Exhibit 10.1

 

OPTION to Purchase AGREEMENT

 

THIS OPTION TO PURCHASE AGREEMENT is made and entered into effective as of
October 16, 2019, by and among Golden Minerals Company, a Delaware corporation,
whose address for purposes hereof is 350 Indiana Street, Suite 800, Golden,
Colorado, U.S.A. 80401 (hereinafter referred to as “GMC”), and its wholly-owned
subsidiary, Minera de Cordilleras, S. de R.L. de C.V. (“GMC Mexico”), and
Magellan Gold Corporation, a Nevada corporation, whose address for purposes
hereof is 500 Marquette Avenue N.W., Suite 1200, Albuquerque, NM 87102
(“Magellan”), and its wholly-owned subsidiary, Recursos Ecologicos Alternativos
la Rumorosa (REA) S.A. de C.V (“Magellan Mexico”). GMC, GMC Mexico, Magellan and
Magellan Mexico may be individually referred to as a “Party” and will be
collectively referred to hereinafter as the “Parties.”

 

RECITALS

 

A.       GMC Mexico is the holder of contractual interests in certain mining
concessions which together comprise the Santa Maria Mine in the State of
Chihuahua, Mexico. Those concessions (the “Concessions”) and GMC Mexico’s
contractual interests therein are more particularly described in the attached
Exhibit A-1.

 

B.       GMC, through GMC Mexico, desires to grant to Magellan, through Magellan
Mexico, and Magellan desires to acquire an exclusive option to purchase GMC
Mexico’s interest in Concessions and related rights (collectively, the
“Property” as defined below) from GMC Mexico, for the consideration and upon the
terms and conditions described herein.

 

C.       Magellan and GMC wish to enter into this Agreement for the purposes of
setting forth the structure of the transaction they wish to accomplish between
their respective Mexican subsidiaries and agreeing upon the respective rights
and obligations that they will cause their respective subsidiaries to assume and
perform.

 

AGREEMENT

 

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which the Parties hereby confirm and acknowledge, and the mutual promises,
covenants, and conditions contained in this Agreement, the Parties agree as
follows:

 

ARTICLE 1
DEFINITIONS

 

As used in this Agreement, the following terms shall have the meanings assigned
to them in this Article 1.

 

1.1            “Affiliate” means any person, partnership, joint venture,
corporation, company or other form of enterprise which directly or indirectly
Controls, is Controlled by, or is under common Control with, a Party to this
Agreement.

 

1.2            “Agreement” means this Option to Purchase Agreement, the recitals
and all exhibits attached hereto, which by this reference are incorporated
herein.

 

1.3            “Area of Interest” means the area that is encompassed within two
kilometers around the current exterior boundaries of the Concessions and
including the entire area of any other concession that falls partly within and
partly outside the Area of Interest.

 

1.4            “Business Day” means a day other than a Saturday, Sunday or any
day on which federally chartered banks in the city of Denver, Colorado, are not
open for business during normal banking hours.

 

1.5            “Commercial Production” means the commercial exploitation of
Valuable Minerals from the Property, or any part, as a mine, but does not
include milling for the purpose of testing or milling by a pilot plant.
Commercial Production shall be deemed to have commenced:

 

 

 

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(a)             if a processing plant is located on the Property, on the first
day following the first period of 90 consecutive days during which Valuable
Minerals have been produced from the Property and processed in the processing
plant at an average rate not less than 80% of the initial design rated capacity
of such plant; or

 

(b)             if no processing plant is located on the Property, on the first
day of the month following the first period of 90 consecutive days during which
Valuable Minerals have been shipped from the Property to a processing plant on a
reasonably regular basis for the purpose of earning revenue.

 

1.6            “Control” when used as a verb with respect to an entity, means
the ability, directly or indirectly through one or more intermediaries, to
direct or cause the direction of the management and policies of such entity
through (i) the legal or beneficial ownership of voting securities or membership
interests; (ii) the right to appoint managers, directors or corporate
management; (iii) contract; (iv) operating agreement; (v) voting trust; or
otherwise; and, when used with respect to a person, means the actual or legal
ability to control the actions of another, through family relationship, agency,
contract or otherwise; and, when used as a noun, means an interest which gives
the holder the ability to exercise any of the foregoing powers.

 

1.7            “Development Period” means the one-year period following the
Closing Date, subject to the provisions of Article 13.

 

1.8            “Effective Date” means October 16, 2019.

 

1.9            “Encumbrance” or “Encumbrances” means mortgages, deeds of trust,
security interests, pledges, liens, net profits interests, royalties or
overriding royalty interests, other payments out of production, or other burdens
or charges of any nature.

 

1.10         “Environmental Compliance” means actions taken in connection with
activities or operations on the Property to comply with the requirements of all
Environmental Laws or contractual commitments related to reclamation of the
Property, or other compliance with Environmental Laws.

 

1.11         “Environmental Laws” means Laws aimed at reclamation or restoration
of the Property; abatement of pollution; protection of the environment;
protection of human health and safety; protection of wildlife, including
endangered species; ensuring public safety from environmental hazards;
protection of cultural or historic resources; management, storage or control of
Hazardous Materials; releases or threatened releases of pollutants,
contaminants, chemicals or industrial, toxic or Hazardous Materials as wastes
into the environment, including ambient air, surface water and groundwater; and
all other Laws relating to the manufacturing, processing, distribution, use,
treatment, storage, disposal, handling or transport of pollutants, contaminants,
chemicals or industrial, toxic or Hazardous Materials or wastes.

 

1.12         “Environmental Liabilities” means any liability arising out of,
based on or resulting from (i) the presence, release, threatened release,
discharge or emission into the environment of any Hazardous Materials existing
or arising on, beneath or above the Property and/or emanating or migrating
and/or threatening to emanate or migrate from the Property to other properties;
(ii) disposal or treatment of or the arrangement for the disposal or treatment
of Hazardous Materials originating or transported from the Property to an
off-site treatment, storage or disposal facility, (iii) physical disturbance of
the environment on or from the Property; or (iv) the violation or alleged
violation of any Environmental Laws relating to the Property.

 

1.13         “Existing Data” means information relating to title to the Property
or environmental conditions at or pertaining to the Property, maps, drill logs
and other drilling data, core tests, pulps, reports, surveys, assays, analyses,
production reports, operations, technical, accounting and financial records, and
other material information, pertaining to or developed with respect to the
Property prior to the Effective Date.

 

1.14         “Exploration Agreements” means the agreements by which GMC Mexico
holds its interests in the Concessions, as those agreements are more
particularly described in the attached Exhibit A-1.

 

1.15         “Financing” means Magellan’s raising of at least $2,000,000 through
such means (equity or debt) as it chooses in its sole discretion, such funds to
be used solely for purposes of (a) paying portions of the Purchase Price or
(b) achieving Commercial Production of Valuable Minerals from the Concessions.

 

 

 

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1.16         “Governmental Fees” means all location fees, maintenance payments,
land taxes and similar payments required by Law to maintain the Concessions.

 

1.17         “Hazardous Materials” means any substance: (a) the presence of
which requires reporting, investigation, removal or remediation under any
Environmental Law; (b) that is defined as a “hazardous waste,” “hazardous
substance,” “extremely hazardous substance” or “pollutant” or “contaminant”
under any Environmental Law; (c) that is toxic, explosive, corrosive, flammable,
ignitable, infectious, radioactive, reactive, carcinogenic, mutagenic or
otherwise hazardous and is regulated under any Environmental Law; (d) the
presence of which on a property causes or threatens to cause a nuisance upon the
property or to adjacent properties or poses or threatens to pose a hazard to the
health or safety of persons on or about the Property; (e) that contains
gasoline, diesel fuel or other petroleum hydrocarbons; or (f) that contains
PCBs, asbestos or urea formaldehyde foam insulation; in each case subject to
exceptions provided in applicable Environmental Laws.

 

1.18         “Law” or “Laws” means all applicable federal, provincial, state and
local laws (statutory or common), rules, ordinances, regulations, grants,
concessions, franchises, licenses, orders, directives, judgments, decrees, and
other governmental restrictions, including permits and other similar
requirements, whether legislative, municipal, administrative or judicial in
nature.

 

1.19         “NSR Agreement” means a royalty agreement in the form attached
hereto as Exhibit B.

 

1.20         “Option” means Magellan Mexico’s exclusive right to purchase GMC
Mexico’s interest in the Property pursuant to Section 2.1.

 

1.21         “Option Period” means the period of time commencing on the
Effective Date and continuing until the earlier of (i) the date upon which
Magellan notifies GMC that it has completed the Financing and (ii) March 14,
2020 (the date 150 days after the Effective Date), unless Magellan and Magellan
Mexico have otherwise relinquished their rights hereunder.

 

1.22         “Property” means GMC’s Mexico’s interest in the Exploration
Agreements and the Concessions, together with all surface rights, water rights,
easements and rights-of-way owned or held by GMC Mexico in connection with its
interests in the Concessions (collectively, the “Ancillary Rights”), as
identified on Exhibit A-2.

 

1.23         “Purchase Price” means $4,000,000, payable as set forth in Section
2.2.

 

1.24         “Royalty” means the production royalty payable under the NSR
Agreement.

 

1.25         “Securities Laws” means the United States Securities Act of 1933,
as amended, and all applicable Canadian federal and provincial and U.S. federal
and state securities laws.

