UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported) December 30, 2014
HOMELAND RESOURCES LTD.
(Exact
name of registrant as specified in its charter)
NEVADA
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000-55282
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26-0841675
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(State
or other jurisdiction of incorporation)
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(Commission
File Number)
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(IRS
Employer Identification No.)
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3395 S.
Jones Boulevard, Las Vegas, Nevada
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89146
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(Address
of principal executive offices)
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(Zip
Code)
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Registrant's
telephone number, including area code
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(877) 503-4299
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9120 Double Diamond Parkway H#269, Reno, NV 89521
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
[ ] |
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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[ ] |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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[ ] |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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[ ] |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
ITEM 1.01
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ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
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On
December 30, 2014, Homeland Resources Ltd. (the “Company”) entered into a
Securities Purchase Agreement dated for reference December 23, 2014 (the
“Securities Purchase Agreement”) with LG Capital Funding, LLC (“LG Capital”), a New
York limited liability company. Under the terms of the Securities
Purchase Agreement, LG Capital loaned $25,000 to the Company, which loan is
secured by an
8% convertible note of the Company (the “Convertible Note”). Although
the Securities Purchase Agreement is dated for reference December 23, 2014, it
was not effective until December 30, 2014 when it was executed by LG Capital. Details of
the Convertible Note are set out in Item 2.03 below.
ITEM 2.03 |
CREATION OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE SHEET ARRANGEMENT OF A REGISTRANT |
Homeland Resources Ltd. (the “Company”)
issued a convertible note (the “Convertible Note”) dated for
reference December 23, 2014 in the principal amount of $25,000 to LG Capital
Funding, LLC (“LG Capital”), a New York corporation, pursuant to the
terms of a Securities Purchase Agreement dated for reference December 23, 2014
(the “Securities Purchase Agreement”). Under the terms of the Convertible
Note,
the Company shall repay to LG Capital the principal amount
of $25,000 plus interest at a rate of 8% per annum on December 23, 2015 (the
“Maturity Date”). Interest shall be paid by the Company in common stock
The Company has the right to prepay the
principal and accrued interest in full upon giving three trading days prior
written notice to LG Capital by paying a premium of 15% if paid within 30
days of the issue date increasing by 6% per month to a maximum of 45% if paid
within 180 days following the issue date, after which the Company has no
further rights of prepayment of the Convertible Note.
At any time commencing 180 days from the date
of issuance of the Convertible Note, LG Capital has the right to
convert all or any portion of the outstanding and unpaid principal amount and
interest of the Convertible Note into shares of the Company’s common stock at a
conversion price equal to 61% of the average of the lowest five closing bid
prices for the Company’s common stock during the 10 trading days prior to the
conversion date, subject to a limitation that LG Capital and its
affiliates cannot at any time hold, as a result of conversion, more than 9.9%
of the outstanding common stock of the Company.
The Convertible Note contains restrictions on
the Company completing sales of all or substantially all of its assets. It
also includes customary conditions, representations and warranties.
In the event that the Company defaults in the
payment of any amount due under the Convertible Note, the unpaid amount shall
bear interest (“Default Interest”) at 24% per annum and defaults under certain
provisions of the agreement can result in additional penalties of 50% of the
amount outstanding.
Although the Convertible Note is dated for
reference December 23, 2014, it was not effective until December 30, 2014 when
the funds were advanced to the Company.
2
ITEM 9.01
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FINANCIAL STATEMENTS AND EXHIBITS.
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(d) Exhibits
The following exhibits are
either provided with this Current Report or are incorporated herein by
reference:
SIGNATURE
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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HOMELAND
RESOURCES LTD. |
Date:
January 5, 2015 |
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By: |
/s/
David St. James |
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David St. James, |
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Secretary and Treasurer |
3
SECURITIES PURCHASE AGREEMENT
This
SECURITIES PURCHASE AGREEMENT (the “Agreement”), dated as of December 23,
2014, by and between Homeland Resources Ltd., a Nevada corporation, with headquarters located at 3395 S. Jones Blvd.,
#169, Las Vegas, NV 89146 (the “Company”), and LG CAPITAL FUNDING, LLC,
a New York limited liability company, with its address at 1218 Union Street, Suite #2, Brooklyn, NY 11225 (the “Buyer”).
WHEREAS:
A.
The Company and the Buyer are
executing and delivering this Agreement in reliance upon the exemption from
securities registration afforded by the rules and regulations as promulgated by
the United States Securities and Exchange Commission (the “SEC”) under the
Securities Act of 1933, as amended (the “1933 Act”);
B.
Buyer desires to purchase
and the Company desires to issue and sell, upon the terms and conditions set
forth in this Agreement an 8% convertible note of the Company, in the forms
attached hereto as Exhibit A in the aggregate principal amount of $25,000.00
(together with any note(s) issued in replacement thereof or as a dividend
thereon or otherwise with respect thereto in accordance with the terms thereof,
the “Note”), convertible into shares of common stock, $0.001
par value per share, of the Company (the “Common Stock”), upon the terms and
subject to the limitations and conditions set forth in such Note.
C.
The Buyer wishes to
purchase, upon the terms and conditions stated in this Agreement, such principal
amount of Note as is set forth immediately below its name on the signature
pages hereto; and
NOW THEREFORE, the Company and the Buyer severally (and not jointly)
hereby agree as follows:
1.
Purchase and Sale of Note.
a.
Purchase of Note. On each Closing Date (as defined below), the
Company shall issue and sell to the Buyer and the Buyer agrees to purchase from
the Company such principal amount of Note as is set forth immediately below the
Buyer’s name on the signature pages hereto.
b.
