Document:

ex4-1.htm

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    AMENDED
AND RESTATED

    CERTIFICATE
OF DESIGNATION

    of

    8%
SERIES A CONVERTIBLE PREFERRED STOCK

    of

    RUBICON
FINANCIAL INCORPORATED

    

    Establishing
the

    

    Voting
Powers, Designations, Preferences, Limitations,

    Restrictions,
and Relative Rights of

    

    
      
        
          

        
Pursuant to Section 151 of the

    

    
      General
Corporation Law of the State of Delaware 

    

    
      

    

     

    Rubicon Financial Incorporated, a
corporation organized and existing under the General Corporation Law of the
State of Delaware (hereinafter called the “Company”), hereby certifies
that the following resolution was adopted by the board of directors of the
Company as required by Section 151 of the General Corporation Law at a
meeting duly called and held on October 29, 2008;

     

     

                    RESOLVED,
that pursuant to the authority granted to and vested in the board of directors
of the Corporation (the “Board”) in accordance with
the provisions of the certificate of incorporation of the Company, as currently
in effect, the Board hereby creates a series of Preferred Stock, par value
$0.001 per share (the “Preferred Stock”), of the
Company and hereby states the designation and number of shares, and fixes the
relative rights, preferences, and limitations thereof as follows:

     

     

    8% Series
A Convertible Preferred Stock:

     

     

    The
number of shares constituting the 8% Series A Convertible Preferred Stock shall
be 1,000,000. Such number of shares may be increased or decreased by resolution
of the Board; provided,
that no decrease shall reduce the number of shares of 8% Series A Convertible
Preferred Stock to a number less than the number of shares then outstanding plus
the number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding securities
issued by the Company convertible into 8% Series A Convertible Preferred
Stock.

     

    Section
1.        DESIGNATION.  The
Shares are designated as the Company’s 8% Series A Convertible Preferred Stock
(the “Shares”).

    

    Section
2.        DIVIDEND PROVISIONS.
The holders of the Shares will be entitled to a preferred dividend at the rate
of 8% per annum.  Dividends on the Shares will be cumulative and shall
be paid, solely at the option and discretion of the Company, either (i) in cash,
or (ii) in shares of the Company’s Common Stock at a price equal to $0.50 per
share (4 shares of Common Stock for each Preferred Share).  Dividends
shall be paid semi-annually.

    

    Section
3.        REDEMPTION.

    

    (a)           This
Company may at any time following the first anniversary from the date of
issuance (the “Redemption
Date”), at the option of the Board, redeem in whole or in part the Shares
by paying in cash in exchange for the Shares to be redeemed a sum equal to the
Original Series A Issue Price (as adjusted for any stock dividends, combinations
or splits with respect to such Shares) plus all declared or accumulated but
unpaid dividends on such Shares (the “Redemption Price”). Any
redemption affected pursuant to this provision shall be made on a pro rata basis
among the holders of the Shares in proportion to the number of Shares then held
by them.

    

    
      
         

      

      
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    (b)           Subject
to the rights of series of preferred stock which may from time to time come into
existence, at least ten (10) but no more than sixty (60) days prior to each
Redemption Date, written notice shall be mailed, first class postage prepaid, to
each holder of record (at the close of business on the business day next
preceding the day on which notice is given) of the Shares to be redeemed, at the
address last shown on the records of this Company for such holder, notifying
such holder of the redemption to be effected, specifying the number of shares to
be redeemed from such holder, the Redemption Date, the Redemption Price, the
place at which payment may be obtained and calling upon such holder to surrender
to this Company, in the manner and at the place designated, his, her or its
certificate or certificates representing the Shares to be redeemed (the “Redemption Notice”). Except
as provided in subsection (4)(c) on or after the Redemption Date, each holder of
Shares to be redeemed shall surrender to this Company the certificate or
certificates representing such shares, in the manner and at the place designated
in the Redemption Notice, and thereupon the Redemption Price of such shares
shall be payable to the order of the person whose name appears on such
certificate or certificates as the owner thereof and each surrendered
certificate shall be cancelled. In the event less than all the Shares
represented by any such certificate are redeemed, a new certificate shall be
issued representing the unredeemed Shares.

