Document:

THESE SECURITIES HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE OFFERED OR SOLD IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT
UNDER SAID ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, REGISTRATION UNDER SAID ACT.

 

CONVERTIBLE PROMISSORY NOTE

 

U.S. $10,000.00

 

	Date of Issuance:	May 4, 2012

  

FOR VALUE RECEIVED,
Todays Alternative Energy Corporation, a Nevada corporation (the “Maker”), hereby promises to pay to ____________________,
or its successors and assigns (the “Payee”), at its address at ______________, or to such other address as Payee shall
provide in writing to the Maker for such purpose, a principal sum of Ten Thousand Dollars and Zero Cents (U.S. $10,000.00). The
Payee has paid the aggregate principal amount outstanding under this Note to the Maker. The entire principal amount hereunder shall
be due and payable in full on May 4, 2014 (the “Maturity Date”), or on such earlier date as such principal amount may
earlier become due and payable pursuant to the terms hereof.

 

1.Interest
Rate. Interest shall accrue on the unpaid principal amount of this Secured Convertible Promissory Note (the “Note”)
at the rate of 10% per annum from the date hereof until such unpaid principal amount is paid in full or earlier converted into
shares (the “Shares”) of the Maker’s common stock, par value $0.00001 per share (the “Common Stock”)
in accordance with the terms hereof. Interest hereunder shall be paid quarterly or on such earlier date as the principal amount
under this Note becomes due and payable or is converted in accordance with the terms hereof and shall be computed on the basis
of a 360-day year for the actual number of days elapsed.

 

2.Conversion
of Principal and Interest. Subject to the terms and conditions hereof, the Payee, at its sole option, may deliver to the Maker
a notice in the form attached hereto as Exhibit A (a “Conversion Notice”) and an updated Loan Schedule, at any time
and from time to time after the date hereof (the date of the delivery of a Conversion Notice, a “Conversion Date”),
to convert all or any portion of the outstanding principal amount of this Note plus accrued and unpaid interest thereon, for a
number of Shares equal to the quotient obtained by dividing the dollar amount of such outstanding principal amount of this Note
plus the accrued and unpaid interest thereon being convened by the Conversion Price (as defined in Section 16). Conversions hereunder
shall have the effect of lowering the outstanding principal amount of this Note plus all accrued and unpaid interest thereunder
in an amount equal to the applicable conversion, which shall be evidenced by entries set forth in the Conversion Notice and the
Loan Schedule.

 

    	 

    	 

    

 

3.Certain
Conversion Limitations. The Maker shall not effect any conversion of this Note, and a Payee shall not have the right to convert
any portion of this Note, to the extent that after giving effect to the conversion set forth on the applicable Notice of Conversion,
the Payee (together with the Payee’s affiliates, and any other person or entity acting as a group together with the Payee
or any of the Payee’s affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). 
For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the Payee and its affiliates
shall include the number of shares of Common Stock issuable upon conversion of this Note with respect to which such determination
is being made, but shall exclude the number of shares of Common Stock which are issuable upon (A) conversion of the remaining,
unconverted principal amount of this Note beneficially owned by the Payee or any of its Affiliates and (B) exercise or conversion
of the unexercised or unconverted portion of any other securities of the Maker subject to a limitation on conversion or exercise
analogous to the limitation contained herein (including, without limitation, any other Notes or the Warrants) beneficially owned
by the Payee or any of its Affiliates.  Except as set forth in the preceding sentence, for purposes of this Section 4(c)(ii),
beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated
thereunder. To the extent that the limitation contained in this Section 4(c)(ii) applies, the determination of whether this Note
is convertible (in relation to other securities owned by the Payee together with any Affiliates) and of which principal amount
of this Note is convertible shall be in the sole discretion of the Payee, and the submission of a Notice of Conversion shall be
deemed to be the Payee’s determination of whether this Note may be converted (in relation to other securities owned by the
Payee together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the Beneficial
Ownership Limitation. To ensure compliance with this restriction, the Payee will be deemed to represent to the Maker each time
it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this paragraph
and the Maker shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as
to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules
and regulations promulgated thereunder. For purposes of this Section 4(c)(ii), in determining the number of outstanding shares
of Common Stock, the Payee may rely on the number of outstanding shares of Common Stock as stated in the most recent of the following:
(A) the Maker’s most recent periodic or annual report, as the case may be; (B) a more recent public announcement by the Maker;
or (C) a more recent notice by the Maker or the Maker’s transfer agent setting forth the number of shares of Common Stock
outstanding.  Upon the written or oral request of a Payee, the Maker shall within two Trading Days confirm orally and in writing
to the Payee the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common
Stock shall be determined after giving effect to the conversion or exercise of securities of the Maker, including this Note, by
the Payee or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The “Beneficial
Ownership Limitation” shall be 4.99% of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the Payee. The Beneficial Ownership
Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with
the terms of this Section 4(c)(ii) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with
the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable to properly
give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Note.

