission or to make the
Registration Statement, the U.S. Preliminary Prospectus, the U.S. Prospectus or
the Canadian Prospectus, as the case may be, comply with such requirements, and
the Company will furnish to the Agents such number of copies of such amendment
or supplement as the Agents may reasonably request. If at any time following
the issuance of an Issuer Free Writing Prospectus there occurred or occurs an
event or development as a result of which such Issuer Free Writing Prospectus
conflicted or would conflict with the information contained in the Registration
Statement, the Pricing Prospectus or any preliminary prospectus or any
prospectus or included or would include an untrue statement of a material fact
or omitted or would omit to state a material fact necessary in order to make
the statements therein, in the light of the circumstances prevailing at that
subsequent time, not misleading, the Company will promptly notify the Lead
Agent and will promptly amend or supplement, at its own expense, such Issuer
Free Writing Prospectus to eliminate or correct such conflict, untrue statement
or omission.

(g)                                 Rule 158. The Company will file, on a timely basis,
such reports pursuant to the 1934 Act as are necessary in order to make
generally available to its securityholders as soon as practicable an earnings
statement for the purposes of, and to provide to the Agents the benefits
contemplated by, the last paragraph of Section 11(a) of the 1933 Act and the
regulations thereunder.

(h)                                 Use of Proceeds. The Company will use the net proceeds
received by it from the sale of the Shares in the manner specified in the U.S.
Preliminary Prospectus and the Canadian Preliminary Prospectus under “Use of
Proceeds.”

(i)                                     Restriction on Sale of
Shares. During a period of
90 days from the Closing Date, the Company will not, without the prior written
consent of the Lead Agent (i) directly or indirectly, offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase or
otherwise transfer or dispose of any Common Shares or any securities
convertible into or exercisable or exchangeable for Common Shares or file any
registration statement under the 1933 Act with respect to any of the foregoing,
(ii) enter into any swap or any other agreement or in respect of the foregoing,
any transaction that transfers, in whole or in part, directly or indirectly,
the economic consequence of ownership of the Common Shares, whether any such
swap or transaction described in clause (i) or (ii) above is to be settled by
delivery of Common Shares or such other securities, in cash or otherwise, or
(iii) publicly announce an intention to do any of the foregoing. The foregoing
sentence shall not apply to (A) any Common Shares issuable upon exercise of the
warrants of the Company outstanding on the date hereof, (B) the Shares to be
sold hereunder, (C) any Common Shares issued or options to purchase Common
Shares granted pursuant to existing employee plans of the Company referred to
in the U.S. Prospectus and the Canadian Prospectus, including, without
limitation, the Company’s stock option plan, (D) any Common Shares issued
pursuant to any non-employee director stock option plan or dividend
reinvestment plan, and (E) any securities issued in connection with the
Arrangement.

(j)                                     Listing. The Company will use its best efforts to
effect the listing of the Shares on the TSX and AMEX and, at the request of the
Lead Agent, will request to have the Shares trade on an “when issued basis” on
the TSX and AMEX as of the opening of trading on the Business Day following the
date of this agreement.

(k)                                  Reporting Requirements. The Company, during the period when the U.S.
Preliminary Prospectus or the U.S. Prospectus is required to be delivered under
the 1933 Act or the 1934 Act in respect of the offer and sale of the Shares,
will file all documents required to be filed by the Company with the Commission
pursuant to the 1934 Act within the time periods required by the 1934 Act and 

 9
 

 

the rules and regulations of
the Commission thereunder.

(l)                                     Delivery of Documents at
the time of filing of Canadian Prospectus Supplement. The Company shall deliver to the Agents
contemporaneously with or prior to the filing of the Canadian Prospectus
Supplement with the Qualifying Authorities:

(i)                                     the comfort letter
of its auditors, PricewaterhouseCoopers LLP, referred to in paragraph 5(k) of
this agreement;

 

(ii)                                  a
letter from the TSX advising the Company that approval of the conditional
listing of the Shares has been granted by the TSX; and

 

(iii)                               evidence
satisfactory to the Agents that the Shares will be listed on AMEX at Closing.

 

(m)                               Supplementary Material. The Company shall deliver to the Agents
contemporaneously with or prior to the filing of any Supplementary Material
with any Qualifying Authority or the Commission a comfort letter from
PricewaterhouseCoopers LLP relating to financial information, if any, contained
in the Supplementary Material that is incorporated or deemed to be incorporated
by reference into the Canadian Preliminary Prospectus, the U.S. Preliminary
Prospectus, the Canadian Prospectus, the U.S. Prospectus or the Registration
Statement in the form and substance of the comfort letter described in
subparagraph 1(l)(i) of this agreement.

(n)                                 Changes. From the date of this agreement until the end
of the period of Distribution under the Canadian Prospectus and the U.S.
Prospectus, the Company shall promptly notify the Agents in writing of:

(i)                                     any material
change (actual, anticipated, contemplated or threatened, financial or
otherwise) in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise whether or not arising in the ordinary course of
business;

 

(ii)                                  any
change in any fact contained in the Registration Statement, the Canadian
Preliminary Prospectus, the U.S. Preliminary Prospectus, the Canadian
Prospectus, the U.S. Prospectus or Supplementary Material, which change is or
may be of such a nature as to render the Registration Statement, the Canadian
Preliminary Prospectus, the U.S. Preliminary Prospectus, the Canadian
Prospectus, the U.S. Prospectus, the Pricing Disclosure Package or
Supplementary Material misleading or untrue in any material respect or result
in a misrepresentation therein; or

 

(iii)                               any
change in applicable laws, materially and adversely affecting, or which may
materially and adversely affect, the earnings, business affairs or business
prospects of the Company and its subsidiaries considered as one enterprise, the
Common Shares or the Distribution under the Canadian Prospectus or the U.S.
Prospectus.

 

SECTION 2. Representations and Warranties of the
Company. The Company represents and warrants to the Agents as of the date
hereof and as of the Closing Time and agrees with each Agent as follows:

(a)                                  Eligibility and compliance
with Securities Regulatory Requirements. The Company meets the general eligibility requirements for use of a
short form prospectus under National Instrument 

 10
 

 

44-101, for use of a shelf
prospectus under National Instrument 44-102 and for use of Form S-3 under the
1933 Act. Prior to the execution of this agreement, the Company has not,
directly or indirectly, offered or sold any Shares by means of any “prospectus”
(within the meaning of the 1933 Act) or used any “prospectus” (within the
meaning of the 1933 Act) in connection with the offer or sale of the Shares, in
each case other than the Canadian Preliminary Prospectus and the U.S.
Preliminary Prospectus and the Permitted Free Writing Prospectuses, if any; the
Company has not, directly or indirectly, prepared, used or referred to any
Permitted Free Writing Prospectus except in compliance with Rules 164 and 433
under the 1933 Act, assuming that such Permitted Free Writing Prospectus is
accompanied or preceded by the most recent Canadian Preliminary Prospectus or
U.S. Preliminary Prospectus, whichever applicable (which such most recent
preliminary prospectus shall contain a price range, if so required by the 1933
Act), or the Canadian Prospectus or U.S. Prospectus, whichever applicable, as
the case may be, and that such Permitted Free Writing Prospectus is so sent or
given after the Registration Statement was filed with the Commission (and after
such Permitted Free Writing Prospectus was, if required pursuant to Rule 433(d)
under the 1933 Act, filed with the Commission), the sending or giving, by any
Agent, or any Permitted Free Writing Prospectus will satisfy the provisions of
Rule 164 and Rule 433 (without reliance on subsections (b), (c) and (d) of Rule
164). At the time the Registration Statement became effective under the 1933
Act and at all times subsequent thereto up to any Closing Time: (A) the
Canadian Prospectus complied and will comply in all material respects with
Canadian Securities Laws as interpreted and applied by the Qualifying
Authorities; (B) the Registration Statement, the U.S. Preliminary Prospectus
and the U.S. Prospectus, and any amendments or supplements thereto complied and
will comply in all material aspects with the requirements of the 1933 Act and
the 1933 Act Regulations; (C) no order preventing or suspending the use of any
U.S. Preliminary Prospectus, any U.S. Prospectus or any Issuer Free Writing
Prospectus has been issued by the Commission, (D) the Registration Statement,
or any amendment or supplement thereto does not contain, and any amendment or
supplement thereto 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; and (E) each of the U.S.
Preliminary Prospectus and the Canadian Preliminary Prospectus constitutes, and
each of the U.S. Prospectus, Canadian Prospectus, the Pricing Disclosure
Package and any Supplementary Material or any amendment or supplement thereto
will constitute, full, true and plain disclosure of all material facts relating
to the Company and its subsidiaries, considered as one enterprise, and the
Shares, and will not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading, except
that the representations and warranties contained in clauses (D) and (E) above
do not apply to statements or omissions made in reliance upon and in conformity
with information furnished in writing to the Company by any Agent through the
Lead Agent expressly for use in the Registration Statement, the U.S.
Preliminary Prospectus, the U.S. Prospectus, the Canadian Prospectus, any
Issuer Free Writing Prospectus and any Supplementary Material and the parties
hereto agree that such information provided by or on behalf of any Agent
through the Lead Agent consists solely of the material referred to in Section
14 hereof.

(b)                                 MRRS Decision Document. The Reviewing Authority has issued MRRS
Decision Documents dated September 12, 2006 with respect to the Preliminary
Base Shelf Prospectus and dated October 3, 2006 with respect to the Canadian
Base Prospectus, and no order suspending the distribution of any of the
securities of the Company has been issued by the Reviewing Authority and no
proceeding for that purpose has been initiated or, to the best of the Company’s
knowledge, threatened by the Reviewing Authority, and any request on the part
of the Reviewing Authority for additional information has been complied with.

 11
 

 

(c)                                  Documents Incorporated by
Reference. Each document
filed or to be filed with the Qualifying Authorities and the Commission and
incorporated by reference in the Canadian Preliminary Prospectus, the U.S.
Preliminary Prospectus, the Canadian Prospectus,  the U.S. Prospectus or the Registration
Statement complied, as at the applicable filing date, or will comply when so
filed, in all material respects with the requirements of Canadian Securities
Laws, U.S. securities laws, and the Shelf Procedures and, when read together
with the Canadian Preliminary Prospectus, the U.S. Preliminary Prospectus, the
Canadian Prospectus or the U.S. Prospectus, as the case may be, do not as of
the date of the Canadian Preliminary Prospectus and the U.S. Preliminary
Prospectus, and will not as of the date of the Canadian Prospectus or the U.S.
Prospectus, 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 light of the circumstances under which they were made, not
misleading.

(d)                                 Documents Filed with
Qualifying Authorities and Commission. Since the time that the Reviewing Authority issued an MRRS Decision
Document on behalf of the Qualifying Authorities for the Canadian Base
Prospectus, no document with respect to the Canadian Base Prospectus or the
Registration Statement, any amendment thereto or any document incorporated by
reference therein, has been filed or transmitted for filing with the Qualifying
Authorities or the Commission by or on behalf of the Company, except (i) the
Canadian Preliminary Prospectus Supplement and U.S. Preliminary Prospectus
Supplement in the form previously delivered to the Agents, and (ii) any
document incorporated (or deemed to be incorporated) by reference in the
Canadian Base Prospectus or incorporated by reference in the Canadian
Prospectus Supplement and publicly available on the System for Electronic
Document Analysis and Retrieval of the Qualifying Authorities (“SEDAR”), (iii) any document filed on EDGAR
and incorporated (or deemed to be incorporated) by reference into the
Registration Statement, U.S. Preliminary Prospectus or the U.S. Prospectus, and
(iv) any other document copies of which have been provided or made available to
the Agents.

(e)                                  Pricing Disclosure Package.
The Pricing Disclosure
Package, as of the Applicable Time, did not, and as of the Closing Date, 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 light of the circumstances under which they were made, not misleading. Each
Issuer Free Writing Prospectus complies in all material respects with the
applicable provisions of the 1933 Act and the rules and regulations thereunder,
and does not include information that conflicts with the information contained
in the Registration Statement, the U.S. Preliminary Prospectus, the Pricing
Prospectus or the U.S. Prospectus, and each Issuer Limited Use Free Writing
Prospectus, as supplemented by and taken together with the Pricing Disclosure
Package as of the Applicable Time, did 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 light of the circumstances under
which they were made, not misleading. No representation and warranty is made in
this paragraph 2(e) with respect to any information contained in or omitted
from the Pricing Disclosure Package or any Issuer Free Writing Prospectus in
reliance upon and in conformity with information furnished in writing to the
Company by or on behalf of any Agent through the Lead Agent expressly for use
therein. The parties hereto agree that such information provided by the Lead Agent
consists solely of the materials referred to in Section 14 hereof.

(f)                                    Independent Accountants. The accountants who reported on and certified
the financial statements included or incorporated by reference in the
Registration Statement, the U.S. Preliminary Prospectus, the U.S. Prospectus,
and the Canadian Prospectus, are independent public accountants as required by
the 1933 Act, the 1933 Act Regulations and the rules of the Public Company

 12

 

Accounting Oversight Board
and are independent with respect to the Company within the meaning of the Business Corporations Act (Yukon) and
applicable Canadian Securities Laws.

(g)                                 Good Standing of the
Company. The Company is a
corporation duly continued, validly existing and in good standing under the
laws of the Yukon Territory and has the corporate power and authority to own,
lease and operate its properties and to conduct its business as described in
the Canadian Prospectus, the U.S. Preliminary Prospectus, the U.S. Prospectus
and the Pricing Disclosure Package and to enter into, deliver and perform its
obligations under this agreement; and the Company is duly qualified as an
extra-provincial corporation 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, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse
Effect.

(h)                                 Good Standing of
Subsidiaries. The Company’s
only consolidated subsidiaries are as set out in Schedule A hereto. The
information with respect to the subsidiaries set forth in Schedule A hereto is
true and accurate in all material respects. Each subsidiary is a corporation
duly incorporated, validly existing and in good standing and has filed its
annual return or other information filings under applicable corporations
information legislation for the most recent year in which it was required to
make such filing under the laws of the jurisdiction of its incorporation, has
the requisite power and capacity to own, lease and operate its properties and
to conduct its business as described in the Canadian Preliminary Prospectus,
the U.S. Preliminary Prospectus, the Canadian Prospectus, the U.S. Prospectus
and the Pricing Disclosure Package and is duly qualified as an extra-provincial
or foreign corporation 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, except where the failure to so
qualify or to be in good standing would not result in a Material Adverse
Effect; all of the issued and outstanding shares of capital stock of each
subsidiary have been duly authorized and validly issued, are fully paid and
non-assessable and are owned by the Company directly or through subsidiaries,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; the outstanding shares of capital stock of any subsidiary were
issued in compliance with all applicable securities laws and were not issued in
violation of any preemptive rights, resale rights, rights of first refusal or
similar rights.

(i)                                     Compliance with Securities
Laws. All consents,
approvals, permits, authorizations or filings as may be required under Canadian
Securities Laws and U.S. securities laws (including with respect to the filing
of any prospectus) and the by-laws, rules and regulations of the Exchanges
necessary to the execution and delivery of and the performance by the Company
of its obligations under this agreement have been made and obtained or will
have been made and obtained by the Closing Time.

