Exhibit 10.3
 
Confidential
U.S. Accredited.Investors Only

EXHIBIT A
 
FORM OF WARRANT
 
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND
EXCHANGE COMMISSION (THE “SEC”) UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE “1933 ACT”). THERE HAS BEEN NO REGISTRATION UNDER THE SECURITIES LAWS OF
ANY STATE OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE RESOLD ABSENT
REGISTRATION UNDER THE APPLICABLE SECURITIES LAWS OR AN EXEMPTION THEREFROM, THE
SECURITIES WILL HAVE A LEGEND ON THEM TO THIS EFFECT. THE SECURITIES REPRESENTED
HEREBY HAVE BEEN OFFERED UPON AN EXEMPTION FROM SECURITIES REGISTRATION PURSUANT
TO SECTION 4(2) AND/OR RULE 506 OF THE REGULATION D (“REGULATION D”) AS
PROMULGATED BY THE SEC UNDER THE 1933 ACT.
 

 
THESE WARRANTS WILL EXPIRE AND BECOME NULL AND VOID
 
AT _____________ (______________ TIME) ON ____________________, ________.
 
SHARE PURCHASE WARRANTS TO PURCHASE COMMON SHARES OF
 
Pan American Goldfields Ltd.
 
THIS IS TO CERTIFY THAT _____________________, (the “Holder”) of
________________, has the right to purchase, upon and subject to the terms and
conditions hereinafter referred to, up to _______ fully paid and non-assessable
common shares (the “Shares”) of Pan American Goldfields Ltd. (hereinafter called
the “Company”) on or before _______ p.m. (_______ time) on _______ (the “Expiry
Date”) at a price per share of U.S. $0.30 (the “Exercise Price”) on the terms
and conditions attached hereto as Appendix A (the “Terms and Conditions”).
 
 
1.
ONE (1) WARRANT AND THE EXERCISE PRICE ARE REQUIRED TO PURCHASE ONE SHARE. THIS
CERTIFICATE REPRESENTS _______ WARRANTS.

 
 
2.
These Warrants are issued subject to the Terms and Conditions, and the Warrant
Holder may exercise the right to purchase Shares only in accordance with those
Terms and Conditions. The Warrant shall expire twenty-four months (24) months
after the date of this Agreement and shall be exercisable at $0.30 per share of
Common Stock.

 
3.
Nothing contained herein or in the Terms and Conditions will confer any right
upon the Holder hereof or any other person to subscribe for or purchase any
Shares at any time subsequent to the Expiry Date, and from and after such time,
this Warrant and all rights hereunder will be void and of no value.

 
 

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Confidential
U.S. Accredited Investors Only

 
IN WITNESS WHEREOF, the Company has executed this Warrant Certificate this
_______ day of _______,_______.

PAN AMERICAN GOLDFIELDS LTD.

Per:____________________________________________           
Authorized Signatory

 

 
 

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Confidential
U.S. Accredited Investors Only

APPENDIX A
 
TERMS AND CONDITIONS dated _________________, _______, attached to the
non-transferable Warrants issued by Pan American Goldfields Ltd.
 
SECTION 1   INTERPRETATION
 
1.1           Definitions
 
In these Terms and Conditions, unless there is something in the subject matter
or context inconsistent therewith:
 
 
(a)
“Company” means Pan American Goldfields Ltd. until a successor corporation will
have become such as a result of consolidation, amalgamation or merger with or
into any other corporation or corporations, or as a result of the conveyance or
transfer of all or substantially all of the properties and estates of the
Company as an entirety to any other corporation and thereafter “Company” will
mean such successor corporation.

 
 
(b)
“Company’s Auditors” means an independent firm of accountants duly appointed as
auditors of the Company.

 
 
(c)
“Director” means a director of the Company for the time being, and reference,
without more, to action by the directors means action by the directors of the
Company as a Board, or whenever duly empowered, action by an executive committee
of the Board.

 
 
(d)
“herein,” “hereby” and similar expressions refer to these Terms and Conditions
as the same may be amended or modified from time to time; and the expression
“Article” and “Section,” followed by a number refer to the specified Article or
Section of these Terms and Conditions.