 

4.Deliveries.

 

(a)Not later
than three (3) Trading Days (as defined in Section 16) after any Conversion Date, the Maker will deliver to the Payee either (i)
a certificate or certificates representing the number of Shares being acquired upon the conversion of this Note and any interest
accrued thereunder being converted pursuant to the Conversion Notice (subject to the limitations set forth in Section 3 hereof),
and (ii) an endorsement by the Maker of the Loan Schedule acknowledging the remaining outstanding principal amount of this Note
plus all accrued and unpaid interest thereon not converted (an “Endorsement”). The Maker’s delivery to the Payee
of stocks certificates in accordance clause (i) above shall be Maker’s conclusive endorsement of the remaining outstanding
principal amount of this Note plus all accrued and unpaid interest thereon not converted as set forth in the Loan Schedule.

 

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5.Mandatory
Prepayment Upon Triggering Events. Upon the occurrence of a Triggering Event (as defined below), the Payee shall have the right
(in addition to all other rights it may have hereunder or under applicable law), exercisable at the sole option of the Payee, to
require the Maker to prepay all or a portion of the outstanding principal amount of this Note plus all accrued and unpaid interest
thereon. Such prepayment shall be due and payable within thirty (30) Trading Days of the date on which the notice for the payment
therefore is provided by the Payee.

 

A “Triggering
Event” means any one or more of the following events (whatever the reason and whether it shall be voluntary or involuntary,
or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of
any administrative or governmental body):

 

(i)any default
in the payment of the principal of interest on or other payments owing in respect of this Note, free of any claim of subordination,
as and when the same shall become due and payable (whether on a Conversion Date, the Maturity Date, by acceleration or otherwise)
and such non-payment continues for ten (10) Business Days after written notice of non-payment is given by Payee to Maker;

 

(ii)the
Maker shall fail for any reason to deliver certificates or an Endorsement to the Payee prior to the sixtieth (60th)
day after a Conversion Date pursuant to any in accordance with Section 4;

 

(iii)the
Maker or any of its subsidiaries shall commence or there shall be commenced against the Maker or any such subsidiary a case under
any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Maker commences any
other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction whether now or hereafter in effect relating to the Maker or any subsidiary thereof or there
is commenced against the Maker or subsidiary thereof any such bankruptcy, insolvency or other proceeding which remains undismissed
for a period of 60 days; or the Maker or any subsidiary thereof is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or the Maker or any subsidiary thereof suffers any appointment of
any custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period
of 60 days; or the Maker or any subsidiary thereof shall by any act or failure to act indicate its consent to, approval of or acquiescence
in any of the foregoing; or any corporate or other action is taken by the Maker or any subsidiary thereof for the purpose of effecting
any of the foregoing.

 

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6.Prepayment.
In the event the Maker deems the Payee is converting this Note in a manner that is not in the best interests of the Maker, the
Maker shall have the right, exercisable on not less than ten (10) Trading Days prior written notice to the Payee to prepay the
Note in accordance with this Section 6. Any notice of prepayment hereunder (an “Optional Prepayment”) shall be delivered
to the Payee at its registered address appearing on the books and records of the Maker and shall state (1) that the Maker is exercising
its right to prepay the Note issued on the Date of Issuance and (2) the date of prepayment (the “Optional Prepayment Notice”).
On the date fixed for prepayment (the “Optional Prepayment Date”), the Maker shall make payment of the Optional Prepayment
Amount (as defined below) to or upon the order of the Payee as specified by the Payee in writing to the Maker at least one (1)
business day prior to the Optional Prepayment Date. If the Maker exercises its right to prepay the Note, the Maker shall make
payment to the Payee of an amount in U.S. dollars by check or wire transfer (the “Optional Prepayment Amount”)
equal to the entire outstanding principal and all accrued interest as of the Optional Prepayment Date. 

