Document:

Exhibit 10.5

Exhibit 10.5

Confidential

U.S. Accredited Investors Only

FORM OF WARRANT

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

THESE WARRANTS WILL EXPIRE AND BECOME NULL AND VOID

AT                      (                     TIME) ON      
          
     ,       
              .

SHARE PURCHASE WARRANTS TO PURCHASE COMMON SHARES OF

MEXORO Minerals, Ltd.

THIS IS TO CERTIFY THAT                     , (the “Holder”) of                     , has the right to purchase, upon
and subject to the terms and conditions hereinafter referred to, up to                      fully paid and
non-assessable common shares (the “Shares”) of Mexoro Minerals, Ltd. (hereinafter called
the “Company”) on or before                     
p.m. (                     time) on                      (the “Expiry Date”) at a price per share of U.S.
$0.30 (the “Exercise Price”) on the terms and conditions attached hereto as Appendix A (the “Terms and Conditions”).

	 	1.	 	ONE (1) WARRANT AND THE EXERCISE PRICE ARE REQUIRED TO PURCHASE ONE SHARE. THIS
CERTIFICATE REPRESENTS                      WARRANTS.

	 
	 	2.	 	These Warrants are issued subject to the Terms and Conditions, and the Warrant
Holder may exercise the right to purchase Shares only in accordance with those Terms
and Conditions. The Warrant shall expire twenty-four months (24) months after the date
of this Agreement and shall be exercisable at $0.30 per share of Common Stock for a
period of one year, commencing one year after the date of this Agreement. In
other words, the term of the Warrant is two years and they are not exercisable for the
first twelve months after the date of this Agreement.

 

 

 

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

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

MEXORO MINERALS, LTD.

	 	 	 	 	 
	Per:
	 	 	 	 
	 

	 	 

Authorized Signatory
	 	 

 

 

 

Confidential

U.S. Accredited Investors Only

APPENDIX A

TERMS AND CONDITIONS dated                                         ,                     , attached
to the non-transferable Warrants issued by Mexoro
Minerals, Ltd.

SECTION 1 INTERPRETATION

1.1 Definitions

In these Terms and Conditions, unless there is something in the subject matter or context
inconsistent therewith:

	 	(a)	 	“Company” means Mexoro Minerals, Ltd. until a successor corporation will have
become such as a result of consolidation, amalgamation or merger with or into any other
corporation or corporations, or as a result of the conveyance or transfer of all or
substantially all of the properties and estates of the Company as an entirety to any
other corporation and thereafter “Company” will mean such successor corporation.

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

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

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

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

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

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

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

1.2 Gender

Words importing the singular number include the plural and vice versa, and words importing the
masculine gender include the feminine and neuter genders.

 

 

 

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1.3 Interpretation not affected by Headings

The division of these Terms and Conditions into Articles and Sections, and the insertion of
headings are for convenience of reference only and will not affect the construction or
interpretation thereof.

1.4 Applicable Law

The rights and restrictions attached to the Warrant shall be construed in accordance with the
laws of the State of New York, U.S.A. The Holder, in its personal or corporate capacity and, if
applicable, on behalf of each beneficial purchaser for whom it is acting, irrevocably agrees to
the jurisdiction of the courts of the State of New York, U.S.A.

1.5 Additional Issuances of Securities

The Company may at any time and from time to time do further equity or debt financing and may
issue additional Shares, Warrants, convertible securities, stock options or other similar rights
to purchase its capital stock.

SECTION 2 ISSUE OF WARRANTS

2.1 Issue in substitution for Lost Warrants

	 	(a)	 	In case a Warrant becomes mutilated, lost, destroyed or stolen, the Company, at
its discretion, may issue and deliver a new Warrant of like date and tenor as the one
mutilated, lost, destroyed or stolen, in exchange for and in place of and upon
cancellation of such mutilated Warrant, or in lieu of, and in substitution for such
lost, destroyed or stolen Warrant and the substituted Warrant will be entitled to the
benefit hereof and rank equally in accordance with its terms with all other Warrants
issued or to be issued by the Company.

