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EXHIBIT A
CONVERTIBLE PROMISSORY NOTE
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS
CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE 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 TIIE HOLDER),
IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR (11) UNLESS SOLD PURSUANT TO RULE 144 OR RULE
144A UNDER SAID ACT. NOTWITHSTANDINGTHEFOREGOING,THESECURITIES
MAYBE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR
OTHER LOAN OR FINANCINGARRANGEMENTSECURED BYTHE SECURITIES.
Issue Date: January __, 2015
Principal Amount: $77,778.00
Original Issue Discount: 10%
Interest Rate: 6% per annum
Maturity Date: January __, 2016
CONVERTIBLE PROMISSORY NOTE
FOR VALUE RECEIVED, MineralRite Corporation, a Nevada corporation (hereinafter called the
"Borrower"), hereby promises to pay to the order of River North Equity Inc., an Illinois
corporation, or its registered assigns (the "Holder") the sum of $77,778.00 together with any
interest as set forth herein, on January __, 2016 (the "Maturity Date"), and to pay interest on the
unpaid principal balance hereof at the rate of six percent (6%) per annum (the "Interest Rate")
from the date hereof (the "Issue Date") until the same becomes due and payable, whether at the
Maturity Date or upon acceleration or by prepayment or otherwise. This Note may not be prepaid
in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or
interest on this Note, which is not paid when due, shall bear interest at the rate of sixteen percent
(16%) per annum from the due date thereof until the same is paid ("Default Interest") and shall
be subject to a partial penalty at the rate of five percent (5%) on the outstanding principal and
accrued interest under this Note ("Partial Penalty Payment"). Interest shall commence accruing
on the date that the Note is fully paid by the Holder and shall be computed on the basis of a 365-
day year and the actual number of days elapsed. All payments due hereunder (to the extent not
converted into common stock, $0.001 par value per share (the "Common Stock")) in accordance
with the terms hereof shall be made in lawful money of the United States of America. All
payments shall be made at such address, as Holder shall hereafter give to Borrower by written
notice made in accordance with the provisions of this Note.Whenever any amount expressed to be
due by the terms of this Note is due on any day which is not a business day, the same shall instead
Borrower _______________
Holder _______________
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be due on the next succeeding day which is a business day and in the case of any interest payment
date which is not the date on which this Note is paid in full, the extension of the due date thereof
shall not be taken into account for purposes of determining the amount of interest due on such
date. As used in this Note, the term "business day" shall mean any day other than a Saturday,
Sunday or a day on which commercial banks in the city of New York, New York are authorized
or required by law or executive order to remain closed. Each capitalized term used herein, and
not otherwise defined, shall have the meaning ascribed thereto in that certain Convertible Note
Purchase Agreement dated the date hereof, by and between Borrower and Holder, pursuant to
which this Note was originally issued (the "Purchase Agreement").
This Note is 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 Borrower and
will not impose personal liabilityupon Holder thereof.
The following terms shall applyto this Note:
ARTICLEI.CONVERSIONRIGHTS
1.1 Conversion Right. 180 days after the Issue Date and until this Note is no longer outstanding,
this Note shall be convertible, in whole or in part, into shares of Common Stock (as such
Common Stock exists on the Issue Date, or any shares of capital stock or other securities of
Borrower into which such Common Stock shall hereafter be changed or reclassified) at the
option of the Holder, at any time and from time to time, at the conversion price (the
"Conversion Price") determined as provided herein (a "Conversion"); provided,
however, that in no event shall Holder be entitled to convert any portion of this Note in
excess of that portion of this Note upon conversion of which the sum of (1) the number of
shares of Common Stock beneficially owned by Holder and its affiliates (other than shares of
Common Stock which may be deemed beneficially owned through the ownership of the
unconverted portion of the Notes or the un-exercised or unconverted portion or any other
security of Borrower subject to a limitation on conversion or exercise analogous to the
limitations contained herein) and (2) the number of shares of Common Stock issuable upon
the conversion of the portion of this Note with respect to which the determination of this
proviso is being made, would result in beneficial ownership by Holder and its affiliates of
more than 9.99% of the outstanding shares of Common Stock. For purposes of the proviso to
the immediately preceding sentence, beneficial ownership shall be determined in accordance
with Section 13(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and Regulations 13D thereunder, except as otherwise provided in clause (1) of
such proviso, provided, further, however that the limitations on conversion may be waived
by Holder upon, at the election of Holder, not less than 61 days' prior notice to Borrower, and
the provisions of the conversion limitation shall continue to apply until such 61st day (or such
later date, as determined by Holder, as may be specified in such notice of waiver). Should
Borrower fail to eliminate any prohibitions under applicable law or the rules or regulations of
any stock exchange, inter-dealer quotation system or other self-regulatory organization with
jurisdiction over Borrower or any of its securities on Borrower's ability to issue shares of
Common Stock, in lieu of any right to convert thisNote as described in this Section 1.1,this will be
consideredan Event ofDefault underSection 3.2 oftheNote.
Borrower _______________
Holder _______________
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The number of shares of Common Stock to be issued upon each conversion of this Note shall
be determined by dividing the Conversion Amount (as defined below) by the applicable
Conversion Price then in effect on the date specified in the notice of conversion, in the form
attached hereto as Exhibit C (the "Conversion Notice"), delivered to Borrower by Holder in
accordance with Section 1.4 below; provided that the Conversion Notice is submitted by
facsimile or e-mail (or by other means resulting in, or reasonably expected to result in,
notice) to Borrower before 6:00 pm New York, New York time on such conversion date (the
"Conversion Date"). The term “Conversion Amount" means, with respect to any conversion
of this Note, the sum of (1) the principal amount of this Note to be converted in such
conversion plus (2) at Borrower's option, accrued and unpaid interest, if any, on such principal
amount at the interest rates provided in this Note to the Conversion Date, plus (3) at
Borrower's option, Default Interest and Partial Penalty Payment, if any, on the amounts
referred to in the immediately preceding clauses (1) and/or (2) plus (3) at Holder's option, any
amounts owed to Holder pursuant to Sections 1.3 and 1.4(g) hereof.