(j)                                     Financial Statements. The financial statements included or
incorporated by reference in the Canadian Preliminary Prospectus and U.S.
Preliminary Prospectus and to be included or incorporated by reference in the
Registration Statement, the Canadian Prospectus and the Pricing Disclosure
Package and notes thereto, present fairly the financial position of the Company
and its consolidated subsidiaries at the dates and for the periods indicated;
and the balance sheets, statements of income (loss) and comprehensive income (loss),
shareholders’ equity, and cash flows of the Company and its consolidated
subsidiaries for the periods specified in such financial

 13
 

 

statements have been
prepared in conformity with generally accepted accounting principles of Canada
(“Canadian GAAP”) applied on a consistent basis throughout
the periods involved except as may be expressly stated in the related notes
thereto.  The Company’s consolidated
financial statements for the 2004 and 2005 financial years, together with the
financial statements for the interim periods during the 2004 and 2005 financial
years as filed with the Qualifying Authorities and the Commission, have been
reconciled to the generally accepted accounting principles of the United States
(“U.S. GAAP”) in accordance with
the 1933 Act and the Commission’s rules and guidelines.  The selected financial information included
or incorporated by reference in the Registration Statement, the U.S.
Preliminary Prospectus or the Canadian Preliminary Prospectus or to be included
or incorporated by reference in the Registration Statement, the U.S.
Preliminary Prospectus, the U.S. Prospectus, the Canadian Prospectus and the
Pricing Disclosure Package presents fairly the information shown therein and
has been compiled on a basis consistent with that of the audited financial
statements included in the Registration Statement, the U.S. Preliminary
Prospectus, the Canadian Preliminary Prospectus, and to be included or
incorporated by reference in the Registration Statement, the Canadian
Prospectus, the U.S. Prospectus and the Pricing Disclosure Package.  All pro forma financial information included
or incorporated by reference in the Canadian Preliminary Prospectus and U.S.
Preliminary Prospectus and to be included or incorporated by reference in the
Registration Statement, the Canadian Prospectus, the U.S. Prospectus and the
Pricing Disclosure Package, comply with the requirements of the Canadian
Securities Laws and the 1933 Act and the Commission’s rules and guidelines, and
the assumptions used in the preparation of such pro forma financial information
are reasonable, the pro forma adjustments used therein are appropriate to give
effect to the transactions or circumstances described therein and the pro forma
adjustments have been properly applied to the historical amounts in the
compilation of such information; the other financial and statistical data
contained or incorporated by reference in the Canadian Preliminary Prospectus
and U.S. Preliminary Prospectus and to be included or incorporated by reference
in the Registration Statement, the Canadian Prospectus, the U.S. Prospectus and
the Pricing Disclosure Package, are accurately and fairly presented 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 in the Canadian Preliminary Prospectus
or the U.S. Preliminary Prospectus or to be included or incorporated by
reference in the Registration Statement, the Canadian Prospectus, the U.S.
Prospectus or the Pricing Disclosure Package that are not included or will not
be included as required; and the Company and the subsidiaries do not have any
material liabilities or obligations, direct or contingent (including any
off-balance sheet obligations), not described in the Canadian Preliminary
Prospectus and U.S. Preliminary Prospectus and to be included or incorporated
by reference in the Registration Statement, the Canadian Prospectus, the U.S.
Prospectus and the Pricing Disclosure Package that would otherwise be required
to be described therein; and all disclosures contained or incorporated by
reference in the Canadian Preliminary Prospectus and U.S. Preliminary
Prospectus and to be included or incorporated by reference in the Registration
Statement, the Canadian Prospectus, the U.S. Prospectus and the Pricing
Disclosure Package regarding “non-GAAP financial measures” (as such term is
defined by the rules and regulations of the Commission) comply with Regulation
G of the 1934 Act and Item 10 of Regulation S-K promulgated under the 1933 Act
and 1934 Act, to the extent applicable.

(k)                                  No Material Adverse Change
in Business. Since the dates
as of which information is given in the Canadian Preliminary Prospectus, the
U.S. Preliminary Prospectus and the Pricing Disclosure Package, except as
otherwise stated therein, (A) there has been no material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary

 14
 

 

course of business (a “Material Adverse Effect”), (B) there have
been no transactions entered into by the Company or any of its subsidiaries,
other than those in the ordinary course of business, which are material with
respect to the Company and its subsidiaries considered as one enterprise, and
(C) there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its share capital.

(l)                                     Forward-looking Information. Each “forward-looking statement” (within
the meaning of Section 27A of the 1933 Act or Section 21E of the 1934 Act)
included or incorporated by reference in the Canadian Preliminary Prospectus
and U.S. Preliminary Prospectus and to be included or incorporated by reference
in the Registration Statement, the Canadian Prospectus, the U.S. Prospectus and
the Pricing Disclosure Package, has been or will be made or reaffirmed with a
reasonable basis and in good faith.

(m)                               Absence of Rights. Except as disclosed in the Canadian
Preliminary Prospectus, the U.S. Preliminary Prospectus and the Pricing
Disclosure Package as at the date thereof and as will be disclosed in the
Canadian Prospectus and the U.S. Prospectus, and except for 220,000 options
issued under the Company’s Stock Option Plan since June 30, 2006, no person has
any 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 shares of the Company or any of its subsidiaries or
any other agreement or option, for the issue or allotment of any unissued
shares of the Company or any of its subsidiaries or any other security
convertible into or exchangeable for any such shares or to require the Company
or any of its subsidiaries to purchase, redeem or otherwise acquire any of the
issued and outstanding shares of the Company or any of its subsidiaries, as the
case may be.

(n)                                 Absence of Proceedings. There is no action, suit, proceeding, inquiry
or investigation before or brought by any court or governmental agency,
governmental instrumentality or body, domestic or foreign, now pending or, to
the knowledge of the Company, threatened or contemplated, against or affecting
the Company or any subsidiary, which is required to be disclosed in the
Canadian Preliminary Prospectus, the U.S. Preliminary Prospectus, the Canadian
Prospectus, the U.S. Prospectus, the Pricing Disclosure Package or the
Supplementary Material and which is not so disclosed or will not be so
disclosed, or which may reasonably be expected to result in a Material Adverse
Effect, or which may reasonably be expected to materially and adversely affect
the properties or assets of the Company or any subsidiary or which may
materially and adversely affect the consummation of the transactions
contemplated in this agreement or the performance by the Company of its
obligations hereunder; the aggregate of all pending legal or governmental
proceedings to which the Company or any subsidiary is a party or of which any
of their respective properties or assets is the subject which are not described
in the Canadian Preliminary Prospectus, the U.S. Preliminary Prospectus, the
Pricing Disclosure Package or the Supplementary Material including ordinary
routine litigation incidental to the business, could not reasonably be expected
to result in a Material Adverse Effect.

(o)                                 Authorization. This agreement has been duly authorized,
executed and delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable against the Company in accordance with
its terms, except as enforcement thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws relating to or affecting
the rights of creditors generally and except as limited by the application of
equitable principles when equitable remedies are sought, and by the fact that
rights to indemnity, contribution and waiver, and the ability to sever
unenforceable terms, may be limited by applicable law.

 15
 

 

(p)                                 Authorized Capital. The authorized, issued and outstanding share
capital of the Company was, at June 30, 2006, as set forth in the Canadian
Preliminary Prospectus Supplement, the U.S. Preliminary Prospectus Supplement
and the Pricing Disclosure Package under the caption “Capitalization”. All of
the issued and outstanding shares in the capital of the Company have been duly
authorized and validly issued and are fully paid and non-assessable and have
been issued in compliance with all applicable securities laws. None of the
outstanding shares in the capital of the Company was issued in violation of any
pre-emptive rights, resale rights, rights of first refusal or similar rights.

(q)                                 Reporting Issuer Status. The Company is a reporting issuer not in
default for purposes of the Securities Act (Ontario)
and the corresponding provisions of the other Canadian Securities Laws in
jurisdictions which recognize the concept of reporting issuer status. Further,
the Company is not an “ineligible issuer” (as defined in Rule 405 of the 1933
Act) as of the eligibility determination date for purposes of Rules 164 and 433
under the 1933 Act with respect to the Offering.

(r)                                    Authorization and
Description of Shares. The
Shares have been duly authorized for issuance and sale pursuant to this
agreement. The Shares, when issued and delivered by the Company pursuant to
this agreement against payment of the consideration set forth herein, will be
validly issued and fully paid and non-assessable, the Common Shares conform to
all statements relating thereto contained in the Canadian Preliminary
Prospectus, the U.S. Preliminary Prospectus and the Pricing Disclosure Package
and will conform to all statements relating thereto to be contained in the
Canadian Prospectus and the U.S. Prospectus, and such description conforms to
the rights set forth in the instruments defining the same; no holder of the
Shares will be subject to personal liability solely by reason of being such a
holder; the issuance of the Shares is not subject to any preemptive rights,
resale rights, rights of first refusal or similar rights; and all corporate
action required to be taken for the authorization, issuance, sale and delivery
of the Shares has been validly taken.

(s)                                  Absence of Defaults and
Conflicts. Neither the
Company nor any of its subsidiaries is in violation of its charter or by-laws
or in default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed of
trust, loan or credit agreement, note, lease, license or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or assets
of the Company or any subsidiary is subject (collectively, “Agreements and Instruments”) except for
such defaults that would not result in a Material Adverse Effect. The
execution, delivery and performance of this agreement and the consummation of
the transactions contemplated herein and in the Canadian Preliminary
Prospectus, the U.S. Preliminary Prospectus and the Pricing Disclosure Package,
and as will be contemplated in the Canadian Prospectus and the U.S. Prospectus
(including the authorization, issuance, sale and delivery of the Shares and the
use of the proceeds from the sale of the Shares as described in the Canadian
Preliminary Prospectus and the U.S. Preliminary Prospectus under the caption “Use
of Proceeds”) and compliance by the Company with its obligations hereunder have
been duly authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that would
not result in a Material Adverse Effect), nor will such action result in any
violation or conflict with the provisions of the charter or by-laws of the

 16
 

 

Company or any subsidiary or
any existing applicable law, statute, rule, regulation, judgment, order, writ
or decree of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any subsidiary or any of their
assets, properties or operations except for such violations or conflicts that
would not, singly or in the aggregate, result in a Material Adverse Effect. As
used herein, a “Repayment Event”
means any event or condition which gives the holder of any note, debenture or
other evidence of indebtedness (or any person acting on such holder’s behalf)
the right to acquire the repurchase, redemption or repayment of all or a
portion of such indebtedness by the Company or any subsidiary.

(t)                                    Absence of Labour Dispute. No labour dispute with the employees of the
Company or any subsidiary exists or, to the knowledge of the Company, is
imminent, and the Company is not aware of any existing or imminent labour
disturbance by the employees of any of its or any subsidiary’s principal
suppliers, manufacturers, customers or contractors, which, in either case, may
reasonably be expected to result in a Material Adverse Effect.

(u)                                 Tax Returns. All tax returns required to be filed by the
Company or any of its subsidiaries have been timely filed, and all taxes and
other assessments of a similar nature (whether imposed directly or through
withholding) including any interest, additions to tax or penalties applicable
thereto due or claimed to be due from such entities have been timely paid,
other than those being contested in good faith and for which adequate reserves
have been provided.

(v)                                 Insurance. The Company and each of its subsidiaries
maintains insurance covering its properties, operations, personnel and
businesses as the Company reasonably deems adequate; such insurance insures
against such losses and risks to an extent which is adequate in accordance with
customary industry practice to protect the Company and its subsidiaries and
their respective businesses; all such insurance is fully in force on the date
hereof and will be fully in force on the Closing Date; neither the Company nor
any of its subsidiaries has reason to believe that it will not be able to renew
any such insurance as and when such insurance expires.

(w)                               Financial Controls. The Company and each of its subsidiaries
maintain a system of internal accounting controls sufficient to provide
reasonable assurance that (i) transactions are executed in accordance with
management’s general or specific authorization; (ii) transactions are recorded
as necessary to permit preparation of financial statements in conformity with
Canadian GAAP and to maintain accountability for assets; (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
existing assets at reasonable intervals and appropriate action is taken with
respect to any differences.

(x)                                   Disclosure Controls. The Company has established “disclosure
controls and procedures” (as such term is defined in Rule 13a-15(e) under the
1934 Act) and “internal controls over financial reporting” (as such term is
defined in Rule 13a-15(f) under the 1934 Act); such disclosure controls and
procedures are designed to ensure that material information relating to the
Company, including its consolidated subsidiaries, is made known to the Company’s
Chief Executive Officer and its Chief Financial Officer by others within those
entities, and such disclosure controls and procedures are effective to perform
the functions for which they were established; and the Company has taken all
necessary actions to ensure that, upon and at all times after the filing of the
Registration Statement, the Company and the Subsidiaries and their respective
officers and directors, in their capacities as such, will be in compliance in
all material respects with the applicable provisions of the Sarbanes-Oxley Act
of 2002 (the “Sarbanes-Oxley Act”)
and the rules and regulations promulgated thereunder.

 17
 

 

(y)                                 Third-Party Data. All statistical or market-related data or
third-party data included or incorporated by reference in the Canadian
Preliminary Prospectus and U.S. Preliminary Prospectus and to be included or
incorporated by reference in the Registration Statement, the Canadian
Prospectus, the U.S. Prospectus and the Pricing Disclosure Package, are or will
be based on or derived from sources that the Company reasonably believes to be
reliable and accurate, and the Company has obtained the written consent to the
use of such data from such sources to the extent required.

(z)                                   Title to Property. The Company and its subsidiaries have good
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other property described in the Canadian
Preliminary Prospectus, the U.S. Preliminary Prospectus and the Pricing Disclosure
Package in each case as at the date thereof and as will be described in the
Canadian Prospectus and the U.S. Prospectus, in each case, free and clear of
all mortgages, pledges, liens, security interests, claims, restrictions or
encumbrances of any kind (including mining, zoning, use or building code
restrictions that would prohibit or prevent the continued effective ownership,
leasing, licensing or use of such property in the business of the Company and
its subsidiaries) except such as (A) are described in the Canadian Preliminary
Prospectus, the U.S. Preliminary Prospectus and the Pricing Disclosure Package
or (B) do not, singly or in the aggregate, materially affect the value of such
property and do not interfere with the use made and proposed to be made of such
property by the Company or any of its subsidiaries. The Company and its
subsidiaries hold either freehold title, mining leases, mining concessions,
mining claims or participating interests or other conventional property or
proprietary interests or rights, recognized in the jurisdiction in which a
particular property is located, in respect of the ore bodies and minerals
located in properties in which the Company and its subsidiaries have an
interest as described in the Canadian Preliminary Prospectus, the U.S.
Preliminary Prospectus and the Pricing Disclosure Package under valid,
subsisting and enforceable title documents or other recognized and enforceable
agreements or instruments, sufficient to permit the Company or applicable
subsidiary to explore the minerals relating thereto.  All property, leases or claims in which the
Company or any subsidiary has an interest or right have been validly located
and recorded in accordance with all applicable laws and are valid and
subsisting where the failure to be so would have a material adverse effect on
the Company and its subsidiaries, taken as a whole.  The Company and its subsidiaries have all
necessary surface rights, access rights and other necessary rights and
interests relating to the properties in which the Company and its subsidiaries
have an interest as described in the Canadian Preliminary Prospectus, the U.S.
Preliminary Prospectus and the Pricing Disclosure Package granting the Company
or applicable subsidiary the right and ability to explore for minerals, ore and
metals for development purposes as are appropriate in view of the rights and
interest therein of the Company or applicable subsidiary, with only such
exceptions as do not interfere with the use made by the Company or applicable subsidiary
of the rights or interest so held, and each of the proprietary interests or
rights and each of the documents, agreements and instruments and obligations
relating thereto referred to above is currently in good standing in the name of
the Company or a subsidiary where the failure to be so would have a material
adverse effect on the Company and its subsidiaries, taken as a whole. The
Company is entitled to extract minerals from its mines as set forth in the
Canadian Preliminary Prospectus and U.S. Preliminary Prospectus in each case as
at the date thereof and as will be set forth in the Canadian Prospectus, the
U.S. Prospectus and the Pricing Disclosure Package and to do all of the
exploration and development contemplated in the Canadian Preliminary Prospectus,
the U.S. Preliminary Prospectus and the Pricing Disclosure Package, except as
otherwise described in the Canadian Preliminary Prospectus,  the U.S. Preliminary Prospectus and the
Pricing Disclosure Package.

 18
 

 

(aa)                            Environmental Laws. Except as described in the Canadian
Preliminary Prospectus, the U.S. Preliminary Prospectus and the Pricing
Disclosure Package in each case as at the date thereof and as will be described
in the U.S. Prospectus and the Canadian Prospectus, and except as would not, singly
or in the aggregate, result in a Material Adverse Effect, (A) neither the
Company nor any of its subsidiaries is in violation of any federal, provincial,
state, local, municipal or foreign statute, law, rule, regulation, ordinance,
code, policy or rule of common law or any judicial or administrative
interpretation thereof, including any judicial or administrative order,
consent, decree or judgment, relating to pollution or protection of human
health, the environment (including, without limitation, ambient air, surface
water, groundwater, land surface or subsurface strata) or wildlife, including,
without limitation, laws and regulations 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”), (B) the Company and its subsidiaries have all
permits, authorizations and approvals required under any applicable
Environmental Laws and are each in compliance with their requirements, (C)
there are no pending or threatened administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, notices of
non-compliance or violation, investigation or proceedings relating to any
Environmental Laws against the Company or any of its subsidiaries and (D) other
than in respect of past activities at the Hycroft Mine, which have been
disclosed to the Agents, there are no events or circumstances that might
reasonably be expected to form the basis of an order for clean­up or
remediation, or an action, suit or proceeding by any private party or governmental
body or agency, against or affecting the Company or any of its subsidiaries
relating to Hazardous Materials or any Environmental Laws.