 

1.26         “Transfer” means, when used as a verb, to sell, grant, assign,
create an Encumbrance, pledge or otherwise convey, or dispose of or commit to do
any of the foregoing, either directly or indirectly; and, when used as a noun,
means such a sale, grant, assignment, Encumbrance, pledge or other conveyance or
disposition, or such an arrangement.

 

1.27         “Valuable Minerals” shall mean all ores, minerals, mineral deposits
or mineral substances located in, on or under the Property, which the holder has
the right to mine under the Concessions.

 

1.28         “$” shall mean United States currency.

 

 

 

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ARTICLE 2
GRANT OF OPTION

 

2.1            Rights Granted. GMC Mexico hereby grants to Magellan Mexico the
exclusive and irrevocable option to acquire the Property (the “Option”) by
(a) completing the Financing during the Option Period, (b) promptly notifying
GMC of such completion on or prior to the last day of the Option Period, and (c)
commencing Commercial Production from a deposit of Valuable Minerals from the
Property by the last day of the Development Period. Magellan and Magellan Mexico
agree to use their commercially reasonable best efforts to complete the
Financing during the Option Period. Magellan shall provide GMC with updates on
its efforts to obtain the Financing at least once every 15 days during the
Option Period.

 

2.2            Acquisition of the Property.

 

(a)             Exercise of Option. Upon timely completion of the Financing and
providing notice of the same to GMC, Magellan Mexico shall have the right to
exercise the Option.

 

(b)             Procedures. To exercise the Option, Magellan Mexico shall
promptly (and in any event on or before the last day of the Option Period) give
GMC Mexico notice of its completion of the Financing, and of its decision to
exercise the Option. In order to exercise the Option, Magellan shall have, on or
before the last day of the Option Period, issued a press release announcing
completion of the Financing and made all filings required under applicable
Securities Laws and stock exchange rules in connection therewith. Within 15 days
after the date of GMC Mexico’s receipt of such notice, on a mutually agreed date
(the “Closing Date”) and at a mutually agreeable time and place, the parties
shall close the sale of the Property to Magellan Mexico (the “Closing”). At the
Closing, Magellan Mexico shall pay the Initial Payment (as defined in
Section 2.2(c) below) to GMC Mexico, and GMC Mexico shall execute and deliver to
Magellan Mexico such documents in addition to this Agreement as Magellan Mexico
may reasonably require, sufficient for registering in the appropriate offices of
the Mexican Mining Registry, to confirm Magellan Mexico’s rights hereunder to
conduct exploration, development and mining activities on the Property (to the
extent permitted under the Exploration Agreements and the Ancillary Rights). If
Magellan Mexico notifies GMC Mexico that it has elected not to exercise the
Option, this Agreement shall terminate and the provisions of Section 9.2 shall
apply.

 

(c)             Initial Cash Payment on Closing. At the Closing, Magellan Mexico
will pay $1,000,000 to GMC Mexico by wire transfer in immediately available
funds (the “Initial Payment”).

 

(d)             Net Smelter Royalty. At the Closing, Magellan Mexico and GMC
Mexico shall execute and deliver the NSR Agreement, pursuant to which Magellan
Mexico shall grant a 6.5% net smelter returns production royalty (the “Royalty”)
to GMC Mexico. The remaining portion of the Purchase Price ($3,000,000) shall be
paid by a combination of either production royalty payments under the NSR
Agreement or (at the discretion of the Magellan Mexico) cash payments by
Magellan Mexico directly to GMC Mexico. Upon full payment by Magellan Mexico of
the remainder of the Purchase Price to GMC Mexico pursuant to this Section
2.2(d), the Royalty under the NSR Agreement shall be reduced to 3%, as set forth
therein.

 

(e)             Delivery of Conveyance Documents. Upon receipt by GMC Mexico of
the entire amount of the Purchase Price, GMC Mexico and Magellan Mexico shall
promptly execute and deliver conveyances of GMC Mexico’s interest in the
Property to Magellan Mexico, pursuant to which Magellan Mexico assumes (and GMC
Mexico is released from) all of GMC Mexico’s obligations under the Exploration
Agreements, sufficient for registering in the appropriate offices of the Mexican
Mining Registry, in a form of assignment mutually agreeable to the parties and
their respective counsel in Mexico (the “Assignments”). The Assignments shall
convey GMC Mexico’s interest in the Property to Magellan Mexico free and clear
of all Encumbrances (except for the Royalty) arising by, through or under GMC
Mexico.

 

2.3            Failure to Achieve Commercial Production. If Magellan Mexico has
not achieved Commercial Production from a deposit of Valuable Minerals from the
Concessions within 365 days after the Closing Date (during the Development
Period), then GMC Mexico shall have no obligation to execute and deliver the
Assignments, and this Agreement shall terminate pursuant to the provisions of
Section 9.2. Upon such termination, GMC shall have no obligation to return the
Initial Payment or any other portions of the Purchase Price that have been paid
by Magellan Mexico, and the Parties agree that those payments will constitute
the consideration for the granting of the Option.

 

 

 

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2.4            Geological and Other Data. Upon execution of this Agreement, GMC
shall make the Existing Data available to Magellan, and Magellan, at its
expense, may copy any such Existing Data that it desires. Neither GMC nor GMC
Mexico makes any representation or warranty as to the accuracy, reliability or
completeness of any Existing Data, and Magellan and Magellan Mexico shall rely
on the same at their sole risk.

 

2.5            Activities During Option Period. During the Option Period,
Magellan Mexico shall have no right to conduct any activities other than
exploration work as mutually agreed on the Concessions or at the Property.
During the Option Period, GMC Mexico shall make all payments and take all other
actions as required under the Exploration Agreements to maintain the
Concessions. In addition, during the Option Period, GMC Mexico shall timely make
all option and other payments due to the owners of the Concessions under the
Exploration Agreements.

 

ARTICLE 3
RIGHTS OF Magellan MEXICO DURING THE Development PERIOD

 

3.1            Magellan Mexico’s Rights. During the Development Period, Magellan
Mexico’s rights shall include, without limitation, but subject to the terms of
and limitations set forth in the Exploration Agreements, the following:

 

(a)             Magellan Mexico may carry out such operations at the Property as
it may, in its sole discretion, determine to be warranted, and Magellan Mexico
shall have exclusive control of all operations on or for the benefit of the
Property, and of any and all equipment, supplies, machinery or other assets
purchased or otherwise acquired in connection with such operations.

 

(b)             Magellan Mexico’s rights shall include all other rights
necessary or incident to or for its performance of any operations hereunder,
including the authority to apply for all necessary permits, licenses and other
approvals from the federal government of Mexico, the State of Chihuahua or any
other governmental or other entity having regulatory authority over any part of
the Property.

 

ARTICLE 4
OBLIGATIONS OF Magellan MEXICO DURING THE Development PERIOD

 

4.1            Conduct of Operations by Magellan and Magellan Mexico at the
Property. All of the work which may be performed by or on behalf of Magellan
Mexico on or at the Property during the Development Period shall be performed in
a good and workerlike manner and in accordance with good industry practices, and
in full compliance with the terms and conditions of the Exploration Agreements.
Further, Magellan Mexico acknowledges and agrees that under the terms and
conditions of the Exploration Agreement described in Part A of Exhibit A-1, it
cannot perform commercial mining operations unless and until it has exercised
the option to purchase the Concessions covered thereby.

 

4.2            Indemnity. Magellan and Magellan Mexico agree to indemnify,
defend and hold GMC and GMC Mexico harmless from and against any loss,
liability, expense or damage (including reasonable attorneys’ fees) either GMC
or GMC Mexico may incur to third persons or entities for injury to or death of
persons or damage to property which is the result of any operations conducted by
or on behalf of Magellan Mexico at or on the Property during the Development
Period.

 

4.3            Insurance. Magellan Mexico agrees to carry such insurance,
covering all persons and entities working at or on the Property for Magellan
Mexico, as will fully comply with the requirements of the Laws of Mexico and the
State of Chihuahua pertaining to worker’s compensation and occupational disease
and disabilities as are now in force or as may be hereafter amended or enacted.
In addition, during the Development Period, Magellan Mexico agrees to carry
liability insurance with respect to such operations in reasonable amounts not
less than the greater of the minimum levels required by Law or as set forth
below:

 

(a)             Commercial General Liability Insurance with limits of not less
than $2,000,000 per occurrence.

 

(b)             Automobile Liability Insurance, with:

 

(i)              Limits of not less than $1,000,000 Combined Single Limit per
accident; and

 

(ii)            Coverage applying to any auto.

 

 

 

 

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All of the above-described policies (with the exception of worker’s compensation
and occupational disease and disabilities) shall name GMC Mexico as an
additional insured and shall contain provisions that the insurance companies
will have no right of recovery or subrogation against GMC Mexico or its
Affiliates, it being the intention of the parties that the carrier of Magellan
Mexico shall be liable for any and all losses covered by the above-described
insurance. All policies providing coverage hereunder shall contain provisions
that no cancellation or material changes in the policies shall become effective
except on thirty (30) days’ advance written notice thereof to GMC Mexico.

 

4.4            Compliance with Laws. Magellan Mexico agrees to conduct and
perform all of its operations at the Property during the Development Period in
full compliance with all applicable Laws, including Environmental Laws, and
Magellan and Magellan Mexico shall defend, indemnify and hold GMC and GMC Mexico
harmless from and against payment of any damages or penalties occasioned by
Magellan Mexico’s failure (or the failure of any of its contractors or
subcontractors) to comply with said Laws.