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

2.2 Warrant Holder Not a Shareholder

The holding of a Warrant will not constitute the Holder thereof as a shareholder of the
Company, nor entitle him to any right or interest in respect thereof except as the Warrant
expressly provided.

 

 

 

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SECTION 3 NOTICE

3.1 Notice to Warrant Holders

Any notice required or permitted to be given to the Holders will be in writing and may be
given by prepaid registered post, electronic facsimile transmission or other means of electronic
communication capable of producing a printed copy to the address of the Holder appearing on the
Holder’s Warrant or to such other address as any Holder may specify by notice in writing to the
Company, and any such notice will be deemed to have been given and received by the Holder to whom
it was addressed if mailed, on the third day following the mailing thereof, if by facsimile or
other electronic communication, on successful transmission, or, if delivered, on delivery; but if
at the time of mailing or between the time of mailing and the third business day thereafter there
is a strike, lockout, or other labour disturbance affecting postal service, then the notice will
not be effectively given until actually delivered.

3.2 Notice to the Company

Any notice required or permitted to be given to the Company will be in writing and may be
given by prepaid registered post, electronic facsimile transmission or other means of electronic
communication capable of producing a printed copy to the address of the Company set forth below or
such other address as the Company may specify by notice in writing to the Holder, and any such
notice will be deemed to have been given and received by the Company to whom it was addressed if
mailed, on the third day following the mailing thereof, if by facsimile or other electronic
communication, on successful transmission, or, if delivered, on delivery; but if at the time of
mailing or between the time of mailing and the third business day thereafter there is a strike,
lockout, or other labour disturbance affecting postal service, then the notice will not be
effectively given until actually delivered:

Mexoro Minerals, Ltd.

C. General Retana #706

Col San Felipe

Chihuahua, Chih. 31203

Mexico

Attention: Francisco Quiroz, President

Fax No. +52 (614) 426 5505 ext 104

with a copy, which shall not constitute notice, to:

DLA Piper US LLP

4365 Executive Drive, Suite 1100

San Diego, CA 92121-2133

Attention: Jeffrey C. Thacker

Fax: +1 (858) 638-5128

 

 

 

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U.S. Accredited Investors Only

SECTION 4 EXERCISE OF WARRANTS

4.1 Method of Exercise of Warrants

The right to purchase Shares conferred by the Warrants may be exercised by the Holder
surrendering the Warrant Certificate representing same, with a duly completed and executed
subscription in the form attached hereto and a bank draft or certified cheque payable to the
Company for the aggregate purchase price applicable at the time of surrender in respect of the
shares subscribed for in lawful money of the United States of America, to the Company at the
address set forth herein.

4.2 Effect of Exercise of Warrants

	 	(a)	 	Upon surrender and payment as aforesaid, the Shares so subscribed for will be
deemed to have been issued and such person or persons will be deemed to have become the
Holder or Holders of record of such shares on the date of such surrender and payment,
and such shares will be issued at the subscription price in effect on the date of such
surrender and payment.

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

4.3 Limitation on Exercise of Warrants

The Warrant shall expire twenty-four months (24) months after the date of this Agreement and
shall be exercisable at $0.30 per Share for a period of one year, commencing one
year after the date of this Agreement. In other words, the term of the Warrants is two years
and they are not exercisable for the first twelve months after the date of this Agreement.

4.4 Subscription for Less Than Entitlement

The Holder of any Warrant may subscribe for and purchase a number of shares less than the
number which he is entitled to purchase pursuant to the surrendered Warrant. In the event of any
purchase of a number of shares less than the number which can be purchased pursuant to a Warrant,
the Holder thereof upon exercise thereof will in addition be entitled to receive a new Warrant in
respect of the balance of the shares which he was entitled to purchase pursuant to the surrendered
Warrant and which were not then purchased.

4.5 Warrants for Fractions of Shares

To the extent that the Holder of any Warrant is entitled to receive on the exercise or
partial exercise thereof a fraction of a share, such right may be exercised in respect of such
fraction only in combination with another Warrant or other Warrants which in the aggregate entitle
the Holder to receive a whole number of such shares.

