Document:

fc_ex1027a-90401.htm

    Exhibit
10.27(a)

     

    AMENDMENT
TO LOAN DOCUMENTS

    

    This AMENDMENT TO LOAN DOCUMENTS
(this “Amendment”) is made as of the 31st day of March, 2009, by and among
FIRSTGOLD CORP., a Delaware corporation (the “Borrower”), PLATINUM LONG TERM
GROWTH, LLC, a Delaware limited liability company (“Platinum”) and Lakewood
Group LLC, a Delaware limited liability company (“Lakewood” and, together with
Platinum, the “Lenders”).

    

    WHEREAS, the Lenders and the
Borrower previously entered into a Note and Warrant Purchase Agreement, dated as
of August 7, 2008 (as previously amended or otherwise modified, the “Purchase
Agreement”), which provided for, among other things, the issuance of certain
senior secured promissory notes (the “Notes”) to the Lenders and the extension
of credit by the Lenders (the “Loans”) as set forth therein;

    

    WHEREAS, pursuant to the
Purchase Agreement, the Borrower issued to Platinum Notes in the aggregate
principal amount of $9,600,000, consisting of the $5,394,100 Senior Secured
Promissory Note, dated as of August 7, 2008 (the “Initial Platinum Note”), the
$378,378.37 Senior Secured Promissory Note, dated as of August 27, 2008 (the
“August Platinum Note”), the $1,081,081.08 Senior Secured Promissory Note, dated
as of September 10, 2008 (the “September 10 Platinum Note”) and the
$2,746,440.54 Senior Secured Promissory Note, dated as of September 29, 2008
(the “September 29 Platinum Note” and, together with the Initial Platinum Note,
the August Platinum Note and the September 10 Platinum Note, the “Platinum
Notes”);

    

    WHEREAS, pursuant to the
Purchase Agreement, the Borrower issued to Lakewood Notes in the aggregate
principal amount of $2,400,000, consisting of the $1,348,525 Senior Secured
Promissory Note, dated as of August 7, 2008 (the “Initial Lakewood Note”), the
$94,594.60 Senior Secured Promissory Note, dated as of August 27, 2008 (the
“August Lakewood Note”), the $270,270.27 Senior Secured Promissory Note, dated
as of September 10, 2008 (the “September 10 Lakewood Note”) and the $686,610.14
Senior Secured Promissory Note, dated as of September 29, 2008 (the “September
29 Lakewood Note” and, together with the Initial Lakewood Note, the August
Lakewood Note and the September 10 Lakewood Note, the “Lakewood
Notes”);

    

    WHEREAS,  the
Borrower and the Guarantor have granted to the Lenders a first priority security
interest in substantially all of their respective assets pursuant to the
Security Agreements;

    

    WHEREAS,  the
Borrower’s obligations are secured by the land and premises encumbered by the
Mortgages, which Mortgages have been duly recorded in the land records set forth
on Schedule 4.2(j) to the Purchase Agreement and constitute a first lien on the
property described  therein;

    

    WHEREAS, the Borrower has not
met certain covenants under the Purchase Agreement and the Notes;

    

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

    WHEREAS, it is in the interest of the
Borrower that a portion of the outstanding amounts under the Initial Platinum
Note and the Initial Lakewood Notes become convertible into Common Stock;
and

    

    WHEREAS, the Lenders have
agreed to the amendment and restatement of the Initial Platinum Note and the
Initial Lakewood Note to provided for the convertible of a portion
thereof.

    

    NOW, THEREFORE, in
consideration of the foregoing and for the covenants contained herein, and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, the parties agree as follows:

    

    

    SECTION ONE

    DEFINITIONS;
REPRESENTATIONS

    

    Section 1.1    Terms Defined.  Unless
otherwise defined herein, capitalized terms used herein shall have the meanings
given to such terms in the Purchase Agreement.

    

    Section
1.2            Representations and Warranties of
Borrower.  The Borrower represents, warrants and covenants to the
Lenders as follows:

    

    (a)           Except
as otherwise set forth herein or in the Schedules and Exhibits hereto, the
representations and warranties of the Borrower made in the Transaction Documents
remain true, complete and accurate in all material respects, and the covenants
of the Borrower are hereby reaffirmed, as of the date hereof.  The
aggregate amount of principal and interest of all outstanding, as of the date
hereof, Notes are detailed on Exhibit 1.2A hereto.

    

    (b)           Except
for the failure to make principal payments pursuant to Section 1.3(b) of the
Notes and interest payments pursuant to Section 1.2 of the Notes (the “Existing
Defaults”), the Borrower has performed, in all material respects, all
obligations to be performed by it to date under the Transaction Documents and no
Event of Default (other than the Existing Defaults) exists thereunder or an
event that with the passage of time or giving of notice or both, would
constitute an Event of Default.  As of the date hereof, the Borrower
acknowledges that it has failed to make an aggregate of $1,600,000 of principal
payments pursuant to Section 1.3(b) of the Notes.  The Borrower
further acknowledges that it has failed to make interest payments pursuant to
Section 1.2 of the Notes and that, as of the date hereof, an aggregate of
$762,960.35 of interest has accrued and not been paid under the
Notes.  The Borrower acknowledges and agrees that amounts outstanding
under the Notes shall continue to bear interest at the default rate set forth
therein, and that the LENDERS DO NOT, IN ANY MANNER, WAIVE ANY OF THE DEFAULTS
IDENTIFIED HEREIN AND RETAIN ALL RIGHTS AND REMEDIES IN RESPECT THEREOF, as is
set forth in the Notices of Default and Forbearance delivered on the date hereof
to the Borrower by each of the Lenders.

    

    (c)           The
Borrower is a corporation duly organized, qualified, and existing in good
standing under the laws of the State of Delaware and has full power and
authority to consummate the transactions contemplated hereby.  The
Borrower is duly qualified to do business in all states and other jurisdictions
in which the character of the property owned by it or the nature of its
activities causes such qualification to be necessary, except where the failure
to be so qualified could not result in a Material Adverse Effect.

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    (d)           The
execution, delivery and performance of this Amendment, the Amended and Restated
Platinum Note (as defined below) and the Amended and Restated Lakewood Note (as
defined below) (together, the “Amendment Documents”) has been duly authorized by
all necessary corporate actions of Borrower, are within the corporate power of
Borrower and are not in contravention of law, the Borrower’s Articles of
Incorporation, By-laws or the terms of any other documents, agreements or
undertakings to which the Borrower is a party or by which the Borrower is
bound.  Except for the approval of the Toronto Stock Exchange, which
has been received, no approval of any person, corporation, governmental body or
other entity is a prerequisite to the execution, delivery and performance by the
Borrower of this Amendment or the other Amendment Documents to ensure the
validity or enforceability hereof or the continued first priority lien of the
Lenders in the collateral securing the Loans, including any deeds of
trusts.

    

    (e)           The
Amendment Documents will each constitute the legally binding obligation of
Borrower, enforceable in accordance with its terms, subject to the effect of
applicable bankruptcy, insolvency, reorganization, moratorium and other similar
laws now existing or hereafter enacted relating to or affecting the enforcement
of creditors’ rights generally, and as enforceability may be subject to
limitations based on general principles of equity (regardless of whether such
enforceability is considered a proceeding in equity or at law).

    

    (f)           None
of (i) the Amendment Documents, (ii) the Transaction Documents, and (iii) any
financial statements or other materials and related information delivered in
connection herewith or therewith contained (in each case, as of its date) any
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements contained therein, under the
circumstances which they were made, not misleading.  There is no fact
known to the Borrower that could reasonably be expected to have a Material
Adverse Effect.

     

    (g)           The
Borrower has authorized and has initially reserved and covenants to continue to
reserve, free of preemptive rights and other similar contractual rights of
stockholders, a number of its authorized but unissued shares of Common Stock at
least equal to 120% of the aggregate number of shares of Common Stock needed to
effect the conversion of the Amended Platinum Note and the Amended Lakewood Note
in full.  Any shares of Common Stock issuable upon conversion of the
Amended Platinum Note and the Amended Lakewood Note (and such shares when
issued) are herein referred to as the “Conversion Shares”.

     

    (h)           Upon
issuance, the Amended Platinum Note and the Amended Lakewood Note shall be
validly issued and outstanding, free and clear of all liens, encumbrances and
rights of refusal of any kind.  When the Conversion Shares are issued
and paid for in accordance with the terms of the Amended Platinum Note and the
Amended Lakewood Note, such shares will be duly authorized by all necessary
corporate action and validly issued and outstanding, fully paid and
nonassessable, free and clear of all liens, encumbrances and rights of refusal
of any kind and the holders shall be entitled to all rights accorded to a holder
of Common Stock.  The Company understands and acknowledges that its
obligation to issue the Conversion Shares upon the conversion of the Amended
Platinum Note and the Amended Lakewood Note is absolute and unconditional
regardless of the dilutive effect that such issuance may have on the ownership
interest of other stockholders of the Company.

     

    
      
        
        

      

      
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    (i)           Upon
the issuance thereof and assuming the Lenders remain unaffiliated with the
Borrower, the Conversion Shares are and shall be freely salable by the Lenders
without volume limitations or other manner of sale requirements, under Rule 144;
provided, that, until August 7, 2009, the current public information
requirements of Rule 144(c) shall apply.

     

    

    SECTION TWO

    AMENDMENTS

    

    The
Lenders and the Borrower have agreed to amend certain provisions of the
Transaction Documents as set forth herein.

    

    Section 2.1    Amendment to Initial Platinum
Note.  The Initial Platinum Note shall be amended and restated
in the form attached hereto as Exhibit
2.1.

    

    Section
2.2            Amendment to Initial Lakewood
Note.  The Initial Lakewood Note shall be amended and restated
in the form attached hereto as Exhibit
2.2.

    

    Section
2.2            Amendment to Definition of
Securities.  References to “Securities” under the Purchase
Agreement shall be deemed to refer to the Notes, the Warrants, the Conversion
Shares and the Warrant Shares, collectively.

    

    Section
2.3            Amendment to Section 3.2 of Purchase
Agreement. Section 3.2 of the Purchase Agreement is hereby amended to
read in its entirety as follows:

    

    The
Company shall cause its Common Stock to continue to be registered under Sections
12(b) or 12(g) of the Exchange Act, to comply in all respects with its reporting
and filing obligations under the Exchange Act and any applicable Canadian
securities laws, and to not take any action or file any document (whether or not
permitted by the Securities Act or the rules promulgated thereunder) to
terminate or suspend such registration or to terminate or suspend its reporting
and filing obligations under the Exchange Act or Securities Act.  The
Company will take all action necessary to continue the listing or trading of its
Common Stock on the OTC Bulletin Board, the Toronto Stock Exchange, the New York
Stock Exchange, the Nasdaq Capital Markets, the Nasdaq Global Markets, the
Nasdaq Global Select Market or the American Stock Exchange.  If
required, the Company will promptly file the “Listing Application” for, or in
connection with, the issuance and delivery of the Warrant Shares and the
Conversion Shares.   Subject to the terms of the Transaction
Documents, the Company further covenants that it will take such further action
as the Lenders may reasonably request, all to the extent required from time to
time to enable the Lenders to sell the Warrant Shares and the Conversion Shares
without registration under the Securities Act within the limitation of the
exemptions provided by Rule 144 promulgated under the Securities
Act.  Upon the request of either Lender, the Company shall deliver to
the Lenders a written certification of a duly authorized officer as to whether
it has complied with such requirements.