 

4.5            Maintenance of Concessions. During the Development Period,
Magellan Mexico shall timely pay to the appropriate governmental authority all
Governmental Fees required to maintain the Concessions, shall timely and
properly perform all assessment work required to maintain the Concessions, and
shall timely file proof of performance thereof with the appropriate governmental
authority, all as required by applicable Laws and in accordance with the terms
and conditions of the Exploration Agreements. In addition, during the
Development Period, Magellan Mexico shall timely make all option and other
payments due to the owners of the Concessions under the Exploration Agreements.

 

4.6            Taxes. During the Development Period, to the extent required
under the Exploration Agreements, Magellan Mexico shall be responsible for full
and timely payment of all taxes levied or assessed upon or against the Property
and any facilities or improvements located thereon; provided, however, that
Magellan Mexico shall not be responsible for any such payments for which GMC
Mexico receives notices of due dates and fails to promptly forward copies of
such notices to Magellan Mexico.

 

4.7            Liens and Encumbrances. Magellan Mexico shall keep the title to
the Property free and clear of all Encumbrances resulting from its operations
hereunder. At its sole cost and expense, Magellan Mexico shall contest any suit,
demand or action commenced to enforce such a claim and, if the suit, demand or
action is decided by a court or other authority of ultimate and final
jurisdiction against Magellan Mexico or the Property, Magellan Mexico shall
promptly pay the judgment and shall post any bond and take all other action
necessary to prevent any sale or loss of the Property or any part thereof.

 

4.8            Reclamation. If this Agreement is terminated and Magellan Mexico
does not acquire the Property, Magellan Mexico shall reclaim the Property, to
the extent disturbed by Magellan Mexico during the Development Period, in
accordance with applicable Laws and the terms and conditions of the Exploration
Agreements. GMC Mexico, to the extent it is entitled to do so under the terms
and conditions of the Exploration Agreements, hereby agrees to grant to Magellan
Mexico such access to the Property following termination as is reasonably
necessary to complete such reclamation work.

 

ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF GMC and GMC Mexico

 

5.1            Representations and Warranties. GMC and GMC Mexico represent and
warrant to Magellan and Magellan Mexico as of the Effective Date as follows:

 

(a)             Organization and Standing. GMC is a corporation duly organized,
validly existing, and in good standing under the Laws of the State of Delaware,
and GMC Mexico is a company duly organized, validly existing, and in good
standing under the Laws of Mexico and the State of Chihuahua.

 

(b)             Corporate Power. Each of GMC and GMC Mexico has the requisite
corporate power and authority (i) to enter into this Agreement and all other
agreements contemplated hereby, and (ii) to carry out and perform its
obligations under the terms and provisions of this Agreement and all agreements
contemplated hereby.

 

 

 

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(c)             Authorization. All requisite corporate action on the part of GMC
and GMC Mexico, and their respective officers, directors and shareholders,
necessary for the execution, delivery, and performance of this Agreement and all
other agreements of either GMC or GMC Mexico contemplated under this Agreement,
have been taken. This Agreement and all agreements and instruments contemplated
hereby are, and when executed and delivered by GMC and GMC Mexico (assuming
valid execution and delivery by Magellan and Magellan Mexico), will be, legal,
valid, and binding obligations of GMC and GMC Mexico enforceable against each of
them in accordance with their respective terms. The execution, delivery and
performance of this Agreement will not violate any provision of Law; any order
of any court or other agency of government; or any provision of any indenture,
agreement or other instrument to which either GMC or GMC Mexico is a party or by
which its properties or assets are bound; or be in conflict with, result in a
breach of or constitute (with due notice and lapse of time) a default under any
such indenture, agreement or other instrument. There is no judgment, decree or
order of any court or governmental authority binding on either GMC or GMC Mexico
which would be contravened by the execution, delivery, performance, or
enforcement of this Agreement or any instrument or agreement required hereunder.
Notwithstanding the foregoing, no representation is made as to (i) the
availability of equitable remedies for the enforcement of this Agreement or any
other agreement contemplated hereby or (ii) rights to indemnity under this
Agreement for securities law liability. Additionally, this representation is
limited by applicable bankruptcy, insolvency, moratorium, and other similar laws
affecting generally the rights and remedies of creditors and secured parties.

 

(d)             Royalties. Except for the production royalties set forth in
Exhibit A-3 (the “Existing Royalties”), to the knowledge of GMC and GMC Mexico
there are no royalties or other burdens on production arising by, through or
under GMC Mexico affecting the Property.

 

(e)             Permits and Licenses. GMC Mexico has obtained all material
permits, licenses, approvals, authorizations and qualifications of all federal,
state and local authorities (collectively, “Permits”) required for it to carry
on its current operations at or on the Property. To the knowledge of GMC and GMC
Mexico, GMC Mexico is not in violation of and has no liability (other than
liability for compliance with existing permits and Laws, including performance
of reclamation) under any statute, rule or regulation of any governmental
authority applicable to the Property.

 

(f)              Title to the Property.

 

(i)              GMC Mexico has not pledged, conveyed or otherwise assigned (or
agreed to pledge, convey or otherwise assign) any interest in the Property to
any third party. With respect to the Concessions, to the knowledge of GMC and
GMC Mexico, (A) the owners of the Concessions as described in the Exploration
Agreements are the legal and beneficial owner of the Concessions; (B) the
Concessions were properly issued by and are properly registered with the
appropriate governmental agencies; (C) from and after the dates GMC Mexico
entered into each of the Exploration Agreements, all annual labor required to
hold the Concessions covered thereby has been timely and properly performed and
all Governmental Fees required to hold the Concessions covered thereby have been
timely and properly paid through the Effective Date; and (D) proof of the
performance of required annual labor with respect to the Concessions covered
thereby has been timely and properly filed with the appropriate governmental
agencies.

 

(ii)            The Property is free and clear of all Encumbrances arising by,
through or under GMC or GMC Mexico except for the Existing Royalties.

 

(g)             Environmental Compliance. Neither GMC nor GMC Mexico has
received any notice of violation or any consent order issued under applicable
Laws concerning protection of the environment and health and safety to which the
Property or operations thereon are now subject. There are no pending or, to the
knowledge of GMC and GMC Mexico, threatened proceedings by or before any court
or other governmental authority with respect to operations on or the ownership
of the Property alleged to be, or to have been, in violation of, or to be the
basis of liability under, any Environmental Law, and neither GMC nor GMC Mexico
has knowledge of any release of any Hazardous Materials at, from or affecting
the Property.

 

(h)             Material Contracts and Commitments. Through the Effective Date,
GMC Mexico has performed all material obligations required to be performed by it
under the Exploration Agreements and under any other contracts affecting the
Property to which it is a party. True and correct copies of the Exploration
Agreements, as amended, have been provided to Magellan.

 

 

 

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(i)              Legality. GMC Mexico has conducted all of its activities and
operations on the Property in substantial compliance with applicable Laws.

 

(j)              Litigation and Claims. There are no actions, suits or
proceedings pending or, to the knowledge of GMC or GMC Mexico, threatened
against or affecting the Property, including any actions, suits, or proceedings
being prosecuted by any federal, state or local department, commission, board,
bureau, agency, or instrumentality.

 

(k)             Consents. Other than consents from each of the counterparties to
the Exploration Agreements, GMC and GMC Mexico have obtained or made all
consents, approvals, authorizations, declarations, or filings required by, from
or under any federal, state, local, or other authority, stock exchange or any
other third party, in connection with the valid execution, delivery, and
performance by each of them of this Agreement and the consummation of the
transactions contemplated hereby.

 

(l)              Taxes. All federal, state and local excise, property and other
taxes and assessments pertaining to or assessed against the Property which GMC
Mexico is required to pay pursuant to the Exploration Agreements have been
timely and properly paid.

 

(m)           Brokerage or Finder’s Fee. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on by GMC
and GMC Mexico in such manner as not to give rise to any valid claim against
Magellan or Magellan Mexico or any other third party for a brokerage commission,
finder’s fee, or other fee or commission arising by reason of the transactions
contemplated by this Agreement.

 

ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF Magellan and Magellan Mexico

 

6.1            Representations and Warranties. Magellan and Magellan Mexico
represent and warrant to GMC and GMC Mexico as of the Effective Date as follows:

 

(a)             Organization and Standing. Magellan is a corporation duly
organized, validly existing, and in good standing under the laws of the State of
Nevada, and Magellan Mexico is a company duly organized, validly existing, and
in good standing under the Laws of Mexico and the State of Chihuahua.

 

(b)             Corporate Power. Each of Magellan and Magellan Mexico has the
requisite corporate power and authority (i) to enter into this Agreement and all
other agreements contemplated hereby, and (ii) to carry out and perform its
obligations under the terms and provisions of this Agreement and all agreements
contemplated hereby.

 

(c)             Authorization. All requisite corporate action on the part of
Magellan and Magellan Mexico, and their respective officers, directors and
shareholders, necessary for the execution, delivery and performance of this
Agreement and all other agreements of either Magellan or Magellan Mexico
contemplated under this Agreement, have been taken. This Agreement and all
agreements and instruments contemplated under this Agreement, when executed and
delivered by Magellan and Magellan Mexico (assuming valid execution and delivery
by GMC and GMC Mexico), will be the legal, valid, and binding obligations of
Magellan and Magellan Mexico enforceable against each of them in accordance with
their terms. The execution, delivery and performance of this Agreement will not
violate any provision of Law; any order of any court or other agency of
government; or any provision of any indenture, agreement or other instrument to
which either Magellan or Magellan Mexico is a party or by which its properties
or assets are bound; or be in conflict with, result in a breach of or constitute
(with due notice and lapse of time) a default under any such indenture,
agreement or other instrument. There is no judgment, decree or order of any
court or governmental authority binding on either Magellan or Magellan Mexico
which would be contravened by the execution, delivery, performance or
enforcement of this Agreement or any instrument or agreement required hereunder.
Notwithstanding the foregoing, no representation is made as to (i) the
availability of equitable remedies for the enforcement of this Agreement or any
other agreement contemplated hereby or (ii) rights to indemnity under this
Agreement for securities law liability. Additionally, this representation is
limited by applicable bankruptcy, insolvency, moratorium, and other similar laws
affecting generally the rights and remedies of creditors and secured parties.

