Exhibit 10.1

 

EXECUTION VERSION

 

SUBSCRIPTION AGREEMENT

 

THIS SUBSCRIPTION AGREEMENT (this “Agreement”) is made as of October 7, 2011, by
and among GOLDEN MINERALS COMPANY, a Delaware corporation (the “Company”), and
SENTIENT GLOBAL RESOURCES FUND III, L.P. (“FUND III”), a Cayman Islands exempted
limited partnership, SGRF III PARALLEL I, L.P. (“SGRF III”), a Cayman Islands
exempted limited partnership, and SENTIENT GLOBAL RESOURCES FUND IV, L.P. (“FUND
IV”), a Cayman Islands exempted limited partnership (Fund III, SGRF III and Fund
IV, collectively, the “Buyers”).

 

RECITALS

 

A.                                   Fund III and SGRF III currently hold an
aggregate of 2,939,790 shares of the Company’s common stock, par value $0.01 per
share (“Common Stock”), representing approximately 9.3% of the total outstanding
shares of Common Stock.

 

B.                                     The Buyers have advised the Company that
they desire to purchase additional shares of Common Stock in order to permit the
Buyers to increase their collective ownership interest up to approximately 19.9%
of the issued and outstanding common stock of the Company (excluding outstanding
restricted common shares held by employees).  The purchase and sale of the
Shares (defined below) pursuant to this Agreement will occur on a private
placement basis as an offering outside of the United States pursuant to
Regulation S under the U.S. Securities Act of 1933 (the “Securities Act”), as
amended and as a prospectus exempt distribution in Canada.

 

NOW, THEREFORE, in consideration of the recitals and the mutual promises,
representations, warranties, and covenants set forth in this Agreement and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

 

AGREEMENT

 

1.                                      Subscription.  In consideration of and
in reliance on the representations, warranties, covenants and agreements of the
Company in this Agreement, the Buyers hereby agree to purchase 4,118,150 shares
of Common Stock (the “Shares”) at a purchase price of US$7.44 per share (the
“Offering Price”).  The total purchase price for the Shares shall be allocated
between and paid by the Buyers in the manner set forth in Exhibit A.

 

2.                                      Acceptance of Subscription.  The
Company, in consideration of and in reliance on the representations and
warranties, covenants and agreements of the Buyers in this Agreement, hereby
accepts the subscription of the Buyers, subject to the terms and conditions of
this Agreement, and agrees to issue the Shares to the Buyers.

 

3.                                      Buyer Representations and Warranties. 
Buyers, each severally with respect to the Shares purchased by it, hereby
represent and warrant to the Company as follows:

 

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3.1                               Organization; Authorization; Validity of
Agreement.  Each Buyer is a limited partnership duly organized, validly existing
and in good standing under the laws of the Cayman Islands and has full limited
partnership power and authority to execute and deliver this Agreement and the
Registration Rights Agreement and to consummate the transactions contemplated
hereby and thereby.  The execution, delivery and performance by Buyers of this
Agreement and the Registration Rights Agreement and the consummation of the
transactions contemplated hereby and thereby have been duly authorized by
Buyers, and no other action on the part of Buyers is necessary to authorize the
execution and delivery by Buyers of this Agreement or the consummation of the
transactions contemplated hereby and thereby.  No vote of, or consent by, the
limited partners of Buyers is necessary to authorize the execution and delivery
by Buyers of this Agreement and the Registration Rights Agreement or the
consummation by it of the purchase and sale of the Shares.

 

3.2                               Execution; Validity of Agreement.  This
Agreement has been duly executed and delivered by Buyers, and assuming due and
valid authorization, execution and delivery hereof by the Company, is a valid
and binding obligation of each Buyer, enforceable against each Buyer in
accordance with its terms, except as such enforceability may be limited by the
effects of bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and other laws relating to or affecting creditors’ rights, and the
general principles of equity.

