Document:

Unassociated Document

     

    EXHIBIT
10.1

     

    STOCK
PURCHASE AGREEMENT

     

    

    STOCK
PURCHASE AGREEMENT, dated as of September 29, 2009 (this “Agreement”), between
the parties listed on Exhibit A (each, a
“Seller” and
together, the “Sellers”) and Wits
Basin Precious Minerals Inc. (the “Purchaser”).

     

    

    BACKGROUND

     

    A.           Each
Seller is the record holder of the shares of common stock, $0.001 par value per
share, of Princeton Acquisitions, Inc., a Colorado corporation (the “Company”), set forth
next to such Sellers name on Exhibit A (the “Shares”), which
Shares collectively total 1,383,543 shares of the Company’s common stock and
which represent approximately 81% of the issued and outstanding capital stock as
of the date hereof calculated on a fully diluted basis pursuant to the terms
hereof.

     

    B.           On
September 11, 2009, the Company entered into a share exchange agreement with
Hunter Bates Mining Corporation, a Minnesota corporation (“Hunter Bates”), and
certain shareholders of Hunter Bates (the “Share Exchange
Agreement”), pursuant to which Hunter Bates’ shareholders are exchanging
all of the issued and outstanding stock of Hunter Bates for newly issued shares
of the Company’s capital stock on a one-for-one basis, resulting in the
shareholders of Hunter Bates holding approximately 99% of the issued and
outstanding capital stock of the Company, on a fully diluted basis, immediately
following effectiveness of the share exchange (the “Share
Exchange”).

     

    C.           As
a condition precedent to the completion of the Share Exchange, the Purchasers
desire to purchase the Shares from the Sellers, and the Sellers desire to sell
the Shares to the Purchasers, on the terms and conditions set forth
below.

     

    NOW, THEREFORE, in consideration of the
premises and of the mutual promises set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Purchasers and the Sellers hereby agree as follows:

     

    AGREEMENT

     

    1.           Purchase and
Sale.

     

    The
Sellers shall sell, transfer, convey and deliver unto the Purchasers the Shares
and the Purchasers shall acquire and purchase from the Sellers the
Shares.

     

    2.           Purchase
Price.

     

    (a)           General.  The
purchase price (the “Purchase Price”) for
the Shares, in the aggregate, is Two Hundred and Sixty-Two Thousand Five Hundred
Dollars ($262,500.00) payable as specified in this Section 2
subject to the other terms and conditions of this Agreement.

     

    (b)           Cash
Deposit.  Pursuant to the terms of that certain Letter of
Intent dated July 13, 2009 by and between the Purchaser and the Company (the
“LOI”), the Purchaser made a cash deposit into the trust account of the Law
Office of Gary Agron (“Agron”), counsel for
the Sellers, in the amount of Forty Thousand Dollars ($40,000.00) (the “Cash Deposit”) which
shall be fully credited against the Purchase Price at the Closing (as defined
below).

     

    
      
         

      

      
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    (c)           Adjustment for Outstanding
Liabilities.  In the event that the Company shall have any
liability (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due), including any liability for
taxes (“Liability”), as of
the Closing, at Purchaser’s option, the portion of the Purchase Price payable at
the Closing shall be reduced on a dollar for dollar basis by the amount of such
Liability.

     

    3.           The
Closing.

     

    (a)           General.  The
closing of the transactions contemplated by this Agreement (the “Closing”) shall take
place by exchange of documents among the parties by fax or courier, as
appropriate, following the satisfaction or waiver of all conditions to the
obligations of the parties to consummate the transactions contemplated hereby
(other than conditions with respect to actions the respective parties will take
at the Closing itself) on September 29, 2009, the closing date of the Share
Exchange Agreement (the “Closing
Date”).

     

    (b)           Deliveries on Closing
Date.

     

    (i)           On
the Closing Date, the Sellers shall deliver (or cause to be delivered) to the
Purchasers:

     

    (A)           Certificates
evidencing all of the Shares together with duly executed, medallion-guaranteed
stock powers with respect thereto; and

     

    (B)           Releases
in form and substance satisfactory to the Purchaser signed by the Sellers, and
by each officer and director of the Company.

     

    (ii)           On
the Closing Date, the Purchaser shall deliver by Federal funds wire transfer,
the Purchase Price less the Cash Deposit (and less any Liability, if applicable)
to the Sellers.

     

    4.           Representations and
Warranties of Seller.  Each Seller jointly and severally
represents and warrants to the Purchaser that:

     

    (a)           The
Seller is the record owner of the number of Shares set forth next to such
Seller’s name on Exhibit A, free and clear of all liens, claims, charges,
security interests, and encumbrances of any kind whatsoever.  The
Seller has sole control over such Shares or sole discretionary authority over
any account in which they are held.

     

    (b)           The
Seller has not, since acquiring the Shares to be sold by such Seller hereunder,
ever granted to any person an option or right to purchase or otherwise acquire
such Shares, by contract of sale or otherwise, nor had any “short position in”
with respect to such Shares.  The Seller has never effected nor
attempted to effect any distribution or public offering of such
Shares.

     

    (c)           The
Seller has full right, power and authority to execute, deliver and perform this
Agreement and to carry out the transactions contemplated hereby.  The
execution and delivery of this Agreement by the Seller and the consummation by
Seller of the transactions contemplated hereby have been duly authorized by all
necessary corporate action on the part of the Seller and no further action is
required by the Seller in connection therewith.  This Agreement has
been duly and validly executed and delivered by the Seller and constitutes a
valid, binding obligation of the Seller; enforceable against the Seller in
accordance with its terms (except as such enforceability may be limited by
applicable bankruptcy and similar laws affecting the enforcement of creditors’
rights generally and to general equitable principles).

     

    
      
         

      

      
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    (d)           The
Seller has, in connection with the transactions contemplated hereby and all
aspects thereof, dealt directly with the Purchaser and has no arrangement or
understanding with or obligation to any broker (except with respect to
ministerial functions, if any) or other intermediary that would result in the
payment of a brokerage fee or other similar remuneration by anyone other than
the Seller except as set forth on Schedule 4(d) hereof.

     

    (e)           Since
November 1, 2007, the Company has filed or furnished (i) all reports, schedules,
forms, statements, prospectuses and other documents required to be filed with,
or furnished to, the Securities and Exchange Commission (the “SEC”) by the
Company (all such documents, as amended or supplemented, are referred to
collectively as, the “Company SEC Documents”) and (ii) all certifications and
statements required by (x) Rule 13a-14 or 15d-14 under the Exchange Act, or (y)
18 U.S.C. §1350 (Section 906 of the Sarbanes-Oxley act of 2002) with respect to
any applicable Company SEC Document (collectively, the “SOX
Certifications”).  The Company has made available to the Purchaser all
SOX Certifications and comment letters received by the Company from the staff of
the SEC and all responses to such comment letters by or on behalf of the
Company.  Since November 1, 2007, the Company complied in all respects
with its SEC filing obligations under the Securities Exchange Act of 1934 (the
“Exchange Act”) and the Securities Act of 1933 (the “Securities
Act”).  Each of the audited financial statements and related schedules
and notes thereto and unaudited interim financial statements of the Company
(collectively, the “Company Financial Statements”) contained in the Company SEC
Documents (or incorporated therein by reference) were prepared in accordance
with United States generally accepted accounting principles applied on a
consistent basis (“GAAP”) (except in the case of interim unaudited financial
statements) except as noted therein, and fairly present in all respects the
consolidated financial position of the Company and its consolidated subsidiaries
as of the dates thereof and the consolidated results of their operations, cash
flows and changes in stockholders’ equity for the periods then ended, subject
(in the case of interim unaudited financial statements) to normal year-end audit
adjustments (the effect of which will not, individually or in the aggregate, be
adverse) and, such financial statements complied as to form as of their
respective dates in all respects with applicable rules and regulations of the
SEC.  The financial statements referred to herein reflect the
consistent application of such accounting principles throughout the periods
involved, except as disclosed in the notes to such financial
statements.  No financial statements of any person not already
included in such financial statements are required by GAAP to be included in the
consolidated financial statements of the Company.  As of their
respective dates, each Company SEC Document was prepared in accordance with and
complied with the requirements of the Securities Act or the Exchange Act, as
applicable, and the rules and regulations thereunder, and the Company SEC
Documents (including all financial statements included therein and all exhibits
and schedules thereto and all documents incorporated by reference therein) did
not, as of the date of effectiveness in the case of a registration statement,
the date of mailing in the case of a proxy or information statement and the date
of filing in the case of other Company SEC Documents, contain any untrue
statement of a fact or omit to state a fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading.  Neither the Company nor,
to the Seller’s knowledge, any of the Company’s officers has received notice
from the SEC or any other governmental authority questioning or challenging the
accuracy, completeness, content, form or manner of filing or furnishing of the
SOX Certifications.