 

 

 

 8 

 

 

(d)             Brokerage or Finder’s Fee. All negotiations relative to this
Agreement and the transactions contemplated hereby have been carried on by
Magellan and Magellan Mexico in such manner as not to give rise to any valid
claim against GMC or GMC Mexico or any third party for a brokerage commission,
finder’s fee or other fee or commission arising by reason of the transactions
contemplated by this Agreement.

 

ARTICLE 7
NOTICES

 

7.1            Notices. All notices given under this Agreement shall be in
writing, and all such notices and deliveries to be made pursuant hereto shall be
given or made in person, by reputable overnight courier, or by email
acknowledged upon receipt. Such notices and deliveries shall be deemed to have
been duly given and received when actually delivered in person or confirmed as
received by email (during normal business hours), or on the next Business Day
following the date they are sent by courier, addressed as follows:

 

(a)             If to GMC or GMC Mexico:

Golden Minerals Company
350 Indiana Street, Suite 800
Golden, CO 80401
Attention: Warren Rehn
Email: warren.rehn@goldenminerals.com
Telephone No.: (303) 839-5060

 

(b)             If to Magellan or Magellan Mexico:

Magellan Gold Corporation
4709 Millrace Lane
Salt Lake City, UT 84107Attention: David E. Drips
Email: dedrips@msn.com
Telephone No.: (385) 227-7272

 

ARTICLE 8
INDEMNIFICATION

 

8.1            By GMC and GMC Mexico. GMC and GMC Mexico agree to defend,
indemnify and hold harmless Magellan and Magellan Mexico, and their respective
successors, assigns, Affiliates, officers and directors from and against any and
all claims, actions, suits, losses, liabilities, damages, assessments,
judgments, costs and expenses, including reasonable attorneys’ fees, arising out
of or related to (a) any breach by GMC or GMC Mexico of any representation,
covenant or warranty set forth herein, and (b) any activities conducted by GMC
or GMC Mexico on or in connection with the Property prior to the Effective Date.

 

8.2            By Magellan and Magellan Mexico. Magellan and Magellan Mexico
agree to defend, indemnify and hold harmless GMC and GMC Mexico, and their
respective successors, assigns, Affiliates, officers and directors from and
against any and all claims, actions, suits, losses, liabilities, damages,
assessments, judgments, costs and expenses, including reasonable attorneys’
fees, arising out of or related to (a) any breach by Magellan or Magellan Mexico
of any representation, covenant or warranty set forth herein, or (b) any
activities conducted by Magellan Mexico or any third party on Magellan Mexico’s
behalf on or in connection with the Property from and after the Effective Date
and (c) any Environmental Liabilities associated with activities conducted by
Magellan Mexico or any third party on Magellan Mexico’s behalf on the Property
from and after the Effective Date.

 

 

 

 9 

 

 

8.3            Notification. Either Party who has a claim giving rise to
indemnification liability pursuant to this Agreement (an “Indemnified Party”),
which results from a claim by a third party or otherwise, shall give prompt
notice to the other Party (the “Indemnifying Party”) of such claim, together
with a reasonable description thereof. Failure to provide such notice shall not
relieve a Party of any of its indemnification obligations hereunder except to
the extent materially prejudiced thereby. With respect to any claim by a third
party against any Party to this Agreement which is subject to indemnification
under this Agreement, the Indemnifying Party shall be afforded the opportunity,
at its expense, to defend or settle the claim if it utilizes counsel reasonably
satisfactory to the Indemnified Party, and promptly commences the defense of
such claim and pursues such defense with diligence; provided, however, that the
Indemnifying Party shall secure the consent of the Indemnified Party to any
settlement, which consent shall not be unreasonably withheld. The Indemnified
Party may participate in the defense of any claim at its expense, and until the
Indemnifying Party has agreed to defend such claim, the Indemnified Party may
file any motion, answer or other pleading or take such other action as it deems
appropriate to protect its interests or those of the Indemnifying Party. If an
Indemnifying Party does not elect to contest any third-party claim, the
Indemnifying Party shall be bound by the results obtained with respect thereto
by the Indemnified Party, including any settlement of such claim.

 

ARTICLE 9
TERM AND TERMINATION

 

9.1            Term and Termination. This Agreement will remain in effect during
the Option Period, after which (if Magellan Mexico does not exercise the Option)
it will terminate automatically, unless it is sooner terminated as a result of
the exercise of the Option by Magellan Mexico or pursuant to the provisions of
this Article 9. If Magellan Mexico exercises the Option, this Agreement will
remain in effect during the Development Period. At the end of the Development
Period, if Magellan Mexico has achieved Commercial Production as set forth in
Section 2.1, this Agreement shall remain in full force and effect; if not, as
set forth in Section 2.3, this Agreement shall terminate and the provisions of
Section 9.2 shall apply.

 

9.2            Termination by Magellan. Magellan shall have the right to
terminate, surrender and relinquish this Agreement at any time during the Option
Period or the Development Period, by giving written notice to GMC of such
election. Any termination by Magellan pursuant to this Section 9.2 will be
effective upon receipt of such notice by GMC. Upon termination of this Agreement
pursuant to this Section 9.2, Magellan and Magellan Mexico shall have no further
liabilities or obligations under this Agreement or with respect to the Property,
except for the obligations set forth in Sections 4.2, 4.4, 4.7, 4.8, 8.2, 8.3,
this Section 9.2, 9.4, 9.5 and 9.6, as well as any accrued production royalty
payment obligations under the NSR Agreement, and GMC and GMC Mexico shall have
no further liabilities or obligations under this Agreement, except for the
obligations set forth in Sections 8.1, 8.2, this Section 9.2, and 9.4. In
addition, Magellan Mexico shall be responsible for paying any fees required to
maintain the Concessions in good standing for a period of 90 days after the
effective date of such termination, and any option or other payments owed to the
counterparties to the Exploration Agreements within 90 days after the effective
date of such termination. In the event of termination of this Agreement under
this Section 9.2, GMC shall have no obligation to return the Initial Payment or
any other portions of the Purchase Price that have been paid by Magellan Mexico,
and the Parties agree that those payments will constitute the consideration for
the granting of the Option. The provisions of Article 14 of this Agreement shall
survive such termination.

 

9.3            Termination by GMC. In the event of a default under this
Agreement on the part of Magellan or Magellan Mexico, GMC shall give to Magellan
written notice specifying the particular default or defaults asserted, and, in
the case of a default other than with respect to the payment of money, Magellan
shall have 30 days after the receipt of said notice within which to either cure
such specified defaults, or to undertake diligent efforts to cure the same. In
the event of such a cure (or the commencement of diligent efforts to cure) by
Magellan, this Agreement shall continue in full force and effect as though no
default had occurred. In the event such curative action is not so completed or
diligent efforts to cure such defaults are not undertaken within the applicable
30-day period and thereafter diligently pursued to completion, GMC may elect to
terminate this Agreement by notice to Magellan as provided in Section 7.1. In
the case of a default by Magellan relating to the payment of any funds to GMC,
or any third party as required hereunder, Magellan shall have 10 days after
receipt of notice of such default to rectify the same, failing which GMC may
elect to terminate this Agreement by written notice to Magellan as provided in
Section 7.1. Upon termination of this Agreement pursuant to this Section 9.3,
Magellan and Magellan Mexico shall have no further liabilities or obligations
under this Agreement or with respect to the Property, except for the obligations
set forth in Sections 4.2, 4.4, 4.7, 4.8, 8.2, 8.3, this Section 9.3, 9.4, 9.5
and 9.6, and GMC and GMC Mexico shall have no further liability or obligations
under this Agreement, except for the obligations set forth in Sections 8.1, 8.2,
this Section 9.3 and 9.4. In addition, Magellan Mexico shall be responsible for
paying any fees required to maintain the Concessions in good standing for a
period of 90 days after the effective date of such termination, and any option
or other payments owed to the counterparties to the Exploration Agreements
within 90 days after the effective date of such termination. In the event of
termination of this Agreement under this Section 9.2, GMC shall have no
obligation to return the Initial Payment or any other portions of the Purchase
Price that have been paid by Magellan Mexico, and the Parties agree that those
payments will constitute the consideration for the granting of the Option. The
provisions of Article 14 of this Agreement shall survive such termination.

 

 

 

 10 

 

 

9.4            Return of Data. As soon as practicable upon the termination of
this Agreement, if Magellan Mexico has not exercised the Option and timely paid
the Purchase Price in full, Magellan shall return to GMC copies of all title,
environmental, metallurgical, geological, geophysical, milling and other data
pertaining to the Property and furnished to Magellan by GMC. At such time,
Magellan shall make available to GMC for examination and copying all information
relating to title to the Property or environmental conditions at or pertaining
to the Property, and all maps, assays, surveys drill logs, samples, mine, mill,
processing and smelter records, and metallurgical, geological, geophysical,
geochemical and engineering data and interpretive reports derived therefrom,
developed by Magellan with respect to the Property during the Option Period or
the Development Period.