 
 
(e)
“person” means an individual, corporation, partnership, trustee or any
unincorporated organization and words importing persons have a similar meaning.

 
 
(f)
“Shares” means the common shares of the Company as constituted at the date
hereof and any shares resulting from any subdivision or consolidation of the
shares.

 
 
(g)
“Warrant Holders” or “Holders” means the holders of the Warrants.

 
 
(h)
“Warrants” means the warrants of the Company issued and presently authorized and
for the time being outstanding.

 

 
 

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Confidential
U.S. Accredited Investors Only

1.2           Gender
 
Words importing the singular number include the plural and vice versa, and words
importing the masculine gender include the feminine and neuter genders.
 
1.3           Interpretation not affected by Headings
 
The division of these Terms and Conditions into Articles and Sections, and the
insertion of headings are for convenience of reference only and will not affect
the construction or interpretation thereof.
 
1.4           Applicable Law
 
The rights and restrictions attached to the Warrant shall be construed in
accordance with the laws of the State of New York, U.S.A. The Holder, in its
personal or corporate capacity and, if applicable, on behalf of each beneficial
purchaser for whom it is acting, irrevocably agrees to the jurisdiction of the
courts of the State of New York, U.S.A.
 
1.5           Additional Issuances of Securities
 
The Company may at any time and from time to time do further equity or debt
financing and may issue additional Shares, Warrants, convertible securities,
stock options or other similar rights to purchase its capital stock.
 
SECTION 2   ISSUE OF WARRANTS
 
2.1           Issue in substitution for Lost Warrants
 
 
(a)
In case a Warrant becomes mutilated, lost, destroyed or stolen, the Company, at
its discretion, may issue and deliver a new Warrant of like date and tenor as
the one mutilated, lost, destroyed or stolen, in exchange for and in place of
and upon cancellation of such mutilated Warrant, or in lieu of, and in
substitution for such lost, destroyed or stolen Warrant and the substituted
Warrant will be entitled to the benefit hereof and rank equally in accordance
with its terms with all other Warrants issued or to be issued by the Company.

 
 
(b)
The applicant for the issue of a new Warrant pursuant hereto will bear the cost
of the issue thereof and in case of loss, destruction or theft furnish to the
Company such evidence of ownership and of loss, destruction, or theft of the
Warrant so lost, destroyed or stolen as will be satisfactory to the Company in
its discretion and such applicant may also be required to furnish indemnity in
amount and form satisfactory to the Company in its discretion, and will pay the
reasonable charges of the Company in connection therewith.

 

 
 

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U.S. Accredited Investors Only

2.2           Warrant Holder Not a Shareholder
 
The holding of a Warrant will not constitute the Holder thereof as a shareholder
of the Company, nor entitle him to any right or interest in respect thereof
except as the Warrant expressly provided.
 
SECTION 3   NOTICE
 
3.1           Notice to Warrant Holders
 
Any notice required or permitted to be given to the Holders will be in writing
and may be given by prepaid registered post, electronic facsimile transmission
or other means of electronic communication capable of producing a printed copy
to the address of the Holder appearing on the Holder’s Warrant or to such other
address as any Holder may specify by notice in writing to the Company, and any
such notice will be deemed to have been given and received by the Holder to whom
it was addressed if mailed, on the third day following the mailing thereof, if
by facsimile or other electronic communication, on successful transmission, or,
if delivered, on delivery; but if at the time of mailing or between the time of
mailing and the third business day thereafter there is a strike, lockout, or
other labour disturbance affecting postal service, then the notice will not be
effectively given until actually delivered.
 
3.2           Notice to the Company
 
Any notice required or permitted to be given to the Company will be in writing
and may be given by prepaid registered post, electronic facsimile transmission
or other means of electronic communication capable of producing a printed copy
to the address of the Company set forth below or such other address as the
Company may specify by notice in writing to the Holder, and any such notice will
be deemed to have been given and received by the Company to whom it was
addressed if mailed, on the third day following the mailing thereof, if by
facsimile or other electronic communication, on successful transmission, or, if
delivered, on delivery; but if at the time of mailing or between the time of
mailing and the third business day thereafter there is a strike, lockout, or
other labour disturbance affecting postal service, then the notice will not be
effectively given until actually delivered:
 