    

    
      
        
        

      

      
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    Section 2.4    Amendment to Section 3.14 of the
Purchase Agreement.  Section 3.14 of the Purchase Agreement is
hereby amended to read in its entirety as follows:

    

    So long
as the Warrants remains outstanding, the Company shall take all action necessary
to at all times have authorized and reserved for the purpose of issuance, the
aggregate number of shares of Common Stock needed to provide for the issuance of
the Warrant Shares.  So long as the Notes remain outstanding, the
Company shall take all action necessary to at all times have authorized and
reserved for the purpose of issuance, 120% of the aggregate number of shares of
Common Stock needed to provide for the issuance of the Conversion
Shares.

    

    Section
2.5            Amendment to Section 3.27 of the
Purchase Agreement.  Section 3.27 of the Purchase Agreement is
hereby amended to read in its entirety as follows:

    

    For so
long as either Lender owns any Notes or other Securities, the Company will
provide, at the Company’s expense, such legal opinions in the future as are
reasonably necessary for the issuance and resale of the Common Stock issuable
upon exercise of the Warrants or conversion of the Notes pursuant to an
effective registration statement, Rule 144 or an exemption from
registration.  In the event that Common Stock is sold in a manner that
complies with an exemption from registration, the Company will promptly instruct
its counsel (at its expense) to issue to the transfer agent an opinion
permitting removal of the legend (indefinitely, if more than one year has
elapsed from the Closing Date, or to permit sale of the shares if pursuant to
the other provisions of Rule 144).

    

    Section
2.6            Amendment to Section 3.29 of the
Purchase Agreement.  Section 3.29 of the Purchase Agreement is
hereby amended to read in its entirety as follows:

    

    If the
Company shall determine to prepare and file with the Commission a registration
statement (a “Registration Statement”) relating to an offering for its own
account or the account of others under the Securities Act of any of its equity
securities, other than on Form S-4 or Form S-8 (each as promulgated under the
Securities Act), or their then equivalents, relating to equity securities to be
issued solely in connection with any acquisition of any entity or business or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to the Lenders a written notice of
such determination and, if within ten days after the date of such notice, either
Lender shall so request in writing, the Company shall include in such
Registration Statement all or any part of the Warrant Shares and/or Conversion
Shares as either Lender requests to be registered so long as such Warrant Shares
and/or Conversion Shares are proposed to be disposed in the same manner as those
set forth in the Registration Statement.  

     

    
      
        
        

      

      
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    The
Company shall use its best efforts to cause any Registration Statement to be
declared effective by the Commission as promptly as is possible following it
being filed with the Commission and to remain effective until all Warrant Shares
or Conversion Shares subject thereto have been sold or may be sold without
limitations as to volume or the availability of current public information under
Rule 144.  All fees and expenses incident to the performance of or
compliance with this Section 3.29 by the Company shall be borne by the Company
whether or not any Warrant Shares or Conversion Shares are sold pursuant to the
Registration Statement.  The Company shall indemnify and hold harmless
each Lender, the officers, directors, members, partners, agents, brokers,
investment advisors and employees of each of them, each person who controls each
Lender (within the meaning of Section 15 of the Securities Act or Section 20 of
the Exchange Act), and the officers, directors, members, shareholders, partners,
agents and employees of each such controlling person, to the fullest extent
permitted by applicable law, from and against any and all losses, claims,
damages, liabilities, costs (including, without limitation, reasonable
attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out
of or relating to (1) any untrue or alleged untrue statement of a material fact
contained in the Registration Statement, any prospectus included therein or any
form of prospectus or in any amendment or supplement thereto or in any
preliminary prospectus, or arising out of or relating to any omission or alleged
omission of a material fact required to be stated therein or necessary to make
the statements therein (in the case of any prospectus or form of prospectus or
supplement thereto, in light of the circumstances under which they were made)
not misleading or (2) any violation or alleged violation by the Company of the
Securities Act, the Exchange Act or any state securities law, or any rule or
regulation thereunder, in connection with the performance of its obligations
under this Section 3.29, except to the extent, but only to the extent, that such
untrue statements or omissions referred to in (1) above are based solely upon
information regarding such Lender furnished in writing to the Company by such
Lender expressly for use therein.

    

    Section 2.7    Amendment to Section 5.1 of the
Purchase Agreement.  Section 5.1 of the Purchase Agreement is
hereby amended to read in its entirety as follows:

    

    Each
certificate representing the Warrants, the Warrant Shares and the Conversion
Shares shall be stamped or otherwise imprinted with a legend substantially in
the following form (in addition to any legend required by applicable state
securities or “blue sky” laws):

    

    THE
SECURITIES REPRESENTED BY THIS CERTIFICATE (THE “SECURITIES”) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”)
OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE
DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE
STATE SECURITIES LAWS OR FIRSTGOLD CORP. SHALL HAVE RECEIVED AN OPINION OF
COUNSEL THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER
THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    The
Company agrees to issue or reissue certificates representing any of the Warrant
Shares or Conversion Shares, without the legend set forth above if at such time,
prior to making any transfer of the Warrant Shares, the holder thereof shall
give written notice to the Company describing the manner and terms of such
transfer and removal as the Company may reasonably request, and (x) such Warrant
Shares or Conversion Shares have been registered for sale under the Securities
Act and the holder is selling such shares and is complying with its prospectus
delivery requirement under the Securities Act, (y) the holder is selling such
Warrant Shares or Conversion Shares in compliance with the provisions of Rule
144 or other exemption from registration or (z) the provisions of paragraph
(b)(1)(i) of Rule 144 apply to such shares.

    

    Section 2.8    Definition of
Notes.   Without limiting the generality of any other
provision hereof, the Borrower, and the Guarantor, by its execution hereof,
agrees that all references to “Notes” in the transaction documents shall include
the Initial Platinum Note and the Initial Lakewood Note as amended by the
Amended Platinum Note and the Amended Lakewood Note.

    

    Section
2.9            Consultant
Fees.   The Borrower agrees to reimburse a total of $7,500
paid by the Lenders in connection with the Lenders’ diligence reviews of the
Loans.  Such amount shall be deemed added to the amounts outstanding
under the September 29 Platinum Note and the September 29 Lakewood Note, with
the allocation based on the Lenders’ Pro Rata Share.

    

    Section
2.10          8-K.  The Borrower
shall file a Current Report on Form 8-K disclosing the transactions contemplated
by this Amendment, the Amendment Documents and the Forbearance Agreements among
the parties within one business day of the date hereof.

     

     

    SECTION THREE

    CLOSING CONDITIONS

    

    Section 3.1    Closing Conditions.  The
obligations of the Lenders hereunder, and the effectiveness of the modifications
contained herein, are subject to fulfillment of the following conditions
precedent:

    

    (a)           Amendment
Documents.  The Borrower shall execute and deliver to the Lenders
this Amendment and all other Amendment Documents, and the Guarantor shall have
confirmed its Guaranty in favor of the Lenders.

    

    
      
        
        

      

      
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    (b)           Opinion
Matters.  The Borrower shall have provided an opinion of counsel, in
form and substance satisfactory to the Lenders, as to the Borrower’s
authorization of the execution, delivery and validity of the Amendment Documents
and related matters, and the availability of Rule 144 for immediate re-sales of
the Conversion Shares.  The Borrower shall have provided an opinion,
in form and substance satisfactory to the Lenders, as to the continuation of the
Lenders’ first priority lien pursuant to the Mortgage and confirmation that the
Mortgage continues to secure the indebtedness evidenced by the Notes as amended
hereby.

    

    (c)           Closing
Expenses.  The Borrower shall pay all closing expenses, including
reasonable attorneys’ fees, filing fees and recording fees, reasonably incurred
by the Lenders in connection with this Amendment and the other Amendment
Documents (which legal fees and expenses shall not exceed $25,000 in the
aggregate).  Such fees shall be deemed added to the amounts
outstanding under the September 29 Platinum Note and the September 29 Lakewood
Note, with the allocation based on the Lenders’ Pro Rata Share.

    

    (d)           Evidence of Corporate
Approvals.  The Borrower shall have provided the Lenders with
evidence of the receipt of all necessary corporate and regulatory approvals
(including the approval of the Toronto Stock Exchange).  The Borrower
shall have executed amendments to the Mortgage in form and substance
satisfactory to the Lenders.

    

    Section 3.2    Effective
Date.  This Amendment shall become effective as of the date
first above written upon receipt by the Lenders of copies hereof duly executed
by the Borrower and the Guarantor, and evidence satisfactory to the Lenders that
all closing conditions have been satisfied (the “Effective Date”).

    

    Section 3.3            Releases and Waivers.  The Borrower
hereby knowingly and voluntarily forever releases, acquits and discharges the
Lenders from and of any and all claims that the Lenders, their affiliates or
their agents are in any way responsible for the past or current condition or
deterioration of the business operations and/or financial condition of the
Borrower, and from and of any and all claims that the Lenders breached any
agreement to loan money or make other financial accommodations available to the
Borrower or to fund any operations of the Borrower at any time. The Borrower
also hereby knowingly and voluntarily forever releases, acquits and discharges
the Lenders from and of any and all other claims, damages, losses, actions,
counterclaims, suits, judgments, obligations, liabilities, defenses, affirmative
defenses, setoffs, and demands of any kind or nature whatsoever, in law or in
equity, whether presently known or unknown, which the Borrower may have had, now
have, or which it can, shall or may have for, upon, or by reason of any matter,
course or thing whatsoever relating to, arising out of, based upon, or in any
manner connected with, any transaction, event, circumstance, action, failure to
act, or occurrence of any sort or type, whether known or unknown, which
occurred, existed, was taken, permitted, begun, or otherwise related or
connected to or with any or all of the obligations, this agreement, any or all
of the loan documents, and/or any direct or indirect action or omission of the
Lenders.  The Borrower further agrees that from and after the date
hereof, it will not assert to any person or entity that any deterioration of the
business operations or financial condition of the Borrower was caused by any
breach or wrongful act of the Lenders which occurred prior to the date
hereof.  Borrower acknowledges and agrees that the Lenders have no
further obligation to extend credit pursuant to the Purchase
Agreement.

    

    

    

    
      
        
        

      

      
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    SECTION FOUR

    MISCELLANEOUS

    

    Section 4.1    Transaction Documents.  The Borrower
shall deliver this Amendment, and all other Amendment Documents to the Lenders,
and these documents shall be included in the term “Transaction Documents” in the
Purchase Agreement and the Notes.  For avoidance of doubt, a breach of
the terms hereof shall be deemed an Event of Default under each of the
Notes.

    

    Section
4.2            Future
References.  All references to the Purchase Agreement shall
hereinafter refer to such agreement as amended hereby.  All references
to the Notes shall hereinafter refer to such instruments as amended
hereby.

    

    Section
4.3            Continuing
Effect.  The provisions of the Transaction Documents, as
modified herein, shall remain in full force and effect in accordance with their
terms and are hereby ratified and confirmed.  The collateral granted
to the Lenders under the Transaction Documents, including without limitation,
all collateral under the Security Agreements and all collateral mortgaged to, or
for the benefit of, the Lenders under the Mortgage, shall continue to secure the
Loans as set forth in the Transaction Documents, as amended
hereby.  The Lenders do not in any way waive the Borrowers’
obligations to comply with any of the provisions, covenants and terms of the
Purchase Agreement and the other Transaction Documents, nor do the Lenders waive
any other right the Lenders may have at law or in equity.  For the
avoidance of doubt, the Borrower hereby confirms and agrees that the Existing
Defaults, and the Lenders’ remedies in respect thereof, are not in any manner
whatsoever waived by this Amendment or the Amended Platinum Note or the Amended
Lakewood Note.  The Lenders’ interest in the collateral pledged by the
Borrower and the Guarantor to secure the Loans retains its original priority,
unimpaired by this Amendment.

    

    Section
4.4            Expenses.  The
Borrower agrees, regardless of whether or not the transactions contemplated
hereby shall be consummated, to pay all expenses incurred by the Lenders
incident to such transactions in the preparation of documentation relating
thereto, including all fees and disbursements of the counsel to the Lenders, for
services to the Lenders.