     

    (f)           Since
July 1, 2003, and to the best knowledge of Seller prior to July 1, 2003, the
Company has timely filed, or has caused to be timely filed on its behalf, all
tax returns required to be filed by it, and all such tax returns are true,
complete and accurate, except to the extent any failure to file, any delinquency
in filing or any inaccuracies in any filed tax returns, individually or in the
aggregate, have not had and would not reasonably be expected to have a material
adverse effect to the Company.  All taxes shown to be due on such tax
returns, or otherwise owed, and all assessments and penalties due, have been
timely paid, except to the extent that any failure to pay, individually or in
the aggregate, has not had and would not reasonably be expected to have a
material adverse effect to the Company.  All such tax returns were
complete and correct in all respects as filed, and no claims have been assessed
with respect to such returns.  There are no present, pending, or
threatened audit, investigations, assessments or disputes as to taxes of any
nature payable by the Company or any of its subsidiaries, nor any tax liens
whether existing or inchoate on any of the assets of the Company or any of its
subsidiaries, except for current year taxes not presently due and
payable.  No IRS or foreign, state, county or local tax audit is
currently in progress.  Neither the Company nor any of its
subsidiaries has waived the expiration of the statute of limitations with
respect to any taxes.  There are no outstanding requests by the
Company or any of its subsidiaries for any extension of time within which to
file any tax return or to pay taxes shown to be due on any tax
return.

     

    
      
         

      

      
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    (g)           All
Liabilities of the Company have been paid off or otherwise satisfied at or prior
to the Closing, and shall in no event become the Liability of the Purchaser or
remain the Liabilities of the Company following the Closing.

     

    (h)           There
is no legal, administrative, investigatory, regulatory or similar action, suit,
claim or proceeding which is pending or, to any Seller’s knowledge, threatened
against the Company.

     

    (i)           Since
March 31, 2009, there has not been any event or condition of any character which
has adversely affected, or may be expected to adversely affect, the Company’s
business or prospects, including, but not limited to any adverse change in the
condition, assets, liabilities (existing or contingent) or business of the
Company from that shown in the financial statements of the Company included in
its quarterly report on Form 10-QSB filed for the quarter ended March 31,
2009.

     

    5.           Representations and
Warranties of the Purchaser.

     

    The
Purchaser represents and warrants to each Seller that:

     

    (a)           The
Purchaser has the full right, power and authority to execute, deliver and
perform this Agreement and to carry out the transactions contemplated
hereby.  The execution and delivery of this Agreement by the Purchaser
and the consummation by the Purchaser of the transactions contemplated hereby
have been duly authorized by all necessary corporate action on the part of the
Purchaser and no further action is required by the Purchaser in connection
therewith.  This Agreement has been duly and validly executed by the
Purchaser and constitutes a valid obligation of the Purchaser, is legally
binding and is enforceable against the Purchaser in accordance with its terms
(except as such enforceability may be limited by applicable bankruptcy and
similar laws affecting the enforcement of creditors’ rights generally and to
general equitable principles).

     

    (b)           The
Purchaser is acquiring the Shares for its own account (and not for the account
of others) for investment and not with a view to the distribution or resale
thereof and has reviewed copies of such documents and other information as the
Purchaser has deemed necessary in order to make an informed investment decision
with respect to its purchase of the Shares.

     

    (c)           The
Purchaser recognizes that investments in the Company involve substantial risks,
including the risks described in the Company’s filings with the Securities and
Exchange Commission.  The Purchaser has taken full cognizance of, and
understands, such risks and has obtained sufficient information to evaluate the
merits and risks of an investment in the Company and the acquisition of the
Shares.

     

    
      
         

      

      
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    (d)           The
Purchaser understands that the Shares being sold to the Purchaser may have
restrictive legends on the certificates and that such Shares may not be sold,
transferred or otherwise disposed of without registration under the Securities
Act of 1933, as amended (the “Securities Act”) and the rules and
regulations promulgated thereunder or the availability of an exemption
therefrom.

     

    (e)           The
Purchaser is not currently or and has never been an “affiliate” of the Company
(as such term is defined by Rule 144 as promulgated under the Securities
Act).  The Purchaser is aware that the Sellers are affiliates of the
Company and that the Shares are restricted in accordance with Rule
144.  The Purchaser also understands that the exemption provided by
Rule 144 under the Securities Act may not be available because of the conditions
and limitations of Rule 144, and that in the absence of the availability of Rule
144, any disposition by the Purchaser of any portion of the Shares will require
that such Shares be registered or be disposed of in compliance with some other
exemption under the Securities Act.

     

    (f)           The
Purchaser is an “Accredited Investor” as such term is defined under Rule 501(a)
of Regulation D as promulgated under the Securities Act.  The
Purchaser is able to bear the substantial economic risks of the Purchaser’s
investment in the Company and the purchase of securities of the Company in that,
among other factors, the Purchaser can afford to hold securities of the Company
for an indefinite period and can afford a complete loss of the Purchaser’s
investment in the Company.

     

    (g)           The
Purchaser has in connection with the transactions contemplated hereby and all
aspects thereof dealt directly with the Sellers and has no arrangement or
understanding with or obligation to any broker (except with respect to
ministerial functions, if any) or other intermediary.

     

    (h)           The
Purchaser understands, acknowledges and agrees that the offering and sale of the
Shares to the Purchaser has not been registered under the Securities Act or
under any state securities laws or regulations and that the Shares are being
offered and sold to it in reliance on an exemption from the registration
requirements of United States federal and state securities laws under Regulation
D promulgated under the Securities Act and that the Company is relying upon the
truth and accuracy of the representations, warranties, agreements,
acknowledgments and understandings of the Purchaser set forth herein in order to
determine the applicability of such exemptions and the suitability of the
Purchaser to acquire the Shares.

     

    6.           Survival;
Indemnification.

     

    (a)           The
Purchaser covenants that its representations and warranties contained herein
shall be true in all respects as of the Closing date of the sale of the Shares
pursuant to this Agreement.  All representations and warranties and
other agreements made by the Purchaser in this Agreement or pursuant hereto
shall survive the Closing date.

     

    (b)           The
Sellers covenant that (i) their representations and warranties contained herein
shall be true in all respects as of the Closing date of the sale of the Shares
pursuant to this Agreement and (ii) that the representations and warranties of
the Company contained in the Share Exchange Agreement shall be true in all
respects as of the Closing Date (as defined in the Share Exchange
Agreement).  All representations and warranties and other agreements
made by the Sellers in this Agreement or the Share Exchange Agreement shall
survive the Closing date.

