Exhibit 10.2

 

ESCROW AGREEMENT

 

THIS AGREEMENT is made as of the 13th day of July, 2011.

 

AMONG:

 

ECU SILVER MINING INC.

 

(the “Corporation”)

 

- and -

 

GOLDEN MINERALS COMPANY

 

(“Golden Minerals”)

 

- and -

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

(the “Escrow Agent”)

 

WHEREAS:

 

1.             Golden Minerals has subscribed for and offered to purchase from
the Corporation on a private placement basis (the “Placement”) $15,000,000
principal amount (the “Subscription Price”) of 0.0% convertible senior unsecured
notes of the Corporation (the “Notes”), on and subject to the terms and
conditions of a subscription agreement dated the 24th day of June, 2011 between
the Corporation and Golden Minerals (the “Subscription Agreement”);

 

2.             Golden Minerals and the Corporation have agreed that the Original
Escrowed Funds (as hereinafter defined) are to be delivered upon closing of the
Placement (“Closing”) to the Escrow Agent, to be held on the terms and subject
to the conditions provided for in this Escrow Agreement;

 

3.             the Escrow Agent has agreed to undertake and perform its duties
according to the terms and conditions hereof.

 

NOW THEREFORE in consideration of the mutual premises and covenants contained
herein, and other good and valuable consideration (the receipt and sufficiency
of which are acknowledged by each party), the parties hereto agree as follows:

 

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ARTICLE 1
INTERPRETATION

 

1.1                            Definitions

 

In this Escrow Agreement, including the Recitals set forth above and the
Schedules appended hereto, the following terms and expressions will have the
following meanings:

 

(a)           “Arbiter” has the meaning ascribed thereto in Section 3.6(b)(i);

 

(b)           “Arbitration Act” has the meaning ascribed thereto in
Section 3.6(a);

 

(c)           “Arrangement Agreement” means the arrangement agreement dated
June 24, 2011 between Golden Minerals and the Corporation, including (unless the
context  otherwise requires) the Schedules thereto, as the same may be amended,
supplemented or otherwise modified from time to time in accordance with the
terms thereof;

 

(d)           “Business Day” means any day, other than a Saturday, a Sunday or
any other day on which the principal chartered banks located in (i) Denver,
Colorado, (ii) Montreal, Québec or (iii) Toronto, Ontario are not open for
business during normal banking hours;

 

(e)           “Cash Payment Forecast Schedule” has the meaning ascribed thereto
in Section 3.1(b)(iii);

 

(f)            “Challenge Decision” means a decision, order, judgment or decree
of the Arbiter made in respect of any Challenged Disapproval or Challenged
Default Claim;

 

(g)           “Challenge Settlement” means any written agreement between the
Corporation and Golden Minerals entered into in respect of the final settlement
of a Challenged Disapproval or a Challenged Default Claim;

 

(h)           “Challenged Default Claim” has the meaning ascribed thereto in
Section 3.5(a);

 

(i)            “Challenged Default Claim Notice” has the meaning ascribed
thereto in Section 3.5(a);

 

(j)            “Challenged Disapproval” has the meaning ascribed thereto in
Section 3.3(a);

 

(k)           “Challenged Disapproval Notice” has the meaning ascribed thereto
in Section 3.3(a);

 

(l)            “Claim of Default” has the meaning ascribed thereto in
Section 3.4(a);

 

(m)          “Closing” has the meaning ascribed thereto in the Recitals above;

 

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(n)           “Closing Disbursement” means $2,850,000, being the amount released
to the Corporation by Golden Minerals at Closing for the purposes set forth in
the Closing Cash Payment Forecast Schedule;

 

(o)           “Closing Cash Payment Forecast Schedule” means the cash payment
forecast schedule attached hereto as Schedule “B”;

 

(p)           “Convertible Note Certificate” means the certificate evidencing
the Notes issued by the Corporation to Golden Minerals on the date of Closing;

 

(q)           “Disapproval Notice” has the meaning ascribed thereto in
Section 3.2(a);

 

(r)            “Disapproved Amount” has the meaning ascribed thereto in
Section 3.2(a)(ii);

 

(s)           “Disbursement Request” has the meaning ascribed thereto in
Section 3.1(a);

 

(t)            “Escrow Agent” means Computershare Trust Company of Canada and
any successor escrow agent appointed in accordance with the provisions hereof;

 

(u)           “Escrow Agreement” means this escrow agreement and all instruments
supplemental or ancillary hereto or in amendment or confirmation hereof, and
“hereof”, “hereto”, “hereunder” and similar expressions mean and refer to this
Escrow Agreement and not to any particular section or subdivision hereof;

 

(v)           “Escrowed Funds” means the Original Escrowed Funds, together with
all Interest earned thereon, less any amount by which such funds may be reduced
pursuant to any release of funds hereunder from time to time, that are held in
trust by the Escrow Agent from time to time pursuant to the provisions hereof;

 

(w)          “Event of Default” has the meaning ascribed thereto in the
Convertible Note Certificate;

 

(x)            “Interest” has the meaning ascribed thereto in Section 2.3(b);

 

(y)           “Notes” has the meaning ascribed thereto in the Recitals above;

 

(z)            “Original Escrowed Funds” means $12,150,000, being the
Subscription Price less the Closing Disbursement;

 

(aa)         “Permitted Uses” has the meaning ascribed thereto in Schedule “A”;

 

(bb)         “Person” shall be broadly interpreted and includes an individual,
partnership, association, body corporate, trustee, executor, administrator,
legal representative, governmental entity or any other entity, whether or not
having legal status;

 

(cc)         “Placement” has the meaning ascribed thereto in the Recitals above;

 

(dd)         “Reconciliation Schedule” has the meaning ascribed thereto in
Section 3.1(c);

 

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(ee)         “Requested Disbursement Amount” has the meaning ascribed thereto in
Section 3.1(b)(i);

 

(ff)           “Subscription Agreement” has the meaning ascribed thereto in the
Recitals above; and

 

(gg)         “Subscription Price” has the meaning ascribed thereto in the
Recitals above.

 

1.2                            Definitions in Arrangement Agreement

 

Terms defined in the Arrangement Agreement and used in this Escrow Agreement
have the same meanings given to them in the Arrangement Agreement unless
otherwise defined herein or the context otherwise requires.

 

1.3                            Schedules

 

The following Schedules are attached to and incorporated by reference in, and
form an integral part of, this Escrow Agreement:

 

Schedule “A” — Permitted Uses of Escrowed Funds; and

 

Schedule “B” — Closing Cash Payment Forecast Schedule.

 

ARTICLE 2
THE ESCROW RELATIONSHIP

 

2.1                            Appointment of Escrow Agent and Establishment of
Escrow

 

The Escrow Agent agrees to act as escrow agent for the Escrowed Funds in
accordance with the terms hereof and hereby acknowledges receipt from Golden
Minerals of the Subscription Price and agrees that it will hold the Escrowed
Funds as escrow agent for and on behalf of Golden Minerals and the Corporation
and invest, disburse and otherwise deal with the same strictly in accordance
with the terms of this Escrow Agreement.