(bb)                          Foreign Transactions. None of the Company, any subsidiary or, to
the Company’s knowledge, any director, officer, agent, employee or affiliate of
the Company or any of the subsidiaries is aware of or has taken any action,
directly or indirectly, that would result in a violation by such persons of the
Foreign Corrupt Practices Act of 1977,
as amended, and the rules and regulations thereunder. The operations of the Company and each
subsidiary are and have been conducted at all times in compliance with
applicable financial record-keeping and reporting requirements of the United
States Currency and Foreign Transactions
Reporting Act of 1970, as amended, the money laundering statues of
all applicable jurisdictions, the rules and regulations thereunder and any
related or similar rules, regulations or guidelines issued, administered or
enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or
before any court or governmental agency, authority or body or any arbitrator
involving the Company or any subsidiary with respect to the Money Laundering
Laws is pending or, to the best knowledge of the Company, threatened. Neither
the Company nor any subsidiary nor, to the knowledge of the Company, any
director, officer, agent, employee or affiliate of the Company or any
subsidiary is currently subject to any U.S. sanctions administered by the
Office of Foreign Assets Control of the U.S. Treasury Department (“OFAC”), and the Company will not directly
or indirectly use the proceeds of the Offering, or lend, contribute or
otherwise make available such proceeds to any subsidiary, joint venture partner
or other person or entity, for the purpose of financing the activities of any
person currently subject to any U.S. sanctions administered by OFAC.

(cc)                            No Stabilization or
Manipulation. The Company
has not taken and will not take, directly or indirectly, any action designed
to, or that might be reasonably expected to, cause or result in stabilization
or manipulation of the price of the Common Shares.

 19
 

 

(dd)                          Reserve Information. The information set forth in the Canadian
Preliminary Prospectus, the U.S. Preliminary Prospectus and the Pricing
Disclosure Package and as will be set out in the Canadian Prospectus and the
U.S. Prospectus relating to the estimates by the Company of the proven and
probable ore reserves and mineral resources has been reviewed and verified by
the Company and, in all cases, the ore reserve information has been prepared in
accordance with Canadian industry standards set forth in National Instrument
43-101 — Standards of Disclosure for Mineral
Projects and Industry Guide 7 under the 1933 Act, to the extent that
it is applicable to the Company as a result of its status as a Canadian
corporation, and the method of estimating the ore reserves has been verified by
mining experience and the information upon which the estimates of reserves were
based, was, at the time of delivery thereof, complete and accurate in all
material respects and there have been no material changes to such information
since the date of delivery or preparation thereof.

(ee)                            Absence of Further Requirements.
No filing with, or
authorization, approval, consent, license, order, registration, qualification
or decree of any court or governmental authority or agency, or the approval of
the Company’s shareholders, is necessary or required for the performance by the
Company of its obligations hereunder, in connection with the Offering, issuance
or sale of the Shares hereunder or the consummation of the transactions
contemplated by this agreement, except for the final listing approval of the
TSX and AMEX, the filing of the Canadian Prospectus Supplement with the
Reviewing Authority and the Qualifying Authorities and the filing of the U.S.
Prospectus Supplement with the Commission.

(ff)                                Possession of Licenses and
Permits. The Company and its
subsidiaries possess such permits, certificates, licenses, approvals, consents
and other authorizations (collectively, “Governmental
Licenses”) issued by
the appropriate federal, provincial, state, local or foreign regulatory
agencies or bodies necessary to own, lease, stake or maintain claims and other
property interest and to conduct the business now operated by them, except
where the failure to possess such Governmental Licenses would not singly or in
the aggregate have a Material Adverse Effect; the Company and its subsidiaries
are in compliance with the terms and conditions of all such Governmental
Licenses, except where the failure so to comply would not, singly or in the
aggregate, have a Material Adverse Effect; all of the Governmental Licenses are
valid and in full force and effect, except where the invalidity of such
Governmental Licenses or the failure of such Governmental Licenses to be in
full force and effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental Licenses
which, singly or in the aggregate, if the subject of an unfavourable decision,
ruling or finding, would result in a Material Adverse Effect.

(gg)                          Investment Company Act. The Company is not, and upon the issuance and
sale of the Shares as herein contemplated and the application of the net
proceeds therefrom as will be described in the Canadian Prospectus, the U.S.
Prospectus and the Pricing Disclosure Package will not be, an “investment
company” or an entity “controlled” by an “investment company” as such terms are
defined in the United States Investment
Company Act of 1940, as amended.

(hh)                          Absence of Registration
Rights. There are no persons
with registration rights or other similar rights to have any securities
registered pursuant to the Registration Statement or otherwise registered by
the Company under the 1933 Act or under applicable state securities laws.

(ii)                                  Other Reports and
Information. There are no
reports or information that in accordance with the requirements of any
Qualifying Authority must be made publicly available in connection with the 

 20
 

 

Offering that have not been
made or will not be made publicly available during the period of the distribution
of the Shares as required; there are no documents required to be filed with any
Qualifying Authority in connection with the Canadian Prospectus that have not
been filed or will not be filed as required; during the period of the
Distribution, there are no contracts, documents or other materials required to
be described or referred to in the Registration Statement, the U.S. Prospectus,
the U.S. Preliminary Prospectus or the Pricing Disclosure Package or to be
filed as exhibits to the Registration Statement or the Pricing Disclosure
Package that are not or will not be described, referred to or filed as required
by U.S. federal securities laws and the Canadian Securities Laws.

(jj)                                  No Broker. Other than as contemplated by this agreement,
there is no broker, finder or other party that is entitled to receive from the
Company any brokerage or finder’s fee or other fee or commission as a result of
any of the transactions contemplated by this agreement (other than pursuant to
the Arrangement).

(kk)                            Stamp Tax. No stamp duty, registration or documentary
taxes, duties or similar charges are payable under the federal laws of Canada
or the laws of the Province of Ontario in connection with the creation,
issuance, sale and delivery to the Agents of the Shares or the authorization,
execution, delivery and performance of this agreement or the resale of Shares
by an Agent.

(ll)                                  Tax Disclosure. The statements set forth in the U.S.
Preliminary Prospectus, as at the date thereof, and as will be set forth in the
U.S. Prospectus and the Pricing Disclosure Package under the caption “Certain
U.S. Federal Income Tax Considerations” while not purporting to discuss all
possible United States federal income tax consequences of the acquisition,
ownership and disposition of the Shares constitute, in all material respects, a
fair and accurate summary of the probable significant U.S. federal income tax
consequences of the acquisition, ownership and disposition of the Shares.

(mm)                      CFC. As of the date hereof the Company is not a “controlled
foreign corporation” as such term is defined in the Internal Revenue Code and
does not expect to become a controlled foreign corporation.

SECTION 3. Purchase, Sale
and Delivery of the Shares.

(a)     Appointment of Agents; Sales by Agents.   The Company hereby appoints the
Agents as its sole and exclusive agents for the purpose of selling, in
accordance with the terms and conditions hereof, the Shares.  The Agents hereby accept such agencies and
agree to use their best efforts to sell the Shares on said terms and
conditions.  The appointment of the
Agents hereunder shall terminate upon the Closing of the Offering, unless
earlier terminated pursuant to Section 6 hereof.  The Agents propose to sell the Shares to the
public as agents for the Company upon the terms and conditions set forth in the
U.S. Preliminary Prospectus, the U.S. Prospectus, the Canadian Preliminary
Prospectus and the Canadian Prospectus. In addition, the Agents shall comply
with the Canadian Securities Laws and Rule 15c2-4 under the 1934 Act.  Only broker/dealers who are either (i)
members in good standing of the National Association of Securities Dealers,
Inc. (the “NASD”) that are
registered with the NASD and maintain net capital pursuant to Rule 15c3-1 under
the 1934 Act of not less than US$25,000 or (ii) dealers with their
principal places of business located outside the United States and not
registered as brokers or dealers under the 1934 Act, who have agreed not to
make any sales within the United States or to persons who are nationals thereof
or residents therein shall be designated selected dealers by the Agents in the
United States.  The Agents shall require
all selected dealers to comply with the Canadian Securities Laws and Rule
15c2-4 under the 1934 Act in the United States.

 21
 

 

(b)     Agreement to Sell and Purchase.  On
the basis of the representation, warranties, covenants and agreements contained
herein, but subject to the terms and conditions herein set forth, (i) the
Company agrees to issue and to sell the Shares to the persons identified by the
Agents (collectively, the “Purchasers”)
at a purchase price of US$8.50 per Share. 
It is understood that in no event shall the Agents be obligated to
purchase any Shares.  The Offering is
strictly a “best efforts” offering and is subject to minimum aggregate
subscriptions of US$25 million prior to proceeding with Closing.  All Shares to be offered and sold in the
Offering shall be issued and sold through the Agents, as agents for the
Company, and the Company will not sell or agree to sell any of its Shares
otherwise than through the Agents.  In
the event the Company or any of its executive officers is contacted directly or
indirectly by prospective purchasers of the Shares, the Company will promptly
forward the names of such prospective purchasers to the Lead Agent.

(c)     Escrow.  All
subscriptions from the offering of the Shares in the United States will be
deposited into an escrow account (the “Escrow
Account”) with Wells Fargo Bank, National Association, as escrow
agent, pursuant to an Escrow Agreement, to be entered into (the “Escrow Agreement”), not later than 12:00
Noon of the next Business Day following receipt of each such subscription by
the Agents or other broker-dealers, until either the Company has sold the
minimum aggregate subscriptions in Canada and the United States of US $25
million (the “Minimum”) or the
Offering has terminated.  The Offering
will terminate on November 30, 2006.  If
the Agents have not sold at least the Minimum by such termination of the
Offering, all proceeds held in escrow shall be promptly returned to investors,
without interest.  If the Agents have
sold the Minimum, payment of the purchase price for the Shares shall be made at
the Closing Time as provided below.

(d)     Payment of the Purchase Price. Payment of the purchase price
for, and delivery of certificates for, the Shares shall be made at the offices
of Heenan Blaikie LLP, or at such other place as shall be agreed upon by the
Lead Agent and the Company, at the Closing Time.

Payment in respect of the purchase price for Shares
sold or expected to be sold by the Agents shall be denominated in United States
dollars, and shall be made to the Company by wire transfers of immediately
available funds to a bank account designated by the Company, against delivery
to the Lead Agent for the respective accounts of the Agents of certificates for
the Shares to be purchased by them. It is understood that each Agent has
authorized the Lead Agent, for its account, to accept delivery of, receipt for,
and make payment of the purchase price for the Shares.

(e)
Payment of Agency Fee. At the
Closing Time, the Company shall contemporaneously pay to the Agents the agency
fee referred to in Section 4 of this agreement. The Lead Agent shall at the
Closing Time provide the Company with a receipt acknowledging payment in full
of the applicable amount of the agency fee.

(f) Denominations;
Registration.  Certificates
for the Shares issuable in respect of the Shares shall be in such denominations
and registered in such names as the Lead Agent may request in writing at least
two full Business Days before any Closing Time.

(g) Issuer Free
Writing Prospectuses. The Company represents and agrees that, unless
it obtains the prior consent of the Lead Agent, and each Agent represents and
agrees that, unless it obtains the prior consent of the Company and the Lead
Agent, it has not made and will not make any offer relating to the Shares that
would constitute an “issuer free writing prospectus,” as defined in Rule 433,
or that would otherwise constitute a “free writing prospectus,” as defined in
Rule 405 under the 1933 Act, required to be filed with the Commission. Any such
free writing prospectus consented to by the Company and the Lead Agent is
hereinafter referred to as a “Permitted Free
Writing Prospectus.” The Company 

 22
 

 

represents that it has
treated or agrees that it will treat each Permitted Free Writing Prospectus as
an “issuer free writing prospectus,” as defined in Rule 433, and has complied
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. The Company and the Agents hereby
acknowledge that the Issuer General Use Free Writing Prospectus (as set out in
Schedule F) is a Permitted Free Writing Prospectus for the purposes of this
agreement.

SECTION 4. Compensation of Agents.

(a) Agency Fee.:  In return for their services in respect of
the Distribution, including (i) assisting in the preparation of the Canadian
Prospectus and the U.S. Prospectus (and Supplementary Material), (ii) advising
on the final terms and conditions of the Offering, (iii) forming and managing a
selling group for the sale of the Shares, (iv) distributing the Shares to the
public both directly and through other registered dealers and brokers, and (v)
performing administrative work in connection with the distribution of the
Shares, the Company agrees to pay to the Agents at the Closing Time, an agency
fee of US$0.425 per Share sold.

(b) Agents’ Warrants.  As additional consideration for the services
to be provided by the Agents in respect of the Distribution, the Company shall
issue to the Agents (in such name or name as the Lead Agent shall direct in
writing) at the Closing Time, compensation warrants (the “Agent Warrants”) entitling the Agents to
purchase, in the aggregate, that number of Common Shares of the Company equal
to 5% of the aggregate number of Shares sold hereunder at a price of $8.50 per
Share for a period of two years following the Closing Date.

SECTION
5. Conditions of Agents’ Obligations. The obligations of the Agents to
the performance of their obligations herein are subject to the accuracy of the
representations and warranties of the Company contained in Section 2 hereof or
in certificates of any officer of the Company or any subsidiary of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its covenants and other obligations hereunder, and to the following further
conditions:

(a) Filing of Canadian Prospectus Supplement and U.S.
Prospectus Supplement. (i) The Canadian Prospectus Supplement will
have been filed with each Qualifying Authority and the U.S. Prospectus
Supplement will have been filed with the Commission in accordance with the
requirements of paragraph 1(a) of this agreement; (ii) no stop order suspending
the effectiveness of the Registration Statement or any post-effective amendment
thereto, and no stop order suspending or preventing the use of any U.S.
Preliminary Prospectus, any Issuer Free Writing Prospectus or the U.S.
Prospectus shall have been issued under the 1933 Act or proceedings therefor
initiated or threatened by the Commission; (iii) no order having the effect of
ceasing or suspending the Distribution, or trading in the Common Shares of the
Company or any other securities of the Company shall have been issued or
proceedings therefor initiated or threatened by any securities commission,
securities regulatory authority or stock exchange in Canada or the United
States; and (iv) any request on the part of the Qualifying Authority or the
Commission for additional information shall have been complied with to the
reasonable satisfaction of counsel to the Agents.

(b) Opinion of
Canadian Counsel for Company. At the Closing Time, the Agents shall
have received the favourable opinion, dated as of the Closing Date, of Borden
Ladner Gervais LLP, Canadian counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Agents, to the effect set forth in
Schedule B hereto and to such further effect as counsel to the Agents may
reasonably request.  In giving such
opinion, such counsel may rely, as to all matters governed by the laws of
jurisdictions other than the laws of the Provinces of British Columbia, Alberta
and Ontario, and the

 23
 

 

federal laws of Canada
applicable therein, upon opinions of counsel satisfactory to the Agents.

(c) Title
Opinions. At the Closing Date, the Agents shall have received
favourable title opinions dated the Closing Date regarding the Awak Mas
project, the Mt. Todd project, the Paredones Amarillos project and the Hycroft
Mine project, each in form and substance satisfactory to the Lead Agent and
counsel for the Agents, acting reasonably.

(d) Opinion of
U.S. Counsel for Company. At the Closing Time, the Agents shall have
received the favourable opinions, dated as of the Closing Date, of Burns &
Levinson LLP, United States counsel for the Company, in form and substance
reasonably satisfactory to counsel for the Agents, to the effect set forth in Schedule
C hereto and of Erwin & Thompson LLP, Nevada counsel for the Company, in
form and substance satisfactory to counsel for the Agents, to the effect set
forth in Schedule D hereto, and in each case to such further effect as counsel
to the Agents may reasonably request. Such counsel may also state that, insofar
as such opinion involves factual matters they have relied, to the extent they
deem proper, upon certificates of officers of the Company and its subsidiaries
and certificates of public officials.

