Document:

Lithium Exploration Group, Inc.: Exhibit 10.96 - Filed by newsfilecorp.com

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS, AND MAY
NOT BE SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL IN THE FORM,
SUBSTANCE AND SCOPE REASONABLY SATISFACTORY TO THE COMPANY THAT THIS NOTE MAY BE
SOLD, TRANSFERRED, OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION FROM
REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS. 

LITHIUM EXPLORATION GROUP, INC. 
10% OID Convertible
Promissory Note 
Due March 1, 2017 

March 1, 2016

	Purchase Price: 	USD $10,000 
	Principal Price: 	$13,200 

For value received, Lithium
Exploration Group, Inc., a Nevada corporation (the "Company"), hereby
promises to pay to the order of JDF Capital Inc. (together with its
successors, representatives, and permitted assigns, the "Holder"), in accordance
with the terms hereinafter provided, up to an aggregate of $10,000 (ten thousand
dollars) (the "Principal Amount"), which includes the aggregate principal
sum of $13,200 (thirteen thousand two hundred fifty dollars)
advanced by the Holder, $1,200 Original Issue Discount incurred by the Holder,
and $2,000 legal fees. The Principal Amount outstanding shall be due and payable
on March 1, 2017.

The due dates of any outstanding
principal balance are referred to herein as the "Maturity Date", respectively.

All payments under or pursuant to
this Note refer to and shall be made in United States Dollars in immediately
available funds to the Holder at the address of the Holder first set forth above
or at such other place as the Holder may designate from time to time in writing
to the Company or by wire transfer of funds to the Holder's account,
instructions for which are attached hereto as Exhibit A. 

ARTICLE I 

Section
1.1      Purchase Agreement. This Note has
been executed and delivered pursuant to the Security Purchase Agreement dated as
of March 1, 2016 (the "Purchase Agreement'') by and among the Company and the
purchasers listed therein. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth for such terms in the Purchase
Agreement. 

Section
1.2      Interest. 

(a)      Beginning
on the issuance date of this Note (the "Issuance Date"), the outstanding
principal balance of this Note shall bear interest at a rate per annum equal to
10 percent (10%) accruing on an 12 month basis, which shall consist of the
pre-paid interest referred to above, which may be converted to shares of the
Company's common stock, par value $0.001 per share (the "Common Stock") at the
option of the Holder on the same terms as the Note. 

1

Section
1.3      Payment on Non-Business Days.
Whenever any payment to be made shall be due on a Saturday, Sunday or a public
holiday under the laws of the State of Nevada, such payment may be due on the
next succeeding business day and such next succeeding day shall be included in
the calculation of the amount of accrued interest payable on such date. 

Section
1.4      Transfer. This Note may be
transferred or sold, subject to the provisions of Section 4.8 of this Note, or
pledged, hypothecated or otherwise granted as security by the Holder. 

Section
1.5      Replacement. Upon receipt of a
duly executed, notarized and unsecured written statement from the Holder with
respect to the loss, theft or destruction of this Note (or any replacement
hereof), and without requiring an indemnity bond or other security, or, in the
case of a mutilation of this Note, upon surrender and cancellation of such Note,
the Company shall issue a new Note, of like tenor and amount, in lieu of such
lost, stolen, destroyed or mutilated Note. 

ARTICLE II 

EVENTS OF DEFAULT; REMEDIES 

Section
2.1      Events of Default. The occurrence
of any of the following events shall be an "Event of Default" under this Note:

(a)      the
Company shall fail to make the payment of any amount of principal outstanding on
the date such payment is due hereunder; 

(b)      the
Company shall fail to make any payment of interest in shares of Common Stock for
a period of three (3) days after the date such interest is due; 

(c)      the
suspension from listing, without subsequent listing on any one of, or the
failure of the Common Stock to be listed on at least one of the OTC Bulletin
Board, Nasdaq Small Cap Market, Nasdaq National Market, American Stock Exchange
or The New York Stock Exchange, Inc. for a period of five (5) consecutive
Trading Days; 

(d)      the
Company's notice to the Holder, including by way of public announcement, at any
time, of its inability to comply or its intention not to comply with proper
requests for conversion of this Note into shares of Common Stock;

(e)      the
Company shall fail to (i) timely deliver the shares of Common Stock upon
conversion of the Note or any accrued and unpaid interest, or (ii) make the
payment of any fees and/or liquidated damages under this Note or the Purchase
Agreement, which failure in the case of items (i) and (ii) of this Section
2.1(e) is not remedied within three (3) business days after the incurrence
thereof; 

(f)      default
shall be made in the performance or observance of (i) any material covenant,
condition or agreement contained in this Note (other than as set forth in clause
(e) of this Section 2.1) and such default is not fully cured within five (5)
business days after the occurrence thereof or (ii) any material covenant,
condition or agreement contained in the Purchase Agreement or any other
Transaction Document which is not covered by any other provisions of this
Section 2.1 and such default is not fully cured within five (5) business days
after the occurrence thereof; 

(g)      any
material representation or warranty made by the Company herein or in the
Purchase Agreement or any other Transaction Document shall prove to have been
false or incorrect or breached in a material respect on the date as of which made; 

2

(h)      the
  Company shall (A) default in any payment of any amount or amounts of principal
  of or interest on any Indebtedness (other than the Indebtedness hereunder) the
  aggregate principal amount of which Indebtedness is in excess of $50,000 or (B)
  default in the observance or performance of any other agreement or condition
  relating to any Indebtedness or contained in any instrument or agreement
  evidencing, securing or relating thereto, or any other event shall occur or
  condition exist, the effect of which default or other event or condition is to
  cause, or to perm it the holder or holders or beneficiary or beneficiaries of
  such Indebtedness to cause with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity; 

(i)      the
Company shall (i) apply for or consent to the appointment of, or the taking of
possession by, a receiver, custodian, trustee or liquidator of itself or of all
or a substantial part of its property or assets, (ii) make a general assignment
for the benefit of its creditors, (iii) commence a voluntary case under the
United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic), (iv) file a petition
seeking to take advantage of any bankruptcy, insolvency, moratorium,
reorganization or other similar law affecting the enforcement of creditors'
rights generally, (v) acquiesce in writing to any petition filed against it in
an involuntary case under United States Bankruptcy Code (as now or hereafter in
effect) or under the comparable laws of any jurisdiction (foreign or domestic),
(vi) issue a notice of bankruptcy or winding down of its operations or issue a
press release regarding same, or (vii) take any action under the laws of any
jurisdiction (foreign or domestic) analogous to any of the foregoing; 

(j)      a
proceeding or case shall be commenced in respect of the Company, without its
application or consent, in any court of competent jurisdiction, seeking (i) the
liquidation, reorganization, moratorium, dissolution, winding up, or
composition or readjustment of its debts, (ii) the appointment of a trustee,
receiver, custodian, liquidator or the like of it or of all or any substantial
part of its assets in connection with the liquidation or dissolution of the
Company or (iii) similar relief in respect of it under any law providing for the
relief of debtors, and such proceeding or case described in clause (i), (ii) or
(iii) shall continue undismissed, or unstayed and in effect, for a period of
sixty (60) days or any order for relief shall be entered in an involuntary case
under United States Bankruptcy Code (as now or hereafter in effect) or under the
comparable laws of any jurisdiction (foreign or domestic) against the Company or
action under the laws of any jurisdiction (foreign or domestic) analogous to any
of the foregoing shall be taken with respect to the Company and shall continue
undismissed, or unstayed and in effect for a period of sixty (60) days; or 

(k)      the
failure of the Company to instruct its transfer agent to remove any legends from
shares of Common Stock eligible to be sold under Rule 144 of the Securities Act
and issue such unlegended certificates to the Holder within five (5) business
days of the Holder's request so long as the Holder has provided reasonable
assurances and opinions of counsel to the Company that such shares of Common
Stock can be resold pursuant to Rule 144; or 

(I)      the
failure of the Company to pay any amounts due to the Holder herein within three
(3) business days of receipt of notice to the Company. 