1.2 Conversion Price
1.2(a) Calculation of Conversion Price: The Conversion Price shall equal
the Variable Conversion Price (as defined herein) (subject to equitable adjustments for
stock splits, stock dividends or rights offerings by Borrower relating to Borrower's
securities or the securities of any subsidiary of Borrower, combinations,
recapitalization, reclassifications, extraordinary distributions and similar events). As used
in thisAgreement, the "Variable Conversion Price" shall mean 50% multiplied by the
Formula Price (representing a discount rate of 50%). The term "Formula Price"
means the lower of: (i) the Market Price (as defined herein); and (ii) the closing bid price
on the Conversion Date, subject to adjustment for reverse and forward stock splits, stock
dividends, stock combinations and other similar transactions of the Common Stock that
occur after the date hereof. “Market Price” means the average Trading Price of the
Common Stock during the 10 Trading Days immediately preceding the Conversion Date.
"Trading Price" means, for any security as of any date, the closing bid price on the
OTC Pink, or other applicable Trading Market (as such term is defined in the
Convertible Note Purchase Agreement dated January __, 2015 pursuant to which this
Note is issued (the "Purchase Agreement")), as reported by a reliable reporting service
designated by Holder (e.g. Bloomberg LP), or if no closing bid price of such security is
available in any of the foregoing manners, the average of the closing bid prices of any
market makers for such security that are listed on the OTC Markets. If the Trading
Price cannot be calculated for such security on such date in the manner provided above,
the Trading Price shall be the fair market value as mutually determined by Borrower and
Holders of a majority in interest of the Notes being converted for which the calculation
of the Trading Price is required in order to determine the Conversion Price of such
Notes. "Trading Day" shall mean any day on which the Common Stock is tradable
for any period on the OTC Pink, or any other Trading Market on which the Common
Stock is then being traded.
1.2(b)
Conversion Price During Major Announcements: Notwithstanding
Borrower _______________
Holder _______________
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anything contained in Section 1.2(a) to the contrary, in the event Borrower (i) makes a
public announcement that it intends to consolidate or merge with any other corporation
(other than a merger in which Borrower is the surviving or continuing corporation and its
capital stock is unchanged) or sell or transfer all or substantially all of the assets of
Borrower or (ii) any person, group or entity (including Borrower) publicly announces a
tender offer to purchase 50% or more of Borrower's Common Stock (or any other takeover
scheme) (the date of the announcement referred to in clause (i) or (ii) is hereinafter
referred to as the "Announcement Date"), then the Conversion Price shall, effective
upon the Announcement Date and continuing through the Adjusted Conversion Price
Termination Date (as defined below), be equal to the lower of (x) the Conversion Price
which would have been applicable for a Conversion occurring on theAnnouncement Date
and (y) the Conversion Price that would otherwise be in effect. From and after the
Adjusted Conversion Price Termination Date, the Conversion Price shall be determined
as set forth in this Section 1.2(b). For purposes hereof, "Adjusted Conversion Price
Termination Date" shall mean, with respect to any proposed transaction or tender
offer (or takeover scheme) for which a public announcement as contemplated by this
Section 1.2(b) has been made, the date upon which Borrower (in the case of clause (i)
above) or the person, group or entity (in the case of clause (ii) above) consummates or
publicly announces the termination or abandonment of the proposed transaction or
tender offer or takeover scheme) which caused this Section 1.2(b) to become operative.
1.3 Authorized Shares. Borrower covenants that during the period the conversion right
exists, Borrower will reserve from its authorized and unissued Common Stock a sufficient
number of shares, free from preemptive rights, to provide for the issuance of Common Stock for
the entire principal amount of this Note, plus all accrued and unpaid interest thereon, plus any
liquidated damages as per Section 1.4(g) below (the "Reserved Amount"). Borrower
represents that upon issuance, such shares will be duly and validly issued, fully paid and non-
assessable. In addition, if Borrower shall issue any securities or make any change to its
capital structure which would change the number of shares of Common Stock into which the
Notes shall be convertible at the then current Conversion Price, Borrower shall at the same time
make proper provision so that thereafter there shall be a sufficient number of shares of
Common Stock authorized and reserved, free from preemptive rights, for conversion of the
outstanding Notes. Borrower (i) acknowledges that it has irrevocably instructed its transfer
agent to issue certificates for the Common Stock issuable upon conversion of this Note, and (ii)
agrees that its issuance of this Note shall constitute full authority to its officers and agents who
are charged with the duty of executing stock certificates to execute and issue the necessary
certificates for shares of Common Stock in accordance with the terms and conditions of this
Note. If, at any time Borrower does not maintain the ReservedAmount it will be considered an
Event of Default under Section 3.2 of the Note.
1.4 Method of Conversion.
(a) Mechanics of Conversion. Subject to Section 1.1, this Note may be converted by Holder
in whole or in part at any time from time to time after the Issue Date, by (a) submitting to
Borrower a Conversion Notice by facsimile (with receipt confirmation from recipient), e-
mail or other reasonable means of communication dispatched on the Conversion Date
Borrower _______________
Holder _______________
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prior to 6:00 p.m., Eastern Standard Time and (b) subject to Section 1.4(b), surrendering
this Note at the principal office of Borrower.
