Document:

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Exhibit 10.22

Exhibit B

Form of Warrant Certificate

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”).  THESE SECURITIES MAY BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED ONLY (A) TO THE COMPANY, (B) IF THE SECURITIES HAVE BEEN REGISTERED IN COMPLIANCE WITH THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS (C) IN COMPLIANCE WITH THE EXEMPTION FROM THE REGISTRATION REQUIREMENTS UNDER THE SECURITIES ACT IN ACCORDANCE WITH RULE 144 THEREUNDER, IF APPLICABLE, AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS, OR (D) IN A TRANSACTION THAT DOES NOT REQUIRE REGISTRATION UNDER THE SECURITIES ACT OR ANY APPLICABLE STATE LAWS AND REGULATIONS GOVERNING THE OFFER AND SALE OF SECURITIES, AND THE HOLDER HAS, PRIOR TO SUCH SALE, FURNISHED TO THE COMPANY AN OPINION OF COUNSEL, OF RECOGNIZED STANDING, OR OTHER EVIDENCE OF EXEMPTION, REASONABLY SATISFACTORY TO THE COMPANY.  HEDGING TRANSACTIONS INVOLVING THE SECURITIES REPRESENTED HEREBY MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH U.S. SECURITIES LAWS.

LITTLE SQUAW GOLD MINING COMPANY

CLASS C WARRANTS 

TO PURCHASE SHARES

OF COMMON STOCK OF

LITTLE SQUAW GOLD MINING COMPANY

CERTIFICATE NO.: C-

 ̈

Warrant to Purchase

 ̈

 Shares of Common Stock

[Date of Issuance]

FOR VALUE RECEIVED, LITTLE SQUAW GOLD MINING COMPANY, a Delaware corporation (the "Company"), hereby certifies that ______________, its successor or permitted assigns (the "Holder"), is entitled, subject to the provisions of this Class C Warrant, to purchase from the Company, at the times specified herein, 

 ̈

 fully paid and non-assessable shares of Common Stock of the Company, par value $0.10 per share (the "Common Stock"), at a purchase price per share equal to the Exercise Price (as hereinafter defined).

1.

Definitions.  (a)  The following terms, as used herein, have the following meanings:

"Affiliate" shall have the meaning given to such term in Rule 12b-2 promulgated under the Securities and Exchange Act of 1934, as amended.

"Business Day" means any day except a Saturday, Sunday or other day on which commercial banks in the City of Seattle, Washington are authorized by law to close.

"Common Stock" means the Common Stock, par value $0.10 per share, of the Company.

"Duly Endorsed" means duly endorsed in blank by the Person or Persons in whose name a stock certificate is registered or accompanied by a duly executed stock assignment separate from the certificate with the signature(s) thereon guaranteed by a commercial bank or trust company or a member of a national securities exchange or of the National Association of Securities Dealers, Inc.

“Exercise Date” means the date a Warrant Exercise Notice is delivered to the Company in the manner provided in Section 9 below.

"Exercise Price" means US$1.50.

"Expiration Date" means 5:00 p.m. (Seattle, Washington) on [twenty-four months from issuance date]; provided that if such date shall in the City of Seattle, Washington be a holiday or a day on which banks are authorized to close, then 5:00 p.m. on the next following day which in the City of Seattle, Washington is not a holiday or a day on which banks are authorized to close.

"Fair Market Value" means as to any security, the average closing prices of such security's sales on the Principal Market for the day as of which "Fair Market Value" is being determined, or, if there have been no sales on any such exchanges on any day, the average of the highest bid and lowest asked prices on all such exchanges at the end of such day.  If the Common Stock is not listed or admitted to unlisted trade privileges and bid and asked prices are not so reported, the Fair Market Value shall be determined in such reasonable manner as may be prescribed by the Board of Directors of the Company.

"Initial Warrant Exercise Date" means the date hereof.

"Person" means an individual, partnership, corporation, trust, joint stock company, association, joint venture, or any other entity or organization, including a government or political subdivision or an agency or instrumentality thereof.

“Principal Market” means the National Association of Securities Dealers electronic over-the-counter bulletin board (“OTCBB”), or if not quoted on the OTCBB, the primary securities exchanges or market on which such security may at the time be listed or quoted for trading.

"Warrant Shares" means the shares of Common Stock deliverable upon exercise of this Warrant, as adjusted from time to time.

2.

Exercise of Warrant

(a)

The Holder is entitled to exercise this Warrant in whole or in part at any time on or after the Initial Warrant Exercise Date until the Expiration Date.  To exercise this Warrant, the Holder shall execute and deliver to the Company a Warrant Exercise Notice substantially in the form annexed hereto.  No earlier than five (5) days after delivery of the Warrant Exercise Notice, the Holder shall deliver to the Company this Warrant Certificate, including the Warrant Exercise Subscription Form forming a part hereof duly executed by the Holder, together with payment of the applicable Exercise Price.  Upon such delivery and payment, the Holder shall be deemed to be the holder of record of the Warrant Shares subject to such exercise, notwithstanding that the stock transfer books of the Company shall then be closed or that certificates representing such Warrant Shares shall not then be actually delivered to the Holder.  No fractional shares will be issued.