 

 

 

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4.6 Expiration of Warrants

After the expiration of the period within which a Warrant is exercisable, all rights
thereunder will wholly cease and terminate and such Warrant will be void and of no effect.

4.7

Time of Essence

Time will be of the essence hereof.

4.8 Subscription Price

Each Warrant is exercisable at a price per share (the “Exercise Price”) of U.S. $0.30. One
(1) Warrant and the Exercise Price are required to subscribe for each share during the term of the
Warrants.

4.9 Adjustment of Exercise Price

The Exercise Price and the number of shares deliverable upon the exercise of the
Warrants will be subject to adjustment in the event and in the manner following:

	 	(a)	 	If and whenever the shares at any time outstanding are subdivided into a
greater or consolidated into a lesser number of shares the Exercise Price will be
decreased or increased proportionately as the case may be; upon any such subdivision or
consolidation, the number of shares deliverable upon the exercise of the Warrants will
be increased or decreased proportionately as the case may be.

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

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

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

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

 

 

 

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4.10

Determination of Adjustments

If any questions will at any time arise with respect to the Exercise Price or any adjustment
provided for in the “Adjustment of Exercise Price” section above, such questions will be
conclusively determined by the Company’s Auditors, or, if they decline to so act, any other firm
of certified public accountants in the U.S. that the Company may designate and who will have
access to all appropriate records, and such determination will be binding upon the Company and the
Holders of the Warrants.

SECTION 5 WAIVER OF CERTAIN RIGHTS

5.1 Immunity of Shareholders, etc.

The Warrant Holder, as part of the consideration for the issue of the Warrants, waives and
will not have any right, cause of action or remedy now or hereafter existing in any jurisdiction
against any past, present or future incorporator, shareholder, Director or officer (as such) of
the Company for the issue of shares pursuant to any Warrant or on any covenant, agreement,
representation or warranty by the Company herein contained or in the Warrant.

5.2  Legends

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

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

SECTION 6 MODIFICATION OF TERMS, ETC.

6.1 Modification of Terms and Conditions for Certain Purposes

From time to time the Company may, subject to the provisions of these presents, and it shall,
when so directed by these presents, modify the terms and conditions hereof, for any one or more of
any of the following purposes:

	 	(a)	 	making such provisions not inconsistent herewith as may be necessary or
desirable with respect to matters or questions arising hereunder or for the purpose of
obtaining a listing or quotation of the Warrants on any stock exchange or quotation
system;

 

 

 

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

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

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

	6.2 	Warrants Not Transferable

The Warrant and all rights attached to it are not transferable.

	 
	6.3 	Covenants of the Company

The Company will reserve and there will remain unissued out of its authorized capital stock a
sufficient number of Shares to satisfy the rights of purchase provided for in the Warrants should
the holders of all the Warrants from time to time outstanding determine to exercise such rights in
respect of all Shares why they are or may be entitled to purchase pursuant thereto.

DATED as of the date first above written in these Terms and Conditions.

	 	 	 	 	 	 	 
	 	 	MEXORO Minerals, Ltd.	 	 
	 
	 	 	 	 	 	 
	 

	 	Per:	 	 	 	 
	 

	 	 	 	 

Authorized Signatory
	 	 

 

 

 

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U.S. Accredited Investors Only

FORM OF SUBSCRIPTION

			
	TO:	 	Mexoro Minerals, Ltd.

C. General Retana #706

Col San Felipe

Chihuahua, Chih. 31203

Mexico

Attention: Francisco Quiroz, President:

The undersigned Holder of the within Warrants hereby subscribes for
______ common shares (the “Shares”) of Mexoro Minerals, Ltd. (the “Company”) pursuant to the Warrants
within at US$[•] per share on the terms specified in said Warrants. Capitalized terms
used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.

This subscription is accompanied by a certified cheque or bank draft payable to or to the
order of the Company for the aggregate purchase price of the Shares.

The undersigned represents that, at the time of the exercise of these Warrants, all of the
representations and warranties contained in the Subscription Agreement between the Company and the
undersigned pursuant to which these Warrants were issued are true and accurate.