 

7.No
Waiver of Payee’s Rights, etc. All payments of principal and interest shall be made without setoff, deduction or counterclaim.
No delay or failure on the part of the Payee in exercising any of its options, powers, or rights, nor any partial or single exercise
of its options, powers or rights shall constitute a waiver thereof or of any other option, power or right, and no waiver on the
part of the Payee of any of its options, powers or rights shall constitute a waiver of any other option, power or right. The Maker
hereby waives presentment of payment, protest, and notices or demands in connection with the delivery, acceptance, performance,
default or endorsement of this Note. Acceptance by the Payee of less than the full amount due and payable hereunder shall in no
way limit the right of the Payee to require full payment of all sums due and payable hereunder in accordance with the terms hereof.

 

8.Modifications.
No term or provision contained herein may be modified, amended or waived except by written agreement or consent signed by the party
to be bound thereby.

 

9.Cumulative
Rights and Remedies: Usury. The rights and remedies of the Payee expressed herein are cumulative and not exclusive of any rights
and remedies otherwise available. If it shall be found that any interest outstanding hereunder shall violate applicable laws governing
usury, the applicable rate of interest outstanding hereunder shall be reduced to the maximum permitted rate of interest under such
law.

 

10.Collection
Expenses. If this obligation is placed in the hands of an attorney for collection after default, and provided the Payee prevails
on the merits in respect to its claim of default, the Maker shall pay (and shall indemnify and hold harmless the Payee from and
against), all reasonable attorneys’ fees and expenses incurred by the Payee in pursuing collection of this Note.

 

11.Successors
and Assigns. This Note shall be binding upon the Maker and its successors and shall inure to the benefit of the Payee and its
successors and assigns. The term “Payee” as used herein, shall also include any endorsee, assignee or other holder
of this Note.

 

12.Lost
or Stolen Promissory Note. If this Note is lost, stolen, mutilated or otherwise destroyed, the Maker shall execute and deliver
to the Payee a new promissory note containing the same terms, and in the same form, as this Note. In such event, the Maker may
require the Payee to deliver to the Maker an affidavit of lost instrument and customary indemnity in respect thereof as a condition
to the delivery of any such new promissory note.

 

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13.Due
Authorization. This Note has been duly authorized, executed and delivered by the Maker and is the legal obligation of the Maker,
enforceable against the Maker in accordance with its terms.

 

14.Governing
Law. This Note shall be governed by and construed and enforced in accordance with the internal laws of the State of New York
without regard to the principles of conflicts of law thereof. Each party hereby irrevocably submits to the exclusive jurisdiction
of the state and federal courts sitting in the County of New York, for the adjudication of any dispute hereunder or in connection
herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert
in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such
suit, action or proceeding is improper. Each party hereby irrevocably waives personal service of process and consents to process
being served in any such suit, action or proceeding by mailing a copy thereof to such party at the address in effect for notices
to it under this Note and agrees that such service shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

 

15.Definitions.
For the purposes hereof, the following terms shall have the following meanings:

 

“Business
Day” means any day except Saturday, Sunday and any day which shall be a legal holiday or a day on which banking institutions
in the State of New York are authorized or required by law or other government action to close.

 

“Conversion
Price” shall be $0.0001 per share (which shall not be adjusted if the Maker, at any time while this Note is outstanding,
(a) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity
or equity equivalent securities payable in shares of Common Stock, (b) subdivide outstanding shares of Common Stock into a larger
number of shares, (c) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number
of shares, or (d) issue by reclassification of shares of the Common Stock any shares of its capital stock.

 

“Exchange
Act” means the Securities Exchange Act of 1934, as amended.

 

“Per Share
Market Value” means on any particular date (a) the closing bid price per share of Common Stock on such date on the OTC
Bulletin Board or on such Subsequent Market on which the shares of Common Stock are then listed or quoted, or if there is no such
price on such date, then the closing bid price on the OTC Bulletin Board or on such Subsequent Market on the date nearest preceding
such date, or (b) if the shares of Common Stock are not then listed or quoted on the OTC Bulletin Board or a Subsequent Market,
the closing bid price for a share of Common Stock in the over-the-counter market, as reported by the National Quotation Bureau
Incorporated or similar organization or agency succeeding to its functions of reporting prices) at the close of business on such
date, or (c) if the shares of Common Stock are not then reported by the National Quotation Bureau Incorporated (or similar organization
or agency succeeding to its functions of reporting prices), then the average of the “Pink Sheet” quotes for the relevant
conversion period, as determined in good faith by the Payee.

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“Person”
means a corporation, an association, a partnership, a limited liability company, an organization, a business, an individual, a
government or political subdivision thereof or a governmental agency.

 

“Securities
Act” means the Securities Act of 1933, as amended.