 

3.3                               Consents and Approvals; No Violations.  None
of the execution, delivery or performance of this Agreement or the Registration
Rights Agreement by Buyers and the consummation by Buyers of the purchase and
sale of the Shares or compliance by Buyers with any of the provisions hereof or
thereof will (1) conflict with or result in any breach of any provision of the
certificate of limited partnership and agreement of limited partnership of
either Buyer, (2) require any filing with (except for filings with the United
States Securities and Exchange Commission (the “SEC”), the Ontario Securities
Commission, the Toronto Stock Exchange (the “TSX”), the NYSE Amex, and other
regulatory authorities advising them of the issuance and sale of the Shares), or
permit, authorization, consent or approval of, any governmental entity, except
for approval of the listing of the Shares by the TSX and the NYSE Amex,
(3) result in a violation or breach of, or constitute (with or without due
notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which either Buyer is a party or
to which its assets are subject, or (4) violate any order, writ, injunction,
decree, statute, rule or regulation applicable to either Buyer.

 

3.4                               Report of Trade.  Each Buyer acknowledges that
the Company may be required to file a report of trade with the Ontario
Securities Commission containing personal information about the Buyers. This
report of trade will include the full name, residential address and telephone
number of the Buyers, the number and type of securities purchased, the total
purchase price paid for the Shares, the date of the Closing and the exemption
relied upon under applicable securities laws to complete such purchase.

 

3.5                               Anti-Money Laundering.  None of the funds
being used to purchase the Shares are to the Buyers’ knowledge proceeds obtained
or derived directly or indirectly as a result of illegal activities.  The funds
being used to purchase the Shares which will be advanced

 

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by the Buyers to the Company hereunder will not represent proceeds of crime for
the purposes of the Proceeds of Crime (Money Laundering) and Terrorist Financing
Act (Canada) (the “PCMLTFA”) and the Buyers acknowledge that the Company may in
the future be required by law to disclose the Buyers’ names and other
information relating to this Agreement and the Buyers’ subscription hereunder,
on a confidential basis, pursuant to the PCMLTFA. To the best knowledge of each
Buyer: (i) none of the funds to be provided by or on behalf of the Buyers are
being tendered on behalf of a person or entity who has not been identified to
the Buyers; and (ii) the Buyers shall promptly notify the Company if any Buyer
discovers that any of such representations cease to be true, and to provide the
Company with appropriate information in connection therewith.

 

3.6                               Investment Representations.

 

(a)                                        Each Buyer is acquiring the Shares
for investment and not with a view toward, or for sale in connection with, any
distribution thereof, nor with any present intention of distributing or selling
the Shares.

 

(b)                                       Each Buyer is an “accredited investor”
as defined in Regulation D under the Securities Act and in National Instrument
45-106 - Prospectus and Registration Exemptions of the Canadian Securities
Administrators, has net assets of at least CDN$5,000,000 as shown on its most
recently prepared financial statements, and is able to bear the economic risk of
holding the Shares for an indefinite period, and has knowledge and experience in
financial and business matters such that it is capable of evaluating the risks
of the investment in the Shares.

 

(c)                                        Each Buyer’s principal address is as
set out in Section 6.2 of this Agreement and is outside the United States and no
Buyer is a “U.S. person” as defined in Rule 902 under the Securities Act (a
“Non-U.S. Person”).  Each Buyer is acquiring the Shares outside of the United
States in accordance with Regulation S under the Securities Act.  The purchase
of the Shares by each Buyer is for such Buyer’s own account or for the account
of one or more affiliates of Buyers who are Non-U.S. Persons located outside the
United States.

 

(d)                                       Each Buyer acknowledges that it has
reviewed the Public Reports (as defined in Section 4.8) and that it has had the
right to ask questions of and receive answers from the Company and its officers
and directors, and to obtain such information as Buyers deem necessary to verify
the accuracy (a) of the information referred to in the Public Reports and (b) of
any other information relevant to making an investment decision with respect to
the Shares.

 

(e)                                        Each Buyer acknowledges that (i) the
Shares are being offered in a transaction not involving any public offering
within the United States within the meaning of the Securities Act and that the
Shares have not been registered under the Securities Act, (ii) the Shares are
not being qualified pursuant to a prospectus for distribution to the public in
Canada under applicable Canadian Securities Laws (as defined in section 4.8 of
this Agreement) and are not freely tradeable, and (iii) the certificates
representing the Shares will bear the legend set forth below:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933,

 

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AS AMENDED (THE “U.S. SECURITIES ACT”) OR ANY STATE SECURITIES LAWS, AND MAY BE
OFFERED, SOLD OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE U.S. SECURITIES ACT, (C) OUTSIDE
THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE U.S. SECURITIES ACT,
(D) IN COMPLIANCE WITH THE EXEMPTION FROM REGISTRATION UNDER THE U.S. SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN COMPLIANCE WITH ANY
APPLICABLE STATE SECURITIES LAWS, OR (E) IN A TRANSACTION THAT DOES NOT REQUIRE
REGISTRATION UNDER THE U.S. SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND
REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND, IN THE CASE OF (C),
(D) OR (E), THE HOLDER HAS PRIOR TO SUCH TRANSFER FURNISHED TO THE CORPORATION
AN OPINION OF COUNSEL OF RECOGNIZED STANDING IN FORM AND SUBSTANCE SATISFACTORY
TO THE CORPORATION.

