NOVATION HOLDINGS, INC.

SECURED CONVERTIBLE PROMISSORY NOTE

Issuance Date: November 30, 2012  u.s. $280,000.00

FOR  VALUE  RECEIVED, NOVATION  HOLDINGS,  INC., a  Florida  corporation (the
"Company"), hereby promises to  pay to the order of ISP HOLDINGS, LLC, a  Utah
limited liability company, or its registered assigns (the "Holder"),  the
initial principal sum of $280,000.00 (the "Original Principal  Amount"),  and
any additional advances and other amounts that may accrue or become due under
the terms of this Secured Convertible Promissory Note (this "Note") when due,
whether upon the Maturity Date, on any Installment Date with respect to the
Installment Amount due on such Installment Date (each as defined below),
acceleration, redemption or otherwise (in each case in accordance with the terms
hereof), and to pay interest ("Interesf') on any Outstanding Balance (as defined
below) at the applicable interest rate as set forth herein, whether upon any
Installment Date, the Maturity Date or acceleration, conversion, redemption or
otherwise (in each case in accordance with the terms hereof). Certain
capitalized terms used herein are defined in Section 27 hereof. For purposes
hereof, the term "Outstanding Balance" means the Original Principal Amount, as
reduced or increased, as the case may be, pursuant to the terms hereof for
redemption, conversion or otherwise, plus any accrued but unpaid Interest,
collection and enforcements costs, and any other fees or charges (including
without limitation Late Charges (as defined below)) incurred under this Note or
under the Agreement (defined below).

This Note is issued pursuant to that certain Securities Purchase Agreement dated
November 30,

2012, as the same may be amendedji·om time to time (the "Agreement"), by and
between the Company

and the Holder.

I.     PAYMENTS  OF  PRINCIPAL; PREPAYMENT. On  each  Installment  Date  (which
includes the Maturity Date), the Company shall pay to the Holder an amount equal
to the Installment Amount due on such Installment Date in accordance with
Section 8. Additionally, so long as no Event of Default (as defined below) shall
have occurred, the Company may, in its sole and absolute discretion and upon
giving the Holder not less than five (5) Trading Days written notice (a
"Prepayment Notice"), pay in cash all or any portion of the Outstanding Balance
at any time prior to the Maturity Date; provided that in the event the Company
elects to prepay all or any portion of the Outstanding Balance, it shall pay to
the Holder ISO% of the portion of the Outstanding Balance the Company elects to
prepay (the "Prepayment Premium").

2.          INTEREST; INTEREST RATE. The Company acknowledges that the Original
Principal Amount of this Note exceeds the Purchase Price (as defined in the
Agreement) and that such excess consists of(a) an original issue discount
of$15,000.00  and (b) the Carried Transaction Expense Amount (as defined in the
Agreement) in the amount of $15,000.00, both of which shall be fully earned and
charged to the Company as of the Issuance Date and paid to the Holder as part of
the Original Principal Amount as set forth in this Note. Interest on the
Outstanding Balance shall accrue from the date set forth above as the Issuance
Date (the ''Issuance Date") at the rate of eight percent (8%) per annum,
provided that upon the occurrence of an Event of Default, Interest shall accrue
on the Outstanding Balance at the rate of twenty-two percent (22%) per annum, as
set forth in Section 4.2(d) hereof. All Interest calculations hereunder shall be
computed on the basis of a 360-day year comprised of twelve (12) thirty (30) day
months, shall compound daily and shall be payable in accordance with the terms
of this Note. Notwithstanding any provision to the contrary herein, in no event
shall the applicable interest rate at any time exceed the maximum interest rate
allowed under applicable law. All payments owing hereunder shall be in lawful
money of the United States of America or Conversion Shares, as provided for
herein, and

delivered to Holder at the address furnished to the Company for that purpose.
All payments shall be applied first to (a) costs of collection, if any, then to
(b) fees and charges, if any, then to (c) accrued and unpaid Interest, and
thereafter to (d) principal.

3.          CONVERSION OF NOTE. At the option of the Holder, this Note is
convertible into validly issued, fully paid and non-assessable shares of Common
Stock, on the terms and conditions set forth in this Section 3.

3.I.

Conversion Right.

(a)        Subject to the provisions of Section 3.4, at any time or times after
the Company has confirmed that it will, or has elected or is deemed to have
elected to, pay all or any portion of an Installment Amount by way of a Company
Conversion under Section 8 below, the Holder shall be entitled to convert any
portion of the Outstanding Balance into validly issued, fully paid and non­
assessable  shares  of  Common  Stock  (the  "Section  3  Conversion   Shares")
  in  accordance  with Section 3.3, calculated using the Conversion Rate (as
defined below).

(b)        The Company shall not issue any fraction of a share of Common Stock
upon any conversion. All shares issuable upon each conversion of this Note shall
be aggregated for purposes of determining whether such conversion would result
in the issuance of a fractional share. If the issuance would result in the
issuance of a fraction of a share of Common Stock, the Company shall round such
fraction of a share of Common Stock up to the nearest whole share. The Company
shall pay any and all transfer, stamp, issuance and similar taxes that may be
payable with respect to the issuance and delivery of Section 3 Conversion
Shares.

3.2.       Conversion Rate. The number of Section 3 Conversion Shares issuable
upon conversion of any portion of the Outstanding Balance pursuant to Section
3.l(a)  shall be determined by dividing (x) the applicable Conversion Amount by
(y) the Conversion Price (such formula is referred to herein as the "Conversion
 Rate").

be converted.

(a)

"Conversion  Amount" means the portion of the Outstanding Balance to

(b)        "Conversion  Price"  means, as of any Conversion Date or other date
of determination, $0.03, subject to adjustment as provided herein.

3.3.

Mechanics of Conversion.