The undersigned hereby directs that the Shares be registered as follows:

	 	 	 	 	 
	NAME(S) IN FULL	 	ADDRESS(ES)	 	NUMBER OF SHARES
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	 
	 	 
	 
	 	 	 	 
	 

	 	TOTAL:	 	 
	 

	 	 	 	 

(Please print full name in which share certificates are to be issued, stating whether Mr.,
Mrs. or Miss as applicable).

DATED this                      day of               
               
           ,      
               .

In the presence of:Exhibit 10.6

Exhibit 10.6

Confidential

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FORM OF WARRANT

THE SECURITIES REPRESENTED HEREBY HAVE BEEN OFFERED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE
NOT U.S. PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED (THE “1933 ACT”). NONE OF THE SECURITIES, NOR THE SECURITIES INTO WHICH
THESE SECURITIES ARE EXERCISABLE, HAVE BEEN REGISTERED UNDER THE 1933 ACT, OR ANY U.S. STATE
SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE OFFERED OR SOLD, DIRECTLY OR INDIRECTLY,
IN THE UNITED STATES OR TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT IN ACCORDANCE WITH THE
PROVISIONS OF REGULATION S UNDER THE 1933 ACT, PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT
UNDER THE 1933 ACT, OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO
THE REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH APPLICABLE
STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE 1933 ACT.

THESE WARRANTS WILL EXPIRE AND BECOME NULL AND VOID

AT                     
(                    
TIME) ON                          
               ,                     .

SHARE PURCHASE WARRANTS TO PURCHASE COMMON SHARES OF

MEXORO Minerals, Ltd.

THIS IS TO CERTIFY THAT   
                    
                  , (the
“Holder”) of                
                   
      , has the right to purchase, upon and subject to the terms and conditions
hereinafter referred to, up to               
       fully paid and non-assessable common shares (the “Shares”) of
Mexoro Minerals, Ltd. (hereinafter called the “Company”) on or before      
                p.m. (   
                  time)
on                   
   (the “Expiry Date”) at a price per share of U.S. $0.30
(the “Exercise Price”) on the terms and conditions attached hereto as Appendix A (the
“Terms and Conditions”).

	 	1.	 	ONE (1) WARRANT AND THE EXERCISE PRICE ARE REQUIRED TO
PURCHASE ONE SHARE. THIS CERTIFICATE REPRESENTS                     
WARRANTS.

	 	2.	 	These Warrants are issued subject to the Terms and Conditions, and the Warrant
Holder may exercise the right to purchase Shares only in accordance with those Terms
and Conditions. The Warrant shall expire twenty-four months (24) months after the date
of this Agreement and shall be exercisable at $0.30 per share of common stock of the
Company for a period of one year, commencing one year after the date of this
Agreement. In other words, the term of the Warrant is two years and they are not exercisable for the first twelve months after the date of
this Agreement.

 

 

 

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

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

MEXORO MINERALS, LTD.

	 	 	 	 	 
	Per:

	 	  

Authorized
Signatory
	 	 

 

 

 

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Canadian and Non-U.S. Subscribers Only

APPENDIX A

TERMS AND CONDITIONS
dated                                         ,                     , attached to the
non-transferable Warrants issued by Mexoro
Minerals, Ltd.

SECTION 1 INTERPRETATION

1.1 Definitions

In these Terms and Conditions, unless there is something in the subject matter or context
inconsistent therewith:

	 	(a)	 	“Company” means Mexoro Minerals, Ltd. until a successor corporation will have
become such as a result of consolidation, amalgamation or merger with or into any other
corporation or corporations, or as a result of the conveyance or transfer of all or
substantially all of the properties and estates of the Company as an entirety to any
other corporation and thereafter “Company” will mean such successor corporation.

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

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

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

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

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

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

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

1.2 Gender

Words importing the singular number include the plural and vice versa, and words importing the
masculine gender include the feminine and neuter genders.

 

 

 

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Canadian and Non-U.S. Subscribers Only

1.3 Interpretation not affected by Headings

The division of these Terms and Conditions into Articles and Sections, and the insertion of
headings are for convenience of reference only and will not affect the construction or
interpretation thereof.