    

    (c)           From
and after the Redemption Date, unless there shall have been a default in payment
of the Redemption Price, all rights of the holders of shares of Shares
designated for redemption in the Redemption Notice as holders of Shares (except
the right to receive the Redemption Price without interest upon surrender of
their certificate or certificates) shall cease with respect to such Shares, and
such Shares shall not thereafter be transferred on the books of this Company or
be deemed to be outstanding for any purpose whatsoever. Subject to the rights of
series of preferred stock which may from time to time come into existence, if
the funds of the Company legally available for redemption of Shares on any
Redemption Date are insufficient to redeem the total number of Shares to be
redeemed on such date, those funds which are legally available will be used to
redeem the maximum possible number of such Shares ratably among the holders of
such Shares to be redeemed based upon their holdings of Shares. The Shares not
redeemed shall remain outstanding and entitled to all the rights and preferences
provided herein. Subject to the rights of series of preferred stock which may
from time to time come into existence, at any time thereafter when additional
funds of the Company are legally available for the redemption of shares of
Shares, such funds will immediately be used to redeem the balance of the Shares
which the Company has become obliged to redeem on any Redemption Date but which
it has not redeemed.

    

    Section
4.        CONVERSION. The
holders of the Shares shall have conversion rights as follows (the “Conversion
Rights”):

    

    (a)           Right to Convert.
Each Share shall be convertible into shares of the Company’s Common Stock at a
price per share of $0.50 (the “Conversion Price”) (i.e.
every 1 Share converts to 4 shares of Common Stock), at the option of the holder
thereof, at any time following the date of issuance of such Share and on or
prior to the fifth (5th) day
prior to the Redemption Date, if any, as may have been fixed in any Redemption
Notice with respect to the Shares, at the office of this Company or any transfer
agent for such stock.

    

    (b)           Automatic Conversion.
Each Share shall automatically be converted into shares of Common Stock on the
first day of the thirty-sixth (36th) month
following the original issue date of the Shares, at the Conversion Price per
share.

    

    (c)           Mechanics of
Conversion. Before any holder of Shares shall be entitled to convert the
same into shares of Common Stock, he shall surrender the certificate or
certificates therefor, duly endorsed, at the office of this Company or of any
transfer agent for the Shares, and shall give written notice to this Company at
its principal corporate office, of the election to convert the same and shall
state therein the name or names in which the certificate or certificates for
shares of Common Stock are to be issued. This Company shall, as soon as
practicable thereafter, issue and deliver at such office to such holder of
Shares, or to the nominee or nominees of such holder, a certificate or
certificates for the number of shares of Common Stock to which such holder shall
be entitled as aforesaid. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of such surrender of the
shares of Shares to be converted, and the person or persons entitled to receive
the shares of Common Stock issuable upon such conversion shall be treated for
all purposes as the record holder or holders of such shares of Common Stock as
of such date.

    
      
         

      

      
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    (d)           No Impairment. This
Company will not, by amendment of its Certificate of incorporation or through
any reorganization, recapitalization, transfer of assets, consolidation, merger,
dissolution, issue or sale of securities or any other voluntary action, avoid or
seek to avoid the observance or performance of any of the terms to be observed
or performed hereunder by this Company, but will at all times in good faith
assist in the carrying out of all the provisions of this section and in the
taking of all such action as may be necessary or appropriate in order to protect
the Conversion Rights of the holders of the Shares against
impairment.

    

    (e)           Reservation of Stock
Issuable Upon Conversion. This Company shall at all times reserve and
keep available out of its authorized but unissued shares of Common Stock, solely
for the purpose of effecting the conversion of the shares of the Shares, such
number of its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of all outstanding shares of the Shares; and if at any
time the number of authorized but unissued shares of Common Stock shall not be
sufficient to effect the conversion of all then outstanding shares of the
Shares, in addition to such other remedies as shall be available to the holder
of such Shares, this Company will take such corporate action as may, in the
opinion of its counsel, be necessary to increase its authorized but unissued
shares of Common Stock to such number of shares as shall be sufficient for such
purposes, including, without limitation, engaging in best efforts to obtain the
requisite shareholder approval of any necessary amendment to the Company’s
Certificate of incorporation.