(a)        Conversion Prior to Maturity Date. To convert any Conversion Amount
into shares of Common Stock on any date, the Holder shall deliver (whether via
email, facsimile or otherwise), for receipt on or prior to II :59 p.m., New York
time, on such date (a "Conversion  Date"), a copy of an executed notice of
conversion substantially in the form attached hereto as Exhibit A (the
"Conversion   Notice") to the Company. If required by Section 3.3(c), within
five (5) Trading Days following a conversion of this Note as aforesaid, the
Holder shall surrender this Note to a reputable overnight courier for delivery
to the Company (or an indemnification undertaking with respect to this Note in
the case of its loss, theft or destruction as contemplated by Section 14.2). On
or before the first (I")  Trading Day following the date of receipt of a
Conversion Notice, the Company shall transmit by facsimile or email an
acknowledgment of confirmation, in the form attached hereto as Exhibit B, of
receipt of such  Conversion Notice to the Holder and the Company's  transfer
agent (the "Transfer Agent"). On or before the close of business on the third
(3'd) Trading Day following the date of receipt of a  Conversion Notice (the
"Delivery  Date"),  the  Company shall,  provided that  all  DWAC Eligible

Conditions are then satisfied, credit the aggregate number of Section 3
Conversion Shares to which the Holder shall be entitled to the account specified
on the Conversion Notice via the OWAC system. If all OWAC Eligible Conditions
are not then satisfied, the Company shall instead, on or before the close of
business on the  Delivery Date, issue and deliver to the Holder or  its broker
(as designated in the Conversion Notice), via reputable overnight courier, a
certificate, registered in the name of the Holder or its designee, for the
number of Section 3 Conversion Shares to which the Holder shall be entitled;
provided, however, that, in addition to any other rights or remedies that Holder
may have under this Note, such number of shares issued by certificate rather
than via the OWAC system shall be increased by 5% for each such conversion
(including the first) that occurs more than six (6) months after the Issuance
Date. For the avoidance of doubt, the Company has not met its obligation to
deliver Section 3 Conversion Shares by the Delivery Date unless the Holder or
its broker, as applicable, has actually received the shares electronically into
the applicable account, or if the DWAC Eligible Conditions are not then
satisfied, has actually received the certificate representing the applicable
Section 3 Conversion Shares no later than the close of business on the relevant
Delivery Date pursuant to the terms set forth above. If this Note is physically
surrendered for conversion pursuant to Section 3.3(c) and the Outstanding
Balance of this Note is greater than the principal portion of the Conversion
Amount being converted, then the Company shall as soon as practicable and in no
event later than three (3) Trading Days after receipt of this Note and at its
own expense, issue and deliver to the Holder (or its designee) a new Note (in
accordance with Section

14.4)) representing the Outstanding Balance not converted. The Person or Persons
entitled to receive the shares of Common Stock issuable upon a conversion of
this Note shall be treated for all purposes as the record holder or holders of
such shares of Common Stock on the Conversion Date. In the event of a partial
conversion of this Note pursuant hereto, the principal amount converted shall be
deducted from the Installment Amount(s) relating to the Installment Date(s) as
set forth in the applicable Conversion Notice.

(b)        Company's Failure to Timely Deliver. Failure for any reason
whatsoever to issue any portion of the Section 3 Conversion Shares to Holder by
the applicable Delivery Date in the manner required under this Note shall be a
"Conversion  Failnre". Upon the occurrence of a Conversion Failure, in addition
to all other remedies available to the Holder, (1) the Company shall pay in cash
to the Holder on each day after such third (3'd) Trading Day that the issuance
of such shares of Common Stock is not timely effected an amount equal to the
greater of (A) $2,000.00 per day and (B) 2% of the product of (i) the sum of the
number of Section 3 Conversion Shares not issued to the Holder on a timely basis
and to which the Holder is entitled multiplied by (ii) the Closing Sale Price of
the Common Stock on the Trading Day immediately preceding the last possible date
which the Company could have issued such shares of Common Stock to the Holder
without violating Section 3.3(a); and (2) the Holder, upon written notice to the
Company, may void its Conversion Notice with respect to, and retain or have
returned (as the case may be) any portion of this Note that has not been
converted pursuant to such Conversion Notice, provided that the voiding of a
Conversion Notice shall not affect the Company's obligations to make any
payments which have accrued or are owed to the Holder prior to the date of such
notice pursuant to this Section 3.3(b) or otherwise. Notwithstanding the
foregoing, a Conversion Failure shall not exist to the extent Section 3
Conversion Shares are not issued by the Company in order to comply with the
limitations set forth in Section 3.4 hereof. Upon the occurrence of a Conversion
Failure (unless Holder elects to void the Conversion Notice), in addition to
such failure being considered an Event of Default hereunder, for purposes of
Section 7.I the Company shall also be deemed to have issued the Section 3
Conversion Shares to Holder on the latest possible permitted date and pursuant
to the terms set forth in this Section 3, with Holder entitled to all the rights
and privileges associated with such deemed issued shares (the "Deemed Conversion
Issuance").