 

2.2                            Escrow Agent Standard of Care

 

The standard of care and duty imposed upon the Escrow Agent shall be that the
Escrow Agent shall exercise the powers and discharge the duties of its office
hereunder honestly, in good faith and in the best interests of the Corporation
and Golden Minerals, and in connection therewith shall exercise the degree of
care, diligence and skill that a reasonably prudent person would exercise in
comparable circumstances.

 

2.3                            Interest on Escrowed Funds

 

(a)           Unless herein otherwise expressly provided, the Escrowed Funds
shall be deposited in a segregated account in the name of the Escrow Agent as
agent for the Corporation and Golden Minerals in any Canadian Schedule I
chartered bank at the rate of interest (if any) then current on similar
deposits.  The amounts held

 

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by the Escrow Agent pursuant to this Escrow Agreement are at the sole risk of
the other parties to this Escrow Agreement and, without limiting the generality
of the foregoing, the Escrow Agent shall have no responsibility or liability for
any diminution of the Escrowed Funds which may result from any deposit made with
any bank as contemplated by and in accordance with the preceding sentence,
including any losses resulting from a default by such bank, provided that the
Escrow Agent has not been grossly negligent or engaged in wilful misconduct or
acted in bad faith or breached its standard of care set forth in
Section 2.2. The parties hereto acknowledge and agree that the Escrow Agent will
have acted prudently in depositing the Escrowed Funds at any bank contemplated
by this Section 2.3(a) and that the Escrow Agent is not required to make any
further inquiries in respect of any such bank; and

 

(b)           Interest, income or other amounts from time to time earned on the
Escrowed Funds (“Interest”) shall be held on deposit by the Escrow Agent as part
of the Escrowed Funds and shall be invested, disbursed and otherwise dealt with
in the same manner and on the same terms as the Escrowed Funds governed by this
Agreement. The annual net income derived from the Escrowed Funds shall be income
of the Corporation or Golden Minerals, as applicable, for income tax purposes
and tax slips will be issued in this regard.  For greater certainty, upon the
release of any Escrowed Funds to either the Corporation or Golden Minerals in
accordance with the terms hereof, a pro rata portion of the Interest earned on
the Escrowed Funds prior to the date of such release shall also be released from
escrow and paid to the Corporation or Golden Minerals, as applicable.

 

2.4                            Reports

 

From time to time, upon written request made by Golden Minerals or the
Corporation, and in any event on a quarterly basis, the Escrow Agent shall
deliver to each of Golden Minerals and the Corporation a written report (the
“Escrow Report”) which sets out the amount of Escrowed Funds remaining in
escrow, the interest or other income earned thereon, if any, since the date of
the most recent Escrow Report and the amount of Escrowed Funds released from
escrow pursuant to the terms hereof, if any, since the date of the most recent
Escrow Report.

 

2.5                            Term

 

The term of this Escrow Agreement shall commence on the date hereof and shall
continue until the earlier of (i) the Effective Date, and (ii) the date on which
the Escrow Agent has released all of the Escrowed Funds in accordance with the
terms hereof.  As soon as reasonably practicable following the Effective Date,
provided that the Corporation or Golden Minerals has delivered a copy of the
Certificate of Arrangement to the Escrow Agent, any Escrowed Funds remaining in
escrow, including all Interest accrued thereon, shall be released from escrow
and shall be paid by the Escrow Agent to the Corporation by way of wire transfer
of immediately available funds to an account to be designated by the
Corporation.

 

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ARTICLE 3
RELEASE OF ESCROWED FUNDS FROM ESCROW

 

3.1                            Disbursement Requests

 

(a)           At any time and from time to time during the term of this Escrow
Agreement, the Corporation may, only to the extent that its operating cash flow
is inadequate to fund its ongoing operating and capital cash requirements and
subject to the provisions of Section 3.1(b), make a request for the release of a
portion of the Escrowed Funds by delivering to each of Golden Minerals and the
Escrow Agent a written instrument to that effect that complies with
Section 3.1(b) (a “Disbursement Request”).  Notwithstanding the foregoing, any
Disbursement Request made following the receipt by the Escrow Agent and the
Corporation of a Claim of Default which has not yet been resolved in accordance
with the provisions of Sections 3.5 or 3.6 shall be deemed for all purposes
hereof not to have been validly made and neither the Escrow Agent nor Golden
Minerals shall have any obligation to recognize such Disbursement Request or to
take any action (including releasing any Escrowed Funds) in respect thereof.

 

(b)           Any Disbursement Request made by the Corporation pursuant to the
provisions of this Section 3.1 shall:

 

(i)            request disbursement from the Escrowed Funds of an amount (the
“Requested Disbursement Amount”) that is not less than $250,000; provided,
however, that the Requested Disbursement Amount may be less than $250,000 to the
extent that the remaining Escrowed Funds are less than $250,000, in which case
the Requested Disbursement Amount shall be the full amount of Escrowed Funds
then remaining in escrow;

 

(ii)           certify that the Requested Disbursement Amount is to be allocated
to costs and expenses reasonably estimated by the Corporation to be payable
within thirty (30) days of the Disbursement Request in respect of one or more of
the Permitted Uses set forth in Schedule “A”;

 

(iii)          include a schedule forecasting cash payments to be made during
the thirty (30) day period following the date of the Disbursement Request (the
“Cash Payment Forecast Schedule”), with the following detail provided:

 

(A)          all payments to a single payee in an amount equal to or greater
than $15,000 for which Escrowed Funds are proposed to be used shall be
separately identified and the following information shall be provided in respect
thereof:

 

(I)            the amount of such payment;

 

(II)           the Permitted Use in respect of which such payment is proposed to
be made;

 

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(III)         the name of the payee; and

 

(IV)         the expected payment date;

 

(B)           subject to the provisions of Section 3.1(b)(iii)(C), the aggregate
amount of all payments of less than $15,000 that are proposed to be made to a
single payee shall be disclosed as “Other Payments”; provided, however, that if
such aggregate amount so disclosed exceeds $50,000, payments to any one payee
for less than $15,000 shall be separately identified (with the information
required by Section 3.1(b)(iii)(A) provided in respect thereof), in order of
largest to smallest, until the aggregate amount of all remaining payments of
less than $15,000 proposed to be made to a single payee totals $50,000 or less;
and

 

(C)           notwithstanding the provisions of Section 3.1(b)(iii)(B), payments
proposed to be made to any of the following payees, or in respect of any of the
following matters, shall be separately identified, regardless of amount, with
the information required by Section 3.1(b)(iii)(A) provided in respect thereof:

 

(I)            all payments made to employees or directors other than for normal
payroll or employee benefit plans (it being acknowledged and agreed, for greater
certainty, that bonuses,  severance, change of control or other termination or
extraordinary payments shall not be considered normal payroll for purposes
hereof);

 

(II)           any amounts paid in respect of indebtedness of the Corporation;
and

 

(III)         any amounts paid to any Governmental Entity, or any official or
representative thereof.