    

    Section
4.5             General.  Borrower shall
execute and deliver such additional documents and do such other acts as the
Lenders may reasonably require to implement the intent of this Amendment
fully.  This Amendment may be executed in several counterparts by the
Borrower and the Lenders, each of which shall be deemed an original but all of
which together shall constitute one and the same
Amendment.   This Amendment shall be governed by the laws of the
State of New York without reference to the conflict of law provisions
thereof.

    

    [Signature
page follows]

     

     

     

     

    

    

    
      
        
        

      

      
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    IN WITNESS WHEREOF, the
undersigned have caused this Amendment to the Purchase Agreement to be executed
as of the date first above written.

     

    
      
        	 	FIRSTGOLD
      CORP.	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Stephen
      Akerfeldt	 
	 	Name: 	Stephen
      Akerfeldt	 
	 	Title: 	CEO 	 
	 	 	 	 

      

      
        	 	
                PLATINUM
      LONG TERM GROWTH, LLC

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Mark
      Nordlicht	 
	 	Name: 	Mark
      Nordlicht	 
	 	Title: 	General
      Manager	 
	 	 	 	 

      

      
        	 	
                LAKEWOOD
      GROUP LLC

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/ Mark
      Mueller	 
	 	Name: 	Mark
      Mueller	 
	 	Title:  	Manager	 
	 	 	 	 

      

    Omnirock,
Inc., as Guarantor pursuant the Guaranty (the “Guaranty”), dated August 7, 2008,
delivered to the Lenders, hereby acknowledges and agrees to the execution and
delivery of this Amendment and consents to the modifications to the Purchase
Agreement and the Notes contained herein and in the Amended Platinum Note and
the Amended Lakewood Note.  The undersigned hereby acknowledges that
amounts advanced under the Transaction Documents to date and in the future,
including but not limited to, amounts advanced under the Purchase Agreement, as
amended hereby, shall be guaranteed Obligations under and as defined in the
Guaranty.  The undersigned further confirms that nothing in the
Guaranty or this Amendment shall require or suggest that the consent or
confirmation by the undersigned of its obligations under the Guaranty is
required in connection with this Amendment or any other amendment or
modification of any of the Transaction Documents as a condition to the continued
effectiveness of the Guaranties.

    

    OMNIROCK,
INC.

    

    

    By:    /s/ Stephen
Akerfeldt          

    Name:  Stephen
Akerfeldt             

    Title:       CEO                                  

    

    

    
      
        
        

      

      
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    EXHIBITS/ATTACHMENTS

    

    Exhibit
1.2A

    

    

     

    
      
        	Platinum
      Notes:	 	 
	 	 	 
	Initial Platinum
      Note:	 	
                Principal of
      $5,394,100

              
	 	 	Accrued Interest of
      $354,811.93
	 	 	 
	August Platinum
      Note:	 	Principal of
      $378,378.37
	 	 	Accrued Interest of
      $24,048.05
	 	 	 
	September 10
      Platinum Note:	 	Principal of
      $1,081,081.08
	 	 	Accrued Interest of
      $67,027.03
	 	 	 
	September 29
      Platinum Note:	 	Principal of
      $2,772,440.54 1
	 	 	Accrued Interest of
      $164,481.27
	 	 	 
	 	Total: 	Principal:  $9,625,999.99
	 	 	Interest:  $610,368.28
	 	 	 
	Lakewood
      Notes:	 	 
	 	 	 
	Initial Lakewood
      Note:	 	Principal of
      $1,348,525.00
	 	 	Accrued Interest of
      $88,702.98
	 	 	 
	August Lakewood
      Note:	 	Principal of
      $94,594.60
	 	 	Accrued Interest of
      $6,012.01
	 	 	 
	September 10
      Lakewood Note:	 	Principal of
      $270,270.27
	 	 	Accrued Interest of
      $16,756.76
	 	 	 
	September 29
      Lakewood Note:	 	Principal of
      $693,110.14 1
	 	 	Accrued Interest of
      $41,120.32
	 	 	 
	 	Total:	Principal:
      $2,406,500.01
	 	 	Interest:
      $152,592.07

      

    

     

    __________________

    1           Including the increase in principal
amount pursuant to Sections 2.9 and 3.1(c) hereof.

     

    11fc_ex1028a-90401.htm

    
      Exhibit 10.28(a)

       

      AMENDED
AND RESTATED SENIOR SECURED PROMISSORY NOTE

      
      

       

      
        	Date of Original
      Issuance: August 7, 2008	
                $1,348,525

              

      

       

      Date
of Amendment and Restatement: March 31, 2009

       

      For
value received, FIRSTGOLD CORP., a corporation organized under the laws of the
State of Delaware (the “Maker”),
hereby promises to pay to the order of LAKEWOOD GROUP LLC, with an address of
152 West 57th Street,
4th
Floor, New York, NY 10019 (together with its successors, representatives, and
assigns, the “Holder”),
in accordance with the terms hereinafter provided, the principal amount of One
Million Three Hundred Forty-Eight Thousand Five Hundred Twenty-Five Dollars
($1,348,525) hereunder, together with interest and all other obligations
outstanding hereunder.

       

      All
payments under or pursuant to this Note 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 Maker or by wire transfer of funds to the Holder’s
account, instructions for which are attached hereto as Exhibit
A. The outstanding principal balance of this Note shall be due and
payable on March 1, 2010 (the “Maturity
Date”) or at such earlier time as provided herein.

       

      This
Note was originally issued on August 7, 2008 in the original principal amount of
$1,348,525 (the “Original Note”). Effective March 31, 2009 (the “Amendment
Date”), the terms and provisions of the Original Note are deemed amended and
restated as is set forth herein. This
Note is issued in exchange for the Original Note and does not discharge the
indebtedness evidenced by the Original Note. As of the Amendment Date,
the principal amount outstanding under this Note was $1,348,525 and accrued and
unpaid interest totaled $88,702.98. As of the Amendment Date, the Maker is in
default of its obligations under this Note and other indebtedness of Maker to
Holder (the “Existing
Defaults”), and amounts hereunder, and under such other indebtedness,
bear interest at the default rate set forth below. By acceptance of this Amended
and Restated Note, the Holder does not waive any of its rights and remedies
under this Note or such other indebtedness with respect to the Existing
Defaults, whether arising at law or in equity.

       

      ARTICLE
I

       

      Section
1.1    Purchase
Agreement. This Note has been executed and delivered pursuant to the Note
and Warrant Purchase Agreement, dated as of August 7, 2008 (as amended, the
“Purchase Agreement”), by and between the Maker, the Holder (as a Lender) and
each other Lender party thereto. 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.
The outstanding principal balance of this Note shall bear interest, in arrears,
at a rate per annum equal to four percent (4%), payable in cash on the first
Business Day of each month following the date of original issuance. Interest
shall be computed on the basis of a 360-day year of twelve (12) thirty-day
months, shall compound monthly and shall accrue commencing on the date of
original issuance. Furthermore, upon the occurrence of an Event of Default (as
defined in Section 2.1 hereof), the Maker will pay interest to the Holder,
payable on demand, on the outstanding principal balance of the Note and on all
unpaid interest from the date of the Event of Default at a per annum rate equal
to the lesser of eighteen percent (18%) and the maximum applicable legal rate
per annum, calculated based on a 360-day year.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
1.3    Payment
of Principal; Prepayment.

       

      (a)
The principal amount hereof shall be paid in full on the Maturity Date or, if
earlier, upon acceleration of this Note in accordance with the terms hereof. Any
amount of principal repaid hereunder may not be reborrowed. The Maker may prepay
all or any portion of the principal amount of this Note upon not less than three
(3) Business Days prior written notice to the Holder, without penalty or
premium.

       

      (b)
Not later than the fifteenth (15th) day of
each calendar month, the Maker shall make a mandatory prepayment to the Holder
equal to its Pro Rata Share of forty percent (40%) of the Maker’s Free Cash Flow
in and for the preceding calendar month; provided, however, that commencing with
the payment to be made in December, 2008 and continuing in each month
thereafter, such monthly payment shall be equal to the Holder’s Pro Rata Share
of the greater of (i) forty percent (40%) of the Maker’s Free Cash Flow in the
preceding calendar month, and (ii) $400,000. Each such payment shall be
accompanied by financial calculations of such prior month’s Free Cash Flow
certified as being complete and correct by the Maker’s president or chief
financial officer, in such detail and with such supporting financial documents
as the Collateral Agent (as defined below) may require. Each such mandatory
prepayment shall be applied first to any interest, fee or expense obligation
hereunder which is then due and unpaid and then on account of the principal
balance hereof. Prepayments applied to principal shall be made against the
principal balance of this Note and of all other outstanding Notes issued under
the Purchase Agreement on a pro-rata basis. For the purposes hereof, “Free Cash
Flow” shall mean (in and for each period for which such calculation is made, all
in accordance with GAAP) the Maker’s gross revenue from its operations at the
Relief Canyon Mine less direct operating costs from such mining operations and
less taxes resulting from such revenues.

       

      Section
1.4    Security
Documents. The obligations of the Maker hereunder are secured by a
continuing security interest in substantially all of the assets of the Maker
pursuant to the terms of a Security Agreement, dated August 7, 2008, by and
between the Maker and the Collateral Agent, a Deed or Deeds of Trust, and other
collateral documents. For the purposes hereof, the term “Collateral Agent” shall
have the meaning given thereto in the Security Agreement.

       

      Section
1.5    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 New York,
such payment shall 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
1.6    Transfer.
This Note may be transferred or sold, and may also be pledged, hypothecated or
otherwise granted as security, by the Holder; provided, however, that any
transfer or sale of this Note must be in compliance with any applicable
securities laws.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
1.7    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 a standard indemnity, or, in the case of a mutilation of
this Note, upon surrender and cancellation of such Note, the Maker shall issue a
new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or
mutilated Note.

       

      Section
1.8    Use
of Proceeds. The Maker shall use the proceeds of this Note as set forth
in the Purchase Agreement.

       

      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)    any default
in respect of any payment of the principal amount, interest or any other
monetary obligation under this Note, as and when the same shall be due and
payable (whether on the Maturity Date or by acceleration or otherwise) or within
three (3) days thereafter; or

       

      (b)    the Maker
shall fail to observe or perform any other condition, covenant or agreement
contained in this Note, which failure is not cured within five (5) Business Days
after the Maker’s receipt of notice of such failure; or

       

      (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, the American Stock Exchange, the Nasdaq Capital Markets, the Nasdaq
Global Market, the Nasdaq Global Select Market or The New York Stock Exchange,
Inc. for a period of five (5) consecutive Trading Days, such a suspension to
only constitute an Event of Default if the Holder provides the Maker written
notification that it deems such suspension to be an Event of Default;
or

       

      (d)    the Maker
shall default in the performance or observance of (i) any undertaking, covenant,
condition or agreement contained in the Purchase Agreement or any other
Transaction Document and such default is not fully cured within five (5)
Business Days after the Maker’s receipt of notice of such default;
or

       

      (e)    any
representation or warranty made by the Maker 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; or

       

      (f)    any failure
by Maker to cure within five (5) Business Days after the Maker’s receipt of
notice of (A) a default in any payment of any amount or amounts of principal of
or interest on any Indebtedness of the Maker (other than the Indebtedness
hereunder) the aggregate principal amount of which Indebtedness is in excess of
$50,000 or (B) a 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 permit 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;
or

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (g)    the Maker
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;
or

       

      (h)    a proceeding
or case shall be commenced in respect of the Maker, 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 Maker 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 thirty
(30) 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 Maker or
action under the laws of any jurisdiction (foreign or domestic) analogous to any
of the foregoing shall be taken with respect to the Maker and shall continue
undismissed, or unstayed and in effect for a period of thirty (30) days;
or

       

      (i)    any default
or event of default, or event that, with the passage of time or giving of notice
or both would constitute a default or event of default, shall have occurred
under any mining lease or mining rights or claims agreement to which Maker is
now or at any time hereafter a party or any such agreement is terminated by any
of the parties thereto; or

       

      (j)    a judgment or
judgments in the aggregate amount exceeding $25,000 is/are entered against the
Maker and not dismissed or discharged within twenty (20) days following the
entry thereof; or

       

      (k)    Maker shall
cease to actively conduct its business operations for a period of five (5)
consecutive Business Days; or

       

      (l)    any material
portion of the properties or assets of the Maker is seized by any governmental
authority; or

       

      (m)    the Maker is
indicted for the commission of any criminal activity; or

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (n)    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; or

       

      (o)    the Maker’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 the Conversion Amount into shares of Common
Stock as set forth herein or its failure to timely deliver shares of Common
Stock upon conversion of the Conversion Amount; or

       

      (p)    the failure
of the Maker to instruct its transfer agent to remove any legends from the
Conversion Shares eligible to be sold under Rule 144 of the Securities Act and
issue such unlegended certificates to the Holder within four (4) business days
of the receipt of Holder’s Conversion Notice so long as the Holder has provided
reasonable assurances to the Maker that such shares of Common Stock can be sold
pursuant to Rule 144.