     

    
      
         

      

      
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    (c)           Subject
to the provisions of this Section (c), the Sellers will, jointly and severally,
indemnify, defend and hold the Purchaser and its directors, officers,
shareholders, members, partners, employees and agents (each, a “Purchaser
Party”) harmless from any and all losses, liabilities, obligations, claims,
contingencies, damages, costs and expenses, including all judgments, amounts
paid in settlements, court costs and reasonable attorneys’ fees and costs of
investigation that any such Purchaser Party may suffer or incur as a result of
or relating to any breach of any of the representations, warranties, covenants
or agreements made by the Sellers in this Agreement or in the related
documents.  If any action shall be brought against any Purchaser Party
in respect of which indemnity may be sought pursuant to this Agreement, such
Purchaser Party shall promptly notify the Sellers in writing, and the Sellers
shall have the right to assume the defense thereof with counsel of its own
choosing.  Any Purchaser Party shall have the right to employ separate
counsel in any such action and participate in the defense thereof, but the fees
and expenses of such counsel shall be at the expense of such Purchaser Party
except to the extent that (i) the employment thereof has been specifically
authorized by the Sellers in writing, (ii) the Sellers have failed after a
reasonable period of time to assume such defense and to employ counsel or (iii)
in such action there is, in the reasonable opinion of such separate counsel, a
material conflict on any material issue between the position of the Sellers and
the position of such Purchaser Party.  The Sellers will not be liable
to any Purchaser Party under this Agreement (i) for any settlement by a
Purchaser Party effected without the Sellers’ prior written consent, which shall
not be unreasonably withheld or delayed; or (ii) to the extent, but only to the
extent that a loss, claim, damage or liability is attributable to any Purchaser
Party’s breach of any of the representations, warranties, covenants or
agreements made by the Purchaser in this Agreement or in the other related
documents.

     

    7.           Additional Action.
Each party shall, upon the request of the other, from time to time, execute and
deliver promptly to such other party all instruments and documents of further
assurances or otherwise and will do any and all such acts and things as may be
reasonably required to carry out the obligations of such party hereunder and to
consummate the transactions contemplated hereby.

     

    8.           Successors and
Assigns.  This Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and
assigns.  Nothing expressed or referred to in this Agreement will be
construed to give any person other than the parties to this Agreement any legal
or equitable right, remedy or claim under or with respect to this Agreement or
any provision of this Agreement, except such rights as shall inure to a
successor or permitted assignee pursuant to hereto.

     

    9.           Governing Law; Submission to
Jurisdiction.  The laws of the State of Minnesota shall in all
respects govern this Agreement without giving effect to the principles of
conflicts of law thereof.  Any dispute with respect to the
interpretation of this Agreement or the rights and obligations of the parties
shall exclusively be brought in a proceeding in the United States District Court
for the District of Minnesota, or if such court does not have subject matter
jurisdiction then in the district courts in the State of Minnesota, County of
Hennepin.  Each of the parties accepts and consents for itself and its
property, generally and unconditionally to the exclusive jurisdiction of such
courts and waives the right to object to the jurisdiction or venue of either of
such courts and waives the right to claim that such courts are inconvenient
forums.  Each of the parties specifically states that this Agreement
and any disputes as to their meaning or the rights and obligations of the
parties shall not be subject to arbitration.

     

    10.           Entire Agreement;
Amendment.  This Agreement and the Share Exchange Agreement
constitute the entire arrangement between the parties with respect to the Shares
and supersede all prior agreements, whether written or oral, between the parties
with respect to is subject matter.  The Agreement cannot be changed,
modified, discharged or terminated except by a writing signed by the party
against whom enforcement of any change, modification, discharge or termination
is sought.

     

    
      
         

      

      
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    11.           Waiver; Remedies
Cumulative.  The rights and remedies of the parties to this
Agreement are cumulative and not alternative.  Neither any failure nor
any delay by any party in exercising any right, power or privilege under this
Agreement or any of the documents referred to in this Agreement will operate as
a waiver of such right, power or privilege, and no single or partial exercise of
any such right, power or privilege will preclude any other or further exercise
of such right, power or privilege or the exercise of any other right, power or
privilege.  To the maximum extent permitted by applicable law, (a) no
claim or right arising out of this Agreement or any of the documents referred to
in this Agreement can be discharged by one party, in whole or in part, by a
waiver or renunciation of the claim or right unless in writing signed by the
party with such claim or right; (b) no waiver that may be given by a party will
be applicable except in the specific instance for which it is given; and (c) no
notice to or demand on one party will be deemed to be a waiver of any obligation
of that party or of the right of the party giving such notice or demand to take
further action without notice or demand as provided in this Agreement or the
documents referred to in this Agreement.

     

    12.           Assignment.  The
Purchaser may at any time assign its rights and obligations under this Agreement
to persons or entities affiliated with the Purchaser.  The Sellers
shall be required to honor any such assignment only after receiving notice
thereof from the Purchaser.

     

    13.           Notices.  All
notices, requests, demands, claims, and other communications hereunder will be
in writing.  Any notice, request, demand, claim, or other
communication hereunder shall be deemed duly given if (and then two business
days after) it is sent by registered or certified mail, return receipt
requested, postage prepaid, and addressed to the intended recipient as set forth
below:

     

    If to the
Sellers:

     

    Attn:  Attn:  Timothy Brasel

    Princeton
Acquisitions, Inc.

    2560 West
Main Street, Ste 200

    Littleton,
Colorado 80120

    Tel:  (303)
794-9450

    Fax:  (303)
794-9457

    

    with a
copy to:

     

    Law
Office of Gary Agron

    5445 DTC
Parkway, Suite 520

    Greenwood
Village, Colorado 80111

    Fax:  (303)
770-7257

    

    If to the
Purchaser:

     

    Wits
Basin Precious Minerals Inc.

    80 South
Eighth Street, Suite 900

    Minneapolis,
MN 55402

    Attention:  Stephen
D. King

    Fax:  (612)
395-5276

    

    with a
copy to:

     

    Maslon
Edelman Borman & Brand, LLP

    3300
Wells Fargo Center

    90 South
Seventh Street

    Minneapolis,
MN 55402-4140

    Attention:  Ranga
Nutakki

    Fax:  (612)
642-8311

    

    
      
         

      

      
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    14.           Captions.  The
captions used in this Agreement are for convenience only and shall not be deemed
as, or construed as, a part of this Agreement.

     

    15.           Counterparts; Facsimile
Execution.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which shall
constitute one and the same instrument.  Facsimile execution and
delivery of this Agreement is legal, valid and binding for all
purposes.

     

    16.           Waiver of Jury
Trial.  Each party hereby waives, to the fullest extent
permitted by law, any right it may have to a trial by jury in respect to any
proceeding directly or indirectly arising out of, under or in connection with
this Agreement.

     

    17.           Severability.  If
any term or other provision of this Agreement is invalid, illegal or incapable
of being enforced by any rule of law or public policy, all other conditions and
provisions of this Agreement shall nevertheless remain in full force and
effect.  Upon such determination that any term or other provision is
invalid, illegal or incapable of being enforced, the parties shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible to the fullest extent permitted by applicable law
in an acceptable manner to the end that the transactions contemplated hereby are
fulfilled to the extent possible.

     

    18.           Confidentiality.  This
Agreement and the terms thereof shall be kept confidential and not disclosed to
any person or party (except the respective attorneys of the parties), except as
may be required by law.

     

    19.           Specific
Performance.  Each of the parties acknowledges and agrees that
the other parties would be damaged irreparably in the event any of the
provisions of this Agreement are not performed in accordance with their specific
terms or otherwise are breached.  Accordingly, each of the parties
agrees that the other parties shall be entitled to an injunction or injunctions
to prevent breaches of the provisions of this Agreement and to enforce
specifically this Agreement and the terms and provisions hereof in any action
instituted in any court of the United States or any state thereof having
jurisdiction over the parties and the matter (subject to the provisions set
forth in Section
9), in addition to any other remedy to which they may be entitled, at law
or in equity.

     

    20.           Incorporation of
Exhibits.  The Exhibits identified in this Agreement are
incorporated herein by reference and made a part hereof.

     

    21.           Expenses.  Each
party shall be responsible for, and pay, its own expenses incurred in connection
with the preparation and negotiation of this Agreement and in connection with
its performance hereunder.

     

    

    [Signature Page
Follows]

     

    
      
         

      

      
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    The
Sellers Signature Page

    

    IN
WITNESS WHEREOF, the undersigned the Sellers has duly executed
this Agreement the date first above written.