 

(c)           Each Disbursement Request made by the Corporation pursuant to the
provisions of this Section 3.1 shall, in addition to meeting the requirements
set forth in Section 3.1(b), be accompanied by an additional schedule (a
“Reconciliation Schedule”) which shall:

 

(i)            reconcile:

 

(A)          the payment amounts forecast to be made in (I) the Closing Cash
Payment Forecast Schedule or (II) the Cash Payment Forecast Schedule (and/or, if
applicable, the Reconciliation Schedule) included in the most recent previous
Disbursement Request, as applicable;

 

with:

 

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(B)           actual payments made using (I) the Closing Disbursement or
(II) the Escrowed Funds released in accordance with the terms of this Escrow
Agreement pursuant to the most recent previous Disbursement Request, as
applicable;

 

(ii)           include an explanation as to the cause of any line item variances
in the Reconciliation Schedule of greater than $10,000 or 10% of the payment
amounts forecast to be made in (I) the Closing Cash Payment Forecast Schedule or
(II) the Cash Payment Forecast Schedule (and/or, if applicable, the
Reconciliation Schedule) included in the most recent previous Disbursement
Request, as applicable; and

 

(iii)          to the extent that the Reconciliation Schedule reflects that
additional amounts remain to be paid in respect of payments forecast to be made
in (I) the Closing Cash Payment Forecast Schedule or (II) the Cash Payment
Forecast Schedule (and/or, if applicable, the Reconciliation Schedule) included
in the most recent previous Disbursement Request, as applicable, include a
further forecast in respect of the anticipated timing and amount of such
payments.

 

(d)           Subject to the provisions of Sections 3.2, 3.3, 3.4, 3.5(a) and
3.6, promptly following the expiry of five (5) calendar days from the date of
receipt by each of the Escrow Agent and Golden Minerals of a Disbursement
Request that complies with the provisions of this Section 3.1, the Requested
Disbursement Amount, together with a pro rata portion of the Interest earned on
the Escrowed Funds up until such date, shall be released from escrow and shall
be paid by the Escrow Agent to the Corporation by way of wire transfer of
immediately available funds to an account to be designated by the Corporation.

 

3.2                            Disapproval Notices

 

(a)           Golden Minerals shall be entitled to disapprove or reject the
disbursement from the Escrowed Funds of all or any portion of the Requested
Disbursement Amount reflected in a Disbursement Request if, in the opinion of
Golden Minerals, acting reasonably, all or any portion of such Requested
Disbursement Amount is proposed to be allocated to a purpose that is not a
Permitted Use.  Any such disapproval  by Golden Minerals shall be communicated
in writing to each of the Escrow Agent and the Corporation by delivery of a
notice to that effect (the “Disapproval Notice”) within five (5) calendar days
following the date of receipt by Golden Minerals of such Disbursement Request. 
The Disapproval Notice shall:

 

(i)            describe in reasonable detail, with specific reference to the
Disbursement Request in question (including the Cash Payment Forecast Schedule
and any Reconciliation Schedule attached thereto), the payments proposed to be
made by the Corporation, as reflected in such Disbursement Request, that are
disapproved or rejected and the basis upon which they are

 

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considered by Golden Minerals to not be a Permitted Use of Escrowed Funds; and

 

(ii)           indicate the aggregate amount (the “Disapproved Amount”) of such
payments that are so disapproved or rejected.

 

(b)           If the Escrow Agent and the Corporation have not received a
Disapproval Notice by 5:00 p.m. (Eastern time) on the 5th calendar day following
the date of receipt by each of the Escrow Agent and Golden Minerals of a
Disbursement Request, such Disbursement Request shall be conclusively deemed to
be final and binding upon the parties and the Requested Disbursement Amount
reflected in such Disbursement Request (together with a pro rata portion of the
Interest earned on the Escrowed Funds up until such date) shall be released from
escrow in full and shall be paid in full by the Escrow Agent from the Escrowed
Funds to the Corporation in accordance with the provisions of Section 3.1(d).

 

(c)           Notwithstanding the provisions of Section 3.1(d), the Disapproved
Amount reflected in any Disapproval Notice delivered by Golden Minerals to each
of the Escrow Agent and the Corporation in accordance with the provisions of
this Section 3.2 shall not be released from escrow and shall be deducted from
the Requested Disbursement Amount paid by the Escrow Agent to the Corporation
pursuant Section 3.1(d), pending the resolution of any Challenged Disapproval in
accordance with the provisions of Sections 3.3 or 3.6; provided that, for
greater certainty, the balance, if any, of such Requested Disbursement Amount
after subtracting such Disapproved Amount (together with a pro rata portion of
the Interest earned on the Escrowed Funds up until such date)  shall be released
from escrow and paid by the Escrow Agent to the Corporation in accordance with
Section 3.1(d), regardless of whether any Challenged Disapproval has been
resolved.

 

3.3                            Challenged Disapprovals

 

(a)           The Corporation shall be entitled to challenge any Disapproval
Notice delivered by Golden Minerals in accordance with Section 3.2(a) (any such
challenge being referred to herein as a “Challenged Disapproval”) by delivery of
a written notice to that effect (the “Challenged Disapproval Notice”) to each of
the Escrow Agent and Golden Minerals within fifteen (15) calendar days following
the date of receipt by the Corporation of the Disapproval Notice in question.
The Challenged Disapproval Notice shall describe in reasonable detail, with
specific reference to the Disapproval Notice in question, the basis upon which
all or any portion of the Disapproved Amount is considered by the Corporation to
be a Permitted Use of Escrowed Funds.

 

(b)           If the Escrow Agent and Golden Minerals have not received a
Challenged Disapproval Notice by 5:00 p.m. (Eastern time) on the 15th calendar
day following the date of receipt by the Corporation of the Disapproval Notice
in question, such Disapproval Notice shall be conclusively deemed to be final
and

 

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binding upon the parties and the Disapproved Amount shall not be released from
escrow or paid by the Escrow Agent to the Corporation.

 

(c)           If the Escrow Agent and Golden Minerals have received a Challenged
Disapproval Notice by 5:00 p.m. (Eastern time) on the 15th calendar day
following the date of receipt by the Corporation of the Disapproval Notice in
question, Golden Minerals and the Corporation shall, to the extent possible,
seek to amicably, in good faith, settle their dispute within three (3) Business
Days of the date of receipt by Golden Minerals of such Challenged Disapproval
Notice.  Any settlement of such dispute shall be set forth in writing in a
Challenge Settlement, which shall be provided to the Escrow Agent and which
shall include specific instructions as to the amount, if any, of Escrowed Funds
(including the pro rata portion of the Interest earned on the Escrowed Funds) to
be released from escrow and paid by the Escrow Agent to the Corporation pursuant
to such settlement.  If, notwithstanding their good faith efforts, Golden
Minerals and the Corporation are unable to settle their dispute and enter into a
Challenge Settlement within three (3) Business Days of the date of receipt by
the Escrow Agent and Golden Minerals of a Challenged Disapproval Notice, the
parties shall refer such dispute to arbitration for final settlement in
accordance with the provisions of Section 3.6; provided, however, that nothing
in the foregoing shall preclude Golden Minerals and the Corporation from
continuing to seek to settle such dispute beyond such three (3) Business Day
period and any Challenged Settlement of such dispute entered into following such
three (3) Business Day period shall be final and binding upon the parties,
notwithstanding that the dispute shall have been referred for final settlement
by arbitration in accordance with the provisions of Section 3.6 and all such
arbitration proceedings shall be promptly discontinued by Golden Minerals and
the Corporation.