(b) Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth
herein, upon conversion of this Note in accordance with the terms hereof, Holder shall not be
required to physically surrender this Note to Borrower unless the entire unpaid principal
amount of this Note is so converted. Holder and Borrower shall maintain records showing
the principal amount so converted and the dates of such conversions or shall use such other
method, reasonably satisfactory to Holder and Borrower, so as not to require physical
surrender of this Note upon each such conversion. in the event of any dispute or discrepancy,
such records of Borrower shall, prima-facie, be controlling and determinative in the absence
of manifest error. Notwithstanding the foregoing, if any portion of this Note is converted as
aforesaid, Holder may not transfer this Note unless Holder first physically surrenders this
Note to Borrower, whereupon Borrower will forthwith issue and deliver upon the order of
Holder a new Note of like tenor, registered to Holder (upon payment by Holder of any
applicable transfer taxes) representing in the aggregate the remaining unpaid principal
amount of this Note. Holder and any assignee who is an "accredited investor" as defined
under Rule 501(a), by acceptance of this Note, acknowledge and agree that, by reason of the
provisions of this paragraph, following conversion of a portion of this Note, the unpaid and
unconverted principal amount of this Note represented by this Note may be less than the
amount stated on the facehereof.
(c) Payment of Taxes. Borrower shall not be required to pay any tax which may be payable in
respect of any transfer involved in the issue and delivery of shares of Common Stock or
other securities or property on conversion of this Note in a name other than that of Holder
(or in street name), and Borrower shall not be required to issue or deliver any such shares or
other securities or property unless and until the person or persons (other than Holder or the
custodian in whose street name such shares are to be held for Holder's account) requesting
the issuance thereof shall have paid to Borrower the amount of any such tax or shall have
established to the satisfaction of Borrower that such tax has been paid.
(d) Delivery of Common Stock upon Conversion. Upon receipt by Borrower from Holder of a
facsimile transmission (with receipt confirmation from recipient) or e-mail (or other
reasonable means of communication) of a Conversion Notice meeting the requirements for
conversion as provided in this Section 1.4, Borrower shall issue and deliver or cause to be
issued and delivered to or upon the order of Holder certificates for the Common Stock
issuable upon such conversion within two (2) business days after such receipt (but in no
event later than the fourth (4th) business day being hereinafter referred to as the
"Deadline") (and, solely in the case of conversion of the entire unpaid principal amount
hereof, surrender of this Note) in accordance with the terms hereof and the Purchase
Agreement.
(e) Obligation of Borrower to Deliver Common Stock. Upon receipt by Borrower of a
Conversion Notice, Holder shall be deemed to be Holder of record of the Common Stock
issuable upon such conversion, the outstanding principal amount and the amount of
accrued and unpaid interest on this Note shall be reduced to reflect such conversion, and,
Borrower _______________
Holder _______________
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unless Borrower defaults on its obligations under thisArticle I, all rights with respect to the
portion of this Note being so converted shall forthwith terminate except the right to receive
the Common Stock or other securities, cash or other assets, as herein provided, on such
conversion. If Holder shall have given a Conversion Notice as provided herein,
Borrower's obligation to issue and deliver the certificates for Common Stock shall be
absolute and unconditional, irrespective of the absence of any action by Holder to
enforce the same, any waiver or consent with respect to any provision thereof, the
recovery of any judgment against any person or any action to enforce the same, any
failure or delay in the enforcement of any other obligation of Borrower to Holder of
record, or any setoff; counterclaim, recoupment, limitation or termination, or any
breach or alleged breach by Holder of any obligation to Borrower, and irrespective of
any other circumstance which might otherwise hint such obligation of Borrower to
Holder in connection with such conversion. The Conversion Date specified in the
Conversion Notice shall be the Conversion Date so long as the Conversion Notice is
received by Borrower before 6:00 p.m., Eastern Standard Time, on such date.
(f) Delivery of Common Stock by Electronic Transfer. In lieu of delivering physical
certificates representing the Common Stock issuable upon conversion, provided
Borrower is participating in the Depository Trust Company ("DTC") Fast
Automated Securities Transfer ("FAST") program, upon request of Holder,
Borrower shall use its best efforts to cause its transfer agent to electronically transmit the
Common Stock issuable upon conversion to Holder by crediting the account of Holder's
Prime Broker with DTC through its Deposit Withdrawal Agent Commission ("DWAC")
system.
(g) Failure to Deliver Common Stock Prior to Deadline; Partial Liquidated Damages.
Without in any way limiting Holder's right to pursue other remedies, including actual
damages and/or equitable relief, the parties agree that if delivery of the Common Stock
issuable upon conversion of this Note is not delivered by the Deadline, Borrower shall
pay to Holder $500 per day in cash, for each day beyond the Deadline that Borrower
fails to deliver such Common Stock. Such cash amount shall be paid to Holder on the
business day immediately following delivery of the Common Stock or, at the option of
Holder (by written notice to Borrower), shall be added to the principal amount of this
Note, in which event interest shall accrue thereon in accordance with the terms of this
Note and such additional principal amount shall be convertible into Common Stock in
accordance with the terms of this Note. Borrower agrees that the right to convert is a
valuable right to Holder. The damages resulting from a failure, attempt to frustrate or
interference with such conversion right are difficult if not impossible to qualify.
Accordingly, the parties acknowledge that the partial liquidated damages provision
contained in this Section 1.4(g) are justified.
1.5 Concerning the Shares. Buyer understands that the Note, and until such time as the
Conversion Shares have become eligible for transfer pursuant to any of the alternatives
specified in Section 2(f) of the Purchase Agreement, the Conversion Shares may bear a
restrictive legend in substantially the following form:
Borrower _______________
Holder _______________
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"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
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 from a Security which satisfied any of the
alternatives specified in Section 2(f) of the Purchase Agreement and Company shall
cause its Transfer Agent to issue a certificate(s) without such legend upon request by its
holder. In the absence of a registration statement covering the Security, such holder shall
provide an opinion of counsel, to the effect that a public sale or transfer of such Security
may be made without registration under the 1933 Act. In the event that Company does
not accept the opinion of counsel provided by Buyer by the Deadline, it will be
considered an Event of Default pursuant to Section 3.2 of the Note.