Section
2.2      Remedies Upon An Event of Default.
If an Event of Default shall have occurred and shall be continuing, the Holder
of this Note may at any time at its option, (a) declare the entire unpaid
principal balance of this Note, together with all interest accrued hereon, due
and payable, and thereupon, the same shall be accelerated and so due and
payable, without presentment, demand, protest, or notice, all of which are
hereby expressly unconditionally and irrevocably waived by the Company;
provided, however, that upon the occurrence of an Event of Default described in
(i) Sections 2.1 (k) or (I), the outstanding principal balance and interest
hereunder shall be automatically due and payable and (ii) Sections 2.1 (a)-(j) and 2.l (m)-(n), demand
the prepayment of this Note pursuant to Section 3.6 hereof, (b) subject to
Section 3.4 hereof, demand that the principal amount of this Note then
outstanding shall be converted into shares of Common Stock at a Conversion Price
(as defined in Section 3.2(a) hereof) per share calculated pursuant to Section
3.1 hereof assuming that the date that the Event of Default occurs is the
Conversion Date and demand that all accrued and unpaid interest under this Note
shall be converted into shares of Common Stock in accordance with Section 1.2
hereof, or (c) exercise or otherwise enforce any one or more of the Holder's
rights, powers, privileges, remedies and interests under this Note, the Purchase
Agreement, other Transaction Document or applicable law. No course of delay on
the part of the Holder shall operate as a waiver thereof or otherwise prejudice
the right of the Holder. No remedy conferred hereby shall be exclusive of any
other remedy referred to herein or now or hereafter available at law, in equity,
by statute or otherwise. 

3

ARTICLE III 

CONVERSION; ANTIDILUTION; PREPAYMENT 

Section
3.1      Conversion Option. 

(a)      At
any time on or after the Issuance Date, this Note shall be convertible (in whole
or in part), at the option of the Holder (the "Conversion Option"), into
such number of fully paid and non- assessable shares of Common Stock (the
"Conversion Rate") as is determined by dividing that portion of the
outstanding principal balance under this Note as of such date that the Holder
elects to convert by the Conversion Price (as defined in Section 3.2(a) hereof)
then in effect on the date on which the Holder faxes a notice of conversion (the
"Conversion Notice"), duly executed, to the Company (the "Voluntary
Conversion Date"), provided, however, that the Conversion Price shall be
subject to adjustment as described in Section 3.5 below. The Holder shall
deliver this Note to the Company at the address designated in the Purchase
Agreement at such time that this Note is fully converted. With respect to
partial conversions of this Note, the Company shall keep written records of the
amount of this Note converted as of each Conversion Date. 

(b)      On
any Voluntary Conversion Date, the Holder may cause the any outstanding
Principal Amount of this Note plus all accrued and unpaid interest to convert
into a number of fully paid and non-assessable shares of Common Stock equal to
the quotient of the elected outstanding principal amount of this Note plus all
accrued interest on the elected outstanding on the Voluntary Conversion Date (as
described in this Section below) divided by the Conversion Price as described in
Section 3.2(a) below. Furthermore, upon the occurrence of an Event of Default
(as defined in Section 2.1 hereof), then to the extent permitted by law, the
Company will pay interest to the Holder, payable on demand, on the outstanding
principal balance of the Note from the date of the Event of Default until such
Event of Default is cured at the rate of the lesser of fifteen percent (15%) and
the maximum applicable legal rate per annum. 

(B)           Conversion
Limitations; Holder's Restriction on Conversion. The Company shall
not effect any conversion of this Note, and the Holder shall not have the right
to convert any portion of this Note, to the extent that after giving effect to
such conversion, the Holder (together with the Holder's affiliates), as set
forth on the applicable Conversion Notice, would beneficially own in excess of
4.99% of the number of shares of the Common Stock outstanding immediately after
giving effect to such conversion. For purposes of the foregoing sentence, the
number of shares of Common Stock beneficially owned by the Holder and its
affiliates shall include the number of shares of Common Stock issuable upon
conversion of this Note with respect to which the determination of such sentence
is being made, but shall exclude the number of shares of Common Stock which
would be issuable upon (A) conversion of the remaining, nonconverted portion of
this Note beneficially owned by the Holder or any of its affiliates and (B)
Exercise or conversion of the unexercised or nonconverted portion of any other
securities of the Company (including, without limitation, any other Notes or the
Warrants) subject to a limitation on conversion or exercise analogous to the
limitation contained herein beneficially owned by the Holder or any of its
affiliates. Except as set forth in the preceding sentence, for purposes of this
Section, beneficial ownership shall be calculated in accordance with Section
13(d) of the Exchange Act. To the extent that the limitation contained in this
section applies, the determination of whether this Note is convertible (in
relation to other securities owned by the Holder) and of which a portion of this
Note is convertible shall be in the sole discretion of such Holder. To ensure
compliance with this restriction, the Holder will be deemed to represent to the
Company each time it delivers a Conversion Notice that such Conversion Notice
has not violated the restrictions set forth in this paragraph and the Company
shall have no obligation to verify or confirm the accuracy of such
determination. For purposes of this Section, in determining the number of
outstanding shares of Common Stock, the Holder may rely on the number of
outstanding shares of Common Stock as reflected in (x) the Company's most recent
Form 10-Q or Form 10-K (or such related form), as the case may be, (y) a more
recent public announcement by the Company or (z) any other notice by the Company
or the Company's Transfer Agent setting forth the number of shares of Common
Stock outstanding. Upon the written or oral request of the Holder, the Company
shall within two Trading Days confirm orally and in writing to the Holder 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 Company, including this Note, by
the Holder or its affiliates since the date as of which such number of
outstanding shares of Common Stock was reported. The provisions of this Section
may be waived by the Holder upon, at the election of the Holder, not less than
61 days' prior notice to the Company, and the provisions of this Section shall
continue to apply until such 61st day (or such later date, as determined by the
Holder, as may be specified in such notice of waiver). 

4

Section
3.2      Conversion Price. 

(a)      The
term "Conversion Price" shall mean a 35% discount to the lowest sale price
of the common stock for the 20 trading days immediately prior to (i) the date of
the Purchase Agreement, or (ii) the Voluntary Conversion Date.

Section
3.3      Mechanics of Conversion. 

(a)      Not
later than three (3) Trading Days after any Conversion Date, the Company or its
designated transfer agent, as applicable, shall issue and deliver to the
Depository Trust Company ("DTC") account on the Holder's behalf via the Deposit
Withdrawal Agent Commission System ("DWAC") as specified in the Conversion
Notice, registered in the name of the Holder or its designee, for the number of
shares of Common Stock to which the Holder shall be entitled. In the
alternative, not later than three (3) Trading Days after any Conversion Date,
the Company shall deliver to the applicable Holder by express courier a
certificate or certificates which shall be free of restrictive legends and
trading restrictions (other than those required by Section 5.1 of the Purchase
Agreement) representing the number of shares of Common Stock being acquired upon
the conversion of this Note (the "Delivery Date"). Notwithstanding the
foregoing to the contrary, the Company or its transfer agent shall only be
obligated to issue and deliver the shares to the OTC on the Holder's behalf via
DWAC (or certificates free of restrictive legends) if such conversion is in
connection with a sale and the Holder has complied with the applicable
prospectus delivery requirements. lf in the case of any Conversion Notice such
certificate or certificates are not delivered to or as directed by the
applicable Holder by the Delivery Date, the Holder shall be entitled by written
notice to the Company at any time on or before its receipt of such certificate
or certificates thereafter, to rescind such conversion, in which event the
Company shall immediately return this Note if tendered for conversion, whereupon
the Company and the Holder shall each be restored to their respective positions
immediately prior to the delivery of such notice of revocation, except that any
amounts described in Sections 3.3(b) and (c) shall be payable through the date
notice of rescission is given to the Company. 

