Exhibit
10.1


 


EXECUTION VERSION


 


SUBSCRIPTION
AGREEMENT


 


THIS SUBSCRIPTION AGREEMENT  (this
“Agreement”) is made as of October 11,
2010, by and among GOLDEN MINERALS COMPANY, a Delaware corporation (the “Company”), and SENTIENT
GLOBAL RESOURCES FUND III, L.P., a Cayman Islands exempted limited partnership and
SGRF III PARALLEL I, L.P., a Cayman Islands exempted limited partnership
(collectively, the “Buyers”).


 


RECITALS


 


A.                                   The Buyers
currently hold 1,749,759 shares of the Company’s common stock, par value $0.01
per share (“Common Stock”), representing 18.9% of
the total outstanding shares of Common Stock.


 


B.                                     The Company has
informed the Buyers that it intends to undertake a public offering of Common
Stock in the United States and Canada. 
On October 7, 2010, the Company executed an underwriting agreement
(the “Underwriting Agreement”) with certain
underwriters named therein (the “Underwriters”)
with respect to the issuance and sale of 4,055,000 shares of Common Stock (the “Base Offering”).  In
addition, the Underwriters have an option to purchase up to an additional
608,250 shares of Common Stock upon notice to the Company within five days
following the closing of the Base Offering (the “Over-Allotment
Offering” and, together with the Base Offering, the “Public Offering”).


 


C.                                     The Buyer has
advised the Company that it desires to purchase additional shares of Common
Stock concurrent with the Public Offering in order to permit the Buyers to
increase their ownership interest up to 19.90% 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 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.


 


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 1,038,918 shares of Common Stock
(the “Initial Shares”) at a purchase price of US$18.50 per share (the “Offering Price”).  The
total purchase price for the Initial Shares shall be allocated between 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
Initial Shares to the Buyers.


 


3.                                      Over-Allotment
Shares.  In the event the Underwriters
exercise, in whole or in part, their option to purchase additional shares of
Common Stock in the Over-Allotment Offering (the “Over-Allotment
Option”), the Buyers shall have the option to purchase from the
Company, at the Offering Price, such number of additional shares of Common
Stock as are necessary to cause the Buyers, following the consummation of the
Base Offering, the Over-Allotment Offering, and the issuance of the Shares
pursuant to this Agreement, to own up to 19.90% of the total issued and
outstanding Common Stock of the Company (excluding restricted Common Stock held
by employees) (the “Subsequent Shares”  and together with the “Initial Shares”,
the “Shares”).  Promptly upon receipt by the Company of
notice from the Underwriters regarding the exercise (or non-exercise) of the
Over-Allotment Option, the Company shall notify the Buyers (the “Subsequent Shares Notice”), indicating the number of
Over-Allotment Option shares that the Underwriters have elected to purchase and
the number of Subsequent Shares that the Buyers are entitled to purchase
pursuant to this Section 3.  The
Buyers’ option to purchase the Subsequent Shares shall terminate, if not
exercised by the Buyers by written notice to the Company prior to such time,
upon the earliest of (i) 5:00 PM Mountain Time on the second business day
(in Denver, Colorado) following the date on which the Company delivered the
Subsequent Shares Notice, or (ii) the date and time on which the
Underwriters’ Over-Allotment Option expires, or, if earlier, time at which
Company receives notice from the Underwriters declining to exercise the
Over-Allotment Option.  For the avoidance
of doubt, the purchase and sale of the Subsequent Shares 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.  The total purchase price for the Subsequent
Shares shall be allocated between the Buyers in accordance with the same
percentages set forth in Exhibit A


 


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


 


4.1                               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.  The execution, delivery and performance by
Buyers of this Agreement and the Registration Rights Agreement and the
consummation of the transactions contemplated hereby 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.  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.


 


4.2                               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 


 


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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.


 


4.3                               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 SEC, the Ontario Securities
Commission, the Toronto Stock Exchange (“TSX”), 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.


 


4.4                               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 and 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 7.2 of this
Agreement and is outside the United States and neither 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 5.8) 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 


 


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the Securities Act and that
the Shares have not been registered under the Securities Act, (ii) the
Shares are not being qualified for distribution to the public in Canada under
applicable Canadian Securities Laws (as defined in section 5.8 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, 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, Buyers
are the beneficial owners (as defined in Rule 13d-3 under the Exchange
Act) of 1,749,759 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 


 


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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 5
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 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. 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.


 


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


 


5.1                               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.


 


5.2                               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.


 


5.3                               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, 


 


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qualified and in good standing
would not reasonably be expected to have a Material Adverse Effect.


 


5.4                               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 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.


 


5.5                               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.


 


5.6                               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 lock-up agreement to be executed by
the Buyers concurrent with the closing of the Base Offering, the Securities Act
or any applicable state or Canadian provincial securities laws.


 


5.7                               Capitalization.  The authorized capital of the Company
consists of (i) 50,000,000 shares of Common Stock, of which 9,271,286 are
issued and outstanding as of the date of this Agreement, including 351,750
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 in connection with the
anticipated Public Offering, (c) 46,555 shares of Common Stock to be
issued to directors of Golden Minerals pursuant to outstanding restricted stock
units, (d) shares issuable upon exercise of options issued under the
Company’s 2009 Equity Incentive Plan, and (e) shares of Common Stock which
may be issued in the ordinary course pursuant to the Company’s 2009 Equity
Incentive Plan, 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.


