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 


 

















 


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 


 


7

















 


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


 


9
















 


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 


 


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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

  



 


12

















 


	
  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]


 


13

















 


	
   

  	
   

  	
  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:

  



 

















 


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

  	
   

  	
   

  	
   

  
												



 
















 


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:

  



 

















 


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: