MINES MANAGEMENT INC - S-3 filing on 2004-04-07

EXHIBIT 10.vi

EXCLUSIVE FINDER'S AGREEMENT

This Finder's Agreement (this "Agreement") is made as of December 5, 2003,

between Mines Management, Inc., an Idaho Corporation, (the "Company"), and The

Shemano Group, Inc., a California corporation (the "Finder"). The Finder and

the Company agree:

1. ENGAGEMENT OF FINDER: The Company hereby engages the Finder, and

the Finder hereby accepts such engagement, to act as the Company's

finder with respect to sales by the Company in a private placement

transaction (the "Offering") of up to $15 million

aggregate principal amount of Equity, Equity-Related or Debt

Securities (the "Securities") of the Company to the investors.

2. OFFERING PROCEDURES: The Finder will introduce the Company to

investors who the Finder represents and warrants are "accredited

investors," as that term is defined in Rule 501 of Regulation D

promulgated under the Securities Act of 1933, as amended (the "1933

Act"), with whom the Finder has a pre-existing substantive

relationship.

3. FINDER'S COMPENSATION: In consideration for the services rendered

by the Finder hereunder, the Company shall pay to the Finder, or

cause the Finder to be paid, compensation as provided in this

section within 3 days of the Company's receipt of funds from the

Offerees.

(A) CASH COMPENSATION: The Company shall pay to the Finder cash

compensation equal to seven percent (7%) of the gross

Offering funds received in the Offering.

(B) WARRANTS: The Finder shall receive 3% warrant compensation.

The warrant calculation translates to 30,000 warrants per $1

million raised. The warrant's strike shall equal the strike,

expiration and registration rights of that of the investor in

the respective offering. The equity interests will be priced

on the same terms as the investors. The Shares shall be

subject to equitable adjustment for stock splits, stock

dividends and similar events. The shares shall have

"piggyback" registration rights.

For purposes of determining the Finder's compensation under

this Section 3, the gross offering funds received in the

Offering(s) shall include any amounts paid to the Company by

investors in respect to an exercise or conversion of any of

the Securities or Warrants, (excluding Warrants issued to

the Finder) including the value allocated to any

securities not issued pursuant to a "cashless exercise" or

similar provision.

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4. CERTAIN MATTERS RELATING TO FINDER'S DUTIES:

(A) The Finder's responsibilities shall be limited to introducing

potential investors to the Company, and the Finder shall not

have authority to offer or sell the Securities to any

potential investor. Finder shall not use any general

solicitation or general advertising within the meaning of the

applicable securities laws in connection with any offering.

The Finder shall have no responsibility to participate or

assist in any negotiations between any potential investor and

the Company. The Finder will have no responsibility to act,

and the parties contemplate that the Finder will not act, as

a broker or dealer with respect to the offer or sale of the

Securities. Further, the finder shall have no responsibility

for fulfilling any SEC reporting or filing requirements as

relates to the Company provided however, Finder agrees to

provide Company with reasonable assistance related to any

registration, qualification or other requirements of

applicable securities laws and other regulatory matters.

(B) The Finder agrees to introduce the Company to Offerees

only in states in which the Finder has been advised by the

Company that offers and sales of Securities can be legally

made by the Company.

manner consistent with the instructions of the Company. Such

performance shall include, but not be limited to, the

delivery to each Offeree a current copy of the Private

Placement Memorandum, Subscription Agreement and any Offering

Questionnaire and/or similar documents provided to the Finder

by the Company, as such documents may be amended from time to

time by the Company and delivered to the Finder. The Finder

shall consecutively number each copy of the Private Placement

Memorandum (which will include the first letter of the

Finder's name or other identifying mark sufficient to

designate an Offeree introduced by the Finder); keep a log of

when and to whom each copy of the Private Placement

Memorandum is given, with the Private Placement Memorandum

numbers; maintain a copy of any written information the

Finder obtains regarding the suitability of each Offeree; and

only use the Private Placement Memorandum in introducing

Offerees to the Company. The Finder shall provide this log

and all such written information to the Company at any time

and promptly upon request of the Company at the termination

of this Agreement.