    

    (f)           Notice. Any notice
required by the provisions of this section to be given to the holders of Shares
shall be deemed given if deposited in the United States mail, postage prepaid,
and addressed to each holder of record at his address appearing on the books of
this Company.

    

    Section
5.        LIQUIDATION
PREFERENCE.

    

    (a)           In
the event of any liquidation, dissolution or winding up of the Company, either
voluntary or involuntary, subject to the rights of series of preferred stock
that may from time to time come into existence, the holders of Shares shall be
entitled to receive, prior and in preference to any distribution of any of the
assets of this Company to the holders of Common Stock by reason of their
ownership thereof, an amount per share equal to the sum of (i) $2.00 for each
outstanding Share (the “Original Series A Issue
Price”) and (ii) an amount equal to 12% of the Original Series A Issue
Price for each 12 months that has passed since the date of issuance of any
Shares plus any accrued or declared but unpaid dividends on such Share (such
amount (of declared but unpaid dividends) being referred to herein as the “Premium”). If upon the
occurrence of such event, the assets and funds thus distributed among the
holders of the Shares shall be insufficient to permit the payment to such
holders of the full aforesaid preferential amounts, then, subject to the rights
of series of preferred stock that may from time to time come into existence, the
entire assets and funds of the Company legally available for distribution shall
be distributed ratably among the holders of the Shares in proportion to the
preferential amount each such holder is otherwise entitled to
receive.

    

    (b)           Upon
the completion of the distribution required by subparagraph (a) above and any
other distribution that may be required with respect to series of preferred
stock that may from time to time come into existence, the remaining assets of
the Company available for distribution to stockholders shall be distributed
among the holders of Shares and Common Stock pro rata based on the number of
shares of Common Stock held by each (assuming conversion of all such
Shares).

    

    (i) For
purposes of this provision, a liquidation, dissolution or winding up of this
Company shall be deemed to be occasioned by, or to include, (A) the acquisition
of the Company by another entity by means of any transaction or series of
related transactions (including, without limitation, any reorganization, merger
or consolidation but, excluding any merger effected exclusively for the purpose
of changing the domicile of the Company); or (B) a sale of all or substantially
all of the assets of the Company; unless the Company’s
shareholders of record as constituted immediately prior to such acquisition or
sale will, immediately after such acquisition or sale (by virtue of securities
issued as consideration for the Company’s acquisition or sale or otherwise) hold
at least 50% of the voting power of the surviving or acquiring
entity.

    

    
      
         

      

      
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    (ii)           In
any of such events, if the consideration received by the Company is other than
cash, its value will be deemed its fair market value. Any securities shall be
valued as follows:

    

    (A)           Securities
not subject to investment letter or other similar restrictions on free
marketability (covered by (B) below):

    

    (1)           If
traded on a securities exchange (NASDAQ, AMEX, NYSE, etc.), the value shall be
deemed to be the average of the closing prices of the securities on such
exchange over the thirty-day period ending three (3) days prior to the
closing;

    

    (2)           If
traded on a quotation system, such as the Over-the-Counter Bulletin Board or
Pink Sheets, the value shall be deemed to be the average of the closing bid or
sale prices (whichever is applicable) over the thirty-day period ending three
(3) days prior to the closing; and

    

    (3)           If
there is no active public market, the value shall be the fair market value
thereof, as mutually determined by the Company and the holders of at least a
majority of the voting power of all then outstanding shares of Preferred
Stock.

    

    (B)           The
method of valuation of securities subject to investment letter or other
restrictions on free marketability (other than restrictions arising solely by
virtue of a shareholder’s status as an affiliate or former affiliate) shall be
to make an appropriate discount from the market value determined as above in (A)
(1), (2) or (3) to reflect the approximate fair market value thereof, as
mutually determined by the Company and the holders of at least a majority of the
voting power of all then outstanding shares of such Preferred
Stock.