1.4 Applicable Law

The rights and restrictions attached to the Warrant shall be construed in accordance with the
laws of the State of New York, USA. The Holder, in its personal or corporate capacity and, if
applicable, on behalf of each beneficial purchaser for whom it is acting, irrevocably agrees to
the jurisdiction of the courts of the State of New York, USA.

1.5 Additional Issuances of Securities

The Company may at any time and from time to time do further equity or debt financing and may
issue additional Shares, Warrants, convertible securities, stock options or other similar rights to
purchase its capital stock.

SECTION 2 ISSUE OF WARRANTS

2.1 Issue in substitution for Lost Warrants

	 	(a)	 	In case a Warrant becomes mutilated, lost, destroyed or stolen, the Company, at
its discretion, may issue and deliver a new Warrant of like date and tenor as the one
mutilated, lost, destroyed or stolen, in exchange for and in place of and upon
cancellation of such mutilated Warrant, or in lieu of, and in substitution for such
lost, destroyed or stolen Warrant and the substituted Warrant will be entitled to the
benefit hereof and rank equally in accordance with its terms with all other Warrants
issued or to be issued by the Company.

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

2.2 Warrant Holder Not a Shareholder

The holding of a Warrant will not constitute the Holder thereof as a shareholder of the
Company, nor entitle him to any right or interest in respect thereof except as the Warrant
expressly provided.

 

 

 

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SECTION 3 NOTICE

3.1 Notice to Warrant Holders

Any notice required or permitted to be given to the Holders will be in writing and may be
given by prepaid registered post, electronic facsimile transmission or other means of electronic
communication capable of producing a printed copy to the address of the Holder appearing on the
Holder’s Warrant or to such other address as any Holder may specify by notice in writing to the
Company, and any such notice will be deemed to have been given and received by the Holder to whom
it was addressed if mailed, on the third day following the mailing thereof, if by facsimile or
other electronic communication, on successful transmission, or, if delivered, on delivery; but if
at the time of mailing or between the time of mailing and the third business day thereafter there
is a strike, lockout, or other labour disturbance affecting postal service, then the notice will
not be effectively given until actually delivered.

3.2 Notice to the Company

Any notice required or permitted to be given to the Company will be in writing and may be
given by prepaid registered post, electronic facsimile transmission or other means of electronic
communication capable of producing a printed copy to the address of the Company set forth below or
such other address as the Company may specify by notice in writing to the Holder, and any such
notice will be deemed to have been given and received by the Company to whom it was addressed if
mailed, on the third day following the mailing thereof, if by facsimile or other electronic
communication, on successful transmission, or, if delivered, on delivery; but if at the time of
mailing or between the time of mailing and the third business day thereafter there is a strike,
lockout, or other labour disturbance affecting postal service, then the notice will not be
effectively given until actually delivered:

Mexoro Minerals, Ltd.

C. General Retana #706

Col San Felipe

Chihuahua, Chih. 31203

Mexico

Attention: Francisco Quiroz, President

Fax No. +52 (614) 426 5505 ext 104

with a copy, which shall not constitute notice, to:

DLA Piper US LLP

4365 Executive Drive, Suite 1100

San Diego, CA 92121-2133

Attention: Jeffrey C. Thacker

Fax: +1 (858) 638-5128

 

 

 

Confidential

Canadian and Non-U.S. Subscribers Only

SECTION 4 EXERCISE OF WARRANTS

4.1 Method of Exercise of Warrants

The right to purchase Shares conferred by the Warrants may be exercised by the Holder
surrendering the Warrant Certificate representing same, with a duly completed and executed
subscription in the form attached hereto and a bank draft or certified cheque payable to the
Company for the aggregate purchase price applicable at the time of surrender in respect of the
shares subscribed for in lawful money of the United States of America, to the Company at the
address set forth herein.

4.2 Effect of Exercise of Warrants

	 	(a)	 	Upon surrender and payment as aforesaid, the Shares so subscribed for will be
deemed to have been issued and such person or persons will be deemed to have become the
Holder or Holders of record of such shares on the date of such surrender and payment,
and such shares will be issued at the subscription price in effect on the date of such
surrender and payment.