(D) The Finder is and will hereafter act as an independent

contractor and not as an employee of the Company and nothing

in this Agreement shall be interpreted or construed to create

any employment, partnership, joint venture, or other

relationship between the Finder and the Company. The Finder

will not hold itself out as having, and will not state to any

person that the Finder has, any relationship with the Company

other than as an independent contractor. The Finder shall

have no right or power to find or create any liability or

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obligation for or in the name of the Company or to sign any

documents on behalf of the Company.

5. RIGHT OF FIRST REFUSAL. In consideration for The Shemano Group to

act as the finder in connection with the proposed offering, the

Company hereby grants The Shemano Group a right of first refusal to

serve as the Company's investment banker in connection with

any financial transaction for a period of 1 year from the closing

of the transaction. A "financial transaction" as defined in

this Section 5 is a private placement or registered public offering

of any type for debt or equity financing of not less than $5

million. In the event the company advises The Shemano Group

that it desires to effect any financial transaction, the Company

and The Shemano Group will negotiate in good faith the terms of The

Shemano Groups engagement in a separate agreement which would set

forth, among other matters, compensation for The Shemano Group

based upon customary fees for the services provided.

6. TERMINATION OF AGREEMENT. Either party may terminate this Agreement

by notifying the other party in writing upon a material breach by

that other party, unless such breach is curable and is in fact

cured within 15 days after such notice. This Agreement will

terminate upon completion or termination of the Offering. The

Company may terminate this Agreement following ninety (90) days

after the date hereof upon written notice. Notwithstanding the

foregoing, all provisions of this Agreement other than section 1, 2

and 4 shall survive the termination of this Agreement with respect

to Offerees who the Finder introduces to the Company prior to any

termination with respect to the Offering. The Finder shall be

entitled to compensation under section 3 based on investments made

by such Offerees prior to the termination of this Agreement or at

any time within one year thereafter.

7. INDEMNIFICATION. The Company and the Finder each shall indemnify

and defend the other and the other's affiliates, directors,

officers, employees, agents, consultants, attorneys, accountants

and other representatives (each an "Indemnified Person" in this

subsection (a)) and shall hold each Indemnified Person harmless, to

the fullest extent permitted by law, from and against any and all

claims, liabilities, losses, damages and expenses (including

reasonable attorney's fees and costs), as they are incurred, in

connection with the Offering, resulting from the indemnifying

party's negligence, bad faith or willful misconduct in connection

with the Offering, any violation by the indemnifying party (not

caused by an Indemnified Person) of Federal or state securities

laws in connection with the Offering, or any breach by the

indemnifying party of this Agreement. In case any litigation or

proceeding shall be brought against any Indemnified Person under

this section, the indemnifying party shall be entitled to assume

the defense of such litigation or proceeding with counsel of the

indemnifying party's choice at its expense (in which case the

indemnifying party shall not be responsible for the fees and

expenses of any separate counsel retained by such Indemnified

Person, except in the limited circumstances described below in this

section); provided, however, that such counsel shall be reasonably

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satisfactory to the Indemnified Person. Notwithstanding the

indemnifying party's election to assume the defense of such

litigation or proceeding (a) such Indemnified Person shall have the

right to employ separate counsel and to participate in the defense

of such litigation or proceeding, and (b) the indemnifying party

shall bear the reasonable fees, costs and expenses of separate

counsel if (but only if) the use of counsel selected by the

indemnifying party to represent such Indemnified Person would

present such counsel with a conflict of interest under applicable

laws or rules of professional conduct.

8. CONFIDENTIALITY OF OFFEREE INFORMATION. The Company

acknowledges that the identity of the Offerees, and all

confidential information about Offerees received by the Company

from an Offeree or the Finder, is confidential information of the

Finder and may not be shared with any other person without the

consent of the Finder.

9. NOTICES. Any notice, consent, authorization or other

communication to be given hereunder shall be in writing and shall

be deemed duly given and received when delivered personally, when

transmitted by fax, three days after being mailed by first class

mail, or one day after being sent by a nationally recognized

overnight delivery service, charges and postage prepaid, properly

addressed to the party to receive such notice, at the following

address or fax number for such party (or at such other address or

fax number as shall hereafter be specified by such party by like

notice):

(A) If to the Company, to:

Glenn Dobbs

President and CEO

905 West Riverside, Suite 311

Spokane, WA 99201

Telephone: (509) 838-6050

Fax: (509) 838-0486

(B) If to the Finder, to:

Michael Jacks

Partner

The Shemano Group, Inc.

