Exhibit 10.03

 

EXECUTION COPY

 

In Canada, unless permitted under securities legislation, the holder of this
security must not trade the security before the date that is 4 months and a day
after the later of (i) September 2, 2010, and (ii) the date the issuer became a
reporting issuer in any province or territory.

 

These securities and the securities issuable upon the conversion or exercise
thereof have not been registered under the United States Securities Act of 1933,
as amended (the “1933 Act”) and may not be offered or sold except pursuant to an
effective registration statement under the 1933 Act, or pursuant to an exemption
from the registration requirements of the 1933 Act, or outside the United States
in accordance with Regulation S under the 1933 Act.

 

CONVERTIBLE GRID PROMISSORY NOTE

 

USD$750,000.00

DATE: SEPTEMBER 2, 2010

 

1.                                      Promise to Pay

 

FOR VALUE RECEIVED American Lithium Minerals, Inc. (together with its
successors, the “Borrower”) unconditionally promises to pay to 2245393 Ontario
Inc. (the “Lender”), its successors (including any successor by reason of
amalgamation) and assigns, or to its order in lawful money of the United States
of America, the amount of SEVEN HUNDRED AND FIFTY THOUSAND DOLLARS ($750,000.00)
(the “Principal Amount”) together with interest on the Principal Amount
outstanding from time to time under this promissory note (this “Note”), all as
recorded by the Lender on the grid attached hereto as Schedule 1 and, if
applicable, on any grids attached hereto as subsequently numbered Schedules
(collectively, the “Grid”). The Principal Amount outstanding together with
accrued and unpaid interest shall be due and be paid on August 31, 2015 (the
“Maturity Date”). Capitalized terms used but not defined herein have the
meanings given in the Investment Agreement (as defined herein).

 

2.                                      Interest

 

The Principal Amount outstanding at any time and from time to time shall bear
interest from and including the date hereof to but excluding the Maturity Date
at the rate of 4% per annum (calculated on the basis of a year of 365 days).
Such interest shall be calculated and accrue daily and shall be payable (without
compounding) each and every six months in arrears, with the first payment of
interest due and payable on February 28, 2011.

 

Following the occurrence of an Event of Default, the Principal Amount
outstanding at any time and from time to time and any accrued but unpaid
interest shall bear interest at the rate equal to 12% per annum (calculated on
the basis of a year of 365 days).  Such interest shall accrue daily and shall be
payable on demand.

 

3.                                      Criminal Rate of Interest

 

In no event shall the aggregate “interest” (as defined in Section 347 (the
“Criminal Code Section”) of the Criminal Code (Canada), payable to the Lender
under this Note exceed the effective annual rate of interest lawfully permitted
under the Criminal Code Section.  Further, if any payment, collection or demand
pursuant to this Note in respect of such “interest” is determined to be contrary
to the provisions of the Criminal Code Section, such payment, collection, or
demand shall be deemed to have been made by mutual mistake of the Lender and

 

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the Borrower and such “interest” shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by law or so result in the receipt by the
Lender of interest at a rate not in contravention of the Criminal Code Section.

 

4.                                      Interest Act (Canada)

 

Each interest rate which is calculated under this Note on any basis other than a
full calendar year (the “deemed interest period”) is, for the purposes of the
Interest Act (Canada), equivalent to a yearly rate calculated by dividing such
interest rate by the actual number of days in the deemed interest period, then
multiplying such result by the actual number of days in the calendar year (365
or 366).

 

5.                                      Prepayment

 

The Borrower shall be entitled to prepay all or any portion of the Principal
Amount outstanding, provided that the Borrower has first provided at least 30
days’ prior written notice to the Holder (as defined below). For greater
certainty, the Holder shall be entitled to elect to exercise the right of
conversion provided for in this Note during such 30-day notice period. Any
payments in respect of amounts due under this Note shall be applied first in
satisfaction of any accrued and unpaid interest, and then to the Principal
Amount outstanding.