    

    (iii)           In
the event the requirements of this provision are not complied with, this Company
shall forthwith either:

    

    (A)           cause
such closing to be postponed until such time as the requirements of this
provision have been complied with; or

    

    (B)           cancel
such transaction, in which event the rights, preferences and privileges of the
holders of the Shares shall revert to and be the same as such rights,
preferences and privileges existing immediately prior to the date of the first
notice referred to in subsection 3(c)(iv) hereof.

    

    (iv)           The
Company shall give each holder of record of Shares written notice of such
impending transaction not later than ten (10) days prior to the shareholders’
meeting called to approve such transaction, or ten (10) days prior to the
closing of such transaction, whichever is earlier, and shall also notify such
holders in writing of the final approval of such transaction. The first of such
notices shall describe the material terms and conditions of the impending
transaction and the provisions of this Section 3, and the Company shall
thereafter give such holders prompt notice of any material changes. The
transaction shall in no event take place sooner than twenty (20) days after the
Company has given the first notice provided for herein or sooner than ten (10)
days after the Company has given notice of any material changes provided for
herein; provided, however, that such periods may be shortened upon the written
consent of the holders of Shares that are entitled to such notice rights or
similar notice rights and that represent at least a majority of the voting power
of all then outstanding shares of such Shares.

    

    Section
6.        VOTING RIGHTS. The
holder of each Share shall not have any voting rights, except in the case of
voting on a change in the preferences of Shares.

    

    
      
         

      

      
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    Section
7.       PROTECTIVE
PROVISIONS. So long as any Shares are outstanding, this Company shall not
without first obtaining the approval (by vote or written consent, as provided by
law) of the holders of Shares which is entitled, other than solely by law, to
vote with respect to the matter, and which Shares represents at least a majority
of the voting power of the then outstanding Shares:

    

    (a)           sell,
convey, or otherwise dispose of or encumber all or substantially all of its
property or business or merge into or consolidate with any other corporation
(other than a wholly-owned subsidiary corporation) or effect any transaction or
series of related transactions in which more than fifty percent (50%) of the
voting power of the Company is disposed of;

    

    (b)           alter
or change the rights, preferences or privileges of the Shares so as to affect
adversely the Shares;

    

    (c)           increase
or decrease (other than by redemption or conversion) the total number of
authorized shares of preferred stock;

    

    (d)           authorize
or issue, or obligate itself to issue, any other equity security, including any
other security convertible into or exercisable for any equity security (i)
having a preference over, or being on a parity with, the Shares with respect to
dividends or upon liquidation, or (ii) having rights similar to any of the
rights of the Preferred Stock; or

    

    
      	
                                     
      (e)  

            	
              amend
      the Company’s Certificate of Incorporation or
  bylaws.

            

    

    

    In
WITNESS WHEREOF, the undersigned hereby declares and certifies that this Amended
and Restated Certificate of Designation is executed on behalf of the Company as
of this 30th day of
October, 2008.

    

    

    
      	 
      	
              Company:

            
	 
      	
              Rubicon
      Financial Incorporated

            
	 
      	 
      
	 
      	 
      
	 
      	
              By:
      /s/ Joseph Mangiapane,
      Jr.

            
	 
      	
                     Joseph
      Mangiapane, Jr., CEO

            

    

    

    
      
         

      

      
        5AMENDED AND RESTATED
EXECUTIVE                                            
EMPLOYMENT AGREEMENT 

        This
Amended and Restated Employment Agreement (“Agreement”) is effective as of
January 1, 2008 between Gold Resource Corporation, a Colorado corporation (the
“Company”), and William W. Reid (the “Executive”) (collectively, the
“Parties”). 

W I T N E S S E T H:  

        WHEREAS,
the Company wishes to engage the Executive’s services upon the terms and conditions
hereinafter set forth; and 

        WHEREAS,
the Executive wishes to be employed by the Company upon the terms and conditions
hereinafter set forth. 