Form of Payment. On the Closing Date (as defined below), (i) the Buyer shall pay the purchase price for the
Note to be issued and sold to it at the Closing (as defined below) (the
“Purchase Price”) by wire transfer of immediately available funds to the
Company, in accordance with the Company’s written wiring instructions, against
delivery of the Note in the principal amount equal to the Purchase Price as is
set forth immediately below the Buyer’s name on the signature pages hereto, and(ii) the Company shall deliver such duly
executed Note on behalf of the Company, to the Buyer, against delivery of such
Purchase Price.
“DS”
Company Initials
c.
Closing Date. The date and time of the first issuance and
sale of the Note pursuant to this Agreement (the “Closing Date”) shall be on or
about December 23, 2014,
or such other mutually agreed upon time. The closing of the transactions
contemplated by this Agreement (the “Closing”) shall occur on the Closing Date
at such location as may be agreed to by the parties.
2.
Buyer’s Representations
and Warranties. The Buyer
represents and warrants to the Company that:
a.
Investment Purpose. As of the date hereof, the Buyer is
purchasing the Note and the shares of Common Stock issuable upon conversion of
or otherwise pursuant to the Note, such shares of Common Stock being
collectively referred to herein as the “Conversion Shares” and, collectively
with the Note, the “Securities”) for its own account and not with a present
view towards the public sale or distribution thereof, except pursuant to sales
registered or exempted from registration under the 1933 Act; provided, however,
that by making the representations herein, the Buyer does not agree to hold any
of the Securities for any minimum or other specific term and reserves the right
to dispose of the Securities at any time in accordance with or pursuant to a
registration statement or an exemption under the 1933 Act.
b.
Accredited Investor
Status. The Buyer is an
“accredited investor” as that term is defined in Rule 501(a) of Regulation D
(an “Accredited Investor”).
c.
Reliance on Exemptions. The Buyer understands that the Securities are
being offered and sold to it in reliance upon specific exemptions from the
registration requirements of United States federal and state securities laws
and that the Company is relying upon the truth and accuracy of, and the Buyer’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Buyer set forth herein in order to determine the
availability of such exemptions and the eligibility of the Buyer to acquire the
Securities.
d.
Information. The Buyer and its advisors, if any, have
been, and for so long as the Note remain outstanding will continue to be,
furnished with all materials relating to the business, finances and operations
of the Company and materials relating to the offer and sale of the Securities
which have been requested by the Buyer or its advisors. The Buyer and its
advisors, if any, have been, and for so long as the Note remain outstanding
will continue to be, afforded the opportunity to ask questions of the Company.
Notwithstanding the foregoing, the Company has not disclosed to the Buyer any
material nonpublic information and will not disclose such information unless
such information is disclosed to the public prior to or promptly following such
disclosure to the Buyer. Neither such inquiries nor any other due diligence
investigation conducted by Buyer or any of its advisors or representatives
shall modify, amend or affect Buyer’s right to rely on the Company’s
representations and warranties contained in Section 3 below. The Buyer
understands that its investment in the Securities involves a significant degree
of risk. The Buyer is not aware of any facts that may constitute a breach of
any of the Company's representations and warranties made herein.
e.
Governmental Review. The Buyer understands that no United States federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.
f.
Transfer or Re-sale. The Buyer understands that (i) the sale or re-sale of the Securities has not
been and is not being registered under the 1933 Act or any applicable state
securities laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an
effective registration statement under the 1933 Act, (b) the Buyer shall have delivered to the
Company, at the cost of the Buyer, an opinion of counsel that shall be in form,
substance and scope customary for opinions of counsel in comparable
transactions to the effect that the Securities to be sold or transferred may be
sold or transferred pursuant to an exemption from such registration, which
opinion shall be accepted by the Company, (c) the Securities are sold or transferred to
an “affiliate” (as defined in Rule 144 promulgated under the 1933 Act (or a
successor rule) (“Rule 144”) of the Buyer who agrees to sell or otherwise
transfer the Securities only in accordance with this Section 2(f) and who is an
Accredited Investor, (d) the Securities are sold pursuant to Rule
144, or (e) the Securities are sold pursuant to
Regulation S under the 1933 Act (or a successor rule) (“Regulation S”), and the Buyer shall have delivered to the Company, at
the cost of the Buyer, an opinion of counsel that shall be in form, substance
and scope customary for opinions of counsel in corporate transactions, which
opinion shall be accepted by the Company; (ii) any sale of such Securities made
in reliance on Rule 144 may be made only in accordance with the terms of said
Rule and further, if said Rule is not applicable, any re-sale of such
Securities under circumstances in which the seller (or the person through whom
the sale is made) may be deemed to be an underwriter (as that term is defined
in the 1933 Act) may require compliance with some other exemption under the
1933 Act or the rules and regulations of the SEC thereunder; and (iii) neither
the Company nor any other person is under any obligation to register such
Securities under the 1933 Act or any state securities laws or to comply with
the terms and conditions of any exemption thereunder (in each case).
Notwithstanding the foregoing or anything else contained herein to the
contrary, the Securities may be pledged as collateral in connection with a bona
fide margin account or other lending arrangement.
g.
Legends. The Buyer understands that the Note and,
until such time as the Conversion Shares have been registered under the 1933
Act may be sold pursuant to Rule 144 or Regulation S without any restriction as
to the number of securities as of a particular date that can then be
immediately sold, the Conversion Shares may bear a restrictive legend in
substantially the following form (and a stop-transfer order may be placed
against transfer of the certificates for such Securities):
“NEITHER
THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE
SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR
ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE
SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF
COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY
ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II)
UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE
MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
SECURITIES.”