 

9.5            Release. Upon termination of this Agreement during the Option
Period or the Development Period, if GMC Mexico has not exercised the Option and
timely paid the Purchase Price in full, Magellan Mexico will, at the written
request of GMC, provide GMC Mexico with a written release, in the nature of a
quitclaim deed or similar document in recordable form, of its rights hereunder
with respect to the Property (including any interests in real property within
the Area of Interest which become a part of the Property pursuant to
Section 11.1).

 

9.6            Surrender of Possession and Removal of Equipment. Upon
termination of this Agreement, if Magellan Mexico has not exercised the Option
and timely paid the Purchase Price in full, Magellan Mexico shall surrender
possession of the Property, subject to the condition that Magellan Mexico shall
have the right at any time within one year after such surrender or termination
of this Agreement to complete any reclamation obligations required of it
pursuant to Section 4.8 and remove all Magellan Mexico owned tools, equipment,
machinery, supplies, fixtures, buildings, structures and other property erected
or placed on such property by Magellan Mexico, excepting only timber, chutes and
ladders in place for underground support and entry. Title to such property not
removed within the time period set forth above shall, at the election of GMC
Mexico, pass to GMC Mexico. Alternatively, at the end of the time period set
forth above, GMC Mexico may remove any such property from the Property and
dispose of the same in a commercially reasonable manner, all at the expense of
Magellan.

 

ARTICLE 10
ADDITIONAL AGREEMENT

 

10.1         Mexican Subsidiaries. All of the rights and obligations of the
Parties in connection with the Property and all operations related thereto shall
be subject to and governed by this Agreement and by the Subsidiary Agreement (as
defined below), as well as the Mexican Mining Law and its Regulations, as
applicable. As soon as is reasonably practicable after the Effective Date,
Magellan and GMC agree to cause Magellan Mexico and GMC Mexico, respectively, to
(a) execute and deliver a Spanish-language purchase option agreement
substantially similar in form and substance to this Agreement, modified as
mutually agreed to by the Parties (the “Subsidiary Agreement”), and (b) execute
and deliver other instruments, contracts and documents, and to take such other
measures as may be necessary to accomplish the objectives of this Agreement,
including making such modifications to this Agreement in the Subsidiary
Agreement as may be reasonably recommended by Mexican counsel for GMC and
Magellan, respectively. To the extent necessary to enforce its rights under this
Agreement, in addition to any other legal or equitable remedies available to it,
each of the Parties shall have the remedy of specific performance to compel the
other to cause its Mexican subsidiary to take any actions contemplated under
this Section 10.1.

 

ARTICLE 11
TITLE TO AFTER-ACQUIRED INTERESTS

 

11.1         (a) After-Acquired Property. This Agreement applies and extends to
any further or additional right, title, interest or estate heretofore or
hereafter acquired by Magellan Mexico or any Affiliate in or to the Property or
any part thereof. In the event Magellan Mexico acquires such right, title,
interest or estate, Magellan Mexico will promptly notify GMC Mexico, and such
interest shall become a portion of the Property for all intents and purposes
under this Agreement.

 

(b)             Acquisitions Within the Area of Interest.

 

(i)              If at any time from and after the Effective Date Magellan
Mexico (or any affiliate thereof) acquires any interest in any real property
(including concessions and surface rights) within the Area of Interest, Magellan
shall promptly notify GMC, and such real property interest shall become a part
of the Property under this Agreement (except for purposes of the representations
and warranties under Article 4), and under the NSR Agreement.

 

 

 

 11 

 

 

(ii)            From and after the Effective Date through the end of the
Development Period, neither GMC Mexico nor any affiliate thereof shall acquire
any interest in any real property within the Area of Interest without the prior
written consent of Magellan Mexico. If GMC Mexico receives such written consent
and acquires such real property interest, then thereafter Magellan Mexico shall
have a right of first refusal to acquire such interest as set forth in
Exhibit C.

 

ARTICLE 12
ENTIRE AGREEMENT/AMENDMENT

 

12.1         Entire Agreement. This Agreement is the complete expression of all
agreements, contracts, covenants, and promises between the Parties, and all
negotiations, understandings, and agreements between the Parties are set forth
in this Agreement, which solely and completely expresses their understanding,
and shall be construed without reference to any such negotiations,
understandings and agreements.

 

12.2         Amendments. This Agreement may not be amended or modified, nor may
any obligation hereunder be waived, except by writing duly executed on behalf of
all Parties, and unless otherwise specifically provided in such writing, any
amendment, modification, or waiver shall be effective only in the specific
instance and for the purpose it is given.

 

ARTICLE 13
FORCE MAJEURE

 

13.1         Effect of Occurrence. In the event Magellan Mexico is rendered
unable, wholly or in part, by force majeure applying to it, to timely achieve
Commercial Production during the Development Period, it is agreed that such
obligation of Magellan Mexico, so far as it is affected by such force majeure,
shall be suspended during the continuance of any inability so caused, but for no
longer period; that the various periods and terms provided for herein shall be
extended for a period equivalent to such period of force majeure; and that such
cause shall, so far as possible, be remedied with all reasonable dispatch.
Magellan will promptly notify GMC of the commencement and termination of any
event of force majeure. Under no circumstances shall the Development Period be
extended by more than 180 days as the result of an event of force majeure.

 

13.2         Definition of Force Majeure. The term “force majeure,” as employed
herein, shall mean acts of God, strikes, lockouts or other industrial
disturbances, unavoidable accidents, uncontrollable delays in transportation,
inability to obtain necessary materials in the open market, any state or federal
laws, regulations or requirements (expressly including inability to obtain,
within timeframes reasonably to be expected, after diligent efforts, necessary
governmental approvals, licenses and permits on terms reasonably acceptable to
GMC Mexico or the imposition of material new requirements for approvals,
licenses or permits that did not exist on the Effective Date), actions taken by
ejido groups, environmental groups, or other non-governmental organizations,
criminal activities, political instability, or other matters beyond the
reasonable control of Magellan Mexico, whether similar to matters herein
specifically enumerated or not; provided, however, that performance shall be
resumed within a reasonable period of time after such cause has been removed.

 

ARTICLE 14
GENERAL PROVISIONS

 

14.1         Governing Law. Except for matters of title to the Properties or
their Transfer, or compliance with Mexican Mining Law requirements, which shall
be governed by the law of their situs, this Agreement, and the rights and
liabilities of the Parties hereunder, shall be governed by and construed in
accordance with the Laws of the State of Colorado, other than its rules as to
conflicts of law to the extent the same would result in the imposition of the
Laws of some other jurisdiction. Each Party irrevocably waives any immunity in
respect of its obligations under this Agreement that it may acquire from the
jurisdiction of any court or any legal process for any reason including the
service of notice, attachment before judgment, attachment in aid of execution or
execution.

 

14.2         Parties in Interest; Assignment. All of the terms and provisions of
this Agreement shall be binding upon and inure to the benefit of and be
enforceable by the respective Parties hereto and their successors and permitted
assigns. The rights, powers, privileges, and interests hereunder shall not be
Transferred or delegated by either Party to any third party without the prior
written consent of the other Party, except that no such consent shall be
required (a) for an assignment to an Affiliate (provided that the assigning
Party shall remain responsible for all of its obligations and liabilities
hereunder), (b) in connection with a pledge of a Party’s interest in connection
with obtaining financing to fund its obligations under this Agreement, (c) in
connection with a Change of Control of either Party, or (d) in connection with a
sale of all or substantially all of a Party’s assets. Any consent required under
this Section 14.2 shall not be unreasonably withheld. Any Affiliate or third
party to whom any rights, powers, privileges or interests hereunder are assigned
shall agree in writing to be bound by all the terms and conditions of this
Agreement. Notwithstanding the foregoing, GMC Mexico may Transfer all or any
part of its interest in the NSR Agreement without the consent of Magellan or
Magellan Mexico.

 

 

 

 12 

 

 

14.3         Other Business Opportunities. This Agreement is, and the rights and
obligations of the Parties are, strictly limited to the matters set forth
herein. Subject to the provisions of Article 11 relating to after-acquired
title, each of the Parties shall have the free and unrestricted right to
independently engage in and receive the full benefits of any and all business
ventures of any sort whatever, whether or not competitive with the matters
contemplated hereby, without consulting the other or inviting or allowing the
other to participate therein. The doctrines of “corporate opportunity” or
“business opportunity” shall not be applied to any other activity, venture, or
operation of either Party, whether adjacent to, nearby, or removed from the
Property, and neither Party shall have any obligation to the other with respect
to any opportunity to acquire any interest in any property outside the Property
at any time, or within the Property after termination of this Agreement,
regardless of whether the incentive or opportunity of a Party to acquire any
such property interest may be based, in whole or in part, upon information
learned during the course of operations or activities hereunder.

 

14.4         No Partnership. Nothing contained in this Agreement shall be deemed
to constitute either Party the partner of the other, nor, except as otherwise
herein expressly provided, to constitute either Party the agent or legal
representative of the other, nor to create any fiduciary relationship between
them. It is not the intention of the Parties to create, nor shall this Agreement
be construed to create, any mining, commercial, tax or other partnership.
Neither Party shall have any authority to act for or to assume any obligation or
responsibility on behalf of the other Party, except as otherwise expressly
provided herein.