(c)        Registration; Book-Entry. The Company shall maintain a register (the
"Register") for the recordation of the name and address of the holders of all or
any portion of this Note and the principal amount of this Note held by such
holder (the "Registered  Note"). The entries in the Register shall be conclusive
and binding for all purposes absent manifest error. The Company and the

holder shall treat each Person whose name is recorded in the Register as the
owner of this Note for all purposes (including, without limitation, the right to
receive payments of principal and Interest hereunder) notwithstanding notice to
the contrary. The Registered Note may be assigned, transferred or sold in whole
or in part only by registration of such assignment or sale on the Register. Upon
its receipt of a request to assign, transfer or sell all or part of the
Registered Note by the holder thereof, the Company shal! record the information
contained therein in the Register and issue one or more new Registered Notes in
the same aggregate principal amount as the principal amount of the surrendered
Registered Note to the designated assignee or transferee pursuant to Section 14.
Notwithstanding anything to the contrary in this Section

3.3(c), the Holder may assign this Note or any portion thereof to its Affiliate
without delivering a request

to assign or sell this Note to the Company and the recordation of such
assignment or sale in the Register (a "Related  Party  Assignment"); provided,
that (A) the Company may continue to deal solely with such assigning or selling
Holder unless and until such Holder has delivered a request to assign or sell
this Note or portion thereof to the Company for recordation in the Register; (B)
the failure of such assigning or selling Holder to deliver a request to assign
or sell such Note or portion thereof to the Company shall not affect the
legality, validity, or binding effect of such assignment or sale; and (C) such
assigning or selling Holder shall, acting solely for this purpose as a
non-fiduciary agent of the Company, maintain a register (the "Related  Party
 Register")  comparable to the Register on behalf of the Company, and any such
assignment or sale shall be effective upon recordation of such assignment or
sale in the Related Party Register. Notwithstanding anything to the contrary set
forth in this Section 3, upon conversion of any portion of this Note in
accordance with the terms hereof, the Holder shall not be required to physically
surrender this Note to the Company unless (A) the entire Outstanding Balance of
this Note is being converted (in which event this Note shall be delivered to the
Company as contemplated by Section 3.3(a)) or (B) the Holder has provided the
Company with prior written notice (which notice may be included in a Conversion
Notice) requesting reissuance of this Note upon physical surrender of this Note.
The Holder and the Company shall maintain records showing the Outstanding
Balance and Late Charges converted and/or paid (as the case may be) and the
dates of such conversions and/or payments (as the case may be) or shall use such
other method, reasonably satisfactory to the Holder and the Company, so as not
to require physical surrender of this Note upon conversion.

3.4.

Limitations on Conversions.

(a)        Notwithstanding anything to the contrary contained in this Note
(except as set forth below in this subsection), this Note shall not be
convertible by the Holder hereof, and the Company shall not effect any
conversion of this Note or otherwise issue any shares of Common Stock pursuant
to Section 3 or Section 8 hereof, to the extent (but only to the extent) that
the Holder together with any of its Affiliates would beneficially own in excess
of 4.99% (the "Maximum  Percentage") of the Common Stock outstanding.
 Notwithstanding the forgoing, (i) if any of the DWAC Eligible Conditions are
not then satisfied, the term "4.99%" shall be replaced in the preceding sentence
with "9.99%" at such time as the Market Capitalization of the Common Stock is
less than $3,000,000.00, but (ii) if all of the DWAC Eligible Conditions are
then satisfied, the term "4.99%"  shall be replaced in the preceding sentence
with "9.99%" only at such time as the Market Capitalization of the Common Stock
is less than

$1,500,000.00.  For the avoidance of any doubt, notwithstanding any other
provision contained herein, if

the term "4.99%" is replaced with "9.99%" pursuant to the preceding sentence,
such change to "9.99%" shall be permanent. For purposes of this Agreement, the
term "Market Capitalization of the Common Stock" shall mean the product equal to
(i) the average VWAP of the Common Stock for the immediately preceding thirty
(30) Trading Days, multiplied by (ii) the aggregate number of outstanding shares
of Common Stock as reported on the Company's most recently filed Form 10-Q or
Form 10-K.

(b)        To the extent the limitation set forth in subsection (a) immediately
above applies, the determination of whether this Note shall be convertible
(vis-a-vis other convertible, exercisable or exchangeable securities owned by
the Holder or any of its Affiliates) and of which such

securities shall be convertible, exercisable or exchangeable (as among all such
securities owned by the Holder and its Affiliates) shall, subject to such
Maximum Percentage limitation, be determined on the basis of the first
submission to the Company for conversion, exercise or exchange (as the case may
be). No prior inability to convert this Note, or to issue shares of Common
Stock, pursuant to this Section 3.4 shall  have any effect on the applicability
of the  provisions of this Section 3.4  with respect to any subsequent
determination of convertibility. For purposes of this Section 3.4, beneficial
ownership and all determinations and calculations (including, without
limitation, with respect to calculations of percentage ownership) shall be
determined in accordance with Section 13{e) of the 1934 Act (as defined in the
Agreement) and the rules and regulations promulgated thereunder. The provisions
of this Section 3.4 shall be implemented in a manner otherwise than in strict
conformity with the terms of this Section 3.4 to correct this Section 3.4 (or
any portion hereof) which may be defective or inconsistent with the intended
Maximum  Percentage  beneficial  ownership  limitation  herein  contained  or
 to  make  changes  or supplements necessary or desirable to properly give
effect to such Maximum Percentage limitation. The limitations contained in this
Section 3.4 shall apply to a successor Holder of this Note. The holders of
Common Stock shall be third party beneficiaries of this Section 3.4 and the
Company may not waive this Section 3.4 without the consent of holders of a
majority of its Common Stock. For any reason at any time, upon the written or
oral request of the Holder, the Company shall within one (I) Trading Day confirm
orally and in writing to the Holder the number of shares of Common Stock then
outstanding, including by virtue of any prior conversion or exercise of
convertible or exercisable securities into Common Stock, including, without
limitation, pursuant to this Note.

4.

RIGHTS UPON EVENT OF DEFAULT.

Default":

4.1.

Event of Default. Each of the following events shall constitute an "Event of

(a)        Failure to Pay. The Company shall fail to make any payment when due
and  payable under the terms of this Note including, without limitation, any
payment of costs, fees, interest, principal (including, without limitation, the
Company's failure to deliver any Installment Amount when due or to pay any
redemption payments or amounts hereunder), or other amount due hereunder or
under any other Transaction Document (as defined in the Agreement).