The legend set forth above shall be removed and
the Company shall issue a certificate without such legend to the holder of any
Security upon which it is stamped, if, unless otherwise required by applicable
state securities laws, (a) such Security is registered for sale under an
effective registration statement filed under the 1933 Act or otherwise may be
sold pursuant to Rule 144 or Regulation S without any restriction as to the
number of securities as of a particular date that can then be immediately sold,
or (b) such holder provides the Company with an opinion of counsel, in form,
substance and scope customary for opinions of counsel in comparable
transactions, to the effect that a public sale or transfer of such Security may
be made without registration under the 1933 Act, which opinion shall be
accepted by the Company so that the sale or transfer is effected. The Buyer
agrees to sell all Securities, including those represented by a certificate(s)
from which the legend has been removed, in compliance with applicable
prospectus delivery requirements, if any. In the event that the Company does
not accept the opinion of counsel provided by the Buyer with respect to the
transfer of Securities pursuant to an exemption from registration, such as Rule
144 or Regulation S, within 2
business days, it will be considered an Event of Default under
the Note.
h.
Authorization; Enforcement. This Agreement has been duly and validly
authorized. This Agreement has been duly executed and delivered on behalf of
the Buyer, and this Agreement constitutes a valid and binding agreement of the
Buyer enforceable in accordance with its terms.
i.
Residency. The Buyer is a resident of the jurisdiction
set forth immediately below the Buyer’s name on the signature pages hereto.
3.
Representations and
Warranties of the Company. The
Company represents and warrants to the Buyer that:
a.
Organization and
Qualification. The Company and
each of its subsidiaries, if any, is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction in which it is
incorporated, with full power and authority (corporate and other) to own,
lease, use and operate its properties and to carry on its business as and where
now owned, leased, used, operated and conducted.
b.
Authorization;
Enforcement. (i) The Company
has all requisite corporate power and authority to enter into and perform this
Agreement, the Note and to consummate the transactions contemplated hereby and
thereby and to issue the Securities, in accordance with the terms hereof and
thereof, (ii) the execution and delivery of this Agreement, the Note by the
Company and the consummation by it of the transactions contemplated hereby and
thereby (including without limitation, the issuance of the Note and the
issuance and reservation for issuance of the Conversion Shares issuable upon
conversion or exercise thereof) have been duly authorized by the Company’s
Board of Directors and no further consent or authorization of the Company, its
Board of Directors, or its shareholders is required, (iii) this Agreement has
been duly executed and delivered by the Company by its authorized representative,
and such authorized representative is the true and official representative with
authority to sign this Agreement and the other documents executed in connection
herewith and bind the Company accordingly, and (iv) this Agreement constitutes,
and upon execution and delivery by the Company of the Note, each of such
instruments will constitute, a legal, valid and binding obligation of the
Company enforceable against the Company in accordance with its terms.
c.
Issuance of Shares. The Conversion Shares are duly authorized and
reserved for issuance and, upon conversion of the Note in accordance with its
respective terms, will be validly issued, fully paid and non-assessable, and
free from all taxes, liens, claims and encumbrances with respect to the issue
thereof and shall not be subject to preemptive rights or other similar rights
of shareholders of the Company and will not impose personal liability upon the
holder thereof.
d.
Acknowledgment of
Dilution. The Company
understands and acknowledges the potentially dilutive effect to the Common
Stock upon the issuance of the Conversion Shares upon conversion of the Note.
The Company further acknowledges that its obligation to issue Conversion Shares
upon conversion of the Note in accordance with this Agreement, the Note is
absolute and unconditional regardless of the dilutive effect that such issuance
may have on the ownership interests of other shareholders of the Company.
e.
No Conflicts. The execution, delivery and performance of
this Agreement, the Note by the Company and the consummation by the Company of
the transactions contemplated hereby and thereby (including, without
limitation, the issuance and reservation for issuance of the Conversion Shares)
will not (i) conflict with or result in a violation of any provision of the Certificate
of Incorporation or By-laws, or (ii) violate or conflict with, or result in a
breach of any provision of, or constitute a default (or an event which with
notice or lapse of time or both could become a default) under, or give to
others any rights of termination, amendment, acceleration or cancellation of,
any agreement, indenture, patent, patent license or instrument to which the
Company or any of its subsidiaries is a party, or (iii) result in a violation
of any law, rule, regulation, order, judgment or decree (including federal and
state securities laws and regulations and regulations of any self-regulatory
organizations to which the Company or its securities are subject) applicable to
the Company or any of its subsidiaries or by which any property or asset of the
Company or any of its subsidiaries is bound or affected (except for such
conflicts, defaults, terminations, amendments, accelerations, cancellations and
violations as would not, individually or in the aggregate, have a material
adverse effect). All consents, authorizations, orders, filings and
registrations which the Company is required to obtain pursuant to the preceding
sentence have been obtained or effected on or prior to the date hereof. The
Company is not in violation of the listing requirements of the OTC Pink marketplace
(the “OTC Pink”) and does not reasonably anticipate that the Common Stock will
be delisted by the OTC Pink in the foreseeable future, nor are the Company’s
securities “chilled” by DTC. The Company and its subsidiaries are unaware of
any facts or circumstances which might give rise to any of the foregoing.
f.
Absence of Litigation. Except as disclosed in the Company’s public
filings, there is no action, suit, claim, proceeding, inquiry or investigation
before or by any court, public board, government agency, self-regulatory
organization or body pending or, to the knowledge of the Company or any of its subsidiaries,
threatened against or affecting the Company or any of its subsidiaries, or
their officers or directors in their capacity as such, that could have a material
adverse effect. Schedule 3(f) contains a complete list and summary description
of any pending or, to the knowledge of the Company, threatened proceeding
against or affecting the Company or any of its subsidiaries, without regard to
whether it would have a material adverse effect. The Company and its subsidiaries
are unaware of any facts or circumstances which might give rise to any of the
foregoing.
g.