        NOW,
THEREFORE, in consideration of the premises and mutual promises set forth below, the
sufficiency of which is hereby acknowledged, the Parties agree as follows: 

         
    1.       
          Employment; Duties. The Company hereby agrees to employ
the Executive effective as of the date first above written (the “Effective
Date”) as its President and Chief Executive Officer, and the Executive hereby agrees
to serve in such capacity. The Executive’s principal area of responsibility shall be
to serve as the chief executive officer of the Company, and discharge the duties
incident to that office. In addition, the Executive shall preside at all meetings of
shareholders of the Company and all meetings of the Board of Directors, and negotiate and
execute contracts, deeds, and other instruments on behalf of the Company as are necessary
and appropriate for the conduct of the business and affairs of the Company. The Executive
shall at all times report to and take direction from the Board of Directors of the Company
(the “Board of Directors”), and shall perform such additional duties, not
inconsistent with his position, as shall be designated from time to time by the Company. 

         
    2.       
          Best Efforts. The Executive agrees to use his best efforts to promote the
          interests of the Company and shall, except for illness, reasonable vacation
          periods and leaves of absence, devote his full business time and energies to the
          business and affairs of the Company. The Executive shall be permitted to perform
          material outside business endeavors only with the approval of the Board of
          Directors, provided that such outside activities do not interfere with the
          performance of the Executive’s duties. The Executive may also engage in
          work for charitable, benevolent, civic or educational purposes so long as such
          endeavors do not interfere with the Executive’s duties hereunder. 

         
    3.       
          Term of Agreement. The term of this Agreement shall commence on the
          Effective Date and such term and the employment hereunder shall continue, unless
          earlier terminated in accordance with the provisions of Section 5, for a period
          of three years (the “Original Term”). On each anniversary of this
          Agreement, the term of the Employee’s employment shall be automatically
          extended one additional year unless, prior to 120 days before such anniversary,
          the Employer shall have delivered to the Employee or the Employee shall have
          delivered to the Employer written notice that the term of the Employee’s
          employment hereunder will not be extended. The period of employment of the
          Executive by the Company, commencing with the Effective Date and continuing
          until termination of the employment by expiration or notice hereunder, in
          accordance with Section 5 or otherwise, shall be known as the “Term of
          Employment.” 

    
    4.       
Compensation. 

        
4.1        Base
Salary. As compensation for the
Executive’s services rendered hereunder, the Company shall pay to the Executive a
base salary at an annual rate equal to three hundred thousand dollars ($300,000) (the
“Base Salary”). The Base Salary shall be payable to the Executive on a
monthly basis in accordance with the Company’s standard policies for
management personnel.  

        4.2
       Incentive Compensation. With respect to each calendar year, or portion thereof,
beginning with calendar year 2006, the Executive shall be eligible to receive incentive
compensation, including but not limited to, bonuses, stock options and other perquisites
provided by the Company to executives with comparable authority or duties (and in any
event, not lesser than those provided to executives with junior authority or duties),
payable solely in the discretion of the Board of Directors. 

        4.4
       Benefits. The Executive shall be entitled to participate in all benefit programs
established by the Company and generally applicable to the Company’s executives,
including group health and life insurance and vacation pay. The Executive shall also be
reimbursed for reasonable and necessary business expenses incurred in the course of his
employment with the Company pursuant to Company policies established from time to time.
Reimbursement shall be made to the extent such expenses are deductible by the Company in
accordance with applicable Internal Revenue Service rules. The Employee shall be entitled
to 5 weeks of paid vacation per year and all paid holidays. 

        4.5
       Cellular Phone. The Company shall, during the Term of Employment, provide the
Executive with and pay for the Executive’s use of a cellular phone for business and
reasonable personal use. 

        4.6
       Office, Equipment and Assistance. The Company shall provide for the Executive all
facilities, equipment and services suitable to his position and adequate for the
performance of his duties. The Executive will be required to perform the services and
duties described in Section 1 primarily at the Denver location of the Company. 

       5.
       Termination of Employment Relationship. 

        5.1
       Death.
This Agreement shall terminate immediately upon the death of the Executive. In such event,
Employer shall pay Employee’s estate an amount equal to one year’s Base Salary,
such amount being payable within three months after his death. 

