--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

> > > THIS NOTE AND THE COMMON STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE
> > > NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND
> > > EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE PURSUANT TO
> > > AN EXEMPTION FROM REGISTRATION PROVIDED UNDER THE SECURITIES ACT OF 1933,
> > > AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE
> > > "1933 ACT”)

US $25,000.00

HOMELAND RESOURCES LTD.
8% CONVERTIBLE REDEEMABLE NOTE
DUE DECEMBER 23, 2015

FOR VALUE RECEIVED, Homeland Resources Ltd. (the “Company”) promises to pay to
the order of LG CAPITAL FUNDING, LLC and its authorized successors and permitted
assigns ("Holder"), the aggregate principal face amount of Twenty Five Thousand
Dollars exactly (U.S. $25,000.00) on December 23, 2015 ("Maturity Date") and to
pay interest on the principal amount outstanding hereunder at the rate of 8% per
annum commencing on December 23, 2014. The interest will be paid to the Holder
in whose name this Note is registered on the records of the Company regarding
registration and transfers of this Note.  The principal of, and interest on,
this Note are payable at 1218 Union Street, Suite #2, Brooklyn, NY 11225,
initially, and if changed, last appearing on the records of the Company as
designated in writing by the Holder hereof from time to time.  The Company will
pay each interest payment and the outstanding principal due upon this Note
before or on the Maturity Date, less any amounts required by law to be deducted
or withheld, to the Holder of this Note by check or wire transfer addressed to
such Holder at the last address appearing on the records of the Company.  The
forwarding of such check or wire transfer shall constitute a payment of
outstanding principal hereunder and shall satisfy and discharge the liability
for principal on this Note to the extent of the sum represented by such check or
wire transfer.  Interest shall be payable in Common Stock (as defined below)
pursuant to paragraph 4(b) herein.

This Note is subject to the following additional provisions:

1.         This Note is exchangeable for an equal aggregate principal amount of
Notes of different authorized denominations, as requested by the Holder
surrendering the same.  No service charge will be made for such registration or
transfer or exchange, except that Holder shall pay any tax or other governmental
charges payable in connection therewith.

“DS”
Company Initials    

--------------------------------------------------------------------------------

 

2.         The Company shall be entitled to withhold from all payments any
amounts required to be withheld under applicable laws.

3.         This Note may be transferred or exchanged only in compliance with the
Securities Act of 1933, as amended ("Act") and applicable state securities
laws.  Any attempted transfer to a non-qualifying party shall be treated by the
Company as void.  Prior to due presentment for transfer of this Note, the
Company and any agent of the Company may treat the person in whose name this
Note is duly registered on the Company's records as the owner hereof for all
other purposes, whether or not this Note be overdue, and neither the Company nor
any such agent shall be affected or bound by notice to the contrary.  Any Holder
of this Note electing to exercise the right of conversion set forth in Section
4(a) hereof, in addition to the requirements set forth in Section 4(a), and any
prospective transferee of this Note, also is required to give the Company
written confirmation that this Note is being converted ("Notice of Conversion")
in the form annexed hereto as Exhibit A. The date of receipt (including receipt
by telecopy) of such Notice of Conversion shall be the Conversion Date.

4.         (a)        The Holder of this Note is entitled, at its option, at any
time after 180 days, to convert all or any amount of the principal face amount
of this Note then outstanding into shares of the Company's common stock (the
"Common Stock") without restrictive legend of any nature, at a price
("Conversion Price") for each share of Common Stock equal to 61% of the lowest
closing bid price of the Common Stock as reported on the National Quotations
Bureau OTCQB or OTC Pink exchange which the Company’s shares are traded or any
exchange upon which the Common Stock may be traded in the future ("Exchange"),
for the five prior trading days including the day upon which a Notice of
Conversion is received by the Company (provided such Notice of Conversion is
delivered by fax or other electronic method of communication to the Company
after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes to
include the same day closing price). If the shares have not been delivered
within 3 business days, the Notice of Conversion may be rescinded. Such
conversion shall be effectuated by the Company delivering the shares of Common
Stock to the Holder within 3 business days of receipt by the Company of the
Notice of Conversion.  Once the Holder has received such shares of Common Stock,
the Holder shall surrender this Note to the Company, executed by the Holder
evidencing such Holder's intention to convert this Note or a specified portion
hereof, and accompanied by proper assignment hereof in blank.  Accrued, but
unpaid interest shall be subject to conversion.  No fractional shares or scrip
representing fractions of shares will be issued on conversion, but the number of
shares issuable shall be rounded to the nearest whole share.  In the event the
Company experiences a DTC “Chill” on its shares, the conversion price shall be
decreased to 51% instead of 61% while that “Chill” is in effect. In no event
shall the Holder be allowed to effect a conversion if such conversion, along
with all other shares of Company Common Stock beneficially owned by the Holder
and its affiliates would exceed 9.9% of the outstanding shares of the Common
Stock of the Company.