1.6 Effect of Certain Events.
(a) Effect of Merger, Consolidation, Etc. At the option of Holder, the sale, conveyance or
disposition of all or substantially all of the assets of Borrower, the effectuation by
Borrower of a transaction or series of related transactions in which more than 50% of the
voting power of Borrower is disposed of, or the consolidation, merger or other business
combination of Borrower with or into any other Person (as defined below) or Persons
when Borrower is not the survivor shall either: (i) be deemed to be an Event of Default
(as defined in Article III) pursuant to which Borrower shall be required to pay to Holder
upon the consummation of and as a condition to such transaction an amount equal to the
Default Amount (as defined in Article III) or (ii) be treated pursuant to Section 1.6(b)
hereof. "Person" shall mean any individual, corporation, limited liability company,
partnership, association, trust or other entity or organization
(b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this Note is issued
and outstanding and prior to conversion of all of the Notes, there shall be any merger,
consolidation, exchange of shares, recapitalization, reorganization, or other similar
event, as a result of which shares of Common Stock of Borrower shall be changed into
the same or a different number of shares of another class or classes of stock or securities
Borrower _______________
Holder _______________
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of Borrower or another entity, or in case of any sale or conveyance of all or substantially
all of the assets of Borrower other than in connection with a plan of complete
liquidation of Borrower, then Holder of this Note shall thereafter have the right to
receive upon conversion of this Note, upon the basis and upon the terms and conditions
specified herein and in lieu of the shares of Common Stock immediately theretofore
issuable upon conversion, such stock, securities or assets which Holder would have been
entitled to receive in such transaction had this Note been converted in full immediately
prior to such transaction (without regard to any limitations on conversion set forth
herein), and in any such case appropriate provisions shall be made with respect to the
rights and interests of Holder of this Note to the end that the provisions hereof
(including, without limitation, provisions for adjustment of the Conversion Price and of
the number of shares issuable upon conversion of the Note) shall thereafter be
applicable, as nearly as may be practicable in relation to any securities or assets
thereafter deliverable upon the conversion hereof. Borrower shall not affect any
transaction described in this Section 1.6(b) unless (a) it first gives, to the extent
practicable, thirty (30) days prior written notice (but in any event at least fifteen (15)
days prior written notice) of the record date of the special meeting of shareholders to
approve, or if there is no such record date, the consummation of, such merger,
consolidation, exchange of shares, recapitalization, reorganization or other similar
event or sale of assets (during which time Holder shall be entitled to convert this Note)
and (b) the resulting successor or acquiring entity (if not Borrower) assumes by written
instrument the obligations of this Section 1.6(b). The above provisions shall similarly
apply to successive consolidations, mergers, sales, transfers or share exchanges.
(c) Adjustment due to Distribution. If Borrower shall declare or make any distribution of its
assets (or rights to acquire its assets) to holders of Common Stock as a dividend, stock
repurchase, by way of return of capital or otherwise (including any dividend or distribution to
Borrower's shareholders in cash or shares (or rights to acquire shares) of capital stock of a
subsidiary (i.e., a spin-off)) (a "Distribution"), then Holder of this Note shall be entitled,
upon anyconversion of this Note after the date of record for determining shareholders entitled
to such Distribution, to receive the amount of such assets which would have been payable to
Holder with respect to the shares of Common Stock issuable upon such conversion had such
Holder been Holder of such shares of Common Stock on the record date for the determination
ofshareholdersentitledtosuchDistribution.
(d) Adjustment due to Dilutive Issuance. If, at any time when any Notes are issued and
outstanding, Borrower issues or sells more than 5% of its then outstanding common shares, or
in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any shares of
Common Stock for no consideration or for a consideration per share (before deduction of
reasonable expenses or commissions or underwriting discounts or allowances in connection
therewith) less than the Conversion Price in effect on the date of such issuance (or deemed
issuance) of such shares of Common Stock (a "Dilutive Issuance"), then immediately, upon
the Dilutive Issuance, the Conversion Price will be reduced to the amount of the
consideration per share received by Borrower in such Dilutive Issuance. Borrower shall be
deemed to have issued or sold shares of Common Stock if Borrower in any manner issues or
grants any warrants, rights or options (not including employee stock option plans), whether
Borrower _______________
Holder _______________
Page 9 of 21
or not immediately exercisable, to subscribe for or to purchase Common Stock or other
securities convertible into or exchangeable for Common Stock ("Convertible Securities")
(such warrants, rights and options to purchase Common Stock or Convertible Securities are
hereinafter referred to as "Options") and the price per share for which Common Stock is
issuable upon the exercise of such Options is less than the Conversion Price then in effect,
then the Conversion Price shall be equal to such price per share. For purposes of the
preceding sentence, the "price per share for which Common Stock is issuable upon the
exercise of such Options" is determined by dividing (i) the total amount, if any, received or
receivable by Borrower as consideration for the issuance or granting of all such Options, plus
the minimum aggregate amount of additional consideration, if any, payable to Borrower upon
the exercise of all such Options, plus, in the case of Convertible Securities issuable upon the
exercise of such Options, the minimum aggregate amount of additional consideration
payable upon the conversion or exchange thereof at the time such Convertible Securities first
become convertible or exchangeable, by(ii) the maximum total number of shares of Common
Stock issuable upon the exercise of all such Options (assuming full conversion of Convertible
Securities, if applicable). No further adjustment to the Conversion Price will be made upon
the actual issuance of such Common Stock upon the exercise of such Options or upon the
conversionor exchangeofConvertibleSecuritiesissuableuponexerciseofsuchOptions.
Additionally, Borrower shall be deemed to have issued or sold shares of Common Stock if
Borrower in any manner issues or sells any Convertible Securities, whether or not
immediately convertible (other than where the same are issuable upon the exercise of
Options), and the price per share for which Common Stock is issuable upon such
conversion or exchange is less than the Conversion Price then in effect, then the
Conversion Price shall be equal to such price per share. For the purposes of the
preceding sentence, the "price per share for which Common Stock is issuable upon such
conversion or exchange" is determined by dividing (i) the total amount, if any, received or
receivable by Borrower as consideration for the issuance or sale of all such Convertible
Securities, plus the minimum aggregate amount of additional consideration, if any,
payable to Borrower upon the conversion or exchange thereof at the time such
Convertible Securities first become convertible or exchangeable, by (ii) the maximum
total number of shares of Common Stock issuable upon the conversion or exchange of
all such Convertible Securities. No further adjustment to the Conversion Price will be
made upon the actual issuance of such Common Stock upon conversion or exchange of
such Convertible Securities.