Acknowledgment Regarding Buyer’
Purchase of Securities. The
Company acknowledges and agrees that the Buyer is acting solely in the capacity
of arm’s length purchasers with respect to this Agreement and the transactions
contemplated hereby. The Company further acknowledges that the Buyer is not acting
as a financial advisor or fiduciary of the Company (or in any similar capacity)
with respect to this Agreement and the transactions contemplated hereby and any
statement made by the Buyer or any of its respective representatives or agents
in connection with this Agreement and the transactions contemplated hereby is
not advice or a recommendation and is merely incidental to the Buyer’ purchase
of the Securities. The Company further represents to the Buyer that the
Company’s decision to enter into this Agreement has been based solely on the
independent evaluation of the Company and its representatives.
h.
No Integrated Offering. Neither the Company, nor any of its
affiliates, nor any person acting on its or their behalf, has directly or
indirectly made any offers or sales in any security or solicited any offers to
buy any security under circumstances that would require registration under the
1933 Act of the issuance of the Securities to the Buyer. The issuance of the
Securities to the Buyer will not be integrated with any other issuance of the
Company’s securities (past, current or future) for purposes of any shareholder
approval provisions applicable to the Company or its securities.
i.
Title to Property. The Company and its subsidiaries have good
and marketable title in fee simple to all real property and good and marketable
title to all personal property owned by them which is material to the business
of the Company and its subsidiaries, in each case free and clear of all liens,
encumbrances and defects except such as are described in Schedule 3(i) or such
as would not have a material adverse effect. Any real property and facilities
held under lease by the Company and its subsidiaries are held by them under
valid, subsisting and enforceable leases with such exceptions as would not have
a material adverse effect.
j.
Bad Actor. No officer or director of the Company would
be disqualified under Rule 506(d) of the Securities Act as amended on the basis
of being a "bad actor" as that term is established in the
September 19, 2013 Small Entity Compliance Guide published by the Securities
and Exchange Commission.
k.
Breach of Representations
and Warranties by the Company. If the Company breaches any of the
representations or warranties set forth in this Section 3, and in addition to
any other remedies available to the Buyer pursuant to this Agreement, it will
be considered an Event of default under the Note.
4.
COVENANTS.
a.
Expenses. At the Closing, the Company shall reimburse Buyer
for expenses incurred by them in connection with the negotiation, preparation,
execution, delivery and performance of this Agreement and the other agreements
to be executed in connection herewith (“Documents”),
including, without limitation, reasonable attorneys’ and consultants’ fees and
expenses, transfer agent fees, fees for stock quotation services, fees relating
to any amendments or modifications of the Documents or any consents or waivers
of provisions in the Documents, fees for the preparation of opinions of
counsel, escrow fees, and costs of restructuring the transactions contemplated
by the Documents. When possible, the Company must pay these fees directly,
otherwise the Company must make immediate payment for reimbursement to the Buyer
for all fees and expenses immediately upon written notice by the Buyer or the
submission of an invoice by the Buyer. The Company’s obligation with respect to
this transaction is to reimburse Buyer’s expenses shall be $1,500 in legal fees
which shall be deduced from the Note when funded.
b.
Listing. The Company shall promptly secure the listing
of the Conversion Shares upon each national securities exchange or automated
quotation system, if any, upon which shares of Common Stock are then listed
(subject to official notice of issuance) and, so long as the Buyer owns any of
the Securities, shall maintain, so long as any other shares of Common Stock
shall be so listed, such listing of all Conversion Shares from time to time
issuable upon conversion of the Note. The Company will obtain and, so long as the
Buyer owns any of the Securities, maintain the listing and trading of its
Common Stock on the OTC Pink or any equivalent replacement market, the Nasdaq stock
market (“Nasdaq”), the New York Stock Exchange (“NYSE”), or the American Stock
Exchange (“AMEX”) and will comply in all respects with the Company’s reporting,
filing and other obligations under the bylaws or rules of the Financial
Industry Regulatory Authority (“FINRA”) and such exchanges, as applicable. The
Company shall promptly provide to the Buyer copies of any notices it receives
from OTC Markets and any other markets on which the Common Stock is then listed
regarding the continued eligibility of the Common Stock for listing on such markets.
c.
Corporate Existence. So long as the Buyer beneficially owns any Note,
the Company shall maintain its corporate existence and shall not sell all or
substantially all of the Company’s assets, except in the event of a merger or
consolidation or sale of all or substantially all of the Company’s assets,
where the surviving or successor entity in such transaction (i) assumes the
Company’s obligations hereunder and under the agreements and instruments
entered into in connection herewith and (ii) is a publicly traded corporation
whose Common Stock is listed for trading on the OTCQB, Nasdaq, NYSE or AMEX.
d.
No Integration. The Company shall not make any offers or
sales of any security (other than the Securities) under circumstances that
would require registration of the Securities being offered or sold hereunder
under the 1933 Act or cause the offering of the Securities to be integrated
with any other offering of securities by the Company for the purpose of any
stockholder approval provision applicable to the Company or its securities.
e.
Breach of Covenants.
If the Company breaches any of the covenants set forth in this Section 4, and
in addition to any other remedies available to the Buyer pursuant to this
Agreement, it will be considered an event of default under the Note.
5.
Governing Law;
Miscellaneous.
a.
Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without regard
to principles of conflicts of laws. Any action brought by either party against
the other concerning the transactions contemplated by this Agreement shall be
brought only in the state courts of New York or in the federal courts located
in the state and county of New York. The parties to this Agreement hereby
irrevocably waive any objection to jurisdiction and venue of any action
instituted hereunder and shall not assert any defense based on lack of
jurisdiction or venue or based upon forum non conveniens. The Company
and Buyer waive trial by jury. The prevailing party shall be entitled to
recover from the other party its reasonable attorney's fees and costs. In the
event that any provision of this Agreement or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or
rule of law, then such provision shall be deemed inoperative to the extent that
it may conflict therewith and shall be deemed modified to conform with such
statute or rule of law. Any such provision which may prove invalid or
unenforceable under any law shall not affect the validity or enforceability of
any other provision of any agreement. Each party hereby irrevocably waives
personal service of process and consents to process being served in any suit,
action or proceeding in connection with this Agreement or any other Transaction
Document by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Agreement and agrees that such service
shall constitute good and sufficient service of process and notice thereof.
Nothing contained herein shall be deemed to limit in any way any right to serve
process in any other manner permitted by law.
b.
Counterparts; Signatures
by Facsimile. This Agreement
may be executed in one or more counterparts, each of which shall be deemed an
original but all of which shall constitute one and the same agreement and shall
become effective when counterparts have been signed by each party and delivered
to the other party. This Agreement, once executed by a party, may be delivered
to the other party hereto by facsimile transmission of a copy of this Agreement
bearing the signature of the party so delivering this Agreement.
c.
Headings. The headings of this Agreement are for
convenience of reference only and shall not form part of, or affect the
interpretation of, this Agreement.
d.
Severability. In the event that any provision of this
Agreement is invalid or unenforceable under any applicable statute or rule of
law, then such provision shall be deemed inoperative to the extent that it may
conflict therewith and shall be deemed modified to conform with such statute or
rule of law. Any provision hereof which may prove invalid or unenforceable
under any law shall not affect the validity or enforceability of any other
provision hereof.
e.
Entire Agreement;
Amendments. This Agreement and
the instruments referenced herein contain the entire understanding of the
parties with respect to the matters covered herein and therein and, except as
specifically set forth herein or therein, neither the Company nor the Buyer
makes any representation, warranty, covenant or undertaking with respect to
such matters. No provision of this Agreement may be waived or amended other
than by an instrument in writing signed by the majority in interest of the Buyer.
f.
Notices. All
notices, demands, requests, consents, approvals, and other communications
required or permitted hereunder shall be in writing and, unless otherwise
specified herein, shall be (i) personally served, (ii) deposited in the mail,
registered or certified, return receipt requested, postage prepaid, (iii)
delivered by reputable air courier service with charges prepaid, or (iv)
transmitted by hand delivery, telegram, or facsimile, addressed as set forth
below or to such other address as such party shall have specified most recently
by written notice. Any notice or other communication required or permitted to
be given hereunder shall be deemed effective (a) upon hand delivery or delivery
by facsimile, with accurate confirmation generated by the transmitting
facsimile machine, at the address or number designated below (if delivered on a
business day during normal business hours where such notice is to be received),
or the first business day following such delivery (if delivered other than on a
business day during normal business hours where such notice is to be received)
or (b) on the second business day following the date of mailing by express
courier service, fully prepaid, addressed to such address, or upon actual
receipt of such mailing, whichever shall first occur. The addresses for such
communications shall be:
If to the Company, to:
|
Homeland Resources Ltd. 3395 S. Jones Blvd., #169 Las Vegas, NV 89146 Attn: David St. James, Treasurer and Secretary |
If to the Buyer:
|
LG CAPITAL FUNDING, LLC 1218 Union Street, Suite #2 Brooklyn, NY 11225 Attn: Joseph Lerman, Manager |
Each party shall provide notice to the other
party of any change in address.
g.
Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties and their successors and assigns. Neither
the Company nor the Buyer shall assign this Agreement or any rights or
obligations hereunder without the prior written consent of the other.
Notwithstanding the foregoing, the Buyer may assign its rights hereunder to any
person that purchases Securities in a private transaction from the Buyer or to
any of its “affiliates,” as that term is defined under the 1934 Act, without
the consent of the Company.
h.
Third Party Beneficiaries. This Agreement is intended for the benefit of
the parties hereto and their respective permitted successors and assigns, and
is not for the benefit of, nor may any provision hereof be enforced by, any
other person.
i.
Survival. The representations and warranties of the
Company and the agreements and covenants set forth in this Agreement shall
survive the closing hereunder notwithstanding any due diligence investigation
conducted by or on behalf of the Buyer. The Company agrees to indemnify and
hold harmless the Buyer and all their officers, directors, employees and agents
for loss or damage arising as a result of or related to any breach or alleged
breach by the Company of any of its representations, warranties and covenants
set forth in this Agreement or any of its covenants and obligations under this
Agreement, including advancement of expenses as they are incurred.
j.
Further Assurances. Each party shall do and perform, or cause to
be done and performed, all such further acts and things, and shall execute and
deliver all such other agreements, certificates, instruments and documents, as
the other party may reasonably request in order to carry out the intent and
accomplish the purposes of this Agreement and the consummation of the
transactions contemplated hereby.
k.
No Strict Construction. The language used in this Agreement will be
deemed to be the language chosen by the parties to express their mutual intent,
and no rules of strict construction will be applied against any party.
Remedies. The Company acknowledges that a breach by it
of its obligations hereunder will cause irreparable harm to the Buyer by
vitiating the intent and purpose of the transaction contemplated hereby.
Accordingly, the Company acknowledges that the remedy at law for a breach of
its obligations under this Agreement will be inadequate and agrees, in the
event of a breach or threatened breach by the Company of the provisions of this
Agreement, that the Buyer shall be entitled, in addition to all other available
remedies at law or in equity, and in addition to the penalties assessable
herein, to an injunction or injunctions restraining, preventing or curing any
breach of this Agreement and to enforce specifically the terms and provisions
hereof, without the necessity of showing economic loss and without any bond or
other security being required.