 

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

 

UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST
NOT TRADE THE SECURITY BEFORE [insert date that is 4 months and a day after
issuance].

 

The Buyers shall comply with all resale restrictions applicable to the Shares in
Canada and the United States under applicable securities laws.

 

(f)                                    Golden Minerals Shares.  As of the date
hereof, Fund III and SGRF III are the beneficial owners (as defined in
Rule 13d-3 under the Exchange Act) of an aggregate of 2,939,790 shares of Common
Stock.

 

(g)                                 Brokers or Finders.  Buyers have not entered
into any agreement or arrangement entitling any agent, broker, investment
banker, financial advisor or other firm or person to any broker’s or finder’s
fee or any other commission or similar fee in connection with any of the
transactions contemplated by this Agreement.

 

(h)                                 Non-Reliance of Buyer.  Except for the
specific representations and warranties expressly made by the Company in
Section 4 of this Agreement, Buyers acknowledge that (a) neither the Company,
its affiliates nor any other Person has made any representation or warranty,
express or implied, as to the Company, the Company’s business, assets,
liabilities, operations, prospects, condition (financial or otherwise),
including with

 

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respect to the effectiveness or success of the Company’s exploration activities
or future capital raising activities, and (b) no officer, agent, representative
or employee of the Company has any authority, express or implied, to make any
representations, warranties or agreements not specifically set forth in this
Agreement.  Buyers have not received an “offering memorandum” (as defined in
Ontario Securities Commission Rule 14-501 — Definitions) or any other similar
document describing or purporting to describe the business and affairs of the
Company.  Each Buyer specifically disclaims that it is relying upon or has
relied upon any representations or warranties that may have been made by any
Person except for the specific representations and warranties expressly made by
the Company in Section 4.  Any inspection, investigation or review performed by
Buyers in connection with this Agreement will not affect or negate the
representations and warranties of the Company contained herein.

 

4.                                      Representations and Warranties of the
Company.  The Company hereby represents and warrants to Buyers as follows:

 

4.1                               Organization.  The Company is a corporation,
duly organized, validly existing and in good standing under the laws of the
State of Delaware.  The Company has the requisite corporate power and authority
to own, lease and operate its assets and properties and to carry on its business
as it is now being conducted.  The Company is qualified to transact business and
is in good standing in each jurisdiction in which the properties owned, leased
or operated by it or the nature of the business conducted by it makes such
qualification necessary, except where the failure to be so qualified and in good
standing would not reasonably be expected to have a Material Adverse Effect.

 

4.2                               Authorization; Validity of Agreement.  The
Company has full corporate power and authority to execute and deliver this
Agreement and the Registration Rights Agreement and to consummate the
transactions contemplated hereby and thereby.  The execution, delivery and
performance by the Company of this Agreement and the Registration Rights
Agreement and the consummation of the transactions contemplated hereby and
thereby have been duly authorized by the Company’s Board of Directors, and no
other corporate action on the part of the Company is necessary to authorize the
execution and delivery by the Company of this Agreement or the consummation of
the purchase and sale of the Shares.

 

4.3                               Subsidiaries.  Each direct and indirect
Subsidiary of the Company is duly organized, validly existing and in good
standing under the laws of its jurisdiction of formation and has the requisite
power and authority to own, lease and operate its assets and properties and to
carry on its business as it is now being conducted and each Subsidiary of the
Company is qualified to transact business, and is in good standing, in each
jurisdiction in which the properties owned, leased or operated by it or the
nature of the business conducted by it makes such qualification necessary;
except, in all cases, where the failure to be so organized, existing, qualified
and in good standing would not reasonably be expected to have a Material Adverse
Effect.

 

4.4                               Execution; Validity of Agreement.  This
Agreement has been duly executed and delivered by the Company and, assuming due
and valid authorization, execution and delivery hereof by Buyer, is a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforceability may be limited

 

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by the effects of bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium, and other laws relating to or affecting creditors’ rights, and the
general principles of equity.

 

4.5                               Consents and Approvals; No Violations.  Except
for approval of the listing of the Shares by the TSX and the NYSE Amex, none of
the execution, delivery or performance of this Agreement or the Registration
Rights Agreement by the Company, the consummation by the Company of the issuance
and sale of the Shares in accordance herewith or compliance by the Company with
any of the provisions hereof will (1) conflict with or result in any breach of
any provision of the certificate of incorporation or bylaws of the Company or
any of its Subsidiaries, (2) require any filing with (except for filings with
the SEC, the Ontario Securities Commission, the TSX, and other regulatory
authorities advising them of the issuance and sale of the Shares), or permit,
authorization, consent or approval of, any governmental entity or any other
Person, (3) result in a violation or breach of, or constitute (with or without
due notice or lapse of time or both) a default (or give rise to any right of
termination, cancellation or acceleration) under, any of the terms, conditions
or provisions of any note, bond, mortgage, indenture, lease, license, contract,
agreement or other instrument or obligation to which the Company or any of its
Subsidiaries is a party, other than such violation, breach or default as would
not reasonably be expected to have a Material Adverse Effect, or (4) violate any
order, writ, injunction, decree, statute, rule or regulation applicable to the
Company or any of its Subsidiaries, other than such violation as would not
reasonably be expected to have a Material Adverse Effect.

 

4.6                               Good Title Conveyed.  At the time of issuance,
the Shares will be duly authorized, validly issued, fully paid and nonassessable
and not subject to any preemptive rights.  The Shares, when issued, will be free
and clear of all Encumbrances, except for any restrictions on transfer arising
under the Securities Act or any applicable state or Canadian securities laws.

 

4.7                               Capitalization.  The authorized capital of the
Company consists of (i) 100,000,000 shares of Common Stock, of which 31,566,885
are issued and outstanding as of the date of this Agreement, including 218,000
shares of restricted stock which are subject to forfeiture conditions, and
(ii) 10,000,000 shares of preferred stock, par value $0.01 per share, none of
which are issued and outstanding.  Except for (a) the Shares, (b) shares of
Common Stock to be issued to directors of the Company pursuant to outstanding
restricted stock units, (c) shares of Common Stock issuable upon exercise of
options issued under the Company’s 2009 Equity Incentive Plan, (d) shares of
Common Stock which may be issued in the ordinary course pursuant to the
Company’s 2009 Equity Incentive Plan, (e) shares of common stock issuable upon
the exercise of options issued under the Company’s Replacement Stock Option Plan
adopted in connection with the Company’s business combination with ECU Silver
Mining Inc., and (f) shares of Common Stock issuable upon exercise of warrants
issued in connection with the Company’s business combination with ECU Silver
Mining Inc., the Company has not issued or committed to issue any shares of
Common Stock or preferred stock or any rights, warrants, options to acquire any
shares of any class of capital stock of the Company.

 

4.8                               Filings.  The Company is a reporting issuer in
the Province of Ontario and is not in default in any material respect of any of
the requirements of the Securities Act (Ontario) and the rules and regulations
adopted thereunder together with applicable policy statements of the Ontario
Securities Commission and rules of the TSX (collectively, the “Canadian
Securities Laws”).  The Company has made all filings with the SEC that it has
been required to make under

 

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the Securities Act and the U.S. Securities Exchange Act of 1934, as amended (the
“Exchange Act”) and all filings that it has been required to make pursuant to
the Canadian Securities Laws (collectively, but not including any report
prepared pursuant to Canadian National Instrument 43-101- Standards of
Disclosure for Mineral Projects, the “Public Reports”).  The Company prepared
the Public Reports in good faith, and to the Company’s knowledge (after
reasonably prudent inquiry), none of the Public Reports, as of their respective
dates, contained any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements made therein, in light
of the circumstances under which they were made, not misleading.  The Company is
a domestic issuer, as defined in Rule 902 under the Securities Act.  In
addition, the Company is a “SEC foreign issuer” for the purposes of National
Instrument 71-102 of the Canadian Securities Administrators.