 

“Subsequent
Market” means the New York Stock Exchange, American Stock Exchange, Nasdaq Small Cap Market or Nasdaq National Market.

 

“Trading Day”
means (a) a day on which the shares of Common Stock are traded on such Subsequent Market on which the shares of Common Stock are
then listed or quoted, or (b) if the shares of Common Stock are not listed on a Subsequent Market. a day on which the shares of
Common Stock are traded in the over-the-counter market, as reported by the OTC Bulletin Board, or (c) if the shares of Common Stock
are not quoted on the OTC Bulletin Board, a day on which the shares of Common Stock are quoted in the over-the-counter market as
reported by the National Quotation Bureau Incorporated (or any similar organization or agency succeeding its functions of reporting
prices); provided, however, that in the event that the shares of Common Stock are not listed or quoted as set forth in (a), (b)
and (c) hereof, then Trading Day shall mean any day except Saturday, Sunday and any day which shall be a legal holiday or a day
on which banking institutions in the State of New York are authorized or required by law or other government action to close.

 

 

IN WITNESS WHEREOF,
the Maker has caused this Convertible Promissory Note to be duly executed and delivered as of the date first set forth above.

 

TODAYS ALTERNATIVE ENERGY CORPORATION

 

 

 

 

By: _____________________________

Name: Len Amato

Title:   Chief Executive
Officer

 

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EXHIBIT A

 

NOTICE OF CONVERSION

 

Dated:

 

The undersigned hereby
elects to convert the principal amount and interest indicated below of the attached Secured Convertible Promissory Note into shares
of common stock, $0.00001 par value (the “Common Stock”), of Todays Alternative Energy Corporation, according to the
conditions hereof, as of the date written below. No fee will be charged to the holder for any conversion.

 

Exchange calculations:

 

Date to Effect Conversion:
___________________________________________

 

Principal Amount and
Interest of

Secured Convertible
Note to be Converted: ______________________________

 

Number of shares of
Common Stock to be Issued: ________________________

 

Applicable Conversion
Price:_________________________________________

 

 

Signature: ________________________________________________________

 

Name:___________________________________________________________

 

Address: _________________________________________________________

 

    	A-1ex10-1.htm

Exhibit 10.1

 

NORTH BAY RESOURCES INC.

 

CONVERTIBLE PROMISSORY NOTE

 

$100,000 PLUS INTEREST DUE & PAYABLE

 

 

THIS CONVERTIBLE NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS CONVERTIBLE NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR UNDER THE SECURITIES LAWS OF APPLICABLE STATES.  THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM.  HOLDER SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.  THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE ACT AND ANY APPLICABLE STATE SECURITIES LAWS.

 

FOR VALUE RECEIVED, on the Effective Date, as defined below on the signature page, North Bay Resources, Inc. (“the Company”), with current address at North Bay Resources Inc., 2120 Bethel Road,

 

Lansdale, PA 19446, as Obligor (“Borrower,” or “Obligor”), hereby promises to pay the Lender (“Lender” or “Holder”), as defined below on the signature page, the Principal Sum, as defined below, along with the Interest Rate, as defined below, according to the terms herein.

 

 

	
The “Lender” shall be:

	
Tangiers Investors LP / Its Principal or Its Assignees

 

	
The “Principal Sum” shall be:

 

	
$100,000 (One Hundred Thousand US Dollars): Subject to the following: accrued, unpaid interest shall be added to the Principal Sum.

	
The “Consideration” shall be:

	
$100,000 (One Hundred Thousand US Dollars) paid via bank wire, with $50,000 paid on the effective date as defined below on the signature page, and $50,000 paid within one week thereafter.

	
The “Interest Rate” shall be:

	
The interest on the unpaid principal balance equal to 7%, computed on the basis of the actual number of days elapsed and a year of 365 days from the date of this Convertible Note. No interest or principal payments are required until the Maturity Date, but both principal and interest may be included in conversion prior to maturity date.

	
The “Conversion Price” shall be the following price:

	
As applied to the Conversion Formula set forth in 2.2, the lower of $.07 or the undiscounted Volume Weighted Average Price (VWAP) on the date prior to conversion, subject to a floor price of $.02; as applies to North Bay Resources, Inc. voting common stock.

	
The “Maturity Date” is the date upon which the Principal Sum of this Note, as well as any unpaid interest shall be due and payable, and that date shall be:

 

	
12 (twelve) months from the Effective Date, as defined below on the signature page.

	
The “Prepayment Terms” shall be:

 

	
Prepayment is permitted at Borrower’s  option upon one (1) week notice during which Lender can elect to convert.