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

4.3 Limitation on Exercise of Warrants

The Warrant shall expire twenty-four months (24) months after the date of this Agreement and
shall be exercisable at $0.30 per Share for a period of one year, commencing one
year after the date of this Agreement. In other words, the term of the Warrants is two years
and they are not exercisable for the first twelve months after the date of this Agreement.

4.4 Subscription for Less Than Entitlement

The Holder of any Warrant may subscribe for and purchase a number of shares less than the
number which he is entitled to purchase pursuant to the surrendered Warrant. In the event of any
purchase of a number of shares less than the number which can be purchased pursuant to a Warrant,
the Holder thereof upon exercise thereof will in addition be entitled to receive a new Warrant in
respect of the balance of the shares which he was entitled to purchase pursuant to the surrendered
Warrant and which were not then purchased.

4.5 Warrants for Fractions of Shares

To the extent that the Holder of any Warrant is entitled to receive on the exercise or
partial exercise thereof a fraction of a share, such right may be exercised in respect of such
fraction only in combination with another Warrant or other Warrants which in the aggregate entitle
the Holder to receive a whole number of such shares.

 

 

 

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4.6 Expiration of Warrants

After the expiration of the period within which a Warrant is exercisable, all rights
thereunder will wholly cease and terminate and such Warrant will be void and of no effect.

4.7 Time of Essence

	 	 	Time will be of the essence hereof.

4.8 Subscription Price

Each Warrant is exercisable at a price per share (the “Exercise Price”) of U.S. $0.30. One (1)
Warrant and the Exercise Price are required to subscribe for each share during the term of the
Warrants.

4.9 Adjustment of Exercise Price

The Exercise Price and the number of shares deliverable upon the exercise of the
Warrants will be subject to adjustment in the event and in the manner following:

	 	(a)	 	If and whenever the shares at any time outstanding are subdivided into a
greater or consolidated into a lesser number of shares the Exercise Price will be
decreased or increased proportionately as the case may be; upon any such subdivision or
consolidation, the number of shares deliverable upon the exercise of the Warrants will
be increased or decreased proportionately as the case may be.

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

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

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

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

 

 

 

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4.10 Determination of Adjustments

If any questions will at any time arise with respect to the Exercise Price or any adjustment
provided for in the “Adjustment of Exercise Price” section above, such questions will be
conclusively determined by the Company’s Auditors, or, if they decline to so act, any other firm of
certified public accountants in the U.S. that the Company may designate and who will have access to
all appropriate records, and such determination will be binding upon the Company and the Holders of
the Warrants.

4.11 United States Restrictions

These Warrants and the Shares issuable upon the exercise of these Warrants have not been and
will not be registered under the U.S. Securities Act of 1933, as amended (the “1933 Act”) or any
state securities laws. These Warrants may not be exercised in the U.S. (as defined in Regulation S
under the 1933 Act) unless these Warrants and the Shares issuable upon exercise hereof have been
registered under the 1933 Act and any applicable state securities laws or unless an exemption from
such registration is available.

SECTION 5 WAIVER OF CERTAIN RIGHTS

5.1 Immunity of Shareholders, etc.

The Warrant Holder, as part of the consideration for the issue of the Warrants, waives and
will not have any right, cause of action or remedy now or hereafter existing in any jurisdiction
against any past, present or future incorporator, shareholder, Director or officer (as such) of the
Company for the issue of shares pursuant to any Warrant or on any covenant, agreement,
representation or warranty by the Company herein contained or in the Warrant.

5.2 Legends

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

“THESE SECURITIES WERE ISSUED IN AN OFFSHORE TRANSACTION TO PERSONS WHO ARE NOT U.S.
PERSONS (AS DEFINED HEREIN) PURSUANT TO REGULATION S UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). ACCORDINGLY, NONE OF THE
SECURITIES TO WHICH THIS CERTIFICATE RELATES HAVE BEEN REGISTERED UNDER THE 1933
ACT, OR ANY U.S. STATE SECURITIES LAWS, AND, UNLESS SO REGISTERED, NONE MAY BE
OFFERED OR SOLD IN THE UNITED STATES (AS DEFINED HEREIN) OR, DIRECTLY OR INDIRECTLY,
TO U.S. PERSONS (AS DEFINED HEREIN) EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE
REGISTRATION REQUIREMENTS OF THE 1933 ACT AND IN EACH CASE ONLY IN ACCORDANCE WITH
APPLICABLE STATE SECURITIES LAWS. IN ADDITION, HEDGING TRANSACTIONS INVOLVING THE
SECURITIES MAY NOT BE CONDUCTED UNLESS IN ACCORDANCE WITH THE 1933 ACT.

