Exhibit 10.1
STRATEGIC ALLIANCE AGREEMENT
THIS AGREEMENT dated for reference the 5th day of December
2008.
BETWEEN:
|
|
GOLD
RESOURCE CORPORATION , a company organized under the laws of the
State of Colorado, with registered office located at 222 Milwaukee
Street, Suite 301, Denver, CO 80206 ( “GRC” or
“the Company” )
|
AND:
|
|
HOCHSCHILD MINING HOLDINGS
LIMITED , a private
limited company organized under the laws of England and Wales, with
registered office located at 46 Albemarle Street, London, England
W1S 4JL (“ HOC ”)
|
WHEREAS:
A. The
Company is a mineral exploration and development company engaged in
the acquisition and exploration, as well as development of mineral
properties (the “Properties” ) in Mexico through
its Mexican subsidiaries with prospects for hosting gold, silver
and base metal deposits, and through such subsidiaries holds
interests in several mineral resource properties, including but not
limited to (i) El Aguila, (ii) Las Margaritas, (iii) Solaga, and
(iv) El Rey located in Oaxaca, Mexico (the “Existing
Properties” );
B. HOC is
an Affiliate of Hochschild Mining plc., a leading underground
precious metals producer operating in the Americas with a primary
focus on silver and gold;
C. The
Company and HOC believe that their respective corporate strategies
are compatible and, as such, wish to establish a strategic alliance
on the terms and conditions set forth herein;
D. The
Company and HOC are entering into this Agreement as a condition to
and in furtherance of the investment in Shares (as defined below)
contemplated in the Subscription Agreement dated December 5, 2008
(the “Subscription Agreement” ) between the
Company and HOC without the Company having executed and delivered
this Agreement; and
E. The
Board of Directors has authorized the Company to enter into this
Agreement.
NOW
THEREFORE THIS AGREEMENT WITNESSES that in consideration of the
mutual premises, covenants and agreements contained herein, and
other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by both parties, the parties
hereby covenant and agree as follows:
ARTICLE 1
INTERPRETATION
1.1
Definitions. In this Agreement, unless the context otherwise
requires:
|
|
(a)
|
“
Acceptance Notice ” has the meaning ascribed to it in
Section 4.1(e);
|
|
|
(b)
|
“
Additional Securities ” has the meaning ascribed to it
in Section 4.1(a);
|
|
|
(c)
|
“
Additional Shares ” has the meaning ascribed to it in
Section 2.1;
|
|
|
(d)
|
“
Affiliate ” shall have the meaning ascribed thereto in
the Securities Act;
|
|
|
(e)
|
“
Agreement ” means this strategic alliance agreement
and any instrument amending this Agreement and “
hereof ”, “ hereto ”, “
hereunder ” and similar expressions mean and refer to
this Agreement and not to a particular Article, Section, Subsection
or Paragraph;
|
|
|
(f)
|
“
Alternative Proposal ” has the meaning ascribed to it
in Section 9.1;
|
|
|
(g)
|
“
Authority ” and “ Authorities ”
means any (i) multinational, federal, provincial, state, regional,
municipal, local or other government, governmental or public
department, securities commission (including the Securities
Commissions), central bank, court, tribunal, arbitral body,
commission, board, bureau or agency, domestic or foreign, (ii) any
subdivision, agent, commission, board, or authority of any of the
foregoing, or (iii) any quasi-governmental or private body
exercising any regulatory, expropriation or taxing authority under
or for the account of any of the foregoing, and includes a stock
exchange and any other self-regulatory authority;
|
|
|
(h)
|
“Board
of Directors ”
means the board of directors of the Company;
|
|
|
(i)
|
“
Business Day ” means any day which is not a Saturday,
a Sunday or a day on which banks are generally closed for business
in Denver, Colorado or London, England;
|
|
|
(j)
|
“
Claims ” means all losses, damages, expenses,
Liabilities, claims and demands of whatever nature or kind,
including all reasonable legal fees and disbursements;
|
|
|
(k)
|
“
Closing Date ” has the meaning given to it in the
Subscription Agreement;
|
|
|
(l)
|
“Commencement of
Production” has the
meaning given to it in Section 2.3;
|
|
|
(m)
|
“Common Stock”
has the meaning given to it in
Section 4.1(a);
|
|
|
(n)
|
“
Company ” has the meaning given to it in the preamble
hereto;
|
|
|
(o)
|
“
Company Indemnitees ” has the meaning given to it in
Section 11.2;
|
|
|
(p)
|
“
Convertible Securities ” means all warrants, rights,