(b)      The
Company understands that a delay in the delivery of the shares of Common Stock upon conversion of this Note beyond the Delivery Date
could result in economic loss to the Holder. If the Company fails to deliver to
the Holder such shares via DWAC or a certificate or certificates pursuant to
this Section hereunder by the Delivery Date, the Company shall pay to such
Holder, in cash, an amount per Trading Day for each Trading Day until such
shares are delivered via DWAC or certificates are delivered, together with
interest on such amount at a rate of l0% per annum, accruing until such amount
and any accrued interest thereon is paid in full, equal to the greater of (A)
(i) 1% of the aggregate principal amount of the Note requested to be converted
for the first five (5) Trading Days after the Delivery Date and (ii) 2% of the
aggregate principal amount of the Note requested to be converted for each
Trading Day thereafter and (B) $2,000 per day (which amount shall be paid as
liquidated damages and not as a penalty). Nothing herein shall limit a Holder's
right to pursue actual damages for the Company's failure to deliver certificates
representing shares of Common Stock upon conversion within the period specified
herein and such Holder shall have the right to pursue all remedies available to
it at law or in equity (including, without limitation, a decree of specific
performance and/or injunctive relief). Notwithstanding anything to the contrary
contained herein, the Holder shall be entitled to withdraw a Conversion Notice,
and upon such withdrawal the Company shall only be obligated to pay the
liquidated damages accrued in accordance with this Section 3.3(b) through the
date the Conversion Notice is withdrawn. 

5

(c)      ln
  addition to any other rights available to the Holder, if the Company fails
  to cause its transfer agent to transmit to the Holder a certificate or
  certificates representing the shares of Common Stock issuable upon conversion of
  this Note on or before the Delivery Date, and if after such date the Holder is
  required by its broker to purchase (in an open market transaction or otherwise)
  shares of Common Stock to deliver in satisfaction of a sale by the Holder of the
  shares of Common Stock issuable upon conversion of this Note which the Holder
  anticipated receiving upon such exercise (a "Buy- In"), then the
  Company shall ( 1) pay in cash to the Holder the amount by which (x) the
  Holder's total purchase price (including brokerage commissions, if any) for the
  shares of Common Stock so purchased exceeds (y) the amount obtained by multi
  plying (A) the number of shares of Common Stock issuable upon conversion of this
  Note that the Company was required to deliver to the Holder in connection with
  the conversion at issue times (B) the price at which the sell order giving rise
  to such purchase obligation was executed, and (2) at the option of the Holder,
  either reinstate the portion of the Note and equivalent number of shares of
  Common Stock for which such conversion was not honored or deliver to the Holder
  the number of shares of Common Stock that would have been issued had the Company
  timely complied with its conversion and delivery obligations hereunder. For
  example, if the Holder purchases Common Stock having a total purchase price of
  $11,000 to cover a Buy-In with respect to an attempted conversion of shares of
  Common Stock with an aggregate sale price giving rise to such purchase
  obligation of $10,000, under clause (1) of the immediately preceding sentence
  the Company shall be required to pay the Holder $1,000. The Holder shall provide
  the Company written notice indicating the amounts payable to the Holder in
  respect of the Buy-In, together with applicable confirmations and other evidence
  reasonably requested by the Company. Nothing herein shall limit a Holder's right
  to pursue any other remedies available to it hereunder, at law or in equity
  including, without limitation, a decree of specific performance and/or
  injunctive relief with respect to the Company's failure to timely deliver
  certificates representing shares of Common Stock upon conversion of this Note as
required pursuant to the terms hereof. 

Section
3.4      Ownership Cap and Certain Conversion
Restrictions. 

Notwithstanding
anything to the contrary set forth in Section 3 of this Note, at no time may the
Holder convert all or a portion of this Note if the number of shares of Common
Stock to be issued pursuant to such conversion would exceed, when aggregated
with all other shares of Common Stock owned by the Holder at such time, the
number of shares of Common Stock which would result in the Holder beneficially
owning (as determined in accordance with Section l3(d) of the Exchange Act and
the rules thereunder) more than 9.9% of all of the Common Stock outstanding at
such time; provided, however, that upon the Holder providing the Company with
sixty-one (61) days notice (pursuant to Section 4.1 hereof) (the "Waiver Notice") that the Holder would
like to waive this Section 3.4 with regard to any or all shares of Common Stock
issuable upon conversion of this Note, this Section 3.4 will be of no force or
effect with regard to all or a portion of the Note referenced in the Waiver
Notice; provided, further, that this provision shall be of no further force or
effect during the sixty-one (61) days immediately preceding the Maturity Date. 

6

Section
  3.5      Adjustment of Conversion Price.

(a)      The
Conversion Price shall be subject to adjustment from time to time as follows:

(i)      Adjustments
for Stock Splits and Combinations. If the Company shall at any time or from
time to time after the Issuance Date, effect a stock split of the outstanding
Common Stock, the applicable Conversion Price in effect immediately prior to the
stock split shall be proportionately decreased. If the Company shall at any time
or from time to time after the Issuance Date, combine the outstanding shares of
Common Stock, the applicable Conversion Price in effect immediately prior to the
combination shall be proportionately increased. Any adjustments under this
Section 3.5(a)(i) shall be effective at the close of business on the date the
stock split or combination occurs. 

(ii)      Adjustments
for Certain Dividends and Distributions. If the Company shall at any time or
from time to time after the Issuance Date, make or issue or set a record date
for the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in shares of Common Stock, then, and in each
event, the applicable Conversion Price in effect immediately prior to such event
shall be decreased as of the time of such issuance or, in the event such record
date shall have been fixed, as of the close of business on such record date, by
multiplying, the applicable Conversion Price then in effect by a fraction: 

(1)      the numerator of which shall be the total number of shares of Common Stock issued and outstanding immediately prior to the
time of such issuance or the close of business on such record date; and 

(2)      the
denominator of which shall be the total number of shares of Common Stock issued
and outstanding immediately prior to the time of such issuance or the close of
business on such record date; plus the number of shares of Common Stock issuable
in payment of such dividend or distribution. 

(iii)      Adjustment
for Other Dividends and Distributions. If the Company shall at any time or
from time to time after the Issuance Date, make or issue or set a record date
for the determination of holders of Common Stock entitled to receive a dividend
or other distribution payable in other than shares of Common Stock, then, and in
each event, an appropriate revision to the applicable Conversion Price shall be
made and provision shall be made (by adjustments of the Conversion Price or
otherwise) so that the holders of this Note shall receive upon conversions
thereof, in addition to the number of shares of Common Stock receivable thereon,
the number of securities of the Company which they would have received had this
Note been converted into Common Stock on the date of such event and had
thereafter, during the period from the date of such event to and including the
Conversion Date, retained such securities (together with any distributions
payable thereon during such period), giving application to all adjustments
called for during such period under this Section 3.5(a)(iii ) with respect to
the rights of the holders of this Note; provided, however, that if such record
date shall have been fixed and such dividend is not fully paid or if such
distribution is not fully made on the date fixed therefor, the Conversion Price
shall be adjusted pursuant to this paragraph as of the time of actual payment of
such dividends or distributions. 

(iv)      Adjustments
for Reclassification, Exchange or Substitution. If the Common Stock issuable upon conversion of this Note at any
time or from time to time after the Issuance Date shall be changed to the same
or different number of shares of any class or classes of stock, whether by
reclassification, exchange, substitution or otherwise (other than by way of a
stock split or combination of shares or stock dividends provided for in Sections
3.5(a)(i), (ii) and (iii), or a reorganization, merger, consolidation, or sale
of assets provided for in Section 3.5(a)(v)), then, and in each event, an
appropriate revision to the Conversion Price shall be made and provisions shall
be made (by adjustments of the Conversion Price or otherwise) so that the Holder
shall have the right thereafter to convert this Note into the kind and amount of
shares of stock and other securities receivable upon reclassification, exchange,
substitution or other change, by holders of the number of shares of Common Stock
into which such Note might have been converted immediately prior to such
reclassification, exchange, substitution or other change, all subject to further
adjustment as provided herein. 

7

(v)      Adjustments
  for Reorganization, Merger, Consolidation or Sales of Assets. If at any time
  or from time to time after the Issuance Date there shall be a capital
  reorganization of the Company (other than by way of a stock split or combination
  of shares or stock dividends or distributions provided for in Section 3.5(a)(i),
  (ii) and (iii), or a reclassification, exchange or substitution of shares
  provided for in Section 3.5(a)(iv)), or a merger or consolidation of the Company
  with or into another corporation where the holders of outstanding voting
  securities prior to such merger or consolidation do not own over fifty percent
  (50%) of the outstanding voting securities of the merged or consolidated entity,
  immediately after such merger or consolidation, or the sale of all or
  substantially all of the Company's properties or assets to any other person (an
  "Organic Change"), then as a part of such Organic Change an
  appropriate revision to the Conversion Price shall be made and provision shall
  be made (by adjustments of the Conversion Price or otherwise) so that the Holder
  shall have the right thereafter to convert such Note into the kind and amount of
  shares of stock and other securities or property of the Company or any successor
  corporation resulting from Organic Change. In any such case, appropriate
  adjustment shall be made in the application of the provisions of this Section
  3.5(a)(v) with respect to the rights of the Holder after the Organic Change to
  the end that the provisions of this Section 3.5(a)(v) (including any adjustment
  in the applicable Conversion Price then in effect and the number of shares of
  stock or other securities deliverable upon conversion of this Note) shall be
  applied after that event in as nearly an equivalent manner as may be
practicable. 