 


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5.8                               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 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.


 


5.9                               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.


 


5.10                        Absence of Changes.  Since June 30, 2010, (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.


 


5.11                        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.


 


5.12                        Brokers or Finders.  Except as set forth in the Underwriting
Agreement, 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.


 


6.                                      Closing
Conditions.  The
purchase and sale of the Initial Shares is expected to be completed on or about
October 22, 2010, concurrent with the closing of the Base Offering, upon 


 


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satisfaction of the closing conditions set forth in
this Section 6 (the date on which such closing occurs, the “Initial Closing Date”). 
The purchase and sale of the Subsequent Shares, if any, is expected to
be completed concurrent with the closing of the Over-Allotment Offering, upon
satisfaction of the closing conditions set forth in this Section 6 (the
date on which such closing occurs, the “Subsequent Closing Date”).


 


6.1                               Conditions to Buyer’s Obligation to Close.  The obligations of Buyers to consummate the
purchase and sale of the Initial Shares and, if the Over-Allotment Option set
forth in Section 3 is exercised by the Buyers, the Subsequent Shares, as
applicable, 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 Initial Shares or Subsequent
Shares, as applicable; 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 Initial Shares or Subsequent Shares, as applicable.


 


(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 Initial Shares or
Subsequent Shares, as applicable, 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 Initial
Closing Date or Subsequent Closing Date, as applicable, 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 6.1(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 the NYSE Amex with respect to the listing of the
Initial Shares or Subsequent Shares, as applicable.


 


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(f)                                          Public Offering.  With respect to the Initial Shares, the
Company shall have issued (or concurrent with the Initial Shares, will issue)
the shares sold in the Base Offering. 
With respect to the Subsequent Shares, the Company shall have issued (or
concurrent with the Subsequent Shares, will issue) the shares sold in the
Over-Allotment Offering.


 


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


 


(i)                                     At the Initial Closing and Subsequent Closing, as applicable,
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 Initial Closing and Subsequent Closing, as applicable, 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
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 and bylaws of the Company, as in effect on the Closing Date, and (iv) that
the condition to closing set forth in Section 6.1(c) has been met; provided
that with respect to the Subsequent Closing, the matters set forth in clause
(i), (ii) and (iii) may be addressed by certification that there have
been no changes to such documents since the Initial Closing.


 


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


 


(iv)                              At the Initial 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 Initial Shares and the Subsequent 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 Initial Closing and Subsequent Closing, as applicable, an opinion
of Canadian counsel to the Company addressed to the Buyers, providing that the
issuance of the Initial Shares and the Subsequent Shares, as applicable, is
exempt from Ontario prospectus requirements, 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.


 


6.2                               Conditions to the Company’s Obligation to Close.  The obligations of the Company
to consummate the purchase and sale of the Initial Shares and, if the option
set forth in Section 3 is exercised by the Buyers, the Subsequent Shares,
as applicable, 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 


 


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the purchase and sale of the
Initial Shares or Subsequent Shares, as applicable; 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 Initial Shares or
Subsequent Shares, as applicable.


 


(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 Initial Shares or
Subsequent Shares, as applicable.


 


(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 Initial Closing Date or Subsequent Closing
Date, as applicable, 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 the NYSE Amex with respect to the listing of the
Initial Shares or Subsequent Shares, as applicable.


 


(f)                                          Public Offering.  With respect to the Initial Shares, the
Company shall have issued (or concurrent with the Initial Shares, will issue)
the shares sold in the Base Offering. 
With respect to the Subsequent Shares, the Company shall have issued (or
concurrent with the Subsequent Shares, will issue) the shares sold in the
Over-Allotment Offering.


 


(g)                                       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 Initial Closing, the Registration Rights Agreement, duly executed
by the Buyers.


 


7.                                      Miscellaneous.


 


7.1                               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.


 


10

















 


7.2                               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

  
	
   

  	
   

  	
   

  
	
  Buyers:

  	
   

  	
  Sentient
  Global Resources Fund III, LP

  SGRF III Parallel I, 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 7.2.  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.


 


7.3                               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 


 


11

















 


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.


 


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


 


7.5                               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.


 


7.6                               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.


 


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


 


7.8                               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.


 


7.9                               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.  Neither 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 7.9
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.


 


12

















 


7.10                        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 an
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.


 


(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.


 


7.11                        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 $50,000.


 


*  * 
*  *  *


 


13

















 


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:

  	
  Senior
  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

  



 

















 


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.: (503) 223-2721

  Fax No.: (503) 223-1384

  	
   

  	
  90.9375

  	
  %

  	
  944,766

  	
   

  	
  $

  	
  17,478,171

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  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.: (503) 223-2721

  Fax No.: (503) 223-1384

  	
   

  	
  9.0625

  	
  %

  	
  94,152

  	
   

  	
  $

  	
  1,741,812

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Total:

  	
   

  	
  100.00

  	
  %

  	
  1,038,918

  	
   

  	
  $

  	
  19,219,983