(e) Opinion of Canadian Counsel for Agents. At
the Closing Time, the Agents shall have received the favourable opinion, dated
as of the Closing Date, of Heenan Blaikie LLP, Canadian counsel for the Agents.
In giving such opinion, such counsel may rely, as to all matters governed by
the laws of jurisdictions other than the laws of the Provinces of Ontario,
Alberta and British Columbia and the federal laws of Canada applicable therein
upon the opinions of counsel satisfactory to the Agents and as to matters pertaining
to the Company upon the opinion of Borden Ladner Gervais LLP. Such counsel may
also state that, insofar as such opinion involves factual matters, they have
relied, to the extent they deem proper, upon certificates of officers of the
Company and its subsidiaries and certificates of public officials.

(f) Opinion of
U.S. Counsel for Agents. At the Closing Time, the Agents shall have
received the favourable opinion, dated as of the Closing Date, of Troutman
Sanders LLP, United States counsel for the Agents. In giving such opinion, such
counsel may state that, insofar as such opinion involves factual matters, they
have relied, to the extent they deem proper, upon certificates of officers of
the Company and its subsidiaries and certificates of public officials.

(g) Officers’
Certificate. At the Closing Time, the Agents shall have received a
certificate of the President and Chief Executive Officer and the Chief
Financial Officer of the Company, dated as of the Closing Date, to the effect
that (i) there has been no Material Adverse Effect, (ii) the representations
and warranties in Section 2 hereof are true and correct with the same force and
effect as though expressly made at and as of the Closing Time, (iii) the
Company has complied with all agreements and satisfied all conditions on its
part to be performed or satisfied at or prior to the Closing Time, (iv) no stop
order suspending the effectiveness of the Registration Statement or any
post-effective amendment thereto, and no stop order suspending or preventing
the use of any U.S. Preliminary Prospectus, any Issuer Free Writing Prospectus
or the U.S. Prospectus has been issued and no proceedings for that purpose have
been instituted or are pending or, to the knowledge of such officers, are
contemplated by the Commission, and (v) no order having the effect of ceasing
or suspending the Distribution shall have been issued by any securities
commission or securities regulatory authority in Canada or the United States.

(h) Accountants’ Comfort Letter. At
the time of the execution of this agreement, the Agents shall have received
from PricewaterhouseCoopers LLP a letter dated the date of this agreement and
prepared as at a specified date not more than two Business Days prior to the
date of this agreement, in form and substance satisfactory to the Agents,
containing statements and information of the type ordinarily

 24
 

 

included in accountants’ “comfort letters” to agents with respect to
the financial statements and certain financial information contained in the
Registration Statement, the U.S. Preliminary Prospectus, the U.S. Prospectus,
the Canadian Prospectus and the Pricing Disclosure Package.

(i) Bringdown Comfort Letter. At
Closing Time, the Agents shall have received from PricewaterhouseCoopers LLP, a
letter dated as of the Closing Date, to the effect that they reaffirm the
statements made in the letter furnished pursuant to paragraph (k) of this
Section, except that the specified date referred to shall be a date not more
than two Business Days prior to the Closing Date.

(j)
Approval of Listing. At Closing
Time, (i) the Shares, shall have been approved for listing on the TSX, subject
to the Company fulfilling the requirements of the TSX, and (ii) the Shares
shall have been approved for listing on the AMEX, subject to official notice of
issuance if required.

(k)
Additional Documents. At any
Closing Time, counsel for the Agents shall have been furnished with such
documents and opinions as they may reasonably require for the purpose of
enabling them to pass upon the issuance and the sale of the Shares as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions and
covenants herein contained; and all proceedings taken by the Company in
connection with the issuance and sale of the Shares as herein contemplated
shall be satisfactory in form and substance to the Lead Agent and counsel for
the Agents, acting reasonably.

SECTION
6.  Termination of Agreement.

(a)     Termination.  The
Agents may terminate this agreement, by notice to the Company at any time at or
prior to the Closing Time,

(i)                               if there has been, since the time of
execution of this agreement or since the respective dates as of which
information is given in the Canadian Prospectus, the U.S. Prospectus or the
Pricing Disclosure Package,

a.               any material adverse change in the condition,
financial or otherwise, or in the earnings, business affairs, properties,
management or business prospects of the Company and its subsidiaries considered
as one enterprise or there shall have been discovered any previously
undisclosed adverse material fact relating to the Company, or

b.              there shall have occurred any change in the
applicable securities laws or any inquiry, investigation or other proceeding is
made or any order is issued under or pursuant to any statute of Canada or any
province thereof, any statute of the United States or any state or territory
thereof, or any stock exchange in relation to the Company or any of its
securities (except for any inquiry, investigation or other proceeding based
upon activities of the Agents and not upon activities of the Company)

which,
in the opinion of the Agents, prevents or restricts trading in or the
distribution of the Shares or materially adversely affects or might reasonably
be expected to materially adversely affect the market price or value of the
Common Shares,

(ii)                            the
state of the financial markets becomes
such that, in the opinion of the Agents acting reasonably, the Shares cannot be
successfully marketed;

 25

 

(iii)                         if there should develop, occur or come into
effect or existence any event, action, state, condition or major financial
occurrence, catastrophe, war or act of terrorism of national or international
consequence or any law or regulation which, in the reasonable opinion of the
Agents, seriously adversely affects or involves, or will seriously adversely
affect or involve, the financial markets or the business, operations or affairs
of the Company and its subsidiaries, taken as a whole;

(iv)                        a cease trade order is made by any securities
commission or other competent authority by reason of the fault of the Company
or its respective directors, officers and agents and such cease trade order is
not rescinded within 48 hours; or

(v)                           if the Company fails to obtain the approval
of the AMEX or the TSX for the listing of the Shares.

(b) Liabilities. If this
agreement is terminated pursuant to this Section 6, such termination shall be
without liability of any party to any other party except as provided in Section
10 hereof, and provided further that Sections 2, 6, 7 and 8 shall survive such
termination and remain full force and effect.

SECTION 7. Indemnity.

(a) Indemnity of the Agents. The
Company covenants and agrees to indemnify and save harmless each of the Agents
and their respective directors, officers, shareholders and employees and agents
(collectively, the “Agents’ Personnel”)
from any and all losses (other than loss of profits), claims, damages,
liabilities, costs or expenses, whether joint or several, caused or incurred by
reason of or in connection with the transactions contemplated hereby including,
without limitation, the following:

(i)                                     any untrue statement
or alleged untrue statement of a material fact contained in the Registration
Statement, including all documents
incorporated by reference therein (or contained in the Registration Statement as
amended or supplemented by any post-effective amendment or supplement thereof
or thereto by the Company), or any omission or alleged omission to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading.;

(ii)                                  any “misrepresentation”
within the meaning of Canadian Securities Laws or any untrue statement of
material fact or alleged untrue statement of material fact included in the
Canadian Preliminary Prospectus, the U.S. Preliminary Prospectus, the Canadian
Prospectus, the U.S. Prospectus, in any Issuer Free Writing Prospectus or in
any prospectus together with any combination of one or more Issuer Free Writing
Prospectuses, or in any materials or information provided to investors by, or
with the approval of, the Company in connection with the marketing of the
Offering, including any roadshow or investor presentations made to investors by
the Company (whether in person or electronically), or any omission or alleged
omission to state a material fact required to be stated therein or necessary to
make the statements therein not misleading in light of the circumstances in
which they were made;

(iii)                               the omission or alleged omission to state in
any certificate of the Company, or of any officers of the Company delivered
hereunder or pursuant hereto, of any material fact required to be stated
therein where such omission or alleged omission constitutes or is alleged to
constitute a misrepresentation; 

 26
 

 

(iv)                              any order made or any inquiry, investigation
or proceeding commenced or threatened by any securities regulatory authority,
stock exchange or by any other competent authority, based upon any
misrepresentation or alleged misrepresentation in the Canadian
Preliminary Prospectus, the U.S. Preliminary Prospectus, the Canadian
Prospectus or the U.S. Prospectus
based upon any failure or alleged failure to comply with Canadian Securities
Laws or the applicable securities laws of the United States (other than any
failure or alleged failure to comply by the Agents) preventing and restricting
the trading in or the sale of the Shares or any of them in the jurisdictions of
Canada, the United States, or any state of the United States; 

(v)                                 the non-compliance or alleged non-compliance
by the Company with any material requirement of applicable securities laws,
including the Company’s non-compliance with any statutory requirement to make
any document available for inspection; or 

(vi)                              the material breach of any representation, warranty or covenant of the
Company contained herein or the failure of the Company to comply in all
material respects with any of its obligations hereunder,

except, with respect
to any of the Canadian Preliminary Prospectus, the U.S. Preliminary Prospectus,
the Canadian Prospectus or the U.S. Prospectus, insofar as any such loss, claim, damage, liability, cost or
expense
arises out of or is based upon any untrue statement or alleged untrue statement
of a material fact contained in, and in conformity with, information concerning
the Agents furnished by the Lead Agent to the Company expressly for use in,
such document, or arises out of or is based upon any omission or alleged
omission to state a material fact in any of the Canadian Preliminary
Prospectus, the U.S. Preliminary Prospectus, the Canadian Prospectus or the
U.S. Prospectus in connection with such information, which material fact was
not contained in such information and which material fact was required to be
stated in such information, or was necessary to make such information not
misleading. The parties hereto agree that such information provided by the Lead
Agent consists solely of the materials referred to in Section 14 hereof.

(b) Expenses.
The Company shall reimburse the Agents promptly upon demand for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such losses, claims, damages, liabilities or actions in respect
thereof, as incurred.

(c) Consent
to  Settlement. The
Company shall not, without the prior written consent of the Agents, 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 the
Agents or any of the Agents’ Personnel are a party to such claim, action, suit
or proceeding), unless such settlement, compromise or consent includes an
unconditional release of each of the Agents and of the Agents’ Personnel from
all liability arising out of such claim, action, suit or proceeding and does
not include a statement as to, or an admission of, fault, culpability or any
failure to act, by or on behalf of the Agents or the Agents’ Personnel.

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.

(d) Notice.
If any matter or thing contemplated by this Section shall be asserted against
any party in respect of which indemnification is or might reasonably be
considered to be provided (an “Indemnified
Party”), such Indemnified Party will notify the Company as soon as
possible and in any event on a timely basis, of the nature of such claim, provided, however,
that the omission to so notify the Company shall not relieve the Company from
any liability which the Company may have to any

 27
 

 

Indemnified Party hereunder
unless the Company is materially prejudiced by such omission. 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.

(e) Indemnity
Exclusion.  The foregoing
indemnity shall not apply to the extent that a court of competent jurisdiction
in a final judgment that has become non-applicable shall determine that such
losses, expenses, claims, damages or liabilities to which the Indemnified Party
may be subject were caused by the gross negligence, wilful misconduct or bad
faith of the Indemnified Party. 

(f) Counsel.
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 reasonably incurred shall be paid by the
Indemnified Party, unless (i) the Company and the Indemnified Party mutually
agree to retain such other counsel or (ii) 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 the representation of the
Company and the Indemnified Party by the same counsel would be inappropriate
due to actual or potential conflicting interests, in which event such fees and
disbursements shall be paid by the Company to the extent that they have been
reasonably incurred; provided that in no circumstances shall the Company be
required to pay the fees and disbursements of more than one set of counsel for
all Indemnified Parties.

(g) Waiver
of Right to Contribution. The Company hereby waives all rights which
it may have by statute or common law to recover contribution from the Agents 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;
provided, however, that such waiver shall not apply in respect of losses by
reason of or in consequence of any misrepresentation which is based upon or
results from information or statements furnished by the Agents.

SECTION 8. Contribution. If the
indemnification provided for herein is for any reason unavailable to or
insufficient to hold harmless an Indemnified Party in respect of any losses,
liabilities, claims, damages or expenses referred to therein, then the Company
shall contribute to the aggregate amount of such losses, liabilities, claims,
damages and expenses incurred by such Indemnified Party (i) in such proportion
as is appropriate to reflect the relative benefits received by the Company on
the one hand and the Agents on the other hand from the Offering or (ii) if the
allocation provided by clause (i) is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company, on the one
hand, and of the Agents, on the other hand, in connection with the statements
or omissions which resulted in such losses, liabilities, claims, damages or
expenses, as well as any other relevant equitable considerations. 

The relative benefits received by the Company,
on the one hand, and the Agents, on the other hand, in connection with the
Offering shall be deemed to be in the same respective proportions as the total
net proceeds from the Offering (before deducting expenses) received by the
Company and the total agency fee received by the Agents, bear to the aggregate
initial offering price of the Shares. 

The relative fault of the Company, on the one
hand, and the Agents, on the other hand, shall be determined by reference to,
among other things, whether any such 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 by the Agents and the parties’
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission.

 28
 

 

The Company and the Agents agree that it would
not be just and equitable if contribution were determined by pro rata
allocation (even if the Agents were treated as one entity for such purpose) or
by any other method of allocation which does not take account of the equitable
considerations referred to above. The aggregate amount of losses, liabilities,
claims, damages and expenses incurred by an Indemnified Party and referred to
above shall be deemed to include any legal or other expenses reasonably
incurred by such Indemnified Party in investigating, preparing or defending
against any litigation, or any investigation or proceeding by any governmental
agency or body, commenced or threatened, or any claim whatsoever based upon any
such untrue or alleged untrue statement or omission or alleged omission.

Notwithstanding the foregoing provisions, no
Agent shall be required to contribute any amount in excess of the aggregate
fees actually received by the Agent from the Company. 

No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the 1933 Act) or a
misrepresentation, as defined in Canadian Securities Laws, that is fraudulent
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. 

The Agents’ respective
obligations to contribute are several in proportion to the principal amount of
Shares so sold by the Agent under the Offering and not joint. The rights of
contribution provided herein shall be in addition to and not in derogation of
any right to contribute which the Agents may have by statute or otherwise.

SECTION 9.  Severability.  If any provision of Sections 7 and 8 is
determined to be void or unenforceable in whole or in part, it shall be deemed
not to affect or impair the validity of any other provision of this agreement
and such void or unenforceable provision shall be severable from this
agreement.

SECTION 10. Expenses of the Offering. Whether
or not the transactions herein contemplated shall be completed, except as
hereinafter specifically provided, all expenses of or incidental to the
authorization, allotment and issue of the Shares and all expenses of or
incidental to all other matters in connection with such transactions including,
without limitation, listing fees, expenses payable in connection with the
qualification of the Shares for sale to the public, the fees and expenses of
counsel for the Company, all fees and expenses of local counsel, all fees and
expenses of the Company’s auditors, all costs relating to information meetings
(including roadshow expenses), all filing and listing fees and all costs
incurred in connection with the preparation, printing and filing of, and any
costs associated with electronic delivery by the Agents to investors of, the
Registration Statement, Canadian Preliminary Prospectus, U.S. Preliminary Prospectus,
Canadian Prospectus, U.S. Prospectus, Supplementary Material, any Permitted
Free Writing Prospectus and share certificates representing the Shares, filing
fees incident to the review by the NASD of the terms of the sale of the Shares,
fees and expenses of the transfer agent and registrar for the Shares shall be
borne by and be for the account of the Company, provided that the Company shall
only be responsible for the first US$100,000 of the legal fees of Agents’
counsel (exclusive of disbursements and applicable taxes) and 50% of the next
US$50,000 of legal fees of Agents’ counsel (exclusive of disbursements and
applicable taxes) to a maximum liability of the Company for legal fees of
Agents’ counsel of US$125,000.

SECTION 11. Remedies. The rights of
termination contained in Section 6 are in addition to any other rights or
remedies the Agents or any of them may have in respect of any default, act or
failure to act or non-compliance by the Company in respect of any of the
matters contemplated by this agreement.

 29
 

 

SECTION
12. Survival. All warranties, representations, covenants and agreements
herein contained or contained in any documents submitted pursuant to this
agreement and in connection with the transaction herein contemplated shall
survive the purchase and sale of the Shares and continue in full force and
effect for the benefit of the Agents and shall not be limited or prejudiced by
any investigation made by or on behalf of the Agents in connection with the
purchase and sale of the Shares or the preparation of the Registration
Statement, the Canadian Prospectus, the U.S. Prospectus or otherwise. This
agreement shall constitute the entire agreement with respect to the purchase of
the Shares among the parties.

