Exhibit 10.1

 

PAN AMERICAN GOLDFIELDS LTD.

 

TRANSITION AND SETTLEMENT AGREEMENT

 

This Transition and Settlement Agreement (this “Agreement”) is effective as of
June 24, 2013 (the “Effective Date”) by and among Pan American Goldfields Ltd.
(“Pan American”), Messrs. Neil Maedel, Hernan Celorrio, George Young, Randy
Buchamer and Gary Parkison (collectively, the “Departing Directors”), Vortex
Capital Ltd., Vortex Capital Global Precious Metals Fund, Vortex Capital Asset
Management Limited (collectively, the “Vortex Group”), and each of
Messrs. Laurent Deydier, Balbir Bindra, William R. Majcher, Emilio Alvarez,
Bruno Le Barber (the “Vortex Nominees”, and collectively with the Vortex Group,
the “Vortex Parties”).  Pan American, each of the Departing Directors, each of
the Vortex Parties, and Mr. Touche shall each be referred to herein as a “Party”
and collectively, as the “Parties.”

 

RECITALS

 

Pan American and the Vortex Group jointly submitted an Order Setting Meeting
Date and Quorum Rule (the “Order”), which the Delaware Court of Chancery entered
on March 1, 2013.

 

Under the Order, the Parties agreed that Pan American would hold an annual
meeting of stockholders on June 17, 2013 (the “Annual Meeting”) and that all
Board seats would be up for election at the Annual Meeting.

 

On March 19, 2013, the Vortex Group submitted a Notice of Stockholder Nomination
(the “Notice”) to Pan American in which it nominated five (5) directors.

 

On May 20, 2013, Pan American filed its definitive proxy statement with the
Securities and Exchange Commission (“SEC”) in which Pan American nominated the
following seven (7) directors: (i) George Young and Hernan Celorrio to hold
office until the 2014 Annual Meeting, (ii) Randy Buchamer, Ricardo Ernesto
Marcos Touche and Robert Knight to hold office until the 2015 Annual Meeting,
and (iii) Gary Parkison and Neil Maedel to hold office until the 2016 Annual
Meeting.

 

On June 11, 2013, counsel for Pan American delivered a letter to the Vortex
Group questioning the sufficiency of the Notice (the “June 11 Letter”).

 

On June 12, 2013, the Vortex Group filed its revised definitive proxy statement
with the SEC in which the Vortex Group nominated the Vortex Nominees as follows
(i) Laurent Deydier to hold office until the 2014 Annual Meeting, (ii) Balbir
Bindra and William R. Majcher to hold office until the 2015 Annual Meeting, and
(iii) Emilio Alvarez and Bruno Le Barber to hold office until the 2016 Annual
Meeting.

 

On June 13, 2013, counsel for the Vortex Group delivered a letter to counsel for
Pan American disagreeing with the allegations set forth in the June 11 Letter
and reasserting the position of the Vortex Group that the Notice was valid.

 

At the Annual Meeting, the following actions occurred: (i) Pan American took the
position that the Vortex Nominees should be excluded from consideration at the
Annual Meeting and (ii) the Vortex Group objected to Pan American’s purported
exclusion and asserted the nomination of the Vortex Nominees was valid and
sufficient.

 

--------------------------------------------------------------------------------

 

IVS Associates, Inc., the independent inspector of elections was asked to
prepare a report of the preliminary results of the voting at the Annual Meeting
(the “IVS Report”).

 

Based on the IVS Report, the following were the six individuals receiving the
most votes from stockholders at the Annual Meeting: Laurent Deydier, Balbir
Bindra, William R. Majcher, Emilio Alvarez, Bruno Le Barber and Ricardo Ernesto
Marcos Touche.

 

The Parties have determined that the interests of Pan American and its
stockholders would be best served at this time by, among other things,
(i) avoiding litigation concerning actions taken by the Parties at the Annual
Meeting and the expense and disruption that may result therefrom,
(ii) determining the composition of the Pan American Board of Directors (the
“Board”) and (iii) setting forth the treatment of the Departing Directors, and
to come to an agreement with respect to these and certain other matters, as
provided in this Agreement

 

AGREEMENT

 

NOW THEREFORE, in consideration of the mutual promises and covenants contained
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Parties hereby agree as
follows:

 

1.                                      Annual Meeting Matters.

 

a.                                                                                                       
Each of the Parties agrees for purposes of this Agreement the Notice will be
deemed valid and the nomination of the Vortex Nominees was submitted for a vote
of stockholders at the Annual Meeting.