(b)

The Exercise Price may be paid to the Company in cash or by certified or official bank check or bank cashier's check payable to the order of the Company, or by wire transfer or by any combination of cash, check or wire transfer.

(c)

If the Holder exercises this Warrant in part, this Warrant Certificate shall be surrendered by the Holder to the Company and a new Warrant Certificate of the same tenor and for the unexercised number of Warrant Shares shall be executed by the Company.  The Company shall register the new Warrant Certificate in the name of the Holder or in such name or names of its transferee pursuant to paragraph 6 hereof as may be directed in writing by the Holder and deliver the new Warrant Certificate to the Person or Persons entitled to receive the same.

(d)

Upon surrender of this Warrant Certificate in conformity with the foregoing provisions, the Company shall transfer to the Holder of this Warrant Certificate appropriate evidence of ownership of the shares of Common Stock or other securities or property to which the Holder is entitled, registered or otherwise placed in, or payable to the order of, the name or names of the Holder or such transferee as may be directed in writing by the Holder, and shall deliver such evidence of ownership and any other securities or property to the Person or Persons entitled to receive the same.  

(e)

In no event may the Holder exercise these Warrants in whole or in part unless the Holder is an “accredited investor” as defined in Regulation D under the Securities Act of 1933, as amended (the “U.S. Securities Act”), or the Holder is a non-U.S. person (as defined in Regulation S of the U.S. Securities Act) exercising these Warrants in an “off shore transaction” in accordance with the requirements of Regulation S of the U.S. Securities Act. 

(f)

Notwithstanding any other provision hereof, no Holder shall exercise these Warrants, if as a result of such conversion the holder would then become a “ten percent beneficial owner” (as defined in Rule 16a-2 under the Securities Exchange Act of 1934, as amended) of Common Stock.  For greater certainty, the Warrants shall not be exercisable by the Holder or redeemed by the Company, if, after giving effect to such exercise, the holder of such securities, together with its affiliates, would in aggregate beneficially own, or exercise control or direction over that number of voting securities of the Company which is 9.99% or greater of the total issued and outstanding voting securities of the Company, immediately after giving effect to such exercise; provided, however, that upon a holder of these Warrants providing the Company with a Waiver Notice that such holder would like to waive the provisions of this paragraph 2(f) with regard to any or all shares of Common Stock issuable upon exercise of these Warrants, this paragraph 2(f) shall be of no force or effect with regard to those shares of Common Stock referenced in the Waiver Notice; provided, further, that this provision shall be of no further force or effect during the sixty-one (61) days immediately preceding the expiration of the term of these Warrants.

3.

Mandatory Exercise.  Following the effectiveness of a registration statement qualifying the resale of the Warrant Shares, the Company may require Warrant holders, at any time following the date that the closing bid price of the Shares as listed on a Principal Market (as defined herein), as quoted by Bloomberg L.P. (the “Closing Bid Price”) has averaged at or above $2.00 for a period of five consecutive trading days, to exercise the Warrants and acquire Warrant Shares at the applicable exercise price per Warrant Share.  The Warrant holders will be required to exercise the Warrants within five (5) business days of the receipt of notice from the Company, after which time the Warrants shall be cancelled if unexercised.  As used herein, “Principal Market” shall mean The National Association of Securities Dealers Inc.'s OTC Bulletin Board, the Nasdaq SmallCap Market, or the American Stock Exchange.  If the Common Shares are not traded on a Principal Market, the Closing Bid Price shall mean the reported Closing Bid Price for the Common Shares, as furnished by the National Association of Securities Dealers, Inc., for the applicable periods.

4.

Restrictive Legend.  Certificates representing shares of Common Stock issued pursuant to this Warrant shall bear a legend substantially in the form of the legend set forth on the first page of this Warrant Certificate to the extent that and for so long as such legend is required pursuant to applicable law.  

5.

Covenants of the Company.

(a)

The Company hereby agrees that at all times there shall be reserved for issuance and delivery upon exercise of this Warrant such number of its authorized but unissued shares of Common Stock or other securities of the Company from time to time issuable upon exercise of this Warrant as will be sufficient to permit the exercise in full of this Warrant.  All such shares shall be duly authorized and, when issued upon such exercise, shall be validly issued, fully paid and non-assessable, free and clear of all liens, security interests, charges and other encumbrances or restrictions on sale and free and clear of all preemptive rights.

(b)

The Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder against impairment.  Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the amount payable therefore upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable shares of Common Stock upon the exercise of this Warrant, and (iii) use its best efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof as may be necessary to enable the Company to perform its obligations under this Warrant.

(c)

Before taking any action which would cause an adjustment reducing the current Exercise Price below the then par value, if any, of the shares of Common Stock issuable upon exercise of the Warrants, the Company shall take any corporate action which may be necessary in order that the Company may validly and legally issue fully paid and non-assessable shares of such Common Stock at such adjusted Exercise Price.

(d)

Before taking any action which would result in an adjustment in the number of shares of Common Stock for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

(e)

The Company covenants that during the period the Warrant is outstanding, it will use its best efforts to comply with any and all reporting obligations under the Securities Exchange Act of 1934, as amended.