 

4.9                               Financial Statements.  The financial
statements included in the Public Reports (including the related notes and
schedules) (the “Financial Statements”) have been prepared in accordance with
United States generally accepted accounting principles applied on a consistent
basis throughout the periods covered thereby and fairly present in all material
respects the financial condition of the Company as of the indicated dates and
the results of operations of the Company for the indicated periods, subject, in
the case of unaudited consolidated financial statements, to normal year-end
adjustments.

 

4.10                        Absence of Changes.  Since, June 30, 2011, except as
disclosed in the Public Reports, (i) no event has occurred which has caused or
constitutes a Material Adverse Effect, and (ii) neither the Company nor any of
its Subsidiaries has entered into any agreement that was material to the Company
and was required to be disclosed pursuant to Form 8-K under the Exchange Act
that has not been disclosed.

 

4.11                        Litigation. There are no claims, suits, actions or
proceedings pending or, to the knowledge of the Company, threatened against,
relating to or affecting the Company or any of its Subsidiaries, before any
court, governmental department, commission, agency, instrumentality or
authority, or any arbitrator that would reasonably be expected, individually or
in the aggregate, to have a Material Adverse Effect.  Neither the Company nor
any of its Subsidiaries is subject to any judgment, decree, injunction, rule or
order of any court, governmental department, commission, agency, instrumentality
or authority, or any arbitrator which prohibits the consummation of the
transactions contemplated hereby or would reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect.

 

4.12                        Brokers or Finders.  The Company has not entered
into any agreement or arrangement entitling any agent, broker, investment
banker, financial advisor or other firm or Person to any broker’s or finder’s
fee or any other commission or similar fee in connection with any of the
transactions contemplated by this Agreement.

 

5.                                      Closing Conditions.  The purchase and
sale of the Shares is expected to be completed on or about October 7, 2011, upon
satisfaction of the closing conditions set forth in this Section 5 (the
“Closing”, and the date on which the Closing occurs, the “Closing Date”)

 

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5.1                               Conditions to Buyers’ Obligation to Close. 
The obligations of Buyers to consummate the purchase and sale of the Shares
shall be subject to the satisfaction or waiver on or prior to the applicable
Closing Date of each of the following conditions:

 

(a)                                        Statutes; Court Orders.  No statute,
rule or regulation shall have been enacted or promulgated by any governmental
entity which prohibits the consummation of the purchase and sale of the Shares;
and there shall be no order or injunction of a court of competent jurisdiction
in effect precluding or prohibiting consummation of the purchase and sale of the
Shares.

 

(b)                                       Government Action.  There shall not be
threatened or pending any suit, action or proceeding by any governmental entity
seeking to restrain or prohibit the consummation of the purchase and sale of the
Shares, or seeking to impose material limitations on the ability of Buyers
effectively to exercise full rights of ownership of the Shares, including the
right to vote the Shares.

 

(c)                                        Representations and Warranties.  The
representations and warranties of the Company set forth in this Agreement shall
be true and correct as of the Closing Date, as though made on and as of such
date, except where the failure to do so would not have a Material Adverse
Effect, provided that if any fact or condition occurs after the date of this
Agreement and such fact or condition causes any representation or warranty in
this Agreement to be untrue, misleading or inaccurate in any material respect,
the Company will deliver to Buyers a certificate describing the exceptions to
the applicable representation (a “Representation Update Certificate”), and such
Representation Update Certificate will be deemed to modify automatically the
applicable representation or warranty; provided, however, that if such
Representation Update Certificate reflects an occurrence which could reasonably
be expected to have a Material Adverse Effect, Buyers shall be entitled to
reject the Representation Update Certificate and the condition set forth in this
Section 5.1(c) shall not be met.

 

(d)                                       Covenants.  The Company shall have
complied in all material respects with all covenants, agreements and obligations
of the Company contained in this Agreement.

 

(e)                                        Consents and Approvals.  The Company
shall have received conditional approval from the TSX and approval from the NYSE
Amex with respect to the listing of the Shares.

 

(f)                                          Deliveries at Closing.  Buyers
shall have received from the Company each of the deliveries set forth below:

 

(i)                                     At the Closing, certificates
representing the Shares, duly and validly issued in favor of Buyers and
otherwise sufficient to vest in Buyers good title to the Shares;

 

(ii)                                  At the Closing, a certificate issued by
the secretary or an assistant secretary of the Company, dated the Closing Date,
in form and substance reasonably satisfactory to Buyers, certifying on behalf of
the Company (i) the resolutions of the board of directors of the Company
authorizing the execution, delivery and

 

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performance of this Agreement and the issuance of the Shares, (ii) the
incumbency and signature of the authorized signatory of the Company executing
this Agreement, (iii) the amended and restated certificate of incorporation, as
amended, and bylaws of the Company, as in effect on the Closing Date, and
(iv) that the condition to closing set forth in Section 5.1(c) has been met.