       

      Section
2.2    Remedies
Upon An Event of Default. If an Event of Default shall have occurred and
shall be continuing, the Collateral Agent may at any time at its option (a)
declare the entire unpaid principal balance of this Note, together with all
interest accrued hereon, plus fees and expenses, 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 Maker; provided, however, that upon the occurrence
of an Event of Default described in Sections 2.1 (g) or (h) above, the
outstanding principal balance and accrued interest hereunder, plus fees and
expenses, shall be immediately and automatically due and payable, and/or (b)
exercise or otherwise enforce any one or more of the Holder’s rights, powers,
privileges, remedies and interests as well as its own rights, powers and
remedies under this Note, the Purchase Agreement, the Security Agreement or
other Transaction Document or applicable law. No course of delay on the part of
the Collateral Agent or the Holder shall operate as a waiver thereof or
otherwise prejudice the right of the Collateral Agent or 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. Upon and
after an Event of Default, this Note shall bear interest at the default rate set
forth in Section 1.2 hereof.

       

       

      ARTICLE
IIA

       

      CONVERSION;
ANTIDILUTION; PREPAYMENT

       

       

      Section
2A.1    Conversion
Option. At any time and from time to time on or after the Amendment Date,
the Conversion Amount shall be convertible (in whole or in part, subject to the
limitations set forth herein), at the option of the Holder (the “Conversion
Option”), into such number of fully paid and non-assessable shares of
Common Stock as is determined by dividing (x) that portion of the Conversion
Amount that the Holder elects to convert by (y) the Conversion Price (as defined
in Section 2A.2 hereof) then in effect on the date on which the Holder faxes a
notice of conversion (the “Conversion
Notice”), duly executed, to the Maker (facsimile number: (530) 677-7626,
Attn.: Chief Financial Officer) (the “Conversion
Date”), provided, however, that the Conversion Price shall be subject to
adjustment as described below. With respect to partial conversions of this Note,
the Maker shall keep written records of the amount of this Note converted as of
each Conversion Date. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Notwithstanding
anything to the contrary contained herein, (i) not more than $800,000 of
principal and/or accrued and unpaid interest on this Note shall be convertible
pursuant to a conversion under this Section 2A.1 without the Maker’s express
written consent (the “Conversion
Amount”), (ii) until April 30, 2009, conversions by the Holder hereunder
shall be deemed to be conversions of accrued and unpaid interest under this
Note, as the same exists and to the extent counsel for the Maker delivers an
opinion satisfactory to the Holder as to the free transferability of such
conversion shares pursuant to Rule 144; thereafter, any conversion shall be
deemed to be a conversion of the principal amount hereunder; and (iii) if no
default or Event of Default exists hereunder or under any other indebtedness of
the Maker to the Holder, upon the Maker’s written notice to the Holder, the
Maker may suspend the convertibility of this Note for so long as no such default
or Event of Default exists (provided, that, (i) the Maker shall be obligated to
honor all conversion notices delivered prior to such notice from the Maker and
(ii) if a default or an Event of Default after such suspension occurs, such
suspension shall end and this Note shall thereafter be convertible as set forth
herein).

       

      Section
2A.2    Conversion
Price. The term “Conversion Price” shall mean $0.145, subject to
adjustment under Section 2A.5 hereof.

       

      Section
2A.3    Mechanics
of Conversion.

       

      (a)    Not later
than four (4) Trading Days after receipt of a Conversion Notice, the Maker 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 four (4) Trading Days after
receipt of a Conversion Notice, the Maker 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 Maker or its
transfer agent shall only be obligated to issue and deliver the shares to the
DTC 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 (as evidenced by
documentation furnished to and reasonably satisfactory to the Maker) or such
shares may be sold pursuant to Rule 144. If in the case of any Conversion Notice
such certificate or certificates are not delivered to or as directed by the
Holder by the Delivery Date, the Holder shall be entitled by written notice to
the Maker at any time on or before its receipt of such certificate or
certificates thereafter, to rescind such conversion, in which event the Maker
shall immediately return this Note tendered for conversion, whereupon the Maker
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 2A.3(b) and (c) shall be payable through the date notice
of rescission is given to the Maker.

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (b)    The Maker
understands that a delay in the delivery of the Conversion Shares beyond the
Delivery Date could result in economic loss to the Holder. If the Maker fails to
deliver to the Holder such shares via DWAC (or, if applicable, certificates) by
the Delivery Date, the Maker 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 (if applicable), together with interest on such
amount at a rate of 10% 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 Notes 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 the Holder’s right to
pursue actual damages for the Maker’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 Maker shall not be obligated to pay the liquidated
damages accrued in accordance with this Section 2A.3(b).

       

      (c)    In addition
to any other rights available to the Holder, if the Maker fails to cause its
transfer agent to transmit via DWAC or transmit to the Holder a certificate or
certificates representing the Conversion Shares 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 Conversion Shares which the Holder
anticipated receiving upon such conversion (a “Buy-In”),
then the Maker 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
multiplying (A) the number of Conversion Shares that the Maker 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 Maker 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 Maker shall be required to
pay the Holder $1,000. The Holder shall provide the Maker 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
Maker. Nothing herein shall limit the 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 Maker’s failure to timely deliver certificates representing
shares of Common Stock upon conversion of this Note as required pursuant to the
terms hereof.

       

      Section
2A.4    Ownership Cap and
Certain Conversion Restrictions.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (a)    Notwithstanding
anything to the contrary set forth in this Note, at no time may all or a portion
of this Note be converted 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 13(d) of the Exchange Act and the rules thereunder) more
than 4.99% of all of the Common Stock outstanding at such time; provided,
however,
that upon the Holder providing the Maker with sixty-one (61) days notice
(pursuant to Section 3.1 hereof) (the “Waiver
Notice”) that the Holder would like to waive this Section 2A.4(a) with
regard to any or all shares of Common Stock issuable upon conversion of this
Note, this Section 2A.4(a) will be of no force or effect with regard to all or a
portion of the Note referenced in the Waiver Notice.

       

      (b)    Notwithstanding
anything to the contrary set forth in this Note, at no time may all or a portion
of this Note be converted if the number of shares of Common Stock to be issued
pursuant to such conversion, when aggregated with all other shares of Common
Stock owned by the Holder at such time, would result in the Holder beneficially
owning (as determined in accordance with Section 13(d) of the Exchange Act and
the rules thereunder) in excess of 9.99% of the then issued and outstanding
shares of Common Stock outstanding at such time. The provisions of this Section
2A.4(b) may not be amended or waived by the Holder or the Maker.

       

      (c)    Any
Conversion Notice delivered in connection herewith shall be deemed to be a
representation by the Holder that such conversion complies with the provisions
of this Section 2A.4.

       

      Section
2A.5    Adjustment
of Conversion Price.

       

      (a)    Until the
Note has been paid in full or the Conversion Amount has been converted in full,
the Conversion Price shall be subject to adjustment from time to time as follows
(but shall not be increased, other than pursuant to Section 2A.5(a)(i)
hereof):

       

      (i)    Adjustments
for Stock Splits and Combinations. If the Maker shall at any time or from
time to time after the Amendment 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 Maker shall at any time
or from time to time after the Amendment Date, combine the outstanding shares of
Common Stock (e.g., a “reverse stock split”), the applicable Conversion Price in
effect immediately prior to the combination shall be proportionately increased.
Any adjustments under this Section 2A.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 Maker shall at any time
or from time to time after the Amendment 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 Maker shall at any time or
from time to time after the Amendment 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 Maker or other issuer (as applicable) which they
would have received had the convertible portion of 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 2A.5(a)(iii) with respect to the rights of the Holder 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
Amendment 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 2A.5(a)(i), (ii) and (iii), or a
reorganization, merger, consolidation, or sale of assets provided for in Section
2A.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.

       

      (v)    Adjustments
for Reorganization, Merger, Consolidation or Sales of Assets.
If at any time or from time to time after the Amendment Date there shall be a
capital reorganization of the Maker (other than by way of a stock split or
combination of shares or stock dividends or distributions provided for in
Section 2A.5(a)(i), (ii) and (iii), or a reclassification, exchange or
substitution of shares provided for in Section 2A.5(a)(iv)), or a merger or
consolidation of the Maker with or into another Person 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 Maker’s properties or assets to any other
Person (an “Organic
Change”), then as a part of such Organic Change, (A) if the surviving
entity in any such Organic Change is a public company that is registered
pursuant to the Securities Exchange Act of 1934, as amended, and its common
stock is listed or quoted on a national exchange or the OTC Bulletin Board, 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 the convertible portion of this Note
into the kind and amount of shares of stock and other securities or property of
the Maker or any successor corporation resulting from Organic Change, and (B) if
the surviving entity in any such Organic Change is not a public company that is
registered pursuant to the Securities Exchange Act of 1934, as amended, or its
common stock is not listed or quoted on a national exchange or the OTC Bulletin
Board, the Holder shall have the right to demand prepayment pursuant to Section
2A.6(b) hereof. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      In
any such case, appropriate adjustment shall be made in the application of the
provisions of this Section 2A.5(a)(v) with respect to the rights of the Holder
after the Organic Change to the end that the provisions of this Section
2A.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 and the Other Notes) shall be applied after that event
in as nearly an equivalent manner as may be practicable. References herein to
“Other Notes” shall mean and refer to any other convertible promissory note
issued by the Maker to the Holder or Platinum Long Term Growth,
LLC.

       

      (b)    Record
Date. In case the Maker shall establish a record date for the purpose of
entitling the holders of its Common Stock 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)    [Reserved].

       

      (d)    No
Impairment. The Maker 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 Maker, but will at all times in good
faith, assist in the carrying out of all the provisions of this Section 2A.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 the convertible portion of this Note as provided
herein, the Maker cannot refuse conversion based on any claim that such Holder
or any one 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 enjoining conversion of all or any of the Note shall have
issued and the Maker shall allocate for the benefit of such Holder in an amount
equal to one hundred thirty percent (130%) of the amount of the shares the
Holder has elected to convert, which allocation shall remain in effect until the
completion of arbitration/litigation of the dispute.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (e)    Certificates
as to Adjustments. Upon occurrence of each adjustment or readjustment of
the Conversion Price or number of Conversion Shares issuable upon conversion of
this Note pursuant to this Section 2A.5, the Maker 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 Maker 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
Maker 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 Maker 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 Conversion Shares pursuant thereto; provided,
however,
that the Maker 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 Maker 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 Maker 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 Maker shall, from time to time in accordance with Delaware 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
Maker’s obligations under this Section 2A.5(h).