(f)

The Company will take all such reasonable action as may be necessary (i) to maintain a Principal Market for its Common Shares in the United States and (ii) to assure that such Warrant Stock may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of  the Principal Market upon which the Common Stock may be listed.

(g)

The Company shall preserve and maintain its corporate existence and all licenses and permits that are material to the proper conduct of its business.

(h) 

The Company will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant.

6.

Exchange, Transfer or Assignment of Warrant; Registration

(a)

Each taker and holder of this Warrant Certificate by taking or holding the same, consents and agrees that the registered holder hereof may be treated by the Company and all other persons dealing with this Warrant Certificate as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented hereby.

(b)

The Holder agrees that it will not transfer, hypothecate, sell, assign, pledge or encumber any Warrants or Warrant Shares unless such securities are registered under the U.S. Securities Act and registered or qualified under any applicable state securities laws or such transfer is effected pursuant to an available exemption from registration.

(c)

The Holder of this Warrant has been granted certain registration rights by the Company.  The registration rights are set forth in that certain Subscription Agreement between the Company and the Holder under which this Warrant was issued.  The terms of the Subscription Agreement are incorporated herein by this reference.

7.

Anti-Dilution Provisions.  The Exercise Price in effect at any time and the number and kind of securities purchasable upon the exercise of the Warrant shall be subject to adjustment from time to time upon the happening of certain events as follows:

(a)

In case the Company shall (i) declare a dividend or make a distribution on its outstanding shares of Common Stock in shares of Common Stock, (ii) subdivide or reclassify its outstanding shares of Common Stock into a greater number of shares, or (iii) combine or reclassify its outstanding shares of Common Stock into a smaller number of shares, the number of Warrant Shares shall be proportionately adjusted to reflect such dividend, distribution, subdivision, reclassification or combination. For example, if the Company declares a 2 for 1 stock split and the number of Warrant Shares immediately prior to such event was 200,000, the number of Warrant Shares immediately after such event would be 400,000.  Such adjustment shall be made successively whenever any event listed above shall occur. 

 

(b)

Whenever the number of Warrant Shares is adjusted pursuant to Subsection (a) above, the Exercise Price shall simultaneously be adjusted by multiplying the Exercise Price immediately prior to such event by the number of Warrant Shares immediately prior to such event and dividing the product so obtained by the number of Warrant Shares, as adjusted. If an Exercise Price has not yet been established, an adjustment thereof shall be deferred until one is established pursuant to the terms of this Warrant.

(c)

No adjustment in the Exercise Price shall be required unless such adjustment would require an increase or decrease of at least five percent (5%) in such price; provided, however, that any adjustments which by reason of this Subsection (c) are not required to be made shall be carried forward and taken into account in any subsequent adjustment required to be made hereunder. All calculations under this Section 7 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be.

(d)

Whenever the Exercise Price is adjusted, as herein provided, the Company shall promptly cause a notice setting forth the adjusted Exercise Price and adjusted number of Shares issuable upon exercise of each Warrant to be mailed to the Holder.  The Company may retain a firm of independent certified public accountants selected by the Board of Directors (who may be the regular accountants employed by the Company) to make any computation required by this Section 7, and a certificate signed by such firm shall be conclusive evidence of the correctness of such adjustment.

(e)

In the event that at any time, as a result of an adjustment made pursuant to Subsection (a) above, the Holder of this Warrant thereafter shall become entitled to receive any shares of the Company, other than Common Stock, thereafter the number of such other shares so receivable upon exercise of this Warrant shall be subject to adjustment from time to time in a manner and on terms as nearly equivalent as practicable to the provisions with respect to the Common Stock contained in Subsection (a), above.

(f)

Irrespective of any adjustments in the Exercise Price or the number or kind of shares purchasable upon exercise of this Warrant, Warrants theretofore or thereafter issued may continue to express the same price and number and kind of shares as are stated in this Warrant.

(g)

In case at any time or from time to time conditions arise by reasons of action taken by the Company, which in the reasonable opinion of its Board of Directors, are not adequately covered by the provisions of Section 7 hereof, and which might materially and adversely affect the exercise rights of the Holder hereof, the Board of Directors shall appoint a firm of independent certified public accountants, which may be the firm regularly retained by the Company, which will give their opinion upon the adjustment, if any, on a basis consistent with the standards established in the other provisions of Section 7 necessary with respect to the Exercise Price then in effect and the number of shares of Common Stock for which the Warrant is exercisable, so as to preserve, without dilution, the exercise rights of the Holder.  Upon receipt of such opinion, the Board of Directors shall forthwith make the adjustments described therein.

1.

Loss or Destruction of Warrant.  Upon receipt by the Company of evidence satisfactory to it (in the exercise of its reasonable discretion) of the loss, theft, destruction or mutilation of this Warrant Certificate, and (in the case of loss, theft or destruction) of reasonably satisfactory indemnification, and upon surrender and cancellation of this Warrant Certificate, if mutilated, the Company shall execute and deliver a new Warrant Certificate of like tenor and date.

2.