 

3.4                            Claims of Default

 

(a)           If at any time during the term of this Escrow Agreement, Golden
Minerals becomes aware or otherwise determines, acting reasonably, that an Event
of Default has occurred, it shall deliver notice thereof (a “Claim of Default”)
to each of the Escrow Agent and the Corporation.  The Claim of Default shall
describe in reasonable detail the basis upon which Golden Minerals has
determined that an Event of Default has occurred.

 

(b)           Notwithstanding the provisions of Section 3.1(d), in the event
that Golden Minerals delivers a Claim of Default to each of the Escrow Agent and
the Corporation in accordance with the provisions of this Section 3.4, the
Escrow Agent shall:

 

(i)            suspend any release of Escrowed Funds from escrow hereunder and
any payment of all or any portion of any Requested Disbursement Amount (or any
Interest earned thereon) to the Corporation, pending the resolution of any
Challenged Default Claim in accordance with the provisions of Sections 3.5 or
3.6; and

 

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(ii)           subject to the prior resolution of any Challenged Default Claim
in accordance with the provisions of Sections 3.5 or 3.6, at the written
direction of Golden Minerals, return all remaining Escrowed Funds (including all
Interest earned thereon) to Golden Minerals by way of wire transfer of
immediately available funds to an account to be designated by Golden Minerals.

 

3.5                                                                              
Challenged Default Claims

 

(a)                                  The Corporation shall be entitled to
challenge any Claim of Default that relates to an Event of Default under
Section 5.1(n) or Section 5.1(o) of the Convertible Note Certificate that is
delivered by Golden Minerals in accordance with Section 3.4(a) (any such
challenge being referred to herein as a “Challenged Default Claim”) by delivery
of a written notice to that effect (the “Challenged Default Claim Notice”) to
each of the Escrow Agent and Golden Minerals within fifteen (15) calendar days
following the date of receipt by each of the Escrow Agent and the Corporation of
the Claim of Default in question.   The Challenged Default Claim Notice shall
describe in reasonable detail, with specific reference to the Claim of Default
in question, the basis upon which the Corporation considers that an Event of
Default has not occurred.

 

(b)                                 If the Escrow Agent and Golden Minerals have
not received a Challenged Default Claim Notice by 5:00 p.m. (Eastern time) on
the 15th calendar day following the date of receipt by the Corporation of the
Claim of Default in question, such Claim of Default shall be conclusively deemed
to be final and binding upon the parties and the Escrow Agent shall continue to
give effect to the provisions of Section 3.4(b), including, if so directed by
Golden Minerals, by immediately returning all remaining Escrowed Funds
(including all Interest earned thereon) to Golden Minerals in accordance with
the provisions of Section 3.4(b)(ii); provided, however, that the outstanding
principal amount of the Notes shall be reduced by the amount of the Escrowed
Funds so returned to Golden Minerals.

 

(c)                                  If the Escrow Agent and Golden Minerals
have received a Challenged Default Claim Notice by 5:00 p.m. (Eastern time) on
the 15th calendar day following the date of receipt by each of the Escrow Agent
and the Corporation of the Claim of Default in question, Golden Minerals and the
Corporation shall, to the extent possible, seek to amicably, in good faith,
settle their dispute within three (3) Business Days of the date of receipt by
Golden Minerals of such Challenged Default Claim Notice.  Any settlement of such
dispute shall be set forth in writing in a Challenge Settlement, which shall be
provided to the Escrow Agent and which shall specifically address (i) whether an
Event of Default has occurred and (ii) the action, if any, to be taken by the
Escrow Agent in respect of the release of any Escrowed Funds from escrow and the
payment to the Corporation of all or any portion of any Requested Disbursement
Amount (including a pro rata portion of any Interest earned on the Escrowed
Funds up until such date), to the extent that such release and payment were
previously suspended by the provisions of Section 3.4(b)(i).  If,
notwithstanding their good faith efforts, Golden Minerals

 

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and the Corporation are unable to settle their dispute and enter into a
Challenge Settlement within three (3) Business Days of the date of receipt by
Golden Minerals of a Challenged Default Claim Notice, the parties shall refer
such dispute for final settlement by arbitration in accordance with the
provisions of Section 3.6; provided, however, that nothing in the foregoing
shall preclude Golden Minerals and the Corporation from continuing to seek to
settle such dispute beyond such three (3) Business Day period and any Challenge
Settlement entered into following such three (3) Business Day period shall be
final and binding upon the parties, notwithstanding that such dispute shall have
been referred for final settlement by arbitration in accordance with the
provisions of Section 3.6 and all such arbitration proceedings shall be promptly
discontinued by Golden Minerals and the Corporation.

 

3.6                                                                              
Dispute Resolution

 

(a)                                  If at any time during the term of this
Escrow Agreement any disagreement, dispute, difference or question shall arise
between the Corporation and Golden Minerals or their successors or permitted
assigns in respect of any matter arising under this Escrow Agreement (including,
for greater certainty, any disagreement relating to a Challenged Disapproval or
a Challenged Default Claim that has not been resolved by the Corporation and
Golden Minerals within three (3) Business Days in accordance with the provisions
of Section 3.3(c) or Section 3.5(c), as applicable) the parties shall refer such
matter for final settlement by arbitration in accordance with the Commercial
Arbitration Rules of the American Arbitration Association except as expressly
provided in this Section 3.6, and conducted pursuant to the U.S. Federal
Arbitration Act (the “Arbitration Act”).  The Arbitration Act shall govern the
interpretation, enforcement and proceedings under this Section 3.6., except to
the extent of any inconsistency with the terms and provisions set forth herein.