(vi)     
Issuance of Common Stock Equivalents. If the Company, at any time after
the Issuance Date, shall issue any securities convertible into or exchangeable
for, directly or indirectly, Common Stock ("Convertible Securities"),
other than the Note, or any rights or warrants or options to purchase any such
Common Stock or Convertible Securities, shall be issued or sold (collectively,
the "Common Stock Equivalents") and the aggregate of the price per share
for which Additional Shares of Common Stock may be issuable thereafter pursuant
to such Common Stock Equivalent, plus the consideration received by the Company
for issuance of such Common Stock Equivalent divided by the number of shares of
Common Stock issuable pursuant to such Common Stock Equivalent (the
"Aggregate Per Common Share Price") shall be less than the applicable
Conversion Price then in effect, or if, after any such issuance of Common Stock
Equivalents, the price per share for which Additional Shares of Common Stock may
be issuable thereafter is amended or adjusted, and such price as so amended
shall make the Aggregate Per Share Common Price be less than the applicable
Conversion Price in effect at the time of such amendment or adjustment, then the
applicable Conversion Price upon each such issuance or amendment shall be
adjusted as provided in the first sentence of subsection (vi) of this Section
3.5(a) on the basis that (1) the maximum number of Additional Shares of Common
Stock issuable pursuant to all such Common Stock Equivalents shall be deemed to
have been issued (whether or not such Common Stock Equivalents are actually then
exercisable, convertible or exchangeable in whole or in part) as of the earlier
of (A) the date on which the Company shall enter into a firm contract for the
issuance of such Common Stock Equivalent, or (B) the date of actual issuance of
such Common Stock Equivalent. No adjustment of the applicable Conversion Price
shall be made under this subsection (vii) upon the issuance of any
Convertible Security which is issued pursuant to the exercise of any warrants or
other subscription or purchase rights therefor, if any adjustment shall
previously have been made to the exercise price of such warrants then in effect
upon the issuance of such warrants or other rights pursuant to this subsection
(vii). No adjustment shall be made to the Conversion Price upon the issuance of
Common Stock pursuant to the exercise, conversion or exchange of any Convertible
Security or Common Stock Equivalent where an adjustment to the Conversion Price
was made as a result of the issuance or purchase of any Convertible Security or
Common Stock Equivalent. 

8

(vii)      Consideration
  for Stock. In case any shares of Common Stock or any Common Stock
Equivalents shall be issued or sold: 

(1)     
in connection with any merger or consolidation in which the Company is the
surviving corporation (other than any consolidation or merger in which the
previously outstanding shares of Common Stock of the Company shall be changed to
or exchanged for the stock or other securities of another corporation), the
amount of consideration therefor shall be, deemed to be the fair value, as
determined reasonably and in good faith by the Board of Directors of the
Company, of such portion of the assets and business of the non-surviving
corporation as such Board may determine to be attributable to such shares of
Common Stock, Convertible Securities, rights or warrants or options, as the case
may be; or 

(2)     
in the event of any consolidation or merger of the Company in which the Company
is not the surviving corporation or in which the previously outstanding shares
of Common Stock of the Company shall be changed into or exchanged for the stock
or other securities of another corporation, or in the event of any sale of all
or substantially all of the assets of the Company for stock or other securities
of any corporation, the Company shall be deemed to have issued a number of
shares of its Common Stock for stock or securities or other property of the
other corporation computed on The basis of the actual exchange ratio on which
the transaction was predicated, and for a consideration equal to the fair market
value on the date of such transaction of all such stock or securities or other
property of the other corporation. If any such calculation results in adjustment
of the applicable Conversion Price, or the number of shares of Common Stock
issuable upon conversion of the Note, the determination of the applicable
Conversion Price or the number of shares of Common Stock issuable upon
conversion of the Note immediately prior to such merger, consolidation or sale,
shall be made after giving effect to such adjustment of the number of shares of
Common Stock issuable upon conversion of the Note. In the event Common Stock is
issued with other shares or securities or other assets of the Company for
consideration which covers both, the consideration computed as provided in this
Section 3.5(viii) shall be allocated among such securities and assets as
determined in good faith by the Board of Directors of the Company. 

(b)      Record
Date. In case the Company shall take record of the holders of its Common
Stock for the purpose of entitling them to subscribe for or purchase Common
Stock or Convertible Securities, then the date of the issue or sale of the
shares of Common Stock shall be deemed to be such record date. 

(c)     
Certain Issues Excepted Anything herein to the contrary notwithstanding,
the Company shall not be required to make any adjustment to the Conversion Price
in connection with (i) securities issued (other than for cash) in connection
with a merger, acquisition, or consolidation, (ii) securities issued
pursuant to a bona fide firm underwritten public offering of the Company's
securities,
(iii) securities issued pursuant to the conversion or exercise
of convertible or exercisable securities issued or outstanding on or prior to
the date hereof or issued pursuant to the Purchase Agreement, (iv) the shares
of Common Stock issuable upon the exercise of Warrants, (v)
securities issued in connection with strategic license agreements or other
partnering arrangements so long as such issuances are not for the purpose of
raising capital, (vi) Common Stock issued or options to purchase Common Stock
granted or issued pursuant to the Company's stock option plans and employee
stock purchase plans as they now exist, (vii) the payment of any accrued
interest in shares of Common Stock pursuant to this Note. 

9

(d)      No
  Impairment. The Company shall not, by amendment of its Certificate of
  Incorporation or through any reorganization, transfer of assets, consolidation,
  merger, dissolution, issue or sale of securities or any other voluntary action,
  avoid or seek to avoid the observance or performance of any of the terms to be
  observed or performed hereunder by the Company, but will at all times in good
  faith, assist in the carrying out of all the provisions of this Section 3.5 and
  in the taking of all such action as may be necessary or appropriate in order to
  protect the Conversion Rights of the Holder against impairment. In the event a
  Holder shall elect to convert any Note as provided herein, the Company cannot
  refuse conversion based on any claim that such Holder or anyone associated or
  affiliated with such Holder has been engaged in any violation of law, violation
  of an agreement to which such Holder is a party or for any reason whatsoever,
  unless, an injunction from a court, or notice, restraining and or adjoining
  conversion of all or of said Note shall have issued and the Company posts a
  surety bond for the benefit of such Holder in an amount equal to one hundred
  thirty percent ( 130%) of the amount of the Note the Holder has elected to
  convert, which bond shall remain in effect until the completion of
  arbitration/litigation of the dispute and the proceeds of which shall be payable
to such Holder in the event it obtains judgment. 

(e)      Certificates
as to Adjustments. Upon occurrence of each adjustment or readjustment of the
Conversion Price or number of shares of Common Stock issuable upon conversion
of this Note pursuant to this Section 3.5, the Company at its expense shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and furnish to the Holder a certificate setting forth such adjustment and
readjustment, showing in detail the facts upon which such adjustment or
readjustment is based. The Company shall, upon written request of the Holder, at
any time, furnish or cause to be furnished to the Holder a like certificate
setting forth such adjustments and readjustments, the applicable Conversion
Price in effect at the time, and the number of shares of Common Stock and the
amount, if any, of other securities or property which at the time would be
received upon the conversion of this Note. Notwithstanding the foregoing, the
Company shall not be obligated to deliver a certificate unless such certificate
would reflect an increase or decrease of at least one percent (1%) of such
adjusted amount. 

(f)      Issue
Taxes. The Company shall pay any and all issue and other taxes, excluding
federal, state or local income taxes, that may be payable in respect of any
issue or delivery of shares of Common Stock on conversion of this Note pursuant
thereto; provided, however, that the Company shall not be obligated to pay any
transfer taxes resulting from any transfer requested by the Holder in connection
with any such conversion. 