(b)        Interest on any unpaid principal balance of this Note shall be paid
at the rate of 8% per annum.  Interest shall be paid by the Company in Common
Stock ("Interest Shares").  Holder may, at any time, send in a Notice of
Conversion to the Company for Interest Shares based on the formula provided in
Section 4(a) above.  The dollar amount converted into Interest Shares shall be
all or a portion of the accrued interest calculated on the unpaid principal
balance of this Note to the date of such notice.

“DS”
Company Initials 2  

--------------------------------------------------------------------------------

 

(c)        The Notes may be prepaid with the following penalties:

PREPAY DATE PREPAY AMOUNT < 30 days 115% of principal plus accrued interest 31-
60 days 121% of principal plus accrued interest 61-90 days 127% of principal
plus accrued interest 91-120 days 133% of principal plus accrued interest
121-150 days 139% of principal plus accrued interest 151-180 days 145% of
principal plus accrued interest

This Note may not be prepaid after the 180th day. Such redemption must be closed
and funded within 3 days of giving notice of redemption of the right to redeem
shall be null and void.

(d)       Upon (i) a transfer of all or substantially all of the assets of the
Company to any person in a single transaction or series of related transactions,
(ii) a reclassification, capital reorganization or other change or exchange of
outstanding shares of the Common Stock, other than a forward or reverse stock
split or stock dividend, or (iii) any consolidation or merger of the Company
with or into another person or entity in which the Company is not the surviving
entity (other than a merger which is effected solely to change the jurisdiction
of incorporation of the Company and results in a reclassification, conversion or
exchange of outstanding shares of Common Stock solely into shares of Common
Stock) (each of items (i), (ii) and (iii) being referred to as a "Sale Event"),
then, in each case, the Company shall, upon request of the Holder, redeem this
Note in cash for 150% of the principal amount, plus accrued but unpaid interest
through the date of redemption, or at the election of the Holder, such Holder
may convert the unpaid principal amount of this Note (together with the amount
of accrued but unpaid interest) into shares of Common Stock immediately prior to
such Sale Event at the Conversion Price.

(e)        In case of any Sale Event (not to include a sale of all or
substantially all of the Company’s assets) in connection with which this Note is
not redeemed or converted, the Company shall cause effective provision to be
made so that the Holder of this Note shall have the right thereafter, by
converting this Note, to purchase or convert this Note into the kind and number
of shares of stock or other securities or property (including cash) receivable
upon such reclassification, capital reorganization or other change,
consolidation or merger by a holder of the number of shares of Common Stock that
could have been purchased upon exercise of the Note and at the same Conversion
Price, as defined in this Note, immediately prior to such Sale Event. The
foregoing provisions shall similarly apply to successive Sale Events. If the
consideration received by the holders of Common Stock is other than cash, the
value shall be as determined by the Board of Directors of the Company or
successor person or entity acting in good faith.

“DS”
Company Initials 3  

--------------------------------------------------------------------------------

 

5.         No provision of this Note shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, and
interest on, this Note at the time, place, and rate, and in the form, herein
prescribed.

6.         The Company hereby expressly waives demand and presentment for
payment, notice of non-payment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, and diligence in taking any
action to collect amounts called for hereunder and shall be directly and
primarily liable for the payment of all sums owing and to be owing hereto.

7.         The Company agrees to pay all costs and expenses, including
reasonable attorneys' fees and expenses, which may be incurred by the Holder in
collecting any amount due under this Note.