	
The “Use of Proceeds” shall be:

 

	
The proceeds of this debenture shall be used for mining projects and general working capital.

  

  

  

 

ARTICLE 1: PAYMENT-RELATED PROVISION

 

	
1.1  

	
Interest Rate. Subject to the Holder’s right to convert, interest payable on this Note will accrue interest at the Interest Rate and shall be applied to the Principal Sum.

 

ARTICLE 2: CONVERSION RIGHTS

 

The Holder will have the right to convert the Principal Sum and accrued interest under this Note into Shares of the Borrower’s Common Stock as set forth below.

 

	
2.1  

	
Conversion Rights and Cashless Exercise. Subject to the terms set forth in Section 2.7, the Holder will have the right at its election from and after the Effective Date, and then at any time, to convert all or part of the outstanding and unpaid Principal Sum and accrued interest into shares of fully paid and non-assessable shares of common stock of the Company (as such stock exists on the date of issuance of this Note, or any shares of capital stock of The Company into which such stock is hereafter changed or reclassified, herein the “Shares” or the “Common Stock”) as per the Conversion Formula set forth in Section 2.2. Any such conversion shall be cashless, and shall not require further payment from Holder. Unless otherwise agreed in writing by both the Borrower and the Holder, at no time will the Holder convert any amount of the Note into common stock that would result in the Holder owning more than 9.99% of the common stock outstanding of The Company.  Shares from any such conversion delivered to the Company (see 4.1) by 4:00pm EST will be delivered to Holder within 2 (two) business days of conversion notice with delivery via “DWAC/FAST” electronic transfer (see Section 2.6). To effect conversions hereunder, the Holder shall not be required to physically surrender Debentures to the Company. In the event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of manifest error.

 

	
2.2  

	
Conversion Formula. The number of shares issued through conversion is the conversion amount divided by the conversion price.

 

#Shares = Conversion Amount

 

                 Conversion Price

 

	
2.3  

	
Adjustment for Stock Splits, Stock Dividends, Recapitalizations, etc. If the Company, at any time while this Debenture is outstanding: (A) shall pay a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities  payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company pursuant to this Debenture, including as interest  thereon), (B) subdivide outstanding shares of Common Stock into a larger number of shares, (C) combine (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares, or (D) issue by reclassification of shares of the Common Stock any shares of capital stock of the Company, then the Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding before such event and of which the denominator shall be the number of shares of Common Stock outstanding after such event. Any adjustment made pursuant to this Section shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

 

  

  

  

 

	
2.4  

	
Additional Adjustment for Stock Splits, Stock Dividends, Recapitalizations, etc. If (A) the Company shall declare a dividend (or any other distribution) on the Common Stock; (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock; (C) the Company shall  authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights; (D) the approval  of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any  sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property; (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company; then, in each case, the Company shall cause to be filed at each office or agency maintained for the purpose of conversion of the Debentures, and shall cause to be mailed to the Holders at their last addresses as they shall  appear upon the stock books of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided, that the failure to mail such notice or any defect therein or in the mailing thereof shall not affect the validity of the corporate action required to be specified in such notice. Holders are entitled to convert Debentures during the 20-day period commencing the date of such notice to the effective date of the event triggering such notice.

 

 

	
2.5  

	
Merger, Sale, Tender, Exchange, Reclassification, etc. If, at any time while this Debenture is outstanding, (A) the Company effects any merger or consolidation of the Company with or into another Person, (B) the Company effects any sale of all or substantially all of its assets in one or a series of related transactions, (C) any tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Common Stock are permitted to tender or exchange their shares for other securities, cash or property, or (D) the Company effects any reclassification of the Common Stock or any compulsory share exchange pursuant to which the Common Stock is effectively converted into or exchanged for other securities, cash or property (in any such case, a "Fundamental Transaction"), then upon any subsequent conversion of this Debenture, the Holder shall have the right to receive, for each Underlying Share that would have been issuable upon such conversion absent such Fundamental Transaction, the same kind and amount of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction if it had been, immediately prior to  such Fundamental Transaction, the holder of one share of  Common Stock (the "Alternate Consideration"). For purposes of any such conversion, the determination of the Set Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one share of Common Stock in such Fundamental Transaction, and the Company shall apportion the Set Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate consideration it receives upon any conversion of this Debenture following such Fundamental Transaction. To the extent necessary to effectuate the foregoing provisions, any successor to the Company or surviving entity in such Fundamental Transaction shall issue to the Holder a new debenture consistent with the foregoing provisions and evidencing the Holder's right to convert such debenture into Alternate Consideration. The terms of any agreement pursuant to which a Fundamental Transaction is effected shall include terms requiring any such successor or surviving entity to comply with the provisions of this paragraph (c) and insuring that this Debenture (or any such replacement security) will be similarly adjusted upon any subsequent transaction analogous to a Fundamental Transaction. If any Fundamental Transaction constitutes or results in a Change of Control Transaction, then at the request of the Holder delivered before the 90th day after such Fundamental Transaction, the Company (or any such successor or surviving entity) will purchase the Debenture from the Holder for a purchase price, payable in cash within five Trading Days after such request (or, if  later, on the effective date of the Fundamental Transaction), equal to the 100% of the remaining unconverted principal amount of this Debenture on the date of such request, plus all accrued and unpaid interest thereon, plus all other accrued and unpaid amounts due hereunder.