     

    
      
        	 	 	 	 
	 	 	LAZZERI
      FAMILY TRUST	 
	 	 	 	 
	
                 

              	
                 

              	/s/ Robert
      Lazzeri	 
	 	 	Name:  
      Robert Lazzeri	 
	 	 	Title:    
      Trustee	 
	 	 	 	 

    

    
      
        
          	 	 	 	 
	 	 	LAZZERI
      EQUITY PARTNERS 401K PLAN	 
	 	 	 	 
	
                   

                	
                   

                	/s/ Robert
      Lazzeri	 
	 	 	Name:  
      Robert Lazzeri	 
	 	 	Title:    
      Trustee	 
	 	 	 	 

      

    

    
      
        
          
            	 	 	 	 
	 	 	EARNCO
      MONEY PURCHASE PROFIT PLAN	 
	 	 	 	 
	
                     

                  	
                     

                  	/s/ Earnest
      Mathis	 
	 	 	Name:  
      Earnest Mathis	 
	 	 	Title:    
      Trustee	 
	 	 	 	 

        

      

      
        
          
            
              
                	 	 	 	 
	 	 	MATHIS
      FAMILY PARTNERS LTD	 
	 	 	 	 
	
                         

                      	
                         

                      	/s/ Earnest
      Mathis	 
	 	 	Name:  
      Earnest Mathis	 
	 	 	Title:    
      General Partner	 
	 	 	 	 

            

          

          
            
              
                
                  
                    	 	 	 	 
	 	 	BLUERIDGE
      CONSULTANTS, INC.
PROFIT SHARING PLAN	 
	 	 	 	 
	
                             

                          	
                             

                          	/s/ Timothy
      Brasel	 
	 	 	Name:  
      Timothy Brasel	 
	 	 	Title:    
      Trustee	 
	 	 	 	 

                

              

              
                
                  
                    
                      
                        	 	 	 	 
	 	 	CHARITABLE
      REMAINDER TRUST OF
TIMOTHY J. BRASEL	 
	 	 	 	 
	
                                 

                              	
                                 

                              	/s/ Timothy
      Brasel	 
	 	 	Name:  
      Timothy Brasel	 
	 	 	Title:    
      Trustee	 
	 	 	 	 

                    

                  

                  
                    
                      
                        
                          
                            	 	 	 	 
	 	 	LA
      MIRAGE TRUST	 
	 	 	 	 
	
                                     

                                  	
                                     

                                  	/s/ Timothy
      Brasel	 
	 	 	Name:  
      Timothy Brasel	 
	 	 	Title:    
      Trustee	 
	 	 	 	 

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
         

      

      
        9

        
          

        

      

      
         

      

    

     

    Purchaser
Signature Page

    

    IN WITNESS WHEREOF, the undersigned
Purchaser has duly
executed this Agreement the date first above written.

     

    
      
        	 	 	 
	 	WITS
      BASIN PRECIOUS MINERALS INC.:	 
	 	 	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Stephen D.
      King	 
	 	 	Name: 
      Stephen D.
      King	 
	 	 	Title:   
      Chief Executive
      Officer	 
	 	 	 	 

      

    

     

    
      
         

      

      
        [Signature
Page to Stock Purchase Agreement]Exhibit 4.1

UNLESS PERMITTED
UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY AND ANY SECURITY
ISSUED ON EXERCISE HEREOF MUST NOT TRADE THE SECURITY BEFORE JULY 20, 2009.

THE SECURITIES
REPRESENTED HEREBY AND THE SECURITES ISSUABLE UPON THE EXERCISE HEREOF HAVE NOT
BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE
“1933 ACT”). UNLESS REGISTERED UNDER THE 1933 ACT, THESE SECURITIES MAY BE
OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B)
OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S UNDER THE 1933 ACT,
(C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER
THE 1933 ACT PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE
WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT
REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE LAWS, AND THE
HOLDER HAS, PRIOR TO SUCH SALE UNDER (C) OR (D) ABOVE, FURNISHED TO THE COMPANY
AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE REASONABLY
SATISFACTORY TO THE COMPANY. DELIVERY OF THIS CERTIFICATE MAY NOT CONSTITUTE
“GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES IN CANADA. THE
SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE SUBJECT OF HEDGING TRANSACTIONS
UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN COMPLIANCE WITH THE 1933 ACT.

THIS WARRANT MAY NOT
BE EXERCISED IN THE UNITED STATES OR BY OR ON BEHALF OF, OR FOR THE ACCOUNT OR
BENEFIT OF, A U.S. PERSON OR PERSON IN THE UNITED STATES UNLESS THIS WARRANT
AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE BEEN REGISTERED
UNDER THE 1933 ACT AND THE APPLICABLE SECURITIES LEGISLATION OF ANY SUCH STATE
OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS IS AVAILABLE. “UNITED
STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933 ACT.

WARRANTS TO PURCHASE 

SHARES OF COMMON STOCK OF PARAMOUNT GOLD AND SILVER CORP.

(a corporation existing under the laws of the State of Delaware)

	
  

 	
  

 	
  

 
	
 Warrant Certificate Number:

 	
  

 	
 Number of Warrants:

 
	
  

 	
  

 	
  

 
	
 09-03-01

 	
  

 	
 12,000,000

 

THIS
IS TO CERTIFY THAT for value received FCMI
FINANCIAL CORPORATION Suite 250, BCE Place, 181 Bay Street, Toronto,
Ontario, M5J 2T3 (the “Warrantholder”)
has the right to purchase in respect of each warrant (“Warrants”) represented by this certificate
or by a replacement certificate (in either case this “Warrant Certificate”), at
any time after September 19, 2009 and until 5:00 p.m. Toronto time, on
March 19, 2013 (the “Expiry Time”)
one fully paid and non-assessable share of common stock, U.S.$0.001 par value
(“Common Shares” and which term
shall include any shares or other securities to be issued in addition thereto
or in substitution or replacement therefor as provided herein) in the capital
of Paramount Gold and Silver Corp. (the “Corporation”),
a corporation incorporated under the laws of the State of Delaware, as
constituted on the date hereof at a purchase price (the purchase price in
effect from time to time being called the “Exercise
Price”) of C$1.05 per Common Share, subject to adjustment as
provided herein.  

The
Corporation agrees that the Common Shares purchased pursuant to the exercise of
the Warrants shall be and be deemed to be issued to the Warrantholder as of the
close of business on the date on which this Warrant Certificate shall have been
surrendered and payment made for such Common Shares as aforesaid.

Nothing
contained herein shall confer any right upon the Warrantholder to subscribe for
or purchase any Common Shares at any time after the Expiry Time and from and after
the Expiry Time the Warrants and all rights under this Warrant Certificate
shall be void and of no value.

The
above provisions are subject to the following:

	
  

 	
  

 
	
 1.

 	
 Exercise: In the event
 that the Warrantholder desires to exercise the right to purchase Common
 Shares conferred hereby, the Warrantholder shall (a) complete to the extent
 possible in the manner indicated and execute a subscription form in the form
 attached as schedule A to this Warrant Certificate, (b) surrender this
 Warrant Certificate to the Corporation in accordance with section 9 hereof,
 and (c) pay the amount payable on the exercise of such Warrants in respect of
 the Common Shares subscribed for by certified cheque, bank draft or money
 order in lawful money of the Canada payable to the Corporation or by
 transmitting same day funds in lawful money of Canada by wire to such account
 as the Corporation shall direct the Warrantholder. Upon such surrender and
 payment as aforesaid, the Warrantholder shall be deemed for all purposes to
 be the holder of record of the number of Common Shares to be so issued and
 the Warrantholder shall be entitled to delivery of a certificate or
 certificates representing such Common Shares and the Corporation shall cause
 such certificate or certificates to be delivered to the Warrantholder at the
 address specified in the subscription form within five business days after
 such surrender and payment as aforesaid. No fractional Common Shares will be
 issuable upon any exercise of the Warrants and the Warrantholder will not be
 entitled to any cash payment or compensation in lieu of a fractional Common
 Share.

 
	
  

 	
  

 
	
 2.

