Exhibit 6.a
MANAGEMENT AND ADMINISTRATION AGREEMENT
Between
GOLD RESOURCE CORPORATION
And
U. S. GOLD CORPORATION
THIS MANAGEMENT AND ADMINISTRATION AGREEMENT (the "Agreement") is
made and entered into effective as of July 1, 2000, between Gold
Resource Corporation, a Colorado corporation ("GRC"), whose address
is 0000 Xxxxxxx Xxxxxx, Xxxxxx, Xxxxxxxx 00000-0000 and U.S. Gold
Corporation, a Colorado corporation ("U.S. Gold"), whose address is
0000 Xxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxxx, Xxxxxxxx 00000-0000, and
Xxxxxxx X. Xxxx and Xxxxx X. Xxxx as to the matters in Article
VIII.
ARTICLE I.
RECITALS:
1.1 WHEREAS GRC has certain intended business activities including
management and evaluation and potential development of mineral
properties located in Mexico, related funding activities and
general corporate administration (collectively "Business
Activities") and is interested in securing the management and
administration of such Business Activities; and
1.2 WHEREAS U.S. Gold has the personnel, facilities and experience
to provide GRC certain management and administrative services
related to the Business Activities;
1.3 NOW THEREFORE, in consideration of the promises and of the
mutual covenants, conditions, and obligations contained herein, and
other valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties hereto agree as follows:
ARTICLE II.
SCOPE OF SERVICES TO BE PROVIDED
2.1 U.S. Gold agrees to provide the following general Management
and Administrative Services to GRC as provided in this Agreement:
2.2 Executive Management- The time and services of the following
individuals will be provided on an as-needed basis (anticipated to
require, on average, no more than approximately 50% of the normal
available work period): a) Xxxxxxx X. Xxxx; b) Xxxxxxx X. Pass, and
c) Xxxxx X. Xxxx, each whom are full-time executive employees of
U.S. Gold.
2.3 Office Services- The office and infrastructure of U.S.
Gold's Lakewood, Colorado offices will be made available to support
the Business Activities of GRC including, but not limited to,
non-exclusive use of computers, printers, telephones, facsimile,
files storage, mail service. Any third party expenses for the
direct benefit of GRC shall be paid directly by GRC.
2.4 Preparation of Agreements- U.S. Gold, on behalf of GRC, will
prepare such drafts and negotiate with third parties any agreements
related to Business Activities, for final review, approval and
execution, as directed by the Board of Directors of GRC. Any out
of pocket costs related to such activities, including but not
limited to travel costs, fees of attorneys, accountants and tax
experts, shall be paid directly by GRC.
2.5 Financing Activity- U.S. Gold, on behalf of GRC, shall prepare
such documents and make such presentations as necessary or
appropriate towards the objective of raising funding for Gold
Resource, including but not limited to equity, debt, and lease
financings, except that under no circumstances shall U.S. Gold act
as, or be construed as acting as financial advisor to, or
underwriter or placement agent of any securities of GRC. All
arrangements shall be reviewed, approved and executed as directed
by the Board of Directors of GRC. Any out of pocket expenses
related to such activities shall be paid directly by GRC.
2.6 Management of Consultants- U.S. Gold, on behalf of GRC, may
and shall enter into consulting agreements with third parties for
the furtherance of Business Activities, and shall work with and
manage such consultants in such activities, as directed by the
Board of Directors of GRC. All direct and indirect costs and
expenses related to such consultants, consulting agreements and
related activities shall be paid directly by GRC. Examples include
lawyers, accountants, engineers, engineering firms, field
personnel, etc.
2.7 Management of Contracts- U.S. Gold, on behalf of GRC, shall
enter into such contracts with third parties as required for the
furtherance of Business Activities, and shall manage such
contracts. All direct and indirect costs and expenses related to
such contracts shall be paid directly by GRC. Examples include but
are not limited to engineering design, facilities fabrication and
construction, permitting, etc.
2.8 Establishment of Subsidiaries and Qualification to Conduct
Business- U.S. Gold, on behalf of GRC and upon advice of
consultants, shall create such business entities as necessary and
appropriate including subsidiaries of GRC, to hold assets and
conduct operations related to or in furtherance of Business
Activities.
2.9 Opening of Bank Checking and Savings Accounts- U.S. Gold,
on behalf and in the name of GRC, shall from time to time open
checking and savings accounts at banks and other financial
institutions to hold assets and conduct operations related to or in
furtherance of Business Activities.