Notices.  Any notice, demand or delivery authorized by this Warrant Certificate shall be in writing and shall be given to the Holder or the Company, as the case may be, at its address (or telecopier number) set forth below, or such other address (or telecopier number) as shall have been furnished to the party giving or making such notice, demand or delivery:

If to the Company:

LITTLE SQUAW GOLD MINING COMPANY

3412 S. Lincoln Dr.

Spokane, WA 99203-1650

Attention:  Ted R. Sharp, Chief Financial Officer

Fax:  509-624-2878

with a copy to:

DORSEY & WHITNEY LLP

Republic Plaza Building

370 Seventeenth Street, Suite 4700

Denver, CO  80202-5647

Attention:  Kenneth G. Sam

Fax:  303-629-3450

If to the Holder:  at the address set forth on the last page of this Warrant.

Each such notice, demand or delivery shall be effective (i) if given by telecopy, when such telecopy is transmitted to the telecopy number specified herein and the intended recipient confirms the receipt of such telecopy or (ii) if given by any other means, when received at the address specified herein.  

10.

Rights of the Holder.  Prior to the exercise of any Warrant, the Holder shall not, by virtue hereof, be entitled to any rights of a shareholder of the Company, including, without limitation, the right to vote, to receive dividends or other distributions, to exercise any preemptive right or any notice of any proceedings of the Company except as may be specifically provided for herein.

11.

GOVERNING LAW.  THIS WARRANT CERTIFICATE AND ALL RIGHTS ARISING HEREUNDER SHALL BE CONSTRUED AND DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF WASHINGTON, AND THE PERFORMANCE THEREOF SHALL BE GOVERNED AND ENFORCED IN ACCORDANCE WITH SUCH LAWS.

12.

Amendments; Waivers.  Any provision of this Warrant Certificate may be amended or waived if, and only if, such amendment or waiver is in writing and signed, in the case of an amendment, by the Holder and the Company, or in the case of a waiver, by the party against whom the waiver is to be effective.  No failure or delay by either party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.  The rights and remedies herein provided shall be cumulative and not exclusive of any rights or remedies provided by law.

13.

Company Reorganization.  In the event of any sale of substantially all the assets of the Company or any reorganization, reclassification, merger or consolidation of the Company where the Company is not the surviving entity, then as a condition to the Company entering into such transaction, the entity acquiring such assets or the surviving entity, as the case may be, shall agree to assume the Company's obligations hereunder.

************

IN WITNESS WHEREOF, the Company has duly caused this Warrant to be signed by its duly authorized officer and to be dated as of [Issuance Date].

LITTLE SQUAW GOLD MINING COMPANY

By:

Name:

Title:

HOLDER:

______________________________

______________________________

______________________________

(Name and address)

Subscription Agreement - 1 of 9Filed by Automated Filing Services Inc. (604) 609-0244 - Azco Mining, Inc. - Exhibit 4.1

AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT, SENIOR

SECURED CONVERTIBLE NOTES AND WARRANTS

          This
AMENDMENT NO. 2 TO SECURITIES PURCHASE AGREEMENT, SENIOR SECURED CONVERTIBLE
NOTES AND WARRANTS (this “Amendment”) is made and entered into as of February
23, 2007, by and among Azco Mining, Inc., a Delaware corporation (the
“Company”), and the purchasers identified on the signature pages hereto (each, a
“Purchaser” and, collectively, the “Purchasers”). 

RECITALS 

	1. 	
      The Company and the Purchasers are parties to a
      Securities Purchase Agreement, dated as of March 20, 2006 (the “Purchase
      Agreement”), as amended by Amendment No. 1 to Senior Secured Convertible
      Notes, Warrants, Additional Investment Rights and Security Agreement dated
      as of September 6, 2006 (“Amendment No. 1”) pursuant to which the Company
      issued and sold to the Purchasers an aggregate of $3,781,662 of Senior
      Secured Convertible Notes due January 1, 2008 (the “Notes”) and certain
      Warrants and Additional Investment Rights (each as defined in the Purchase
      Agreement). Capitalized terms used and not defined in this Amendment shall
      have the respective meanings set forth in the Purchase Agreement or Notes,
      as the case may be.

	 	 
	2. 	
      In connection with Amendment No. 1, the principal amount
      of the Notes consists of (i) $2,500,000 of Senior Secured Convertible
      Notes issued on March 20, 2006 (the “Original Notes”), (ii) $1,000,000 of
      Senior Secured Convertible Notes issued pursuant to Amendment No. 1, and
      (iii) $281,662 of accrued interest and liquidated damages.

	 	 
	3. 	
      In connection with Amendment No. 1, the Warrants and
      Additional Investment Rights consist of (i) the original warrants and
      additional investment rights issued under the Purchase Agreement on March
      20, 2006 (the “Original Warrants” and the “Original Additional Investment
      Rights”, respectively), and (ii) the warrants and additional investment
      rights issued under Amendment No. 1.

	 	 
	4. 	
      The Company and the Purchasers now wish to further modify
      certain terms of the Purchase Agreement, Notes and
  Warrants.