 

(b)                                 Any arbitration to be carried out hereunder
shall be subject to the following terms and provisions:

 

(i)            the arbitration shall be conducted by a mutually agreed upon
arbiter who does not provide legal, consulting or other services to either the
Corporation or Golden Minerals.  If the Corporation and Golden Minerals cannot
agree to the selection of an arbiter within a period of three (3) calendar days
following the referral of a matter for final settlement by arbitration, the
arbiter shall be selected by two (2) independent arbiters, one of which shall be
nominated by the Corporation and the other of which shall be nominated by Golden
Minerals.  The arbiter so determined in accordance with the provisions of this
Section 3.6(b) shall hereinafter be referred to as the “Arbiter”;

 

(ii)           the Arbiter shall be instructed to deliver as soon as
practicable, and in any event within thirty (30) calendar days, a decision in
writing in respect of the dispute or disagreement on the basis of the
information provided to it

 

12

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by the Corporation and Golden Minerals, which information shall, in the case of
any disagreement relating to a Challenged Disapproval or a Challenged Default
Claim, consist only of (A) the Disapproval Notice and the Challenged Disapproval
Notice or (B) the Claim of Default and the Challenged Default Claim Notice, as
applicable, together with such additional information or submissions as the
Arbiter may request from the Corporation and/or Golden Minerals (it being
acknowledged and agreed that the other party shall in all events be provided
with a copy of, and an opportunity to respond to, any such additional
information or submissions that the Arbiter may request from the Corporation
and/or Golden Minerals);

 

(iii)          any determination made by the Arbiter in respect of the matters
referred to him or her for final settlement by arbitration, including any
Challenge Decision, shall be final and binding on the parties hereto and
non-appealable;

 

(iv)          a copy of any Challenge Decision rendered by the Arbiter shall be
delivered to the Escrow Agent and such Challenge Decision shall, among other
things:

 

(A)                              in the case of a Challenged Disapproval,
include specific instructions as to the amount, if any, of Escrowed Funds
(including the pro rata portion of the Interest earned thereon) to be released
from escrow and paid by the Escrow Agent to the Corporation; and

 

(B)                                in the case of a Challenged Default Claim,
specifically address:

 

(I)            whether an Event of Default has occurred; and

 

(II)           the action, if any, to be taken by the Escrow Agent in respect of
the release of any Escrowed Funds from escrow and the payment to the Corporation
of all or any portion of any Requested Disbursement Amount (including a pro rata
portion of any Interest earned on the Escrowed Funds up until such date), to the
extent that such release and payment were previously suspended by the provisions
of Section 3.4(b)(i);

 

(v)           the costs and expenses relating to the arbitration and the
remuneration of the Arbiter shall be borne by the losing party or, in the event
that the Arbiter’s decision takes exception to the positions advanced by both
the Corporation and Golden Minerals, shall be borne by the Corporation and
Golden Minerals equally;

 

(vi)          the seat, or legal place, of the arbitration shall be in New York,
New York;

 

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(vii)         all communications during the arbitration proceedings shall be in
the English language; and

 

(viii)        the Arbiter may determine any matters of procedure for the
arbitration not specified herein or in the Arbitration Act.

 

3.7                                                                              
Release of Escrowed Funds Upon Redemption, Payment at Maturity or Conversion of
Notes

 

(a)                                  In the event of any redemption of the Notes
pursuant to the provisions of Section 2.5 of the Convertible Note Certificate,
the Escrow Agent shall, promptly upon being provided with a joint direction by
Golden Minerals and the Corporation, release from escrow and pay the entire
amount of the Escrowed Funds (including any Interest earned thereon) to the
Corporation by way of wire transfer of immediately available funds to an account
to be designated by the Corporation.

 

(b)                                 In the event of any conversion of the Notes,
in whole or in part, into common shares of the Corporation in accordance with
the provisions of Section 3.1 of the Convertible Note Certificate, the Escrow
Agent shall, promptly upon being provided with a joint direction by Golden
Minerals and the Corporation, release from escrow and pay to the Corporation, by
way of wire transfer of immediately available funds to an account to be
designated by the Corporation, such portion of the Escrowed Funds (including any
Interest earned thereon) as may be set out in such joint direction in accordance
with the provisions of Section 3.1 of the Convertible Note Certificate.

 

(c)                                  In connection with the repayment of
principal, accrued and unpaid interest on, and any other amounts payable under
the Notes on the maturity date thereof pursuant to the provisions of
Section 2.3(b) of the Convertible Note Certificate, the Escrow Agent shall,
promptly upon being provided with a direction from Golden Minerals, release from
escrow and pay the entire amount of the Escrowed Funds (including any Interest
earned thereon) to Golden Minerals by way of wire transfer of immediately
available funds to an account to be designated by Golden Minerals.

 

(d)                                 In the event of any redemption of the Notes
pursuant to the provisions of Section 6.2 of the Convertible Note Certificate,
the Escrow Agent shall, promptly upon being provided with a direction from
Golden Minerals, release from escrow and pay an amount equal to the redemption
price stated in such direction from the Escrowed Funds (together with a pro rata
portion of any Interest earned thereon up until such date) to Golden Minerals by
way of wire transfer of immediately available funds to an account to be
designated by Golden Minerals.

 

3.8                                                                              
General

 

The Escrow Agent shall only release the Escrowed Funds in accordance with the
provisions this Escrow Agreement.

 

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ARTICLE 4
LIABILITY OF ESCROW AGENT

 

4.1                                                                              
Responsibility of the Escrow Agent

 

(a)                                  The Corporation and Golden Minerals
acknowledge and agree that the Escrow Agent acts hereunder as an escrow agent
only and (i) it shall be obligated only for the performance of such duties as
are expressly and specifically set forth in this Escrow Agreement on its part to
be performed, and no implied duties or obligations of any kind shall be read
into this Escrow Agreement against or on the part of the Escrow Agent; (ii) it
shall not be required to take notice of any default or to take any action with
respect to such default involving any expense or liability, unless notice in
writing of such default is formally given to the Escrow Agent by a party, and
unless it is indemnified and funded, in a manner satisfactory to it, by such
party against such expense or liability; and (iii) it may rely on and shall be
protected in acting or refraining from acting upon any written notice,
instruction (including, without limitation, wire transfer instructions, whether
incorporated herein or provided in a separate written instruction), instrument,
statement, certificate, request or other document furnished to it hereunder and
believed by it to be genuine and to have been signed or presented by the proper
Person or Persons, and shall have no responsibility for determining the accuracy
thereof.

 

(b)                                 The Escrow Agent may employ such counsel,
accountants, engineers, appraisers and other experts as it may reasonably
require for the purpose of discharging its duties under this Escrow Agreement,
and the Escrow Agent may act and shall be protected in acting in good faith on
the opinion or advice or on information obtained from any such parties and shall
not be responsible for any misconduct on the part of any of them provided that
it has no knowledge of such misconduct.

 

(c)                                  The Escrow Agent shall retain the right not
to act and shall not be held liable for refusing to act unless it has received
clear and reasonable documentation which complies with the terms of this Escrow
Agreement, including joint notices and directions contemplated hereunder.  Such
documentation must not require the exercise of any discretion or independent
judgment.

 

(d)                                 No provision of this Agreement shall require
the Escrow Agent to expend or risk its own funds or otherwise incur financial
liability in the performance of its duties or the exercise of any of its rights
or powers.

 

(e)                                  The Escrow Agent shall not be liable for
any error of judgment, or for any act done or step taken or omitted by it in
good faith, or for any mistake of fact or law, or for anything which it may do
or refrain from doing in connection herewith.