 

6.                                      Conversion

 

The Lender may, at the Lender’s option,  at any time and from time to time prior
to the close of business of the Borrower on the fifth business day prior to the
Maturity Date, elect to convert, in whole or in part, the Principal Amount
outstanding and accrued but unpaid interest into common shares in the capital of
the Borrower (“Common Shares”). Each Common Share so issued will for these
purposes be valued based on a conversion price of US$0.54 per Common Share (the
“Conversion Price”).

 

The Lender, or the current holder of this Note (the “Holder”), shall give a
minimum of five business days prior written notice (“Notice of Conversion”) to
the Borrower at its address for purposes of notice under Section 13 together
with the Conversion Form attached hereto as Schedule B exercising the right to
convert this Note in accordance with the provisions hereof. Thereupon the Holder
shall be entitled to be entered in the books of the Borrower as at the date of
conversion as the holder of the number of Common Shares into which this Note (or
the portion converted) is convertible in accordance with the provisions of this
Section and, as soon as practicable thereafter and upon surrender of this Note
to the Borrower, the Borrower shall deliver to the Holder a certificate or
certificates for such Common Shares.

 

If the Lender provides a Notice of Conversion to the Borrower with respect to
the conversion of a portion of the principal amount outstanding under this Note,
the Borrower shall issue to the Lender a new convertible promissory note, having
the same terms and conditions as this Note, representing the principal amount of
the Note not converted.

 

For the purposes of this Section, this Note shall be deemed to be surrendered
for conversion on the date (herein called “Conversion Date”) which is five
business days following the date on which Notice of Conversion is received by
the Borrower, provided that if this Note is

 

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surrendered for conversion on a day on which the register of Common Shares is
closed, the Holder shall become the holder of record of such Common Shares as at
the date on which such register is next re-opened.

 

The Borrower shall not be required to issue fractional Common Shares upon the
exercise of any conversion right. In lieu of fractional Common Shares, the
number of Common Shares issuable on conversion shall be rounded up or down, as
the case may be, to the nearest whole Common Share. For greater certainty, no
cash payments shall be made by the Borrower in lieu of issuing any fractional
interest in a Common Share.

 

The Borrower covenants that it will issue and deliver to the Lender certificates
evidencing such number of Common Shares as shall then be issuable upon the
conversion of this Note or such portion of it as is specified in the Notice of
Conversion.  The Borrower covenants that all Common Shares which shall be so
issuable shall be duly and validly issued as fully paid and non-assessable. The
Borrower acknowledges that such certificates may bear legends regarding
applicable restrictions on transfers of the Common Shares under applicable
Canadian and U.S. securities laws. The Borrower represents and warrants that a
sufficient number of Common Shares are authorized and have been reserved for
issuance to satisfy the Borrower’s obligations on conversion of the Note.

 

The Borrower shall not declare or pay dividends in respect of the Common Shares
following receipt by the Borrower of the Notice of Conversion, until after the
Conversion Date.

 

7.                                      Anti-Dilution Protection

 

(a)                                  Definitions:  For the purposes of this
Section 7, unless there is something in the subject matter or context
inconsistent therewith, the words and terms defined below shall have the
respective meanings specified therefor in this Section 7:

 

(i)                                   “Adjustment Period” means the period
commencing on the date of issue of the Note and ending at the Maturity Date;

 

(ii)                                “Current Market Price” of the Common Shares
at any date means the price per share equal to the weighted average price at
which the Common Shares have traded on the Over-the-Counter Bulletin Board or
such other stock exchange or over-the-counter market as may be selected by the
directors of the Borrower for such purpose during the period of any twenty
consecutive trading days ending not more than five business days before such
date; provided that the weighted average price shall be determined by dividing
the aggregate sale price of all Common Shares sold on the said exchange or
market, as the case may be, during the said twenty consecutive trading days by
the total number of Common Shares so sold; and provided further that if the
Common Shares are not then listed on any stock exchange or traded in the
over-the-counter market, then the Current Market Price shall be determined by a
firm of independent chartered accountants selected by the directors of the
Borrower;