agreements, options, or Debt Instruments present or future,
contingent or absolute, or any right or privilege capable of
becoming a right, agreement or option, for the purchase,
subscription or issuance of any Shares in the Company or any other
security or Debt Instruments convertible or exchangeable for
Shares, including options granted to officers, directors or
employees, and whether issued pursuant to the Stock Option
Plan;
|
2
|
|
(q)
|
“Debt
Instrument ” means
any loan, bond, debenture, promissory note or other instrument
evidencing material indebtedness of the Company for borrowed money
or other material liability;
|
|
|
(r)
|
“
Equity Securities ” means Shares, Convertible
Securities and any other equity or voting securities of the
Company;
|
|
|
(s)
|
“Existing Properties”
has the meaning given to it in the
preamble hereto;
|
|
|
(t)
|
“
Financing Election ” has the meaning ascribed to it in
Section 2.3;
|
|
|
(u)
|
“HOC
Director ” has the
meaning ascribed to it in Section 5.1;
|
|
|
(v)
|
“ HOC
Entities ” means HOC and its Affiliates, and any person
acting jointly or in concert with any of them, excluding, for
greater certainty, the Company and any of its Subsidiaries to the
extent they may be or become Affiliates at any relevant point in
time;
|
|
|
(w)
|
“ HOC
Indemnitees ” has the meaning ascribed to it in Section
11.1;
|
|
|
(x)
|
“ HOC
JV Acceptance Notice ” has the meaning ascribed to it in
Section 6.2(b);
|
|
|
(y)
|
“HOC
Option” has the
meaning ascribed to it in Section 2.1;
|
|
|
(z)
|
“
Joint Venture Proposal Notice ” has the meaning
ascribed to it in Section 6.2(a);
|
|
|
(aa)
|
“ JV
Negotiation Period ” has the meaning ascribed to it in
Section 6.2(b);
|
|
|
(bb)
|
“
Laws ” means any and all applicable (i) laws,
constitutions, treaties, statutes, codes, ordinances, orders,
decrees, rules, regulations and municipal by-laws, (ii) judicial,
arbitral, administrative, ministerial, departmental or regulatory
judgments or orders of any Authorities, and (iii) policies,
guidelines and protocols;
|
|
|
(cc)
|
“
Liabilities ” means, with respect to any Person, any
liability or obligation of such Person of any kind, character or
description, whether known or unknown, absolute or contingent,
accrued or unaccrued, disputed or undisputed, liquidated or
unliquidated, secured or unsecured, joint or several, due or to
become due;
|
|
|
(dd)
|
“
Lien ” means any mortgage, easement, encroachment,
adverse claim, and assignment by way of security, security
interest, servitude, pledge, charge, lien, assignment,
hypothecation, conditional sale agreement, title retention,
preferential right, trust arrangement, right of set-off,
counterclaim or banker’s lien, financing statement, privilege
or priority, or other encumbrance of any kind having the effect of
security, any designation of loss payees or beneficiaries or any
similar arrangement under or with respect to any insurance policy
or any preference of one creditor over another arising by operation
of law;
|
|
|
(ee)
|
“
Market Purchases ” has the meaning ascribed to it in
Section 3.1;
|
3
|
|
(ff)
|
“Option Exercise Notice”
has the meaning ascribed to it in
Section 2.1;
|
|
|
(gg)
|
“Option Expiration Date”
has the meaning ascribed to it in
Section 2.1;
|
|
|
(hh)
|
“
Options ” means outstanding options to acquire Shares
under the Stock Option Plan;
|
|
|
(ii)
|
“
Other Purchasers ” has the meaning ascribed to it in
Section 4.1(a);
|
|
|
(jj)
|
“
Parties ” means the Company and HOC and their
successors and permitted assigns; and “ Party ”
means any one of them;
|
|
|
(kk)
|
“
Person ” means an individual, partnership,
unincorporated association, organization, syndicate, corporation or
trust or a trustee, executor, administrator or other legal or
personal representative;
|
|
|
(ll)
|
“
Private Agreement Purchases ” means purchases of
Equity Securities other than on any stock exchange on which the
Shares are then listed or quoted provided such purchases are made
in accordance with applicable Laws, including applicable Securities
Laws;
|
|
|
(mm)
|
“ Pro
Rata Interest ” has the meaning ascribed to it in Section
4.1(a);
|
|
|
(nn)
|
“
Proposed Joint Venture ” has the meaning ascribed to
it in Section 6.1(a);
|
|
|
(oo)
|
“
Properties ” has the meaning ascribed to it in the
Preamble hereto;
|
|
|
(pp)
|
“Purchased Shares”
shall mean the shares of Common
Stock to be acquired by HOC pursuant to the terms of the
Subscription Agreement.