2 

       5.2
       Disability. This Agreement shall not terminate upon the temporary disability of the
Employee, but the Employer may terminate this Agreement upon permanent disability of the
Employee. In such event, Employer shall pay Employee an amount equal to two years Base
Salary, such amount being payable within three months after such termination, such amount
being reduced by any disability insurance thereafter to be received by Employee for which
the Employer pays all the premiums and of which Employee is the beneficiary. The Board of
Directors shall make a determination of the Total Disability of the Executive based upon
the definition of disability contained in any disability insurance policy owned by the
Company and insuring against the disability of the Executive, and if the Company does not
have such a policy, then by reference to any policy owned by the Executive. If no such
policy exists or if such policy does not comply with the provisions of Section 409A, Total
Disability shall be based upon the inability of the Executive to engage in substantial
gainful activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or can be expected to last for a continuous period
of not less than 12 months. Any such determination by the Board of Directors shall be
evidenced by its written opinion delivered to the Executive. Such written opinion shall
specify with particularity the reasons supporting such opinion and be manually signed by
at least a majority of the Board of Directors. 

       5.3
       Termination by the Company. This Agreement may be terminated by the Company for
“Cause” and, in such event, the term of employment shall terminate at the
termination date designated by the Company. For the purpose of this paragraph,
“Termination for Cause” or “Cause” shall include the following: 

         
          
    (a)       
          A finding by a court of breach of fiduciary duty or conviction of criminal
          conduct by the Executive, in either case after all rights of appeal have expired
          or such appeals have been exhausted, having the effect of materially adversely
          affecting the Company and/or its reputation; 

         
          
    (b)       
          Failure by the Executive to substantially perform his duties hereunder; 

         
          
    (c)       
          Engagement by the Executive in the use of narcotics or alcohol to the extent
          that the performance of his duties is materially impaired; 

         
          
    (d)       
          Material breach of the terms of this Agreement by the Executive or failure to
          substantially comply with proper instructions of the Board of Directors; 

         
          
    (e)       
          Willful misconduct by the Executive which is materially injurious to the
          Company, other than business decisions made in good faith; or 

         
          
    (f)       
          Any act or omission on the part of the Executive not described above, but which
          constitutes material and willful misfeasance, malfeasance, or gross negligence
          in the performance of his duties to the Company. 

       
5.4       
Termination by the Executive. The Executive may terminate this Agreement for
“Good Reason.” For purposes of this paragraph, Good Reason shall mean: 

         
          
    (a)       
          Any assignment to the Executive of any duties materially inconsistent with the
          position described in Section 1 hereof; 

3 

         
              (b)       
          Any material diminution of the duties of the Executive then-existing without the
          written consent of the Executive; 

         
              (c)       
          Any removal of the Executive from, or failure to re-elect the Executive to, the
          positions described in Section 1 hereof without the Executive’s written
          consent, except in connection with termination of the Executive pursuant to
          Section 5.1 or 5.2 hereof; 

         
              (d)       
          A reduction in the Executive’s rate of compensation, or a reduction in the
          Executive’s fringe benefits, moving the Company’s headquarters from
          Denver or any other failure of the Company to comply with Section 4 of this
          Agreement; 

         
              (e)       
          Other material breach of this Agreement by the Company; or 

         
              (f)       
          Following a “Change in Control,” defined below. 

        A
“Change of Control” shall be deemed to have occurred if (i) a tender offer shall
be made and consummated for the ownership of 50% or more of the outstanding voting
securities of the Company; (ii) the sale of 30% or more of the outstanding voting
securities of the Company in a single transaction or a series of transactions occurring
during a period of not more than twelve months; (iii) the Company shall be merged or
consolidated with another corporation and as a result of such merger or consolidation less
than 50% of the outstanding securities of the surviving or resulting corporation shall be
owned in the aggregate by the former shareholders of the Company, as the same shall have
existed immediately prior to such merger or consolidation; or (iv) the Company shall sell
more than 40% of the fair market value of its assets to another corporation which is not a
wholly owned subsidiary. 

        Any
termination by the Board of Directors pursuant to Section 5.2 or by the Executive pursuant
to Section 5.3 shall be communicated by written Notice of Termination to the other Party
hereto. Notice of Termination shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for termination of the
Executive’s employment under the provision so indicated. 