 

(f)                                    The Escrow Agent does not have any
interest in the Escrowed Funds or any Interest earned thereon but is serving as
escrow agent only and is not a debtor of the parties hereto in respect of the
Escrowed Funds.

 

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(g)                                 The Escrow Agent shall have no duties except
those which are expressly set forth herein, and it shall not be bound by any
notice of a claim or demand with respect to, or any waiver, modification,
amendment, termination or rescission of this Escrow Agreement, unless received
by it in writing, and signed by the parties hereto and if its duties herein are
affected, unless it shall have given its prior written consent thereto.

 

(h)                                 The Escrow Agent accepts the duties and
responsibilities under this Escrow Agreement as agent, and no trust is intended
to be, or is or will be, created hereby and the Escrow Agent shall owe no duties
hereunder as trustee. The Escrow Agent’s duty to deliver the Escrowed Funds and
any interest earned thereon shall be fully performed by delivering the monies
comprising the Escrowed Funds which it has actually received (including any
interest or other amounts earned thereon) in accordance with this Escrow
Agreement.

 

(i)                                     The Escrow Agent will have no
responsibility for seeking, obtaining, compiling, preparing or determining the
accuracy of any information or document, including the representative capacity
in which a party purports to act, that the Escrow Agent receives as a condition
to a release of the Escrowed Funds and any interest earned thereon from escrow
under this Escrow Agreement.

 

(j)                                     Any limitations on the responsibilities,
liabilities, obligations and/or duties of the Escrow Agent set forth in the
preceding Sections of this Section 4.1 shall not apply in cases of, or as a
result of or in connection with, the Escrow Agent’s gross negligence, wilful
misconduct or bad faith or breach of its standard of care set out in
Section 2.2.

 

4.2                                                                              
Indemnity in Favour of the Escrow Agent

 

(a)                                  The Corporation and Golden Minerals, on a
several basis and each as to fifty percent (50%) of the amount of any
indemnification arising pursuant to this Section 4.2, shall indemnify the Escrow
Agent and its officers, directors, employees and agents and hold it and them
harmless from and against any loss, fee, claim, demand, penalty, liability,
damage, cost and expense of any nature incurred by the Escrow Agent  and its
officers, directors, employees and agents arising out of or in connection with
this Escrow Agreement or with the administration of its duties hereunder,
including but not limited to, reasonable attorneys’ fees and other costs and
expenses of defending or preparing to defend against any claim of liability,
unless and except to the extent such loss, liability, damage, cost and expense
shall be caused by the Escrow Agent’s or its officers’, directors’, employees’
or agents’ gross negligence, wilful misconduct or bad faith or breach of the
standard of care set out in Section 2.2. The foregoing indemnification and
agreement to hold harmless shall survive the resignation or removal of the
Escrow Agent or the termination of this Escrow Agreement. Notwithstanding the
foregoing or any other provision of this Escrow Agreement, any liability of the
Escrow Agent shall be limited, in the aggregate, to

 

16

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the amount of annual retainer fees paid by the Corporation and Golden Minerals
to the Escrow Agent under this Escrow Agreement.

 

(b)                                 Notwithstanding any other provision of this
Escrow Agreement, and whether such losses or damages are foreseeable or
unforeseeable, the Escrow Agent shall not be liable under any circumstances
whatsoever for any (i) breach by any other party of securities law or other
rule of any securities regulatory authority, (ii) lost profits, or
(iii) special, indirect, incidental, consequential, exemplary, aggravated or
punitive losses or damages.

 

(c)                                  This Section 4.2 shall survive
notwithstanding any termination of this Escrow Agreement or the resignation or
removal of the Escrow Agent.

 

4.3                                                                              
No Implied Duties of Escrow Agent

 

This Escrow Agreement sets forth all of the duties of the Escrow Agent in
respect of the Escrowed Funds.  The Escrow Agent shall not refer to, and shall
not be bound by, the provisions of any other agreement other than the terms of
this Escrow Agreement and no implied duties or obligations of the Escrow Agent
may be read into this Escrow Agreement.  The Escrow Agent’s duty to deliver the
Escrowed Funds shall be fully performed by delivering the monies in such Escrow
Fund it has actually received (including any interest or other amounts accrued
thereon), in accordance with this Escrow Agreement.

 

4.4                                                                              
Expenses of Escrow Agent

 

The Escrow Agent shall be entitled to reimbursement of its reasonable
out-of-pocket expenses for carrying out its duties hereunder (including the
reasonable fees and disbursements of its outside counsel and outside advisors
required for the discharge of its duties hereunder).  The Corporation and Golden
Minerals shall each be severally liable for fifty percent (50%) of such
expenses.

 

4.5                                                                              
Fees of Escrow Agent

 

The Escrow Agent shall be paid the fees set forth in the fee schedule agreed
upon between the Corporation, Golden Minerals and the Escrow Agent, in exchange
for its services provided pursuant to this Escrow Agreement. The Corporation and
Golden Minerals shall each be responsible, on a several basis, for fifty percent
(50%) of such fees.  For greater certainty, such fees are in addition to any
claim for indemnity or reimbursement that may be claimed by the Escrow Agent
pursuant to Section 4.2.  Any amount owing under this Section 4.5 and unpaid
thirty (30) days after request for such payment will bear interest from the
expiration of such thirty (30) days at a rate per annum equal to the then
current rate charged by the Escrow Agent, payable on demand by the party or
parties who owe such amount.

 

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ARTICLE 5
CHANGE IN THE ESCROW AGENT

 

5.1                                                                              
Resignation of the Escrow Agent

 

The Escrow Agent may resign and be discharged, from and after the effective time
of the Escrow Agent’s resignation, of all of its obligations in this Escrow
Agreement (except any liabilities relating to any time prior to the effective
time of its resignation) by giving the Corporation and Golden Minerals 60 days
prior written notice or such shorter notice as they may accept.  If the Escrow
Agent resigns, a new escrow agent shall be appointed by mutual agreement of the
Corporation and Golden Minerals, failing which a replacement escrow agent shall
be appointed by a court of competent jurisdiction upon application by either the
Corporation or Golden Minerals; provided that notice of and a copy of such
application shall in all events be provided by the party making such application
to the other.  If such replacement escrow agent has not been appointed by the
expiry of such 60-day notice period, the Escrow Agent shall be entitled to apply
for leave to deliver the Escrowed Funds (together with all interest earned
thereon) and all related records and documents into the custody of a court of
competent jurisdiction and the resignation of the Escrow Agent shall become
effective upon such delivery.