|
|
|
(qq)
|
“
Rights Notice ” has the meaning ascribed to it in
Section 4.1(c);
|
|
|
(rr)
|
“
Securities Exchange Act ” means the Securities
Exchange Act of 1934;
|
|
|
(ss)
|
“
Securities Commissions ” means the securities
regulator in each jurisdiction whose Securities Laws are applicable
to the Company;
|
|
|
(tt)
|
“
Securities Laws ” means the Laws relating to
securities of the Company, and the regulations and rules made and
forms prescribed thereunder together with all applicable published
policy statements, blanket orders, rulings and notices adopted by
the Securities Commissions of each such jurisdiction or applicable
in such jurisdictions;
|
|
|
(uu)
|
“
Shareholders ” means the holders of Shares;
|
|
|
(vv)
|
“
Shares ” means common shares or any other securities
into which the common shares in the capital of the Company are
reorganized, exchanged or converted;
|
|
|
(ww)
|
“
Stock Option Plan ” means any stock option plan,
agreement or arrangement adopted by the Company from time to time
which provides for the issuance of options to acquire
Shares;
|
4
(xx)
“ Subscription Agreement ” has the meaning
ascribed to it in the Preamble hereto;
(yy)
“Subsequent Closing Date” has the meaning
ascribed to it in Section 2.1;
(zz)
“ Transactions ” means the transactions
contemplated in this Agreement.
1.2 Gender and Certain
References. Whenever the
context requires, the gender of all words used shall include the
masculine, feminine and neuter, and the number of all words shall
include the singular and plural. The terms “hereof”,
“herein” or “hereunder”shall refer to this
Agreement as a whole and not to any particular Article or Section
hereof. All titles and headings to Articles and Sections in this
Agreement are included for convenience and ease of reference.
Titles and headings shall not affect in any way the meaning or
interpretation of Articles or Sections of this Agreement. Any
references to specific Articles or Sections shall mean the Articles
and Sections in this Agreement.
ARTICLE 2
ADDITIONAL INVESTMENTS BY HOC
2.1
HOC Option to Purchase Additional
Shares. From and after
the Closing Date and until 5:00 pm Denver time on the date which is
eighty (80) days from the Closing Date (the “Option
Expiration Date”), HOC shall have the option (the
“Option” ), at its sole discretion, to subscribe
for all, but not less than all, of an additional 4,330,000 Shares
from the Company (the “Additional Shares” ) at a
price of US$3.00 per share, or a total of US$12,990,000. If HOC
wishes to exercise the Option, it shall give written notice to the
Company (the “Option Exercise Notice” ) prior to
the Option Expiration Date in the manner set forth in
Section 12.1 of this Agreement. If HOC fails to deliver the
Option Exercise Notice on or before the Option Expiration Date, HOC
shall be deemed to have waived its rights under this
Section 2.1. In the event HOC exercises the Option, one or
more of the HOC Entities shall subscribe and pay for and the
Company shall issue to the relevant HOC Entities, free and clear of
any liens or encumbrances, the Additional Shares and the Parties
shall exchange representations and warranties substantially similar
to those contained in the Subscription Agreement and execute such
documents as may be necessary to complete the subscription and sale
of the Additional Shares. Closing of the purchase and sale of the
Additional Shares shall take place within ten (10) business days of
the delivery of the Option Exercise Notice, such date being
referred to as the “Subsequent Closing
Date”.