(e) Purchase Rights. If, at any time when any Notes are issued and outstanding, Borrower
issues any convertible securities or rights to purchase stock, warrants, securities or other
property (the "Purchase Rights") pro rata to the record holders of any class of Common
Stock, then Holder of this Note will be entitled to acquire, upon the terms applicable
to such Purchase Rights, the aggregate Purchase Rights which such Holder could have
acquired if such Holder had held the number of shares of Common Stock acquirable
upon complete conversion of this Note (without regard to any limitations on conversion
contained herein) immediately before the date on which a record is taken for the grant,
issuance or sale of such Purchase Rights or, if no such record is taken, the date as of
which the record holders of Common Stock are to be determined for the grant, issue or
sale of such Purchase Rights.
Borrower _______________
Holder _______________
Page 10 of 21
(f) Notice of Adjustments. Upon the occurrence of each adjustment or readjustment of the
Conversion Price as a result of the events described in this Section 1.6, Borrower, at its
expense, shall promptly compute such adjustment or readjustment and prepare and
furnish to Holder a certificate setting forth such adjustment or readjustment and showing
in detail the facts upon which such adjustment or readjustment is based. Borrower shall,
upon the written request at any time of Holder, furnish to such Holder a like certificate
setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in
effect and (iii) 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 conversion of the Note.
1.7 Status as Shareholder. Upon submission of a Conversion Notice by a Holder, (i) the shares
covered thereby(provided the ReservedAmount fullycovers the dollar amount being converted and
that such shares meet the conditions set forth in Section 1.1 above) shall be deemed converted into
shares of Common Stock and (ii) Holder's rights as a Holder of such converted portion of this Note
shall cease and terminate, excepting onlythe right to receive certificates (or electronic transmissions
into Holder's broker account) for such shares of Common Stock and to any remedies provided
herein or otherwise available at law or in equity to such holder because of a failure by Borrower to
comply with the terms of this Note. Notwithstanding the foregoing, if a Holder has not received
certificates (or transfer in the form of electronic transmission into Holder's broker account) for all
shares of Common Stock prior to the tenth (10th) business day after the expiration of the Deadline
with respect to a conversion of any portion of this Note for any reason, then (unless Holder
otherwise elects to retain its status as a holder of Common Stock by so notifying Borrower) Holder
shall regain the rights of a Holder of this Note with respect to such unconverted portions of this Note
and Borrower shall, as soon as practicable, return such unconverted Note to Holder or, if the Note
has not been surrendered, adjust its records to reflect that such portion of this Note has not been
converted. In all cases, Holder shall retain all of its rights and remedies (including, without
limitation the right to receive liquidated damages pursuant to Section 1.4(g), to the extent required
thereby,for Borrower'sfailuretoconvertthisNote.
1.8 Prepayment Notwithstanding anything to the contrary contained in this Note, so long as
Borrower has not received a Conversion Notice from Holder, then at any time during the period
beginning on the Issue Date, Borrower shall have the right, exercisable on not less than three
(3) Trading Days prior written notice to Holder of the Note to prepay the outstanding Note
(principal and accrued interest), in full, in accordance with this Section 1.9. Any notice of
prepayment hereunder (an "Optional Prepayment Notice") shall be delivered to Holder of the
Note at its registered addresses by facsimile (with receipt confirmation by recipient) or email and
shall state: (i) that Borrower is exercising its right to prepay the Note, and (ii) the date of
prepayment which shall be not more than three (3) Trading Days from the date of the Optional
Prepayment Notice. On the date fixed for prepayment (the "Optional Prepayment Date"),
Borrower shall make payment of the Optional Prepayment Amount (as defined below) to or upon
the order of Holder as specified by Holder in writing to Borrower at least one (1) business day
prior to the Optional Prepayment Date. If Borrower exercises its right to prepay the Note,
Borrower shall make payment to Holder of an amount in cash (the "Optional Prepayment
Amount") equal to 105%, multiplied by the sum of (w) the then outstanding principal
amount of this Note plus (x) accrued and unpaid interest on the unpaid principal amount of
Borrower _______________
Holder _______________
Page 11 of 21
this Note to the Optional Prepayment Date plus (y) Default Interest and Partial Penalty
Payment, if any, on the amounts referred to in clauses (w) and (x) plus (iv) any amounts owed to
Holder pursuant to Sections 1.4 and 3.2 hereof. If Borrower delivers an Optional Prepayment
Notice and fails to pay the Optional PrepaymentAmount due to Holder of the Note within two (2)
business days following the Optional Prepayment Date, Borrower shall forever forfeit its right to
prepaytheNotepursuanttothisSection1.8.
ARTICLE II. CERTAIN COVENANTS
2.1 Distributions on Capital Stock. So long as Borrower shall have any obligation under this
Note, Borrower shall not without Holder's written consent (a) pay, declare or set apart for such
payment, any dividend or other distribution (whether in cash, property or other securities) on
shares of capital stock other than dividends on shares of Common Stock solely in the form of
additional shares of Common Stock or (b) directly or indirectly or through any subsidiary
make any other payment or distribution in respect of its capital stock except for distributions
pursuant to any shareholders' rights plan which is approved by a majority of Borrower's
disinterested directors.
2.2 Restriction on Stock Repurchases. So long as Borrower shall have any obligation under
this Note, Borrower shall not without Holder's written consent redeem, repurchase or otherwise
acquire (whether for cash or in exchange for property or other securities or otherwise) in any
one transaction or series of related transactions any shares of capital stock of Borrower or any
warrants, rights or options to purchase or acquire any such shares.