       

      (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 Maker
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
2A.6    Prepayment.

       

      (a)    [Reserved].

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (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 below), the Holder shall have the right, at the Holder’s option, to
require the Maker to prepay all or a portion of the Holder’s Notes in cash at a
price equal to the sum of (i) the greater of (A) one hundred percent (100%) of
the aggregate principal amount of this Note plus all accrued and unpaid 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 Major Transaction Prepayment Price
is paid in full, whichever is less, multiplied by the VWAP on (x) the date the
Major Transaction Prepayment Price is demanded or otherwise due, and (y) the
date the Major Transaction 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 “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 Maker 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 percent (100%) of the aggregate principal amount of this Note
plus all accrued and unpaid interest and (B) 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 Maker 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 Maker or
(B) a consolidation, merger or other business combination in which the Maker is
the surviving entity and the holders of the Maker’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).

       

      (ii)    the sale or
transfer of more than fifty percent (50%) of the Maker’s assets (based on the
fair market value as determined in good faith by the Maker’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
the occurrence of 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, the Toronto Stock Exchange, the American Stock Exchange, the Nasdaq
Capital Markets, the Nasdaq Global Market, the Nasdaq Global Select Market or
The New York Stock Exchange, Inc. for a period of five (5) consecutive Trading
Days;

       

      (ii)    the Maker’s
notice to any holder of the Notes, including by way of public announcement, at
any time, of its inability to comply (including for any of the reasons described
in Section 2A.7) or its intention not to comply with proper requests for
conversion of any Notes into shares of Common Stock; or

       

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

       

      (iv)    the Maker
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;
or

       

      (v)    the Maker
shall fail to comply with Section 3.11(d) of this Note.

       

      (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 Maker 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 Maker 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 Maker, which Notice of
Prepayment at Option of Holder Upon Major Transaction shall indicate (i) the
principal amount of the Notes that such holder is electing to have prepaid and
(ii) the applicable Major Transaction Prepayment Price, as calculated pursuant
to Section 2A.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 Maker 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 and the Other Notes then
outstanding may require the Maker 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 Maker,
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 2A.6(c) above. 

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      A
holder shall only be permitted to require the Maker to prepay the Note pursuant
to Section 2A.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.

       

      (h)    Payment
of Prepayment Price. Upon the Maker’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 Maker shall immediately notify each holder of the Notes by facsimile
of the Maker’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 Maker such holder’s certificates representing the Notes which such holder
has elected to have prepaid. The Maker shall deliver the applicable Triggering
Event Prepayment Price, in the case of a prepayment pursuant to Section 2A.6(g),
to such holder within five (5) business days after the Maker’s receipt of a
Notice of Prepayment at Option of Holder Upon Triggering Event and, in the case
of a prepayment pursuant to Section 2A.6(f), the Maker 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 Maker; provided further that if the Maker is
unable to prepay all of the Notes to be prepaid, the Maker 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 and Other Notes held by such
holder relative to the number of Notes and Other Notes outstanding) of all Notes
being prepaid. If the Maker 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 Maker 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 Maker
to promptly return to such holder(s) all of the Notes that were submitted for
prepayment by such holder(s) under this Section 2A.6 and for which the
applicable Prepayment Price has not been paid, by sending written notice thereof
to the Maker via facsimile (the “Void
Optional Prepayment Notice”). Upon the Maker’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, and (ii) the Maker shall immediately return any Notes
submitted to the Maker by each holder for prepayment under this Section 2A.6(h)
and for which the applicable Prepayment Price has not been paid. A holder’s
delivery of a Void Optional Prepayment Notice and exercise of its rights
following such notice shall not effect the Maker’s obligations to make any
payments which have accrued prior to the date of such notice. Payments provided
for in this Section 2A.6 shall have priority to payments to other stockholders
in connection with a Major Transaction.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
2A.7    Inability
to Fully Convert.

       

      (a)    Holder’s
Option if Maker Cannot Fully Convert. If, upon the Maker’s receipt of a
Conversion Notice, the Maker cannot issue shares of Common Stock for any reason,
including, without limitation, because the Maker (x) does not have a sufficient
number of shares of Common Stock authorized and available, or (y) 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 Maker 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 Maker 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 that is entitled to be converted, the
Holder, solely at Holder’s option (in addition to its other remedies hereunder),
can elect to:

       

      (i)    If the
Maker’s inability to honor any conversion fully is pursuant to Section
2A.7(a)(x) or (y) above, require the Maker to prepay that portion of this Note
for which the Maker 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 Maker’s obligations
to make any payments which have accrued prior to the date of such
notice);

       

      (iii)    exercise its
Buy-In rights pursuant to and in accordance with the terms and provisions of
Section 2A.3(c) of this Note.

       

      In
the event a Holder shall elect to convert any portion of its Notes as provided
herein, the Maker cannot refuse conversion based on any claim that such Holder
or any one 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 enjoining conversion of all or of said Notes shall have been
issued and the Maker shall allocate for the benefit of such Holder in an amount
equal to 130% of the amount of the shares the Holder has elected to convert,
which allocation shall remain in effect until the completion of
arbitration/litigation of the dispute.

       

      (b)    Mechanics
of Fulfilling Holder’s Election. The Maker 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 2A.7(a)
above, a notice of the Maker’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 Maker 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
Maker of its election pursuant to Section 2A.7(a) above by delivering written
notice via facsimile to the Maker (“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 2A.7(a)(i) above, the Maker shall pay the Mandatory
Prepayment Price to the Holder within thirty (30) days of the Maker’s receipt of
the Holder’s Notice in Response to Inability to Convert, provided
that prior to the Maker’s receipt of the Holder’s Notice in Response to
Inability to Convert the Maker 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 Maker shall fail to pay the applicable Mandatory Prepayment
Price to the Holder on the date that is thirty (30) days following the Maker’s
receipt of the Holder’s Notice in Response to Inability to Convert (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, and
(ii) receive back such Note.

       

      (d)    Pro-rata
Conversion and Prepayment. In the event the Maker receives a Conversion
Notice from more than one holder of the Notes on the same day and the Maker can
convert and prepay some, but not all, of the Notes pursuant to this Section
2A.7, the Maker 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 and any Other Notes
outstanding) of all the Notes being converted and prepaid at such
time.

       

      Section
2A.8    No
Rights as Shareholder. Nothing contained in this Note shall be construed
as conferring upon the Holder, prior to the conversion of this Amended and
Restated 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 Maker or of any other matter, or any other
rights as a shareholder of the Maker.

       

      ARTICLE
III

       

      MISCELLANEOUS

       

       

      Section
3.1    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, 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.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Section
3.2    Governing
Law. This Note shall be governed by and construed in accordance with the
internal laws of the State of New York, 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
3.3    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
3.4    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 Maker 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 Maker (or the
performance thereof). The Maker 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
Maker agrees that, in the event of any such breach or threatened breach, the
Collateral Agent (on behalf of 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
3.5    Enforcement
Expenses. The Maker agrees to pay all costs and expenses incurred from
time to time by the Holder with respect to any modification, consent or waiver
of the provisions of this Note or the Transaction Documents and any enforcement
of this Note and the Transaction Documents, including, without limitation,
reasonable attorneys’ fees and expenses.

       

      Section
3.6    Amendments.
This Note may not be modified or amended in any manner except in writing
executed by the Maker and the Holder.

       

      Section
3.7    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 except in accordance with applicable
law.

       

      Section
3.8    Consent
to Jurisdiction. Each of the Maker and the Holder (i) hereby irrevocably
submits to the exclusive jurisdiction of the United States District Court
sitting in the Southern District of New York and the courts of the State of New
York located in New York county 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 Maker 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 3.8 shall affect or limit any right to serve
process in any other manner permitted by law. Each of the Maker 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
3.9    Binding
Effect. This Note shall be binding upon, inure to the benefit of and be
enforceable by the Maker, the Holder and their respective successors and
permitted assigns. The Maker shall not delegate or transfer this Note or any
obligations or undertakings contained in this Note.

       

      Section
3.10    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.

       

      Section
3.11    Maker
Waivers; Dispute Resolution.

       

      (a)    Except as
otherwise specifically provided herein, the Maker 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 Maker liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY
JURY.

       

      (b)    No delay or
omission on the part of the Collateral Agent or 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 Collateral Agent or the Holder,
nor shall any waiver by the Collateral Agent or 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.

       

      (c)    THE MAKER
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 AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE
HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      (d)    In the case
of a dispute as to the determination of the Closing Bid Price or the VWAP or the
arithmetic calculation of the Conversion Price, any adjustment to the Conversion
Price, liquidated damages amount, interest or dividend calculation, or any
redemption price, redemption amount, adjusted Conversion Price, or similar
calculation, or as to whether a subsequent issuance of securities is prohibited
hereunder or would lead to an adjustment to the Conversion Price, the Maker
shall submit the disputed determinations or arithmetic calculations via
facsimile within two (2) Business Days of receipt, or deemed receipt, of the
Conversion Notice, any redemption notice, default notice or other event giving
rise to such dispute, as the case may be, to the Holder. If the Holder and the
Maker are unable to agree upon such determination or calculation within two (2)
Business Days of such disputed determination or arithmetic calculation being
submitted to the Holder, then the Maker shall, within two (2) Business Days
submit via facsimile (a) the disputed determination of the Closing Price or the
VWAP to an independent, reputable investment bank selected by the Maker and
approved by the Holder, which approval shall not be unreasonably withheld, (b)
the disputed arithmetic calculation of the Conversion Price, adjusted Conversion
Price or any redemption price, redemption amount or default amount to the
Maker’s independent, outside accountant or (c) the disputed facts regarding
whether a subsequent issuance of securities is prohibited hereunder or would
lead to an adjustment to the Conversion Price (or any of the other above
described facts not expressly designated to the investment bank or accountant),
to an expert attorney from a nationally recognized outside law firm (having at
least 100 attorneys and having with no prior relationship with the Maker)
selected by the Maker and approved by the Lead Purchaser as defined in the
Purchase Agreement). The Maker, at the Maker’s expense, shall cause the
investment bank, the accountant, the law firm, or other expert, as the case may
be, to perform the determinations or calculations and notify the Maker and the
Holder of the results no later than five (5) Business Days from the time it
receives the disputed determinations or calculations. Such investment bank’s,
accountant’s or attorney’s determination or calculation, as the case may be,
shall be binding upon all parties absent demonstrable error.

       

      Section
3.12    Definitions.
Terms used herein and not defined shall have the meanings set forth in the
Purchase Agreement. For the purposes hereof, the following terms shall have the
following meanings:

       

      “Business
Day” (whether or not capitalized) shall mean any day banking transactions
can be conducted in New York City, NY, USA and does not include any day which is
a federal or state holiday in such location.

       

      “Closing
Bid Price” shall mean, on any particular date (i) the last trading price
per share of the Common Stock on such date on the OTC Bulletin Board or another
registered national stock exchange on which the Common Stock is then listed, or
if there is no such price on such date, then the last trading price on such
exchange or quotation system on the date nearest preceding such date, or (ii) if
the Common Stock is not then listed or traded on a registered national
securities exchange or quoted on the OTC Bulletin Board, then the average of the
“Pink Sheet” quotes for the relevant conversion period, as determined in good
faith by the Holder, or (iii) if the Common Stock is not then publicly traded
the fair market value of a share of Common Stock as determined by the Holder and
reasonably acceptable to the Maker.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      “Person”
means an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.