2.2 Use
of Proceeds. In the event
HOC exercises the Option, the Company agrees to use not less than
five million U.S. Dollars (US$5,000,000) of the proceeds from the
subscription of the Purchased Shares and the Additional Shares to
fund exploration activities (including but not limited to drilling,
assaying and staking new claims) on the El Aguila project.
The Company further agrees that the balance of the proceeds from
the subscription of the Purchased Shares and the Additional Shares
shall be used as follows: (i) ten million U.S. Dollars
(US$10,000,000) to fund the development and construction of the
mine and plant for the El Aguila project; and (ii) three
million U.S. Dollars (US$3,000,000) for working capital of the
Company and other investments in the El Aguila
project.
5
2.3. Additional
Financing. Subject to the provisions of Section 8.2, if the
Company determines to solicit additional equity financing
subsequent to exercise of the Option but prior to Commencement of
Production (hereinafter defined) at the El Aguila project,
it shall provide written notice to that effect to HOC and HOC shall
be entitled to exclusively provide such financing upon the terms
and conditions hereinafter set forth. For purposes of the preceding
sentence, “Commencement of Production” shall be
defined as the production and delivery to the point of sale
(refiner) by the Company (either directly or through a subsidiary)
of not less than 4,000 ounces of gold within a 45 day period. HOC
shall have ten (10) Business Days from delivery of such notice in
which to notify the Company that it desires to provide all of such
financing (the “Financing Election” ). If HOC
delivers the Financing Election, the purchase price for each share
shall be equal to eighty percent (80%) of the average closing price
of the Shares during the thirty (30) calendar days preceding the
date HOC delivers the Financing Election. Closing of the
subscription, purchase and sale shall be at such place and time as
the Parties agree but not more than ten (10) days from delivery of
the Financing Election. If HOC delivers the Financing Election, one
or more of the HOC Entities shall pay the purchase price for, and
the Company shall issue, additional Shares, free and clear of all
liens and encumbrances. The Parties shall exchange representations
and warranties, in form and in substance substantially similar to
those provided in the Subscription Agreement and execute such
documents as may be necessary to complete the subscription and sale
of the Shares. In the event HOC fails to provide the Financing
Election as set forth above, the Company shall be free to obtain
such financing from one or more additional parties, free of any
obligation to HOC.
ARTICLE 3
MARKET PURCHASES AND PRIVATE PURCHASES
3.1 Market
Purchases. Subject to
compliance with applicable laws, the HOC Entities shall at any time
and from time to time, in their sole discretion, be entitled to
make purchases of the Company’s common stock in the
over-the-counter market or on any stock exchange on which its
common stock is then quoted or listed (the “Market
Purchases” ); provided, however, that for a period of two
(2) years following the Closing Date, unless the Parties otherwise
agree, the HOC Entities do not beneficially own, directly or
indirectly, more than forty percent (40%) of the Company’s
outstanding common stock on an undiluted basis, following any
Market Purchase and any Private Agreement Purchase. For purposes of
this Agreement, beneficial ownership shall be determined in
accordance with the provisions of Rule 13d-3 of the Securities
Exchange Act.
3.2 Private
Purchase. In addition to
Market Purchases, as described in Section 3.1 above, HOC shall be
entitled to make Private Agreement Purchases, provided that such
purchases are made in accordance with all applicable laws; and
provided further, that for a period of two (2) years following the
Closing Date, unless the Parties otherwise agree, the HOC Entities
will not beneficially own more than forty percent (40%) of the
Company’s outstanding common stock on an undiluted basis
following any Market Purchase and/or Private Agreement Purchase. At
the request of HOC, the Company shall introduce HOC to persons whom
the Company believes may be interested in selling its common
stock.
