Document:

Exhibit 10.1

 

PROMISSORY
NOTE

 

	
  $385,000

  	
   

  	
  April 17, 2009

  
	
  San
  Francisco, California

  	
   

  	
   

  

 

FOR
VALUE RECEIVED, receipt of which is hereby acknowledged, Etelos, Inc., a
Delaware Corporation with its principal place of business at 26828 Maple Valley
Highway, #297, Maple Valley, WA 98038 (the “Borrower”) promises to pay
to the order of Enable Growth Partners LP located at One Ferry Building, Suite 255,
San Francisco, California or at such other place as Lender may designate in
writing (the “Lender”) in lawful money of the United States of America,
the principal sum of Three Hundred Eighty Five Thousand Dollars ($385,000) plus
interest thereon from the date the proceeds of the loan evidenced by this Note
are disbursed from the Lender to the Borrower until the Maturity Date (as
defined below), whether scheduled or accelerated, at a fixed interest rate equal
to Ten Percent (10%) per annum.

 

1.             Payment.  Payment of principal and accrued but unpaid interest
shall be due and payable in full on October 17, 2009 (the “Maturity
Date”), unless due earlier in accordance with the terms of this Note.

 

2.             Events of Default.

 

(a)           “Event of Default”,
wherever used herein, means any one of the following events (whatever the
reason for such event and whether such event shall be voluntary or involuntary
or effected by operation of law or pursuant to any judgment, decree or order of
any court, or any order, rule or regulation of any administrative or
governmental body):

 

(i)            Any default in the payment of the principal amount of, or
the interest on, this Note, when due and payable or any failure to pay any fees
or other charges on this Note when due and payable;

 

(ii)           The Borrower or any of its subsidiaries or any other
Person shall fail to provide the Lender with, or to perform any obligation
under this Note or any contract, instrument, addenda, or document executed in
connection with this Note, including without limitation, any rate option
agreement, guaranty, pledge agreement, security agreement, or deed of trust (all
such documents, including this Note, each a “Loan Document”);

 

(iii)          The Borrower or any of its subsidiaries shall commence, or
there shall be commenced against Borrower or any subsidiary a case under any
applicable bankruptcy or insolvency laws as now or hereafter in effect or any
successor thereto, or the Borrower or any subsidiary commences any other
proceeding under any reorganization, arrangement, adjustment of debt, relief of

 

1

 

debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Borrower or any
subsidiary, or there is commenced against Borrower or any subsidiary any such
bankruptcy, insolvency or other proceeding which remains undismissed for a
period of 60 days; or Borrower or any subsidiary is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or Borrower or any subsidiary suffers any appointment of
any custodian or the like for it or any substantial part of its property which
continues undischarged or unstayed for a period of 60 days; or Borrower or any
subsidiary makes a general assignment for the benefit of creditors; or Borrower
or any subsidiary shall fail to pay, or shall state that it is unable to pay,
or shall be unable to pay, its debts generally as they become due; or Borrower
or any subsidiary shall call a meeting of its creditors with a view to
arranging a composition, adjustment or restructuring of its debts; or the
Borrower shall die, become incapacitated, dissolve or terminate the business of
the Borrower; or Borrower or any subsidiary shall by any act or failure to act
expressly indicate its consent to, approval of or acquiescence in any of the
foregoing; or any corporate or other action is taken by Borrower or any
subsidiary for the purpose of effecting any of the foregoing;

 

(iv)          The Borrower or any of its subsidiaries shall fail to
perform under any other agreement involving the borrowing of money, the purchase
of property, the advance of credit or any other monetary liability of any kind
to any Person, whether such indebtedness now exists or shall hereafter be
created and such default shall result in such indebtedness becoming or being
declared due and payable prior to the date on which it would otherwise become
due and payable;

 