2.3 Par Value of Common Stock. So long as Borrower shall have any obligation under this
Note, Borrower covenants that at any time when Holder shall deliver a Conversion Notice, the
par value of Borrower's Common Stock shall not be higher than the Conversion Price
applicable to such Conversion Notice.
2.4 Mandatory Reverse Stock Split. So long as Borrower shall have any obligation under this
Note, should there be no bid on the Trading Market where the Company's Common Stock is
listed or traded for 3 consecutive trading days, the Company shall immediately have its
Common Stock undergo a reverse stock split at a ratio of 100-to-1.
2.5 Current status of SEC Reports. 14 days of the date hereof the Company shall cease being
delinquent with its SEC filings and shall regain current status with respect to such filings.
2.6 Borrowings. So long as Borrower shall have any obligation under this Note, Borrower
shall not, without giving Holder notice of his Right Of First Refusal, in accordance with Section
4(c) of the Purchase Agreement written consent, create, incur, assume guarantee, endorse,
contingently agree to purchase or otherwise become liable upon the obligation of any
person, firm, partnership, joint venture or corporation, except by the endorsement of
negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed
money, except (a) borrowings in existence or committed on the date hereof and of which
Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to trade
creditors or financial institutions incurred in the ordinary course of business or (c)
Borrower _______________
Holder _______________
Page 12 of 21
borrowings, the proceeds of which shall be used to repay this Note.
2.7 Sale of Assets. So long as Borrower shall have any obligation under this Note, Borrower
shall not, without Holder's written consent, sell, lease or otherwise dispose of any significant
portion of its assets outside the ordinary course of business. Any consent to the disposition of
any assets may be conditioned on a specified use of the proceeds of disposition.
2.8 Advances and Loans. So long as Borrower shall have any obligation under this Note,
Borrower shall not, without Holder's written consent, lend money, give credit or make advances
to any person, firm, joint venture or corporation, including, without limitation, officers,
directors, employees, subsidiaries and affiliates of Borrower, except loans, credits or
advances (a) in existence or committed on the date hereof and which Borrower has informed
Holder in writing prior to the date hereof, (b) made in the ordinary course of business or (c)
not in excess of $150,000.
ARTICLEIII. EVENTSOFDEFAULT/INDEMNITY
If any of the following events occur (each, an "Event of Default"), the Holder shall be
entitled to consider the Borrower to be in default and this Note shall become immediately due
and payable:
3.1 Failure to Pay Principal or Interest. Borrower fails to pay the principal hereof or interest
thereon when due on this Note, whether at the Maturity Date, upon acceleration or otherwise.
3.2 Conversion and the Shares. Borrower fails to issue shares of Common Stock to Holder (or
announces or threatens in writing that it will not honor its obligation to do so) upon exercise
by Holder of the conversion rights of Holder in accordance with the terms of this Note, fails to
transfer or cause its transfer agent to transfer or issue any certificate (or electronic
transmission) for shares of Common Stock issued to Holder upon conversion of or otherwise
pursuant to this Note as and when required by this Note, Borrower directs its transfer agent
not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing)
(electronically or in certificated form) the shares of Common Stock to be issued to Holder
upon conversion of or otherwise pursuant to this Note as and when required by this Note, or
fails to remove (or directs its transfer agent not to remove or impairs, delays, and/or hinders
its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer
instructions in respect thereof) on any certificate for any shares of Common Stock issued to
Holder upon conversion of or otherwise pursuant to this Note as and when required by this
Note (or makes any written announcement, statement or threat that it does not intend to honor
the obligations described in this paragraph) and any such failure shall continue uncured (or
any written announcement, statement or threat not to honor its obligations shall not be
rescinded in writing) for three (3) business days after Holder shall have delivered a
Conversion Notice.
3.3 Breach of Covenants. Borrower breaches any material covenant or other material term or
condition contained in this Note and any collateral documents including but not limited to the
PurchaseAgreement and such breach continues for a period of ten (10) days after written notice
Borrower _______________
Holder _______________
Page 13 of 21
thereof to Borrower from Holder.
3.4 Breach of Representations and Warranties. Any representation or warranty of Borrower
made herein or in any agreement, statement or certificate given in pursuant hereto or in
connection herewith (including, without limitation, the Purchase Agreement), shall be false or
misleading in any material respect when made and the breach of which has (or with the
passage of time will have) a material adverse effect on the rights of Holder with respect to this Note
orthePurchaseAgreement.
3.5 Receiver or Trustee. Borrower or any subsidiary of Borrower shall make an assignment for the
benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a
substantialpartofitspropertyorbusiness,orsuchareceiverortrusteeshallotherwisebeappointed.
3.6 Judgments. Any money judgment, writ or similar process shall be entered or filed against
Borrower or any subsidiary of Borrower or any of its property or other assets for more than $50,000,
and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless otherwise
consentedtobyHolder,whichconsentwillnotbeunreasonablywithheld.
3.7 Bankruptcy. Bankruptcy, insolvency, reorganization or liquidation proceedings or other
proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief
of debtors shall be instituted by or against Borrower or any subsidiaryofBorrower.
3.8 Delisting of Common Stock. Borrower shall fail to maintain the listing of the Common Stock
onaTradingMarket.
3.9 Failure to Comply with the Exchange Act. Borrower shall fail to comply with the reporting
requirements of the Exchange Act; and/or Borrower shall cease to be subject to the reporting
requirementsoftheExchangeAct.
3.10 Liquidation. Any dissolution, liquidation, or winding up of Borrower or any substantial
portionofitsbusiness.
3.11CessationofOperations. Any cessation of operations by Borrower or Borrower admits it is
otherwise generally unable to pay its debts as such debts become due, provided, however, that any
disclosure of Borrower's ability to continue as a "going concern" shall not be an admission that
Borrowercannotpayitsdebtsastheybecomedue.