8.         If one or more of the following described "Events of Default" shall
occur:

(a)        The Company shall default in the payment of principal or interest on
this Note or any other note issued to the Holder by the Company; or

(b)        Any of the representations or warranties made by the Company herein
or in any certificate or financial or other written statements heretofore or
hereafter furnished by or on behalf of the Company in connection with the
execution and delivery of this Note, or the Securities Purchase Agreement under
which this note was issued shall be false or misleading in any respect; or

(c)        The Company shall fail to perform or observe, in any respect, any
covenant, term, provision, condition, agreement or obligation of the Company
under this Note or any other note issued to the Holder; or

(d)       The Company shall (1) become insolvent; (2) admit in writing its
inability to pay its debts generally as they mature; (3) make an assignment for
the benefit of creditors or commence proceedings for its dissolution; (4) apply
for or consent to the appointment of a trustee, liquidator or receiver for its
or for a substantial part of its property or business; (5) file a petition for 
bankruptcy relief, consent to the filing of such petition or have filed against
it an involuntary petition for bankruptcy relief, all under federal or state
laws as applicable; or

(e)        A trustee, liquidator or receiver shall be appointed for the Company
or for a substantial part of its property or business without its consent and
shall not be discharged within sixty (60) days after such appointment; or

(f)        Any governmental agency or any court of competent jurisdiction at the
instance of any governmental agency shall assume custody or control of the whole
or any substantial portion of the properties or assets of the Company; or

(g)        One or more money judgments, writs or warrants of attachment, or
similar process, in excess of fifty thousand dollars ($50,000) in the aggregate,
shall be entered or filed against the Company or any of its properties or other
assets and shall remain unpaid, unvacated, unbonded or unstayed for a period of
fifteen (15) days or in any event later than five (5) days prior to the date of
any proposed sale thereunder; or

“DS”
Company Initials 4  

--------------------------------------------------------------------------------

 

(h)        The Company shall have defaulted on or breached any term of any other
note of similar debt instrument into which the Company has entered and failed to
cure such default within the appropriate grace period; or

(i)         The Company shall have its Common Stock delisted from an exchange
(including the OTC Pink exchange) or, if the Common Stock trades on an exchange,
then trading in the Common Stock shall be suspended for more than 10 consecutive
days;

(j)         If a majority of the members of the Board of Directors of the
Company on the date hereof are no longer serving as members of the Board;

(k)        The Company shall not deliver to the Holder the Common Stock pursuant
to paragraph 4 herein without restrictive legend within 3 business days of its
receipt of a Notice of Conversion; or

(l)         The Company shall not replenish the reserve set forth in Section 12,
within 3 business days of the request of the Holder.

(m)       The Company shall not be “current” in its filings with the Securities
and Exchange Commission; or

(n)        The Company shall lose the “bid” price for its stock in a market
(including the OTCQB or OTC Pink marketplace or other exchange).

Then, or at any time thereafter, unless cured within 5 days, and in each and
every such case, unless such Event of Default shall have been waived in writing
by the Holder (which waiver shall not be deemed to be a waiver of any subsequent
default) at the option of the Holder and in the Holder's sole discretion, the
Holder may consider this Note immediately due and payable, without presentment,
demand, protest or (further) notice of any kind (other than notice of
acceleration), all of which are hereby expressly waived, anything herein or in
any note or other instruments contained to the contrary notwithstanding, and the
Holder may immediately, and without expiration of any period of grace, enforce
any and all of the Holder's rights and remedies provided herein or any other
rights or remedies afforded by law.  Upon an Event of Default, interest shall
accrue at a default interest rate of 24% per annum or, if such rate is usurious
or not permitted by current law, then at the highest rate of interest permitted
by law.  In the event of a breach of Section 8(k) the penalty shall be $250 per
day the shares are not issued beginning on the 4th day after the conversion
notice was delivered to the Company.  This penalty shall increase to $500 per
day beginning on the 10th day.  The penalty for a breach of Section 8(n) shall
be an increase of the outstanding principal amounts by 20%.  In case of a breach
of Section 8(i), the outstanding principal due under this Note shall increase by
50%.  If this Note is not paid at maturity, the outstanding principal due under
this Note shall increase by 10%.

“DS”
Company Initials 5  

--------------------------------------------------------------------------------

 

If the Holder shall commence an action or proceeding to enforce any provisions
of this Note, including, without limitation, engaging an attorney, then if the
Holder prevails in such action, the Holder shall be reimbursed by the Company
for its attorneys’ fees and other costs and expenses incurred in the
investigation, preparation and prosecution of such action or proceeding.

Make-Whole for Failure to Deliver Loss.  At the Holder’s election, if the
Company fails for any reason to deliver to the Holder the conversion shares by
the by the 3rd business day following the delivery of a Notice of Conversion to
the Company and if the Holder incurs a Failure to Deliver Loss, then at any time
the Holder may provide the Company written notice indicating the amounts payable
to the Holder in respect of the Failure to Deliver Loss and the Company must
make the Holder whole as follows:
Failure to Deliver Loss = [(High trade price at any time on or after the day of
exercise) x (Number of conversion shares)]

The Company must pay the Failure to Deliver Loss by cash payment, and any such
cash payment must be made by the third business day from the time of the
Holder’s written notice to the Company.

9.         In case any provision of this Note is held by a court of competent
jurisdiction to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is
enforceable to the maximum extent possible, and the validity and enforceability
of the remaining provisions of this Note will not in any way be affected or
impaired thereby.

10.       Neither this Note nor any term hereof may be amended, waived,
discharged or terminated other than by a written instrument signed by the
Company and the Holder.

11.       The Company represents that it is not a “shell” issuer and has never
been a “shell” issuer or that if it previously has been a “shell” issuer that at
least 12 months have passed since the Company has reported form 10 type
information indicating it is no longer a “shell issuer.  Further. The Company
will instruct its counsel to either (i) write a 144- 3(a)(9) opinion to allow
for salability of the conversion shares or (ii) accept such opinion from
Holder’s counsel.

12.      The Company shall issue irrevocable transfer agent instructions
reserving 520,830 shares of its Common Stock for conversions under this Note
(the “Share Reserve”). The reserve shall be replenished as needed to allow for
conversions of this Note.   Upon full conversion of this Note, any shares
remaining in the Share Reserve shall be cancelled. The Company shall pay all
costs associated with issuing and delivering the shares. The company should at
all times reserve a minimum of four times the amount of shares required if the
note would be fully converted.  The Holder may reasonably request increases from
time to time to reserve such amounts.

13.       The Company will give the Holder direct notice of any corporate
actions, including but not limited to name changes, stock splits,
recapitalizations etc.  This notice shall be given to the Holder as soon as
possible under law. 

“DS”
Company Initials 6  

--------------------------------------------------------------------------------

 

14.       This Note shall be governed by and construed in accordance with the
laws of New York applicable to contracts made and wholly to be performed within
the State of New York and shall be binding upon the successors and assigns of
each party hereto.  The Holder and the Company hereby mutually waive trial by
jury and consent to exclusive jurisdiction and venue in the courts of the State
of New York.  This Agreement may be executed in counterparts, and the facsimile
transmission of an executed counterpart to this Agreement shall be effective as
an original.

“DS”
Company Initials 7  

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Company has caused this Note to be duly executed by an
officer thereunto duly authorized.

Dated:             December 23, 2014                

 
HOMELAND RESOURCES LTD.       By: /s/ David St. James           David St. James
        Title: Treasurer and Secretary      

“DS”
Company Initials 8  

--------------------------------------------------------------------------------

 

EXHIBIT A

NOTICE OF CONVERSION

 (To be Executed by the Registered Holder in order to Convert the Note)

The undersigned hereby irrevocably elects to convert $___________ of the above
Note into _________ Shares of Common Stock of Homeland Resources Ltd.
 (“Shares”) according to the conditions set forth in such Note, as of the date
written below.

If Shares are to be issued in the name of a person other than the undersigned,
the undersigned will pay all transfer and other taxes and charges payable with
respect thereto.

Date of Conversion:
                                                                                                  
Applicable Conversion Price:
                                                                        
        
Signature:
                                                                                                                  
                                    [Print Name of Holder and Title of Signer]
Address:
                                                                                                                    
          
                                                                                                                         

SSN or EIN:                                                              
Shares are to be registered in the following name:
                                                  
                                          

Name:
                                                                                                
                        
Address:
                                                                                                                    
Tel:                                                                    
                         
Fax:                                                                          
                   
SSN or EIN:                                                  
                             

Shares are to be sent or delivered to the following account:

Account Name:                                                               
                                            
Address:
                                                                                                                    
 

“DS”
Company Initials 9  

--------------------------------------------------------------------------------