 

(iii)                             “director” means a director of the Borrower
for the time being and, unless otherwise specified herein, a reference to action
“by the directors” means action

 

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by the directors of the Borrower as a board or, whenever empowered, action by
the executive committee of such board; and

 

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

 

(b)                                 Adjustments:  Subject to Section 7(5), the
Conversion Price shall be subject to adjustment from time to time in the events
and in the manner provided as follows:

 

(i)                                     If at any time during the Adjustment
Period the Borrower shall:

 

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

 

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

 

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

 

(D)                               consolidate the outstanding Common Shares into
a smaller number of Common Shares,

 

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

 

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

 

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

 

To the extent that any adjustment in the Conversion Price occurs pursuant to
this Section 7(b)(i) as a result of the fixing by the Borrower of a record date
for the

 

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distribution of securities exchangeable for or convertible into Common Shares,
the Conversion Price shall be readjusted immediately after the expiry of any
relevant exchange or conversion right to the Conversion Price which would then
be in effect based upon the number of Common Shares actually issued and
remaining issuable after such expiry and shall be further readjusted in such
manner upon the expiry of any further such right.

 

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

 

(A)                              the numerator of which shall be the aggregate
of

 

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

 

(2)                                  the quotient determined by dividing

 

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

 

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

 

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

 

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If by the terms of the rights, options, or warrants referred to in this
Section 7(b)(ii), there is more than one purchase, conversion or exchange price
per Common Share, the aggregate price of the total number of additional Common
Shares offered for subscription or purchase, or the aggregate conversion or
exchange price of the convertible or exchangeable securities so offered, shall
be calculated for purposes of the adjustment on the basis of the lowest
purchase, conversion or exchange price per Common Share, as the case may be. 
Any Common Shares owned by or held for the account of the Borrower shall be
deemed not to be outstanding for the purpose of any such calculation.  To the
extent that any adjustment in the Conversion Price occurs pursuant to this
Section 7(b)(ii) as a result of the fixing by the Borrower of a record date for
the issue or distribution of rights, options or warrants referred to in this
Section 7(b)(ii), the Conversion Price shall be readjusted immediately after the
expiry of any relevant exchange, conversion or exercise right to the Conversion
Price which would then be in effect based upon the number of Common Shares
actually issued and remaining issuable after such expiry and shall be further
readjusted in such manner upon the expiry of any further such right.

 

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

 

(A)                              shares of the Borrower of any class other than
Common Shares;

 

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

 

(C)                                evidences of indebtedness of the Borrower; or

 

(D)                               any property or assets of the Borrower;

 

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

 

(1)                                  the numerator of which shall be the
difference between

 

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

 

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

 

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

 

Any Common Shares owned by or held for the account of the Borrower shall be
deemed not to be outstanding for the purpose of such calculation.  To the extent
that any adjustment in the Conversion Price occurs pursuant to this
Section 7(b)(iii) as a result of the fixing by the Borrower of a record date for
the issue or distribution of rights, options or warrants to acquire Common
Shares or securities exchangeable for or convertible into Common Shares referred
to in this Section 7(b)(iii), the Conversion Price shall be readjusted
immediately after the expiry of any relevant exercise, exchange or conversion
right to the amount which would then be in effect based upon the number of
Common Shares issued and remaining issuable after such expiry and shall be
further readjusted in such manner upon the expiry of any further such right.