{b)       Failure to  Deliver or  Process Shares. The  Company (or  its Transfer
Agent, as applicable) (i) fails to issue Section 3 Conversion Shares by the
Delivery Date; (ii) fails to issue any Pre-Installment Conversion Shares,
Post-Installment Conversion Shares, Pre-Installment Certificated Shares, or
Post-Installment Certificated Shares, as applicable, within the time periods
required by Section

8; (iii) announces (or threatens in writing) that it will not honor its
obligation to issue shares to Holder in accordance with Section 3 and/or Section
8 of this Note; (iv) fails to transfer or cause its Transfer Agent to transfer
or issue (electronically or in certificated form, as applicable) any Section 3
Conversion Shares, Pre-Installment Conversion Shares,  Post-Installment
Conversion Shares,  Pre-Installment Certificated Shares, or Post-Installment
Certificated Shares, as applicable, issued to the Holder upon conversion of or
otherwise pursuant to this Note as and when required by this Note; (v) 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, as applicable) any Section 3 Conversion Shares, Pre-Installment Conversion
Shares, Post-Installment Conversion Shares, Pre-Installment Certificated Shares,
or Post-Installment Certificated Shares, as applicable, to be issued to the
Holder upon conversion of or otherwise pursuant to this Note as and when
required by this Note; or (vi) as applicable, 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 Section 3 Conversion
Shares,   Pre-Installment  Conversion  Shares,  Post-Installment  Conversion
  Shares,   Pre-Installment

Certificated Shares or Post-Installment Certificated Shares as and when required
by this Note (or makes any written announcement, statement or threat that it
does not intend to honor any such obligations).

(c)        Judgment.  A final judgment or judgments for the payment of money
aggregating in excess of $100,000 are rendered against the Company and/or any of
its Subsidiaries and which judgments are not, within thirty (30) calendar days
after the entry thereof, bonded, discharged or stayed pending appeal, or are not
discharged within thirty (30) calendar days after the expiration of such stay;
provided, however, any judgment which is covered by insurance or an indemni1y
from a credit worthy party shall not be included in calculating the $100,000
amount set forth above so long as the Company provides the Holder a written
statement from such insurer or indemni1y provider (which written statement shall
be reasonably satisfactory to the Holder) to the effect that such judgment is
covered by insurance or an indemni1y and the Company or such Subsidiary (as the
case may be) will receive the proceeds of  such  insurance or  indemni1y within
thirty (30) calendar  days  of  the  issuance of  such judgment.

(d)        Breach of Obligations: Covenants. The Company or its Subsidiaries, if
any, shall fail to observe or perform any other covenant, obligation, condition
or agreement contained in this Note or any of the other Transaction Documents,
including without limitation (i) all reporting covenants and covenants to timely
file all required quarterly and annual reports and any other filings required
pursuant to Rule 144, and (ii) strict compliance with all provisions of Sections
3, 8, and 10 of this Note.

(e)        Breach of Representations and Warranties. Any representation,
warran1y, certificate, or other statement (financial or otherwise) made or
furnished by or on behalf of the Company to the Holder in writing included in
this Note or in connection with any of the Transaction Documents, or as an
inducement to the Holder to enter into this Note or any of the other Transaction
Documents, shall be false, incorrect, incomplete or misleading in any material
respect when made or furnished or becomes false thereafter.

(f)        Receiver or Trustee. The Company shall make an assignment for the
benefit of creditors, or apply for, or consent to, or otherwise be subject to,
the appointment of a receiver, trustee, liquidator, assignee, custodian,
sequestrator, or other similar official for a substantial part of its property
or business.

(g)        Failure to Pay Debts. If any of the Company's assets are assigned to
its creditors, or upon the occurrence of any default under, redemption of or
acceleration prior to maturi1y of any Indebtedness of the Company or any of its
Subsidiaries in an amount equal to $1 00,000 or more.

(h)      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 the Company.

(i)         Delisting of Common Stock. The suspension from trading or the
failure of the Common Stock to be trading on an Eligible Market for a period of
five (5) consecutive Trading Days or for more than an aggregate often (I0)
Trading Days in any 365-day period.

GJ           Liquidation. Any dissolution, liquidation, or winding up of the
Company or any substantial portion of its business.

(k)        Cessation of Operations. Any cessation of operations by the Company
or the Company admits it is otherwise generally unable to pay its debts as such
debts become due; provided,

however, that any disclosure of the Company's ability to continue as a "going
concern" shall not be an admission that the Company cannot pay its debts as they
become due.

(I)         Maintenance of Assets. The failure by the Company to maintain any
material intellectual property rights, personal, real property or other assets
which are necessary to conduct its business (whether now or in the future).

(m)      Financial Statement Restatement. The restatement of any financial
statements filed by the Company with the SEC for any date or period from two
years prior to the date of this Note 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 the Company with respect to this Note or the Agreement.

(n)

Reverse Split. The Company effectuates a reverse split of its Common

Stock without twenty (20) Trading Days prior written notice to the Holder.

(o)        Replacement of Transfer Agent. In the event that the Company proposes
to replace its Transfer Agent, the Company fails to provide, prior to the
effective date of such replacement, a fully executed Transfer Agent Letter (as
defined by the Agreement) in a form as required to be initially delivered
pursuant to the Agreement (including but not limited to the provision to
irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the
successor transfer agent and delivered to the Company and the Holder.

(p)        Governmental Action. If any governmental or regulatory authority
takes or institutes any action against the Company, a Subsidiary, or an
executive officer or director of the Company, that will materially affect the
Company's financial condition, operations or ability to pay or perform the
Company's obligations under this Note.

(q)

defined in the Agreement).