 

b.                                                                                                       
Each of the Parties agrees that the six individuals receiving the most votes
from stockholders at the Annual Meeting — Laurent Deydier, Balbir Bindra,
William R. Majcher, Emilio Alvarez, Bruno Le Barber and Ricardo Ernesto Marcos
Touche — were elected to the Board at the Annual Meeting.

 

c.                                                                                                        
Each of the Parties agrees for purposes of this Agreement the votes reported at
the Annual Meeting are as set forth in the IVS Report dated June 19, 2013.

 

2.                                      Board Matters.

 

a.                                                                                                       
Board Composition:  Each of the Parties agrees that the Board shall consist of
Laurent Deydier, Balbir Bindra, William R. Majcher, Emilio Alvarez, Bruno Le
Barber and Ricardo Ernesto Marcos Touche and that such individuals shall be
placed into existing classes of the Board as follows: (i) Laurent Deydier and
Ricardo Ernesto Marcos Touche serving in the class of directors holding office
until Pan American’s 2014 Annual Meeting of stockholders, (ii) Balbir Bindra and
William R. Majcher serving in the class of directors holding office until Pan
American’s 2015 Annual Meeting of stockholders and (iii) Emilio Alvarez and
Bruno Le Barber serving in the class of directors holding office until Pan
American’s 2016 Annual Meeting of stockholders.  Each of the Parties further
agrees that there is one vacancy in the class of directors holding office until
Pan American’s 2015 Annual Meeting of stockholders (collectively, the “New
Board”).

 

b.                                                                                                       
Departing Directors:  Each of the Departing Directors to confirm that they are
no longer members of the Board has agreed to execute and deliver as of the
Effective Date a Resignation Agreement substantially in the form attached hereto
as Exhibit A (the “Resignation Agreement”).

 

2

--------------------------------------------------------------------------------

 

3.                                      Treatment of Departing Directors.  Each
of the Parties agrees to, and to take all actions necessary to: (i) maintain in
effect the Director Indemnification Agreements entered into with the Departing
Directors, (ii) maintain the levels of protection accorded the Departing
Directors under the current exculpation and indemnification provisions of Pan
American’s Certificate of Incorporation or By-Laws and (iii) ensure any
insurance coverage for director and officer liability that Pan American decides
to maintain in its sole discretion following the Effective Date also covers the
Departing Directors.

 

4.                                      Related Party Transactions.  The Company
will, following the Effective Date, take all actions necessary to, make sure
that a committee of independent directors evaluates and approves any potential
transaction involving Pan American and any of its directors, officers,
beneficial holders of more than 5% of its voting securities or any of their
respective affiliates, including, but not limited to, Mario Ayub Touche.

 

5.                                      Consulting Agreement.  Mr. Maedel has
resigned as Executive Chairman as of the Effective Date and agrees to enter into
a Consulting Agreement substantially in the form attached hereto as Exhibit B
(the “Consulting Agreement”), pursuant to which he shall serve as senior advisor
to the Board for the period from the Effective Date until December 31, 2013, for
a monthly advisory fee equal to US$5,000 (the “Advisory Fee”).

 

6.                                      Option and Warrant Exchange and Share
Issuance Agreement.

 

a.                                                                                                       
Pan American and each of the Departing Directors shall enter into an Option and
Warrant Exchange and Share Issuance Agreements substantially in the form
attached hereto as Exhibit C (the “Issuance Agreement”), which shall be
effective as of the Effective Date.

 

b.                                                                                                       
Pan American shall (i) hereby instruct its transfer agent, American Stock
Transfer, to issue the shares issuable pursuant to the Option and Warrant
Exchange and Share Issuance Agreement, and that such shares issuable thereunder
shall be issued pursuant to Rule 4(2), or other applicable exemption, under the
Securities Act of 1933 or rules promulgated thereunder and (ii) take such
actions as are necessary for such shares to be issued to the Departing
Directors.

 

7.                                      Transition Period.

 

a.                                                                                                       
Each of Parties hereto shall reasonably cooperate to smoothly transition
management of Pan American, including without limitation, (a) preservation and
transfer of all corporate documents, (b) transfer of control of the bank
accounts (and all account information) and replacement of authorized
signatories, (c) resignations and appointments of board members and/or legal
representatives of Pan American’s Subsidiaries, (d) identify, pay and collection
payables and receivables, and (e) all such other matters with respect to the
transition of the business reasonably requested by the New Board.

 

b.                                                                                                       
Each of the Parties agrees that Pan American shall file with the SEC a Form 8-K
in a form mutually agreeable to the Parties describing the provisions of this
Agreement and disclosing the vote count of the Annual Meeting.

