Exhibit 10.7
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SUBSCRIPTION AGREEMENT AND
STOCK PURCHASE OPTION AGREEMENT
Gold Resource Corporation
0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxx 00000-0000
Gentlemen:
Gold Resource Corporation (the "Company") is a Colorado corporation. The
authorized capital stock of the Company is 60,000,000 common shares par value
$0.001 per share (the Shares) and 5,000,000 shares of preferred stock par value
$0.001 per share. No preferred stock has been issued by the Company to date.
When issued, Shares are fully paid and non-assessable. Each outstanding share,
regardless of class, is entitled to one vote at annual or special meetings of
shareholders
Heemskirk Consolidated Limited ("Heemskirk") hereby tenders this
subscription for the purchase of Six Hundred Thousand (600,000) Shares of the
common stock ($0.001 par value) of Gold Resource Corporation (the "Company") at
US$0.50/share for the sum of US$300,000, upon the terms and conditions as set
forth below (the "Initial Private Placement"). A wire transfer payable to "Gold
Resource Corporation" in the amount of US$300,000 for the Initial Private
Placement is delivered herewith. Wire instructions are provided in Exhibit A
attached hereto.
Heemskirk also has the option under this agreement with terms and
conditions as provided herein (the "Option") and subject to approval of the
Board of Directors of Heemskirk, to purchase an additional One Million Four
Hundred Thousand (1,400,000) Shares at US$.50/share for US$700,000 (the "Option
Private Placement").
Heemskirk acknowledges prior receipt of the audited financial statements as
of December 31, 2004 of the Company.
By execution below, Heemskirk acknowledges that the Company is relying upon
the accuracy and completeness of the representations contained herein in
complying with their obligations under applicable securities laws.
1. Heemskirk acknowledges and represents as follows:
(a) That Heemskirk is in a financial position to hold the Shares for an
indefinite period of time and is able to bear the economic risk and
withstand a complete loss of Heemskirk's investment in the Shares;
(b) That Heemskirk, either alone or with the assistance of Heemskirk's own
professional advisor, has such requisite knowledge and experience in
financial and business matters and that Heemskirk is capable of
reading and interpreting financial statements and evaluating the
merits and risk of an investment in the Shares and Heemskirk has the
net worth to undertake such risks;
(c) Heemskirk understands that the Shares are a speculative investment
that involves a risk of loss by Heemskirk;
(d) Heemskirk believes that an investment in the Shares is suitable for
Heemskirk based upon Heemskirk's investment objectives and financial
needs, and Heemskirk has no need for liquidity of investment with
respect to the Shares;
(e) That Heemskirk has been given access to full and complete information
regarding the Company and has utilized such access to Heemskirk's
satisfaction for the purpose of obtaining such information regarding
the Company as Heemskirk has reasonably requested; and, particularly,
Heemskirk has been given reasonable opportunity to ask questions of,
and receive answers from, representatives of the Company concerning
the terms and conditions of the offering of the Shares and to obtain
any additional information, to the extent reasonably available;
(f) That Heemskirk recognizes that the Company has a limited operating
history and that the Shares as an investment involve a high degree of
risk, including but not limited to the risk of economic losses from
operations of the Company;
(g) That Heemskirk recognizes that (i) the purchase of the Shares is a
long-term investment; (ii) the purchaser of the Shares must bear the
economic risk of investment for an indefinite period of time because
the Shares have not been registered under the Securities Act of 1933
or under the securities laws of any state and, therefore, the Shares
cannot be resold unless the Shares are subsequently registered under
said laws or exemptions from such registrations are available; (iii)
there is presently no public market for the Shares and Heemskirk may
be unable to liquidate Heemskirk's investment in the event of an
emergency, or pledge the Shares as collateral for a loan; (iv) the
transferability of the Shares will be restricted and requires
conformity with the restrictions contained in paragraph 2 below; and
(vi) Rule 144 is not currently available for resale of the Shares and
will likely not be available in the future; and (v) legends will be
placed on the certificate(s) representing the Shares referring to the
applicable restrictions on transferability; and
(h) That Heemskirk certifies, under penalties of perjury, that Heemskirk
is not subject to the backup withholding provisions of Section
3406(a)(i)(C) of the Internal Revenue Code.
2. Heemskirk acknowledges that the Shares have not been registered under
the Securities Act of 1933 or applicable state securities laws and that the
Shares are being offered and sold pursuant to exemption from such laws and that
the Company's reliance upon such exemptions is predicated in part on Heemskirk's
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representations as contained herein. Heemskirk further understands that the
Shares may not be sold or transferred in the absence of any effective
registration statement or qualification under the Act and any applicable state
securities laws, or the opinion of counsel, acceptable to the Company, that such
registration is not required. Heemskirk represents and warrants that the Shares
are being purchased for the account of Heemskirk and for investment purposes
only, and without the intention of reselling or redistributing the same, that
Heemskirk has made no agreement with others regarding any of the Shares, and
that Heemskirk's financial condition is such that it is not likely that it will
be necessary to dispose of any of such securities in the foreseeable future.