(v)           The Borrower shall (a) be a party to any Change of
Control Transaction (as defined below), (b) agree to sell or dispose all
or in excess of 33% of its assets in one or more transactions (whether or not
such sale would constitute a Change of Control Transaction), (c) redeem or
repurchase more than a de minimis number of shares of Common Stock or other
equity securities of Borrower, or (d) make any distribution or declare or
pay any dividends (in cash or other property, other than common stock) on, or
purchase, acquire, redeem, or retire any of Borrower’s capital stock, of any
class, whether now or hereafter outstanding. “Change of Control Transaction”
shall mean the occurrence after the date hereof of any of: (i) an
acquisition after the date hereof by an individual or legal entity or “group”
(as described in Rule 13d-5(b)(1) promulgated under the Securities
Exchange Act of 1934, as amended) of effective control (whether through legal
or beneficial ownership of capital stock of Borrower, by contract or otherwise)
of in excess of 33% of the voting securities of Borrower, (ii) a
replacement at one time or over time of more than one-half of the members of
Borrower’s board of directors which is not approved by a majority of those
individuals who are members of the board of directors on the date hereof (or by
those individuals who are serving as members of the board of directors on any 

 

2

 

date whose nomination to the board of directors was approved by a
majority of the members of the board of directors who are members on the date
hereof), (iii) the merger of Borrower with or into another entity that is
not wholly-owned by Borrower, consolidation or sale of 33% or more of the
assets of Borrower in one or a series of related transactions, or (iv) the
execution by Borrower of an agreement to which Borrower is a party or by which
it is bound, providing for any of the events set forth above in (i), (ii) or
(iii).

 

(vi)          Any judgment(s), writ or similar final process shall be
entered or filed against the Borrower or any of its subsidiaries, or any
involuntary lien(s) of any kind or character shall attach to any assets or
property of Borrower, any of which, in the judgment of Lender, might have a
material adverse effect on the financial condition or business of Borrower;

 

(vii)         Any governmental or regulatory authority shall take any
action, any defined benefit pension plan maintained by Borrower shall have any
unfunded liabilities, or any other event shall occur, any of which, in the
judgment of Lender, might have a material adverse effect on the financial condition
or business of Borrower;

 

(viii)        The Lender reasonably determine, in good
faith, that its security interest in the Collateral (as defined in the Security
Agreement) or the prospect of payment or performance under this Agreement or
any Loan Document is materially impaired;

 

(ix)           Without Lender’s prior written consent, any change shall
occur in the executive management of Borrower or any of its subsidiaries or any
change shall occur in the corporate or legal structure of Borrower or any of
its subsidiaries;

 

(x)            The Borrower or any of its subsidiaries shall fail to
perform any of its covenants, agreements, duties or obligations or otherwise
commit any breach hereunder or in any Loan Document.

 

(b)           Remedies Upon Event of
Default.  If any Event of Default occurs
(unless waived in writing by the Lender), the full principal amount of this
Note, together with all accrued interest thereon, shall become, at the Lender’s
election, immediately due and payable in cash. Commencing 5 days after the
occurrence of any Event of Default that results in the acceleration of this
Note, the interest rate on this Note shall accrue at the rate of 18% per annum,
or such lower maximum amount of interest permitted to be charged under
applicable law.  The Lender need not
provide and Borrower hereby waives any presentment, demand, protest or other
notice of any kind, and the Lender may immediately and without expiration of
any grace period enforce any and all of its rights and remedies hereunder and
all other remedies available to it under applicable law. Such declaration may
be rescinded and annulled by Lender at any time prior to payment hereunder. No
such rescission or annulment shall affect any subsequent Event of 

 

3

 

Default
or impair any right consequent thereon. The Lender have the right, at its sole
option, to continue to accept interest and/or principal payments due under the
Loan Documents after any Event of Default, and such acceptance shall not
constitute a waiver of such Event of Default or an extension of the Maturity
Date unless Lender agree otherwise in writing. In the event of an Event of
Default, Borrower agrees to pay all costs incurred in connection with the
collection of this Note, or enforcement of the terms of this Note, including
Lender’s reasonable attorneys’ fees and related costs.

 

3.             Security Interest.   As an
inducement for the Lender to make the loan evidenced by this Note, and to
secure the complete and timely payment, performance and discharge in full, as
the case may be, of all of the obligations of the Borrower under this Note, the
Borrower, for itself, and each of its subsidiaries, unconditionally and
irrevocably pledges, grants and hypothecates to the Lender a continuing and
perfected security interest in and to, a lien upon and a right of set-off
against all of their respective right, title and interest of whatsoever kind
and nature in and to, all of the assets of the Borrower.  The Borrower acknowledges and agrees that the
obligations of the Borrower under this Note, are subject to security interest
granted by the Borrower pursuant to the Security Agreement dated January 31,
2008, by and among the Borrower and the secured parties thereto (the “Security
Agreement”) and that such obligations are “Obligations” under the Security
Agreement.  The Borrower and each of its
subsidiaries shall take any and all actions requested by the Lender in order to
grant the Lender a first priority security interest in the assets of the
Borrower and its subsidiaries, including all UCC-1 filing receipts.