 

8.                                      Payment of Fees.  Each of Parties agrees
that DLA Piper LLP and MacKenzie Partners, Inc. shall be reimbursed by Pan
American for their outstanding reasonable, documented out-of-pocket fees and
expenses for services rendered for Pan American that were incurred through the
Effective Date, including any expenses that were incurred in connection with the
proxy solicitation and Annual Meeting.  Such amounts, which the Departing
Directors represent and warrant to, are set forth on Schedule I.  Such
reimbursement shall take place in three installments to be paid every two months
over the six months following the Effective Date.

 

3

--------------------------------------------------------------------------------

 

9.                                      Mutual Release.  To the fullest extent
permitted by applicable law (i) Pan American shall forever fully release,
discharge and hold harmless each of the Departing Directors and each of the
Vortex Parties, (ii) each of the Departing Directors shall forever fully
release, discharge and hold harmless Pan American and each of the Vortex
Parties, and (iii) each of the Vortex Parties shall forever fully release,
discharge and hold harmless each of the Departing Directors and Pan American, in
each case from and against any and all known or unknown, present or future,
fixed or contingent claims of any nature whatsoever arising out of actions,
events or omissions occurring on or prior to the Effective Date excluding for
the sake of clarity any claims arising out of the performance of this Agreement,
provided, however, that the releases contemplated by this Section 9 shall not
cover any claims relating to or arising from possible fraud, breach of the duty
of loyalty or willful misconduct.

 

10.                               Covenants Not to Sue.  Each of Pan American,
the Departing Directors and the Vortex Parties further promises and agrees not
to sue any of the other Parties with respect to any claim covered by the release
provisions of this Agreement.

 

11.                               Nondisparagement.  The Parties agree they will
not make any voluntary statements, written or verbal, or cause or encourage
others to make any such statements that defame, disparage or in any way
criticize the reputation, business practices or conduct of any other Party
hereto.

 

12.                               Further Assurance.  The Parties agree to
co-operate, perform all such further acts and things and execute and deliver all
such other agreements, instruments and documents as reasonably necessary to
implement each of the items agreed in this Agreement.

 

13.                               Governing Law.  This Agreement is governed by
Delaware law and all legal proceedings regarding its terms, the Parties rights
hereunder, or any alleged breach, shall be brought exclusively in Delaware, with
each Party agreeing to consent to personal jurisdiction, to waive any defense of
inconvenient forum, to accept service of process via first class mail and
Federal Express and further agreeing to waive trial by jury.  Each of the
Parties agrees that, in the event of a breach or threatened breach of this
Agreement by any other Party, the other Parties shall be entitled, in addition
to any other remedies to which they may be entitled at law, to equitable relief,
including a right to rescind or set aside agreements executed or actions taken
in violation of this Agreement, and an injunction or injunctions, to prevent any
breaches and to enforce specifically this Agreement’s terms and provisions.  In
the event of litigation concerning this Agreement, the prevailing party shall be
entitled to recover its reasonable attorney’s fees and expenses.

 

14.                               Integrated Agreement.  The Parties acknowledge
and agree that no promises or representations were made to them concerning the
subject matter of this Agreement which do not appear written herein and that
this Agreement contains the entire agreement of the Parties on the subject
matter thereof.  The Parties further acknowledge and agree that parol evidence
shall not be required to interpret the intent of the Parties.

 

15.                               Voluntary Execution.  The Parties hereby
acknowledge that they have read and understand this Agreement and that they sign
this Agreement voluntarily and without coercion.

 

16.                               Waiver, Amendment and Modification of
Agreement; Assignment.  The Parties agree that no waiver, amendment or
modification of any of the terms of this Agreement shall be effective unless in
writing and signed by all Parties affected by the waiver, amendment or
modification.  No waiver of any term, condition or default of any term of this
Agreement shall be construed as a waiver of any other term,

 

4

--------------------------------------------------------------------------------

 

condition or default.  The rights and liabilities of the Parties hereto shall
bind and inure to the benefit of their respective successors, heirs, executors
and administrators, as the case may be.

 

17.                               Survival.  Sections 8 through 22 shall survive
termination or expiration of this Agreement.

 

18.                               Drafting.  The Parties agree that this
Agreement shall be construed without regard to the drafter of the same and shall
be construed as though each party to this Agreement participated equally in the
preparation and drafting of this Agreement.

 

19.                               Counterparts.  This Agreement may be signed in
counterparts and said counterparts shall be treated as though signed as one
document.

 

20.                               Attorneys’ Fees.  Each Party shall be
responsible for its own legal fees incurred in connection with the entering into
of this Agreement, provided, however, nothing in this Agreement shall limit the
ability of the Vortex Parties to seek reimbursement from Pan American for its
costs and expenses relating to their proxy solicitation and the Annual Meeting.