SECTION 13.  Time
is of the Essence and Governing Laws. Time shall be of the essence of the
agreement arising from this offer and its acceptance by the Company and such
agreement shall be governed and construed in accordance with the laws of the
Province of British Columbia and the laws of Canada applicable therein.

SECTION 14.  Agent
Information.  The
parties hereto acknowledge and agree that, for all purposes of this Agreement,
the information provided by or on behalf of any Agent consists solely of the
names of the Agents contained on the cover of the Canadian Preliminary
Prospectus Supplement, the U.S. Preliminary Prospectus Supplement, the Canadian
Prospectus Supplement and the U.S. Preliminary Prospectus Supplement and the
statements concerning the Agents contained in the third paragraph under the
heading “Plan of Distribution” in the Canadian Prospectus Supplement and the
U.S. Prospectus Supplement.

SECTION 15. Authority of the Lead Agent.  In connection with this agreement, the Lead
Agent will act for and on behalf of the several Agents, and any action taken
under this agreement by the Lead Agent, will be binding on all the Agents.  Each of the Agents authorizes the Lead Agent
to manage the Offering and the sale of the Shares and to take such action in
connection therewith as the Lead Agent in its sole discretion deems appropriate
or desirable, consistent with the provisions of this agreement. 

SECTION 16. Use of Headings. The headings and
subheadings of sections and paragraphs of this agreement appear for reference
only and shall not be read or interpreted as forming part of the relevant
section or paragraph.

SECTION 17. Notices.

(a) Unless herein
otherwise expressly provided, any notice, request, direction, consent, waiver,
extension, agreement or other communication (a “Communication”) that is or may be given or made hereunder
shall be in writing addressed as follows:

If
to the Company, at:

	
  Vista Gold Corp.

  	
   

  
	
  7961 Shaffer
  Parkway, Suite 5

  	
   

  
	
  Littleton, CO

  
	
  U.S.A.  80127

  
	
   

  
	
  Attention:

  	
  Michael B. Richings

  
	
   

  	
  President and Chief Executive Officer

  
	
   

  	
   

  
	
  Fax No.: (720)
  981-1186

  
			

 

 30
 

 

If to the Lead Agent or any or all of the
Agents, addressed and sent to:

	
   

  	
  Sprott Securities (USA)
  Limited

  	
   

  
	
   

  	
  c/o Sprott
  Securities Inc.

  	
   

  
	
   

  	
  Royal Bank Plaza

  	
   

  
	
   

  	
  South Tower,
  Suite 2800

  	
   

  
	
   

  	
  Toronto, ON

  	
   

  
	
   

  	
  M5J 2J2

  	
   

  
	
   

  	
   

  
	
   

  	
  Attention:

  	
  Jeffrey Kennedy

  
	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  Fax No.: (416)
  943-6496

  	
   

  
				

 

or to such other address as any of the parties may designate by notice
given to the others in accordance with this subparagraph.

(b)               Each Communication shall be personally
delivered to the addressee or sent by facsimile transmission to the addressee
and (i) a Communication which is personally delivered shall, if delivered
before 5:00 p.m. 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
Communication which is sent by telex, telegraph or facsimile transmission
shall, if sent on a Business Day and the machine on which it is sent receives
the answer back code of the party to whom it is sent before 5:00 p.m., 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 sent.

(c)                Each Agent hereby agrees and acknowledges
that the Company shall be entitled to and shall act on any Communication given
or agreement entered into by or on behalf of the Agents by the Lead Agent and
that the Lead Agent has irrevocable authority to bind the Agents, except in
respect of any consent to a settlement of any claim, action, suit or proceeding
referred to in Section 7, which consent shall be given by the Indemnified
Party.

(d)               Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Lead Agent or to counsel
for the Agents shall be deemed a representation and warranty by the Company to
each Agent as to the matters covered thereby.

SECTION
18. No Fiduciary Relationship. The Company acknowledges and agrees that
(a) the purchase and sale of the Shares pursuant to this agreement, including
the determination of the public offering price of the Shares and any related
fees, is an arm’s-length commercial transaction between the Company, on the one
hand, and the several Agents, on the other hand, (b) in connection with the
Offering contemplated hereby and the process leading to such transaction each
Agent is not the fiduciary of the Company, or its shareholders, creditors,
employees or any other party, (c) no Agent has assumed or will assume an
advisory or fiduciary responsibility in favor of the Company with respect to
the Offering contemplated hereby or the process leading thereto (irrespective
of whether such Agent has advised or is currently advising the Company on other
matters) and no Agent has any obligation to the Company with respect to the
Offering contemplated hereby except the obligations expressly set forth in this
agreement, (d) the Agents and their respective affiliates may be engaged in a
broad range of transactions that involve interests that differ from those of
the Company, and (e) the Agents have not provided any legal, accounting,
regulatory or tax advice with respect to the Offering contemplated hereby and
the Company has consulted its own legal, accounting, regulatory and tax
advisors to the extent it deemed appropriate.

 31
 

 

SECTION 19. Parties. This agreement
shall each inure to the benefit of and be binding upon the Agents and the Company
and their respective successors. Nothing expressed or mentioned in this
agreement is intended or shall be construed to give any person, firm or
corporation, other than the Agents and the Company and their respective
successors and the controlling persons and officers and directors and any other
person who may be an Indemnified Party, and their heirs and legal
representatives, any legal or equitable right, remedy or claim under or in
respect of this agreement or any provision herein contained. This agreement and
all conditions and provisions hereof are intended to be for the sole and
exclusive benefit of the Agents and the Company and their respective
successors, and said controlling persons and officers and directors, and any
other person who may be an Indemnified Party, and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
No purchaser of Shares shall be deemed to be a successor by reason merely of
such purchase.

SECTION
20. Counterparts. This agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same agreement.

If
the foregoing is in accordance with your understanding and is agreed to by you,
please signify your acceptance on the accompanying counterparts of this letter
and return the same to us, whereupon this letter as so accepted shall
constitute an agreement between us in accordance with the foregoing.

Vista Gold Corp.

	
  per:

  	
   

  	
            “Greg
  Marlier”

  	
   

  
	
   

  	
  Name:

  	
  Greg Marlier

  
	
   

  	
  Title:

  	
  Chief Financial Officer 

  
					

 

 32
 

 

The foregoing offer is
accepted and agreed to by the Agents as of the date first above written.

	
  SPROTT SECURITIES INC.

  	
   

  	
  SPROTT
  SECURITIES (USA) LIMITED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  per:

  	
                  “Jeffrey
  Kennedy”

  	
   

  	
   

  	
  per: 

  	
                 “Jeffrey
  Kennedy” 

  	
   

  
	
   

  	
  Name: Jeffrey Kennedy 

  	
   

  	
   

  	
  Name: Jeffrey Kennedy 

  
	
   

  	
  Title: Chief Financial Officer

  	
   

  	
   

  	
  Title: Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  GMP
  SECURITIES L.P.

  	
   

  	
  GRIFFITHS
  MCBURNEY CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  per:

  	
                  “Mark
  Wellings”

  	
   

  	
   

  	
  per: 

  	
                 “Kevin
  M. Sullivan 

  	
   

  
	
   

  	
  Name: Mark Wellings 

  	
   

  	
   

  	
  Name: Kevin M. Sullivan 

  
	
   

  	
  Title: Director – Investment Banking

  	
   

  	
   

  	
  Title: Chief Executive Officer

  
										

 

 33

 

Schedule A

List of
Subsidiaries

	
  Legal Name of Subsidiary

  	
   

  	
  Status of Incorporation

  	
   

  	
  Per Cent of Issued and Outstanding Voting

  Shares Beneficially Owned by Vista Gold 

  Corp. or a direct or indirect wholly owned 

  subsidiary

  	
   

  
	
  Vista Gold U.S. Inc.

  	
   

  	
  Delaware

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Granges Inc.

  	
   

  	
  British
  Columbia

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minera Paredones
  Amarillos S.A. de C.V.

  	
   

  	
  Mexico

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Idaho Gold Resources
  LLC

  	
   

  	
  Idaho

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vista Gold Antigua
  Corp.

  	
   

  	
  Antigua

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vista Gold (Barbados)
  Corp.

  	
   

  	
  Barbados

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vista Minerals
  (Barbados) Corp.

  	
   

  	
  Barbados

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Compania Inversora
  Vista S.A.

  	
   

  	
  Bolivia

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Salu Siwa Pty. Ltd.

  	
   

  	
  Australia

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vista Australia Pty.
  Ltd.

  	
   

  	
  Australia

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Minera Nueva Vista S.A.

  	
   

  	
  Barbados

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Compania Exploradora
  Vistex S.A.

  	
   

  	
  Bolivia

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  PT Masmindo Dwi

  	
   

  	
  Indonesia

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Allied Nevada Gold
  Corp.

  	
   

  	
  Delaware

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vista Gold Holdings
  Inc.

  	
   

  	
  Nevada

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Victory Gold Inc.

  	
   

  	
  Nevada

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hycroft Resources &
  Development Inc.

  	
   

  	
  Nevada

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Vista Nevada Corp.

  	
   

  	
  Nevada

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Mineral Ridge Resources
  Inc.

  	
   

  	
  Nevada

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Victory Exploration
  Inc.

  	
   

  	
  Nevada

  	
   

  	
  100

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Hycroft Lewis Mine Inc.

  	
   

  	
  Nevada

  	
   

  	
  100

  	
  %

  

 

Schedule B

Canadian Counsel Opinion

(Borden Ladner Gervais LLP Opinion)

(b)                                 The Company is a corporation existing under
the laws of the Yukon Territory.

(c)                                  The Company has the corporate power and
capacity to own, lease and operate its properties and assets (including assets
such as licences and other similar rights), to conduct its business as
described in the Canadian Preliminary Base Shelf Prospectus, the Canadian Base
Shelf Prospectus, U.S. Base Shelf Prospectus, the Canadian Preliminary
Prospectus Supplement, the U.S. Preliminary Prospectus Supplement, the Canadian
Prospectus Supplement, the U.S. Prospectus Supplement and the Registration
statement (collectively, the “Offering Documents”) and to enter into and
perform its obligations under the Agency Agreement.

(d)                                 The Company is duly registered and qualified
to transact business and is in good standing in each Canadian jurisdiction in
which such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so to
qualify or to be in good standing would not result in a Material Adverse
Effect.

(e)                                  The authorized, issued and outstanding share
capital of the Company is as set forth in the Offering Documents under the
caption “Capitalization”.

(f)                                    All necessary corporate action has been taken
by the Company to authorize the execution and delivery by the Company of each
of the Agency Agreement and the Merger and Arrangement Agreement and the
performance of its obligations thereunder and the Agency Agreement and the
Merger and Arrangement Agreement have each 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.

(g)                                 The execution and filing of each of the
Offering Documents with the Qualifying Authorities and the SEC, as the case may
be, have been duly approved and authorized by the Company, and each of the
Offering Documents has been duly executed by the Company and the Canadian
Preliminary Base Shelf Prospectus, the Canadian Base Shelf Prospectus, the
Canadian Preliminary Prospectus Supplement, the Canadian Prospectus Supplement
have each been duly filed by the Company with the Qualifying Authorities.

(h)                                 The form of certificate representing the
Shares has been duly approved and adopted by the Company and conforms to the
requirements of the Business Corporations
Act (Yukon), the
by-laws of the Company, and the requirements of the TSX.

(i)                                     To our knowledge, there is not pending or
threatened, any action, suit, proceeding, inquiry or investigation, to which
the Company or any subsidiary is a party, or to which the property of the
Company or any subsidiary thereof is subject, before or brought by any court or
governmental agency or body, which would reasonably be expected to result in a
Material Adverse Effect, or which would reasonably be expected to materially
and adversely affect the consummation of the transactions contemplated in the
Agency Agreement or the Merger and Arrangement Agreement or the performance by
the Company of its obligations thereunder.

 

(j)                                     The statements made in the Offering Documents
under the caption “Description of Securities”, insofar as such statements
constitute summaries of the principal attributes of the share capital of the
Company, constitute fair summaries of such attributes and provisions.

(k)                                  The authorization, execution and delivery of
each of the Agency Agreement and the Merger and Arrangement Agreement, the
performance of the provisions thereof by the Company and the offering, issue
and sale of the Shares and the issue of the Agent Warrants and the Agent
Warrant Shares do not and will not: (i) to our knowledge require the
consent, approval or authorization of, or registration or qualification with,
any governmental authority, stock exchange, securities regulatory authority or
other person, except such as have been obtained or in the process of being
obtained, (ii) conflict with or result in any breach or violation of the
articles of, or any resolution of the directors or shareholders of, the Company
or to our knowledge any agreement or other instrument to which the Company is a
party or by which it is bound, (iii) violate the provisions of any law,
statute, rule or regulation to which the Company or the property or assets
thereof is subject, or (iv) to our knowledge breach any judgment, order or
decree of any court, governmental authority, agency, tribunal, arbitrator,
stock exchange or securities regulatory authority or other authority to which
the Company or any of the property or assets thereof is subject.

(l)                                     The Company has all requisite corporate power
and authority to issue and deliver the Shares, and the issuance of the Shares
has been duly authorized and approved and, when issued and delivered, the
Shares will be validly issued and outstanding as fully paid and non-assessable
shares and will conform in all material respects to the description thereof
contained in the Offering Documents. All corporate action required to be taken
by the Company for the authorization, issuance and delivery of such Shares has
been taken, and the issuance of the Shares is not, to our knowledge, subject to
any preemptive rights of any security holder of the Company.

(m)                               All documents have been filed, all requisite
proceedings have been taken and all legal requirements have been fulfilled by
the Company to qualify the Shares for distribution and sale to the public in
each of the Qualifying Provinces through investment dealers or brokers registered
under the applicable laws of the Qualifying Provinces who have complied with
the terms of such registration and the relevant provisions of such applicable
laws.

(n)                                 The Shares have been conditionally approved
for listing by TSX, subject to fulfillment by the Company of the customary
conditions of such exchange.

(o)                                 The Company is a “reporting issuer” under the
Securities Act (British
Columbia), Securities Act
(Alberta) and Securities Act
(Ontario) and is not included in a list of defaulting reporting issuers
maintained pursuant thereto. The Corporation is a reporting issuer under
subsection 118(1) of The Securities Act
(Manitoba) and subject to the requirements of National Instrument 51-102
Continuous Disclosure Obligations (“NI 51-102”)
and the Corporation is not in default of its requirement to file financial
statements pursuant to NI 51-102 along with any prescribed filing fee as set
out in the regulations to The Securities Act
(Manitoba) and there is no order in effect which directs trading to cease in
any securities of the Corporation and no Manitoba Securities Commission
proceeding is scheduled to consider whether such an order should be issued.

(p)                                 the Shares are qualified investments under
the Income Tax Act (Canada) and
the regulations thereunder for trusts governed by registered retirement savings
plans, registered retirement income funds, registered education savings plans
and deferred profit sharing plans.

 2
 

 

(q)                                 Computershare Investor Services Inc. has been
duly appointed the transfer agent and registrar for the common shares of the
Company.

Based upon the foregoing and subject to the
limitations set forth herein, we confirm to you that, on the basis of the
information we gained in the course of performing the services referred to
above, no facts have come to our attention which have caused us to believe that
(i) the Canadian Base Shelf Prospectus and Canadian Prospectus Supplement, when
taken as a whole (together, the “Canadian Prospectus”), contained any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances in
which they were made, not misleading, or (ii) as of the date of the Canadian
Prospectus Supplement and as of the time of delivery of this letter, the
Canadian Prospectus contains any untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements therein, in
light of the circumstances in which they are made, not misleading (in each
case, other than the financial statements and other financial and statistical
information, and the information derived from the reports of technical
consultants, included or incorporated by reference therein).

A “material fact” (as defined in the Securities Act (British Columbia)) in
relation to the offering of the Securities by the Corporation means a fact that
significantly affects, or would reasonably be expected to have a significant
effect on, the market price or value of the Shares.  We are not qualified to judge the impact
which any facts may have in the securities marketplace.  Our comment to the effect set out above
concerning the materiality of facts which have come to our attention is based
on our experience in practicing securities law and on the meaning of the term “material
fact” as stated above, and should not be interpreted as an opinion or an expert
comment about financial facts or the impact of any facts on market prices or
values of securities.