 

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

 

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

 

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

 

(C)                                the transfer of the undertaking or assets of
the Borrower as an entirety or substantially as an entirety to another Company
or entity;

 

(any of such events being called a “Capital Reorganization”), after the
effective date of the Capital Reorganization the Holder shall be entitled to
receive, and shall accept, for the same aggregate consideration, upon conversion
of the Note, in lieu of the number of Common Shares to which the Holder was
theretofor entitled upon the conversion of the Note, the kind and aggregate
number of shares and other securities or property

 

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resulting from the Capital Reorganization which the Holder would have been
entitled to receive as a result of the Capital Reorganization if, on the
effective date thereof, the Holder had been the registered holder of the number
of Common Shares which the Holder was theretofore entitled to purchase or
receive upon the conversion of the Note.  If necessary, as a result of any such
Capital Reorganization, appropriate adjustments shall be made in the application
of the provisions of this Note with respect to the rights and interests
thereafter of the Holder to the end that the provisions shall thereafter
correspondingly be made applicable as nearly as may reasonably be possible in
relation to any shares or other securities or property thereafter deliverable
upon the conversion of the Note.

 

(v)                                 If at any time during the Adjustment Period
any adjustment or readjustment in the Conversion Price shall occur pursuant to
the provisions of Sections 7(b)(i), (ii), or (iii) of this Note, then the number
of Common Shares purchasable upon the subsequent conversion of the Note shall be
simultaneously adjusted or readjusted, as the case may be, by multiplying the
number of Common Shares issuable on conversion of the Note immediately prior to
such adjustment or readjustment by a fraction which shall be the reciprocal of
the fraction used in the adjustment or readjustment of the Conversion Price.

 

(c)                                  Rules:  Subject to Section 7(d), the
following rules and procedures shall be applicable to adjustments made pursuant
to this Section 7:

 

(i)                                     Subject to the following sections of
this Section 7(c), any adjustment made pursuant to Section 7 shall be made
successively whenever an event referred to therein shall occur.

 

(ii)                                  No adjustment in the Conversion Price
shall be required unless such adjustment would result in a change of at least
one per cent in the then Conversion Price; provided, however, that any
adjustments which except for the provision of this subsection (ii) would
otherwise have been required to be made shall be carried forward and taken into
account in any subsequent adjustment.  Notwithstanding any other provision of
Section 7, no adjustment of the Conversion Price shall be made which would
result in an increase in the Conversion Price (except in respect of a
consolidation of the outstanding Common Shares).

 

(iii)                               If at any time during the Adjustment Period
the Borrower shall take any action affecting the Common Shares, other than an
action or event described in Section 7, which in the opinion of the directors
would have a material adverse effect upon the rights of the Holder, the
Conversion Price shall, subject to any necessary regulatory approval, be
adjusted in such manner and at such time as the directors may determine to be
equitable in the circumstances, provided that no such action shall be taken
unless and until the Holder has been provided with notice of such proposed
action and the consequences thereof.

 

(iv)                              If the Borrower sets a record date to
determine holders of Common Shares for the purpose of entitling such holders to
receive any dividend or distribution or any subscription or purchase rights and
shall thereafter and before the distribution to

 

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such holders of any such dividend, distribution or subscription or purchase
rights legally abandon its plan to pay or deliver such dividend, distribution or
subscription or purchase rights, then no adjustment in the Conversion Price
shall be required by reason of the setting of such record date.

 

(v)                                 No adjustment in the Conversion Price shall
be made in respect of any event described in Section 7 if the Holder is entitled
to participate in such event on the same terms mutatis mutandis as if the Holder
had converted the Note prior to or on the record date or effective date, as the
case may be, of such event. Any such participation by the Holder is subject to
regulatory approval.

 

(vi)                              In any case in which this Note shall require
that an adjustment shall become effective immediately after a record date for an
event referred to in Section 7 hereof, the Borrower may defer, until the
occurrence of such event:

 

(A)                              issuing to the Holder, to the extent that the
Note is converted after such record date and before the occurrence of such
event, the additional Common Shares issuable upon such exercise by reason of the
adjustment required by such event; and

 

(B)                                delivering to the Holder any distribution
declared with respect to such additional Common Shares after such record date
and before such event;

 

provided, however, that the Borrower shall deliver to the Holder an appropriate
instrument evidencing the right of the Holder upon the occurrence of the event
requiring the adjustment, to an adjustment in the Conversion Price or the number
of Common Shares purchasable upon the conversion of the Note and to such
distribution declared with respect to any such additional Common Shares issuable
on the conversion of the Note.