“UNITED STATES” AND “U.S. PERSON” ARE AS DEFINED BY REGULATION S UNDER THE 1933
ACT.”

 

 

 

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“UNLESS PERMITTED UNDER SECURITIES LEGISLATION, THE HOLDER OF THIS SECURITY MUST NOT
TRADE THE SECURITY BEFORE • [INSERT THE DATE THAT IS 4 MONTHS AND A DAY AFTER THE
CLOSING].”

SECTION 6  MODIFICATION OF TERMS, ETC.

6.1 Modification of Terms and Conditions for Certain Purposes

From time to time the Company may, subject to the provisions of these presents, and it shall,
when so directed by these presents, modify the terms and conditions hereof, for any one or more of
any of the following purposes:

	 	(a)	 	making such provisions not inconsistent herewith as may be necessary or
desirable with respect to matters or questions arising hereunder or for the purpose of
obtaining a listing or quotation of the Warrants on any stock exchange or quotation
system;

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

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

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

6.2 Warrants Not Transferable

	 	 	The Warrant and all rights attached to it are not transferable.

6.3 Covenants of the Company

The Company will reserve and there will remain unissued out of its authorized capital stock a
sufficient number of Shares to satisfy the rights of purchase provided for in the Warrants should
the holders of all the Warrants from time to time outstanding determine to exercise such rights in
respect of all Shares why they are or may be entitled to purchase pursuant thereto.

DATED as of the date first above written in these Terms and Conditions.

 

 

 

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	 	 	MEXORO Minerals, Ltd.
	 
	 	 	 	 
	 

	 	Per:
	 	 
	 

	 	 	 	 
	 

	 	 	 	Authorized Signatory

 

 

 

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Canadian and Non-U.S. Subscribers Only

FORM OF SUBSCRIPTION

	 	 	 
	TO:

	 	Mexoro Minerals, Ltd.
	 

	 	C. General Retana #706 
	 

	 	Col San Felipe 
	 

	 	Chihuahua, Chih. 31203

 Mexico

Attention: Francisco Quiroz, President:

The undersigned Holder of the within Warrants hereby subscribes for                     
common shares (the “Shares”) of Mexoro Minerals, Ltd. (the “Company”) pursuant to the
Warrants within on the terms specified in said Warrants. Capitalized terms used herein
and not otherwise defined shall have the respective meanings set forth in the Warrant.

This subscription is accompanied by a certified cheque or bank draft payable to or
to the order of the Company for the aggregate purchase price of the Shares.

The undersigned represents that, at the time of the exercise of these Warrants, all
of the representations and warranties contained in the Subscription Agreement between
the Company and the undersigned pursuant to which these Warrants were issued are true
and accurate.

The undersigned hereby directs that the Shares be registered as follows:

	 	 	 	 	 
	NAME(S) IN FULL	 	ADDRESS(ES)	 	NUMBER OF SHARES
	 	 	 	 	 
	 
	 	 
	 	 
	 
	 	 
	 	 
	 
	 	 
	 	 
	 
	 
	 	TOTAL:
	 	 
	 
	 	 	 	 

(Please print full name in which share certificates are to be issued, stating
whether Mr., Mrs. or Miss as applicable).

DATED this
                     day of                                         ,
                    .

In the presence of:

 

 

 

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Canadian and Non-U.S. Subscribers Only

	 	 	 
	 
	 	 
	 

	 	 
	Signature of Witness

	 	Signature of Warrant Holder

	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Please print your name and address in full below.	 	 
	 
	 	 	 	 	 	 
	 	 	Name (Mr./Mrs./Miss)	 	 
	 
	 	 	 	 	 	 
	 

	 	Address

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