(g)      Fractional
Shares. No fractional shares of Common Stock shall be issued upon conversion
of this Note. In lieu of any fractional shares to which the Holder would
otherwise be entitled, the Company shall pay cash equal to the product of such
fraction multiplied by the average of the Closing Bid Prices of the Common Stock
for the five (5) consecutive Trading Days immediately preceding the Conversion
Date. 

(h)      Reservation
of Common Stock. The Company shall at all times when this Note shall be
outstanding, reserve and keep available out of its authorized but unissued
Common Stock, such number of shares of Common Stock as shall from time to time
be sufficient to effect the conversion of this Note and all interest accrued
thereon; provided that the number of shares of Common Stock so reserved
shall at no time be less than one hundred twenty percent ( 120%) of the number
of shares of Common Stock for which this Note and all interest accrued thereon
are at any time convertible. The Company shall, from time to time in accordance
with Nevada corporate law, increase the authorized number of shares of Common Stock if at any time the unissued
number of authorized shares shall not be sufficient to satisfy the Company's
obligations under this Section 3.5(h). 

10

(i)      Regulatory
  Compliance. If any shares of Common Stock to be reserved for the purpose of
  conversion of this Note or any interest accrued thereon require registration or
  listing with or approval of any governmental authority, stock exchange or other
  regulatory body under any federal or state law or regulation or otherwise before
  such shares may be validly issued or delivered upon conversion, the Company
  shall, at its sole cost and expense, in good faith and as expeditiously as
  possible, endeavor to secure such registration, listing or approval, as the case
may be. 

Section
3.6      Prepayment. 

(a)      Prepayment
Upon an Event of Default. Notwithstanding anything to the contrary contained
herein, upon the occurrence of an Event of Default described in Sections 2.1
(a)-(j)) and 2.1 (m)- (o) hereof, the Holder shall have the right, at such
Holder's option, to require the Company to prepay in cash all or a portion of
this Note at a price equal to one hundred twenty percent (120%) of the aggregate
principal amount of this Note plus all accrued and unpaid interest applicable at
the time of such request (the "Event of Default Prepayment Price").
Nothing in this Section 3.6(a) shall limit the Holder's rights under Section
2.2 hereof. 

(b)      Prepayment
Option Upon Major Transaction. In addition to all other rights of the Holder
contained herein, simultaneous with the occurrence of a Major Transaction (as
defined in Section 3.6(e) hereof), the Holder shall have the right, at the
Holder's option, to require the Company to prepay all or a portion of the
Holder's Note at a price equal to one hundred ten percent (110%) of the
aggregate principal amount of this Note plus all accrued and unpaid interest
(the "Major Transaction Prepayment Price"). 

(c)      Prepayment
Option Upon Triggering Event. In addition to all other rights of the Holder
contained herein, after a Triggering Event (as defined below), the Holder shall
have the right, at the Holder's option, to require the Company to prepay all or
a portion of this Note in cash at a price equal to the sum of (i) the greater of
(A) one hundred twenty percent (120%) of the aggregate principal amount of this
Note plus all accrued and un paid interest and (B) in the event at such time the
Holder is unable to obtain the benefit of its conversion rights through the
conversion of this Note and resale of the shares of Common Stock issuable upon
conversion hereof in accordance with the terms of this Note and the other
Transaction Documents, the aggregate principal amount of this Note plus all
accrued but unpaid interest hereon, divided by the Conversion Price on (x) the
date the Prepayment Price (as defined below) is demanded or otherwise due or (y)
the date the Prepayment Price is paid in full, whichever is less, multiplied by
the VWAP on (x) the date the Prepayment Price is demanded or otherwise due, and
(y) the date the Prepayment Price is paid in full, whichever is greater, and
(ii) all other amounts, costs, expenses and liquidated damages due in respect of
this Note and the other Transaction Documents (the "Triggering Event Prepayment
Price," and, collectively with the "Major Transaction Prepayment Price," the
"Prepayment Price"). 

(d)      Major
Transaction. A "Major Transaction" shall be deemed to have occurred at such
time as any of the following events: 

(i)      the
consolidation, merger or other business combination of the Company with or into
another Person (other than (A) pursuant to a migratory merger effected solely
for the purpose of changing the jurisdiction of incorporation of the Company or
(B) a consolidation, merger or other business combination in which holders of
the Company's voting power immediately prior to the transaction continue after
the transaction to hold, directly or indirectly, the voting power of the
surviving entity or entities necessary to elect a majority of the members of the
board of directors (or their equivalent if other than a corporation) of such
entity or entities); or 

11

(ii)      the
  sale or transfer of more than fifty percent (50%) of the Company's assets (based
  on the fair market value as determined in good faith by the Company's Board of
  Directors) other than inventory in the ordinary course of business in one or a
related series of transactions; or 

(iii)      closing
of a purchase, tender or exchange offer made to the holders of more than fifty
percent (50%) of the outstanding shares of Common Stock in which more than fifty
percent (50%) of the outstanding shares of Common Stock were tendered and
accepted. 

(e)      Triggering
Event. A "Triggering Event" shall be deemed to have occurred at such time as
any of the following events: 

(i)      the
suspension from listing, without subsequent listing on any one of, or the
failure of the Common Stock to be listed on at least one of the OTC Bulletin
Board, Nasdaq SmallCap Market, Nasdaq National Market, American Stock Exchange
or The New York Stock Exchange, Inc. for a period of five (5) consecutive
Trading Days; 

(ii)     
the Company's notice to any holder of the Note, including by way of public
announcement, at any time, of its inability to comply (including for any of the
reasons described in Section 3.8) or its intention not to comply with proper
requests for conversion of any Note into shares of Common Stock; or (iii) the
Company's failure to comply with a Conversion Notice tendered in accordance with
the provisions of this Note within ten (10) business days after the receipt by
the Company of the Conversion Notice; or 

(iv)      the
Company deregisters its shares of Common Stock and as a result such shares of
Common Stock are no longer publicly traded; or 

(v)      the
Company consummates a ''going private" transaction and as a result the Common
Stock is no longer registered under Sections 12(b) or 12(g) of the Exchange
Act. 

(f)      Mechanics
of Prepayment at Option of Holder Upon Major Transaction. No sooner than
fifteen (15) days nor later than ten (10) days prior to the consummation of a
Major Transaction, but not prior to the public announcement of such Major
Transaction, the Company shall deliver written notice thereof via facsimile and
overnight courier ("Notice of Major Transaction") to the Holder of this Note. At
any time after receipt of a Notice of Major Transaction (or, in the event a
Notice of Major Transaction is not delivered at least ten (10) days prior to a
Major Transaction, at any time within ten (10) days prior to a Major
Transaction), any holder of the Notes then outstanding may require the Company
to prepay, effective immediately prior to the consummation of such Major
Transaction, all of the holder's Notes then outstanding by delivering written
notice thereof via facsimile and overnight courier ("Notice of Prepayment at
Option of Holder Upon Major Transaction") to the Company, which Notice of
Prepayment at Option of Holder Upon Major Transaction shall indicate (i) the
number of Notes that such holder is electing to prepay and (ii) the applicable
Major Transaction Prepayment Price, as calculated pursuant to Section 3.6(b)
above. 

(g)      Mechanics
of Prepayment at Option of Holder Upon Triggering Event. Within one (1)
business day after the occurrence of a Triggering Event, the Company shall
deliver written notice thereof via facsimile and overnight courier ("Notice of
Triggering Event") to each holder of the Notes. At any time after the earlier of
a holder's receipt of a Notice of Triggering Event and such holder becoming
aware of a Triggering Event, any holder of this Note may require the Company to
prepay all of the Notes on a pro rata basis by delivering written notice thereof
via facsimile and overnight courier ("Notice of Prepayment at Option of
Holder Upon Triggering Event") to the Company, which Notice of Prepayment at
Option of Holder Upon Triggering Event shall indicate (i) the amount of the Note
that such holder is electing to have prepaid and (ii) the applicable Triggering
Event Prepayment Price, as calculated pursuant to Section 3.6(c) above. A holder
shall only be permitted to require the Company to prepay the Note pursuant to
Section 3.6 hereof for the greater of a period of ten (10) days after receipt by
such holder of a Notice of Triggering Event or for so long as such Triggering
Event is continuing. 