 

4.             No Waiver of Lender’s Rights.   All payments of principal and interest shall
be made without setoff, deduction or counterclaim. No delay or failure on the
part of the Lender in exercising any of its options, powers or rights, nor any
partial or single exercise of its options, powers or rights shall constitute a
waiver thereof or of any other option, power or right, and no waiver on the
part of the Lender of any of its options, powers or rights shall constitute a
waiver of any other option, power or right. Borrower hereby waives presentment
of payment, protest, and all notices or demands in connection with the
delivery, acceptance, performance, default or endorsement of this Note.
Acceptance by the Lender of less than the full amount due and payable hereunder
shall in no way limit the right of the Lender to require full payment of all
sums due and payable hereunder in accordance with the terms hereof.

 

5.             Modifications.   No term or provision contained herein may be
modified, amended or waived except by written agreement or consent signed by
the party to be bound thereby.

 

6.             Consent.   In accordance with the provisions of the
Loan Documents held by Lender, and solely with respect to this Note, Lender
waives its rights under those certain Loan Documents and grants its consent to
Borrower to enter into and perform the obligations in this Note.

 

7.             Choice of Law.   All questions concerning the construction,
validity, enforcement and interpretation of this Note shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each of
Borrower and Lender agree that all legal proceedings concerning the 

 

4

 

interpretations,
enforcement and defense of this Note shall be commenced in the state and
federal courts sitting in the City of New York, Borough of Manhattan (the “New
York Courts”). Each of Borrower and Lender hereby irrevocably submit to the
exclusive jurisdiction of the New York Courts for the adjudication of any
dispute hereunder (including with respect to the enforcement of this Note), and
hereby irrevocably waives, and agrees not to assert in any suit, action or
proceeding, any claim that it is not personally subject to the jurisdiction of
any such court, that such suit, action or proceeding is improper. Each of
Borrower and Lender hereby irrevocably waive personal service of process and
consents to process being served in any such suit, action or proceeding by
mailing a copy thereof via registered or certified mail or overnight delivery
(with evidence of delivery) to the other at the address in effect for notices
to it under this Note and agrees that such service shall constitute good and
sufficient service of process and notice thereof. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. EACH OF BORROWER AND LENDER HEREBY IRREVOCABLY WAIVE, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR THE
TRANSACTIONS CONTEMPLATED HEREBY.

 

8.             Cumulative Rights and Remedies;
Usury.   The rights and remedies of
Lender expressed herein are cumulative and not exclusive of any rights and
remedies otherwise available under this Note or applicable law (including at
equity). The election of Lender to avail itself of any one or more remedies
shall not be a bar to any other available remedies, which Borrower agrees
Lender may take from time to time. If it shall be found that any interest due
hereunder shall violate applicable laws governing usury, the applicable rate of
interest due hereunder shall be reduced to the maximum permitted rate of
interest under such law.

 

9.             Severability.   If any
provision of this Note is declared by a court of competent jurisdiction to be
in any way invalid, illegal or unenforceable, the balance of this Note shall
remain in effect, and if any provision is inapplicable to any person or
circumstance, it shall nevertheless remain applicable to all other persons and
circumstances. If it shall be found that any interest or other amount deemed
interest due hereunder shall violate applicable laws governing usury, the
applicable rate of interest due hereunder shall automatically be lowered to
equal the maximum permitted rate of interest.

 

10.           Successors and Assigns.   This Note shall be binding upon Borrower and
its successors and shall inure to the benefit of the Lender and its successors
and assigns. The term “Lender” as used herein, shall also include any endorsee,
assignee or other holder of this Note.