Share Reserve. The Company's failure to maintain the Share Reserve (as

(r)        Certification of Equity Conditions. A false  or inaccurate
certification (including, without limitation, a false or inaccurate deemed
certification) by the Company that the Equity Conditions are satisfied, that
there has been no Equity Conditions Failure or as to whether any Event of
Default has occurred.

(s)        DWAC Eligibility. The failure of any of the DWAC Eligible Conditions
to be satisfied at any time during which the Company has obligations under this
Note, including without limitation, the failure within 180 days of the Issuance
Date to have a Transfer Agent that is participating in the DTC/FAST Program.

(t)         Cross Default. Notwithstanding anything to the contrary contained in
this Note or the other Transaction Documents, a breach or default by the Company
of any covenant or other term or condition contained in (i) any of the other
Transaction Documents, or (ii) any Other Agreements (defined below); shall, at
the option of the Holder, be considered a default under this Note, in which
event the Holder shall be entitled (but in no event required) to apply all
rights and remedies of the Holder under the terms of this Note. The Company
hereby agrees to notifY the Holder in writing within three (3) Trading Days
after any such default; provided, however, any filing of an 8-K that identifies
any such default shall not be deemed notice under this Section 4.l(t). "Other
 Agreements" means, collectively,(!) all existing and future agreements and
instruments between, among or by the Company (or a Subsidiary), on the one hand,
and the Holder (or an Affiliate of Holder), on the other hand, and (2) any
financing

agreement or a material agreement that affects the Company's  ongoing business
operations. For the avoidance of doubt, all existing and future loan
transactions between the Company and the Holder and its Affiliates will be
cross-defaulted with each other loan transaction and with all other existing and
future debt of the Company to the Holder.

Each subsection of this Section 4.1 shall be interpreted and applied
independently, and no such subsection shall be deemed to limit or qualifY any
other subsection in any manner whatsoever.

4.2.

Notice of an Event of Default Redemption Right.

(a)        Upon the occurrence of an Event of Default, the Company shall within
one (I) Trading Day deliver written notice thereof via facsimile and reputable
overnight courier (with next day delivery specified) (an "Event of Default
Notice") to the Holder.

(b)        At any time and from time to time after the earlier of the Holder's
receipt of an Event of Default Notice and the Holder becoming aware of an Event
of Default, the Holder may require the Company to redeem (regardless of whether
such Event of Default has been cured) all or any portion of this Note by
delivering written notice thereof (the "Event of Default Redemption  Notice") to
the Company, which Event of Default Redemption Notice shall indicate the portion
of the Outstanding Balance the Holder is electing to redeem (the "Default
Redemption  Amount"). Redemptions required by this Section 4.2(b) shall be made
in accordance with the provisions of Section 10. Notwithstanding anything to the
contrary in this  Section 4, but subject to Section 3.4,  until the Default
Redemption Amount (together with Late Charges thereon) is paid in full pursuant
to and in accordance with the terms set forth in Section  I 0; the Outstanding
Balance (together with any Late Charges thereon), may be converted, in whole or
in part from time to time, by the Holder into Common Stock pursuant to the other
terms of this Note. In the event of a partial redemption of this Note pursuant
hereto, the applicable Default Redemption Amount shall be deducted from the
Installment Amount(s) relating to the applicable Installment Date(s) as set
forth in the Event of Default Redemption Notice. Notwithstanding the foregoing,
this Section 4.2(b) shall not apply to an Event of Default arising under Section
4.1(h) (Bankruptcy).

(c)

Upon the occurrence of an Event of Default occurring under Section

4.1(h) due to the institution by or against the Company of any bankruptcy
proceeding for relief under any

bankruptcy law or any law for the relief of debtors, (i) the Outstanding Balance
shall automatically increase to an amount equal to the Outstanding Balance
immediately prior to such Event of Default multiplied by the Redemption Premium,
and (ii) all amounts owed under this Note shall accelerate and be immediately
due and payable, all without the need for any further notice to or action by any
party hereunder.

(d)        Upon the occurrence of any Event of Default, this Note shall
thereafter accrue interest at the rate of 1.8% per month (or 22% per annum),
compounding daily, whether before or after judgment; provided, however, that
notwithstanding any provision to the contrary herein, in no event shall the
applicable interest rate at any time exceed the maximum interest rate allowed
under applicable law.

(e)        Notwithstanding and in addition to any other provision contained
herein, beginning 180 days after the Issuance Date, if Section 3 Conversion
Shares are delivered to Holder in certificated form rather than electronic form,
the Outstanding Balance shall automatically increase by an amount equal to the
decline in Value (as defined below), if any, of such shares between the time the
certificate representing such shares was required to be delivered to the Holder
hereunder, and the date the certificate representing such shares becomes Free
Trading. The Company agrees to use it best efforts to

cause such shares to become Free Trading. "Value", as used in this subsection,
shall mean the five (5) Trading Day trailing average VWAP for the applicable
shares.

5.

RIGHTS UPON FUNDAMENTAL TRANSACTION.