IN WITNESS WHEREOF, the
undersigned Buyer and the Company have caused this Agreement to be duly
executed as of the date first above written.
Homeland Resources Ltd.
By: |
/s/ David St. James |
|
________________________________ |
|
David
St. James |
|
Treasurer
and Secretary |
LG CAPITAL FUNDING,
LLC.
By: |
/s/ Joseph Lerman |
|
________________________________ |
Name: |
Joseph Lerman |
Title: |
Manager |
AGGREGATE SUBSCRIPTION AMOUNT:
Aggregate Principal
Amount of Note: |
$25,000.00 |
Aggregate Purchase Price:
Note 1: $25,000.00 less $1,500.00 in legal fees
EXHIBIT A
144 NOTE - $25,000
THIS NOTE AND THE COMMON
STOCK ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN AND WILL NOT BE
REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE
SECURITIES COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION
PROVIDED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT”)
US $25,000.00
HOMELAND RESOURCES LTD.
8% CONVERTIBLE REDEEMABLE NOTE
DUE DECEMBER 23, 2015
FOR VALUE RECEIVED, Homeland
Resources Ltd. (the “Company”) promises to pay to the order of LG CAPITAL
FUNDING, LLC and its authorized successors and permitted assigns ("Holder"),
the aggregate principal face amount of Twenty Five Thousand Dollars exactly
(U.S. $25,000.00) on December 23, 2015 ("Maturity Date") and
to pay interest on the principal amount outstanding hereunder at the rate of 8%
per annum commencing on December 23, 2014. The interest will be paid to the
Holder in whose name this Note is registered on the records of the Company
regarding registration and transfers of this Note. The principal of, and
interest on, this Note are payable at 1218 Union Street, Suite #2, Brooklyn, NY
11225, initially, and if changed, last appearing on the records of the Company
as designated in writing by the Holder hereof from time to time. The Company
will pay each interest payment and the outstanding principal due upon this Note
before or on the Maturity Date, less any amounts required by law to be deducted
or withheld, to the Holder of this Note by check or wire transfer addressed to
such Holder at the last address appearing on the records of the Company. The
forwarding of such check or wire transfer shall constitute a payment of
outstanding principal hereunder and shall satisfy and discharge the liability
for principal on this Note to the extent of the sum represented by such check
or wire transfer. Interest shall be payable in Common Stock (as defined below)
pursuant to paragraph 4(b) herein.
This Note
is subject to the following additional provisions:
1. This
Note is exchangeable for an equal aggregate principal amount of Notes of
different authorized denominations, as requested by the Holder surrendering the
same. No service charge will be made for such registration or transfer or
exchange, except that Holder shall pay any tax or other governmental charges
payable in connection therewith.
2. The
Company shall be entitled to withhold from all payments any amounts required to
be withheld under applicable laws.
3. This
Note may be transferred or exchanged only in compliance with the Securities Act
of 1933, as amended ("Act") and applicable state securities
laws. Any attempted transfer to a non-qualifying party shall be treated by the
Company as void. Prior to due presentment for transfer of this Note, the
Company and any agent of the Company may treat the person in whose name this
Note is duly registered on the Company's records as the owner hereof for all
other purposes, whether or not this Note be overdue, and neither the Company
nor any such agent shall be affected or bound by notice to the contrary. Any
Holder of this Note electing to exercise the right of conversion set forth in
Section 4(a) hereof, in addition to the requirements set forth in Section 4(a),
and any prospective transferee of this Note, also is required to give the
Company written confirmation that this Note is being converted ("Notice
of Conversion") in the form annexed hereto as Exhibit A. The
date of receipt (including receipt by telecopy) of such Notice of Conversion
shall be the Conversion Date.
4. (a) The
Holder of this Note is entitled, at its option, at any time after 180 days, to
convert all or any amount of the principal face amount of this Note then
outstanding into shares of the Company's common stock (the "Common
Stock") without restrictive legend of any nature, at a price ("Conversion
Price") for each share of Common Stock equal to 61% of the lowest
closing bid price of the Common Stock as reported on the National
Quotations Bureau OTCQB or OTC Pink exchange which the Company’s shares are
traded or any exchange upon which the Common Stock may be traded in the future
("Exchange"), for the five prior trading
days including the day upon which a Notice of Conversion is received by the
Company (provided such Notice of Conversion is delivered by fax or other
electronic method of communication to the Company after 4 P.M. Eastern Standard
or Daylight Savings Time if the Holder wishes to include the same day closing
price). If the shares have not been delivered within 3 business days, the
Notice of Conversion may be rescinded. Such conversion shall be effectuated by
the Company delivering the shares of Common Stock to the Holder within 3
business days of receipt by the Company of the Notice of Conversion. Once the
Holder has received such shares of Common Stock, the Holder shall surrender
this Note to the Company, executed by the Holder evidencing such Holder's
intention to convert this Note or a specified portion hereof, and accompanied
by proper assignment hereof in blank. Accrued, but unpaid interest shall be
subject to conversion. No fractional shares or scrip representing fractions of
shares will be issued on conversion, but the number of shares issuable shall be
rounded to the nearest whole share. In the event the Company experiences a
DTC “Chill” on its shares, the conversion price shall be decreased to 51%
instead of 61% while that “Chill” is in effect. In no event shall the
Holder be allowed to effect a conversion if such conversion, along with all
other shares of Company Common Stock beneficially owned by the Holder and its
affiliates would exceed 9.9% of the outstanding shares of the Common Stock of
the Company.