 	
 Partial Exercise: The Warrantholder may from time to time subscribe for and
 purchase any lesser number of Common Shares than the number of Common Shares
 expressed in this Warrant Certificate. In the event that the Warrantholder
 subscribes for and purchases any such lesser number of Common Shares prior to
 the Expiry Time, the Warrantholder shall be entitled to receive a replacement
 certificate representing the unexercised balance of the Warrants.

 
	
  

 	
  

 
	
 3.

 	
 Not a Shareholder: The holding of the Warrants shall not constitute the
 Warrantholder a shareholder of the Corporation nor entitle the Warrantholder
 to any right or interest in respect thereof except as expressly provided in
 this Warrant Certificate.

 
	
  

 	
  

 
	
 4.

 	
 Covenants, Representations and Warranties: The Corporation hereby represents
 and warrants that it is authorized to create and issue the Warrants and
 covenants and agrees that it will cause the Common Shares from time to time
 subscribed for and purchased in the manner provided in this Warrant
 Certificate and the certificate or certificates representing such Common
 Shares to be issued and that, at all times prior to the Expiry Time, it will
 reserve and there will remain unissued a sufficient number of Common Shares
 to satisfy the right of purchase provided for in this Warrant Certificate.

 

- 2 -

	
  

 	
  

 	
  

 	
  

 	
  

 
	
 5.

 	
 Anti-Dilution Protection:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (1)

 	
 Definitions: For the purposes of this section 5, unless there is something in
 the subject matter or context inconsistent therewith, the words and terms
 defined below shall have the respective meanings specified therefor in this
 subsection 5(1):

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (a)

 	
  “Adjustment Period” means
 the period commencing on the date of issue of the Warrants and ending at the
 Expiry Time;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (b)

 	
  “Affiliate” means any
 partner, officer, director or any person directly or indirectly controlling,
 controlled by or under common control with the Warrantholder;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (c)

 	
  “Current Market Price” of
 the Common Shares at any date means the price per share equal to the weighted
 average price at which the Common Shares have traded on the NYSE Alternext
 US, or if the Common Shares are not then listed on the NYSE Alternext US, on
 the The Toronto Stock Exchange or, if the Common Shares are not then listed
 on The Toronto Stock Exchange, on such other Canadian or U.S. stock exchange
 as may be selected by the directors of the Corporation for such purpose or,
 if the Common Shares are not then listed on any Canadian or U.S. stock
 exchange, in the over-the-counter market or the OTC Bulletin Board, during
 the period of any 20 consecutive trading days ending not more than five
 business days before such date; provided that the weighted average price
 shall be determined by dividing the aggregate sale price of all Common Shares
 sold on the said exchange or market, as the case may be, during such 20
 consecutive trading days by the total number of Common Shares so sold; and
 provided further that if the Common Shares are not then listed on any
 Canadian or U.S. stock exchange or traded in the over-the-counter market or
 the OTC Bulletin Board, then the Current Market Price shall be determined by
 a firm of independent chartered accountants selected by the directors of the
 Corporation;

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (d)

 	
  “director” means a director
 of the Corporation for the time being and, unless otherwise specified herein,
 a reference to action “by the directors” means action by the directors of the
 Corporation as a board or, whenever empowered, action by any committee of the
 directors of the Corporation; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (e)

 	
  “trading day” with respect
 to a stock exchange or over-the-counter market means a day on which such
 stock exchange or market is open for business.

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (2)

 	
 Adjustments: The Exercise Price and the number of Common Shares issuable to
 the Warrantholder upon the exercise of the Warrants shall be subject to
 adjustment from time to time in the events and in the manner provided as
 follows:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (a)

 	
 If at any
 time during the Adjustment Period the Corporation shall:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

 	
 fix a record
 date for the issue of, or issue, Common Shares to the holders of all or
 substantially all of the outstanding Common Shares by way of a stock
 dividend;

 

- 3 -

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 fix a record
 date for the distribution to, or make a distribution to, the holders of all
 or substantially all of the outstanding Common Shares payable in Common
 Shares or securities exchangeable for or convertible into Common Shares; 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iii)

 	
 subdivide
 the outstanding Common Shares into a greater number of Common Shares; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iv)

 	
 consolidate
 the outstanding Common Shares into a lesser number of Common Shares,

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (any of such
events in subclauses 5(2)(a)(i), 5(2)(a)(ii), 5(2)(a)(iii) and 5(2)(a)(iv)
above being herein called a “Common Share
Reorganization”), the Exercise Price shall be adjusted on the
earlier of the record date on which holders of Common Shares are determined
for the purposes of the Common Share Reorganization and the effective date of
the Common Share Reorganization to the amount determined by multiplying the
Exercise Price in effect immediately prior to such record date or effective
date, as the case may be, by a fraction: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 A.

 	
 the
 numerator of which shall be the number of Common Shares outstanding on such
 record date or effective date, as the case may be, before giving effect to
 such Common Share Reorganization; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 B.

 	
 the
 denominator of which shall be the number of Common Shares which will be
 outstanding immediately after giving effect to such Common Share
 Reorganization (including in the case of a distribution of securities
 exchangeable for or convertible into Common Shares the number of Common
 Shares that would have been outstanding had such securities been exchanged
 for or converted into Common Shares on such date).

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 To the
 extent that any adjustment in the Exercise Price occurs pursuant to this
 clause 5(2)(a) as a result of the fixing by the Corporation of a record date
 for the distribution of securities exchangeable for or convertible into
 Common Shares, the Exercise Price shall be readjusted immediately after the
 expiry of any relevant exchange or conversion right to the Exercise Price
 which would then be in effect based upon the number of Common Shares actually
 issued and remaining issuable after such expiry and shall be further
 readjusted in such manner upon the expiry of any further such right.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (b)

 	
 If at any
time during the Adjustment Period the Corporation shall fix a record date for
the issue or distribution to the holders of all or substantially all of the
outstanding Common Shares of rights, options or warrants pursuant to which
such holders are entitled, during a period expiring not more than 45 days
after the record date for such issue (such period being the “Rights Period”), to subscribe for or
purchase Common Shares or securities exchangeable for or convertible into
Common Shares at a price per share to the holder (or in the case of
securities exchangeable for or convertible into Common Shares, at an exchange
or conversion price per share) at the date of issue of such securities of
less than 95% of the Current Market Price of the Common Shares on such record
date (any of such events being called a “Rights
Offering”), the Exercise Price shall be adjusted effective
immediately after the record date for such Rights Offering to the amount
determined by multiplying the Exercise Price in effect on such record date by
a fraction:  

 

- 4 -

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

 	
 the
 numerator of which shall be the aggregate of

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 A.

 	
 the number
 of Common Shares outstanding on the record date for the Rights Offering, and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 B.

 	
 the quotient
 determined by dividing

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (1)

 	
 either (a)
 the product of the number of Common Shares offered during the Rights Period
 pursuant to the Rights Offering and the price at which such Common Shares are
 offered, or, (b) the product of the exchange or conversion price of the
 securities so offered and the number of Common Shares for or into which the
 securities offered pursuant to the Rights Offering may be exchanged or
 converted, as the case may be, by 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (2)

 	
 the Current
 Market Price of the Common Shares as of the record date for the Rights
 Offering; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 the
 denominator of which shall be the aggregate of the number of Common Shares
 outstanding on such record date and the number of Common Shares offered
 pursuant to the Rights Offering (including in the case of the issue or
 distribution of securities exchangeable for or convertible into Common Shares
 the number of Common Shares for or into which such securities may be
 exchanged or converted).