 3

Schedule C

Form of Opinion of U.S. Counsel

(Burns & Levinson LLP)

1.                                       The Registration Statement filed in
connection with the offering and sale of the Shares in the United States, is
effective under the 1933 Act. The Company is eligible to file the Registration
Statement. To the best of such counsel’s knowledge, no stop order suspending
the effectiveness of the Registration Statement has been issued and no
proceedings for that purpose have been instituted or are pending or threatened
under the 1933 Act. The filing of the U.S. Preliminary Prospectus Supplement to
the Registration Statement on October 17, 2006
with the Commission pursuant Rule 424(b) under the 1933 Act has been made in
the manner and in the time period required by such rule. The filing of the U.S.
Prospectus Supplement to the Registration Statement on October 31, 2006 with
the Commission pursuant to Rule 424(b) under the 1933 Act has been made in the
manner and in the time period required by such rule.  Each Issuer General Free Writing Prospectus
set forth on Schedule C to the Agency Agreement has been filed in the manner
and within the time period set forth in Rule 433(d) promulgated under the 1933
Act, subject to compliance therewith as permitted under Rule 164 promulgated  under the 1933 Act.

2.                                       The Registration Statement and the U.S.
Prospectus, including the documents incorporated by reference therein, and each
amendment or supplement thereto (except for the financial statements, financial
statement schedules and other financial data included therein or omitted
therefrom as to which such counsel need express no opinion), as of their
respective effective or issue dates, comply as to form in all material respects
with the requirements of U.S. securities laws.

3.                                       To our knowledge, the Company is not an “ineligible
issuer” (as defined in Rule 405 under the 1933 Act) as of the eligibility
determination date for purposes of Rules 164 and 433 under the 1933 Act with
respect to the offering of the Shares contemplated by the Registration
Statement.

4.                                       No approval, authorization, consent or order
of or filing by the Company with any U.S. federal governmental or regulatory
commission, board, body, authority or agency, or of or with any self-regulatory
organization or other non-governmental regulatory authority (including, without
limitation, the AMEX) is required in connection with the issuance and sale of
the Shares or the consummation by the Company of the transactions contemplated
by the Agency Agreement, other than (i) registration of the offer and sale of
the Shares under the 1933 Act and registration of the Shares under the 1934
Act, which have been effected by the Company and (ii) any notices and filings
required to be given to, or made with, AMEX, which have been made by the
Company and except that we express no opinion as to any necessary qualification
under the state securities or blue sky laws of the various jurisdictions in
which the Shares are being offered by the Agents and we express no opinion with
respect to the Conduct Rules of the NASD.

5.                                       The Shares have been approved for listing on
the AMEX, subject to official notice of issuance of the Shares.

6.                                       The Company is not, and upon the issuance and
sale of the Shares and the application of the net proceeds therefrom as
described in the Canadian Prospectus and the U.S. Prospectus and the Pricing
Disclosure Package will not be, an “investment company” as such term is defined
in the Investment Company Act of 1940, as amended (the “1940 Act”); nor is the Company “controlled”
by an entity required to be registered as an “investment company” under the
1940 Act.

 

7.                                       To such counsel’s knowledge, (i) the Company
is not a party to any legal or governmental action or proceeding that
challenges the validity or enforceability, or seeks to enjoin the performance,
of the Agency Agreement and (ii) except as disclosed in the Registration
Statement, the U.S. Prospectus Supplement, or the Pricing Disclosure Package
there is not pending or threatened any action, suit, proceeding, inquiry, or
investigation, to which the Company or any subsidiary is a party, or to which
the property of the Company or any subsidiary is subject, before or brought by
any court or governmental agency or body, domestic or foreign which could
reasonably be expected to result in a Material Adverse Effect.

8.                                       To our knowledge, except as described in the
Registration Statement, the U.S. Preliminary Prospectus and the U.S.
Prospectus, no person has the right, pursuant to the terms of any contract,
agreement or other instrument, to cause the Company to register under the 1933
Act any Common Shares or shares of any other share capital or other equity
interest of the Company, or to include any such shares or interest in the
Registration Statement, the U.S. Prospectus or the offering contemplated thereby.

9.                                       Although the discussion set forth in the
Registration Statement, the U.S. Preliminary Prospectus and the U.S. Prospectus
under the caption “Certain U.S. Federal Income Tax Considerations” does not
purport to discuss all possible United States federal income tax consequences
of the acquisition, ownership and disposition of the Shares, such discussion
constitutes, in all material respects, a fair and accurate summary of the
probable significant U.S. federal income tax consequences of the acquisition, ownership
and disposition of the Shares.

Such
opinion shall additionally state that such counsel has participated in the
preparation of the U.S. Prospectus Supplement and in conferences with officers
and other representatives of the Company, representatives of the auditors of
the Company, and representatives of the Agents, at which the contents of the
Registration Statement and the U.S. Prospectus and related matters (including
the preparation thereof) were discussed and such counsel has reviewed a copy of
the Registration Statement and, although such counsel is not passing upon and
does not assume any responsibility for the accuracy, completeness or fairness
of the statements contained in the Registration Statement and the U.S.
Prospectus, on the basis of the foregoing, nothing has come to such counsel’s
attention that has caused it to believe that, (A) the Registration Statement or
any amendment thereto made prior to the Closing Time (except for the financial
statements, financial statement schedules and other financial data included or
incorporated therein or omitted therefrom and the scientific and technical
information included therein in reliance on the authority of •, • and •,
as experts, as to which we have not been requested to express a
view), at the time such Registration Statement or any amendment thereto became
effective and as of the date of the U.S. Prospectus Supplement, contained an
untrue statement of a material fact or omitted to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading, (B) the U.S. Prospectus or any amendment or supplement thereto made
prior to the Closing Time (except for the financial statements, financial
statement schedules and other financial data included or incorporated therein
or omitted therefrom and the scientific and technical information included therein
in reliance on the authority of •, • and
•, as experts, as to which we have
not been requested to express a view), at the time the U.S. Prospectus was
issued, at the time any such amended or supplemented prospectus was issued or
at the Closing Time, included or includes an untrue statement of a material
fact or omitted or omits to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading or (C) the Pricing Disclosure Package (other than the
financial statements, financial statement schedules and other financial data
included or incorporated therein or omitted therefrom and the scientific and
technical information included 

 2
 

 

therein in reliance on the authority of • and •, as
experts, as to which we have not been requested to express a view), as of the
Applicable Time, contained any untrue statement of a material fact or omitted
to state any material fact necessary in order to make the statements therein,
in the light of circumstances under which they were made, not misleading. With
respect to statements contained in the Pricing Disclosure Package, any
statement contained in any of the constituent documents shall be deemed to be
modified or superseded to the extent that any information contained in
subsequent constituent documents modifies or replaces such statement.

In
giving such opinion, such counsel may rely, as to all matters governed by the
laws of jurisdictions other than the law of · and the federal law of the United States,
upon opinions of local counsel, in which case the opinion shall state that they
believe the Agents and they are entitled to so rely. Such counsel may also
state that, insofar as such opinion involves factual matters, they have relied,
to the extent they deem proper, upon certificates of officers of the Company
and certificates of public officials; provided that such certificates have been
delivered to the Agents. Such opinion shall not state that it is to be governed
or qualified by, or that it is otherwise subject to, any treatise, written
policy or other document relating to legal opinions, including, without
limitation, the Legal Opinion Accord of the ABA Section of Business Law (1991).

 3

 

Schedule D

Form of Nevada Counsel

(Erwin & Thompson LLP)

1.               Each of the subsidiaries is validly existing
as a corporation in good standing under the laws of its jurisdiction of
incorporation, with full corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the Registration
Statement, the U.S. Preliminary Prospectus and the U.S. Prospectus.

2.               The Company and the subsidiaries are each
duly qualified to do business as a foreign corporation and are in good standing
in each jurisdiction in the United States where the ownership or leasing of
their respective properties or the conduct of their respective businesses
requires such qualification, except where the failure to be so qualified and in
good standing would not, individually or in the aggregate, have a Material
Adverse Effect.

3.               All of the outstanding shares of capital
stock of each of the subsidiaries have been duly authorized and validly issued,
are fully paid and non-assessable and, except as otherwise disclosed in the
Registration Statement, the U.S. Preliminary Prospectus and the U.S.
Prospectus, all of such shares are owned by the Company.

4.               The execution, delivery and performance of
the Agency Agreement by the Company, the issuance and sale of the Shares by the
Company and the consummation by the Company of the other transactions
contemplated by the Agency Agreement do not and will result in any breach or
violation of or constitute a default under (nor constitute any event which,
with notice, lapse of time or both, would result in any breach or violation of
or constitute a default under or give the holder of any indebtedness (or a
person acting on such holder’s behalf) the right to require the repurchase,
redemption or repayment of all or a part of such indebtedness under), or result
in the creation or imposition of a lien, charge or encumbrance on any property
or assets of the Company or any of the subsidiaries pursuant to the terms of
(i) the articles of incorporation and by-laws or other organizational documents
of the subsidiaries, or (ii) any indenture, mortgage, deed of trust, bank loan
or credit agreement or other evidence of indebtedness, or any license, lease,
contract or other agreement or instrument (collectively, “Agreements and Instruments”)
which is listed in Annex A hereto, or (iii) any U.S. federal law, regulation or
rule, or (iv) any decree, judgment or order applicable to the Company or any of
the subsidiaries or any of their respective properties, which decree, judgment
or order is known by us.

 

Schedule E

Agents

Sprott
Securities Inc.

Sprott
Securities (USA) Limited

GMP
Securities L.P.

Griffiths
McBurney Corp.

 

 

Schedule F

Issuer General Use Free Writing Prospectuses

Canadian
Preliminary Prospectus.Exhibit 10.1

LICENSE AGREEMENT

This License Agreement (the “Agreement”), effective as
of October 27, 2006 (the “Effective Date”), is entered into by and between Valentis,
Inc., a Delaware corporation having offices at 863A Mitten Road, Burlingame,
California 94010 (“Valentis”) and Juvaris BioTherapeutics, Inc., a Delaware
corporation having offices at 6200 Stoneridge Mall Road, Suite 3F, Pleasanton,
CA 94588 (“Juvaris”).  All references to Valentis
and Juvaris in this Agreement shall include their Affiliates (as defined
below).

BACKGROUND

A.            Valentis
is the owner or exclusive licensee of certain Patent Rights and Know-How (as
such terms are defined below), and Juvaris wishes to acquire a license under
the Patent Rights and Know-How; and

B.            Valentis
is willing to grant Juvaris such a license, on the terms and conditions set
forth below.

NOW, THEREFORE, in consideration of the promises and
the mutual covenants hereinafter recited, the parties agree as follows:

ARTICLE 1.

DEFINITIONS

In this Agreement, the following terms shall have the
meanings set forth in this Article.

1.1           “Affiliate”
means any company, corporation, division or other entity which is directly or
indirectly controlling, controlled by or under common control with a party
hereto.  For the purpose of this
Agreement, with respect to any company, corporation, division or other entity, “control”
shall mean the direct or indirect ownership of at least fifty percent (50%) of
the outstanding shares or other voting rights of the subject company, corporation
or other entity to elect directors.

1.2           “Confidential
Information” means (a) any proprietary or confidential information
or material in tangible form disclosed hereunder that is marked as “Confidential”
at the time it is delivered to the receiving party, or (b) proprietary or
confidential information disclosed orally hereunder which is identified as
confidential or proprietary when disclosed and such disclosure of confidential
information is confirmed in writing within thirty (30) days by the disclosing party.

1.3           “Know-How”
means unpatented and/or unpatentable technical information, including ideas,
concepts, inventions, discoveries, data, designs, formulas, specifications,
procedures for experiments and tests and other protocols, results of
experimentation and testing, fermentation and purification techniques, and
assay protocols owned by Valentis as of the Effective Date which may be
necessary for the practice of the Patent 

 

 

Rights solely as contemplated hereunder.  Know-How shall not include the Patent
Rights.  All Know-How shall be
Confidential Information of Valentis.

1.4           “Juvaris Customer”
means any person or entity (a) for whom Juvaris, pursuant to a written
agreement, undertakes Process Development and (b) who otherwise abides by the
requirements of Section 2.3.

1.5           “Juvaris Partner”
means an entity with whom Juvaris, pursuant to a written agreement and a bona
fide collaboration or license of rights, shares substantial cost and economic
risk of the development, commercialization or marketing of a Juvaris Product.

1.6           “Juvaris Expression
Materials” means those compositions of matter or articles of
manufacture created by Juvaris that are suitable for the manufacture of a
polynucleotide.

1.7           “Juvaris Products”
means any product or material resulting from the use of the Licensed Technology
by or on behalf of: (i) Juvaris; or (ii) Juvaris Customers or Juvaris Partners
that are sublicensees of Juvaris under such Licensed Technology pursuant to the
terms of Article 2.

1.8           “Licensed Technology”
means the Patent Rights and the Know-How.

1.9           “Patent Rights”
means the patent applications and patents listed on Schedule 1.9 hereto
and, to the extent covered by the transfer of rights pursuant to this
Agreement, patent applications and patents owned or controlled by Valentis
covering improvements made by Juvaris to the technology disclosed in the patent
applications and patents listed on Schedule 1.9, and all divisions,
continuations, continuations-in-part, and substitutions thereof, all foreign
patent applications corresponding to the preceding applications; and all U.S.
and foreign patents issuing on any of the preceding applications, including
extensions, reissues, and reexaminations.

1.10         “Process Development”
means, when undertaken by Juvaris on behalf of a Juvaris Customer, as
applicable, using, making, having made or importing the methods, compositions
of matter or articles of manufacture embodied by the Patent Rights or the
Know-How, but only as it directly relates to those activities customarily
associated with or reasonably necessary for the development of manufacturing or
scale-up processes reasonably required for the commercial or clinical
production of a plasmid DNA product, including for example preclinical studies,
GLP toxicology studies and other activities to support an IND filing, and
clinical trials; provided, however, that, notwithstanding anything to the
contrary, production of material for use in a clinical study, such as, for
example, a Phase IIb clinical trial, that was not intended to be a pivotal
trial but is determined later to be suitable to qualify as a pivotal trial will
be deemed to be Process Development.

1.11         “Third Party”
means any person or entity other than Juvaris or Valentis.

 2
 

 

 

ARTICLE 2.

LICENSE

2.1           Grant to Juvaris.  Subject to the terms and conditions of this
Agreement, Valentis hereby grants to Juvaris for the sum of two hundred
thousand dollars ($200,000) payable on or before the one year anniversary of
the Effective Date, a non-exclusive, non-transferable (except as provided for
in this Article 2 and Section 9.2 below), worldwide, royalty-free, fully paid
up license under the Licensed Technology, with the right to grant sublicenses
to Juvaris Customers and Juvaris Partners, to:

(a)           make, have made, use, sell, offer for sale, export and
import Juvaris Products;

(b)           engage in Process Development for Juvaris Customers;

(c)           transfer to a Juvaris Customer in exchange for
consideration any Juvaris Expression Materials encoding such Juvaris Customer’s
product; and

(d)           make, have made, use, sell, offer for sale, export and
import any Juvaris Product for the benefit of a Customer, in exchange for
consideration, at a facility designated by Juvaris.

2.2           Grant to Juvaris
Customers.  Subject to the
terms and conditions of this Agreement, Valentis hereby grants to Juvaris a
right to grant to each Juvaris Customer who abides by the conditions of Section
2.3, a non-exclusive, non-transferable, worldwide license under the Licensed
Technology, with the right to grant sublicenses to contract manufacturers
solely for the production of the Juvaris Customer’s products, to:

(a)           have Juvaris, on behalf of and for the benefit of such Juvaris
Customer, make, have made, use, export and import Juvaris Expression Materials
encoding any such Juvaris Customer’s product;

(b)           have Juvaris, on behalf of and for the benefit of such Juvaris
Customer, undertake Process Development with respect to any such Juvaris
Customer’s product;

(c)           have Juvaris make, on behalf of and for the benefit of
such Juvaris Customer and at a facility designated by Juvaris any Juvaris Product
using Juvaris Expression Materials;

(d)           have a contract manufacturer who is otherwise licensed by Valentis,
under the terms of the applicable license agreement, make any Juvaris Product
using Juvaris Expression Materials; and

(e)           use, export and import, and sell, any Juvaris Product made
by Juvaris or a contract manufacturer in accordance with the license grants of
this Agreement.