(b) Interest
on any unpaid principal balance of this Note shall be paid at the rate of 8%
per annum. Interest shall be paid by the Company in Common Stock
("Interest Shares"). Holder may, at any time, send in a Notice of
Conversion to the Company for Interest Shares based on the formula provided in
Section 4(a) above. The dollar amount converted into Interest Shares shall be
all or a portion of the accrued interest calculated on the unpaid principal
balance of this Note to the date of such notice.
(c) The Notes may be
prepaid with the following penalties:
PREPAY DATE
|
PREPAY AMOUNT
|
< 30 days
|
115% of principal plus accrued
interest
|
31- 60 days
|
121% of principal plus accrued
interest
|
61-90 days
|
127% of principal plus accrued
interest
|
91-120 days
|
133% of principal plus accrued
interest
|
121-150 days
|
139% of principal plus accrued
interest
|
151-180 days
|
145% of principal plus accrued
interest
|
This Note may not be prepaid
after the 180th day.
Such redemption must be closed and funded within 3 days of giving notice of
redemption of the right to redeem shall be null and void.
(d) Upon
(i) a transfer of all or substantially all of the assets of the Company to any
person in a single transaction or series of related transactions, (ii) a
reclassification, capital reorganization or other change or exchange of
outstanding shares of the Common Stock, other than a forward or reverse stock
split or stock dividend, or (iii) any consolidation or merger of the Company
with or into another person or entity in which the Company is not the surviving
entity (other than a merger which is effected solely to change the jurisdiction
of incorporation of the Company and results in a reclassification, conversion
or exchange of outstanding shares of Common Stock solely into shares of Common
Stock) (each of items (i), (ii) and (iii) being referred to as a "Sale
Event"), then, in each case, the Company shall, upon request of the
Holder, redeem this Note in cash for 150% of the principal amount, plus accrued
but unpaid interest through the date of redemption, or at the election of the
Holder, such Holder may convert the unpaid principal amount of this Note
(together with the amount of accrued but unpaid interest) into shares of Common
Stock immediately prior to such Sale Event at the Conversion Price.
(e) In
case of any Sale Event (not to include a sale of all or substantially all of
the Company’s assets) in connection with which this Note is not redeemed or
converted, the Company shall cause effective provision to be made so that the
Holder of this Note shall have the right thereafter, by converting this Note,
to purchase or convert this Note into the kind and number of shares of stock or
other securities or property (including cash) receivable upon such
reclassification, capital reorganization or other change, consolidation or
merger by a holder of the number of shares of Common Stock that could have been
purchased upon exercise of the Note and at the same Conversion Price, as
defined in this Note, immediately prior to such Sale Event. The foregoing
provisions shall similarly apply to successive Sale Events. If the consideration
received by the holders of Common Stock is other than cash, the value shall be
as determined by the Board of Directors of the Company or successor person or
entity acting in good faith.
5. No
provision of this Note shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, and interest on,
this Note at the time, place, and rate, and in the form, herein prescribed.
6. The
Company hereby expressly waives demand and presentment for payment, notice of
non-payment, protest, notice of protest, notice of dishonor, notice of
acceleration or intent to accelerate, and diligence in taking any action to
collect amounts called for hereunder and shall be directly and primarily liable
for the payment of all sums owing and to be owing hereto.
7. The
Company agrees to pay all costs and expenses, including reasonable attorneys'
fees and expenses, which may be incurred by the Holder in collecting any amount
due under this Note.
8. If
one or more of the following described "Events of Default" shall
occur:
(a) The
Company shall default in the payment of principal or interest on this Note or
any other note issued to the Holder by the Company; or
(b) Any
of the representations or warranties made by the Company herein or in any
certificate or financial or other written statements heretofore or hereafter
furnished by or on behalf of the Company in connection with the execution and
delivery of this Note, or the Securities Purchase Agreement under which this
note was issued shall be false or misleading in any respect; or
(c) The
Company shall fail to perform or observe, in any respect, any covenant, term,
provision, condition, agreement or obligation of the Company under this Note or
any other note issued to the Holder; or
(d) The
Company shall (1) become insolvent; (2) admit in writing its inability to pay
its debts generally as they mature; (3) make an assignment for the benefit of
creditors or commence proceedings for its dissolution; (4) apply for or consent
to the appointment of a trustee, liquidator or receiver for its or for a
substantial part of its property or business; (5) file a petition for
bankruptcy relief, consent to the filing of such petition or have filed against
it an involuntary petition for bankruptcy relief, all under federal or state
laws as applicable; or
(e) A
trustee, liquidator or receiver shall be appointed for the Company or for a
substantial part of its property or business without its consent and shall not
be discharged within sixty (60) days after such appointment; or
(f) Any
governmental agency or any court of competent jurisdiction at the instance of
any governmental agency shall assume custody or control of the whole or any
substantial portion of the properties or assets of the Company; or
(g) One
or more money judgments, writs or warrants of attachment, or similar process,
in excess of fifty thousand dollars ($50,000) in the aggregate, shall be
entered or filed against the Company or any of its properties or other assets
and shall remain unpaid, unvacated, unbonded or unstayed for a period of
fifteen (15) days or in any event later than five (5) days prior to the date of
any proposed sale thereunder; or
(h) The
Company shall have defaulted on or breached any term of any other note of
similar debt instrument into which the Company has entered and failed to cure
such default within the appropriate grace period; or
(i) The
Company shall have its Common Stock delisted from an exchange (including the
OTC Pink exchange) or, if the Common Stock trades on an exchange, then trading
in the Common Stock shall be suspended for more than 10 consecutive days;
(j) If
a majority of the members of the Board of Directors of the Company on the date
hereof are no longer serving as members of the Board;
(k) The
Company shall not deliver to the Holder the Common Stock pursuant to paragraph
4 herein without restrictive legend within 3 business days of its receipt of a
Notice of Conversion; or
(l) The
Company shall not replenish the reserve set forth in Section 12, within 3
business days of the request of the Holder.
