Form of Regulation S 12% Unsecured Convertible Debenture

NEITHER THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT" ), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY.



Original Issue Date: _____________, 2006

Conversion Price: $0.75



$_______________



12% UNSECURED CONVERTIBLE DEBENTURE

DUE October 1, 2008



This 12% Unsecured Convertible Debenture is one of a series of duly authorized and issued Unsecured Convertible Debentures of Bullion River Gold Corp., a Nevada corporation, having a principal place of business at 3500 Lakeside Court, Suite 200, Reno, NV 89509 (the " Company "), designated as its 12% Unsecured Convertible Debenture, due October 1, 2008 (this debenture, the " Debenture " and collectively with the other such series of debentures, the " Debentures ").



FOR VALUE RECEIVED, the Company promises to pay to ______________________ or its registered assigns (the " Holder "), or shall have paid pursuant to the terms hereunder, the principal sum of $_______________ by October 1, 2008, or such earlier date as this Debenture is required or permitted to be repaid as provided hereunder (the " Maturity Date "), and to pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture in accordance with the provisions hereof. This Debenture is subject to the following additional provisions:



Section 1. Definitions



For the purposes hereof, in addition to the terms defined elsewhere in this Debenture: (a) capitalized terms not otherwise defined herein have the meanings given to such terms in the Purchase Agreement, and (b) the following terms shall have the following meanings:



" Alternate Consideration " shall have the meaning set forth in Section 6.2.



" Business Day " means any day except Saturday, Sunday and any day which shall be a federal legal holiday in the United States or a day on which banking institutions in the State of Nevada are authorized or required by law or other government action to close.



" Common Stock " means the common stock, par value $0.001 per share, of the Company and stock of any other class of securities into which such securities may hereafter have been reclassified or changed into.



" Conversion Date " shall have the meaning set forth in Section 4.1.
















" Conversion Price " shall have the meaning set forth in Section 4.3.



" Conversion Shares " means the shares of Common Stock issuable upon conversion of this Debenture or as payment of interest in accordance with the terms.



" Event of Default " shall have the meaning set forth in Section 8.



" Fundamental Transaction " shall have the meaning set forth in Section 6.2.



" Interest Conversion Rate " means $0.75 per share.



" Maturity Date " means October 1, 2008



" Nevada Courts " shall have the meaning set forth in Section 9.4.



" Notice of Conversion " shall have the meaning set forth in Section 4.1.



" Optional Prepayment" shall have the meaning set forth in Section 7.



" Optional Prepayment Amount" shall have the meaning set forth in Section 7



" Optional Prepayment Date" shall have the meaning set forth in Section 7.



" Optional Prepayment Notice" shall have the meaning set forth in Section 7.



" Original Issue Date " shall mean the date of the first issuance of the Debentures regardless of the number of transfers of any Debenture and regardless of the number of instruments which may be issued to evidence such Debenture.



" Person " means a corporation, an association, a partnership, organization, a business, an individual, a government or political subdivision thereof or a governmental agency.



" Purchase Agreement " means the Securities Purchase Agreement, dated as of _____________ __, 2006, to which the Company and the original Holder are parties, as amended, modified or supplemented from time to time in accordance with its terms.



" Trading Day " means a day on which the Common Stock is traded on one of the following markets or exchanges: the OTC Bulletin Board, the Nasdaq SmallCap Market, the American Stock Exchange, the New York Stock Exchange or the Nasdaq National Market.



Section 2. Interest



2.1 Accrual of Interest. Interest shall accrue on the principal balance of this Debenture at the rate of twelve percent (12%) per annum.



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2.2 Payment of Interest in Cash or Kind . The Company shall pay interest to the Holder on the aggregate unconverted and then outstanding principal amount of this Debenture at the rate of 12% simple interest per annum, payable quarterly on January 1, April 1, July 1 and October 1, beginning on January 1, 2007, and on the Maturity Date (except that, if any such date is not a Business Day, then such payment shall be due on the next succeeding Business Day). Interest may, at the option of the Company, be paid in cash or shares of Common Stock at the Interest Conversion Rate, or a combination of shares and cash.



Section 3. Repayment of Principal



3.1 Repayment in U.S. Dollars . On or before the Maturity Date, the Company shall repay the unpaid principal amount of this Debenture in U.S. Dollars.