 

14.5         Confidentiality. Except as set forth in Section 14.6, the Parties
hereto agree to treat all data, reports, records and other information developed
or made available to them by the other Party under this Agreement and applicable
to the Property as confidential, and unless either Party is required by any Law
or order to disclose any of such information, such information shall not be
disclosed to any person without the prior written consent of the non-disclosing
Party.

 

14.6         Public Announcements. Disclosure of information relating to this
Agreement or the Property may be made by either Party if such information is
required to be disclosed to any federal, state or local government or
appropriate agencies and departments thereof or if such information is required
by Law, stock exchange rule or regulation to be publicly announced. Each of
Magellan and GMC agrees that it will, not less than two Business Days in advance
of making public any information referred to in the preceding sentence, give the
other Party written notice of the text of the proposed disclosure and provide
that Party with the opportunity to comment before the same is issued. The Party
receiving the notice shall respond within two Business Days of receipt of such
notice, or its silence will constitute a waiver of any objection to the terms of
the proposed disclosure.

 

14.7         Waiver; Amendment. Any of the terms or conditions of this Agreement
may be waived at any time by the Party which is entitled to the benefit thereof,
but no such waiver shall affect or impair the right of the waiving Party to
require observance, performance, or satisfaction of any other term or condition
hereof. Any of the terms of provisions of this Agreement may be amended or
modified at any time by agreement in writing.

 

14.8         Severability. In the event that any one or more of the provisions
contained in this Agreement or in any other instrument or agreement contemplated
hereby shall, for any reason, be held to be invalid, illegal, or unenforceable
in any respect, such invalidity, illegality, or unenforceability shall not
affect any other provision of this Agreement or any such other instrument or
agreement.

 

14.9         Attorneys’ Fees. In the event of any controversy, claim, or dispute
between the Parties hereto, arising out of or relating to this Agreement or the
breach thereof, the prevailing Party shall be entitled to recover from the
losing Party reasonable expenses, attorneys’ fees, and costs.

 

14.10     Further Documents. At the request of either Party, the Parties shall
execute and deliver any further instruments, agreements, documents or other
papers reasonably requested by either Party to effect the purposes of this
Agreement and the transactions contemplated hereby.

 

14.11     Dispute Resolution. The Parties hereby agree that any dispute arising
under this Agreement shall be subject to the informal dispute resolution
procedure set forth in this Section 14.11. The Party asserting the existence of
a dispute as to the interpretation of any provision of this Agreement or the
performance by the other Party of any of its obligations hereunder shall notify
the other Party of the nature of the asserted dispute. Within seven Business
Days of receipt of such notice, Warren Rehn (for GMC) and David E. Drips (for
Magellan), or their designees, shall arrange for a personal or telephone
conference in which they use good faith efforts to resolve such dispute. If
those individuals are unable to resolve the dispute, they shall jointly prepare
and, within seven Business Days after their conference, circulate to a
designated director of GMC and a designated director of Magellan a memorandum
outlining in reasonable detail the nature of the dispute. Within five Business
Days after receipt of that memorandum, the individuals to whom that memorandum
was addressed shall arrange for a personal or telephone conference in which they
attempt to resolve such dispute. If those individuals are unable to resolve the
dispute, either Party may proceed with any legal remedy available to it;
provided, however, that the Parties agree that any statement made as to the
subject matter of the dispute in any of the conferences referred to in this
Section 14.11 shall not be used in any legal proceeding against the Party that
made such statement.

 

 

 

 13 

 

 

14.12     Interpretation. In this Agreement, the word “including” shall mean
“including without limitation,” or “including but not limited to,” and the words
“herein” and “hereunder” shall be a reference to the entire Agreement and not
just the paragraph in which the words appear. Any reference to “either Party” or
the “other Party” in this Agreement shall mean Magellan and Magellan Mexico,
collectively, or GMC and GMC Mexico, collectively, as the context requires. With
respect to any representation or warranty made hereunder to a Party’s knowledge,
“knowledge” for those purposes means to the actual knowledge of the corporate
officers of that Party, without independent inquiry.

 

14.13     Headings. The subject headings of the different Sections of this
Agreement and the Paragraphs and Subparagraphs of the Exhibits to this Agreement
are included for purposes of convenience only, and shall not affect the
construction or interpretation of any of its provisions.

 

14.14     Counterparts. This Agreement may be executed in multiple counterparts,
by electronic signatures, and all such counterparts taken together shall be
deemed to constitute one and the same document.

 

 

 

 14 

 

 

IN WITNESS WHEREOF, the Parties hereto have caused this Option to Purchase
Agreement to be duly executed, delivered, and effective as of the Effective
Date.

 

   

MAGELLAN GOLD CORPORATION,
a Nevada corporation

 

By:__________________
Name:________________
Title: _________________

 

GOLDEN MINERALS COMPANY,
a Delaware corporation

 

By:__________________
Name:________________
Title: _________________

 

 

 

 

 

 15 

 

 

EXHIBIT A-1

Concessions

 

Part A

 

Contract of Mining Exploration and of Promise of Assignment of Rights and
Obligations by and between Mr. Jose Alfredo Cervantes Rivera his wife, Ms.
Claudia Guadalupe Peralta Alcaraz and Minera de Cordilleras, S. de R.L. de C.V.,
dated August 4, 2017.

 

Matamoros, Chihuahua Area Title/Concession # Year Concession Awarded Year
Concession Expires Concession Area (Hectares) Maria 226591 02/01/2006 02/01/2056
10.84 Martia III 231703 04/14/2008 04/14/2058 41.97 Maria II Frac. I 230200
07/30/2007 07/30/2057 24.33

 

 

Part B

 

Contratos de Exploración de Minera Con Derecho a Explotación de Minerales y de
Promesa de Cesión de Derechos by and between Joaquin Rolando Chavez Gonzalez and
Minera de Cordilleras, S. de R.L. de C.V., dated November 9, 2018.

 

Santa Barbara, Chihuahua Area Title/Concession # Year Concession Awarded Year
Concession Expires Concession Area (Hectares) Santa Maria 216532 05/16/2002
05/16/2052 17.97 Punto Com 228022 09/28/2006 09/28/2056 5.96

 

 

Note:

 

Prior written consent must be obtained from Mr. Jose Cervantes for an assignment
of the contract described in Part A above.

 

Post-Closing notice must be provided to Mr. Joaquin Chavez following an
assignment of the contract described in Part B above.

 

 

 

 

 

 A-1-1 

 

Exhibit A-2

 

Ancillary Rights

 

1.Manifestación de Impacto Ambiental, modalidad Particular for the Santa Maria
project, Oficio No. SG.IR.08-2017-091, dated March 10, 2017

 

2.Notificación respecto al Informe Preventivo for the Exploración Minera Santa
María project, dated June 7, 2017, Oficio No. SG.IR.08-2017/163

 

3.Access Agreement (via Joaquin Chavez) with Ranch Owner, Ramon Galindo dated
October 14, 2016

 

 

 

 A-2-1 

 

 

Exhibit A-3

 

Royalty Interests

 

1.Net smelter returns royalty pursuant to the Marias Assignment of Rights
Agreement described in Part A of Exhibit A-1.

 

 

 

 

 

 

 

 

 

 

 A-3-2 

 

 

EXHIBIT B

NSR Agreement

 

ROYALTY AGREEMENT

 

THIS ROYALTY AGREEMENT (the “Royalty Agreement”) is made and entered into as of
this day of _______, 20__ (the “Effective Date”), by and between Recursos
Ecologicos Alternativos la Rumorosa (REA) S.A. de C.V, a ____________________
(“Payor”), whose address is _________________________‌_____________, and Minera
de Cordilleras S. de R.L. de C.V. (“Payee”), a __________________, whose address
is __________________________________________.

 

WITNESSETH

 

A.              Payor and Payee, along with their ultimate corporate parents,
Magellan Gold Corporation and Golden Minerals Company, respectively, are parties
to that Option to Purchase Agreement dated October 15, 2019 (the “Option
Agreement”), as well as the Spanish language Subsidiary Agreement referred to in
the Option Agreement.

 

B.              Pursuant to the terms and conditions of the Option Agreement and
the Subsidiary Agreement, Payor has the option (the “Option”) to acquire Payee’s
interest in the Concessions (as defined in Section 1.1 below), which Payee holds
pursuant to two separate Exploration Agreements described in the attached
Schedule A (the “Exploration Agreements”).

 

C.              If Payor exercises the Option, it has agreed under the Option
Agreement and the Subsidiary Agreement to achieve Commercial Production (as
defined in the Option Agreement) from the Concessions with one-year following
the Closing Date under the Option Agreement, and upon exercise of the Option,
Payor has agreed to pay the Royalty (as defined below) to Payee.

 

NOW, THEREFORE, for and in consideration of the mutual premises and covenants
herein contained, and other good and valuable consideration, the receipt and
sufficiency of which are hereby confessed and acknowledged, Payor, so long as it
is the operator or owner of, or otherwise holds an interest in, the Concessions
(as defined below), hereby agrees on behalf of itself and its successors and
assigns to pay to Payee a Royalty of six and one-half percent (6.5%) of the Net
Smelter Returns from the production of Valuable Minerals (as defined below) from
the Concessions, to be reduced to 3.0 percent of the Net Smelter Returns as
described herein.

 

Article I

 
THE CONCESSIONS

 

1.1       The Concessions. The “Concessions” are the concessions which together
comprise the Santa Maria Mine in the State of Chihuahua, Mexico, as more
particularly described in Schedule A attached hereto and incorporated herein by
reference.