12

(h)      Payment
  of Prepayment Price. Upon the Company's receipt of a Notice(s) of Prepayment
  at Option of Holder Upon Triggering Event or a Notice(s) of Prepayment at Option
  of Holder Upon Major Transaction from any holder of the Notes, the Company shall
  immediately notify each holder of the Notes by facsimile of the Company's
  receipt of such Notice(s) of Prepayment at Option of Holder Upon Triggering
  Event or Notice(s) of Prepayment at Option of Holder Upon Major Transaction and
  each holder which has sent such a notice shall promptly submit to the Company
  such holder's certificates representing the Notes which such holder has elected
  to have prepaid. The Company shall deliver the applicable Triggering Event
  Prepayment Price, in the case of a prepayment pursuant to Section 3.6(i), to
  such holder within five (5) business days after the Company's receipt of a
  Notice of Prepayment at Option of Holder Upon Triggering Event and, in the case
  of a prepayment pursuant to Section 3.6(f), the Company shall deliver the
  applicable Major Transaction Prepayment Price immediately prior to the
  consummation of the Major Transaction; provided that a holder's original Note
  shall have been so delivered to the Company; provided further that if the
  Company is unable to prepay all of the Notes to be prepaid, the Company shall
  prepay an amount from each holder of the Notes being prepaid equal to such
  holder's pro-rata amount (based on the number of Notes held by such holder
  relative to the number of Notes outstanding) of all Notes being prepaid. If the
  Company shall fail to prepay all of the Notes submitted for prepayment (other
  than pursuant to a dispute as to the arithmetic calculation of the Prepayment
  Price), in addition to any remedy such holder of the Notes may have under this
  Note and the Purchase Agreement, the applicable Prepayment Price payable in
  respect of such Notes not prepaid shall bear interest at the rate of two percent
  (2%) per month (prorated for partial months) until paid in full. Until the
  Company pays such unpaid applicable Prepayment Price in full to a holder of the
  Notes submitted for prepayment, such holder shall have the option (the "Void
  Optional Prepayment Option") to, in lieu of prepayment, require the Company to
  promptly return to such holder(s) all of the Notes that were submitted for
  prepayment by such holder(s) under this Section 3.6 and for which the applicable
  Prepayment Price has not been paid, by sending written notice thereof to the
  Company via facsimile (the "Void Optional Prepayment Notice"). Upon the
  Company's receipt of such Void Optional Prepayment Notice(s) and prior to
  payment of the full applicable Prepayment Price to such holder, (i) the
  Notice(s) of Prepayment at Option of Holder Upon Triggering Event or the
  Notice(s) of Prepayment at Option of Holder Upon Major Transaction, as the case
  may be, shall be null and void with respect to those Notes submitted for
  prepayment and for which the applicable Prepayment Price has not been paid, (ii)
  the Company shall immediately return any Notes submitted to the Company by each
  holder for prepayment under this Section 3.6(h) and for which the applicable
  Prepayment Price has not been paid and (iii) the Conversion Price of such
  returned Notes shall be adjusted to the lesser of (A) the Conversion Price as in
  effect on the date on which the Void Optional Prepayment Notice(s) is delivered
  to the Company and (B) the lowest Closing Bid Price during the period beginning
  on the date on which the Notice(s) of Prepayment of Option of Holder Upon Major
  Transaction or the Notice(s) of Prepayment at Option of Holder Upon Triggering
  Event, as the case may be, is delivered to the Company and ending on the date on
  which the Void Optional Prepayment Notice(s) is delivered to the Company;
  provided that no adjustment shall be made if such adjustment would result in an
  increase of the Conversion Price then in effect. A holder's delivery of a Void
  Optional Prepayment Notice and exercise of its rights following such notice
  shall not effect the Company's obligations to make any payments which have
  accrued prior to the date of such notice. Payments provided for in this Section
3.6 shall have priority to payments to other stockholders in connection with a Major Transaction. 

13

(i)      Company
  Prepayment Option upon Major Transaction. Upon the consummation of a Major
  Transaction, the Company may prepay in cash all or any portion of the
  outstanding principal amount of this Note together with all accrued and unpaid
  interest thereon upon at least thirty (30) days prior written notice to the
  Holder (the "Company's Prepayment Notice") at a price equal to one
  hundred twenty percent (120%) of the aggregate principal amount of this Note
  plus any accrued but unpaid interest (the "Company's Prepayment Price");
  provided, however, that if a holder has delivered a Conversion Notice to the
  Company or delivers a Conversion Notice within such thirty (30) day period
  following delivery of the Company's Prepayment Notice, the principal amount of
  the Notes plus any accrued but unpaid interest designated to be converted may
  not be prepaid by the Company and shall be converted in accordance with Section
  3.3 hereof; provided further that if during the period between delivery of the
  Company's Prepayment Notice and the Company's Prepayment Date (as defined
  below), a holder shall become entitled and elects to deliver a Notice of
  Prepayment at Option of Holder Upon Major Transaction or Notice of Prepayment at
  Option of Holder upon Triggering Event, then such rights of the holders shall
  take precedence over the previously delivered Company Prepayment Notice if the
  holder so elects. The Company's Prepayment Notice shall state the date of
  prepayment which date shall be the date of the consummation of the Major
  Transaction (the "Company's Prepayment Date"), the Company's Prepayment Price
  and the principal amount of Notes plus any accrued but unpaid interest to be
  prepaid by the Company. The Company shall deliver the Company's Prepayment Price
  on the Company's Prepayment Date, provided, that if the holder(s) delivers a
  Conversion Notice before the Company's Prepayment Date, then the portion of the
  Company's Prepayment Price which would be paid to prepay the Notes covered by
  such Conversion Notice shall be returned to the Company upon delivery of the
  Common Stock issuable in connection with such Conversion Notice to the
  holder(s). On the Company's Prepayment Date, the Company shall pay the Company's
  Prepayment Price, subject to any adjustment pursuant to the immediately
  preceding sentence, to the holder(s) on a pro rata basis. If the Company fails
  to pay the Company's Prepayment Price by the third (3rd) business day after the
  Company's Prepayment Date, the prepayment will be declared null and void and the
  Company shall lose its right to serve a Company's Prepayment Notice pursuant to
  this Section 3.6(i) in the future. Notwithstanding the foregoing to the
  contrary, the Company may effect a prepayment pursuant to this Section 3.6(i)
  only if trading in the Common Stock shall not have been suspended by the
  Securities and Exchange Commission or the Nasdaq SmallCap Market (or other
  exchange or market on which the Common Stock is trading), and the Company is
  in material compliance with the terms and conditions of this Note and the other
Transaction Documents. 

Section
3.7      Inability to Fully Convert. 

(a)      Holder's
Option if Company Cannot Fully Convert. If, upon the Company's receipt of a
Conversion Notice, the Company cannot issue shares of Common Stock for any
reason, including, without limitation, because the Company (w) does not have a
sufficient number of shares of Common Stock authorized and available, or (x) is
otherwise prohibited by applicable law or by the rules or regulations of any
stock exchange, interdealer quotation system or other self-regulatory
organization with jurisdiction over the Company or any of its securities from
issuing all of the Common Stock which is to be issued to the Holder pursuant to
a Conversion Notice, then the Company shall issue as many shares of Common Stock
as it is able to issue in accordance with the Holder's Conversion Notice and,
with respect to the unconverted portion of this Note, the Holder, solely at
Holder's option, can elect to: 

(i)      require
the Company to prepay that portion of this Note for which the Company is unable
to issue Common Stock in accordance with the Holder's Conversion Notice (the
"Mandatory Prepayment") at a price per share equal to the
Triggering Event Prepayment Price as of such Conversion Date (the "Mandatory
Prepayment Price"); 

(ii)      void
its Conversion Notice and retain or have returned, as the case may be, this Note that was to be converted pursuant to the
Conversion Notice (provided that the Holder's voiding its Conversion Notice
shall not effect the Company's obligations to make any payments which have
accrued prior to the date of such notice). 