3.12 Maintenance of Assets. The failure by Borrower to maintain any material intellectual
property rights, personal, real property or other assets which are necessary to conduct its business
(whethernoworinthefuture).
3.13 FinancialStatementRestatement.
The restatement of any financial statements filed by
Borrower with the SEC for any date or period from two (2) years prior to the Issue Date and until
this Note is no longer outstanding, if the result of such restatement would, by comparison to the
unrestated financial statement, have constituted a material adverse effect on the rights of Holder
with respect to this Note or the Purchase Agreement.
Borrower _______________
Holder _______________
Page 14 of 21
3.14 Reverse Splits. Borrower effectuates a reverse split of its Common Stock without twenty
(20) days prior written notice to Holder, unless such reverse split is done pursuant to Section 2.4 of
this Note.
3.15 Replacement of Transfer Agent. In the event that Borrower proposes to replace its transfer
agent, Borrower fails to provide, prior to the effective date of such replacement, a fully executed
Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase
Agreement (including but not limited to the provision to irrevocably reserve shares of Common
Stock in the ReservedAmount) signed bythe successor transfer agent toBorrower and Borrower.
3.16 Cross-Default. Notwithstanding anything to the contrary contained in this Note or the other
related or companion documents, a breach or default by Borrower of any covenant or other term or
condition contained in any of the OtherAgreements, after the passage of all applicable notice and
cure or grace periods, shall, at the option of Holder, be considered a default under this Note and
the OtherAgreements, in which event Holder shall be entitled (but in no event required) to apply
all rights and remedies of Holder under the terms of this Note and the Other Agreements by
reason of a default under said Other Agreement or hereunder. "Other Agreements" means,
collectively, all agreements and instruments between, among or by: (i) Borrower or Pledgor,
and, or for the benefit of, (ii) Holder and any affiliate of Holder, including, without limitation,
the Purchase Agreement, Stock Pledge Agreement, and any promissory notes. Each of the loan
transactions will be cross-defaulted with each other loan transaction and with all other existing and
future debt of Borrower to Holder. Upon the occurrence of an Event of Default under Article III,
exercisable through the delivery of written notice to Borrower by such Holders (the "Default
Notice"), the Note shall become immediately due and payable and Borrower shall pay to
Holder, in full satisfaction of its obligations hereunder, an amount equal to the greater of: (i)
150% times the sum of (w) the then outstanding principal amount of this Note plus (x)
accrued and unpaid interest on the unpaid principal amount of this Note to the date of
payment (the "Mandatory Prepayment Date") plus (y) Default Interest and Partial Penalty
Payment, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts
owed to Holder pursuant to Section 1.4(g) hereof (the then outstanding principal amount of this
Note to the date of payment plus the amounts referred to in clauses (x), (y) and (z) shall
collectively be known as the "Default Sum") and (ii) the "parity value" of the Default Sum
to be prepaid, where parity value means: (a) the highest number of shares of Common Stock
issuable upon conversion of or otherwise pursuant to such Default Sum in accordance with
Article I, treating the Trading Day immediately preceding the Mandatory Prepayment Date as
the Conversion Date for purposes of determining the lowest applicable Conversion Price,
unless the Event of Default arises as a result of a breach in respect of a specific Conversion
Date in which case such Conversion Date shall be the Conversion Date), multiplied by (b)
the highest Closing Price for the Common Stock during the period beginning on the date of first
occurrence of the Event of Default and ending one day prior to the Mandatory Prepayment
Date (the "Default Amount") and all other amounts payable hereunder shall immediately
become due and payable, all without demand, presentment or notice, all of which hereby are
expressly waived, together with all costs, including, without limitation, legal fees and
expenses, of collection, and Holder shall be entitled to exercise all other rights and remedies
available at law or in equity. If Borrower fails to pay the Default Amount within five (5)
Borrower _______________
Holder _______________
Page 15 of 21
business days of written notice that such amount is due and payable, then Holder shall have the
right at any time, so long as Borrower remains in default (and so long and to the extent that there
are sufficient authorized shares), to require Borrower, upon written notice, to immediately issue,
in lieu of the Default Amount (or any part thereof), the number of shares of Common Stock of
Borrower equal to the Default Amount (or any part thereof) divided by the Conversion Price
then in effect.
3.17 Par Value of Common Stock. Borrower shall fail to have the appropriate Common Stock
par value in accordance with Section 2.3 of this Note.
3.18 Mandatory Reverse Stock Split. Borrower shall fail to have its Common Stock undergo a
reverse stock split in accordance with Section 2.4 of this Note.
3.19 Current status of SEC reports. Borrower shall fail to regain current status with respect to its
SEC reports within 14 days of the date hereof.
3.20 Indemnification of Holder. In addition to any other remedies available to the Holder,
Borrower will, at all times, indemnify, save, and hold harmless Holder and its officers,
directors, employees, and agents from and against all sums and expenses, claims, costs,
charges, legal fees, collection fees, disbursements, and expenses of very kind and nature
associated with a breach of this Agreement by Borrower, including, but not limited to, any
breach of a representation, warranty, or covenant made by Borrower.
ARTICLE IV. MISCELLANEOUS
4.1 Failure or Indulgence Not Waiver. No failure or delay on the part of 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 privileges. All rights and remedies
existing hereunder are cumulative to, and not exclusive of, any rights or remedies otherwise
available.
4.2 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 he received) or (b) on the second business day following the date of mailing
Borrower _______________
Holder _______________
Page 16 of 21
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 Borrower, to:
MineralRite Corporation
55 South Geneva Road
Lindon, Utah 84042
Attn: GuyPeckham
Telephone: 801-796-8944
Email: info@mineralrite.com
If to Holder, to:
River North Equity, Inc.
360 W. Hubbard St., Unit 2801
Chicago, Illinois 60654
Attn: Edward Liceaga
Telephone: (312)-643-0280
E-mail: Edward@rivernorthequity.com
4.3 Amendments. This Note and any provision hereof may only be amended by an instrument
in writing signed by Borrower and Holder. The term "Note" and all reference thereto, as
used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant
to the Purchase Agreement) as originally executed, or if later amended or supplemented, then as
so amended or supplemented.