6
ARTICLE 4
PRE-EMPTIVE RIGHT
4.1
HOC’s Pre-emptive
Right.
|
|
(a)
Subject to the provisions of subsection (g) of this Section 4.1 and
Section 8.2 hereof, if at any time after the Closing Date, the
Company proposes to issue or sell Equity Securities (
“Additional Securities” ) other than (i) under
any Stock Option Plan, (ii) pursuant to the exercise of options
under any Stock Option Plan, (iii) upon the exercise, exchange or
conversion of any Convertible Securities, or (iv) for property
other than money, the HOC Entities shall have the right to
subscribe for and purchase Additional Securities, at the price at
which such Additional Securities are offered for sale to other
purchasers (the “Other Purchasers” ), up to its
Pro Rata Interest (as defined below) prior to giving effect to the
issuance or sale of such Additional Securities. “ Pro Rata
Interest” means, at any relevant time, the ownership
interest of HOC, expressed as a percentage, equal to: (i) the
number of outstanding shares of common stock of the Company (
“Common Stock” ) beneficially owned by the HOC
Entities, including all shares of Common Stock issuable upon the
conversion, exercise or exchange of all Convertible Securities
beneficially owned by the HOC Entities divided by (ii) the
aggregate number of outstanding shares of Common Stock, plus the
number of shares of Common Stock issuable upon the conversion,
exercise or exchange of all outstanding Convertible
Securities;
|
|
|
(b)
If the Company issues Equity Securities in circumstances that would
not give rise to the rights of the HOC Entities pursuant to
Section 4.1(a) (the “Non-Participating
Transaction” ), then in any concurrent or subsequent
transaction which does give rise to the rights of the HOC Entities
pursuant to Section 4.1(a) (the “Participating
Transaction” ), the Company shall allow the HOC Entities
to subscribe for and purchase Additional Securities in an amount
greater than HOC’s Pro Rata Interest; provided that in the
Participating Transaction, HOC shall not be entitled to purchase
any more than its Pro Rata Interest of the securities sold
collectively in the Non-Participating Transaction and the
Participating Transaction.
|
|
|
(c)
If the Company intends to authorize and/or issue equity securities
that give rise to the rights of HOC pursuant to
Section 4.1(a), the Company shall provide notice to HOC (the
“Rights Notice” ) no less than ten (10) business
days before the date on which the Company intends to issue equity
securities giving rise to the rights of HOC in
Section 4.1(a).
|
|
|
(d)
The Rights Notice shall specify sufficient information regarding
the particulars of the issuance or sale of the Additional
Securities to allow HOC to make a reasoned decision in respect of
making the investment, including to the extent any such terms are
determinable at such time: (i) the total number of equity
securities outstanding as of the date thereof; (ii) the total
number of Additional Securities which are being offered; (iii) the
rights, privileges, restrictions, terms and conditions of such
Additional Securities; (iv) the amount payable by HOC for the
Additional Securities to which it is entitled pursuant to
Section 4.1(a); and (v) the proposed closing date, and
thereafter, to the extent it is not included in the Rights Notice,
the Company shall immediately provide notice to HOC of such
information as it is determined.
|
|
|
(e)
HOC shall give notice (an “Acceptance Notice” )
to the Company not later than 5:00 p.m. (Denver time) on the tenth
business day following the deemed receipt of any Rights Notice
given under paragraph 4.1(c) setting out the number of
Additional Securities, if any, which any of HOC Entities intends to
subscribe for and purchase and, if applicable, the name and address
of HOC Entity whose name in which such securities should be
registered, provided that if HOC, acting reasonably, determines
that it has insufficient information to make such investment
decision, HOC shall notify the Company of the information required
to make such investment decision and thereafter shall have the
longer of (i) the remainder of the ten (10) Business Days set out
in the first sentence of this paragraph; or (ii) two (2) Business
Days from the receipt of such additional information to make the
investment decision and deliver or refrain from delivering the
Acceptance Notice. Notwithstanding the preceding sentence, the
Rights Notice shall be deemed to include sufficient information to
make such investment decision if it includes the information
specified in items (i) to (iv) of Section 4.1(d). If no
Acceptance Notice has been provided to the Company within the
required time, HOC will be deemed to have elected not to subscribe
for or purchase any such Additional Securities.
|
7
|
|
(f)
Following delivery of the Acceptance Notice, if any, the HOC
Entities shall pay for, and the Company shall issue to the relevant
HOC Entities, free and clear of any liens, the number of Additional
Securities specified in the Acceptance Notice and, except as
otherwise agreed, the Company shall provide HOC with substantially
the sa
|
|