 

11.           Lost or Stolen Promissory Note.   If this Note is lost, stolen, mutilated or
otherwise destroyed, Borrower shall execute and deliver to the Lender a new
promissory note containing the same terms, and in the same form, as this Note.
In such event, Borrower may require the Lender to deliver to Borrower an
affidavit of lost instrument and customary indemnity in respect thereof as a
condition to the delivery of any such new promissory note.

 

12.           Due Authorization.   This Note has been duly authorized, executed
and delivered by 

 

5

 

Borrower
and is the legal obligation of Borrower, enforceable against Borrower in
accordance with its terms except as limited by general equitable principles and
applicable bankruptcy, insolvency, reorganization, moratorium and other laws of
general application affecting enforcement of creditors’ rights generally.  No consent of any other party and no consent,
license, approval or authorization of, or registration or declaration with, any
governmental authority, bureau or agency is required in connection with the
execution, delivery or performance by the Borrower, or the validity or
enforceability of this Note other than such as have been met or obtained. The
execution, delivery and performance of this Note and all other agreements and
instruments executed and delivered or to be executed and delivered pursuant
hereto or thereto or the securities issuable upon conversion of this Note will
not violate any provision of any existing law or regulation or any order or
decree of any court, regulatory body or administrative agency or the
certificate of incorporation or by-laws of the Borrower or any mortgage,
indenture, contract or other agreement to which the Borrower is a party or by
which the Borrower or any property or assets of the Borrower may be bound.

 

13.           Notice.   Any
and all notices or other communications or deliveries to be provided by the
Lender hereunder shall be in writing and delivered personally, by facsimile,
sent by a nationally recognized overnight courier service or sent by certified
or registered mail, postage prepaid, addressed to the Borrower, or such other
address or facsimile number as the Borrower may specify for such purposes by
notice to the Lender delivered in accordance with this paragraph.  Any and all notices or other communications
or deliveries to be provided by the Borrower hereunder shall be in writing and
delivered personally, by facsimile, sent by a nationally recognized overnight
courier service or sent by certified or registered mail, postage prepaid,
addressed to the Lender at the address of the Lender appearing on the books of
the Borrower, or if no such address appears, at the principal place of business
of the Lender.  Any notice or other
communication or deliveries hereunder shall be deemed given and effective on
the earliest of (i) the date of transmission if delivered by hand or by
telecopy that has been confirmed as received by 5:00 P.M. on a business
day, (ii) one business day after being sent by nationally recognized
overnight courier or received by telecopy after 5:00 P.M. on any day, or (iii) five
business days after being sent by certified or registered mail, postage and
charges prepaid, return receipt requested.

 

14.           Time of the Essence.   Time is
of the essence of this Note.

 

15.           Current Report.   Within 2 business days from the date of
this Note, the Borrower shall file a Current Report on Form 8-K with the
Securities and Exchange Commission, attaching this Note, and disclosing the
material terms of this Note.

 

Prior
to signing this Note, Borrower has consulted with its counsel and has read and
understands all the provisions of this Note. 
Borrower agrees to the terms of the Note and acknowledges receipt of a
completed copy of the Note.

 

6

 

The undersigned signs this Note as a maker and not as a surety or guarantor or in any other capacity.

 

	
   

  	
  ETELOS,
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Daniel J.A. Kolke

  
	
   

  	
  Name:

  	
  Daniel
  J.A. Kolke

  
	
   

  	
  Title:

  	
  Chairman &
  Chief Executive Officer

  

 

7United States Securities & Exchange Commission EDGAR Filing

Exhibit 4.1

EXECUTION COPY

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.

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:

09-03-02

	Number of Warrants:

840,000

THIS IS TO CERTIFY THAT for value received DAHLMAN ROSE & COMPANY, LLC , a Delaware limited liability company with offices at 142 West 57th Street, 18th Floor, New York, New York 10019 (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 October 22, 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 

- 2 -

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.

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; 

- 3 -

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;

(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 

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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:

(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 

- 5 -

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:

(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

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(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.

(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 

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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.

(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 

- 8 -

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.

(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.

- 9 -

(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.

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.

- 10 -

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.

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.

11.

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.

12.

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.

13.

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

14.

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.

15.

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.

IN WITNESS WHEREOF the Corporation has caused this Warrant Certificate to be signed by an authorized officer as of the 21 day of April, 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 April, 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.

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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