        The
Executive’s obligations under Section 6 regarding confidentiality shall survive any
termination of this Agreement by the Executive, by the Company or otherwise. 

      5.4
       
Payment Upon Termination. 

         
              (a)       
          If this Agreement is terminated by the Company for Cause, or the Executive
          resigns without Good Reason, during the Term of Employment, the Executive shall
          not be entitled to severance pay of any kind but shall be entitled to be
          reimbursed for all reasonable business expenses incurred by the Executive and
          shall be paid the Base Salary earned by the Executive prior to the effective
          date of termination or resignation, and all obligations of the Company under
          Section 4 hereof shall terminate upon the designated termination date, except to
          the extent otherwise required by law. 

4 

         
              (b)       
          In the event that the Executive is terminated without Cause or the Executive
          resigns with Good Reason, the Company shall pay the Executive thirty-five (35)
          months Base Salary at the rate prevailing for the Executive immediately
          prior to such termination as severance pay, payable in accordance with
          Company’s normal payroll. The Executive shall also be entitled to receive
          benefits to which he was entitled immediately preceding the date of termination
          for a similar 24 month period, including but not limited to health and dental
          insurance. Notwithstanding the foregoing, the timing of the payments described
          in this subsection (b) of section 5.4 may be modified if, and only if, necessary
          to comply with the provisions of Section 409A of the Internal Revenue Code such
          that the amounts payable to the Executive are paid to him in the year in which
          such income is required to be included in his gross income for tax purposes. 

         
              (c)       
          The parties agree that this Agreement is intended to comply with the
          requirements of Section 409A of the Internal Revenue Code and the regulations
          and other guidance promulgated thereunder or an exemption from 409A.
          Notwithstanding anything in this Agreement to the contrary, if the Executive is
          a “specified employee” (as described in Section 409A) on the date of
          his termination, any amount to which the Executive would otherwise be entitled
          during the first six (6) months following separation of service that constitutes
          nonqualified deferred compensation within the meaning of Section 409A and that
          is therefore not exempt from Section 409A as involuntary separation pay or a
          short-term deferral will be accumulated and paid in a single lump sum cash
          payment (without interest) on the earlier of (i) the first business day of the
          seventh (7th) month following the date of such “separation from
          service” (as defined under Section 409A) or (ii) the date of the
          Executive’s death, and any remaining payments and benefits due under this
          Agreement shall be paid or provided in accordance with the normal payment dates
          specified for them herein. For purposes of this Agreement, each amount to be
          paid or benefit to be provided hereunder shall be construed as a separate
          identified payment for purposes of Section 409A. 

            
6.       
Confidentiality and Non-Disclosure.  

6.1    Confidential Information. The
Executive and the Company recognize that due to the nature of his engagements in this
Agreement, and the relationship of the Executive to the Company, the Executive has had
access to and has acquired, will have access to and will acquire, and has assisted in and
may assist in developing, confidential and proprietary information relating to the
business and operations of the Company and its affiliates, including trade secrets as
defined in the Colorado Uniform Trade Secrets Act and information with respect to their
present and prospective products, services, systems, software, customers, agents,
processes, and sales and marketing methods. The Executive acknowledges that such
information has been and will continue to be of central importance to the business of the
Company and its affiliates and that disclosure of it to or its use by others could cause
substantial loss to the Company. The Executive will keep confidential any trade secrets or
confidential or proprietary information of the Company and its affiliates which are now
known to him or which hereafter may become known to him as a result of his employment or
association with the Company and shall not at any time directly or indirectly disclose any
such information to any person, firm or corporation, or use the same in any way other than
in connection with the business of the Company or its affiliates during and at all times
after the expiration of the Term of Employment.  

5 

       6.2
       Remedy. In the event of a breach or threatened breach by the Executive of any of the
provisions of this Section 6, the Company shall be entitled to injunctive relief,
restraining the Executive and any business, firm, partnership, individual, corporation, or
entity participating in such breach or attempted breach, from engaging in any activity
which would constitute a breach of this Section 6. Nothing herein, however, shall be
construed as prohibiting the Company from pursuing any other remedies available at law or
in equity for such breach or threatened breach, including the recovery of damages. The
provisions of this Section 6 shall survive the termination of this Agreement and the
termination of the Executive’s employment.  