 

	
2.6  

	
Reservation of Shares. As of the issuance date of this Note and for the remaining period during which the conversion right exists, the Borrower will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of Common Stock upon the full conversion of this Note. The Borrower represents that upon issuance, such shares will be duly and validly issued, fully paid and non-assessable. The Borrower agrees that its issuance of this Note constitutes full authority to its officers, agents and transfer agents who are charged with the duty of executing and issuing stock certificates to execute and issue the necessary certificates for shares of Common Stock upon the conversion of this Note.

 

  

  

  

 

	
2.7  

	
Delivery of Conversion Shares. Shares from any such conversion delivered to Company by 4:00pm EST will be requested to be issued to Holder by 2:30pm EST within 2 (two) business days of conversion notice delivery (see 4.1) by “DWAC/FAST” electronic transfer (see “Share Delivery” attachment). In the event delivery DWAC/FAST is unavailable for use in an electronic transfer, physical certificates may be used at Holder’s approval, but the issuance request must be submitted within the same period of time specified above.  If those shares are not requested to be delivered in accordance with this timeframe stated in this Section 2.7, at any time for any reason prior to offering those shares for sale in a private transaction or in the public market through its broker, Holder may rescind that particular conversion to have the conversion amount returned to the note balance with the conversion shares returned to the Borrower. The Company will make its best efforts to deliver shares to Holder same day / next day. For each conversion, in the event that shares are not issued for overnight courier delivery by the third business day (inclusive of the day of the conversion), a penalty of $1,000 per day will be assessed for each day after the third business day (inclusive of the day of the conversion) until share delivery is made. Any such penalty will be added to the principal balance of the Note, under Holders expectation that any penalty amounts will tack back to the original date of the note). If the Company intentionally does not request the issuance of the shares underlying this Debenture after receipt of a notice of conversion within three (3) business days (inclusive of the day of conversion), or the shares are not issued for overnight delivery within four (4) business days (inclusive of the day of conversion) Perry Leopold shall, in his personal capacity, be responsible for any differential in the value of the converted shares underlying this Debenture between the value of the closing price on the date the shares should have been delivered (the third business day following the submission of a conversion request) and the date the shares are actually delivered.  The Holder and any assignee, by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated on the face hereof. Any such clause in this Section 2.7 will be waived in the event of an Act of God.

 

ARTICLE 3: EVENTS OF DEFAULT

 

	
  

	
a)

	
"Event of Default", wherever used herein, means any one of the following events (whatever the reason and whether it shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

 

	
  

	
i) any default in the payment of the principal of, interest (including Late Fees) on, or liquidated damages in respect to this Debenture, free of any claim of subordination, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise) which default is not cured, if possible to cure, within 3 days of notice of such default sent by the Holder;

 

	
  

	
ii) the Company or any of its subsidiaries shall commence, or there shall be commenced against the Company or any such subsidiary a case under any applicable bankruptcy or insolvency laws as now or hereafter in effect or any successor thereto, or the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company or any subsidiary thereof or there is commenced against the Company or any subsidiary thereof any such bankruptcy, insolvency or other proceeding which remains undismissed for a period of 30 days; or the Company or any subsidiary thereof is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Company or any subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial part of its property which continues undischarged or unstayed for a period of 60 days; or the Company or any subsidiary thereof makes a general assignment for the benefit of creditors; or the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or the Company or any subsidiary thereof shall call a meeting of its creditors with a view to arranging a composition, adjustment or restructuring of its debts; or the Company or any subsidiary thereof shall by any act or failure to act expressly indicate its consent to, approval of or acquiescence in any of the foregoing; or any corporate or other action is taken by the Company or any subsidiary thereof for the purpose of effecting any of the foregoing;