601 California Street, Suite 1150

San Francisco, Calif. 94108

Telephone: (415) 274-3200

Fax: (415) 274-3238

E-mail: mjacks@shemano.com

10. COMPANY TO CONTROL TRANSACTIONS. The prices, terms and conditions

under which the Company shall offer or sell any Securities shall be

determined by the Company in its sole discretion. The Company

shall have the authority to control all discussions and

negotiations regarding any proposed or actual offering or sale of

Securities. Nothing in this Agreement shall obligate the Company

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to actually offer or sell any Securities or consummate any

transaction. The Company may terminate any negotiations or

discussions at any time and reserves the right not to proceed with

any offering or sale of Securities. Compensation pursuant to this

Agreement shall only be paid to the Finder in the event of an

actual Closing of the Offering to an Offeree introduced by Finder.

11. CONFIDENTIALITY OF COMPANY INFORMATION. The Finder, and

its officers, directors, employees and agents shall maintain in

strict confidence and not copy, disclose or transfer to any

other party (1) all confidential business and financial information

regarding the Company and its affiliates, including without

limitation, projections, business plans, marketing plans, product

development plans, pricing, costs, customer, vendor and supplier

lists and identification, channels of distribution, and terms of

identification of proposed or actual contracts and (2) all

confidential technology of the Company. In furtherance of the

foregoing, the Finder agrees that it shall not transfer, transmit,

distribute, download or communicate, in any electronic, digitized

or other form or media, any of the confidential technology of the

Company. The foregoing is not intended to preclude the Finder from

utilizing, subject to the terms and conditions of this Agreement,

the Private Placement Memorandum and/or other documents prepared or

approved by the Company for use in the Offering.

All communications regarding any possible transactions, requests

for due diligence or other information, requests for facility

tours, product demonstrations or management meetings, will be

submitted or directed to the Company, and the Finder shall not

contact any employees, customers, suppliers or contractors of the

Company or its affiliates without express permission. Nothing in

this Agreement shall constitute a grant of authority to the Finder

or any representatives thereof to remove, examine or copy any

particular document or types of information regarding the Company,

and the Company shall retain control over the particular documents

or items to be provided, examined or copied. If the Offering is not

consummated, or if at any time the Company so requests, the Finder

and its representatives will return to the Company all copies of

information regarding the Company in their possession.

The provisions of this Section shall survive any termination of

this Agreement.

12. PRESS RELEASES, ETC. The Company shall control all press

releases or announcements to the public, the media or the industry

regarding any offering, placement, transaction or business

relationship involving the Company or its affiliates. Except for

communication to Offerees in furtherance of this Agreement and the

provision of the Private Placement Memorandum, the Finder will not

disclose the fact that discussions or negotiations are taking place

concerning a possible transaction involving the Company, or the

status or terms and conditions thereof.

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13. DUE DILIGENCE: Neither the Company, nor any of its

directors, officers or shareholders, should, in any way

rely on the Finder to perform any due diligence with respect to the

Company. It is expressly understood and agreed that to the extent

due diligence is conducted; it will be conducted by the investors.

14 EXPENSES, ETC. The compensation described in Section 3 of this

Agreement shall be the Finder’s sole compensation for all of its

services and efforts to the Company and its affiliates, in

connection with any offering or placement of Securities. However,

while the Finder shall pay all of its own costs and expenses

exceeding two thousand ($2,000) in carrying out its activities

hereunder; the Company will reimburse the Finder for the first

$2,000 of aforementioned expenses after they have been incurred by

the Finder, and simply accounted for to the Company. The Finder

shall be exclusively responsible for any compensation, fees,

commissions or payments of its employees, agents representatives,

co-finders or other persons or entities utilized by it in connection

with its activities on behalf of the Company, and the Finder will

indemnify and hold harmless the Company and its affiliates from the

claims of any such persons or entities.