 

5.2                                                                              
Anti-Money Laundering

 

The Escrow Agent shall retain the right not to act and shall not be liable for
refusing to act if, due to a lack of information or for any other reason
whatsoever, the Escrow Agent, in its sole and reasonable judgment, determines
that such act might cause it to be in non-compliance with any applicable
anti-money laundering or anti-terrorist legislation, regulation or guideline. 
Further, should the Escrow Agent, in its sole and reasonable judgment, determine
at any time that its acting under this Escrow Agreement has resulted in its
being in non-compliance with any applicable anti-money laundering or
anti-terrorist legislation, regulation or guideline, then it shall have the
right to resign on 10 days’ written notice to the other parties to this Escrow
Agreement, provided that (i) the Escrow Agent’s written notice shall describe
the circumstances of such non-compliance; and (ii) if such circumstances are
rectified to the Escrow Agent’s satisfaction within such 10 day period, then
such resignation shall not be effective.

 

5.3                                                                              
Replacement of the Escrow Agent

 

The Corporation and Golden Minerals may at any time jointly replace the Escrow
Agent by delivering to the Escrow Agent a joint notice signed by each of them
appointing a new escrow agent as the Escrow Agent hereunder.

 

5.4                                                                              
Obligations of the Escrow Agent When Changed

 

Each new escrow agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as Escrow Agent
without any further act or formality, and each of the former Escrow Agent and
the successor escrow agent shall do all acts and things and execute all
documents as may be necessary to give effect to the appointment of the successor
escrow agent hereunder.  Upon payment to the Escrow Agent of all fees and costs
due to it under the terms of this Escrow Agreement, the Escrow Agent will
deliver custody

 

18

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of the accounts containing the Escrowed Funds and any interest earned thereon to
the new escrow agent as soon as it has been advised of the appointment of such
new escrow agent.

 

5.5                                                                              
Succession

 

Any corporation into or with which the Escrow Agent may be merged or
consolidated or amalgamated, or any corporation resulting therefrom to which the
Escrow Agent shall be a party, or any corporation succeeding to all or
substantially all of the corporate trust business of the Escrow Agent shall be
the successor to the Escrow Agent hereunder without any further act on its part
or any of the parties hereto, provided that such corporation would be eligible
for appointment as a successor escrow agent hereunder. The Escrow Agent will
take all steps as are reasonably required to vest the Escrowed Funds and any
interest earned thereon in the successor Escrow Agent.

 

ARTICLE 6
GENERAL

 

6.1                                                                              
Third Party Interest

 

Each party to this Escrow Agent other than the Escrow Agent hereby represents to
the Escrow Agent that any account to be opened by, or interest to be held by the
Escrow Agent in connection with this Escrow Agreement, for or to the credit of
such party, either  (i) is not intended to be used by or on behalf of any third
party; or (ii) is intended to be used by or on behalf of a third party, in which
case such party hereto agrees to complete and execute forthwith a declaration in
the Escrow Agent’s prescribed form as to the particulars of such third party.

 

6.2                                                                              
Privacy

 

The parties acknowledge that the Escrow Agent may, in the course of providing
services hereunder, collect or receive financial and other personal information
about such parties and/or their representatives, as individuals, or about other
individuals related to the subject matter hereof, and use such information for
the following purposes:

 

(a)                                  to provide the services required under this
Escrow Agreement and other services that may be requested by the parties hereto
from time to time;

 

(b)                                 to help the Escrow Agent manage its
servicing relationships with such  individuals;

 

(c)                                  to meet the Escrow Agent’s legal and
regulatory requirements; and,

 

(d)                                 if Social Insurance Numbers are collected by
the Escrow Agent, to perform tax reporting and to assist in verification of an
individual’s identity for security purposes.

 

Each party acknowledges and agrees that the Escrow Agent may receive, collect,
use and disclose personal information provided to it or acquired by it in the
course of this agreement for the purposes described above and, generally, in the
manner and on the terms described in its

 

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Privacy Code, which the Escrow Agent makes and shall continue to make available
on its website or upon request, including revisions thereto. Further, each party
agrees that it shall not provide or cause to be provided to the Escrow Agent any
personal information relating to an individual who is not a party to this Escrow
Agreement unless that party has assured itself that such individual understands
and has consented to the aforementioned uses and disclosures.

 

6.3                                                                              
Force Majeure

 

No party to this Escrow Agreement shall be liable to the other, or held in
breach of this Escrow Agreement, if prevented or delayed in the performance or
observance of any provision contained herein by reason of act of God, riots,
terrorism, acts of war, epidemics, earthquakes, or any other similar causes
(including, but not limited to, mechanical, electronic or communication
interruptions, disruptions or failures).  Performance times under this Escrow
Agreement shall be extended for a period of time equivalent to the time lost
because of any delay that is excusable under this Section 6.3.

 

6.4                                                                              
Irrevocable Agreement

 

This Escrow Agreement shall not be revoked, rescinded or modified as to any of
its terms and conditions, except by consent in writing signed by each of the
Corporation, Golden Minerals and the Escrow Agent.

 

6.5                                                                              
Notices

 

All notices and other communications given or made pursuant hereto shall be in
writing and shall be sent by facsimile or electronic mail or given by hand
delivery, to the parties at the following addresses (or at such other addresses
as shall be specified by any party by notice to the other given in accordance
with these provisions):

 

(a)                                  if to Golden Minerals:

 

Golden Minerals Company

350 Indiana Street, Suite 800

Golden, Colorado, 80401

U.S.A.

 

Attention:

Jeffrey G. Clevenger, President

Facsimile:

(303) 839-5907

Email:

Jeffrey.Clevenger@goldenminerals.com

 

with copies (which shall not constitute notice) to:

 

Fasken Martineau DuMoulin LLP
333 Bay Street, Suite 2400
Bay Adelaide Centre, Box 20
Toronto, ON M5H 2T6

 

Attention:

John M. Sabetti

 

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Facsimile:

416 364 7813

Email:

jsabetti@fasken.com

 

and

 

Davis Graham & Stubbs LLP

1550 Seventeenth Street, Suite 500

Denver, Colorado 80202

 

Attention:

Deborah Friedman

Facsimile:

(303) 893 1379

Email:

Deborah.Friedman@dgslaw.com

 

(b)                                 If to the Corporation:

 

ECU Silver Mining Inc.

87 Front Street East, 2nd Floor

Toronto, ON  M5E 1B8

 

Attention:

Stephen Altmann, President

Facsimile:

(416) 366-8131

Email:

steve@ecu.ca

 

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

 

Blake, Cassels & Graydon LLP

600 de Maisonneuve Boulevard West, Suite 2200

Montréal QC H3A 3J2

 

Attention:

Howard Levine

Facsimile:

(514) 982 4099

Email:

howard.levine@blakes.com

 

(c)                                  if to the Escrow Agent:

 

Computershare Trust Company of Canada
100 University Avenue
9th Floor – North Tower
Toronto, ON, M5J 2Y1

 

Attention:

Manager, Corporate Trust Department

Facsimile:

(416) 981-9777

Email:

corporatetrust.toronto@computershare.com

 

Any notice given or made to the party to whom it is addressed as provided herein
shall be deemed to have been received on the day it is so given or made, or if
sent by mail, on the 3rd day

 

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thereafter, provided that if such day is not a Business Day, then the notice
shall be deemed to have been given and received on the next Business Day.