         
   7.       
Miscellaneous.  

       7.1
       Assignability. The Executive may not assign his rights and obligations under this
Agreement without the prior written consent of the Company, which consent may be withheld
for any reason or for no reason.  

       7.2
       
Severability. In the event that any of the provisions of this Agreement shall be held to
be invalid or unenforceable, the remaining provisions shall nevertheless continue to be
valid and enforceable as though the invalid or unenforceable parts had not been included
therein.  

        7.3
Entire Agreement. This Agreement, and any attachments hereto, constitute the entire
agreement between the Parties relating to the subject matter hereof and supersedes all
prior agreements or understandings among the Parties hereto with respect to the subject
matter hereof. 

       7.4
       
Amendments. This Agreement shall not be amended or modified except by a writing signed by
both Parties hereto.  

       7.5
       
Waiver. The failure of either Party at any time to require performance of the other Party
of any provision of this Agreement shall in no way affect the right of such Party
thereafter to enforce the same provision, nor shall the waiver by either Party of any
breach of any provision hereof be taken or held to be a waiver of any other or subsequent
breach, or as a waiver of the provision itself. This Agreement shall be governed by and
interpreted in accordance with the laws of the State of Colorado without regard to the
conflict of laws of such State. The benefits of this Agreement may not be assigned nor any
duties under this Agreement be delegated by the Executive without the prior written
consent of the Company, except as contemplated in this Agreement. This Agreement and all
of its rights, privileges, and obligations will be binding upon the Parties and all
successors and agreed to assigns thereof.  

       7.6
       
Binding Agreement. This Agreement shall be effective as of the date hereof and shall be
binding upon and inure to the benefit of the Executive, his heirs, personal and legal
representatives, guardians and permitted assigns. The rights and obligations of the
Company under this Agreement shall inure to the benefit of and shall be binding upon any
successor or assignee of the Company, including any entity that may be merged with or into
the Company.  

6 

       7.7
       
Headings. The headings or titles in this Agreement are for the purpose of reference only
and shall not in any way affect the interpretation or construction of this Agreement.  

       7.8
       
No Conflict. The Executive represents and warrants that he is not subject to any
agreement, order, judgment or decree of any kind which would prevent him from entering
into this Agreement or performing fully his obligations hereunder.  

       7.9
       
Survival. The rights and obligations of the Parties shall survive the Term of Employment
to the extent that any performance is required under this Agreement after the expiration
or termination of such Term of Employment.  

       7.10
       
Counterparts. This Agreement may be executed in two or more counterparts, each of which
shall be deemed an original but all of which shall together constitute one and the same
document.  

       7.11
       
Notices. Any notice to be given hereunder by either Party to the other may be effected in
writing by personal delivery, or by mail, certified with postage prepaid, or by overnight
delivery service. Notices sent by mail or by an overnight delivery service shall be
addressed to the Parties at the addresses appearing following their signatures below, or
upon the employment records of the Company but either Party may change its or his address
by written notice in accordance with this paragraph.  

       7.12
       
Opportunity to Consult Counsel. The Parties hereto represent and agree that, prior to
executing this Agreement, each has had the opportunity to consult with independent counsel
concerning the terms of this Agreement.  

       7.13
       
Attorney Fees. In the event of any dispute, arbitration, litigation between the Parties or
proceeding before any court of competent jurisdiction, the prevailing Party shall be
entitled to reasonable attorney fee, costs and expenses.  

[Signatures on
following page] 

7 

        IN
WITNESS WHEREOF, the Parties hereto have properly and duly executed this Agreement to be
effective as of the date first written above. 

	 	
THE COMPANY: 
Gold Resource Corporation

	 	
By: _______________________________________

Name: ___________________________________

Title: _______________________________________

	 	
EXECUTIVE:

	 	
_______________________________________

 William W. Reid 
25 Downing Street,
#1-501 
Denver, CO 80218 W. Reid

8

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