Section 4.Conversion Into Shares of Common Stock



4.1 Voluntary Conversion . At any time after the Original Issue date and until this Debenture is no longer outstanding, this Debenture shall be convertible into shares of Common Stock ( "Conversion Shares ") at the option of the Holder, in whole or in part at any time and from time to time. The Holder shall effect conversions by delivering to the Company the form of Notice of Conversion attached hereto as Annex A (a " Notice of Conversion "), specifying therein the principal amount of this Debenture to be converted and the date on which such conversion is to be effected (a " Conversion Date "). If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is provided hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender this Debenture to the Company unless the entire principal amount of this Debenture plus all accrued and unpaid interest thereon has been so converted. Conversions hereunder shall have the effect of lowering the outstanding principal amount of this Debenture in an amount equal to the applicable conversion. Any and all conversion hereunder shall be made in increments of $10,000 unless the balance of the outstanding debenture amount is less than $10,000 and then in such event, the entire amount of the debenture shall be converted into shares of Common Stock if Holder elects to convert such balance.



4.2 Conversion Records . The Holder and the Company shall maintain records showing the principal amount converted and the date of such conversions. The Company shall deliver a copy of its records as to Holder in a reasonable time following any conversion. If Holder disagrees with the Company's records, Holder shall provide notice of such objection to the Company within twenty days following the Company's mailing of such record to holder. In the event of any dispute or discrepancy, the records of the Company shall be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Debenture, acknowledge and agree that, by reason of the provisions of this paragraph, following conversion of a portion of this Debenture, the unpaid and unconverted principal amount of this Debenture may be less than the amount stated on the face hereof. Notwithstanding anything herein to the contrary, the Holders right to convert hereunder shall in no way excuse the Company from having to meet its obligation to pay the outstanding principal and interest on this Debenture nor shall it limit the Holder's right to seek any other remedy against the Company for failing to meet such obligations. The right to convert this Debenture into Conversion Shares is in addition to any other rights or remedies the Holder may have hereunder or under law.



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4.3 Conversion Price . The conversion price in effect on any Conversion Date shall be $0.75 (subject to adjustment herein)(the " Conversion Price ").



4.4 Mechanics of Conversion



(a) Conversion Shares Issuable Upon Conversion of Principal Amount . The number of shares of Common Stock issuable upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Debenture to be converted by (y) the Conversion Price.



(b) Delivery of Certificate Upon Conversion . Not later than three Trading Days after any Conversion Date, the Company will deliver or cause to be delivered to the Holder (A) a certificate or certificates representing the Conversion Shares which shall be free of restrictive legends and trading restrictions (other than those required by the Purchase Agreement) representing the number of shares of Common Stock being acquired upon the conversion of this Debenture including payment of interest in shares of Common Stock. The Company shall, if available and if allowed under applicable securities laws, use its best efforts to deliver any certificate or certificates required to be delivered by the Company under this Section electronically through the Depository Trust Corporation or another established clearing corporation performing similar functions.



(c) Failure to Deliver Certificates . If in the case of any Notice of Conversion such certificate or certificates are not delivered to or as directed by the applicable Holder by the third Trading Day after a Conversion Date, the Holder shall be entitled by written notice to the Company at any time on or before its receipt of such certificate or certificates thereafter, to rescind such conversion, in which event the Company shall immediately return the certificates representing the principal amount of this Debenture tendered for conversion.



(d) Reservation of Shares Issuable Upon Conversion . The Company covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock solely for the purpose of issuance upon conversion of this Debenture and payment of interest on this Debenture, each as herein provided, free from preemptive rights or any other actual contingent purchase rights of persons other than the Holder (and the other holders of the Debentures), not less than such number of shares of the Common Stock as shall (subject to the terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions of Section 6) upon the conversion of the outstanding principal amount of this Debenture and payment of interest hereunder. The Company covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly and validly authorized, issued and fully paid, nonassessable and, if the Registration Statement is then effective under the Securities Act, registered for public sale in accordance with such Registration Statement.



(e) Fractional Shares . The Holder shall be entitled to receive, in lieu of fractional shares, one whole share of Common Stock.



(f) Transfer Taxes . The issuance of certificates for shares of the Common Stock on conversion of this Debenture shall be made without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such certificate, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder of this Debenture so converted and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.



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Section 5. Registration of Transfers and Exchanges



5.1 Different Denominations . This Debenture is exchangeable for an equal aggregate principal amount of Debentures of different authorized denominations, as requested ...