14

In the event a Holder shall elect to convert any portion of its
  Notes as provided herein, the Company cannot refuse conversion based on any
  claim that such Holder or anyone associated or affiliated with such Holder has
  been engaged in any violation of law, violation of an agreement to which such
  Holder is a party or for any reason whatsoever, unless, an injunction from a
  court, on notice, restraining and or adjoining conversion of all or of said
  Notes shall have been issued and the Company posts a surety bond for the benefit
  of such Holder in an amount equal to 130% of the principal amount of the Notes
  the Holder has elected to convert, which bond shall remain in effect until the
  completion of arbitration/litigation of the dispute and the proceeds of which
shall be payable to such Holder in the event it obtains judgment. 

(b)     
Mechanics of Fulfilling Holder's Election. The Company shall immediately
send via facsimile to the Holder, upon receipt of a facsimile copy of a
Conversion Notice from the Holder which cannot be fully satisfied as described
in Section 3.7(a) above, a notice of the Company's inability to fully satisfy
the Conversion Notice (the "Inability to Fully Convert Notice"). Such
Inability to Fully Convert Notice shall indicate (i) the reason why the Company
is unable to fully satisfy such holder's Conversion Notice, (ii) the amount of
this Note which cannot be converted and (iii) the applicable Mandatory
Prepayment Price. The Holder shall notify the Company of its election pursuant
to Section 3.7(a) above by delivering written notice via facsimile to the
Company ("Notice in Response to Inability to Convert"). 

(c)      Payment
of Prepayment Price. If the Holder shall elect to have its Notes prepaid
pursuant to Section 3.7(a)(i) above, the Company shall pay the Mandatory
Prepayment Price to the Holder within thirty (30) days of the Company's receipt
of the Holder's Notice in Response to Inability to Convert, provided that prior
to the Company's receipt of the Holder's Notice in Response to Inability to
Convert the Company has not delivered a notice to the Holder stating, to the
satisfaction of the Holder, that the event or condition resulting in the
Mandatory Prepayment has been cured and all Conversion Shares issuable to the
Holder can and will be delivered to the Holder in accordance with the terms of
this Note. If the Company shall fail to pay the applicable Mandatory Prepayment
Price to the Holder on a timely basis as described in this Section 3.7(c) (other
than pursuant to a dispute as to the determination of the arithmetic calculation
of the Prepayment Price), in addition to any remedy the Holder may have under
this Note and the Purchase Agreement, such unpaid amount shall bear interest at
the rate of two percent (2%) per month (prorated for partial months) until paid
in full. Until the full Mandatory Prepayment Price is paid in full to the
Holder, the Holder may (i) void the Mandatory Prepayment with respect to that
portion of the Note for which the full Mandatory Prepayment Price has not been
paid, (ii) receive back such Note, and (iii) require that the Conversion Price
of such returned Note be adjusted to the lesser of (A) the Conversion Price as
in effect on the date on which the Holder voided the Mandatory Prepayment and
(B) the lowest Closing Bid Price during the period beginning on the Conversion
Date and ending on the date the Holder voided the Mandatory Prepayment. 

(d)      Pro-rata
Conversion and Prepayment. In the event the Company receives a Conversion
Notice from more than one holder of the Notes on the same day and the Company
can convert and prepay some, but not all, of the Notes pursuant to this Section
3.7, the Company shall convert and prepay from each holder of the Notes electing
to have its Notes converted and prepaid at such time an amount equal to such
holder's pro-rata amount (based on the principal amount of the Notes held by
such holder relative to the principal amount of the Notes outstanding) of all
the Notes being converted and prepaid at such time. 

Section
3.8      No Rights as Shareholder. Nothing
contained in this Note shall be construed as conferring upon the Holder, prior
to the conversion of this Note, the right to vote or to receive dividends or to consent or to receive notice as a
shareholder in respect of any meeting of shareholders for the election of
directors of the Company or of any other matter, or any other rights as a
shareholder of the Company. 

15

ARTICLE IV 

MISCELLANEOUS 

Section
4.1      Notices. Any notice, demand,
request, waiver or other communication required or permitted to be given
hereunder shall be in writing and shall be effective (a) upon hand delivery by
telex (with correct answer back received), telecopy or facsimile at the address
or number designated in the Purchase Agreement (if delivered on a business day
during normal business hours where such notice is to be received), or the first
business day following such delivery (if delivered other than on a business day
during normal business hours where such notice is to be received) or (b) on the
second business day following the date of mailing by express courier service,
fully prepaid, addressed to such address, or upon actual receipt of such
mailing, whichever shall first occur. The Company will give written notice to
the Holder at least ten (10) days prior to the date on which the Company takes a
record (x) with respect to any dividend or distribution upon the Common Stock,
(y) with respect to any pro rata subscription offer to holders of Common Stock
or (z) for determining rights to vote with respect to any Organic Change,
dissolution, liquidation or winding-up and in no event shall such notice be
provided to such holder prior to such information being made known to the
public. The Company will also give written notice to the Holder at least ten
(10) days prior to the date on which any Organic Change, dissolution,
liquidation or winding-up will take place and in no event shall such notice be
provided to the Holder prior to such information being made known to the public.

Section
4.2      Governing Law. This Note shall be
governed by and construed in accordance with the internal laws of the State of
Nevada, without giving effect to any of the conflicts of law principles which
would result in the application of the substantive law of another jurisdiction.
This Note shall not be interpreted or construed with any presumption against the
party causing this Note to be drafted. 

Section
4.3      Headings. Article and section
headings in this Note are included herein for purposes of convenience of
reference only and shall not constitute a part of this Note for any other
purpose. 

Section
4.4      Remedies, Characterizations, Other
Obligations, Breaches and Injunctive Relief. The remedies provided in
this Note shall be cumulative and in addition to all other remedies available
under this Note, at law or in equity (including, without limitation, a decree of
specific performance and/or other injunctive relief), no remedy contained herein
shall be deemed a waiver of compliance with the provisions giving rise to such
remedy and nothing herein shall limit a holder's right to pursue actual damages
for any failure by the Company to comply with the terms of this Note. Amounts
set forth or provided for herein with respect to payments, conversion and the
like (and the computation thereof) shall be the amounts to be received by the
holder thereof and shall not, except as expressly provided herein, be subject to
any other obligation of the Company (or the performance thereof). The Company
acknowledges that a breach by it of its obligations hereunder will cause
irreparable and material harm to the Holder and that the remedy at law for any
such breach may be inadequate. Therefore the Company agrees that, in the event
of any such breach or threatened breach, the Holder shall be entitled, in
addition to all other available rights and remedies, at law or in equity, to
seek and obtain such equitable relief, including but not limited to an
injunction restraining any such breach or threatened breach, without the
necessity of showing economic loss and without any bond or other security being
required. 

Section
4.5      Enforcement Expenses. The Company
agrees to pay all costs and expenses of enforcement of this Note, including, without limitation,
reasonable attorneys' fees and expenses. 

16

Section
  4.6      Binding Effect. The obligations of
  the Company and the Holder set forth herein shall be binding upon the successors
  and assigns of each such party, whether or not such successors or assigns are
permitted by the terms hereof. 

Section
4.7      Amendments. This Note may not be
modified or amended many manner except in writing executed by the Company and
the Holder. 

Section
4.8      Compliance with Securities Laws.
The Holder of this Note acknowledges that this Note is being acquired solely for
the Holder's own account and not as a nominee for any other party, and for
investment, and that the Holder shall not offer, sell or otherwise dispose of
this Note. This Note and any Note issued in substitution or replacement therefor
shall be stamped or imprinted with a legend in substantially the following form:

	
      "THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES
      ACT OF 1933, AS AMENDED (THE "ACT"), OR APPLICABLE STATE SECURITIES LAWS,
      AND MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
      RECEIPT BY THE COMPANY OF AN OPINION OF COUNSEL IN THE FORM, SUBSTANCE AND
      SCOPE REASONABLY SATISFACTORY TO THE COMPANY THAT THIS NOTE MAY BE SOLD,
      TRANSFERRED, HYPOTHECATED OR OTHERWISE DISPOSED OF, UNDER AN EXEMPTION
      FROM REGISTRATION UNDER THE ACT AND SUCH STATE SECURITIES LAWS."
  