 

	
  

	
(iii) the Company shall fail to request the issuance of the shares underlying this Debenture after receipt of a notice of conversion within four (4) business days following the period allowed by Holder for any objection;

 

	
  

	
(iv) the Company shall fail to timely file all reports required to be filed by it with the SEC pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise required by the Exchange Act; or

 

	
  

	
(v) the Common Stock of the Company, after being listed for trading on an exchange above the pinksheets, shall cease to be quoted for trading or listing for trading on any of (a) the American Stock Exchange, (b) New York Stock Exchange, (c) the NASDAQ National Market, (d) the NASDAQ Capital Market, or (e) the NASDAQ OTC Bulletin Board (“OTC”) (each, a “Primary Market”) and shall not again be quoted or listed for trading on any Primary Market within five (5) trading days of such delisting.

 

  

  

  

 

	
  

	
b)

	
If any Event of Default occurs and is continuing, one hundred and fifty percent (150%) of the full principal amount of this Debenture, together with interest and other amounts owing in respect thereof, to the date of acceleration shall become at the Holder's election, immediately due and payable in cash. The Holder need not provide and the Company hereby waives any presentment, demand, protest or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of its rights and remedies hereunder and all other remedies available to it under applicable law. Such declaration may be rescinded and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a Debenture holder until such time, if any, as the full payment under this Section shall have been received by it. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.

 

ARTICLE 4: MISCELLANEOUS

 

	
  

	
4.1

	
Notices. Any notice required or permitted hereunder must be in writing and either personally served, sent by facsimile or email transmission, or sent by overnight courier. Notices will be deemed effectively delivered at the time of transmission if by facsimile or email, and if by overnight courier the business day after such notice is deposited with the courier service for delivery.

 

	
  

	
4.2

	
Amendment Provision. The term “Note” and all reference thereto, as used throughout this instrument, means this instrument as originally executed, or if later amended or supplemented, then as so amended or supplemented.

 

	
  

	
4.3

	
Assignability. This Note will be binding upon the Borrower and its successors and permitted assigns, and will inure to the benefit of the Holder and its successors and permitted assigns, and may be assigned by the Holder.

 

	
  

	
4.4

	
Governing Law. This Note will be governed by, and construed and enforced in accordance, with the laws of the State of California, without regard to the conflict of laws principles thereof. Any action brought by either party against the other concerning the transactions contemplated by this Agreement shall be brought only in the state courts of San Diego or in the federal courts located in Los Angeles, in the State of California. Both parties and the individuals signing this Agreement agree to submit to the jurisdiction of such courts. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Debenture and agrees that such Service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Debenture or the transactions contemplated hereby. Additionally, each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this Debenture or the transactions contemplated hereby.

 

	
  

	
4.5

	
Maximum Payments. Nothing contained herein may be deemed to establish or require the payment of a rate of interest or other charges in excess of the maximum permitted by applicable law. In the event that the rate of interest required to be paid or other charges hereunder exceed the maximum permitted by such law, any payments in excess of such maximum will be credited against amounts owed by the Borrower to the Holder and thus refunded to the Borrower.

 

  

  

  

 

	
  

	
4.6

	
Obligations.  Except as expressly provided herein, no provision of this Debenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, interest and liquidated damages (if any) on, this Debenture at the time, place, and rate, and in the coin or currency, herein prescribed. This Debenture is a direct debt obligation of the Company. This Debenture ranks pari passu with all other Debentures now or hereafter issued under the terms set forth herein. As long as this Debenture is outstanding, the Company shall not and shall cause it subsidiaries not to, without the consent of the Holder, (a) amend its certificate of incorporation, bylaws or other charter documents so as to adversely affect any rights of the Holder; (b) repay, repurchase or offer to repay, repurchase or otherwise acquire more than a de minimis number of shares of its Common Stock or other equity securities other than as to the Underlying Shares to the extent permitted or required hereunder; or (c) enter into any agreement with respect to any of the foregoing.

 

	
  

	
4.7

	
Unenforceability.  If any provision of this Debenture is invalid, illegal or unenforceable, the balance of this Debenture shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest. The Company covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay, extension or usury law or other law which would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Debentures as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this indenture, and the Company (to the extent it may lawfully do so) hereby expressly waives all benefits or advantage of any such law, and covenants that it will not, by resort to any such law, hinder, delay or impeded the execution of any power herein granted to the Holder, but will suffer and permit the execution of every such as though no such law has been enacted.