 

Article II

GRANT OF ROYALTY

 

2.1       Grant of Royalty. Payor hereby agrees, on its own behalf and on behalf
of its successors and assigns, to pay to Payee a Royalty of six and one-half
percent (6.5%) of the Net Smelter Returns from the production of any and all
minerals, mineral deposits, mineral substances and ores and mineral products of
every kind and character whatsoever derived therefrom (collectively, “Valuable
Minerals”), from the Concessions. That Royalty will automatically be reduced to
a Royalty of three percent (3.0%) of Net Returns upon payment in full by Payor
to Payee of the Purchase Price under the Option Agreement. Payor acknowledges
and agrees that if it exercises either or both of the options to purchase the
Concessions under the Exploration Agreements, this Royalty Agreement shall
remain in full force and effect.

 

 

 

 B-1 

 

 

2.2       Royalty. “Royalty” means a production royalty based on the Net Smelter
Returns from the production of Valuable Minerals from the Concessions.

 

2.3       Net Smelter Returns. “Net Smelter Returns” means the Gross Returns
received by Payor from time to time from any smelter, refiner or other purchaser
from the sale of any Valuable Minerals produced by Payor from the Concessions,
after deducting from Gross Returns the Allowable Deductions.

 

(a)       “Gross Returns” has the following meanings for the following
categories of Valuable Minerals:

 

(i)       If Payor causes refined gold that meets or exceeds the generally
accepted commercial standards for refined gold to be produced by an independent
third party refinery from ores mined from the Concessions, for purposes of
determining the Royalty, the refined gold shall be deemed to have been sold in
the calendar month in which it was produced at the refinery at the Monthly
Average Gold Price for that month. The Gross Returns from such deemed sales
shall be determined by multiplying Gold Production during the month by the
Monthly Average Gold Price. As used herein, “Gold Production” means the quantity
of refined gold that is outturned to Payor’s account by the refinery during the
calendar month on either a provisional or final settlement basis. If outturn of
refined gold is made by the refinery on a provisional basis, the Gross Returns
shall be based upon the amount of such provisional settlement, but shall be
adjusted in subsequent statements to account for the amount of refined metal
established by final settlement by the refinery. As used herein, “Monthly
Average Gold Price” means the average London Bullion Market Association P.M.
Gold Fix as quoted in the Financial Times, calculated by dividing the sum of all
such prices reported for the month by the number of days for which such prices
were reported. If the London Bullion Market Association P.M. Gold Fix ceases to
be published, the Monthly Average Gold Price shall be determined by reference to
prices for refined gold for immediate delivery in the most nearly comparable
established market selected by Payor as such prices are published in “Metals
Week” or a similar publication.

 

(ii)       If Payor causes refined silver that meets or exceeds the generally
accepted commercial standards for refined silver to be produced by an
independent third party refinery from ore mined from the Concessions, for
purposes of determining the Production Royalty, the refined silver shall be
deemed to have been sold in the calendar month in which it was produced at the
Monthly Average Silver Price for that month. The Gross Returns from such deemed
sales shall be determined by multiplying Silver Production during the calendar
month by the Monthly Average Silver Price. As used herein, “Silver Production”
shall mean the quantity of refined silver that is outturned to Payor’s account
by the refinery during the calendar month on either a provisional or final
settlement basis. If outturn of refined silver is made by the refinery on a
provisional basis, the Gross Returns shall be based upon the amount of such
provisional settlement, but shall be adjusted in subsequent statements to
account for the amount of refined metal established by final settlement by the
refinery. As used herein, “Monthly Average Silver Price” shall mean the average
New York Silver Price as published daily by Handy & Harman, calculated by
dividing the sum of all such prices reported for the calendar month by the
number of days for which such prices were reported. If the Handy & Harman
quotation ceases to be published, the Monthly Average Silver Price shall be
determined by reference to prices for refined silver for immediate delivery in
the most nearly comparable established market selected by Payor as published in
“Metals Week” or a similar publication.

 

(iii)       If Payor sells refined metals (other than refined gold and refined
silver), doré or concentrates produced from Valuable Minerals from the
Concessions, the Gross Returns for such refined metals shall be the proceeds
actually received by Payor from their sale. If such sales are to an Affiliate,
the refined metals, doré, or concentrates shall be deemed, solely for the
purpose of computing Gross Returns, to have been sold at prices and on terms no
less favorable to Payor than those which would have been received under similar
circumstances from an unaffiliated third party. As used herein, “Affiliate”
means any person, partnership, limited liability company, joint venture,
corporation, or other form of enterprise which Controls, is Controlled by, or is
under common Control with Payor, and “Control” means the ability, directly or
indirectly through one or more intermediaries, to direct or cause the direction
of the management and policies of such entity through (A) the legal or
beneficial ownership of voting securities or membership interests; (B) the right
to appoint managers, directors or corporate management; (C) contract; (D)
operating agreement; (E) voting trust; or (F) otherwise.

 

 

 

 B-2 

 

 

(b)       As used herein, “Allowable Deductions” means the following costs,
charges, and expenses incurred or accrued by Payor:

 

(i)       If Payor sells or is deemed to have sold refined gold or refined
silver:

 

(A)       all costs, charges and expenses for smelting and refining doré or
concentrates to produce the refined gold or refined silver (including handling,
processing, and provisional settlement fees, metal losses, sampling, assaying
and representation costs, penalties, and other processor deductions);

 

(B)       all costs, charges, and expenses for weighing, sampling, determining
moisture content and packaging such Valuable Minerals and for loading and
transportation of ores, minerals, doré or concentrates from the Concessions to
the refinery or smelter and then to the place of sale (including freight,
insurance, security, transaction taxes, handling, port, demurrage, delay, and
forwarding expenses incurred by reason of or in the course of such
transportation); and

 

(C)       actual sales and brokerage costs incurred by Payor.

 

(ii)       If Payor sells refined metals (other than refined gold or refined
silver), doré, concentrate or ores:

 

(A)       all costs, charges, and expenses for (I) beneficiation, processing or
treatment of such materials at any plant or facility not owned by Payor and (II)
smelting or refining to produce a refined metal (including handling, processing,
and provisional settlement fees, sampling, assaying and representation costs,
penalties, and other processor deductions);

 

(B)       all costs, charges, and expenses for weighing, sampling, determining
moisture content and packaging such Valuable Minerals and for loading and
transportation of ores, minerals, doré, concentrates or other products from the
Concessions (I) to the place of sale, or (II) if such ores or other materials
are beneficiated, processed, treated, smelted or refined at any plant or
facility more than five (5) miles from the exterior boundary of the Concessions,
to such plant of facility and then to the place of sale (including freight,
insurance, security, transaction taxes, handling, port, demurrage, delay, and
forwarding expenses incurred by reason of or in the course of such
transportation); and

 

(C)       actual sales and brokerage costs.

 

(iii)       All royalties payable to any governmental agency and all sales, use,
severance and ad valorem taxes and any other tax or governmental levy or fee on
or measured by mineral production or the movement of material from or on the
Concessions (other than taxes based on income).

 

2.4       Hedging. Payor may, but shall not be under any duty to, engage in
price protection (hedging) or speculative transactions such as futures contracts
and commodity options (collectively, “Hedging Transactions”) in its sole
discretion covering all or part of production of Valuable Minerals from the
Concessions. None of the revenues, costs, profits or losses from such
transactions shall be taken into account in calculating Net Smelter Returns or
any interest therein. For purposes of calculating Net Smelter Returns in the
event that, in connection with any Hedging Transactions, Payor elects not to
sell any portion of any gold and/or silver extracted and produced from the
Concessions, but instead elects to have the final product of any such gold
and/or silver credited to or held for its account with any smelter, refiner or
broker, such gold and/or silver shall be deemed to have been sold at the “Quoted
Price” on the day such gold and/or silver is actually credited to or placed in
Payor’s account. For purposes of determining the Royalty payable on gold and/or
silver produced and sold in such circumstances, the “Quoted Price” shall be (for
gold) the London P.M. fix (or the London A.M. fix on days when there is no
London P.M. fix) as quoted in the Financial Times (or such other source as is
mutually agreeable if that information is not available from the Financial
Times), and (for silver) the New York Silver Price as quoted by Handy & Harman
(or such other source as is mutually agreeable if that information is not
available from Handy & Harman ), in each case on the business day such gold
and/or silver is actually credited for or placed in Payor’s account.

 

 

 B-3 

 

 

2.5       Tailing and Residues. All tailing, residues, waste rock, spoiled leach
materials, and other materials (collectively “Materials”) resulting from Payor’s
operations and activities on the Concessions shall be the sole property of
Payor, but shall remain subject to the Royalty should the same be processed or
reprocessed, as the case may be, in the future and result in the production of
Valuable Minerals. Notwithstanding the foregoing, Payor shall have the right to
dispose of Materials from the Concessions as waste in accordance with standard
industry practice.

 

2.6       Commingling. Payor shall have the right of mixing or commingling,
either underground, at the surface, or at processing plants or other treatment
facilities, any material containing Valuable Minerals mined or extracted from
the Concessions with any similar substances derived from other lands or
properties; provided, however, that before commingling, Payor shall calculate
from representative samples the average grade of the ore from the Concessions
and shall either weigh or volumetrically calculate the number of tons of ore
from the Concessions to be commingled. As products are produced from the
commingled ores, Payor shall calculate from representative samples the average
percentage recovery of products produced from the commingled ores during each
month. In obtaining representative samples, calculating the average grade of
commingled ores and average percentage of recovery, Payor shall be entitled to
use any procedures acceptable in the mining and metallurgical industry which
Payor believes to be accurate and cost-effective for the type of mining and
processing activity being conducted. In addition, comparable procedures may be
used by Payor to apportion among the commingled ores any penalty charges imposed
by the smelter or refiner on commingled ores or concentrates. The records
relating to commingled ores shall be available for inspection by Payee, at its
sole expense, at all reasonable times, and shall be retained by Payor for a
period of two (2) years.

 

2.7       Assaying and Sampling. The mineral content of all ore mined and
removed from the Concessions (excluding ore leached in place) and the quantities
of constituents recovered by Payor shall be determined by Payor, or with respect
to such ore which is sold, by the mill or smelter to which the ore is sold, in
accordance with standard sampling and analysis procedures.

 

2.8       Payment of Royalty. Payor shall pay the Royalty to Payee monthly
within thirty (30) days after the end of each calendar month during which the
Payor receives payments on any Minerals produced and sold from the Concessions
and the Royalty will be paid in United States currency. All payments hereunder
shall be sent by certified U.S. mail to Payee at the following address:

 

_______________ 

_______________
_______________ 

 

or by wire transfer to an account designated by and in accordance with written
instructions from Payee, or consistent with such notice as is to be provided by
any successor or assignee of Payee.

 

2.9       Audit. Payee, at its sole election and expense, shall have the right
to procure, not more frequently than once annually following the close of each
calendar year, an audit of Payor’s accounts relating to payment of the Royalty
hereunder, by any qualified authorized representative of Payee. Any such
inspection shall be for a reasonable length of time, during regular business
hours, at a mutually convenient time, and upon reasonable advance written notice
to Payor. All Royalty payments made in any calendar year shall be considered
final and in full satisfaction of all obligations of Payor with respect thereto,
unless Payee gives written notice describing and setting forth a specific
objection to the calculation thereof within nine months following the close of
that calendar year. Payor shall account for any agreed upon deficit or excess in
the payment made to Payee by adjusting the next quarterly statement following
completion of such audit to account for such deficit or excess. Subject to
Payor’s right to contest the results of any such audit, if such audit reveals
that payments of the Royalty for any calendar year were underpaid by five
percent (5%) or more, then Payor shall reimburse Payee for any costs and
reasonable fees paid to outside accountants in performing the audit.

 

2.10       Covenant Running with the Land. The obligation to pay the Royalty
shall be a covenant running with the Concessions or any relocations or
amendments thereof and shall be binding on the Payor and its successors and
assigns, including any third party to whom Payor conveys any interest in the
Concessions.

 

 

 

 B-4 

 

 

2.11       Conduct of Operations. The Payor shall be entitled to (i) make all
operational decisions with respect to the methods and extent of mining and
processing of ore, concentrate, doré, metal and products produced from the
Concessions (for example, without limitation, the decision to process by heap
leaching rather than conventional milling), (ii) make all decisions relating to
sales of such ore, concentrate, doré, metal and products produced and (iii) make
all decisions concerning temporary or long-term cessation of operations. Payor
shall have exclusive control of all operations on or for the benefit of the
Concessions, and any and all equipment, supplies, machinery and other assets
purchased or otherwise acquired or under its control in connection with such
operations. Payor may carry out such operations on the Concessions as it may, in
its sole discretion, determine to be warranted. Subject to the provisions of the
Option Agreement, if Payor, at any time and from time to time after commencing
operations, desires to shut down, suspend or cease operations for any reason, it
shall have the right to do so in its sole discretion. Payor may use and employ
such methods of exploration, development, mining, processing or marketing as it
may desire or find most profitable. Payor shall not be required to mine,
preserve, or protect in its mining operations any Valuable Minerals which cannot
be mined or shipped at a reasonable profit to Payor. Any decision as to the
time, manner and form in which ores or other Valuable Minerals are to be sold
shall be made by Payor in its sole discretion.

 

2.12       Confidentiality. Payee agrees to treat, except as set forth below,
all information received from or concerning Payor or the Concessions pursuant to
this Royalty Agreement as confidential, and except as set forth below, such
information shall not be disclosed to any other person or entity, without the
prior written consent of Payor, which such consent Payor may withhold in its
sole discretion. Notwithstanding the foregoing, Payee may disclose (i) any
information Payee is required to disclose by law, regulation or order of any
governmental entity or stock exchange having jurisdiction, and (ii) such
information as is otherwise available to the public and has been legally
provided to Payee through other means. In the event that Payee is required by
any law, rule, regulation, or order to disclose to the public any of such
information, it shall immediately notify Payor of such requirement and the terms
thereof, together with a copy of such release as may be contemplated, prior to
such disclosure. Payor shall then have two business days to review and comment
upon such disclosure and to request, prior to disclosure, confidential treatment
of any of the information under such terms as it shall, in its reasonable
discretion, determine. Payee shall use its reasonable best efforts to comply
with such request prior to making the required disclosure.

 

2.13       Governing Law. This Royalty Agreement shall be governed by the laws
of the State of Colorado, U.S.A., other than its rules as to conflicts of law
which would result in the imposition of the laws of some other jurisdiction.

 

2.14 Registration. GMC Mexico may register this Royalty Agreement in the
appropriate office of the Mexico Mining Registry and in such other governmental
offices as are necessary to provide notice of GMC Mexico’s rights hereunder, and
the parties agree to execute and deliver such additional documents as may be
necessary to accomplish such registration.

 

IN WITNESS WHEREOF, the parties have executed this Royalty Agreement effective
as of the ____ day of _________, 20__.

 

   

PAYOR:

 

Recursos Ecologicos Alternativos la Rumorosa (REA) S.A. de C.V, a
____________________

 

By:_______________
Name:_____________
Title:______________

 

PAYEE:

Minera de Cordilleras S. de R.L. de C.V., a ________________

 

 

 

By:_______________
Name:_____________
Title:______________

 

 

 

 

 B-5 

 

 

 

Schedule “A”
To
Royalty Agreement

 

 

 

 

 

 B-6 

 

 

EXHIBIT C

Right of First Refusal

 

(a)Except as otherwise provided in this Agreement, if GMC Mexico (the “Offeror”)
desires to sell, assign, transfer or otherwise dispose of all or any part of GMC
Mexico’s interest in any real property within the Area of Interest to a proposed
purchaser (herein called the “Purchaser”) from whom the Offeror shall have
received a bona fide written offer which it is prepared to accept, the Offeror
shall first offer (the “Offer”) the same in writing to Magellan Mexico (the
“Offeree”) at the same price and on the same terms as are offered by the
Purchaser (subject to subsections (b) and (c) below). The Offeror shall also
provide the Offeree with a copy of the bona fide written offer that it has
received from the Purchaser (subject to any confidentiality restrictions set
forth therein).

 

(b)Subject to subsection (c) below, if the Offer is accepted by the Offeree, the
Offeror shall forthwith transfer to the Offeree the interest specified, upon the
Offeree paying the purchase price, by way of a conveyance document mutually
agreeable to the parties conveying that interest free and clear of all
Encumbrances arising by, through and under Offeror, but otherwise without
representations and warranties of any kind. If the Offer is not accepted by the
Offeree within thirty (30) days of receipt of the Offer, then at any time during
the further period of sixty (60) days immediately thereafter the Offeror may
sell, assign, transfer or otherwise dispose of to the Purchaser the property
interest which is the subject matter of the Offer at the same or at a higher
price but otherwise on substantially the same terms and conditions as the
original offer received from the Purchaser under this paragraph.

 

(c)If the offer received by the Offeror from the Purchaser provides for any
consideration payable to the Offeror other than in cash, the Offer shall include
the Offeror’s good faith estimate of the cash equivalent of the non-cash portion
of the consideration. If within a period of thirty (30) days of the receipt of
the Offer the Offeree notifies the Offeror in writing that it has accepted the
Offer, the Offeror shall be bound to sell the property interest which is the
subject matter of the Offer to the Offeree on the terms of the Offer, including
the Offeror’s good faith estimate of the non-cash consideration. If, however,
the Offeree disagrees with the Offeror’s estimate of the cash equivalent of the
non-cash consideration, the Offeree shall so notify the Offeror within fifteen
(15) days after receipt of the Offeree’s notice of acceptance, and the Offeree
shall, in such notice, specify what it considers, in good faith, the fair cash
equivalent to be and the resulting total purchase price. If the Offeree so
notifies the Offeror, the Offeror will have ten (10) days from receipt of such
notice to notify the Offeree of its acceptance or rejection of the Offeree’s
good faith estimate of the cash equivalent of the non-cash consideration. If the
Offeror accepts the Offeree’s estimate within said ten (10) day period then the
Offeree shall be deemed to have accepted the Offer subject to adjustment of the
cash equivalent portion thereof to conform to the Offeree’s good faith estimate.
If the Offeror rejects the Offeree’s estimate or fails to respond within said
ten (10) day period the cash equivalent of the non-cash consideration shall be
determined by the dispute resolution process as described in Section 14.11
hereof. If the Offer is not accepted by the Offeree within thirty (30) days
following the resolution of the dispute, then at any time during the further
period of sixty (60) days immediately thereafter the Offeror may sell, assign,
transfer or otherwise dispose of to the Purchaser the subject matter of the
Offer subject to the conditions set out in subsection (b) above.

 

 

 

 

 C-7