Heemskirk is aware that, in the view of the Securities and Exchange Commission,
a purchase of Shares with an intent to resell by reason of any foreseeable
specific contingency or anticipated change in market value, or any change in the
condition of the Company, or in connection with a contemplated liquidation or
settlement of any loan obtained for the acquisition of such securities and for
which such securities were pledged, would represent an intent inconsistent with
the representations set forth above. Heemskirk further represents and agrees
that if contrary to the foregoing intentions, Heemskirk should later desire to
dispose of or transfer any of such securities in any manner, Heemskirk shall not
do so without first obtaining (i) the opinion of counsel satisfactory to the
Company that such proposed disposition or transfer may be lawfully made without
the registration of such securities pursuant to the Securities Act of 1933, as
then amended, and applicable state securities laws, or (ii) such registration
(it being understood that the Company has no obligation to register any
securities.)
3. The Option.
(a) Heemskirk shall have the Option until September 13, 2005 to
purchase 1,400,000 Shares at US$0.50/share by written notice and
wire transfer to the Company of Seven Hundred Thousand dollars
(US$700,000), subject to approval by the Board of Directors of
Heemskirk.
(b) Prior to the expiration date of the Option, it is anticipated
that the Company and Heemskirk will enter into an agreement that
would provide Heemskirk certain rights to provide or participate
in additional funding to the Company (the "Heemskirk Financing
Option").
(c) Should Heemskirk determine not to exercise its Option and to not
purchase the Option Private Placement in its entirety, then
Heemskirk shall have no rights other that those rights generally
available to any and all shareholders of the Company.
4. Heemskirk represents and warrants that Heemskirk is a bona fide resident
of, is domiciled in and received the offer and made the decision to invest
in the Shares in the State or Country of Australia and the Shares are being
purchased by Heemskirk in Heemskirk's name solely for Heemskirk's own
beneficial interest and not as nominee for, or on behalf of, or for the
beneficial interest of or with the intention to transfer to, any other
person, trust or organization. This Subscription Agreement and Heemskirk's
investment in the Shares shall be governed by and enforced in accordance
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with the laws of the State of Colorado and courts located in the State of
Colorado shall have exclusive jurisdiction with respect to all matters
arising hereunder.
5. Heemskirk is informed of the significance to the Company of the forgoing
representations, agreements and consents, and they are made with the
intention that the Company will rely on them.
6. Heemskirk makes the following additional representations:
(a) Heemskirk was not organized for the specific purpose of acquiring the
Shares, and
(b) This Subscription Agreement has been duly authorized by all necessary
action on the part of Heemskirk, has been duly executed by an
authorized officer or representative of Heemskirk, and is a legal,
valid and binding obligation of Heemskirk enforceable in accordance
with its terms.
7. Heemskirk further represents and warrants that Heemskirk was not assisted
or advised by Heemskirk's own professional advisor in connection with
Heemskirk's investment in the Shares.
8. Manner in Which Title is To Be Held:
Place an "X" in one space below:
(a) Partnership
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(b) X Corporation
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(c) Trust
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(d) Other
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9. Miscellaneous:
Upon Acceptance of this Subscription Agreement and Stock Purchase Option
Agreement by the Company this agreement shall be irrevocable.
SIGNATURES
Dated: July ___, 0000
Xxxxxxxxx Consolidated Limited Xxxxx 0, 000 Xxxxxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxx, Xxxxxxxxx 0000
Signature: /s/Xxxxx Xxxxxxxx Tel: 00 0 0000 0000
Fax: 00 0 0000 0000
E-mail: xxxxxxxxx@xxxxxxxxx.xxx
Typed Name:
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Its: Xxxxx Xxxxxxxx
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Tax Identification Number
* If Shares are being subscribed for by an entity, the Certificate of
Signatory must also be completed.
CERTIFICATE OF SIGNATORY
To be completed if Shares are being subscribed for by an entity.
I Xxxxx Xxxxxxxx, am the Managing Director of Heemskirk Consolidated
Limited (the "Entity").
I certify that I am empowered and duly authorized by Heemskirk to execute
and carry out the terms of the Subscription Agreement and Stock Purchase Option
Agreement to purchase and hold the Shares, and certify further that the
Subscription Agreement and Stock Purchase Option Agreement has been duly and
validly executed on behalf of the Entity and constitutes a legal and binding
obligation of the Entity.
IN WITNESS WHEREOF, I have hereto set my hand this 15th day of July, 2005.
/s/ Xxxxx Xxxxxxxx
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(Signature)
ACCEPTED
This Subscription Agreement and Stock Purchase Option Agreement is accepted as
of July 15, 2005.
GOLD RESOURCE CORPORATION
By: /s/ Xxxxxxx X. Xxxx
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Xxxxxxx X. Xxxx, President
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Exhibit A
Gold Resource Corporation
Wire Transfer Instructions
Routing/ABA #: 000000000
Bank Name: Guaranty Bank & Trust Company
Bank Address: 0000 00xx Xxxxxx
Xxxxxx, XX 00000
Customer: Gold Resource Corporation
Customer Address: 0000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, XX 00000-0000
Customer Telephone No.: 000-000-0000
Customer Account Info: Money Market account # 0000000
Misc.: Guaranty Bank Hours 8:00 a.m. to 5:00 p.m. MST
Phone #: 000-000-0000