 

	
  

	
4.8

	
Attorney Fees. In the event any attorney is employed by either party to this Note with regard to any legal or equitable action, arbitration or other proceeding brought by such party for the enforcement of this Note or because of an alleged dispute, breach, default or misrepresentation in connection with any of the provisions of this Note, the prevailing party in such proceeding will be entitled to recover from the other party reasonable attorneys’ fees and other costs and expenses incurred, in addition to any other relief to which the prevailing party may be entitled.

 

	
  

	
4.9

	
No Public Announcement. Except as required by securities law, no public announcement may be made regarding this Note, payments, or conversions without written permission by both Borrower and Holder.

 

	 	
4.10

	
 
Opinion of Counsel. In the event that an opinion of counsel is needed for any matter related to this Note, Holder has the right to have any such opinion provided by its counsel. Holder also has the right to have any such opinion provided by Borrower’s counsel.

 

	 	
4.11

	
Effective Date. This Note will become effective only upon occurrence of the three following events: the Effective Date has been reached, execution by both parties, and delivery of valid payment by the Lender.

 

	 	
4.12

	
Director’s Resolution. Once effective, Borrower will execute and deliver to Holder a copy of a Board of Director’s resolution resolving that this note is validly issued, paid, and effective.

 

	 	
4.13

	
No Shorting. Holder agrees that so long as any Notes from Borrower to Holder remain outstanding, Holder will not enter into or effect any “short sales” of the common stock or hedging transaction with establishes a net short position with respect to the common stock of the Company. Borrower acknowledge and agrees that upon submission of conversion notice as set forth above (up to the amount of cash paid in under the Notes), Holder immediately owns the common shares described in the conversion notice and any sale of those shares issuable under such conversion notice would not be considered short sales.

 

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

Signature Page Follows

 

  

  

  

 

IN WITNESS WHEREOF, the Company has caused this Debenture to be signed in its name as of the effective date written below.

 

BORROWER[S]:

 

_/s/ Perry Leopold______________________________

 

AUTHORIZED SIGNATORY:  PERRY LEOPOLD

 

POSITION:                      CEO

 

COMPANY NAME:   NORTH BAY RESOURCES INC.

 

EIN#:           83-0402389

 

 

CEO (as to his obligation to Section 2.7 Only):

 

_/s/ Perry Leopold ________

NAME:  PERRY LEOPOLD

 

 

LENDER/HOLDER:

 

_/s/ Michael Sobeck____________________________

 

For: Tangiers Investors, LP

 

By: Tangiers Capital, LLC

 

Its: General Partner

 

 

EFFECTIVE DATE AS EXCUTED BY LENDER/HOLDER: June 19, 2012

 

  

  

  

 

SAMPLE NOTICE OF CONVERSION

 

(To be executed by the Holder in order to convert a portion or the entire Note)

 

The undersigned hereby elects to convert a portion of the Note issued by The Company into Shares of Common Stock of The Company according to the conditions set forth in such Note, as of the date written below.

 

 

Date of Conversion: _________________________________________________________

 

 

Conversion Amount: ________________________________________________________

 

 

Conversion Price: ___________________________________________________________

 

 

Shares to Be Delivered: ______________________________________________________

 

 

Signature: _________________________________________________________________

 

 

Print Name: ________________________________________________________________

 

 

Address: ___________________________________________________________________

 

___________________________________________________________________________

 

 

Delivery Instructions:__________________________________________________________

 

Shares must be delivered to Holder within 2 (two) business days of conversion notice in accordance with Section 2.7.

 

  

  

  

 

SHARE DELIVERY ATTACHMENT

 

EXAMPLE

 

2.7           Delivery of Conversion Shares. Shares from any such conversion notice delivered by Holder to Company before 4:00pm EST will be delivered to Holder by 2:30pm EST within 2 (two) business days of the date of conversion (see 4.1) by “DWAC/FAST” electronic transfer (see “Share Delivery” attachment). If those shares are not delivered in accordance with this timeframe stated in this Section 2.7, at any time for any reason prior to offering those shares for sale in a private transaction or in the public market through its broker, Holder may rescind that particular conversion to have the conversion amount returned to the note balance with the conversion shares returned to the Borrower.

 

Example:

 

Holder delivers conversion notice to Borrower at 1:45pm EST on Monday February 1st.

 

Borrower’s transfer agent must send shares to Holder via “DWAC/FAST” electronic transfer no later than Tuesday February 2nd.

 

Holder must have received the shares or received a delivery attempt no later than 10:30am eastern time on Wednesday February 3rd.

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