5.I.       Assumption. The Company shall not enter into or be party to a
Fundamental Transaction unless (i) the Successor Entity assumes in writing all
of the obligations of the Company under this Note and the other Transaction
Documents in accordance with the provisions of this Section

5.1 pursuant to written agreements in form and substance satisfactory to the
Holder and approved by the

Holder, in its sole discretion, prior to such Fundamental Transaction, including
agreements to deliver to the Holder in exchange for this Note a security of the
Successor Entity evidenced by a written instrument substantially similar in form
and substance to this Note, including, without limitation, having a principal
amount and interest rate equal to the principal amounts then outstanding and the
interest rates of this Note, having similar conversion rights as this Note and
having similar ranking to this Note, and being satisfactory to the Holder in its
sole discretion, (ii) the Successor Entity is a publicly traded corporation
whose common stock is quoted on or listed for trading on an Eligible Market, and
(iii) the Company has received the Holder's prior written consent to enter into
such Fundamental Transaction. Upon the occurrence of any Fundamental
Transaction, the Successor Entity shall succeed to, and be substituted for (so
that from and after the date of such Fundamental Transaction, the provisions of
this Note and the other Transaction Documents referring to the "Company" shall
refer instead to the Successor Entity), and may exercise every right and power
of the Company and shall assume all of the obligations of the Company under this
Note and the other Transaction Documents with the same effect as if such
Successor Entity had been named as the Company herein. Upon consummation of a
Fundamental Transaction, the Successor Entity shall deliver to the Holder
confirmation that there shall be issued upon conversion or redemption of this
Note at any time after the consummation of such Fundamental Transaction, in lieu
of the shares of the Company's  Common Stock (or other securities, cash, assets
or other property (except such items still issuable under Section 6, which shall
continue to be receivable thereafter) issuable upon the conversion or redemption
of this Note prior to such Fundamental Transaction), such shares of the publicly
traded common stock (or their equivalent) of the Successor Entity (including its
Parent Entity) which the Holder would have been entitled to receive upon the
happening of such Fundamental Transaction had this Note been converted
immediately prior to such Fundamental Transaction (without regard to any
limitations on the conversion of this Note), as adjusted in accordance with the
provisions of this Note. The provisions of this Section 5 shall apply similarly
and equally to successive Fundamental Transactions and shall be applied without
regard to any limitations on the conversion of this Note.

5.2.      Notice of a Fundamental Transaction: Redemption Right. No sooner than
twenty (20) Trading Days nor later than ten (10) Trading Days prior to the
consummation of a Fundamental Transaction, but not prior to the public
announcement of such Fundamental Transaction, the Company shall deliver written
notice thereof via facsimile and reputable overnight courier to the Holder (a
"Fundamental Transaction Notice"). At any time during the period beginning after
the Holder's receipt of a Fundamental Transaction Notice or the Holder becoming
aware of a Fundamental Transaction if a Fundamental Transaction Notice is not
delivered to the Holder in accordance with the immediately preceding  sentence
 (as  applicable)  and  ending  on  the  later  of  twenty  (20) Trading  Days
 after (i) consummation of such Fundamental Transaction and (ii) the date of
receipt of such Fundamental Transaction Notice, the Holder may require the
Company to redeem all or any portion of this Note by delivering written notice
thereof ("Fundamental Transaction Redemption Notice") to the Company, which
Fundamental Transaction Redemption Notice shall indicate the portion of the
Outstanding Balance the Holder is electing to redeem (the "Fundamental
Transaction Redemption Amount"). The Fundamental Transaction Redemption Amount
shall be redeemed by the Company in cash pursuant to and in accordance with
Section I 0 and shall have priority to payments to stockholders in connection
with such Fundamental Transaction. Notwithstanding anything to the contrary in
this Section 5, but subject to

Section 3.4, until the  Fundamental  Transaction  Redemption  Amount  (together
 with  any Late  Charges thereon)  is paid  in full,  the Outstanding  Balance
 (together  with  any  Late  Charges  thereon),  may  be converted, in whole or
in part from time to time, by the Holder into Common Stock pursuant to Section
3. In  the  event  of  a  partial  redemption  of  this  Note  pursuant  hereto,
 the  Fundamental  Transaction Redemption  Amount  shall  be  deducted  from
 the  Installment  Amount(s)  relating  to  the  applicable Installment Date(s)
as set forth in the Fundamental Transaction Redemption Notice.

6.

DISTRIBUTION  OF ASSETS; RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER
CORPORATE EVENTS.

6.1.       Distribution of Assets. Without the prior written consent of Holder,
the Company agrees  not to declare or make any dividend  or other distributions
 of its assets (or rights to acquire  its assets)  to  any  or  all  holders  of
shares  of  Common  Stock,  by way  of  return  of  capital  or  otherwise
(including,  without limitation, any distribution  of cash, stock or other
securities, property or options by way of a dividend,  spin off,
reclassification, corporate  rearrangement, scheme  of arrangement  or other
similar transaction).

6.2.       Purchase Rights. In addition to any adjustments pursuant to Section 7
below, if at any time the Company grants, issues or sells any Options,
Convertible Securities  or rights to purchase stock, warrants, securities or
other property pro rata to the record holders of any class of Common Stock (the
"Purchase Rights"),  then the Holder will be entitled to acquire, upon the terms
applicable to such Purchase Rights, the aggregate Purchase Rights which the
Holder could have acquired if the Holder had held the number of shares of Common
Stock acquirable upon complete conversion of this Note (without taking into
account any limitations or restrictions on the convertibility of this Note)
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 (provided, however, to the extent that the
Holder's  right to participate in any such Purchase Right would result in the
Holder exceeding the Maximum Percentage, then the Holder shall not be entitled
to participate in such Purchase Right to such extent (or beneficial ownership of
such shares of Common Stock as a result of such Purchase Right to such extent)
and such Purchase Right to such extent shall be held in abeyance for the Holder
until such time, if ever, as its right thereto would not result in the Holder
exceeding the Maximum Percentage).