          NOW,
THEREFORE, in consideration of the foregoing Recitals and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and each Purchaser, severally and not jointly, agree
as follows:

 

Azco_Amendment_2_Feb-23-07 

	1. 	
      Amendments and
Agreements.

	 	1.1. 	
      The Company and each Purchaser agrees that Section
      2(b) of the Notes shall be deleted and replaced in its entirety as
      follows:

                              “(b)
(1)      The Company shall pay the principal balance of
this Note to the Holder in 12 equal monthly installments (each, a “Monthly
Installment”) commencing on February 1, 2007 and to continue on the first
day of each of the 11 months thereafter, except if such date is not a Trading
Day, in which case such principal shall be payable on the next succeeding
Trading Day (each, a “Principal Payment Date”), until the outstanding
principal balance of this Note has been paid in full; provided, however, that
the February 2007 and March 2007 Monthly Installments shall be paid in
accordance with Section 2(b)(2) below. On the Maturity Date, the Company
shall pay all then accrued and unpaid interest on this Note together with the
final payment of principal hereunder. 

                              (b)
(2)      In connection with the Monthly Installment due
on February 1, 2007 and March 1, 2007, the Company may pay such Monthly
Installments in Common Stock, without being subject to the Equity Conditions, on
or prior to March 15, 2007, provided that the number of shares of Common Stock
to be issued to each Holder as principal shall be determined by dividing the
total principal then payable to such Holder by the lowest of (i) the Conversion
Price, (ii) $0.80, and (iii) the Market Price as of the applicable Principal
Payment Date, and rounding up to the nearest whole share.” 

	 	1.2. 	
      The Company hereby acknowledges, and shall cause its
      counsel to issue a legal opinion to the Purchasers, that (i) the Common
      Stock issuable upon conversion of the Notes up to the principal amount of
      the Original Notes and the Common Stock issuable upon a cashless exercise
      of the Original Warrants (to the extent permitted) shall be eligible to be
      sold under Rule 144 on March 20, 2007, and (ii) the Common Stock issuable
      upon conversion of all the Notes and the Common Stock issuable upon a
      cashless exercise of all the warrants (to the extent permitted) issued
      under Amendment No. 1 shall be eligible to be sold under Rule 144 on
      September 6, 2007.

	 	 	 
	 	1.3. 	
      Following March 20, 2007, if the Company issues any
      Common Stock as a Monthly Installment that is not eligible for resale
      under Rule 144 and the Registration Statement is not effective (any such
      shares issued, the “Restricted Shares”), then (x) the number of shares of
      Common Stock that are issued to each Purchaser as principal shall be
      adjusted so that the number of shares of Common Stock such Purchaser
      receives is equal to the quotient obtained by dividing the total principal
      then payable to such Purchaser by the Issue Price, and (y) each Purchaser
      shall have the right to require the Company to repurchase (the “Repurchase
      Option”) in cash all or any portion of such Restricted Shares, within 10
      Trading Days following delivery by such Purchaser of a notice to the
      Company, at a price equal to 130% of the Issue Price. A Purchaser shall
      not be permitted to exercise its Repurchase Option if at the time of the
      delivery by such Purchaser of the notice to the Company the Restricted
      Shares can be sold under Rule 144 (and Company’s counsel
  has

2 

	 		
      provided the requisite legal opinion for the sale of such
      shares pursuant to Rule 144, at a cost born solely by the Company) or a
      Registration Statement is effective. For the purposes of this Amendment,
      the “Issue Price” shall mean the lowest of (i) the Conversion Price, (ii)
      $0.80, and (iii) the Market Price as of the applicable Principal Payment
      Date (as defined in the Notes), and rounding up to the nearest whole
      share.

	 	 	 
	 	1.4. 	
      The Purchasers agree that any amounts due under
      Section 6.1(d) of the Purchase Agreement shall only apply to Events
      occurring on or after April 30, 2007, except as otherwise set forth in
      this Amendment.

	2. 	
      Additional Warrants.

	 	2.1. 	
      In connection with the transaction contemplated by this
      Amendment, the Company agrees to issue to each Purchaser a warrant in the
      form of Exhibit A hereto (the “Additional Warrant A”), registered
      in the name of such Purchaser, pursuant to which such Purchaser shall have
      the right to acquire such number of Underlying Shares indicated on
      Schedule A hereto under the heading “Additional Warrant A
      Shares”.

	3. 	
      Registration Rights. To ensure that the
      registration rights of the Purchasers are not adversely affected as a
      result of the transactions contemplated by this Amendment and to provide
      registration rights consistent with the existing registration rights in
      respect of the Common Stock issuable upon exercise of the Securities, the
      parties agree as follows with respect to registration rights.

	 	 	 
		3.1. 	
      The Company and each Purchaser agrees that the first
      sentence of Section 6.1(a) of the Purchase Agreement shall be
      deleted and replaced in its entirety as follows:

“As promptly as possible, and in any
event on or prior to the Filing Date, the Company shall prepare and file with
the Commission a “shelf” Registration Statement covering the resale of all
Registrable Securities and the sale of an additional amount of shares equal to
40% of the number of Registrable Securities for an offering to be made on a
continuous basis pursuant to Rule 415.” 