 

(d)                                 Notice:  Subject to Section 7(e), at least
21 days prior to the earlier of the record date or effective date of any event
which requires or might require an adjustment in any of the rights of the Holder
under this Note, including the Conversion Price, the Borrower shall deliver to
the Holder a certificate of the Borrower specifying the particulars of such
event and, if determinable, the required adjustment and the calculation of such
adjustment.  In case any adjustment for which a notice in this Section 7(d) has
been given is not then determinable, the Borrower shall promptly after such
adjustment is determinable deliver to the Holder a certificate providing the
calculation of such adjustment.  The Borrower hereby covenants and agrees that
the register of transfers and share transfer books for the Common Shares will be
open, and that the Borrower will not take any action which might deprive the
Holder of the opportunity of exercising the rights of conversion contained in
this Note, during such 21 day period.

 

(e)                                  Board Discretion: Notwithstanding any of
the foregoing provisions of this Section 7, the board of directors of the
Borrower may, subject to any required regulatory approval, vary the procedures
described in this Section 7 if it determines in good faith having regard to the
intentions underlying these provisions that such procedures would yield an
unintended result, provided that such varied procedures are not prejudicial to
the interests

 

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of the Holder, and the Holder is provided with notice of such proposed variation
and the consequences thereof.

 

8.                                      Covenants

 

(i)                                     Corporate Existence. The Borrower shall
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence. The Borrower shall cause each of its
subsidiaries to preserve and keep in full force and effect its corporate,
partnership or other existence, in each case, except as would not otherwise have
a material adverse effect on the business, assets, operations, condition,
financial or otherwise, of the Borrower and its subsidiaries, taken as a whole.

 

(ii)                                  Ranking. The Borrower shall not permit any
of its subsidiaries to guarantee or otherwise be liable for, directly or
indirectly, any indebtedness for borrowed money unless such subsidiary shall
provide a guarantee of the obligations of the Borrower hereunder. The Borrower
shall not and shall not permit any of its subsidiaries to, directly or
indirectly, create, incur, assume or suffer to exist any lien that secures
obligations under any indebtedness for borrowed money (including any guarantee
in respect thereof) unless the obligations of the Borrower hereunder (and the
obligations of any subsidiary under any guarantee provided in connection
herewith) rank in subordination to this Note.

 

(iii)                               Fundamental Changes. The Borrower shall not,
and shall not permit any of its subsidiaries to, enter into any transaction
whereby all or substantially all of the assets of the Borrower and its
subsidiaries (determined on a consolidated basis) would become the property of
any other person (whether by way of reorganization, merger, amalgamation,
arrangement, consolidation, transfer, sale or otherwise).

 

9.                                      Events of Default

 

All amounts due under this Note shall immediately become due and payable without
any notice, presentation, demand, protest or other action or notice to the
Borrower if any one or more of the following events of default (an “Event of
Default”) has occurred and is continuing:

 

(i)                                     the Borrower fails to make payment when
due of the Principal Amount outstanding or of any accrued interest when due;

 

(ii)                                  any representation and warranty of the
Borrower in the investment agreement dated September 2, 2010 between the
Borrower and the Lender (as amended from time to time, the “Investment
Agreement”) or in any Collateral Document shall be inaccurate in any material
respect when made or deemed to be made;

 

(iii)                               the Borrower shall fail to perform, observe
or comply with, in any material respect, any of its covenants herein or in the
Investment Agreement or in the Collateral Documents;

 

(iv)                              the agreements contained in Section 6.4 of the
Investment Agreement shall not have been fully satisfied and performed on or
before the dates specified in such agreements;

 

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(v)                                 the Borrower shall fail to perform, observe
or comply with any of its covenants contained in Section 8.6 of the Investment
Agreement;

 

(vi)                              any Collateral Document after delivery thereof
shall for any reason (other than pursuant to, and in accordance with, the terms
thereof) cease to create a valid and perfected first priority lien on and
security interest in the collateral purported to be covered thereby;