6.3.       Other Corporate Events. In addition to and not in substitution for
any other rights hereunder,  prior to  the consummation  of any  Fundamental
 Transaction  pursuant  to  which  holders  of shares of Common Stock are
entitled to receive securities or other assets with respect to or in exchange
for shares of Common Stock (a "Corporate Event"), the Company shall make
appropriate  provision to insure  that the  Holder  will thereafter  have the
right to  receive  upon  a conversion  of this  Note (i) in addition to the
shares of Common Stock receivable upon such conversion, such securities or other
assets to which the Holder would have been entitled with respect to such shares
of Common Stock had such shares  of Common  Stock  been  held  by the Holder
 upon the consummation  of such  Corporate  Event (without taking into account
any limitations or restrictions on the convertibility of this Note) or (ii) in
lieu of the shares of Common Stock otherwise receivable upon such conversion,
such securities or other assets received  by the  holders  of  shares  of
 Common  Stock  in connection  with  the  consummation  of  such Corporate Event
in such amounts as the Holder would have been entitled to receive had this Note
initially been issued with conversion rights for the form of such consideration
(as opposed to shares of Common Stock) using a conversion rate for such
consideration commensurate with the Conversion Rate. Provision made pursuant to
the preceding sentence shall be in a form and substance satisfactory to the
Holder. The provisions of this Section 6 shall apply similarly and equally to
successive Corporate Events and shall be applied without regard to any
limitations on the conversion or redemption of this Note.

7.

RIGHTS UPON ISSUANCE OF SECURITIES.

7.1.      Adjustment of Conversion Price upon Issuance of Common Stock. Except
with respect to Excluded Securities, if and whenever on or after the Issuance
Date the Company issues or sells Common Stock, Options, Convertible Securities,
or upon any conversion or Deemed Issuance, or in accordance with subsections (a)
through (e) below is deemed to have issued or sold, any shares of Common Stock
(including without limitation the issuance or sale of shares of Common Stock
owned or held by or for the account of the Company, but excluding any Excluded
Securities issued or sold or deemed to have been issued or sold) for a
consideration per share (the "New Issuance Price") less than a price equal to
the Conversion Price in effect immediately prior to such issue, conversion, or
sale or deemed issuance or sale (such Conversion Price then in effect is
referred to herein as the "Applicable Price")  (the foregoing a "Dilutive
Issuance"),  then, immediately after such Dilutive Issuance, the Conversion
Price then in effect shall be reduced to an amount equal to the New Issuance
Price.  For the avoidance of doubt, if the New Issuance Price is greater than
the Applicable Price, there shall be no adjustment to the Conversion Price. For
purposes of determining the adjusted Conversion Price under this Section 7.I,the
following shall be applicable:

(a)        Issuance of Options. If the Company in any manner grants or sells any
Options and the lowest price per share for which one share of Common Stock is
issuable upon the exercise of any such Option or upon conversion, exercise or
exchange of any Convertible Securities issuable upon exercise of any such Option
is less than the Applicable Price, then such share of Common Stock shall be
deemed to be outstanding and to have been issued and sold by the Company at the
time of the granting or sale of such Option for such price per share. For
purposes of this Section 7.l(a),  the "lowest price per share for which one
share of Common Stock is issuable upon the exercise of any such Options or upon
conversion, exercise or exchange of any Convertible Securities issuable upon
exercise of any such Option" shall be equal to (I) the lower of (x) the sum of
the lowest amounts of consideration (if any) received or receivable by the
Company with respect to any one share of Common Stock upon the granting or sale
of such Option, upon exercise of such Option and upon conversion, exercise or
exchange of any Convertible Security issuable upon exercise of such Option and
(y) the lowest exercise price set forth in such Option for which one share of
Common Stock is issuable upon the exercise of any such Options or upon
conversion, exercise or exchange of any Convertible Securities issuable upon
exercise of any such Option minus (2) the sum of all amounts paid or payable to
the holder of such Option (or any other Person) upon the granting or sale of
such Option, upon exercise of such Option and upon conversion, exercise or
exchange of any Convertible Security issuable upon exercise of such Option plus
the value of any other consideration received or receivable by, or benefit
conferred on, the holder of such Option (or any other Person). Except as
contemplated below, no further adjustment of the Conversion Price shall be made
upon the actual issuance of such share of Common Stock or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of such
share of Common Stock upon conversion, exercise or exchange of such Convertible
Securities. Nothing in this section shall apply to the issuance of options,
stock grants, or other compensation shares to officers, directors, employees or
consultants of the Company, under and in accordance with the 2012 Stock Plan as
duly amended.

(b)        Issuance of Convertible Securities. If the Company in any manner
issues or sells any Convertible Securities, and the lowest price per share for
which one share of Common Stock is issuable upon the conversion, exercise or
exchange thereof is less than the Applicable Price, then such share of Common
Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible Securities for
such price per share. For the purposes of this Section 7.l(b), the "lowest price
per share for which one share of Common Stock is issuable upon the conversion,
exercise or exchange thereof' shall be equal to(!) the lower of (x) the sum of
the lowest amounts of consideration (if any) received or receivable by the
Company with respect to one share of Common Stock upon the issuance or sale of
the Convertible Security and upon conversion,

exercise or exchange of such Convertible Security and (y) the lowest conversion
price set forth in such Convertible Security for which one share of Common Stock
is issuable upon conversion, exercise or exchange thereof minus (2) the sum of
all amounts paid or payable to the holder of such Convertible Security (or any
other Person) upon the issuance or sale of such Convertible Security plus the
value of any other consideration received or receivable by, or benefit conferred
on, the holder of such Convertible Security (or any other Person). Except as
contemplated below, no further adjustment of the Conversion Price shall be made
upon the actual issuance of such share of Common Stock upon conversion, exercise
or exchange of such Convertible Securities, and if any such issue or sale of
such Convertible Securities is made upon exercise of any Options for which
adjustment of the Conversion Price has been or is to be made  pursuant  to
 other  provisions  of  this  Section 7.1,  except  as  contemplated  below,  no
 further adjustment of the Conversion Price shall be made by reason of such
issue or sale.