	 	3.2. 	
      The parties hereby agree that the definition of
      “Registrable Securities” under the Purchase Agreement shall include (a)
      the shares of Common Stock issuable upon the conversion or exercise of the
      Notes, Warrants, Additional Warrants and Additional Investment Rights, and
      (b) any Common Stock (including Underlying Shares) issued or issuable
      pursuant to the Transaction Documents, Amendment No. 1 and this Amendment,
      together with any securities issued or issuable upon any stock split,
      dividend or other distribution, recapitalization or similar event with
      respect to the foregoing.

	 	 	 
	 	3.3. 	
      The Company will use commercially reasonable efforts to
      prepare and file the

3 

	 		
      Registration Statement to cover all shares of Common
      Stock issuable under this Amendment, Amendment No. 1 and the Transaction
      Documents, including the Registrable Securities.

	 	 	 
	 	3.4. 	
      The Filing Date with respect to the initial Registration
      Statement shall be April 30, 2007 and the Required Effectiveness Date with
      respect to the initial Registration Statement shall be the earlier of (i)
      July 31, 2007 and (ii) the fifth Trading Day following the date on which
      the Company is notified by the Commission that the initial Registration
      Statement will not be reviewed or is no longer subject to further review
      and comments. Notwithstanding anything to the contrary herein, a breach of
      this Section 3.4 shall subject the Company to amounts due under
      Section 6.1(d) of the Purchase Agreement.

	 	 	 
	 	3.5. 	
      In addition to any amounts due under Section 6.1(d)
      of the Purchase Agreement, if the Company fails to file the
      Registration Statement by April 30, 2007, then the Company agrees to issue
      to each Purchaser on May 1, 2007 an additional warrant in the form of
      Exhibit B hereto (the “Additional Warrant B” and together with the
      Additional Warrant A, the “Additional Warrants”), registered in the name
      of such Purchaser, pursuant to which such Purchaser shall have the right
      to acquire such number of Underlying Shares indicated on Schedule A
      hereto under the heading “Additional Warrant B Shares”.

	 	 	 
	 	3.6. 	
      Charter Amendment.

	 	(a) 	
      The Company shall use its best efforts to obtain as soon
      as possible, but in no event later than June 30, 2007, shareholder
      approval of the Charter Amendment (the “Charter Amendment Approval Date”).
      If the Charter Amendment fails to be declared effective on or prior to the
      Charter Amendment Approval Date and the Company does not have shares
      available to be issued upon exercise of Warrants or Additional Warrants
      elected by the Purchasers to be exercised or Notes elected by the
      Purchasers to be converted, such failure shall be deemed an “Event” under
      Section 6.1(d) of the Purchase Agreement. For the purposes of this
      Amendment, “Charter Amendment” shall mean an amendment of the Certificate
      of Incorporation of the Company, duly approved by the stockholders of the
      Company, which amendment increases the authorized number of shares of
      Common Stock of the Company, $.002 par value, to a minimum of 200,000,000
      shares.

	 	 	 
	 	(b) 	
      As soon as practicable following the date hereof, but in
      no event later than March 31, 2007, the Company shall prepare and file
      with the Commission proxy materials calling a special meeting or general
      meeting (the "Meeting") of its shareholders seeking approval of the
      Charter Amendment. The Company shall use its reasonable best efforts to
      cause such proxy materials to reach the "no further comment" stage as soon
      as possible (the "Clearance Date") and to hold the Meeting as soon as
      possible following the Clearance Date, but in no event later than 60
      days

4 

	 		
      following the Clearance Date.

	 	 	 
	 	(c) 	
      The Board of Directors shall recommend approval of the
      Charter Amendment to the Company's shareholders. The Company shall mail
      and distribute its proxy materials for the Meeting to its shareholders at
      least 30 days prior to the date of the Meeting and shall actively solicit
      proxies to vote for the Charter Amendment. The Company shall provide the
      Purchasers an opportunity to review and comment on such proxy materials by
      providing (which may be by e-mail) copies of such proxy materials and any
      revised preliminary proxy materials to the Purchasers at least three (3)
      days prior to their filing with the Commission. The Company shall provide
      the Purchasers (which may be by e-mail) copies of all correspondence from
      or to the Commission or its staff concerning the proxy materials for the
      Meeting promptly after the same is sent or received by the Company and
      summaries of any comments of the Commission's staff which the Company
      receives orally promptly after receiving such oral comments. The Company
      shall (i) furnish to the Purchasers and their counsel (which may be by
      e-mail) a copy of its definitive proxy materials for the Meeting and any
      amendments or supplements thereto promptly after the same are first used,
      mailed to shareholders or filed with the Commission, (ii) inform the
      Purchasers of the progress of solicitation of proxies for such Meeting and
      (iii) inform the Purchasers of any adjournment of the Meeting and shall
      report the result of the vote of shareholders on the Charter Amendment at
      the conclusion of the Meeting. In connection with the Meeting, the Company
      shall hire, at its expense, a nationally recognized proxy solicitation
      firm, selected by the Purchasers, to assist it in obtaining the necessary
      shareholder votes to approve the Charter Amendment.