 

(iii)                               At the Closing, the Registration Rights
Agreement, duly executed by the Company;

 

(iv)                              At the Closing, an opinion of U.S. counsel to
the Company addressed to the Buyers, providing that the issuance, sale and
delivery to the Buyers of the Shares have been duly authorized by all necessary
corporate action and upon issuance against payment therefor and delivery to the
Buyers, such Shares will be validly issued, fully paid and non-assessable; and

 

(v)                                 At the Closing, an opinion of Canadian
counsel to the Company addressed to the Buyers, providing that the issuance of
the Shares is exempt from the prospectus requirements under Ontario securities
laws, that such shares are subject to restrictions on transfer under Ontario
securities law and that such shares are conditionally approved for listing on
the TSX.

 

5.2                               Conditions to the Company’s Obligation to
Close.  The obligations of the Company to consummate the purchase and sale of
the Shares shall be subject to the satisfaction on or prior to the applicable
Closing Date of each of the following conditions:

 

(a)                                        Statutes; Court Orders.  No statute,
rule or regulation shall have been enacted or promulgated by any governmental
entity which prohibits the consummation of the purchase and sale of the Shares;
and there shall be no order or injunction of a court of competent jurisdiction
in effect precluding or prohibiting consummation of the purchase and sale of the
Shares.

 

(b)                                       Government Action.  There shall not be
threatened or pending any suit, action or proceeding by any governmental entity
seeking to restrain or prohibit the consummation of the purchase and sale of the
Shares.

 

(c)                                        Representations and Warranties.  The
representations and warranties of Buyers set forth in this Agreement shall be
true and correct in all material respects as though made on and as of the
Closing Date, except when the failure to do so would not have a material adverse
effect on the ability of Buyers to perform its obligations under this Agreement
or the availability of an exemption from registration pursuant to Regulation S
under the Securities Act.

 

(d)                                       Covenants.  Buyers shall have complied
in all material respects with all covenants, agreements and obligations of
Buyers contained in this Agreement.

 

(e)                                        Consents and Approvals.  The Company
shall have received conditional approval from the TSX and approval from the NYSE
Amex with respect to the listing of the Shares.

 

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(f)              Deliveries at Closing.  The Company shall have received from
Buyers the following:

 

(i)            By wire transfer of immediately available funds, the amount of
the purchase price for the Shares to an account designated by the Company prior
to the applicable Closing;

 

(ii)           At the Closing, the Registration Rights Agreement, duly executed
by the Buyers.

 

6.             Miscellaneous.

 

6.1          Successors and Assigns.  Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by any of the
parties hereto without the prior written consent of the other parties.  Subject
to the preceding sentence, this Agreement shall be binding upon, inure to the
benefit of, and be enforceable by, the parties and their respective permitted
successors and assigns.  Nothing in this Agreement is intended to confer upon
any party other than the parties hereto or their respective permitted successors
and assigns any rights, remedies, obligations, or liabilities under or by reason
of this Agreement, except as expressly provided in this Agreement.

 

6.2          Notices.  Unless otherwise provided herein, any notice, request,
waiver, instruction, consent or document or other communication required or
permitted to be given by this Agreement shall be effective only if it is in
writing and (i) delivered by hand or sent by certified mail, return receipt
requested, (ii) if sent by a nationally-recognized overnight delivery service
with delivery confirmed, or (iii) if sent by facsimile (or other similar
electronic means), with receipt confirmed as follows:

 

Company:

 

Golden Minerals Company

350 Indiana Street, Suite 800

Golden, Colorado 80401

Attn: President

Fax: (303) 839-5907

 

 

 

with a copy to:

 

Davis Graham & Stubbs LLP

1550 17th Street, Suite 500

Denver, Colorado 80202

Attn: Deborah J. Friedman

Fax: (303) 892-7400

 

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Buyers:

 