4.4 Assignability. This Note shall be binding upon Borrower and its successors and
assigns, and shall inure to the benefit of Holder and its successors and assigns. Each
transferee of this Note must be an "accredited investor" as defined in Rule 501(a) of the 1933
Act. Notwithstanding anything in this Note to the contrary, this Note may be pledged as
collateral in connection with a bona fide margin account or other lending arrangement in
compliance with applicable securities rules and regulations.
4.5 Cost of Collection. If default is made in the payment of this Note, Borrower shall pay
Holder hereof all costs of collection, including reasonable attorneys' fees.
4.6 Governing Law. This Note shall be governed by and construed in accordance with the laws
of the State of Illinois without regard to principles of conflicts of laws. Any action brought by
either party against the other concerning the transactions contemplated by this Note shall be
brought only in the state courts of Illinois or in the federal courts located in Cook County. The
parties to this Note hereby irrevocably waive any objection to jurisdiction and venue of any
Borrower _______________
Holder _______________
Page 17 of 21
action instituted hereunder and shall not assert any defense based on lack of jurisdiction or
venue or based upon forum non conveniens. Borrower and Holder 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 Note or any other agreement delivered in
connection herewith is invalid or unenforceable under any applicable statute or rule of law,
then such provisions 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 Note, or any other agreement/document related to it, 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.
4.7 Convertible Note Purchase Agreement. By its acceptance of this Note, each party agrees to
be bound by the applicable terms of the Convertible Note Purchase Agreement dated January
__, 2015.
4.8 Notice of Corporate Events. Except as otherwise provided below, Holder of this Note shall
have no rights as a Holder of Common Stock unless and only to the extent that it converts this
Note into Common Stock. Borrower shall provide Holder with prior notification of any
meeting of Borrower's shareholders (and copies of proxy materials and other information sent
to shareholders). In the event of any taking by Borrower of a record of its shareholders for the
purpose of determining shareholders who are entitled to receive payment of any dividend or
other distribution, any right to subscribe for, purchase or otherwise acquire (including by way of
merger, consolidation, reclassification or recapitalization) any share of any class or any other
securities or property, or to receive any other right, or for the purpose of determining shareholders
who are entitled to vote in connection with any proposed sale, lease or conveyance of all or
substantially all of the assets of Borrower or any proposed liquidation, dissolution or winding
up of Borrower, Borrower shall mail a notice to Holder, at least twenty (20) days prior to the
record date specified therein (or thirty (30) days prior to the consummation of the transaction or
event, whichever is earlier), of the date on which any such record is to be taken for the purpose
of such dividend, distribution, right or other event, and a brief statement regarding the amount
and character of such dividend, distribution, right or other event to the extent known at such
time. Borrower shall make a public announcement of any event requiring notification to
Holder hereunder substantially simultaneously with the notification to Holder in accordance
with the terms of this Section 4.9.
4.9 Remedies. Borrower acknowledges that a breach by it of its obligations hereunder
will cause irreparable harm to Holder, by vitiating the intent and purpose of the transaction
contemplated hereby. Accordingly, Borrower acknowledges that the remedy at law for a breach
of its obligations under this Note will be inadequate and agrees, in the event of a breach or
threatened breach by Borrower of the provisions of this Note, that Holder shall be entitled, in
Borrower _______________
Holder _______________
Page 18 of 21
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 Note and to enforce specifically the terms and provisions thereof, without the necessity
of showing economic loss and without any bond or other security being required.
[THE REMAINDER OF THIS PAGE HAS DELIBERATELY BEEN LEFT
BLANK]
Borrower _______________
Holder _______________
Page 19 of 21
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first
written above.
SIGNED by: Edward M. Liceaga
|
for and on behalf of
|
River North Equity, Inc.
|
|
Signature: ____________________
|
|
SIGNED by: ____________________
|
for and on behalf of
|
MineralRite Corporation
Signature: ____________________
|
|
|
|
Borrower _______________
Holder _______________
Page 20 of 21
EXHIBIT C: NOTICE OF CONVERSION
The undersigned hereby elects to convert $[ ____________] of the Note (defined below) into the
number of shares of Common Stock of MineralRite Corporation (the "Borrower") to be issued
pursuant to the conversion of the Note as set forth below according to the conditions of the
Convertible Promissory Note of Borrower dated January __, 2015 (the "Note"). No fee will be
charged to Holder for anyconversion, except fortransfer taxes, if any.
Box Checked as to applicable instructions:
☐ The Borrower shall electronically transmit the Common Stock issuable pursuant to this
Conversion Notice to the account of the undersigned or its nominee with DTC through its
Deposit WithdrawalAgent Commission system ("DWAC Transfer"). This election shall only
be effective if the Company's transfer agent is a participating member of DTC's DWAC
program and the Borrower is DWAC eligible.
Name of DTC Prime Broker:
Account Number:
☐ The undersigned hereby requests that the Borrower issue a certificate or certificates for
the number of shares of Common Stock set forth below (which numbers are based on the
Holder's calculation attached hereto) in the name(s) specified immediately below or, if
additional spaceis necessary, on an attachment hereto:
RiverNorthEquity,Inc.
360 W. Hubbard St., Unit 2801
Chicago, Illinois 60654
T (312)-643-0280
Date of Conversion: ________________
Applicable Conversion Price: ________________
Number ofSharesofCommonStockto be Issued: ________________
PursuanttoConversion ofthe Notes:
AmountofPrincipalBalanceDueremainingunder the Note afterthis conversion:
Borrower _______________
Holder _______________
Page 21 of 21
RiverNorthEquity,Inc.
By: ___________________________
Name: Edward M. Liceaga
Title: President
Date: __________________________
Borrower _______________
Holder _______________