	 	 	 
	 	(d) 	
      If for any reason the Charter Amendment is not approved
      at the Meeting, the Company will take such additional acts or actions as
      are necessary to hold an additional Meeting to consider the Charter
      Amendment and in conjunction therewith shall hire a nationally recognized
      proxy solicitation firm, selected by the Purchasers which is reasonably
      satisfactory to the Company, to assist it in obtaining the necessary
      shareholder votes to approve the Charter Amendment. Such additional
      Meetings shall be held no less frequent than every 3 months until such
      Charter Amendment is approved or the Notes and Warrants are no longer
      outstanding. The Company shall bear all costs and expenses of the
      preparation and filing of any and all proxy materials and Meetings,
      including but not limited to the costs and expenses of the proxy
      solicitation firm if needed.

	 	 	 
	 	(e) 	
      In the event the Charter Amendment is not approved by the
      Charter Amendment Approval Date and the Company does not have shares
      available to be issued upon exercise of Warrants or Additional Warrants
      elected by the Purchasers to be exercised or Notes elected by the
      Purchasers to be converted, in addition to the other remedies available to
      the Purchasers, the Purchasers shall have the right to require the
      Company

5 

to, within five Trading Days after
delivery of a written notice, pay cash to such Purchaser, an amount equal to the
number of shares of Common Stock not issuable by the Company times 100% of the
average Closing Price over the five Trading Days immediately prior to the date
of such notice or, if greater, the five Trading Days immediately prior to the
date of payment (the “Cash Amount”), which Cash Amount shall be in
satisfaction of the Company’s obligation to deliver such shares.

	4. 	
      Continued Validity of Transaction Documents under the
      Purchase Agreement; Waiver of Prior Defaults. The parties hereto agree
      that the Purchase Agreement and the other Transaction Documents entered
      into in connection therewith (as amended by this Amendment), remain in
      full force and effect, modified to the extent and only to the extent
      necessary to give effect to this Amendment and the transactions herein
      contemplated. The parties agree that any default or event of default that
      has occurred, prior to the effective date hereof, under any of the
      Transaction Documents is waived by each of the Purchasers.

	 	 
	5. 	
      Representations and
Warranties.

	 	5.1. 	
      The Company hereby represents and warrants to the
      Purchasers that each of the representations and warrants set forth in
      Section 3.1 of the Purchase Agreement are true and correct as of
      the date hereof.

	 	 	 
	 	5.2. 	
      Each Purchaser hereby, as to itself only and for no other
      Purchaser, represents and warrants to the Company that each of the
      representations and warrants set forth in Section 3.2 of the
      Purchase Agreement are true and correct as of the date
  hereof.

	6. 	
      Miscellaneous.

	 	6.1. 	
      Fees and Expenses. The Company has agreed to
      reimburse Cranshire Capital, L.P. (“Cranshire”) $15,000 for its legal fees
      and expenses in connection with this Amendment. Except for the foregoing,
      each party hereto will bear the fees and expenses of its own counsel and
      advisors in connection with the negotiation and entering into of this
      Amendment. The Company shall pay all transfer agent fees, stamp taxes and
      other taxes and duties levied in connection with the issuance of any
      Securities.

	 	 	 
	 	6.2. 	
      Entire Agreement. This Amendment and the
      Transaction Documents, together with the exhibits and schedules thereto,
      contain the entire understanding of the parties with respect to the
      subject matter hereof and supersede all prior agreements and
      understandings, oral or written, with respect to such matters, which the
      parties acknowledge have been merged into such documents, exhibits and
      schedules.

6 

	 	6.3. 	
      Equal Treatment of Purchasers. No consideration
      shall be offered or paid to any person to amend or consent to a waiver or
      modification of any provision of any of the Transaction Documents unless
      the same consideration is also offered to all of the parties to the
      Transaction Documents.

	 	 	 
	 	6.4. 	
      Public Announcement. The Company shall, by 9 a.m.
      Eastern time on February 27, 2007, issue a press release disclosing the
      material terms of the transactions contemplated hereby and by 4:30 p.m.
      Eastern time on the first Business Day following the date hereof, file a
      Current Report on Form 8-K, attaching such press release and this
      Amendment thereto, each reasonably acceptable to each Purchaser. The
      Company and each Purchaser shall consult with each other in issuing any
      other press releases with respect to the transactions contemplated hereby,
      and neither the Company nor any Purchaser shall issue any such press
      release or otherwise make any such public statement without the prior
      consent of the Company, with respect to any press release of any
      Purchaser, or without the prior consent of each Purchaser, with respect to
      any press release of the Company, which consent shall not unreasonably be
      withheld, except if such disclosure is required by law, in which case the
      disclosing party shall promptly provide the other party with prior notice
      of such public statement or communication. Notwithstanding the foregoing,
      the Company shall not publicly disclose the name of any Purchaser, or
      include the name of any Purchaser in any filing with the Commission or any
      regulatory agency or Trading Market, without the prior written consent of
      such Purchaser, except (i) as required by federal securities law in
      connection with the registration statement contemplated by the Purchase
      Agreement and (ii) to the extent such disclosure is required by law or
      Trading Market regulations, in which case the Company shall provide the
      Purchasers with prior notice of such disclosure permitted under subclause
      (i) or (ii).