 

6.6                                                                              
Further Assurances

 

Each party covenants and agrees to do all acts and things and execute all
documents as may be necessary to give effect to this Escrow Agreement.

 

6.7                                                                              
Governing Law

 

This Escrow Agreement shall be governed by and construed in accordance with the
internal laws of the State of New York without giving effect to any choice or
conflict of law provision or rule (whether of the State of New York or any other
jurisdiction) that would cause the application of laws of any jurisdiction other
than those of the State of New York. Subject to Section 3.6, each party consents
to the exclusive jurisdiction and proper venue of the state and federal courts
located in New York, New York for any claim, dispute or controversy hereunder in
any such suit, action or proceeding and irrevocably waives, to the fullest
extent, any argument that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. Process in any such suit,
action or proceeding may be served on any party anywhere in the world, whether
within or without the jurisdiction of any such court. Each of the parties,
knowingly, voluntarily and intentionally waives any right to trial by jury in
any action or other legal proceeding brought by the other party arising out of
or relating to this Escrow Agreement or the transactions contemplated hereby or
any other document relating or pertaining to this Escrow Agreement or the
transactions contemplated hereby.

 

6.8                                                                              
Headings

 

The headings in this Escrow Agreement are solely for the convenience of
reference and shall not affect its interpretation.

 

6.9                                                                              
Successors and Assigns

 

This Escrow Agreement shall enure to the benefit of and be binding upon each of
the parties hereto and their respective heirs, executors, legal personal
representatives, administrators, successors and permitted assigns.
Notwithstanding the foregoing, this Escrow Agreement shall not be assigned by
any party without the prior written consent of the other parties, except that
Golden shall be permitted to assign this Escrow Agreement to an assignee of
Golden Minerals to whom the rights and obligations of Golden Minerals under the
Convertible Note Certificate are also assigned.

 

6.10                                                                       
Counterparts

 

This Escrow Agreement may be executed in any number of counterparts.  Each
executed counterpart shall be deemed to be an original.  All executed
counterparts taken together shall constitute one agreement.

 

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6.11                                                                       
Interpretation/Business Day

 

Unless the context otherwise requires, “$” means the currency of Canada.  If any
action is to be taken on a day that is not a Business Day, such action shall be
taken on the first day thereafter that is a Business Day.  Unless the context
shall otherwise require, the singular shall include the plural and vice versa.

 

6.12                                                                       
Waiver

 

No waiver of any of the provisions of this Escrow Agreement shall be deemed to
constitute a waiver of any other provision (whether or not similar), nor shall
such waiver be binding unless executed in writing by the party to be bound by
the waiver. No failure on the part of the Corporation or Golden Minerals to
exercise, and no delay in exercising, any right under this Escrow Agreement
shall operate as a waiver of such right; nor shall any single or partial
exercise of any such right preclude any other or further exercise of such right
or the exercise of any other right.

 

6.13                                                                       
Severability

 

If one or more of the provisions hereof shall for any reason be held to be
invalid, illegal or unenforceable in any respect under applicable law, such
invalidity, illegality or unenforceability shall not affect any other provision
hereof, and this Escrow Agreement shall be construed as if such invalid, illegal
or unenforceable provision had never been contained herein, and the remaining
provisions hereof shall remain in full force and effect.

 

6.14                                                                       
Benefits

 

This Escrow Agreement is for the sole and exclusive benefit of the parties
hereto, and nothing in this Escrow Agreement, express or implied, is intended to
confer or shall be construed as conferring upon any other Person any rights,
remedies or any other type or types of benefits.

 

6.15                                                                       
Facsimile Execution

 

To evidence the fact that it has executed this Escrow Agreement, a party may
send a copy of its executed counterpart to all other parties by facsimile
transmission.  That party shall be deemed to have executed this Escrow Agreement
on the date it sent such facsimile transmission.  In such event, such party
shall forthwith deliver to the other party the counterpart of this Escrow
Agreement executed by such party.

 

6.16                                                                        Time
of Execution

 

In the event that the Corporation and Golden Minerals execute this Agreement
prior to the execution hereof by the Escrow Agent, this Agreement shall, in such
circumstances, be legal, valid, binding and enforceable as between the
Corporation and Golden Minerals, provided that notwithstanding anything herein
to the contrary, the Corporation and Golden Minerals agree that (i) no
Disbursement Request shall be permitted to be made or made by the Corporation
hereunder until the Escrow Agent executes this Agreement, and (ii) the Original

 

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Escrowed Funds shall not be funded by Golden Minerals to the Escrow Agent until
the Escrow Agent executes this Agreement (whereupon the Original Escrowed Funds
shall be promptly delivered by Golden Minerals to the Escrow Agent).

 

[THE NEXT PAGE IS THE EXECUTION PAGE]

 

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TO WITNESS their agreement, the Corporation, Golden Minerals and the Escrow
Agent have duly executed this Escrow Agreement under their respective hands and
seals on the date first above written.

 

 

 

ECU SILVER MINING INC.

 

 

 

 

 

Per:

/s/ Dwight Walker

 

Name: Dwight Walker

 

Title: Chief Financial Officer

 

I have authority to bind the Corporation

 

 

 

 

 

GOLDEN MINERALS COMPANY

 

 

 

 

 

Per:

/s/ Robert P. Vogels

 

Name: Robert P. Vogels

 

Title: Senior Vice President and Chief Financial Officer

 

I have authority to bind the Corporation

 

 

 

 

 

COMPUTERSHARE TRUST COMPANY OF CANADA

 

 

 

 

 

Per:

/s/ Patricia Wakelin

 

Name: Patricia Wakelin

 

Title: Corporate Trust Officer

 

 

 

 

 

Per:

/s/ Mohanie Shivprasad

 

Name: Mohanie Shivprasad

 

Title: Associate Trust Officer

 

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SCHEDULE “A”

 

PERMITTED USES OF ESCROWED FUNDS

 

Permitted uses (the “Permitted Uses”) of Escrowed Funds shall include the
following costs and expenses of the Corporation:

 

1.                                       expenses associated with development,
exploration, operating and general and administrative costs (including base
salaries and employee benefits) relating to the development and operating
activities at the Velardeña Property;

 

2.                                       general and administrative expenses,
including base salaries, employee benefits and the various expenses incurred in
connection with the transactions contemplated by the Arrangement Agreement;

 

3.                                       regularly scheduled principal and
interest payments on arm’s length indebtedness existing at the date of the Notes
issuance; and

 

4.                                       such other expenditures (including
funding any deficit in the required minimum cash balance of $1.0 million) as may
be approved by Golden Minerals.

 

Unless approved by Golden Minerals, Escrowed Funds shall not be used for
payments to employees, officers or directors other than for base salaries,
including employee benefits, in the ordinary course of the Corporation’s
business.  For greater certainty, bonus payments, severance payments, change of
control payments, or other termination or extraordinary payments shall not be
considered to be in the ordinary course of the Corporation’s business.

 

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