Sentient Global Resources Fund III, LP

SGRF III Parallel I, LP

Sentient Global Resources Fund IV, LP

Landmark Square, 1st Floor, 64 Earth Close, West Bay Beach South

PO Box 10795

George Town, Grand Cayman KY1-1007

CAYMAN ISLANDS

Attention: Sue Bjuro — Office Manager

Fax (345) 946-0921

 

 

 

with a copy to:

 

Quinn & Brooks, LLP

c/o Gregory A. Smith

9800 Mt. Pyramid Ct., Suite 400

Englewood, Colorado 80112

Fax: (720) 294-8374

 

The parties shall promptly notify each other of any change in their respective
addresses or facsimile numbers or of the individual or entity or office to
receive notices, requests or other communications under this Section 6.2.  All
notices shall be deemed to have been given (i) if personally delivered or sent
by certified mail, as of the date when so delivered, (ii) if sent by
nationally-recognized overnight delivery service, two days after mailing, or
(iii) if sent by facsimile (or other similar electronic means) as of the date
sent, if during normal business hours of the recipient, and otherwise on the
next business day.

 

6.3          Amendments and Waivers.  This Agreement may not be amended or
supplemented, unless set forth in a writing signed by each party hereto. Except
as otherwise permitted in this Agreement, the terms or conditions of this
Agreement may not be waived unless set forth in a writing signed by the party
entitled to the benefits thereof.  No waiver of any of the provisions of this
Agreement shall be deemed or shall constitute a waiver of such provision at any
time in the future or a waiver of any other provision hereof.  The rights and
remedies of the parties hereto are cumulative and not alternative. Except as
otherwise provided in this Agreement, neither the failure nor any delay by any
party hereto in exercising any right, power or privilege under this Agreement
will operate as a waiver of such right, power or privilege, and no single or
partial exercise of any such right, power or privilege will preclude any other
or further exercise of such right, power or privilege or the exercise of any
other right, power or privilege.

 

6.4          Severability.  Any term or provision of this Agreement that is held
by a court of competent jurisdiction or other authority to be invalid, void or
unenforceable in any situation in any jurisdiction shall not affect the validity
or enforceability of the remaining terms and provisions hereof or the validity
or enforceability of the offending term or provision in any other situation or
in any other jurisdiction.  If the final judgment of a court of competent
jurisdiction or other authority declares that any term or provision hereof is
invalid, void or unenforceable, the parties agree that the court making such
determination shall have the power to reduce the scope, duration, area or
applicability of the term or provision, to delete specific words or phrases, or
to replace any invalid, void or unenforceable term or provision with a term or

 

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provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision.

 

6.5          Governing Law.  This Agreement shall be governed by and construed
in accordance with the internal laws (as opposed to the conflicts of law
provisions) of the State of Colorado.

 

6.6          Submission to Jurisdiction.  The parties hereby submit to the
non-exclusive jurisdiction of any court of the State of Colorado or the United
States District Court for the District of Colorado for the purpose of any suit,
action, or other proceeding arising out of this Agreement, and waive any and all
objections to jurisdiction that they may have under the laws of the State of
Colorado or the United States and any claim or objection that any such court is
an inconvenient forum.

 

6.7          Entire Agreement.  This Agreement constitutes the full and entire
understanding and agreement between the parties with regard to the subjects
hereof and thereof.

 

6.8          Counterparts.  This Agreement may be executed in two or more
counterparts (including by facsimile or similar means of electronic
communication), each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

6.9          Announcements.  Publicity and other general releases of information
to the public through the media concerning the transaction contemplated by this
Agreement shall be jointly planned and coordinated between the Company and
Buyers.  No party shall act unilaterally in this regard without the prior
approval of the other party provided, however, that such approval shall not be
unreasonably withheld.  Nothing in this Section 6.9 shall prevent either party
from furnishing information to any governmental entity or from furnishing
information to comply with applicable laws or rules of any applicable stock
exchange.

 

6.10        Definitions.  The following terms shall have the meanings set forth
below:

 

(a)             “Encumbrances” means any and all liens, charges, security
interests, options, claims, mortgages, pledges, proxies, voting trusts or
agreements, obligations, understandings or arrangements, defects or
imperfections of title or other restrictions on title or transfer of any nature
whatsoever.