 3
 

 

 

(f)            Juvaris agrees to generate and maintain a comprehensive
list (“Customer Contact List”) containing the name and address (and individual
to contact, if appropriate) of each Juvaris Customer or entity or person on
whose behalf it engages in Process Development. 
As additional Juvaris Customers are identified and when activities are
initiated by Juvaris on behalf of any such Juvaris Customer, Juvaris shall
update the Customer Contact List.  Juvaris
shall use reasonable commercial efforts to obtain the right in each and every
agreement entered into with a Juvaris Customer to disclose to Valentis such Juvaris
Customer’s name and address (and individual to contact, if appropriate).  To the full extent that Juvaris is able
without violating the terms of an agreement between Juvaris and a Juvaris
Customer, Juvaris shall provide the Customer Contact List to Valentis within
forty-five (45) days after the end of each calendar year.  The Customer Contact List shall be
Confidential Information of Juvaris, and Valentis shall keep such list, and
information contained in such list, strictly confidential; provided,
however, that Valentis’s obligations of confidentiality shall not
prohibit Valentis’s use of the information contained in the Customer Contact
List for purposes of identifying and prosecuting potential infringement of the
Patent Rights or misappropriation of the Know-How.  Except as otherwise set forth in the previous
sentence, Valentis’s obligations of confidentiality with respect to the
Customer Contact List shall be subject to the terms of Article 5 of this
Agreement.

2.3           No Implied Rights.  Only the licenses granted pursuant to the
express terms of this Agreement shall be of any legal force or effect.  No other license rights shall be granted or
created by implication, estoppel or otherwise. 
For the avoidance of doubt, by example only and without expanding or
narrowing the license grants of Sections 2.1 and 2.2, the grants of rights made
pursuant to Sections 2.1 and 2.2 do not include, and expressly exclude, any
right or license (a) to engage in any activities on behalf of or in collaboration
with any Third Party (other than as expressly set forth herein), or (b) to
release or waive any claim of infringement under any patent or patent
application owned or controlled by Valentis or its Affiliates, including,
without limitation, the Patent Rights.

2.4           Ownership; Enforcement;
No Challenge.

(a)           At all times, Valentis will retain ownership of the
Licensed Technology, including all embodiments of the Patent Rights or the
Know-How, that in each case is owned by Valentis as of the Effective Date, and
any improvements made by Valentis thereof, and nothing herein shall be
construed to limit Valentis’ right to freely use and commercialize such
Licensed Technology itself or with Third Parties.  Valentis retains the right, at its sole
discretion, to enforce, maintain and otherwise protect the Licensed
Technology.  Juvaris shall give Valentis
notice of any infringement by a Third Party of any Patent Rights owned or
controlled by Valentis or misappropriation of the Know-How which comes to Juvaris’
actual knowledge during the term of this Agreement.  Juvaris will cooperate on a commercially
reasonable basis with Valentis with respect to any actions Valentis may choose
to take pursuant to this Section 2.4, and Valentis will reimburse Juvaris for
its reasonable costs in this regard.

(b)           Except as required under applicable law, Juvaris shall not
participate, directly or indirectly, in any opposition or challenge to the
validity or enforceability of any Patent Right in any forum and Juvaris shall
not assist any Third Party in any such participation.  Any breach by Juvaris of this Section 2.4(b)
shall constitute a material breach of 

 4
 

 

 

this Agreement and any licenses or rights granted
hereunder may, at Valentis’s option, be terminable.

2.5           Reports, Records and
Audits.

(a)           Juvaris shall use reasonable commercial efforts to obtain
the right in each and every agreement entered into with a Juvaris Customer to
disclose to Valentis the activities, compositions of matter or articles of
manufacture made or undertaken by Juvaris for the benefit of such Juvaris
Customer.  Within forty-five (45) days
after the end of each calendar year, commencing with the first calendar year
after the Effective Date, Juvaris, unless in violation of the terms of an
agreement between Juvaris and a Juvaris Customer, shall deliver to Valentis a
written report which specifies with reasonable detail the activities,
compositions of matter or articles of manufacture made or undertaken by Juvaris
that are subject to this Agreement, including, without limitation, any Process
Development as to which Juvaris claims the benefit of the license grant of
Section 2.1.  The reports delivered by Juvaris
to Valentis pursuant to this Section 2.5(a) shall be Confidential Information
of Juvaris.

(b)           Juvaris shall maintain records fully and properly
reflecting those activities to be reported to Valentis pursuant to Section 2.5(a)
(the “Records”) in sufficient detail and in good scientific manner appropriate
for patent, regulatory and manufacturing purposes for at least three (3) years
after the date of delivery of the report containing such information.  Upon the written request of Valentis and not
more than once in each calendar year, Juvaris shall permit an independent third
party, selected by Valentis and reasonably acceptable to Juvaris, at Valentis’
expense, to have access during normal business hours to such of the Records of Juvaris
as may be reasonably necessary to verify compliance with the terms of this
Agreement, as well as the accuracy of the reports hereunder; provided, however,
that Juvaris shall not be obligated to disclose any information in such Records
to the extent such disclosure would violate the terms of an agreement between
Juvaris and a Juvaris Customer.  Juvaris
shall certify any statements by Juvaris personnel as to their accuracy and
correctness.

ARTICLE 3.

IMPROVEMENTS

Valentis shall be free to research, develop and patent
any improvements made by Valentis to the Licensed Technology and, except as
expressly set forth herein, no rights shall be or are to be construed as granted
under this Agreement to Juvaris to any patents or patent applications (other
than the Patent Rights) arising from such activities.

ARTICLE 4.

REPORTS AND RECORDS

4.1           Reports.  Juvaris shall make a written report to Valentis
within thirty (30) days after each anniversary of the Effective Date describing
Juvaris’ activities under the rights granted to Juvaris pursuant to Section 2.1.  Each such report shall also contain a written

 5
 

 

 

certification that Juvaris is in material compliance
with all relevant terms and conditions of this Agreement.  Valentis shall treat all such reports as
Confidential Information of Juvaris.

4.2           Records.  Juvaris shall, and shall cause any Juvaris
Customer to use reasonable efforts to, keep complete, true and accurate books
of account and records for the purpose of determining compliance with this
Agreement.

ARTICLE 5.

CONFIDENTIALITY

5.1           Confidential Information.  Except as expressly provided herein, the
parties agree that, for the term of this Agreement and for five (5) years
thereafter, the receiving party shall keep confidential and shall not publish
or otherwise disclose, and shall not use for any purpose except for the
purposes contemplated by this Agreement, any Confidential Information furnished
to such receiving party by a disclosing party hereto, except to the extent that
it can be established by the receiving party by written proof that such
Confidential Information:

(a)           was already known to the receiving party, other than under
an obligation of confidentiality to the disclosing party, at the time of
disclosure;

(b)           was generally available to the public or otherwise part of
the public domain at the time of its disclosure to the receiving party;

(c)           became generally available to the public or otherwise part
of the public domain after its disclosure other than through any act or
omission of the receiving party in breach of this Agreement; or

(d)           was subsequently disclosed to the receiving party by a
person or entity with no obligation to the disclosing party with respect to
such information.

5.2           Permitted Use and
Disclosures.  Each party
hereto may use or disclose information disclosed to it by the other party to
the extent such use or disclosure is reasonably necessary for the purposes contemplated
by this Agreement, and in such case pursuant to a confidentiality agreement no
less restrictive than the terms set forth in this Article 5, or in complying
with applicable law or government regulations; provided, however, that if a party is required to make any such
disclosure of the other party’s Confidential Information, other than pursuant
to such a confidentiality agreement, it will give reasonable advance notice to
such other party of such disclosure. 
Notwithstanding anything herein to the contrary, Juvaris shall be free
to disclose the Licensed Technology to the extent such disclosure is required
in its filings with regulatory and patent authorities.

5.3           Confidential Terms.  Except as expressly provided herein, each
party agrees that the terms of this Agreement and the transaction and
relationship with each other constitute Confidential Information and are not to
be disclosed to any Third Party without the consent of the other party; provided that disclosures may be made as required by securities
or 

 6
 

 

 

other applicable laws, or to a party’s accountants,
attorneys and other professional advisors, and potential partners and investors.

5.4           Existence of Agreement.  The parties hereby agree that the
consummation of this Agreement, but not any of the terms hereof, except as
otherwise permitted pursuant to Section 5.3, shall be deemed to be in the
public domain and may be announced or otherwise referred to by a party as
deemed appropriate.

ARTICLE 6.

REPRESENTATIONS AND WARRANTIES

6.1           Representations and
Warranties.

(a)           Valentis represents and warrants that:  (i) it is the sole and exclusive owner or
exclusive licensee of all right, title and interest in the Licensed Technology;
(ii) it has the legal right, authority and power to enter into this Agreement,
and to grant the licenses granted herein; (iii) it has not previously granted
and will not grant any rights in the Licensed Technology that conflict with the
rights and licenses granted to Juvaris herein; (iv) this Agreement shall
constitute a valid and binding obligation of Valentis enforceable in accordance
with its terms; and (v) the performance of its obligations under this Agreement
by Valentis shall not result in a breach of any agreement, contract or other
arrangement to which it is a party.

(b)           Juvaris represents and warrants that: (i) it has the legal
right, authority and power to enter into this Agreement; (ii) this Agreement
shall constitute a valid and binding obligation of Juvaris enforceable in
accordance with its terms; and (iii) the performance of its obligations under
this Agreement by Juvaris shall not result in a breach of any agreement,
contract or other arrangement to which it is a party.

6.2           Disclaimer.  Nothing in this Agreement is or shall be
construed as:

(a)           A warranty or representation by Valentis as to the
validity or scope of any claim or patent within the Patent Rights;

(b)           A warranty or representation by Valentis that anything
made, used, sold, or otherwise disposed of under any license granted in this
Agreement is or will be free from infringement of any patent rights or other
intellectual property right of any Third Party;

(c)           An obligation to bring or prosecute actions or suits
against Third Parties for infringement of any of the Patent Rights; or

(d)           Granting by implication, estoppel, or otherwise any
licenses or rights under patents or other rights of Valentis or Third Parties,
regardless of whether such patents or other rights are dominant or subordinate
to any patent within the Patent Rights.

(e)           An obligation by Valentis to maintain
any of the patent applications and patents listed on Schedule 1.9 hereto.

 7
 

 

 

6.3           No Warranties.  EXCEPT FOR THE EXPRESS WARRANTIES SET FORTH
IN SECTION 6.1, NEITHER PARTY GRANTS ANY WARRANTY, EXPRESS OR IMPLIED, EITHER
IN FACT OR BY OPERATION OF LAW, BY STATUTE OR OTHERWISE, AND EACH PARTY
SPECIFICALLY DISCLAIMS ANY EXPRESS OR IMPLIED WARRANTY OF TITLE, MERCHANTABILITY,
FITNESS FOR A PARTICULAR PURPOSE, OR NON-INFRINGEMENT OF THE INTELLECTUAL
PROPERTY RIGHTS OF ANY THIRD PARTY.

ARTICLE 7.

INDEMNIFICATION

7.1           Juvaris agrees to indemnify, defend and hold Valentis and
its directors, officers, shareholders, employees, contractors and agents (each,
an “Indemnitee”) harmless from and against any and all liabilities, claims,
demands, expenses (including, without limitation, attorneys and professional
fees and other costs of litigation), losses or causes of action brought by
Third Parties (each, whether by a Juvaris Partner or a Juvaris Customer, a “Liability”)
arising out of (i) the possession, manufacture, use, sale or other disposition
of Juvaris Products or the provision of Process Development, whether based on
breach of warranty, negligence, product liability or otherwise; (ii) the use by
Juvaris or Juvaris’ Customers of the Licensed Technology licensed hereunder; (iii)
any breach of a warranty, representation or covenant granted to Valentis
hereunder; or (iv) the exercise of any right granted to Juvaris or a Juvaris
Customer pursuant to this Agreement; except, in each case, to the extent due to
(a) an Indemnitee’s negligence or willful misconduct or violation of applicable
laws or breach of its representations and warranties made in Article 6 above or
(b) the infringement of the Licensed Technology on the intellectual property
rights of third parties, but only to the extent such infringement is due to the
Licensed Technology in the form provided by Valentis and not due to any
modifications made to such Licensed Technology by Juvaris or any Juvaris
Partners or Juvaris Customers.

7.2           An Indemnitee that intends to claim indemnification under
this Article 7 shall (i) promptly notify Juvaris in writing of any
Liability with respect to which the Indemnitee intends to claim such
indemnification, (ii) give Juvaris sole control of the defense and/or
settlement thereof, and (iii) provide Juvaris, at Juvaris’ expense, with
reasonable assistance and full information with respect to such Liability.  Juvaris shall not settle any claim, suit or
proceeding subject to this Article 7 or otherwise consent to an adverse judgment
in such claim, suit or proceeding if the same materially diminishes the rights
or interests of the Indemnitee without the express written consent of the
Indemnitee.  Notwithstanding the
foregoing, Juvaris shall have no obligations for any Liability if the
Indemnitee seeking indemnification makes any admission, settlement or other
communication regarding such Liability without the prior written consent of
Juvaris, which consent shall not be unreasonably withheld.

 8
 

 

 

ARTICLE 8.

TERM AND TERMINATION

8.1           Term.  The term of this Agreement will commence on
the Effective Date and remain in full force and effect until the expiration of
the last of the Patents, unless earlier terminated in accordance with this
Article 8.  If this Agreement has not
been terminated earlier in accordance with this Article 8, upon the expiration
of the Patents, all licenses to the Know-How granted in Article 2 shall become
fully paid-up, royalty free, perpetual and irrevocable.

8.2           Termination for Cause.

(a)           Either party may terminate this Agreement in the event the
other party has materially breached or defaulted in the performance of any of
its obligations hereunder, and such default has continued for thirty (30) days
after written notice thereof was provided to the breaching party by the
non-breaching party.  Any termination
shall become effective at the end of such thirty (30) day period unless the
breaching party has cured any such breach or default prior to the expiration of
such period.  Notwithstanding the
foregoing, if the party alleged to be in breach of this Agreement disputes such
breach by written notice to the other party within such thirty (30) day period,
the non-breaching party shall not have the right to terminate this Agreement
unless it has been determined that this Agreement was materially breached in
accordance with Section 9.12 below, and the breaching party fails to comply
with its obligations hereunder within thirty (30) days after such
determination.  Any such breach or
default by Juvaris alone shall not affect any sublicense granted to a Juvaris
Customer alone shall not affect the rights granted hereunder to any other Juvaris
Customer.

(b)           In the event a Juvaris Customer has materially breached or
defaulted in the performance of any of its obligations hereunder, Valentis may
require Juvaris to terminate, and Juvaris will terminate, any license granted
by Juvaris to such Juvaris Customer pursuant to Section 2.2, provided that such
default has continued for thirty (30) days after written notice thereof was
provided to the breaching party by Juvaris. 
Any termination shall become effective at the end of such thirty (30)
day period unless the breaching party has cured any such breach or default
prior to the expiration of such period. 
Any such breach or default by a Juvaris Customer alone, shall not affect
Juvaris or its related obligations, and any such breach or default by a Juvaris
Customer alone shall not affect the rights granted hereunder to any other Juvaris
Customer.

8.3           Termination for
Insolvency.  If voluntary or
involuntary proceedings by or against a party are instituted in bankruptcy
under any insolvency law, or a receiver or custodian is appointed for such
party, or proceedings are instituted by or against such party for corporate
reorganization or the dissolution of such party, which proceedings, if
involuntary, shall not have been dismissed within sixty (60) days after the
date of filing, or if such party makes an assignment for the benefit of
creditors, or substantially all of the assets of such party are seized or
attached and not released within sixty (60) days thereafter, the other party,
to the extent permitted under applicable law, may immediately terminate this
Agreement effective upon notice of such termination.