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 If by the
 terms of the rights, options, or warrants referred to in this clause 5(2)(b),
 there is more than one purchase, conversion or exchange price per Common
 Share, the aggregate price of the total number of additional Common Shares
 offered for subscription or purchase, or the aggregate conversion or exchange
 price of the convertible or exchangeable securities so offered, shall be
 calculated for purposes of the adjustment on the basis of the lowest
 purchase, conversion or exchange price per Common Share, as the case may be.
 Any Common Shares owned by or held for the account of the Corporation shall
 be deemed not to be outstanding for the purpose of any such calculation. To
 the extent that any adjustment in the Exercise Price occurs pursuant to this
 clause 5(2)(b) as a result of the fixing by the Corporation of a record date
 for the issue or distribution of rights, options or warrants referred to in
 this clause 5(2)(b), the Exercise Price shall be readjusted immediately after
 the expiry of any relevant exchange, conversion or exercise right to the
 Exercise Price which would then be in effect based upon the number of Common
 Shares actually issued and remaining issuable after such expiry and shall be
 further readjusted in such manner upon the expiry of any further such right.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (c)

 	
 If at any
 time during the Adjustment Period the Corporation shall fix a record date for
 the issue or distribution to the holders of all or substantially all of the
 outstanding Common Shares of:

 

- 5 -

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

 	
 shares of
 the Corporation of any class other than Common Shares;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 rights,
 options or warrants to acquire Common Shares or securities exchangeable for
 or convertible into Common Shares (other than rights, options or warrants
 pursuant to which holders of Common Shares are entitled, during a period
 expiring not more than 45 days after the record date for such issue, to
 subscribe for or purchase Common Shares or securities exchangeable for or
 convertible into Common Shares at a price per share (or in the case of
 securities exchangeable for or convertible into Common Shares at an exchange
 or conversion price per share) at the date of issue of such securities to the
 holder of at least 95% of the Current Market Price of the Common Shares on such
 record date);

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iii)

 	
 evidences of
 indebtedness of the Corporation; or

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iv)

 	
 any property
 or assets of the Corporation;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 and if such
issue or distribution does not constitute a Common Share Reorganization or a
Rights Offering (any of such non-excluded events being herein called a “Special Distribution”), the Exercise
Price shall be adjusted effective immediately after the record date for the
Special Distribution to the amount determined by multiplying the Exercise
Price in effect on the record date for the Special Distribution by a
fraction: 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 A.

 	
 the
 numerator of which shall be the difference between

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (1)

 	
 the product
 of the number of Common Shares outstanding on such record date and the
 Current Market Price of the Common Shares on such record date, and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
 (2)

 	
 the fair
 value, as determined by the directors of the Corporation, to the holders of
 Common Shares of the shares, rights, options, warrants, evidences of
 indebtedness or property or assets to be issued or distributed in the Special
 Distribution, and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 B.

 	
 the denominator
 of which shall be the product obtained by multiplying the number of Common
 Shares outstanding on such record date by the Current Market Price of the
 Common Shares on such record date.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Any Common
 Shares owned by or held for the account of the Corporation shall be deemed
 not to be outstanding for the purpose of such calculation. To the extent that
 any adjustment in the Exercise Price occurs pursuant to this clause 5(2)(c)
 as a result of the fixing by the Corporation of a record date for the issue or
 distribution of rights, options or warrants to acquire Common Shares or
 securities exchangeable for or convertible into Common Shares referred to in
 this clause 5(2)(c), the Exercise Price shall be readjusted immediately after
 the expiry of any relevant exercise, exchange or conversion right to the
 amount which would then be in effect based upon the number of Common Shares
 issued and remaining issuable after such expiry and shall be further
 readjusted in such manner upon the expiry of any further such right.

 

- 6 -

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (d)

 	
 If at any
 time during the Adjustment Period there shall occur:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (i)

 	
 a
 reclassification or redesignation of the Common Shares, a change of the
 Common Shares into other shares or securities or any other capital
 reorganization involving the Common Shares other than a Common Share
 Reorganization;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (ii)

 	
 a
 consolidation, amalgamation or merger of the Corporation with or into another
 body corporate which results in a reclassification or redesignation of the
 Common Shares or a change of the Common Shares into other shares or
 securities;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (iii)

 	
 the transfer
 of the undertaking or assets of the Corporation as an entirety or
 substantially as an entirety to another corporation or entity;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (any of such
events being called a “Capital
Reorganization”), after the effective date of the Capital
Reorganization the Warrantholder shall be entitled to receive, and shall
accept, for the same aggregate consideration, upon exercise of the Warrants,
in lieu of the number of Common Shares to which the Warrantholder was
theretofor entitled upon the exercise of the Warrants, the kind and aggregate
number of shares and other securities or property resulting from the Capital
Reorganization which the Warrantholder would have been entitled to receive as
a result of the Capital Reorganization if, on the effective date thereof, the
Warrantholder had been the registered holder of the number of Common Shares
which the Warrantholders was theretofore entitled to purchase or receive upon
the exercise of the Warrants. If necessary, as a result of any such Capital
Reorganization, appropriate adjustments shall be made in the application of
the provisions of this Warrant Certificate with respect to the rights and
interests thereafter of the Warrantholder to the end that the provisions
shall thereafter correspondingly be made applicable as nearly as may
reasonably be possible in relation to any shares or other securities or
property thereafter deliverable upon the exercise of the Warrants. The
Corporation shall not effect any Capital Reorganization unless prior to the
consummation thereof, the successor entity resulting from such Capital
Reorganization that is the issuer of the other shares or securities into
which the Common Shares are changed (if other than the Corporation), or that
acquires the undertaking or assets of the Corporation as an entirety or
substantially as an entirety, as the case may be, assumes by written
instrument (in form and substance satisfactory to the Warrantholder) the
obligation to deliver to the Warrantholder such shares of stock, securities
or assets as, in accordance with the foregoing provisions, the Warrantholder
may be entitled to acquire. 

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (e)

 	
 If at any
 time during the Adjustment Period any adjustment or readjustment in the
 Exercise Price shall occur pursuant to the provisions of clause 5(2)(a),
 5(2)(b) or 5(2)(c) of this Warrant Certificate, then the number of Common
 Shares purchasable upon the subsequent exercise of the Warrants shall be
 simultaneously adjusted or readjusted, as the case may be, by multiplying the
 number of Common Shares purchasable upon the exercise of the Warrants
 immediately prior to such adjustment or readjustment by a fraction which
 shall be the reciprocal of the fraction used in the adjustment or
 readjustment of the Exercise Price.

 

- 7 -

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)

 	
 Rules: The following rules and procedures shall be applicable to
 adjustments made pursuant to subsection 5(2) hereof:

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (a)

 	
 Subject to
 the following clauses of this subsection 5(3), any adjustment made pursuant
 to subsection 5(2) hereof shall be made successively whenever an event
 referred to therein shall occur.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (b)

 	
 No
 adjustment in the Exercise Price shall be required unless such adjustment
 would result in a change of at least one per cent in the then Exercise Price
 and no adjustment shall be made in the number of Common Shares purchasable or
 issuable on the exercise of the Warrants unless it would result in a change
 of at least one one-hundredth of a Common Share; provided, however, that any
 adjustments which except for the provision of this clause 5(3)(b) would
 otherwise have been required to be made shall be carried forward and taken
 into account in any subsequent adjustment. Notwithstanding any other
 provision of subsection 5(2) hereof, no adjustment of the Exercise Price
 shall be made which would result in an increase in the Exercise Price or a
 decrease in the number of Common Shares issuable upon the exercise of the
 Warrants (except in respect of the Common Share Reorganization described in
 subclause 5(2)(a)(iv) hereof or a Capital Reorganization described in subclause
 5(2)(d)(ii) hereof).