15. COMPLIANCE WITH LAWS. The Finder represents and warrants that it is

a duly registered broker/dealer and in good standing with the SEC,

NASD and the State of California and has and shall maintain such

registrations as well as all other necessary licenses and permits

to conduct its activities under this Agreement, which it shall

conduct in compliance with applicable federal and state laws

relating to a private placement under Regulation D of the 1933 Act.

The Finder represents that it is not a party to any other agreement

which would conflict with or interfere with the terms and

conditions of this Agreement.

16 ASSIGNMENT PROHIBITED. No assignment of this Agreement shall be

made the prior written consent of the other party.

17. AMENDMENTS. Neither party may amend this Agreement or rescind any

of its existing provisions without the prior written consent of the

other party.

18. GOVERNING LAW. This Agreement shall be deemed to

have been made in the State of California and shall be construed,

and the rights and liabilities determined, in accordance with the

law of the State of California, without regard to the conflicts of

laws rules of such jurisdiction.

19. WAIVER. Neither Finder’s nor the Company’s failure to insist at any

time upon strict compliance with this Agreement or any of its terms

nor any continued course of such conduct on their part shall

constitute or be considered a waiver by Finder or the Company of any

of their respective rights or privileges under this Agreement.

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20. SEVERABILITY. If any provision herein is or should become

inconsistent with any present or future law, rule or regulation of

any sovereign government or regulatory body having jurisdiction over

the subject matter of this Agreement, such provision shall be deemed

to be rescinded or modified in accordance with such law, rule or

regulation. In all other respects, this Agreement shall continue to

remain in full force and effect.

21. COUNTERPARTS. This Agreement may be executed in one or more

counterparts, each of which shall be deemed an original, and will

become effective and binding upon the parties at such time as all of

the signatories hereto have signed a counterpart of this Agreement.

All counterparts so executed shall constitute one Agreement binding

on all of the parties hereto, notwithstanding that all of the

parties are not signatory to the same counterpart. Each of the

parties hereto shall sign a sufficient number of counterparts so

that each party will receive a fully executed original of this

Agreement.

22. ENTIRE AGREEMENT. This Agreement and all other

agreements and documents referred herein constitutes the entire

agreement between the Company and the Finder. No other agreements,

covenants, representations or warranties, express or implied, oral

or written, have been made by any party hereto to any other party

concerning the subject matter hereof. All prior and

contemporaneous conversations, negotiations, possible and alleged

agreements, representations, covenants and warranties concerning

the subject matter hereof are merged herein. This is an integrated

Agreement.

23. ARBITRATION. The parties agree that this Agreement and all

controversies that may arise between the Finder and the Company,

whether occurring prior, on or subsequent to the date of this

Agreement, will be determined by arbitration. The parties understand

that:

(A) Arbitration is final and binding on the parties.

(B) The parties are waiving their right to seek remedies in

court, including the right to a jury trial.

different from court proceedings.

(D) The arbitrators' award is not required to include factual

findings or legal reasoning and any party's right to appeal

or to seek modification or rulings by the arbitrators is

strictly limited.

(E) The panel of arbitrators will typically include a minority of

arbitrators who were or are affiliated with the securities

industry.

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The parties agree that any arbitration under this Agreement

will be held at the facilities of and before an Arbitration Panel

appointed by the National Association of Securities Dealers, Inc.

("NASD"), or if the NASD refuses to accept jurisdiction, then

before JAMS/ENDISPUTE in San Francisco, California. The award of

the arbitrators, or of the majority of them, will be final, and

judgments upon the award may be entered in any court, state or

federal, having jurisdiction. The parties hereby submit themselves

and their personal representatives to the jurisdiction of any state

or federal court for the purpose of such arbitration and entering

such judgment.

Any forbearance to enforce an agreement to arbitrate will not

constitute a waiver of any rights under this Agreement except to

the extent stated herein.

THIS AGREEMENT IS GOVERNED BY A PRE-DISPUTE ARBITRATION CLAUSE CONTAINED IN

PARAGRAPH 23 OF THIS AGREEMENT

THE SHEMANO GROUP, INC. (the "Finder")

/s/ Michael Jacks

By: _________________________________

Michael Jacks

Title:Partner

MINES MANAGEMENT, INC. (the "Company")

/s/ Glenn Dobbs

By: ____________________________________

Glenn Dobbs

Title: President and CEO, Director