Pan American Goldfields Ltd.
Mountain View Center
12303 Airport Way, Suite 200
Broomfield, CO. 80021

Attention:  Miguel Di Nanno, President

Fax No. (303) 327 1499
 
with a copy, which shall not constitute notice, to:
 
DLA Piper US LLP
4365 Executive Drive, Suite 1100
San Diego, CA 92121-2133
 

 
Attention: Jeffrey C. Thacker
 
Fax:  +1 (858) 638-5128
 

 
 

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Confidential
U.S. Accredited Investors Only

SECTION 4   EXERCISE OF WARRANTS
 
4.1           Method of Exercise of Warrants
 
The right to purchase Shares conferred by the Warrants may be exercised by the
Holder surrendering the Warrant Certificate representing same, with a duly
completed and executed subscription in the form attached hereto and a bank draft
or certified cheque payable to the Company for the aggregate purchase price
applicable at the time of surrender in respect of the shares subscribed for in
lawful money of the United States of America, to the Company at the address set
forth herein.
 
4.2           Effect of Exercise of Warrants
 
 
(a)
Upon surrender and payment as aforesaid, the Shares so subscribed for will be
deemed to have been issued and such person or persons will be deemed to have
become the Holder or Holders of record of such shares on the date of such
surrender and payment, and such shares will be issued at the subscription price
in effect on the date of such surrender and payment.

 
 
(b)
Within three business days after surrender and payment as aforesaid, the Company
will forthwith cause to be delivered to the person or persons in whose name or
names the Shares so subscribed for are to be issued as specified in such
subscription or mailed to him or them at his or their respective addresses
specified in such subscription, a certificate or certificates for the
appropriate number of Shares not exceeding those which the Warrant Holder is
entitled to purchase pursuant to the Warrant surrendered.

 
4.3           Limitation on Exercise of Warrants
 
The Warrant shall expire twenty-four months (24) months after the date of this
Agreement and shall be exercisable at $0.30 per Share .
 
4.4           Subscription for Less Than Entitlement
 
The Holder of any Warrant may subscribe for and purchase a number of shares less
than the number which he is entitled to purchase pursuant to the surrendered
Warrant. In the event of any purchase of a number of shares less than the number
which can be purchased pursuant to a Warrant, the Holder thereof upon exercise
thereof will in addition be entitled to receive a new Warrant in respect of the
balance of the shares which he was entitled to purchase pursuant to the
surrendered Warrant and which were not then purchased.
 

 
 

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Confidential
U.S. Accredited Investors Only

4.5           Warrants for Fractions of Shares
 
To the extent that the Holder of any Warrant is entitled to receive on the
exercise or partial exercise thereof a fraction of a share, such right may be
exercised in respect of such fraction only in combination with another Warrant
or other Warrants which in the aggregate entitle the Holder to receive a whole
number of such shares.
 
4.6           Expiration of Warrants
 
After the expiration of the period within which a Warrant is exercisable, all
rights thereunder will wholly cease and terminate and such Warrant will be void
and of no effect.
 
4.7           Time of Essence
 
Time will be of the essence hereof.
 
4.8           Subscription Price
 
Each Warrant is exercisable at a price per share (the “Exercise Price”) of U.S.
$0.30. One (1) Warrant and the Exercise Price are required to subscribe for each
share during the term of the Warrants.
 
4.9           Adjustment of Exercise Price
 
The Exercise Price and the number of shares deliverable upon the exercise of the
Warrants will be subject to adjustment in the event and in the manner following:
 
 
(a)
If and whenever the shares at any time outstanding are subdivided into a greater
or consolidated into a lesser number of shares the Exercise Price will be
decreased or increased proportionately as the case may be; upon any such
subdivision or consolidation, the number of shares deliverable upon the exercise
of the Warrants will be increased or decreased proportionately as the case may
be.

 
 
(b)
In case of any capital reorganization or of any reclassification of the capital
of the Company or in the case of the consolidation, merger or amalgamation of
the Company with or into any other Company (hereinafter collectively referred to
as a “Reorganization”), each Warrant will, after such Reorganization, confer the
right to purchase the number of shares or other securities of the Company (or of
the Company’s resulting from such Reorganization) which the Warrant Holder would
have been entitled to upon Reorganization if the Warrant Holder had been a
shareholder at the time of such Reorganization.