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (c)

 	
 No
 adjustment in the Exercise Price or in the number or kind of securities
 purchasable upon the exercise of the Warrants shall be made in respect of any
 event described in section 5 hereof if the Warrantholder is entitled to participate
 in such event on the same terms mutatis
 mutandis as if the Warrantholder had exercised the Warrants prior
 to or on the record date or effective date, as the case may be, of such
 event.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (d)

 	
 No
 adjustment in the Exercise Price or in the number of Common Shares
 purchasable upon the exercise of the Warrants shall be made pursuant to
 subsection 5(2) hereof in respect of the issue from time to time of Common
 Shares pursuant to this Warrant certificate or pursuant to any stock option,
 stock purchase or stock bonus plan in effect from time to time for directors,
 officers or employees of the Corporation and/or any subsidiary of the
 Corporation and any such issue, and any grant of options in connection
 therewith, shall be deemed not to be a Common Share Reorganization, a Rights
 Offering nor any other event described in subsection 5(2) hereof.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (e)

 	
 If at any
 time during the Adjustment Period the Corporation shall take any action
 affecting the Common Shares, other than an action described in subsection
 5(2) hereof, which in the opinion of the directors would have a material
 adverse effect upon the rights of Warrantholders, either or both the Exercise
 Price and the number of Common Shares purchasable upon exercise of Warrants
 shall be adjusted in such manner and at such time by action by the directors,
 in their sole discretion, as may be equitable in the circumstances. Failure
 of the taking of action by the directors so as to provide for an adjustment
 prior to the effective date of any action by the Corporation affecting the
 Common Shares shall be deemed to be conclusive evidence that the directors
 have determined that it is equitable to make no adjustment in the
 circumstances.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (f)

 	
 If the
 Corporation shall set a record date to determine holders of Common Shares for
 the purpose of entitling such holders to receive any dividend or distribution
 or any subscription or purchase rights and shall, thereafter and before the
 distribution to such holders of any such dividend, distribution or
 subscription or purchase rights, legally abandon its plan to pay or deliver
 such dividend, distribution or subscription or purchase rights, then no
 adjustment in the Exercise Price or the number of Common Shares purchasable
 upon exercise of the Warrant shall be required by reason of the setting of
 such record date.

 

- 8 -

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (g)

 	
 In any case
 in which this Warrant Certificate shall require that an adjustment shall
 become effective immediately after a record date for an event referred to in
 subsection 5(2) hereof, the Corporation may defer, until the occurrence of
 such event:

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 (i)

 	
 issuing to
 the Warrantholder, to the extent that the Warrants are exercised after such
 record date and before the occurrence of such event, the additional Common
 Shares or other securities issuable upon such exercise by reason of the
 adjustment required by such event; and

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 (ii)

 	
 delivering
 to the Warrantholder any distribution declared with respect to such
 additional Common Shares or other securities after such record date and
 before such event;

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 provided,
 however, that upon request by the Warrantholder, the Corporation shall
 deliver to the Warrantholder an appropriate instrument evidencing the right
 of the Warrantholder upon the occurrence of the event requiring the
 adjustment, to an adjustment in the Exercise Price or the number of Common
 Shares purchasable upon the exercise of the Warrants and to such distribution
 declared with respect to any such additional Common Shares issuable on the
 exercise of the Warrants.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (h)

 	
 In the
 absence of a resolution of the directors fixing a record date for a Rights
 Offering, the Corporation shall be deemed to have fixed as the record date
 therefor the date of the issue of the rights, options or warrants issued
 pursuant to the Rights Offering.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (i)

 	
 If a dispute
 shall at any time arise with respect to adjustments of the Exercise Price or
 the number of Common Shares purchasable upon the exercise of the Warrants,
 such disputes shall be conclusively determined by the auditors of the
 Corporation or if they are unable or unwilling to act, by such other firm of
 independent chartered accountants as may be selected by the directors and any
 such determination shall be conclusive evidence of the correctness of any
 adjustment made pursuant to subsection 5(2) hereof and shall be binding upon
 the Corporation and the Warrantholder.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (j)

 	
 As a
 condition precedent to the taking of any action which would require an
 adjustment pursuant to subsection 5(2) hereof, including the Exercise Price
 and the number or class of Common Shares or other securities which are to be
 received upon the exercise thereof, the Corporation shall take any action
 which may, in the opinion of counsel to the Corporation, be necessary in
 order that the Corporation may validly and legally issue as fully paid and
 non-assessable shares all of the Common Shares or other securities which the
 Warrantholder is entitled to receive in accordance with the provisions of
 this Warrant Certificate.

 
	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (4)

 	
 Notice: At least 15 days prior to the earlier of the record date or
 effective date of any event which requires or might require an adjustment in
 any of the rights of the Warrantholder under this Warrant Certificate,
 including the Exercise Price or the number of Common Shares which may be
 purchased under this Warrant Certificate, the Corporation shall deliver to
 the Warrantholder a certificate of the Corporation specifying the particulars
 of such event and, if determinable, the required adjustment and the
 calculation of such adjustment. In case any adjustment for which a notice in
 this subsection 5(4) has been given is not then determinable, the Corporation
 shall promptly after such adjustment is determinable deliver to the
 Warrantholder a certificate providing the calculation of such adjustment. The
 Corporation hereby covenants and agrees that the register of transfers and share
 transfer books for the Common Shares will be open, and that the Corporation
 will not take any action which might deprive the Warrantholder of the
 opportunity of exercising the rights of subscription contained in this
 Warrant Certificate, during such 15-day period.

 

- 9 -

	
  

 	
  

 
	
 6.

 	
 Further Assurances: The Corporation hereby covenants and agrees that it will do,
 execute, acknowledge and deliver, or cause to be done, executed, acknowledged
 and delivered, all and every such other act, deed and assurance as the
 Warrantholder shall reasonably require for the better accomplishing and
 effectuating of the intentions and provisions of this Warrant Certificate.

 
	
  

 	
  

 
	
 7.

 	
 Time of Essence: Time shall be of the essence of this Warrant Certificate.

 
	
  

 	
  

 
	
 8.

 	
 Governing Laws: This Warrant Certificate shall be construed in accordance with
 the laws of the Province of Ontario and the federal laws of Canada applicable
 therein.

 
	
  

 	
  

 
	
 9.

 	
 Notices: All notices or other communications to be given under this
 Warrant Certificate shall be delivered by hand or by telecopier and, if
 delivered by hand, shall be deemed to have been given on the delivery date
 and, if sent by telecopier, on the date of transmission if sent before 5:00
 p.m. on a business day or, if such day is not a business day, on the first
 business day following the date of transmission.

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Notices to
 the Corporation shall be addressed to:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Paramount
 Gold and Silver Corp.

 
	
  

 	
  

 	
 Suite 100

 
	
  

 	
  

 	
 346 Waverley
 Street

 
	
  

 	
  

 	
 Ottawa, ON
 K2P 0W5

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Attention:       President
 and Chief Executive Officer

 
	
  

 	
  

 	
 Telecopier:     613-248-4971

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Notices to
 the Warrantholder shall be addressed to the address of the Warrantholder set
 out on the face page of this Warrant Certificate.

 

	
  

 	
  

 
	
  

 	
 The
 Corporation and the Warrantholder may change its address for service by
 notice in writing to the other of them specifying its new address for service
 under this Warrant Certificate.

 
	
  

 	
  

 
	
 10.

 	
 Legends on
Common Shares: Any certificate
representing Common Shares issued upon the exercise of the Warrants by the
Warrantholder prior to the date which is four months and one day after the
date hereof will bear the following legends: 

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS
 SECURITY MUST NOT TRADE THE SECURITY BEFORE JULY 20, 2009
 and

 

- 10 -

	
  

 	
  

 	
  

 
	
  

 	
  

 	
  “THE SECURITIES REPRESENTED BY THIS CERTIFICATE ARE LISTED ON THE
 TORONTO STOCK EXCHANGE (“TSX”); HOWEVER, THE SAID SECURITIES CANNOT BE TRADED
 THROUGH THE FACILITIES OF TSX SINCE THEY ARE NOT FREELY TRANSFERABLE, AND
 CONSEQUENTLY ANY CERTIFICATE REPRESENTING SUCH SECURITIES IS NOT “GOOD
 DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON TSX.” 