	 	 	 
	 	6.5. 	
      Notices. Any and all notices or other
      communications or deliveries required or permitted to be provided
      hereunder shall be in writing and shall be deemed given and effective as
      specified in the Purchase Agreement. The address for such notices and
      communications shall be as set forth on the signature pages attached to
      the Purchase Agreement.

	 	 	 
	 	6.6. 	
      Amendments; Waivers. No provision of this
      Amendment may be waived or amended except in a written instrument signed,
      in the case of an amendment, by the Company and each Purchaser or, in the
      case of a waiver, by the party against whom enforcement of any such waiver
      is sought. No waiver of any default with respect to any provision,
      condition or requirement of this Amendment shall be deemed to be a
      continuing waiver in the future or a waiver of any subsequent default or a
      waiver of any other provision, condition or requirement hereof, nor shall
      any delay or omission of either party to exercise any right hereunder in
      any manner impair the exercise of any such right.

	 	 	 
	 	6.7. 	
      Amendment Controls. If any topic is addressed both
      in the Purchase

7 

	 		
      Agreement (or any document related thereto) and in this
      Amendment, this Amendment shall control.

	 	 	 
	 	6.8. 	
      Construction. The headings herein are for
      convenience only, do not constitute a part of this Amendment and shall not
      be deemed to limit or affect any of the provisions hereof. The language
      used in this Amendment will be deemed to be the language chosen by the
      parties to express their mutual intent, and no rules of strict
      construction will be applied against any party.

	 	 	 
	 	6.9. 	
      Governing Law. All questions concerning the
      construction, validity, enforcement and interpretation of this Amendment
      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. The parties agree that Section 7.9 of
      the Purchase Agreement shall apply to this Amendment as if set forth in
      its entirety herein.

	 	 	 
	 	6.10. 	
      Survival. The representations and warranties
      contained herein shall survive the delivery, exercise and/or conversion of
      the securities, as applicable for the applicable statue of
    limitations.

	 	 	 
	 	6.11. 	
      Execution. This Amendment may be executed in two
      or more counterparts, all of which when taken together shall be considered
      one and the same document and shall become effective when counterparts
      have been signed by each party and delivered to the other party, it being
      understood that both parties need not sign the same counterpart.

	 	 	 
	 	6.12. 	
      Severability. If any provision of this Amendment
      is held to be invalid or unenforceable in any respect, the validity and
      enforceability of the remaining terms and provisions of this Amendment
      shall not in any way be affected or impaired thereby and the parties will
      attempt to agree upon a valid and enforceable provision that is a
      reasonable substitute therefor, and upon so agreeing, shall incorporate
      such substitute provision in this Amendment.

	 	 	 
	 	6.13. 	
      Independent Nature of Purchasers’ Obligations and
      Rights. The obligations of each Purchaser hereunder are several and
      not joint with the obligations of any other Purchaser, and no Purchaser
      shall be responsible in any way for the performance of the obligations of
      any other Purchaser. Nothing contained herein, and no action taken by any
      Purchaser pursuant hereto, shall be deemed to constitute the Purchasers as
      a partnership, an association, a joint venture or any other kind of
      entity, or create a presumption that the Purchasers are in any way acting
      in concert or as a group with respect to such obligations or the
      transactions contemplated hereby. Each Purchaser shall be entitled to
      independently protect and enforce its rights, including, without
      limitation, the rights arising out of this Amendment and it shall not be
      necessary for any other Purchaser to be joined as an additional party in
      any proceeding for such purpose. The Purchasers have not relied upon the
      same legal counsel in their review and negotiation of this Amendment. The
      Company has elected to

8 

provide all Purchasers with the same
terms and form of Amendment for the convenience of the Company and not because
it was required or requested to do so by the Purchasers. Each Purchaser
represents that it has been represented by its own separate legal counsel in its
review and negotiations of this Amendment and each party represents and confirms
that Malhotra & Associates LLP represents only Cranshire in connection with
this Amendment. 

(Signature Pages Follow) 

9 

          IN
WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly
executed by their respective authorized signatories as of the date first
indicated above. 

AZCO MINING, INC. 

 

By:__________________________________________
     
Name: 
      Title: 

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK 
SIGNATURE PAGE
FOR PURCHASERS FOLLOWS] 

10 

          IN
WITNESS WHEREOF, the undersigned have caused this Amendment to be duly executed
by their respective authorized signatories as of the date first indicated above.

Name of Investing Entity:
________________________________________________________
Signature of
Authorized Signatory of Investing Entity:
__________________________________
Name of Authorized Signatory:
____________________________________________________
Title of Authorized
Signatory: _____________________________________________________
Email
Address of Authorized
Entity:________________________________________________

11 

 

  Schedule A 

	

Purchaser 	

Additional Warrant
      A 
Shares 	

Additional Warrant
      B 
Shares 
	Cranshire Capital, L.P. 	572,540 	572,540 
	Iroquois Master Fund, Ltd. 	525,000 	525,000 
	Lilac Ventures Master Fund 	127,461 	127,461 
	Crestview Capital Master, LLC 	279,748 	279,748 
	Bristol Investment Fund, Ltd. 	245,253 	245,253 

12

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