(m) The
Company shall not be “current” in its filings with the Securities and Exchange
Commission; or
(n) The
Company shall lose the “bid” price for its stock in a market (including the
OTCQB or OTC Pink marketplace or other exchange).
Then, or at any time thereafter,
unless cured within 5 days, and in each and every such case, unless such Event
of Default shall have been waived in writing by the Holder (which waiver shall
not be deemed to be a waiver of any subsequent default) at the option of the
Holder and in the Holder's sole discretion, the Holder may consider this Note
immediately due and payable, without presentment, demand, protest or (further)
notice of any kind (other than notice of acceleration), all of which are hereby
expressly waived, anything herein or in any note or other instruments contained
to the contrary notwithstanding, and the Holder may immediately, and without
expiration of any period of grace, enforce any and all of the Holder's rights
and remedies provided herein or any other rights or remedies afforded by law.
Upon an Event of Default, interest shall accrue at a default interest rate of
24% per annum or, if such rate is usurious or not permitted by current law,
then at the highest rate of interest permitted by law. In the event of a
breach of Section 8(k) the penalty shall be $250 per day the shares are not
issued beginning on the 4th day after the conversion notice was
delivered to the Company. This penalty shall increase to $500 per day
beginning on the 10th day. The penalty for a breach of Section 8(n)
shall be an increase of the outstanding principal amounts by 20%. In case of a
breach of Section 8(i), the outstanding principal due under this Note shall
increase by 50%. If this Note is not paid at maturity, the outstanding principal
due under this Note shall increase by 10%.
If the Holder shall
commence an action or proceeding to enforce any provisions of this Note, including,
without limitation, engaging an attorney, then if the Holder prevails in such
action, the Holder shall be reimbursed by the Company for its attorneys’ fees
and other costs and expenses incurred in the investigation, preparation and
prosecution of such action or proceeding.
Make-Whole
for Failure to Deliver Loss. At the Holder’s election, if the Company fails
for any reason to deliver to the Holder the conversion shares by the by the 3rd
business day following the delivery of a Notice of Conversion to the Company
and if the Holder incurs a Failure to Deliver Loss, then at any time the Holder
may provide the Company written notice indicating the amounts payable to the
Holder in respect of the Failure to Deliver Loss and the Company must make the
Holder whole as follows:
Failure to Deliver Loss = [(High
trade price at any time on or after the day of exercise) x (Number of conversion
shares)]
The Company must pay the Failure
to Deliver Loss by cash payment, and any such cash payment must be made by the
third business day from the time of the Holder’s written notice to the Company.
9. In
case any provision of this Note is held by a court of competent jurisdiction to
be excessive in scope or otherwise invalid or unenforceable, such provision
shall be adjusted rather than voided, if possible, so that it is enforceable to
the maximum extent possible, and the validity and enforceability of the
remaining provisions of this Note will not in any way be affected or impaired
thereby.
10. Neither
this Note nor any term hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the Company and the Holder.
11. The
Company represents that it is not a “shell” issuer and has never been a “shell”
issuer or that if it previously has been a “shell” issuer that at least 12
months have passed since the Company has reported form 10 type information
indicating it is no longer a “shell issuer. Further. The Company will instruct
its counsel to either (i) write a 144- 3(a)(9) opinion to allow for salability
of the conversion shares or (ii) accept such opinion from Holder’s counsel.
12. The Company shall issue
irrevocable transfer agent instructions reserving 520,830 shares of its Common
Stock for conversions under this Note (the “Share Reserve”). The reserve shall
be replenished as needed to allow for conversions of this Note. Upon full
conversion of this Note, any shares remaining in the Share Reserve shall be cancelled.
The Company shall pay all costs associated with issuing and delivering the
shares. The
company should at all times reserve a minimum of four times the amount of
shares required if the note would be fully converted. The Holder may
reasonably request increases from time to time to reserve such amounts.
13. The
Company will give the Holder direct notice of any corporate actions, including
but not limited to name changes, stock splits, recapitalizations etc. This
notice shall be given to the Holder as soon as possible under law.
14. This
Note shall be governed by and construed in accordance with the laws of New York
applicable to contracts made and wholly to be performed within the State of New
York and shall be binding upon the successors and assigns of each party
hereto. The Holder and the Company hereby mutually waive trial by jury and
consent to exclusive jurisdiction and venue in the courts of the State of New
York. This Agreement may be executed in counterparts, and the facsimile
transmission of an executed counterpart to this Agreement shall be effective as
an original.
IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by an
officer thereunto duly authorized.
Dated:
December 23, 2014
|
HOMELAND
RESOURCES LTD. |
|
|
|
By: |
/s/ David St. James |
|
|
|
|
|
David St. James |
|
|
|
|
Title: |
Treasurer and Secretary |
|
|
|
EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the
Registered Holder in order to Convert the Note)
The
undersigned hereby irrevocably elects to convert $___________ of the above Note
into _________ Shares of Common Stock of Homeland Resources Ltd. (“Shares”) according
to the conditions set forth in such Note, as of the date written below.
If Shares
are to be issued in the name of a person other than the undersigned, the
undersigned will pay all transfer and other taxes and charges payable with
respect thereto.
Date
of Conversion:
Applicable
Conversion Price:
Signature:
[Print
Name of Holder and Title of Signer]
Address:
SSN
or EIN:
Shares
are to be registered in the following name:
Name:
Address:
Tel:
Fax:
SSN
or EIN:
Shares
are to be sent or delivered to the following account:
Account
Name:
Address:
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