 

(vii)                           the Borrower (i) becomes insolvent or generally
not able to pay its debts as they become due, (ii) admits in writing its
inability to pay its debts generally or makes a general assignment for the
benefit of creditors, (iii) institutes or has instituted against it any
proceeding seeking (x) to adjudicate it a bankrupt or insolvent,
(y) liquidation, winding-up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors including any plan
of compromise or arrangement or other corporate proceeding involving its
creditors, or (z) the entry of an order for relief or the appointment of a
receiver, trustee or other similar official for it or for any substantial part
of its properties and assets, and in the case of any such proceeding or order
instituted against it (but not instituted by it), either the proceeding remains
undismissed or unstayed for a period of 45 days, or any of the actions sought in
such proceeding (including the entry of an order for relief against it or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its assets) occurs, or (iv) takes any corporate
action to authorize any of the above actions.

 

10.                               Grid Notations

 

The undersigned agrees that the entries by the Lender on the Grid of advances
and payments shall be prima facie proof of the matters so recorded. The failure
to record any amount on the Grid, however, shall not limit the obligation of the
Borrower to repay the principal amount of the advances under this Note together
with any and all interest accruing thereon or limit the right of the Lender to
recover any amount due and payable hereunder.

 

11.                               Application of Payments

 

Any payments in respect of amounts due under this Note shall be applied first in
satisfaction of any accrued and unpaid interest, and then to the Principal
Amount outstanding.

 

12.                               Waiver by the Borrower

 

The Borrower waives demand, presentment for payment, notice of non-payment,
notice of dishonour, notice of acceleration, and notice of protest of this Note.

 

13.                               No Waiver by the Lender

 

Neither the extension of time for making any payment which is due and payable
under this Note at any time or times, nor the failure, delay, or omission of the
Lender to exercise or enforce any

 

11

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of its rights or remedies under this Note, shall constitute a waiver by the
Lender of its right to enforce any such rights and remedies subsequently.  The
single or partial exercise of any such right or remedy shall not preclude the
Lender’s further exercise of such right or remedy or any other right or remedy.

 

14.                               Transfer

 

This Note, including all rights and obligations associated hereunder, shall be
transferable at the Holder’s option, in whole or in part, subject to applicable
securities law; provided that the Borrower shall not be liable for any
additional costs that may be associated or incurred in connection with the
transfer, including without limitation any withholding taxes.

 

Not later than 5 business days after notice to the Borrower from the Holder of
its intention to make such transfer or exchange is received by the Borrower and
without expense to the Holder, except for any transfer or similar tax which may
be imposed on the transfer or exchange, the Borrower shall issue in exchange
therefor another note or notes for the same aggregate principal amount as the
unpaid principal amount of this Note so surrendered, having the same maturity
and rate of interest, containing the same provisions and subject to the same
terms and conditions as this Note so surrendered. If the Holder proposes to
transfer this Note in part, the Borrower shall issue a note or notes for the
aggregate principal amount to be transferred, on the same basis noted in the
preceding sentence, and issue a replacement note for the part not transferred to
the Holder. Each new Note shall be made payable to such person or persons, or
transferees, as the holder of such surrendered Note may designate, and such
transfer or exchange shall be made in such a manner that no gain or loss of
principal or interest shall result therefrom. The Borrower may elect not to
permit a transfer of this Note if it has not obtained reasonable assurances that
such transfer is exempt from the prospectus and registration requirements under
applicable securities law.