2.10 Maintenance of Books and Records- U.S. Gold will maintain
checking and savings account records for and on behalf of GRC and
shall prepare monthly budgets and monthly accounting for all
activities. An annual independent audit, at the expense of GRC,
shall be performed on the financial accounts of GRC. U.S. Gold
will provide such independent auditors full access to all records
and full cooperation in the conduct of such annual audit.
ARTICLE III.
CONSIDERATION TO U. S. GOLD
3.1 As consideration for a) the efforts of U.S. Gold in evaluation
of mining opportunities in Mexico prior to the date of this
Agreement, and b) for the services provided by U.S. Gold under this
Agreement, unless terminated early as provided herein, GRC shall 1)
deliver to U.S. Gold 280,000 shares of GRC common stock, par value
$0.001, and 2) place into escrow with a mutually acceptable party
an aggregate 1,000,000 shares of GRC common stock, par value $0.001
to be released to U.S. Gold, unless this agreement is terminated as
provided below, as follows: a) 166,670 shares as of September 30,
2000, and b) 166,666 shares on the last day of each of 5 calendar
quarters commencing December 31, 2000 and ending December 31, 2001.
The agreed value of the GRC common stock to be received by U.S.
Gold under this Agreement is and shall be $0.50 per share for
aggregate consideration of $640,000 over the full term of this
Agreement. The GRC shares to be issued under this Agreement shall
be unregistered and "restricted securities" as that term is defined
by the Securities and Exchange Commission regulations. In
addition, U.S. Gold may be an "affiliate" of GRC as that term is
defined by the Securities and Exchange Commission, and as such,
there may be other restrictions on sale or disposition of the GRC
shares. U.S. Gold agrees that it will not sell or otherwise
dispose of the GRC shares in violation of the Securities Act of
1933, as amended, or other applicable federal or state securities
laws.
ARTICLE IV.
TERM OF AGREEMENT
4.1 The term of this Agreement, unless terminated earlier as
provided in Section V below, shall be eighteen (18) months
commencing July 1, 2000 and terminating December 31, 2001.
ARTICLE V.
EARLY TERMINATION
5.1 This Agreement may not be terminated by either party other
than for "cause" except that U.S. Gold shall have the right but not
the obligation to terminate this Agreement upon 30 days prior
written notice in the event that a) Sudbury Contact Mines defaults
on the terms of, or terminates its participation in, the Tonkin
Springs Limited Liability Company, or b) Xxxxxxx or Xxxxx Xxxx
resigns his current position with U.S. Gold. "Cause" is defined as
a material breach of this Agreement or the bankruptcy, cessation of
business or dissolution of a party. Upon any such notice of
termination, the parties will coordinate transfer of
responsibilities and records to GRC.
5.2 In the event that U.S. Gold terminates this Agreement for
cause, all remaining shares of GRC held in escrow as provided in
Section III above, shall be released from escrow immediately upon
termination of this Agreement. In the event that GRC terminates
this Agreement for cause, the proration of shares earned for that
quarter shall be released to U.S. Gold and all remaining shares of
GRC held in escrow as provided in Section III above shall be
cancelled and returned to the treasury of GRC. In the event that
U.S. Gold shall terminate this Agreement for reasons other than for
cause, as provided above, the proration of shares earned for that
quarter shall be released to U.S. Gold and all remaining shares of
GRC held in escrow as provided in Section III above shall be
cancelled and returned to the treasury of GRC. Under no
circumstances shall U.S. Gold terminate this Agreement as provided
above unless the majority of the Directors of U.S. Gold who are not
executives or shareholders of GRC have specifically approved such
termination.
ARTICLE VI.
RIGHT TO OBSERVE
6.1 During the term of this Agreement, and for so long thereafter
as U.S. Gold owns not less than 20% of the issued common shares of
GRC, U.S. Gold shall have the right to observe GRC board meetings
through attendance of one of U.S. Gold's independent Directors or
other nominee approved by GRC. U.S. Gold's observer shall hold any
confidential or commercially sensitive information that is not in
the public domain and is obtained through such attendance in
strictest confidence unless required to disclose such information
under Law, and shall not have the right to vote nor the right to
speak unless invited to speak by GRC. While ever U.S. Gold holds
such observation rights, GRC shall copy both the agenda and minutes
of all board meetings to the Board of U.S. Gold whether or not U.S.