       

      “Trading
Day” means (a) a day on which the Common Stock is traded on the OTC
Bulletin Board or a registered national securities exchange, or (b) if the
Common Stock is not traded on the OTC Bulletin Board or a registered national
securities exchange, a day on which the Common Stock is 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 Common Stock is not listed or quoted as set forth in
(a) or (b) 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.

       

      “Transaction
Documents” means this Note, the Purchase Agreement, the Security
Agreement, any Deed of Trust and all other security documents or related
agreements now or hereafter entered into in connection with and/or as security
for this Note and all amendments and supplements thereto and replacements
thereof and any other Transaction Document (as that term is defined in the
Purchase Agreement).

       

      “VWAP”
means, for any date, (i) the daily volume weighted average price of the Common
Stock for such date on the OTC Bulletin Board as reported by Bloomberg Financial
L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern
Time); (ii) if the Common Stock is not then listed or quoted on the OTC Bulletin
Board and if prices for the Common Stock are then reported in the “Pink Sheets”
published by the Pink Sheets, LLC (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported; or (iii) in all other cases, the fair
market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Holder and reasonably acceptable to the
Maker.

       

       

      [Signature
appears on following page]

       

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      IN WITNESS
WHEREOF, the Maker has caused this Note to be duly executed by its duly
authorized officer as of the date first above
indicated.

       

       

       

      
        
          	 	FIRSTGOLD
      CORP.	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/
      Stephen Akerfeldt	 
	 	Name: 	Stephen Akerfeldt	 
	 	Title: 
      	CEO	 
	 	 	 	 

        

      

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      EXHIBIT
A

       

      WIRE
INSTRUCTIONS

       

      Wire
instructions for Lakewood Group LLC:

       

      Capital
One Bank

       

      ABA#
021407912

       

      Account
Name: Centurion Credit Group Master Fund, LP

       

      Account
Number: 7017207363

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    AMENDED
AND RESTATED SENIOR SECURED PROMISSORY NOTE

     

    
    

     

    
      	Date of Original
      Issuance: August 7, 2008	
              $5,394,100

            

    

     

     

    Date
of Amendment and Restatement: March 31, 2009

     

    For
value received, FIRSTGOLD CORP., a corporation organized under the laws of the
State of Delaware (the “Maker”),
hereby promises to pay to the order of PLATINUM LONG TERM GROWTH, LLC, with an
address of 152 West 57th Street,
4th
Floor, New York, NY 10019 (together with its successors, representatives, and
assigns, the “Holder”),
in accordance with the terms hereinafter provided, the principal amount of Five
Million Three Hundred Ninety-Four Thousand One Hundred Dollars ($5,394,100)
hereunder, together with interest and all other obligations outstanding
hereunder.

     

    All
payments under or pursuant to this Note 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 Maker or by wire transfer of funds to the Holder’s
account, instructions for which are attached hereto as Exhibit
A. The outstanding principal balance of this Note shall be due and
payable on March 1, 2010 (the “Maturity
Date”) or at such earlier time as provided herein.

     

    This
Note was originally issued on August 7, 2008 in the original principal amount of
$5,394,100 (the “Original Note”). Effective March 31, 2009 (the “Amendment
Date”), the terms and provisions of the Original Note are deemed amended and
restated as is set forth herein. This
Note is issued in exchange for the Original Note and does not discharge the
indebtedness evidenced by the Original Note. As of the Amendment Date,
the principal amount outstanding under this Note was $5,394,100 and accrued and
unpaid interest totaled $354,811.93. As of the Amendment Date, the Maker is in
default of its obligations under this Note and other indebtedness of Maker to
Holder (the “Existing
Defaults”), and amounts hereunder, and under such other indebtedness,
bear interest at the default rate set forth below. By acceptance of this Amended
and Restated Note, the Holder does not waive any of its rights and remedies
under this Note or such other indebtedness with respect to the Existing
Defaults, whether arising at law or in equity.

     

    ARTICLE
I

     

    Section
1.1    Purchase
Agreement. This Note has been executed and delivered pursuant to the Note
and Warrant Purchase Agreement, dated as of August 7, 2008 (as amended, the
“Purchase Agreement”), by and between the Maker, the Holder (as a Lender) and
each other Lender party thereto. 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.
The outstanding principal balance of this Note shall bear interest, in arrears,
at a rate per annum equal to four percent (4%), payable in cash on the first
Business Day of each month following the date of original issuance. Interest
shall be computed on the basis of a 360-day year of twelve (12) thirty-day
months, shall compound monthly and shall accrue commencing on the date of
original issuance. Furthermore, upon the occurrence of an Event of Default (as
defined in Section 2.1 hereof), the Maker will pay interest to the Holder,
payable on demand, on the outstanding principal balance of the Note and on all
unpaid interest from the date of the Event of Default at a per annum rate equal
to the lesser of eighteen percent (18%) and the maximum applicable legal rate
per annum, calculated based on a 360-day year.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
1.3    Payment
of Principal; Prepayment.

     

    (a)    The principal
amount hereof shall be paid in full on the Maturity Date or, if earlier, upon
acceleration of this Note in accordance with the terms hereof. Any amount of
principal repaid hereunder may not be reborrowed. The Maker may prepay all or
any portion of the principal amount of this Note upon not less than three (3)
Business Days prior written notice to the Holder, without penalty or
premium.

     

    (b)    Not later
than the fifteenth (15th) day of
each calendar month, the Maker shall make a mandatory prepayment to the Holder
equal to its Pro Rata Share of forty percent (40%) of the Maker’s Free Cash Flow
in and for the preceding calendar month; provided, however, that commencing with
the payment to be made in December, 2008 and continuing in each month
thereafter, such monthly payment shall be equal to the Holder’s Pro Rata Share
of the greater of (i) forty percent (40%) of the Maker’s Free Cash Flow in the
preceding calendar month, and (ii) $400,000. Each such payment shall be
accompanied by financial calculations of such prior month’s Free Cash Flow
certified as being complete and correct by the Maker’s president or chief
financial officer, in such detail and with such supporting financial documents
as the Collateral Agent (as defined below) may require. Each such mandatory
prepayment shall be applied first to any interest, fee or expense obligation
hereunder which is then due and unpaid and then on account of the principal
balance hereof. Prepayments applied to principal shall be made against the
principal balance of this Note and of all other outstanding Notes issued under
the Purchase Agreement on a pro-rata basis. For the purposes hereof, “Free Cash
Flow” shall mean (in and for each period for which such calculation is made, all
in accordance with GAAP) the Maker’s gross revenue from its operations at the
Relief Canyon Mine less direct operating costs from such mining operations and
less taxes resulting from such revenues.

     

    Section
1.4    Security
Documents. The obligations of the Maker hereunder are secured by a
continuing security interest in substantially all of the assets of the Maker
pursuant to the terms of a Security Agreement, dated August 7, 2008, by and
between the Maker and the Collateral Agent, a Deed or Deeds of Trust, and other
collateral documents. For the purposes hereof, the term “Collateral Agent” shall
have the meaning given thereto in the Security Agreement.

     

    Section
1.5    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 New York,
such payment shall 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
1.6    Transfer.
This Note may be transferred or sold, and may also be pledged, hypothecated or
otherwise granted as security, by the Holder; provided, however, that any
transfer or sale of this Note must be in compliance with any applicable
securities laws.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
1.7    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 a standard indemnity, or, in the case of a mutilation of
this Note, upon surrender and cancellation of such Note, the Maker shall issue a
new Note, of like tenor and amount, in lieu of such lost, stolen, destroyed or
mutilated Note.

     

    Section
1.8    Use
of Proceeds. The Maker shall use the proceeds of this Note as set forth
in the Purchase Agreement.

     

    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)    any default
in respect of any payment of the principal amount, interest or any other
monetary obligation under this Note, as and when the same shall be due and
payable (whether on the Maturity Date or by acceleration or otherwise) or within
three (3) days thereafter; or

     

    (b)    the Maker
shall fail to observe or perform any other condition, covenant or agreement
contained in this Note, which failure is not cured within five (5) Business Days
after the Maker’s receipt of notice of such failure; or

     

    (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, the American Stock Exchange, the Nasdaq Capital Markets, the Nasdaq
Global Market, the Nasdaq Global Select Market or The New York Stock Exchange,
Inc. for a period of five (5) consecutive Trading Days, such a suspension to
only constitute an Event of Default if the Holder provides the Maker written
notification that it deems such suspension to be an Event of Default;
or

     

    (d)    the Maker
shall default in the performance or observance of (i) any undertaking, covenant,
condition or agreement contained in the Purchase Agreement or any other
Transaction Document and such default is not fully cured within five (5)
Business Days after the Maker’s receipt of notice of such default;
or

     

    (e)    any
representation or warranty made by the Maker 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; or

     

    (f)    any failure
by Maker to cure within five (5) Business Days after the Maker’s receipt of
notice of (A) a default in any payment of any amount or amounts of principal of
or interest on any Indebtedness of the Maker (other than the Indebtedness
hereunder) the aggregate principal amount of which Indebtedness is in excess of
$50,000 or (B) a 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 permit 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;
or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (g)    the Maker
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;
or

     

    (h)    a proceeding
or case shall be commenced in respect of the Maker, 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 Maker 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 thirty
(30) 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 Maker or
action under the laws of any jurisdiction (foreign or domestic) analogous to any
of the foregoing shall be taken with respect to the Maker and shall continue
undismissed, or unstayed and in effect for a period of thirty (30) days;
or

     

    (i)    any default
or event of default, or event that, with the passage of time or giving of notice
or both would constitute a default or event of default, shall have occurred
under any mining lease or mining rights or claims agreement to which Maker is
now or at any time hereafter a party or any such agreement is terminated by any
of the parties thereto; or

     

    (j)    a judgment or
judgments in the aggregate amount exceeding $25,000 is/are entered against the
Maker and not dismissed or discharged within twenty (20) days following the
entry thereof; or

     

    (k)    Maker shall
cease to actively conduct its business operations for a period of five (5)
consecutive Business Days; or

     

    (l)    any material
portion of the properties or assets of the Maker is seized by any governmental
authority; or

     

    (m)    the Maker is
indicted for the commission of any criminal activity; or

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (n)    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; or

     

    (o)    the Maker’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 the Conversion Amount into shares of Common
Stock as set forth herein or its failure to timely deliver shares of Common
Stock upon conversion of the Conversion Amount; or

     

    (p)    the failure
of the Maker to instruct its transfer agent to remove any legends from the
Conversion Shares eligible to be sold under Rule 144 of the Securities Act and
issue such unlegended certificates to the Holder within four (4) business days
of the receipt of Holder’s Conversion Notice so long as the Holder has provided
reasonable assurances to the Maker that such shares of Common Stock can be sold
pursuant to Rule 144.

     

    Section
2.2    Remedies
Upon An Event of Default. If an Event of Default shall have occurred and
shall be continuing, the Collateral Agent may at any time at its option (a)
declare the entire unpaid principal balance of this Note, together with all
interest accrued hereon, plus fees and expenses, 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 Maker; provided, however, that upon the occurrence
of an Event of Default described in Sections 2.1 (g) or (h) above, the
outstanding principal balance and accrued interest hereunder, plus fees and
expenses, shall be immediately and automatically due and payable, and/or (b)
exercise or otherwise enforce any one or more of the Holder’s rights, powers,
privileges, remedies and interests as well as its own rights, powers and
remedies under this Note, the Purchase Agreement, the Security Agreement or
other Transaction Document or applicable law. No course of delay on the part of
the Collateral Agent or the Holder shall operate as a waiver thereof or
otherwise prejudice the right of the Collateral Agent or 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. Upon and
after an Event of Default, this Note shall bear interest at the default rate set
forth in Section 1.2 hereof.