8.4           Termination by Juvaris.  Juvaris may terminate this Agreement for any
business reason upon thirty (30) days prior written notice to Valentis.  For clarity, any such termination by Juvaris
under this Section 8.4 shall not relieve Juvaris of its obligation to pay to
Valentis the amount set forth in Section 2.1 above on the date set forth
therein.

 9
 

 

 

8.5           Effect of Termination.

(a)           Accrued Rights and
Obligations.  Termination of
this Agreement for any reason shall not release any party hereto from any
liability which, at the time of such termination, has already accrued to the
other party or which is attributable to a period prior to such termination nor
preclude either party from pursuing any rights and remedies it may have
hereunder or at law or in equity with respect to any breach of this
Agreement.  It is understood and agreed
that monetary damages may not be a sufficient remedy for any breach of this
Agreement and that the nonbreaching party may be entitled to injunctive relief
as a remedy for any such breach. Such remedy shall not be deemed to be the
exclusive remedy for any such breach of this Agreement, but shall be in
addition to all other remedies available at law or in equity.

(b)           Return of Confidential
Information.  Upon any
termination of this Agreement, Juvaris and Valentis shall promptly return to
the other party all Confidential Information, including without limitation, any
know-how received from the other party (except Valentis may retain copies of
any reports or records furnished pursuant to Articles 2 and 4).

(c)           Licenses.  Except as expressly provided in this Article 8,
all licenses granted hereunder shall terminate upon the termination of this
Agreement.

8.6           Survival.  Sections 2.6, 7.3, 8.4 and 8.5, Articles 1, 5,
7, and 9 of this Agreement shall survive the expiration or termination of this
Agreement for any reason.  Any
sublicenses granted by Juvaris under and in accordance with the terms of
Article 2 shall survive any termination of this Agreement.

ARTICLE 9.

MISCELLANEOUS PROVISIONS

9.1           Governing Laws.  This Agreement and any dispute, including
without limitation any arbitration, arising from the performance or breach
hereof shall be governed by and construed and enforced in accordance with the
laws of the state of California, without reference to conflicts of laws principles.

9.2           Assignment.  Neither party may transfer or assign this
Agreement, directly or indirectly, or any of its rights hereunder without the
prior written consent, which shall not be reasonably withheld, of the other
party, other than (a) to one or more Affiliates, or (b) to a successor in
connection with the transfer or sale of all or substantially all of its
business relating to the subject matter of this Agreement.  Any attempted transfer or assignment in violation
of this Section 9.2 shall be void; provided:

(a)           Valentis shall have the right to terminate this Agreement
immediately in the event of a change of control or assignment by Juvaris to a
Third Party Potential Infringer, provided that Valentis, prior to such change
of control or assignment, has provided an accurate and updated list of Third
Party Infringers to Juvaris and provided further that, in the event of such
termination, such Third Party Potential Infringer receiving control of 

 10
 

 

 

Juvaris or assignment by Juvaris of this Agreement
shall have the right to continue practicing the rights and licenses granted
hereunder, but only with respect to the Juvaris Products under development
and/or commercialization at the time of such assignment by Juvaris that are the
subject of the assignment to such Third Party. 
Notwithstanding anything herein to the contrary, in the event that a
Third Party Potential Infringer receives assignment of this Agreement, such
assignment shall in no way be a waiver by Valentis of any pre-existing claim
for infringement of the Licensed Technology that Valentis may have against such
Third Party Potential Infringer prior to such assignment or grant of any
license by Valentis to such Third Party Potential Infringer under the Licensed
Technology, except for the rights and licenses to develop and commercialize
Juvaris Products expressly granted in the foregoing sentence.  As used herein, a “Third Party Potential Infringer”
shall mean an entity or person against whom Valentis had filed an
action for the infringement of the Licensed Technology and/or is then engaged
in active licensing discussions with Valentis with respect to the Licensed
Technology, in each case prior to a change of control or assignment by Juvaris
to such entity, and whom was previously identified by Valentis to Juvaris as a
Third Party Potential Infringer.

(b)           In the event of a permitted acquisition of all or
substantially all of a party’s assets relating to the subject matter of this
Agreement, the original party’s (or its successor’s) obligations hereunder, including
the obligation to make payment under Section 2.1 above, shall continue.  This Agreement shall be binding upon and
inure to the benefit of the parties and their permitted successors and assigns.

9.3           Waiver.  No waiver of any rights shall be effective
unless consented to in writing by the party to be charged and the waiver of any
breach or default shall not constitute a waiver of any other right hereunder or
any subsequent breach or default.

9.4           Severability.  In the event that any provisions of this
Agreement are determined to be invalid or unenforceable by a court of competent
jurisdiction, the remainder of the Agreement shall remain in full force and
effect without said provision.

9.5           Notices.  All notices, requests and other
communications hereunder shall be in writing and shall be delivered or sent in
each case to the respective address specified below, or such other address as
may be specified in writing to the other party hereto, and shall be effective
on receipt:

	
   

  	
  If to VALENTIS:

  
	
   

  	
   

  
	
   

  	
  Valentis, Inc.

  
	
   

  	
  863A Mitten Road

  
	
   

  	
  Burlingame, California 94010

  
	
   

  	
  Attn:

  	
  Benjamin F. McGraw, III, Pharm. D.

  
	
   

  	
   

  	
  President and
  Chief Executive Officer

  
	
   

  	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  Liner Yankelevitz Sunshine & Regenstreif LLP

  
	
   

  	
  199 Fremont St,
  20th Floor

  

 11
 

 

 

	
  

  	
  San Francisco, Ca 94105

  
	
   

  	
  Attn: Gregory
  Alan Rutchik, Esq.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  If to JUVARIS:

  
	
   

  	
   

  
	
   

  	
  Juvaris
  Biotherapeutics, Inc.

  
	
   

  	
  6200 Stoneridge
  Mall Road, 3F

  
	
   

  	
  Pleasanton, CA
  94588

  
	
   

  	
  Attn: President/CEO

  
	
   

  	
  Fax:
  925-399-6100

  
	
   

  	
   

  
	
   

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

  
	
   

  	
   

  
	
   

  	
  Wilson Sonsini
  Goodrich & Rosati P.C.

  
	
   

  	
  12235 El Camino
  Real, Suite 200

  
	
   

  	
  San Diego, CA
  92130

  
	
   

  	
  Attn: Technology
  Transactions

  
	
   

  	
   

  
	
   

  	
   

  

9.6           Independent Contractors.  Both parties are independent contractors
under this Agreement.  Nothing contained
in this Agreement is intended nor is to be construed so as to constitute Valentis
or Juvaris as partners or joint venturers with respect to this Agreement.  Except as expressly provided herein, neither
party shall have any express or implied right or authority to assume or create
any obligations on behalf of or in the name of the other party or to bind the
other party to any other contract, agreement, or undertaking with any Third
Party.

9.7           Compliance with Laws.  In exercising their rights under this
license, the parties shall comply in all material respects with the
requirements of any and all applicable laws, regulations, rules and orders of
any governmental body having jurisdiction over the exercise of rights under
this Agreement. Juvaris shall, with respect to the Patent Rights, abide by all
applicable patent marking statutes and, as advised by its own counsel, mark any
Juvaris Products accordingly.

9.8           Bankruptcy.  All rights and licenses granted under or
pursuant to this Agreement by Valentis to Juvaris, for all purposes of Section
365(n) of Title XI of the United States Code (“Title XI”), licenses of
rights to “intellectual property” as defined in Title XI.  During the term of this Agreement Valentis
shall create and maintain current copies to the extent practicable of all
Licensed Technology.  If a bankruptcy
proceeding is commenced by or against Valentis under Title XI, Juvaris shall be
entitled to a copy of any and all such intellectual property and all
embodiments of such intellectual property, and the same, if not in the
possession of Juvaris, shall be promptly delivered to it (a) upon Juvaris’
written request following the commencement of such bankruptcy proceeding,
unless Valentis, or its trustee or receiver, elects within thirty (30) days to
continue to perform all of its obligations under this Agreement, or (b) if not
delivered as provided under clause (a) above, upon Juvaris’ request following
the rejection of this Agreement by or on behalf of Valentis.  If Juvaris has taken possession of all
applicable 

 12
 

 

 

embodiments of the intellectual property of Valentis
pursuant to this Section 9.8 and the trustee in bankruptcy of Valentis does not
reject this Agreement, Juvaris shall return such embodiments upon request.  If Valentis seeks or involuntarily is placed
under Title XI and the trustee rejects this Agreement as contemplated under 11
U.S.C. 365(n)(1), Juvaris hereby elects, pursuant to Section 365(n) of Title
XI, to retain all rights granted to it under this Agreement to the extent
permitted by law.

9.9           Use of Names.  Neither party shall use the name or
trademarks of the other party, except to the extent that a party is permitted
to use the Confidential Information of the other party pursuant to Article 5,
without the prior written consent of such other party.

9.10         Further Actions.  Each party agrees to execute, acknowledge and
deliver such further instruments, and do such other acts, as may be necessary
and appropriate in order to carry out the purposes and intent of this
Agreement.

9.11         Limitation of Liability.  IN NO EVENT WILL EITHER PARTY BE LIABLE FOR
ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR INDIRECT DAMAGES ARISING IN ANY WAY
OUT OF THIS AGREEMENT, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY.  THIS LIMITATION WILL APPLY EVEN IF THE OTHER
PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGE AND NOTWITHSTANDING
ANY FAILURE OF ESSENTIAL PURPOSE OF ANY LIMITED WARRANTY PROVIDED HEREIN.

9.12         Arbitration.

(a)           Solely with respect to any dispute between the parties to
this Agreement (other than any dispute which arises out of or relates to
infringement, validity and/or enforceability of the Patent Rights) upon ten
(10) days written notice, any party involved in the dispute may initiate
arbitration by giving notice to that effect to the other party or parties
involved in the dispute and by filing the notice with the American Arbitration
Association or its successor organization (“AAA”) in accordance with its
Commercial Arbitration Rules.  Such
dispute shall then be settled by arbitration in San Mateo County, in accordance
with the Commercial Arbitration Rules of the AAA or other rules agreed to by
the parties involved in the dispute, by a panel of one neutral arbitrator, who
shall be selected by the parties involved in the dispute using the procedures
for arbitrator selection of the AAA.

(b)           The parties acknowledge that this Agreement evidences a
transaction involving interstate commerce. Insofar as it applies, the United
States Arbitration Act shall govern the interpretation of, enforcement of, and
proceedings pursuant to the arbitration clause in this Agreement.  Except insofar as the United States
Arbitration Act applies to such matters, the agreement to arbitrate set forth
in this Section 9.12 shall be construed, and the legal relations among the
parties shall be determined in accordance with, the substantive laws of the
State of California.

(c)           The arbitrator shall render its decision and award,
including a statement of reasons upon which such award is based, within thirty
(30) days after the arbitration hearing. 
The decision shall be in writing and shall be binding upon the parties
involved in the 

 13
 

 

 

dispute, final and non-appealable. Judgment upon the
award rendered by the panel may be entered in any court having jurisdiction
thereof in accordance with Section 9.13(a).

(d)           Except as provided under the United States Arbitration Act
and with respect to the infringement, validity and/or enforceability of the
Patent Rights, no action at law or in equity based upon any dispute that is
subject to arbitration under this Section 9.12 shall be instituted.

(e)           All expenses of any arbitration pursuant to this Section 9.12,
including fees and expenses of the parties’ attorneys, fees and expenses of the
arbitrators, and fees and expenses of any witness or the cost of any proof
produced at the request of the arbitrators, shall be paid by the non-prevailing
party.

9.13         Venue; Jurisdiction.

(a)           Any action or proceeding brought by either party seeking
to enforce any provision of, or based on any right arising out of, this
Agreement may be brought against any of the parties in the courts of the State
of California, county of San Mateo . 
Each party hereby irrevocably submits to the jurisdiction of the state
courts of the State of California and the country of San Mateo and to the
jurisdiction of any United States District Court in the State of California,
county of San Mateo, for the purpose of any suit, action, or other proceeding
arising out of or based upon this Agreement or the subject matter hereof
brought by any party or its successors or assigns.

(b)           Process in any action or proceeding seeking to enforce any
provision of, or based on any right arising out of, this Agreement may be
served on any party by registered mail at the address to which notices are to
be given pursuant to Section 9.5. 
Nothing herein shall affect the right of a party to serve process in any
other manner permitted by applicable law. 
Each party further agrees that final judgment against it in any such
action or proceeding arising out of or relating to this Agreement shall be
conclusive and may be enforced in any other jurisdiction within or outside the
United States of America by suit on the judgment, a certified or exemplified
copy of which shall be conclusive evidence of the fact and of the amount of its
liability.

(c)           Each party agrees that it shall not, and that it shall
instruct those in its control not to, take any action to frustrate or prevent
the enforcement of any writ, decree, final judgment, award (arbitral or
otherwise) or order entered against it with respect to this Agreement or the
Patent Rights and shall agree to be bound thereby as if issued or executed by a
competent judicial tribunal having personal jurisdiction situated in its
country of residence or domicile.

9.14         Entire Agreement;
Amendment.  This Agreement
constitutes the entire and exclusive Agreement between the parties with respect
to the subject matter hereof and supersedes and cancels all previous
discussions, agreements, commitments and writings in respect thereof.  No amendment or addition to this Agreement
shall be effective unless reduced to writing and executed by the authorized
representatives of the parties.

 14
 

 

 

9.15         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.

 15
 

 

 

IN WITNESS WHEREOF, Valentis and Juvaris have executed
this Agreement in duplicate originals by duly authorized officers.

	
  VALENTIS , INC.

  	
  JUVARIS BIOTHERAPEUTICS, INC

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ John J. Reddington

  	
   

  	
  By:

  	
  /s/ Martin Cleary

  
	
   

  	
  Name: John J. Reddington

  	
   

  	
   

  	
  Name: Martin Cleary

  
	
   

  	
  Title: Chief Operating Officer

  	
   

  	
   

  	
  Title: President and Chief Executive Officer

  
	
   

  	
   

  	
   

  

 

 16

 

SCHEDULE 1.9

PATENT RIGHTS

 

	
  Family

  	
   

  	
  Title

  	
   

  	
  Number

  	
   

  	
  Filed/Priority Date

  
	
  1

  	
   

  	
  Methods for Purifying Nucleic
  Acids (Tangential Flow Ultrafiltration/Diafiltration
  [UF/DF] for plasmid purification)

  	
   

  	
  US6,011,148
WO98/05673

  EP0923592B1

  AU717136B2

  CA2261150C

  JP3492702B2

  	
   

  	
  filed 1996-08-01

  
	
  2

  	
   

  	
  Methods
  for Purifying Nucleic Acids (Purification protocol
  including static mixing for lysis, TMAE anion exchange chromatography and
  UF/DF for plasmid purification)

  	
   

  	
  WO00/05358
US09/121,798

  (US Pub. No. 2002/0198372A1)

  EP1098966A1

  AU48638/99A1

  CA2338397AA

  JP2002-521029,A

  (unexamined publication no.)

  	
   

  	
  PCT
  filed 1999-07-07,

  claiming priority to 1998-07-23

  
	
  3

  	
   

  	
  Process
  and Equipment for Plasmid Purification (TMAE anion exchange
  and/or hydrophobic interaction chromatography (HIC) for plasmid purification)

  	
   

  	
  US7,026,468 (issuing
  from 

  09/774,284, published as 

  2001/034435A1)

  US 11/327,987

  (US Pub. No. 2006/0106208A1)-

  pending

  	
   

  	
  filed
  1997-07-03, claiming priority to 1996-07-19 provisional.

  
	
  4

  	
   

  	
  Apparatus
  and Method for Preparative Scale Purification of Nucleic Acids (flotation of alkaline precipitate for large scale plasmid
  purification)

  	
   

  	
  WO04/024283
US10/527,618

  (US Pub. No. 2006-0166331A1)

  EP1554398A2

  CA2498518AA

  AU3267175AA

  JP2005-538717,A

  (unexamined publication no.)

  	
   

  	
  filed
  2003-09-12 as PCT app., claiming priority to 2002-09-13 (US Provisional)

  
	
  5

  	
   

  	
  Methods
  for Preparing Polynucleotide Transfection Complexes

  	
   

  	
  US 6,303,378

  (issuing from 09/178,371)

  	
   

  	
  Filed
  10-23-98, claiming priority to 10-24-97 and 7-28-98

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