 

(b)             “Material Adverse Effect” means a material adverse effect on the
business, assets, liabilities, financial condition or results of operations of
the Company and its subsidiaries taken as a whole, or a material adverse effect
on the ability of the Company to perform its obligations under this Agreement;
provided however, that none of the following individually or in the aggregate,
will be deemed to have a Material Adverse Effect: (x) fluctuations in the market
price of the Common Stock; or (y) fluctuations in the prices of precious or base
metals, or (z) any change or effect arising out of general economic conditions
or conditions generally affecting the mining industries.

 

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(c)             “Person” means a natural person, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, governmental entity or other entity
or organization.

 

(d)             “Registration Rights Agreement” means the Registration Rights
Agreement in the form attached hereto Exhibit B.

 

(e)             “Subsidiary” means any corporation or other entity with respect
to which a specified Person (or a Subsidiary thereof) owns a majority of the
common stock or other appropriate equity interest, or has the power to vote or
direct the voting of sufficient securities to elect a majority of the directors,
managers or members (as appropriate) of its board of directors or other
governing body.

 

6.11        Expenses.  All reasonable, documented out-of-pocket costs and
expenses incurred by the parties in connection with the negotiation,
preparation, execution and delivery of this Agreement and the Registration
Rights Agreement, including fees, expenses and disbursements of legal counsel,
shall be paid by the Company; provided that the fees, expenses and disbursements
of legal counsel to the Buyers shall not exceed $15,000.

 

*  *  *  *  *

 

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IN WITNESS WHEREOF, the parties have executed this SUBSCRIPTION AGREEMENT as of
the date first written above.

 

GOLDEN MINERALS COMPANY

 

 

 

 

 

 

 

 

By:

/s/ Robert P. Vogels

 

 

Name:

Robert P. Vogels

 

 

Title:

Sr. Vice President and Chief Financial Officer

 

 

 

 

 

 

 

 

 

 

SENTIENT GLOBAL RESOURCES FUND III, LP

 

 

 

 

 

By:

Sentient GP III, L.P., General Partner

 

 

 

 

By:

Sentient Executive GP III, Limited, General Partner

 

 

 

By:

/s/ Gregory Link

 

 

Name:

Gregory Link

 

 

Title:

Director

 

 

 

 

 

 

 

 

 

 

SGRF III PARALLEL I, L.P.

 

 

 

 

 

By:

Sentient GP III, L.P., General Partner

 

 

 

 

By:

Sentient Executive GP III, Limited, General Partner

 

 

 

 

 

 

 

 

 

By:

/s/ Gregory Link

 

 

Name:

Gregory Link

 

 

Title:

Director

 

 

 

 

SENTIENT GLOBAL RESOURCES FUND IV, LP

 

 

 

 

 

By:

Sentient GP IV, L.P., General Partner

 

 

 

 

By:

Sentient Executive GP IV, Limited, General Partner

 

 

 

 

 

 

 

 

 

By:

/s/ Gregory Link

 

 

Name:

Gregory Link

 

 

Title:

Director

 

 

 

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Exhibit A

ALLOCATION OF SHARES

 

Purchaser

 

Pro Rata Share

 

Shares

 

Shares Purchase Price

 

Sentient Global Resources Fund III, L.P.

Landmark Square, 1st Floor, 64 Earth Close,
West Bay Beach South

PO Box 10795

George Town, Grand Cayman KY1-1007

CAYMAN ISLANDS

Tel. No.: (345) 946-0933

Fax No.: (345) 946-0921

 

22.0821

%

909,375

 

$

6,765,750

 

 

 

 

 

 

 

 

 

SGRF III Parallel I, L.P.

Landmark Square, 1st Floor, 64 Earth Close,
West Bay Beach South

PO Box 10795

George Town, Grand Cayman KY1-1007

CAYMAN ISLANDS

Tel. No.: (345) 946-0933

Fax No.: (345) 946-0921

 

2.2006

%

90,625

 

$

674,250

 

 

 

 

 

 

 

 

 

Sentient Global Resources Fund IV, L.P.

Landmark Square, 1st Floor, 64 Earth Close,
West Bay Beach South

PO Box 10795

George Town, Grand Cayman KY1-1007

CAYMAN ISLANDS

Tel. No.: (345) 946-0933

Fax No.: (345) 946-0921

 

75.7173

%

3,118,150

 

$

23,199,036

 

 

 

 

 

 

 

 

 

 

Total:

 

100.00

%

4,118,150

 

$

30,639,036

 

 

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