     

    ARTICLE
IIA

     

    CONVERSION;
ANTIDILUTION; PREPAYMENT

     

    Section
2A.1    Conversion
Option. At any time and from time to time on or after the Amendment Date,
the Conversion Amount shall be convertible (in whole or in part, subject to the
limitations set forth herein), at the option of the Holder (the “Conversion
Option”), into such number of fully paid and non-assessable shares of
Common Stock as is determined by dividing (x) that portion of the Conversion
Amount that the Holder elects to convert by (y) the Conversion Price (as defined
in Section 2A.2 hereof) then in effect on the date on which the Holder faxes a
notice of conversion (the “Conversion
Notice”), duly executed, to the Maker (facsimile number: (530) 677-7626,
Attn.: Chief Financial Officer) (the “Conversion
Date”), provided, however, that the Conversion Price shall be subject to
adjustment as described below. With respect to partial conversions of this Note,
the Maker shall keep written records of the amount of this Note converted as of
each Conversion Date. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Notwithstanding
anything to the contrary contained herein, (i) not more than $3,200,000 of
principal and/or accrued and unpaid interest on this Note shall be convertible
pursuant to a conversion under this Section 2A.1 without the Maker’s express
written consent (the “Conversion
Amount”), (ii) until April 30, 2009, conversions by the Holder hereunder
shall be deemed to be conversions of accrued and unpaid interest under this
Note, as the same exists and to the extent counsel for the Maker delivers an
opinion satisfactory to the Holder as to the free transferability of such
conversion shares pursuant to Rule 144; thereafter, any conversion shall be
deemed to be a conversion of the principal amount hereunder and (iii) if no
default or Event of Default exists hereunder or under any other indebtedness of
the Maker to the Holder, upon the Maker’s written notice to the Holder, the
Maker may suspend the convertibility of this Note for so long as no such default
or Event of Default exists (provided, that, (i) the Maker shall be obligated to
honor all conversion notices delivered prior to such notice from the Maker and
(ii) if a default or an Event of Default after such suspension occurs, such
suspension shall end and this Note shall thereafter be convertible as set forth
herein).

     

    Section
2A.2    Conversion
Price. The term “Conversion Price” shall mean $0.145, subject to
adjustment under Section 2A.5 hereof.

     

    Section
2A.3    Mechanics
of Conversion.

     

    (a)    Not later
than four (4) Trading Days after receipt of a Conversion Notice, the Maker 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 four (4) Trading Days after
receipt of a Conversion Notice, the Maker 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 Maker or its
transfer agent shall only be obligated to issue and deliver the shares to the
DTC 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 (as evidenced by
documentation furnished to and reasonably satisfactory to the Maker) or such
shares may be sold pursuant to Rule 144. If in the case of any Conversion Notice
such certificate or certificates are not delivered to or as directed by the
Holder by the Delivery Date, the Holder shall be entitled by written notice to
the Maker at any time on or before its receipt of such certificate or
certificates thereafter, to rescind such conversion, in which event the Maker
shall immediately return this Note tendered for conversion, whereupon the Maker
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 2A.3(b) and (c) shall be payable through the date notice
of rescission is given to the Maker.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (b)    The Maker
understands that a delay in the delivery of the Conversion Shares beyond the
Delivery Date could result in economic loss to the Holder. If the Maker fails to
deliver to the Holder such shares via DWAC (or, if applicable, certificates) by
the Delivery Date, the Maker 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 (if applicable), together with interest on such
amount at a rate of 10% 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 Notes 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 the Holder’s right to
pursue actual damages for the Maker’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 Maker shall not be obligated to pay the liquidated
damages accrued in accordance with this Section 2A.3(b).

     

    (c)    In addition
to any other rights available to the Holder, if the Maker fails to cause its
transfer agent to transmit via DWAC or transmit to the Holder a certificate or
certificates representing the Conversion Shares 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 Conversion Shares which the Holder
anticipated receiving upon such conversion (a “Buy-In”),
then the Maker 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
multiplying (A) the number of Conversion Shares that the Maker 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 Maker 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 Maker shall be required to
pay the Holder $1,000. The Holder shall provide the Maker 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
Maker. Nothing herein shall limit the 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 Maker’s failure to timely deliver certificates representing
shares of Common Stock upon conversion of this Note as required pursuant to the
terms hereof.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
2A.4    Ownership Cap and
Certain Conversion Restrictions.

     

    (a)    Notwithstanding
anything to the contrary set forth in this Note, at no time may all or a portion
of this Note be converted 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 13(d) of the Exchange Act and the rules thereunder) more
than 4.99% of all of the Common Stock outstanding at such time; provided,
however,
that upon the Holder providing the Maker with sixty-one (61) days notice
(pursuant to Section 3.1 hereof) (the “Waiver
Notice”) that the Holder would like to waive this Section 2A.4(a) with
regard to any or all shares of Common Stock issuable upon conversion of this
Note, this Section 2A.4(a) will be of no force or effect with regard to all or a
portion of the Note referenced in the Waiver Notice.

     

    (b)    Notwithstanding
anything to the contrary set forth in this Note, at no time may all or a portion
of this Note be converted if the number of shares of Common Stock to be issued
pursuant to such conversion, when aggregated with all other shares of Common
Stock owned by the Holder at such time, would result in the Holder beneficially
owning (as determined in accordance with Section 13(d) of the Exchange Act and
the rules thereunder) in excess of 9.99% of the then issued and outstanding
shares of Common Stock outstanding at such time. The provisions of this Section
2A.4(b) may not be amended or waived by the Holder or the Maker.

     

    (c)    Any
Conversion Notice delivered in connection herewith shall be deemed to be a
representation by the Holder that such conversion complies with the provisions
of this Section 2A.4.

     

    Section
2A.5    Adjustment
of Conversion Price.

     

    (a)    Until the
Note has been paid in full or the Conversion Amount has been converted in full,
the Conversion Price shall be subject to adjustment from time to time as follows
(but shall not be increased, other than pursuant to Section 2A.5(a)(i)
hereof):

     

    (i)    Adjustments
for Stock Splits and Combinations. If the Maker shall at any time or from
time to time after the Amendment 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 Maker shall at any time
or from time to time after the Amendment Date, combine the outstanding shares of
Common Stock (e.g., a “reverse stock split”), the applicable Conversion Price in
effect immediately prior to the combination shall be proportionately increased.
Any adjustments under this Section 2A.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 Maker shall at any time
or from time to time after the Amendment 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 Maker shall at any time or
from time to time after the Amendment 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 Maker or other issuer (as applicable) which they
would have received had the convertible portion of 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 2A.5(a)(iii) with respect to the rights of the Holder 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
Amendment 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 2A.5(a)(i), (ii) and (iii), or a
reorganization, merger, consolidation, or sale of assets provided for in Section
2A.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.

     

    (v)    Adjustments
for Reorganization, Merger, Consolidation or Sales of Assets.
If at any time or from time to time after the Amendment Date there shall be a
capital reorganization of the Maker (other than by way of a stock split or
combination of shares or stock dividends or distributions provided for in
Section 2A.5(a)(i), (ii) and (iii), or a reclassification, exchange or
substitution of shares provided for in Section 2A.5(a)(iv)), or a merger or
consolidation of the Maker with or into another Person 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 Maker’s properties or assets to any other
Person (an “Organic
Change”), then as a part of such Organic Change, 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (A)
if the surviving entity in any such Organic Change is a public company that is
registered pursuant to the Securities Exchange Act of 1934, as amended, and its
common stock is listed or quoted on a national exchange or the OTC Bulletin
Board, 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 the convertible
portion of this Note into the kind and amount of shares of stock and other
securities or property of the Maker or any successor corporation resulting from
Organic Change, and (B) if the surviving entity in any such Organic Change is
not a public company that is registered pursuant to the Securities Exchange Act
of 1934, as amended, or its common stock is not listed or quoted on a national
exchange or the OTC Bulletin Board, the Holder shall have the right to demand
prepayment pursuant to Section 2A.6(b) hereof. In any such case, appropriate
adjustment shall be made in the application of the provisions of this Section
2A.5(a)(v) with respect to the rights of the Holder after the Organic Change to
the end that the provisions of this Section 2A.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 and the Other
Notes) shall be applied after that event in as nearly an equivalent manner as
may be practicable. References herein to “Other Notes” shall mean and refer to
any other convertible promissory note issued by the Maker to the Holder or
Lakewood Group, LLC.

     

    (b)    Record
Date. In case the Maker shall establish a record date for the purpose of
entitling the holders of its Common Stock 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)    [Reserved].

     

    (d)    No
Impairment. The Maker 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 Maker, but will at all times in good
faith, assist in the carrying out of all the provisions of this Section 2A.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 the convertible portion of this Note as provided
herein, the Maker cannot refuse conversion based on any claim that such Holder
or any one 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 enjoining conversion of all or any of the Note shall have
issued and the Maker shall allocate for the benefit of such Holder in an amount
equal to one hundred thirty percent (130%) of the amount of the shares the
Holder has elected to convert, which allocation shall remain in effect until the
completion of arbitration/litigation of the dispute.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (e)    Certificates
as to Adjustments. Upon occurrence of each adjustment or readjustment of
the Conversion Price or number of Conversion Shares issuable upon conversion of
this Note pursuant to this Section 2A.5, the Maker 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 Maker 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
Maker 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 Maker 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 Conversion Shares pursuant thereto; provided,
however,
that the Maker 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 Maker 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 Maker 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 Maker shall, from time to time in accordance with Delaware 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
Maker’s obligations under this Section 2A.5(h).

     

    (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 Maker
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
2A.6    Prepayment.

     

    (a)    [Reserved].

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (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 below), the Holder shall have the right, at the Holder’s option, to
require the Maker to prepay all or a portion of the Holder’s Notes in cash at a
price equal to the sum of (i) the greater of (A) one hundred percent (100%) of
the aggregate principal amount of this Note plus all accrued and unpaid 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 Major Transaction Prepayment Price
is paid in full, whichever is less, multiplied by the VWAP on (x) the date the
Major Transaction Prepayment Price is demanded or otherwise due, and (y) the
date the Major Transaction 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 “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 Maker 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 percent (100%) of the aggregate principal amount of this Note
plus all accrued and unpaid interest and (B) 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 Maker 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 Maker or
(B) a consolidation, merger or other business combination in which the Maker is
the surviving entity and the holders of the Maker’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).

     

    (ii)    the sale or
transfer of more than fifty percent (50%) of the Maker’s assets (based on the
fair market value as determined in good faith by the Maker’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
the occurrence of 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, the Toronto Stock Exchange, the American Stock Exchange, the Nasdaq
Capital Markets, the Nasdaq Global Market, the Nasdaq Global Select Market or
The New York Stock Exchange, Inc. for a period of five (5) consecutive Trading
Days;

     

    (ii)    the Maker’s
notice to any holder of the Notes, including by way of public announcement, at
any time, of its inability to comply (including for any of the reasons described
in Section 2A.7) or its intention not to comply with proper requests for
conversion of any Notes into shares of Common Stock; or

     

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

     

    (iv)    the Maker
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;
or

     

    (v)    the Maker
shall fail to comply with Section 3.11(d) of this Note.

     

    (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 Maker 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 Maker 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 Maker, which Notice of
Prepayment at Option of Holder Upon Major Transaction shall indicate (i) the
principal amount of the Notes that such holder is electing to have prepaid and
(ii) the applicable Major Transaction Prepayment Price, as calculated pursuant
to Section 2A.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 Maker 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 and the Other Notes then
outstanding may require the Maker 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 Maker,
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 2A.6(c) above. 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    A
holder shall only be permitted to require the Maker to prepay the Note pursuant
to Section 2A.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.