Gold exercised its rights to observe the meeting.
ARTICLE VII
REGISTRATION RIGHTS
7.1 GRC agrees that it will include any shares of GRC owned by
U.S. Gold in any initial registration statement of common shares
that GRC files with the Securities and Exchange Commission and that
GRC will use reasonable effort to seek effective registration of
such shares. There can be no assurance, however, that GRC will be
successful in any efforts to have the U.S. Gold shares of GRC
registered. GRC shall have no obligation to market, underwrite or
include any GRC shares owned by U.S. Gold in any equity financing
conducted by GRC.
ARTICLE VIII.
REPRESENTATIONS, WARRANTIES AND COVENANTS
8.1 GRC hereby represents and warrants to U.S. Gold as of the date
of this Agreement, and this Agreement is made in reliance on the
following representations and warranties:
a) GRC is a corporation duly organized, validly existing and in
good standing under the laws of Colorado. GRC has full corporate
power and authority, and all franchises, licenses and permits as
are necessary to own its assets and to carry on its business as
presently conducted and to consummate the transactions contemplated
by this Agreement.
b) The authorized capital stock of GRC is 20,000,000 shares of
common stock having a par value of $0.001 and 5,000,000 shares of
preferred stock having a par value of $0.001 per share and which
can be issued in series. GRC has no other authorized classes of
capital stock. GRC has 1,900,000 shares of its common stock
presently issued and outstanding with 100,000 shares reserved for
issuance upon conversion of certain convertible debt held by the
founders, and no shares of its preferred stock issued and
outstanding.
c) GRC has unrestricted equity of not less than $50,000 including
convertible debt in the amount of $50,000 to the founders which is
convertible into 100,000 shares of GRC common stock. The
conversion of the convertible debt will not result in more than
2,000,000 shares of GRC being issued and outstanding as of the date
of this Agreement with the exclusion of the shares to be issued to
U.S. Gold hereunder.
d) The parties agree that if the convertible debt referred to in
c) above is called by the debt holders and not converted into
common shares of GRC, then the shares of GRC standing as of that
date in the name of the founders, Xxxxxxx X. Xxxx and Xxxxx X. Xxxx
shall be returned to the treasury of GRC and cancelled. Further,
the parties agree that the convertible debt referred to in c) above
shall be converted by the debt holders upon GRC entering into an
arm's length option or other agreement to purchase a mining
property appropriate for GRC's business model.
e) Since its formation on July 31, 1998, GRC has been inactive
and there are no financial statements for GRC.
f) There are currently no unaudited quarterly or other financial
statements of GRC since GRC was formed effective July 31, 1998.
8.2 U.S. Gold hereby represents and warrants to GRC as of the date
of this Agreement, and this Agreement is made in reliance on the
following representations and warranties:
a) U.S. Gold is a corporation duly organized, validly existing
and in good standing under the laws of Colorado. U.S. Gold has
full corporate power and authority, and all franchises, licenses
and permits as are necessary to carry on its business as presently
conducted and to consummate the transactions and performance
contemplated by this Agreement.
b) Xxxxxxx X. Xxxx, Xxxxx X. Xxxx and Xxxxxxx X. Pass are
executive employees of U.S. Gold.
c) U.S. Gold has made available to GRC audited financial
statements of U.S. Gold as of December 31, 1999 and unaudited
interim statement as of March 31, 2000.
ARTICLE IX.
GOVERNING LAW
9.1 This Agreement shall in all respects be governed by, and
construed in accordance with, the laws of the State of Colorado,
including all matters of construction, validity and performance.
In WITNESS WHEREOF, the parties have executed this Agreement
effective the first date set forth above.
GOLD RESOURCE CORPORAITON
/s/ Xxxxxxx X. Xxxx 7/27/2000
By: Xxxxxxx X. Xxxx, President
U. S. GOLD CORPORATION
/s/ Xxxx X. Goth 7/27/2000
By: Xxxx X. Goth, Independent Director
/s/ Xxxxxxx X. Xxxxx 7/27/2000
By: Xxxxxxx X. Xxxxx, Independent Director
APPROVED AS TO THE MATTERS IN ARTICLE VIII
/s/ Xxxxxxx X. Xxxx 7/27/2000
Xxxxxxx X. Xxxx
/s/ Xxxxx X. Xxxx 7/27/2000
Xxxxx X. Xxxx