 

	
  

 	
  

 
	
  

 	
 Any
 certificate representing Common Shares issued upon the exercise of the
 Warrants by the Warrantholder will bear a legend substantially in the
 following form:

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
  “THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
 UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). UNLESS
 REGISTERED UNDER THE 1933 ACT, THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED
 OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) OUTSIDE THE UNITED
 STATES IN COMPLIANCE WITH REGULATION S UNDER THE 1933 ACT, (C) IN COMPLIANCE
 WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE 1933 ACT
 PROVIDED BY RULE 144 THEREUNDER, IF AVAILABLE, AND IN ACCORDANCE WITH
 APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT
 REQUIRE REGISTRATION UNDER THE 1933 ACT OR ANY APPLICABLE STATE LAWS, AND THE
 HOLDER HAS, PRIOR TO SUCH SALE UNDER (C) OR (D) ABOVE, FURNISHED TO THE
 COMPANY AN OPINION OF COUNSEL OR OTHER EVIDENCE OF EXEMPTION, IN EITHER CASE
 REASONABLY SATISFACTORY TO THE COMPANY. DELIVERY OF THIS CERTIFICATE MAY NOT
 CONSTITUTE “GOOD DELIVERY” IN SETTLEMENT OF TRANSACTIONS ON STOCK EXCHANGES
 IN CANADA. THE SECURITIES REPRESENTED BY THIS CERTIFICATE CANNOT BE THE
 SUBJECT OF HEDGING TRANSACTIONS UNLESS SUCH TRANSACTIONS ARE CONDUCTED IN
 COMPLIANCE WITH THE 1933 ACT.”

 

	
  

 	
  

 
	
 11.

 	
 Lost Certificate: If this Warrant Certificate or any replacement hereof becomes
 stolen, lost, mutilated or destroyed, the Corporation shall, on such terms as
 it may in its discretion impose, acting reasonably, issue and deliver a new
 certificate, in form identical hereto but with appropriate changes,
 representing any unexercised portion of the subscription rights represented
 hereby to replace the certificate so stolen, lost, mutilated or destroyed.

 
	
  

 	
  

 
	
 12.

 	
 Language: The parties hereto acknowledge and confirm that they have
 requested that this Warrant Certificate as well as all notices and other
 documents contemplated hereby be drawn up in the English language. Les parties aux présentes
 reconnaissent et confirment qu’elles ont exigé que la présente convention
 ainsi que tous les avis et documents qui s’y rattachent soient rédigés en
 langue anglaise.

 
	
  

 	
  

 
	
 13.

 	
 Transfer: The Warrants
 evidenced by this Warrant Certificate and all rights hereunder are not
 transferable, provided that the Warrantholder shall have the right to
 transfer all rights hereunder to an Affiliate of the Warrantholder.

 
	
  

 	
  

 
	
 14.

 	
 Currency: Unless
 otherwise specified, all dollar amounts in this Warrant Cetificate, including
 the symbols “$” and “C$”, are expressed in Canadian dollars

 

-11 -

	
  

 	
  

 
	
 15.

 	
 Successors and Assigns: This Warrant Certificate shall enure to the benefit of the
 Warrantholder and the successors and assignees thereof and shall be binding
 upon the Corporation and the successors thereof.

 
	
  

 	
  

 
	
 16.

 	
 Reservation of Shares. The Corporation shall at all times reserve and keep available out
 of its authorized but unissued Common Shares, solely for the purpose of
 issuance upon the exercise of the Warrants, such number of Common Shares as
 are issuable upon the exercise of all outstanding Warrants. All Common Shares
 which are so issuable shall, when issued, be validly issued, fully paid and
 non-assessable and free from all taxes, liens and charges. The Corporation
 shall take all such actions as may be necessary to assure that all such
 shares may be so issued without violation of any applicable law or
 governmental regulation or any requirements of any securities exchange upon
 which the Common Shares may be listed. The Company shall not take any action
 that would cause the number of authorized but unissued Common Shares to be
 less than the number of such shares required to be reserved hereunder for
 issuance upon exercise of all of the outstanding Warrants.

 

- 12 -

IN
WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be
signed by an authorized officer as of the 19th day of March, 2009.

	
  

 	
  

 	
  

 
	
  

 	
 PARAMOUNT GOLD AND SILVER CORP.

 
	
  

 	
  

 	
  

 
	
  

 	
 By:

 	
 /s/
 Christopher Crupi

 
	
  

 	
  

 	 

 
	
  

 	
  

 	
 Authorized
 Signatory

 

SCHEDULE A

TO:          PARAMOUNT
GOLD AND SILVER CORP.

SUBSCRIPTION FORM

The
undersigned hereby subscribes for _______________ shares of common stock,
U.S.$0.001 par value (“Common Shares”)
in the capital of Paramount Gold and Silver Corp. (the “Corporation”) (or such other number of
shares of common stock or other securities to which such subscription entitles
the undersigned in lieu thereof or in addition thereto pursuant to the
provisions of the warrant certificate (the “Warrant
Certificate”) dated the ____ day of March, 2009 issued by the
Corporation) at the purchase price of C$1.05 per Common Share (or at such other
purchase price as may be in effect under the provisions of the Warrant
Certificate) and on and subject to the other terms and conditions specified in
the Warrant Certificate and hereunder and encloses herewith a certified cheque,
bank draft or money order in lawful money of Canada payable to the Corporation
or has transmitted same day funds in lawful money of Canada by wire to such
account as the Corporation directed the undersigned in payment of the
subscription price.  

The
undersigned represents that it: (a) has had access to such current public
information concerning the Corporation as it considered necessary in connection
with its investment decision and (b) understands that the securities issuable
on exercise hereof have not been registered under the United States Securities Act of 1933, as amended (the “1933 Act”). 

By
signature below, the undersigned represents and warrants to the Corporation
that the undersigned (check one):

	
  

 	
  

 	
  

 	
  

 
	
 _______

 	
 1.

 	
 (i)

 	
 is not (and
 is not exercising the Warrants for the account or benefit of) a “U.S. person”
 as such term is defined in the 1933 Act, or person in the United States;

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (ii)

 	
 did not
 execute or deliver this exercise form while within the United States; and

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (iii)

 	
 has in all
 other respects complied with the terms of Regulation S of the 1933 Act, or
 any successor rule or regulation of the United States Securities and Exchange
 Commission as presently in effect; or

 
	
  

 	
  

 	
  

 	
  

 
	
 _______

 	
 2.

 	
 is tendering
 with this exercise form a written opinion of counsel reasonably satisfactory
 to the Company to the effect that the securities to be delivered upon
 exercise of these Warrants have been registered under the 1933 Act and the
 securities laws of all applicable states of the United States or an exemption
 from registration under such securities laws is available.

 

The
undersigned hereby directs that the Common Shares subscribed for be registered
and delivered as follows:

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Name in Full

 	
  

 	
  

 	
 Address

 	
  

 	
  

 	
 Number of Common Shares

 
	 

 	
  

 	
  

 	 

 	
  

 	
  

 	 

 

Note:
If further nominees are intended, please attach (and initial) a schedule giving
these particulars.

DATED
this _____ day of _______________, 200___.

	
  

 	
  

 	
  

 
	 

 	
  

 	 

 
	
 Signature
 Guaranteed

 	
  

 	
 (Signature
 of Warrantholder)

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	 

 
	
  

 	
  

 	
 Print full
 name

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	 

 
	
  

 	
  

 	
 Print full
 address

 

Instructions:

	
  

 	
  

 
	
 1.

 	
 The
 registered holder may exercise its right to receive Common Shares by
 completing this form and surrendering this form and the Warrant Certificate
 representing the Warrants being exercised to the Corporation, along with
 payment for such Common Shares pursuant to the terms hereof.

 
	
  

 	
  

 
	
 2.

 	
 If the
 Exercise Form indicates that Common Shares are to be issued to a person or
 persons other than the registered holder of the Warrant Certificate, the
 signature of such holder of the Exercise Form must be guaranteed by an
 authorized officer of a chartered bank, trust company or an investment dealer
 who is a member of a recognized stock exchange.

 
	
  

 	
  

 
	
 3.

 	
 If the
 Exercise Form is signed by a trustee, exercise, administrator, curator,
 guardian, attorney, officer of a corporation or any person acting in a
 judiciary or representative capacity, the certificate must be accompanied by
 evidence of authority to sign satisfactory to the Corporation.

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