 

 
 

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Confidential
U.S. Accredited Investors Only

 
 
(c)
In any such case, if necessary, appropriate adjustments will be made in the
application of the provisions of this Article Four relating to the rights and
interest thereafter of the Holders of the Warrants so that the provisions of
this Article Four will be made applicable as nearly as reasonably possible to
any shares or other securities deliverable after the Reorganization on the
exercise of the Warrants.

 
 
(d)
The subdivision or consolidation of shares at any time outstanding into a
greater or lesser number of shares (whether with or without par value) will not
be deemed to be a Reorganization for the purposes of this clause.

 
 
(e)
The adjustments provided for in this Section are cumulative and will become
effective immediately after the record date or, if no record date is fixed, the
effective date of the event which results in such adjustments.

 
4.10           Determination of Adjustments
 
If any questions will at any time arise with respect to the Exercise Price or
any adjustment provided for in the “Adjustment of Exercise Price” section above,
such questions will be conclusively determined by the Company’s Auditors, or, if
they decline to so act, any other firm of certified public accountants in the
U.S. that the Company may designate and who will have access to all appropriate
records, and such determination will be binding upon the Company and the Holders
of the Warrants.
 
SECTION 5   WAIVER OF CERTAIN RIGHTS
 
5.1           Immunity of Shareholders, etc.
 
The Warrant Holder, as part of the consideration for the issue of the Warrants,
waives and will not have any right, cause of action or remedy now or hereafter
existing in any jurisdiction against any past, present or future incorporator,
shareholder, Director or officer (as such) of the Company for the issue of
shares pursuant to any Warrant or on any covenant, agreement, representation or
warranty by the Company herein contained or in the Warrant.
 

 
 

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Confidential
U.S. Accredited Investors Only

5.2           Legends
 
The Subscriber hereby acknowledges that upon the issuance thereof, and until
such time as the same is no longer required under the applicable securities laws
and regulations, the certificates representing any of the Shares issued upon
exercise hereof will bear appropriate legends required by law, including:
 

“THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED. THERE HAS BEEN NO REGISTRATION UNDER THE SECURITIES LAWS OF ANY STATE
OR OTHER JURISDICTION. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD
TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS, OR AN OPINION OF COUNSEL, IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR APPLICABLE STATE SECURITIES
LAWS.

SECTION 6   MODIFICATION OF TERMS, ETC.
 
6.1           Modification of Terms and Conditions for Certain Purposes
 
From time to time the Company may, subject to the provisions of these presents,
and it shall, when so directed by these presents, modify the terms and
conditions hereof, for any one or more of any of the following purposes:
 
 
(a)
making such provisions not inconsistent herewith as may be necessary or
desirable with respect to matters or questions arising hereunder or for the
purpose of obtaining a listing or quotation of the Warrants on any stock
exchange or quotation system;

 
 
(b)
adding to or altering the provisions hereof in respect of the registration and
transfer of Warrants; making provisions for the exchange of Warrants of
different denominations; and making any modification in the form of the Warrants
which does not affect the substance thereof;

 

 
 

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Confidential
U.S. Accredited Investors Only

 
 
(c)
for any other purpose not inconsistent with the terms hereof, including the
correction or recertification of any ambiguities, defective provisions, errors
or omissions herein; and

 
 
(d)
to evidence any successions of any corporation and the assumption of any
successor of the covenants of the Company herein and in the Warrants contained
as provided herein.

 
6.2           Warrants Not Transferable
 
The Warrant and all rights attached to it are not transferable.
 
6.3           Covenants of the Company
 
The Company will reserve and there will remain unissued out of its authorized
capital stock a sufficient number of Shares to satisfy the rights of purchase
provided for in the Warrants should the holders of all the Warrants from time to
time outstanding determine to exercise such rights in respect of all Shares why
they are or may be entitled to purchase pursuant thereto.
 

 
DATED as of the date first above written in these Terms and Conditions.
 
Pan American Goldfields Ltd.

Per: ___________________________________________          
Authorized Signatory