 

21.                               Injunctive Relief.  Each Party acknowledges
and agrees that damages will not be an adequate remedy in the event of a breach
of any of the other Party’s obligations under this Agreement.  Each Party
therefore agrees that other Party shall be entitled (without limitation of any
other rights or remedies otherwise available to such Party and without the
necessity of posting a bond) to obtain an injunction from any court of competent
jurisdiction prohibiting the continuance or recurrence of any breach of this
Agreement.

 

22.                               Notice.  Any notices provided hereunder must
be in writing and such notices or any other written communication shall be
deemed effective: (i) upon personal delivery to the party to be notified;
(ii) when sent by confirmed telex or facsimile if sent during normal business
hours of the recipient or, if not sent during normal business hours, then on the
next business day; (iii) three days after having been sent by registered or
certified mail, return receipt requested, postage prepaid; or (iv) one day after
deposit with a nationally recognized overnight courier, specifying next day
delivery, with written verification of receipt.

 

[Remainder of Page Left Intentionally Blank]

 

5

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF this Agreement has been executed as of the date first written
above.

 

 

PAN AMERICAN GOLDFIELDS LTD.

 

 

 

 

 

/s/ Neil Maedel

 

 

Name: Neil Maedel

 

 

Title: Executive Chairman

 

 

 

[Signature Page to Transition and Settlement Agreement]

 

--------------------------------------------------------------------------------

 

VORTEX CAPITAL LTD.

 

 

 

/s/ Emilio Alvarez, /s/ Bruno Le Barber

 

Name:

Emilio Alvarez, Bruno Le Barber

 

Title:

Managing Directors

 

 

 

 

 

VORTEX CAPITAL GLOBAL PRECIOUS METALS FUND

 

 

 

By:

Vortex Capital Asset Management Limited, its investment manager

 

 

 

 

By:

Vortex Capital Ltd., its investment advisor

 

 

 

 

By:

/s/ Emilio Alvarez, /s/ Bruno Le Barber

 

 

Emilio Alvarez, Bruno Le Barber

 

 

Managing Directors

 

 

 

VORTEX CAPITAL ASSET MANAGEMENT LIMITED

 

 

 

By:

Vortex Capital Ltd., its investment advisor

 

 

 

 

By:

/s/ Emilio Alvarez, /s/ Bruno Le Barber

 

 

Emilio Alvarez, Bruno Le Barber

 

 

Managing Directors

 

 

[Signature Page to Transition and Settlement Agreement]

 

--------------------------------------------------------------------------------

 

/s/ Neil Maedel

 

Neil Maedel

 

 

 

/s/ Hernan Celorrio

 

Hernan Celorrio

 

 

 

/s/ George Young

 

George Young

 

 

 

/s/ Randy Buchamer

 

Randy Buchamer

 

 

 

/s/ Gary Parkison

 

Gary Parkison

 

 

[Signature Page to Transition and Settlement Agreement]

 

--------------------------------------------------------------------------------

 

/s/ Laurent Deydier

 

Name: Laurent Deydier

 

 

 

 

 

/s/ Balbir Bindra

 

Name: Balbir Bindra

 

 

 

 

 

/s/ William R. Majcher

 

Name: William R. Majcher

 

 

 

 

 

/s/ Emilio Alvarez

 

Name: Emilio Alvarez

 

 

 

 

 

/s/ Bruno Le Barber

 

Name: Bruno Le Barber

 

 

[Signature Page to Transition and Settlement Agreement]

 

--------------------------------------------------------------------------------

 

Exhibit A
Form of Director Resignation

 

June       , 2013

 

Pan American Goldfields Ltd.
570 Granville Street, Suite 1200
Vancouver, BC

 

Attn: Board of Directors

 

Re: Resignation Notice

 

To the Board of Directors of Pan American Goldfields Ltd.:

 

I hereby resign from the Board of Directors (the “Board”) of Pan American
Goldfields Ltd. (the “Company”), with my resignation to be effective upon the
Board’s acceptance of such resignation.  There were no disagreements between the
Company and me relative to this resignation.

 

I would like to take this opportunity to thank the Company and the other Board
members for the opportunity to serve on the Board.  I also wish you all the
success going forward.

 

 

Sincerely,

 

 

 

 

 

 

 

[Name]

 

--------------------------------------------------------------------------------

 

Exhibit B
Form of Consulting Agreement

 

--------------------------------------------------------------------------------

 

Exhibit C
Form of Option and Warrant Exchange and Share Issuance Agreements

 

--------------------------------------------------------------------------------

 

Schedule I

Professional Fees

 

1. DLA Piper LLP (US):

 

$

350,000

 

2. MacKenzie Partners, Inc.:

 

$

100,000

 

 

--------------------------------------------------------------------------------