 

15.                               Notices

 

Any notice or other communication that is required or permitted to be given
pursuant to this Note shall be in writing and will be validly given if delivered
in person (including by courier service) or transmitted by electronic delivery
as follows:

 

if to the Lender:

2245393 Ontario Inc.
c/o Osler, Hoskin & Harcourt LLP
Suite 6100, 1 First Canadian Place
Toronto, ON M5X 1B8

 

 

 

 

Attention:

Emmanuel Pressman

 

Fax:

(416) 862-6666

 

E-mail:

epressman@osler.com

 

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if to the Borrower:

American Lithium Minerals, Inc.
2850 W. Horizon Ridge Parkway, Suite 200
Henderson, NV 89052

 

 

 

Attention:

Hugh Aird

 

Fax:

(702) 430-4507

 

E-mail:

haird@americanlithium.com

 

Any such notice or other communication will be deemed to have been given and
received on the day on which it was delivered or transmitted by electronic
delivery (or, if such day is not a Business Day, on the next following Business
Day). Any party may at any time change its address for service from time to time
by giving notice to the other parties in accordance with this Section.  For the
purposes of this Note, “Business Day” means any day, other than a Saturday or
Sunday, on which banks in Toronto, Ontario are open for commercial banking
business during normal banking hours.

 

16.                               Governing Law and Successors

 

This Note is made under and shall be governed by and construed in accordance
with the laws of the Province of Ontario and the federal laws of Canada
applicable in the Province of Ontario, and shall enure to the benefit of the
Lender and its successors (including any successor by reason of amalgamation)
and assigns, and shall be binding on the Borrower and its successors (including
any successor by reason of amalgamation) and permitted assigns.

 

[Signature Page Follows]

 

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AMERICAN LITHIUM MINERALS, INC.,
as Borrower

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

Acknowledged and agreed this 2nd day of September, 2010.

 

 

 

2245393 ONTARIO INC., as Lender

 

 

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

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SCHEDULE NO. 1 TO THE CONVERTIBLE GRID PROMISSORY NOTE OF AMERICAL LITHIUM
MINERALS, INC. TO 2245393 ONTARIO INC.

 

DATED September 2, 2010

 

ADVANCES AND PAYMENT

 

DATE

 

AMOUNT
ADVANCED

 

AMOUNT PAID

 

TOTAL PRINCIPAL
OUTSTANDING

 

NOTATION
MADE BY

 

 

 

 

 

 

 

 

 

 

 

09/02/2010

 

US$

500,000

 

—

 

US$

500,000

 

 

 

 

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SCHEDULE A

 

ASSIGNMENT FORM

 

TO:                                                  American Lithium
Minerals, Inc. (the “Borrower”)

 

FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers to the
following person all rights of the undersigned pursuant to the convertible grid
promissory note issued by the Borrower dated September 2, 2010.

 

 

Name of Assignee:

 

 

Address:

 

 

 

and the undersigned hereby irrevocably constitutes and appoints such assignee to
be the lawful attorney of the undersigned to transfer such rights to the Note on
the books of the Borrower, with full power of substitution.

 

The undersigned hereby certifies that the transfer of these securities is not
being made in any public offering and: (a) that the transferee is an “accredited
investor”, as such term is defined in Rule 501(a) of the United States
Securities Act of 1933, as amended, and (b) that such transferee is an
“accredited investor” as such term is defined in National Instrument 45-106 —
Prospectus and Registration Exemptions of the Canadian Securities Administrators
and specifically represents and warrants that one or more of the categories set
out in such National Instrument correctly, and in all respects, describes the
transferee.

 

Date:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name:

 

 

 

 

 

Title (if applicable):

 

 

 

 

 

Address:

 

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SCHEDULE B

 

CONVERSION FORM

 

TO:                 American Lithium Minerals, Inc. (the “Borrower”)

 

The undersigned hereby irrevocably elects to convert into common shares of the
Borrower as defined in and in accordance with the terms of said Note (check
one):

 

o                               all of the Principal Amount outstanding,
together with any accrued but unpaid interest; or

 

o                               all accrued but unpaid interest, together with
US$                           principal amount of the Note.  The Borrower shall
issue and deliver to the undersigned a note representing the balance of the
principal amount as promptly as practicable.

 

 

DATED at                                      this            day of
                          ,             .

 

 

 

Per:

 

 

 

 

 

 

Address:

 

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