Section
4.9      Consent to Jurisdiction. Each of the
Company and the Holder (i) hereby irrevocably submits to the exclusive
jurisdiction of the State of Nevada for the purposes of any suit, action or
proceeding arising out of or relating to this Note and (ii) hereby waives, and
agrees not to assert in any such suit, action or proceeding, any claim that it
is not personally subject to the jurisdiction of such court, that the suit,
action or proceeding is brought in an inconvenient forum or that the venue of
the suit, action or proceeding is improper. Each of the Company and the Holder
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 the Purchase Agreement and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing in this Section
4.9 shall affect or limit any right to serve process in any other manner
permitted by law. Each of the Company and the Holder hereby agree that the
prevailing party in any suit, action or proceeding arising out of or relating to
this Note shall be entitled to reimbursement for reasonable legal fees from the
non-prevailing party. 

Section
4.10      Parties in Interest. This Note
shall be binding upon, inure to the benefit of and be enforceable by the
Company, the Holder and their respective successors and permitted assigns. 

Section
4.11      Failure or Indulgence Not Waiver.
No failure or delay on the part of the Holder in the exercise of any power,
right or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. 

17

Section
  4.12      Company Waivers. Except as
  otherwise specifically provided herein, the Company and all others that may
  become liable for all or any part of the obligations evidenced by this Note,
  hereby waive presentment, demand, notice of nonpayment, protest and all other
  demands' and notices in connection with the delivery, acceptance, performance
  and enforcement of this Note, and do hereby consent to any number of renewals of
  extensions of the time or payment hereof and agree that any such renewals or
  extensions may be made without notice to any such persons and without affecting
  their liability herein and do further consent to the release of any person
  liable hereon, all without affecting the liability of the other persons, firms
  or Company liable for the payment of this Note, AND DO HEREBY WAIVE TRlAL BY
JURY. 

(a)      No
delay or omission on the part of the Holder in exercising its rights under this
Note, or course of conduct relating hereto, shall operate as a waiver of such
rights or any other right of the Holder, nor shall any waiver by the Holder of
any such right or rights on any one occasion be deemed a waiver of the same
right or rights on any future occasion. 

(b)      THE
COMPANY ACKNOWLEDGES THAT THE TRANSACTION OF WHICH THIS NOTE IS A PART IS A
COMMERCIAL TRANSACTION, AND TO THE EXTENT ALLOWED BY APPLICABLE LAW, HEREBY
WAIVES ITS RIGHT TO NOTICE AN D HEA R ING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER OR ITS
SUCCESSORS OR ASSIGNS MAY DESIRE TO USE. 

18

LITHIUM EXPLORATION GROUP, INC.

	By: 	
	 	Name: 	Alexander Walsh 
	 	Title: 	Chief Executive Officer

19

FORM OF 

NOTICE OF CONVERSION 

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

The undersigned hereby irrevocably elects to convert $ of the
principal amount of the above Note No. _ into shares of Common Stock of Lithium
Exploration Group, Inc. (the "Company") according to the conditions hereof, as
of the date written below. 

Date of Conversion:
________________________________________________

Applicable Conversion Price:
_________________________________________

Number of shares of Common Stock beneficially owned or deemed
beneficially owned by the Holder on the Date of Conversion: __________________________

	Signature: 	 
	 	 
	Print Name: 	 
	 	 
	Address:Exhibit 10.1

 

AMENDMENT TO SECURED CONVERTIBLE PROMISSORY
NOTE

 

THIS AMENDMENT TO SECURED CONVERTIBLE PROMISSORY
NOTE (this “Amendment”), dated as of March 18, 2016, is by and between Searchlight Minerals Corp.,
a Nevada corporation (the “Company”), and the undersigned (“Holder”). The Company
and Holder are sometimes collectively referred to herein as the “Parties” and individually as a “Party.”

 

WHEREAS, Holder is the holder of
that certain Secured Convertible Promissory Note, made by the Company, dated September 18, 2013 (the “Note”);
and

 

WHEREAS, Holder intends to convert
all of the outstanding principal amount and accrued but unpaid interest owing on the Note into fully paid and non-assessable shares
of Common Stock pursuant to the terms and conditions of the Note.

 

NOW, THEREFORE, in consideration
of the mutual covenants and agreements contained herein, and intending to be legally bound hereby, the Parties hereby agree to
amend the Note as follows, as permitted by Section 8 of the Note.

 

1.                 
Defined Terms. All capitalized terms used herein and not otherwise defined herein shall have the meanings given to
them in the Note.

 

2.                 
Amendment to Section 3(a). Section 3(a) of the Note is hereby amended and restated in its entirety to read as follows:

 

Terms of Conversion. Holder has the right, exercisable
at Holder’s option, any time hereafter and until such date as this Note has been paid in full by the Company, to convert,
subject to the terms and provisions of this Section 3, any or all of the unpaid principal amount of this Note, and any or all accrued
but unpaid interest (such amount being the “Converted Amount”), into such number of fully paid and non-assessable
shares of common stock, $0.001 par value per share of the Company (the “Common Stock”) as is determined by dividing
the Converted Amount by the Conversion Price.

 

 

3.                 
Amendment to Section 3(b). Section 3(b)(i) of the Note is hereby amended and restated in its entirety to read as
follows:

 

“Conversion Price”
means $0.035.

 

4.                 
Amendment to Exhibit A. Exhibit A to the Note is hereby amended and restated in its entirety to read as the Exhibit
A attached to this Amendment.

 

5.                 
Entire Agreement. The Note, as amended by this Amendment, embodies the entire understanding among the Parties with
respect to the subject matter thereof and hereof and can be changed only by an instrument in writing executed by all of the Parties.

 

     

     

    

    

6.                 
Conflict of Terms. In the event of a conflict or inconsistency between the terms of the Note and those of this Amendment,
the terms of this Amendment shall control and govern the rights and obligations of the Parties.

 

7.                 
Ratification. Except to the extent amended hereby or inconsistent herewith, all of the terms, covenants, conditions,
and provisions of the Note shall remain in full force and effect, and the Parties hereby acknowledge and confirm that the same
are in full force and effect.

 

8.                 
Execution. This Amendment may be executed in two or more counterparts, each of which shall be an original, but all
of which shall constitute one and the same instrument. Facsimile or other electronic signatures shall be accepted by the Parties
as originals.

 

 

[Remainder of page
intentionally left blank.]

 

    	 	2	 

     

    

   

IN WITNESS WHEREOF, the Parties have caused
this Amendment to be executed by their respective officers thereunto duly authorized as of the date first above written.

 

	 	SEARCHLIGHT MINERALS CORP.
	 	 	 
	 	 	 
	 	By:	/s/ Carl Ager
	 	 	Carl Ager
	 	 	Vice President

 

 

 

 

 

[SIGNATURE PAGE OF HOLDER FOLLOWS]

 

    	 	3	 

     

    

  

[SIGNATURE PAGE OF HOLDER]

 

 

Name of Holder: Luxor Capital Partners, LP

 

Signature of Authorized Signatory of Holder: /s/
Norris Nissim                             

 

Name of Authorized Signatory: Norris Nissim

 

Title of Authorized Signatory: General Counsel, Luxor Capital
Group, LP 

(Investment Manager)

 

    	 	4	 

     

    

 

[SIGNATURE PAGE OF HOLDER]

 

 

Name of Holder: Luxor Wavefront, LP

 

Signature of Authorized Signatory of Holder: /s/
Norris Nissim                             

 

Name of Authorized Signatory: Norris Nissim

 

Title of Authorized Signatory: General Counsel, Luxor Capital
Group, LP 

(Investment Manager)

 

    	 	5	 

     

    

 

[SIGNATURE PAGE OF HOLDER]

 

 

Name of Holder: OC 19 MASTER FUND, L.P. - LCG

 

Signature of Authorized Signatory of Holder: ______________________________

 

Name of Authorized Signatory: Norris Nissim

 

Title of Authorized Signatory: General Counsel, Luxor Capital
Group, LP 

(Investment Manager)

 

    	 	6	 

     

    

  

[SIGNATURE PAGE OF HOLDER]

 

 

Name of Holder: Thebes Offshore Master Fund, LP

 

Signature of Authorized Signatory of Holder: /s/
Norris Nissim                             

 

Name of Authorized Signatory: 
Norris Nissim                             

 

Title of Authorized Signatory: General Counsel, Luxor Capital
Group, LP

 

    	 	7

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