     

    (h)    Payment
of Prepayment Price. Upon the Maker’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 Maker shall immediately notify each holder of the Notes by facsimile
of the Maker’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 Maker such holder’s certificates representing the Notes which such holder
has elected to have prepaid. The Maker shall deliver the applicable Triggering
Event Prepayment Price, in the case of a prepayment pursuant to Section 2A.6(g),
to such holder within five (5) business days after the Maker’s receipt of a
Notice of Prepayment at Option of Holder Upon Triggering Event and, in the case
of a prepayment pursuant to Section 2A.6(f), the Maker 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 Maker; provided further that if the Maker is
unable to prepay all of the Notes to be prepaid, the Maker 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 and Other Notes held by such
holder relative to the number of Notes and Other Notes outstanding) of all Notes
being prepaid. If the Maker 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 Maker 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 Maker
to promptly return to such holder(s) all of the Notes that were submitted for
prepayment by such holder(s) under this Section 2A.6 and for which the
applicable Prepayment Price has not been paid, by sending written notice thereof
to the Maker via facsimile (the “Void
Optional Prepayment Notice”). Upon the Maker’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, and (ii) the Maker shall immediately return any Notes
submitted to the Maker by each holder for prepayment under this Section 2A.6(h)
and for which the applicable Prepayment Price has not been paid. A holder’s
delivery of a Void Optional Prepayment Notice and exercise of its rights
following such notice shall not effect the Maker’s obligations to make any
payments which have accrued prior to the date of such notice. Payments provided
for in this Section 2A.6 shall have priority to payments to other stockholders
in connection with a Major Transaction.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
2A.7    Inability
to Fully Convert.

     

    (a)    Holder’s
Option if Maker Cannot Fully Convert. If, upon the Maker’s receipt of a
Conversion Notice, the Maker cannot issue shares of Common Stock for any reason,
including, without limitation, because the Maker (x) does not have a sufficient
number of shares of Common Stock authorized and available, or (y) 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 Maker 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 Maker 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 that is entitled to be converted, the
Holder, solely at Holder’s option (in addition to its other remedies hereunder),
can elect to:

     

    (i)    If the
Maker’s inability to honor any conversion fully is pursuant to Section
2A.7(a)(x) or (y) above, require the Maker to prepay that portion of this Note
for which the Maker 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 Maker’s obligations
to make any payments which have accrued prior to the date of such
notice);

     

    (iii)    exercise its
Buy-In rights pursuant to and in accordance with the terms and provisions of
Section 2A.3(c) of this Note.

     

    In
the event a Holder shall elect to convert any portion of its Notes as provided
herein, the Maker cannot refuse conversion based on any claim that such Holder
or any one 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 enjoining conversion of all or of said Notes shall have been
issued and the Maker shall allocate for the benefit of such Holder in an amount
equal to 130% of the amount of the shares the Holder has elected to convert,
which allocation shall remain in effect until the completion of
arbitration/litigation of the dispute.

     

    (b)    Mechanics
of Fulfilling Holder’s Election. The Maker 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 2A.7(a)
above, a notice of the Maker’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 Maker 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
Maker of its election pursuant to Section 2A.7(a) above by delivering written
notice via facsimile to the Maker (“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 2A.7(a)(i) above, the Maker shall pay the Mandatory
Prepayment Price to the Holder within thirty (30) days of the Maker’s receipt of
the Holder’s Notice in Response to Inability to Convert, provided
that prior to the Maker’s receipt of the Holder’s Notice in Response to
Inability to Convert the Maker 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 Maker shall fail to pay the applicable Mandatory Prepayment
Price to the Holder on the date that is thirty (30) days following the Maker’s
receipt of the Holder’s Notice in Response to Inability to Convert (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, and
(ii) receive back such Note.

     

    (d)    Pro-rata
Conversion and Prepayment. In the event the Maker receives a Conversion
Notice from more than one holder of the Notes on the same day and the Maker can
convert and prepay some, but not all, of the Notes pursuant to this Section
2A.7, the Maker 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 and any Other Notes
outstanding) of all the Notes being converted and prepaid at such
time.

     

    Section
2A.8    No
Rights as Shareholder. Nothing contained in this Note shall be construed
as conferring upon the Holder, prior to the conversion of this Amended and
Restated 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 Maker or of any other matter, or any other
rights as a shareholder of the Maker.

     

    ARTICLE
III

     

    MISCELLANEOUS

     

    Section
3.1    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, 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.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
3.2    Governing
Law. This Note shall be governed by and construed in accordance with the
internal laws of the State of New York, 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
3.3    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
3.4    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 Maker 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 Maker (or the
performance thereof). The Maker 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
Maker agrees that, in the event of any such breach or threatened breach, the
Collateral Agent (on behalf of 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
3.5    Enforcement
Expenses. The Maker agrees to pay all costs and expenses incurred from
time to time by the Holder with respect to any modification, consent or waiver
of the provisions of this Note or the Transaction Documents and any enforcement
of this Note and the Transaction Documents, including, without limitation,
reasonable attorneys’ fees and expenses.

     

    Section
3.6    Amendments.
This Note may not be modified or amended in any manner except in writing
executed by the Maker and the Holder.

     

    Section
3.7    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 except in accordance with applicable
law.

     

    Section
3.8    Consent
to Jurisdiction. Each of the Maker and the Holder (i) hereby irrevocably
submits to the exclusive jurisdiction of the United States District Court
sitting in the Southern District of New York and the courts of the State of New
York located in New York county 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 Maker 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 3.8 shall affect or limit any right to serve
process in any other manner permitted by law. Each of the Maker 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
3.9    Binding
Effect. This Note shall be binding upon, inure to the benefit of and be
enforceable by the Maker, the Holder and their respective successors and
permitted assigns. The Maker shall not delegate or transfer this Note or any
obligations or undertakings contained in this Note.

     

    Section
3.10    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.

     

    Section
3.11    Maker
Waivers; Dispute Resolution.

     

    (a)    Except as
otherwise specifically provided herein, the Maker 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 Maker liable for the payment of this Note, AND DO HEREBY WAIVE TRIAL BY
JURY.

     

    (b)    No delay or
omission on the part of the Collateral Agent or 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 Collateral Agent or the Holder,
nor shall any waiver by the Collateral Agent or 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.

     

    (c)    THE MAKER
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 AND HEARING WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE
HOLDER OR ITS SUCCESSORS OR ASSIGNS MAY DESIRE TO USE.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (d)    In the case
of a dispute as to the determination of the Closing Bid Price or the VWAP or the
arithmetic calculation of the Conversion Price, any adjustment to the Conversion
Price, liquidated damages amount, interest or dividend calculation, or any
redemption price, redemption amount, adjusted Conversion Price, or similar
calculation, or as to whether a subsequent issuance of securities is prohibited
hereunder or would lead to an adjustment to the Conversion Price, the Maker
shall submit the disputed determinations or arithmetic calculations via
facsimile within two (2) Business Days of receipt, or deemed receipt, of the
Conversion Notice, any redemption notice, default notice or other event giving
rise to such dispute, as the case may be, to the Holder. If the Holder and the
Maker are unable to agree upon such determination or calculation within two (2)
Business Days of such disputed determination or arithmetic calculation being
submitted to the Holder, then the Maker shall, within two (2) Business Days
submit via facsimile (a) the disputed determination of the Closing Price or the
VWAP to an independent, reputable investment bank selected by the Maker and
approved by the Holder, which approval shall not be unreasonably withheld, (b)
the disputed arithmetic calculation of the Conversion Price, adjusted Conversion
Price or any redemption price, redemption amount or default amount to the
Maker’s independent, outside accountant or (c) the disputed facts regarding
whether a subsequent issuance of securities is prohibited hereunder or would
lead to an adjustment to the Conversion Price (or any of the other above
described facts not expressly designated to the investment bank or accountant),
to an expert attorney from a nationally recognized outside law firm (having at
least 100 attorneys and having with no prior relationship with the Maker)
selected by the Maker and approved by the Lead Purchaser as defined in the
Purchase Agreement). The Maker, at the Maker’s expense, shall cause the
investment bank, the accountant, the law firm, or other expert, as the case may
be, to perform the determinations or calculations and notify the Maker and the
Holder of the results no later than five (5) Business Days from the time it
receives the disputed determinations or calculations. Such investment bank’s,
accountant’s or attorney’s determination or calculation, as the case may be,
shall be binding upon all parties absent demonstrable error.

     

    Section
3.12    Definitions.
Terms used herein and not defined shall have the meanings set forth in the
Purchase Agreement. For the purposes hereof, the following terms shall have the
following meanings:

     

    “Business
Day” (whether or not capitalized) shall mean any day banking transactions
can be conducted in New York City, NY, USA and does not include any day which is
a federal or state holiday in such location.

     

    “Closing
Bid Price” shall mean, on any particular date (i) the last trading price
per share of the Common Stock on such date on the OTC Bulletin Board or another
registered national stock exchange on which the Common Stock is then listed, or
if there is no such price on such date, then the last trading price on such
exchange or quotation system on the date nearest preceding such date, or (ii) if
the Common Stock is not then listed or traded on a registered national
securities exchange or quoted on the OTC Bulletin Board, then the average of the
“Pink Sheet” quotes for the relevant conversion period, as determined in good
faith by the Holder, or (iii) if the Common Stock is not then publicly traded
the fair market value of a share of Common Stock as determined by the Holder and
reasonably acceptable to the Maker.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    “Person”
means an individual or a corporation, partnership, trust, incorporated or
unincorporated association, joint venture, limited liability company, joint
stock company, government (or an agency or political subdivision thereof) or
other entity of any kind.

     

    “Trading
Day” means (a) a day on which the Common Stock is traded on the OTC
Bulletin Board or a registered national securities exchange, or (b) if the
Common Stock is not traded on the OTC Bulletin Board or a registered national
securities exchange, a day on which the Common Stock is 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 Common Stock is not listed or quoted as set forth in
(a) or (b) 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.

     

    “Transaction
Documents” means this Note, the Purchase Agreement, the Security
Agreement, any Deed of Trust and all other security documents or related
agreements now or hereafter entered into in connection with and/or as security
for this Note and all amendments and supplements thereto and replacements
thereof and any other Transaction Document (as that term is defined in the
Purchase Agreement).

     

    “VWAP”
means, for any date, (i) the daily volume weighted average price of the Common
Stock for such date on the OTC Bulletin Board as reported by Bloomberg Financial
L.P. (based on a Trading Day from 9:30 a.m. Eastern Time to 4:02 p.m. Eastern
Time); (ii) if the Common Stock is not then listed or quoted on the OTC Bulletin
Board and if prices for the Common Stock are then reported in the “Pink Sheets”
published by the Pink Sheets, LLC (or a similar organization or agency
succeeding to its functions of reporting prices), the most recent bid price per
share of the Common Stock so reported; or (iii) in all other cases, the fair
market value of a share of Common Stock as determined by an independent
appraiser selected in good faith by the Holder and reasonably acceptable to the
Maker.

     

    [Signature
appears on following page]

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    IN WITNESS
WHEREOF, the Maker has caused this Note to be duly executed by its duly
authorized officer as of the date first above
indicated.

     

     

    
      
        	 	
                FIRSTGOLD
      CORP.

              	 
	 	 	 	 
	
                  

              	
                By:
      

              	/s/ Stephen
      Akerfeldt	 
	 	Name: 	Stephen Akerfeldt	 
	 	Title: 	CEO	 
	 	 	 	 

      

    

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    EXHIBIT
A

     

     

    WIRE
INSTRUCTIONS

     

     

    Wire
instructions for Platinum Long Term Growth,
LLC:

     

    Commerce
Bank

     

    ABA#
026013673

     

    Account
Name: Platinum Long Term Growth, LLC

     

    Account
Number: 7926319356

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