(c)        Change  in  Option  Price or  Rate of  Conversion.  If  the  purchase
or exercise price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exercise or exchange of any Convertible
Securities, or the rate at which any Convertible Securities are convertible into
or exercisable or exchangeable for shares of Common Stock increases or decreases
at any time, the Conversion Price in effect at the time of such increase or
decrease shall be adjusted to the Conversion Price which would have been in
effect at such time had such Options or Convertible Securities provided for such
increased or decreased purchase price, additional consideration or increased or
decreased conversion rate (as the case may be) at the time initially granted,
issued or sold. For  purposes of  this  Section 7.l(c),   if the  terms  of  any
 Option or  Convertible Security that  was outstanding as of the Issuance Date
are increased or decreased in the manner described in the immediately preceding
sentence, then such Option or Convertible Security and the shares of Common
Stock deemed issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such increase or decrease. No
adjustment pursuant to this Section 7.1 shall be made if such adjustment would
result in an increase of the Conversion Price then in effect.

(d)        Calculation of Consideration Received. If any Option or Convertible
Security is issued or deemed issued in connection with the issuance or sale or
deemed issuance or sale of any other securities of the Company, together
comprising one integrated transaction, (x) such Option or Convertible Security
(as applicable) will be deemed to have been issued for consideration equal to
the Black Scholes Consideration Value thereof and (y) the other securities
issued or sold or deemed to have been issued or sold in such integrated
transaction shall be deemed to have been issued for consideration equal to the
difference of (I) the aggregate consideration received by the Company minus (II)
the Black Scholes Consideration Value of each such Option or Convertible
Security (as applicable). If any shares of Common Stock, Options or Convertible
Securities are issued or sold or deemed to have been issued or sold for cash,
the consideration received therefor will be deemed to be the net amount received
by the Company therefor. If any shares of Common Stock, Options or Convertible
Securities are issued or sold for a consideration other than cash, the amount of
such consideration received by the Company will be the fair value of such
consideration, except where such consideration consists of publicly traded
securities, in which case the amount of consideration received by the Company
for such securities will be the average VWAP of such security for the five (5)
Trading Day period immediately preceding the date of receipt. If any shares of
Common Stock, Options or Convertible Securities are issued to the owners of the
non­ surviving entity in connection with any merger in which the Company is the
surviving entity, the amount of consideration therefor will be deemed to be the
fair value of such portion of the net assets and business of the non-surviving
entity as is attributable to such shares of Common Stock, Options or Convertible
Securities (as the case may be). The fair value of any consideration other than
cash or publicly traded securities will be determined jointly by the Company and
the Holder. If such parties are unable to reach agreement within  ten  (I0)
Trading  Days after  the  occurrence of  an  event  requiring valuation  (the
"Valuation Event"), the fair value of such consideration will be determined
within five (5) Trading Days after the tenth (!O'h) day following such Valuation
Event by an independent, reputable appraiser jointly

selected by the Company and the Holder. The determination of such appraiser
shall be final and binding upon all parties absent manifest error and the fees
and expenses of such appraiser shall be borne by the Company.

(e)        Record Date. If the Company takes a record of the holders of shares
of Common Stock for the purpose of entitling them (A) to receive a dividend or
other distribution payable in Common Stock, Options or  in Convertible
Securities or (B) to subscribe for  or  purchase shares of Common Stock, Options
or Convertible Securities, then such record date will be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase (as the case may be).

7.2.      Adjustment of Conversion Price upon Subdivision or Combination of
Common Stock. Without limiting any provision of Section 5 or Section 7.1, if the
Company at any time on or after the Issuance Date subdivides (by any stock
split, stock dividend, recapitalization or otherwise) one or more classes of its
outstanding shares of Common Stock into a greater number of shares, the
Conversion Price in effect immediately prior to such subdivision will be
proportionately reduced. Without limiting any provision of Section 5 or Section
7.I, if the Company at any time on or after the Issuance Date combines (by
combination, reverse stock split or otherwise) one or more classes of its
outstanding shares of Common Stock into a smaller number of shares, the
Conversion Price in effect immediately prior to such combination will be
proportionately increased. Any adjustment pursuant to this Section 7.2 shall
become effective immediately after the effective date of such subdivision or
combination. If any event requiring an adjustment under this Section 7.2 occurs
during the period that a Conversion Price is calculated hereunder, then the
calculation of such Conversion Price shall be adjusted appropriately to reflect
such event.

7.3.       Other Events. In the event that the Company (or any Subsidiary) shall
take any action to which the provisions hereof are not strictly applicable, or,
if applicable, would not operate to protect the Holder from dilution or if any
event occurs of the type contemplated by the provisions of this Section 7 but
not expressly provided for by such provisions (including, without limitation,
the granting of stock appreciation rights, phantom stock rights or other rights
with equity features), then the Company's board of directors shall in good faith
determine and implement an appropriate adjustment in the Conversion Price so as
to protect the rights of the Holder, provided that no such adjustment pursuant
to this Section 7.3 will increase the Conversion Price as otherwise determined
pursuant to this Section 7, provided further that if the Holder does not accept
such adjustments as appropriately protecting its interests hereunder against
such dilution, then the Company's board of directors and the Holder shall agree,
in good faith, upon an independent investment bank of nationally recognized
standing to make such  appropriate adjustments, whose determination shall  be
final  and  binding and  whose fees  and expenses shall be borne by the Company.

8.         COMPANY INSTALLMENT CONVERSION OR REDEMPTION. Beginning on the date
that is one hundred eighty (180) calendar days following the Issuance Date (the
"Initial Installment Date"), and on each applicable Installment Date thereafter,
the Company shall pay to the Holder of this Note the applicable Installment
Amount due on such date by converting such Installment Amount in accordance with
this Section 8 (a "Company Conversion"); provided, however, the Company may, at
its option as described below, pay all or any part of such Installment Amount by
redeeming such Installment Amount in cash (a "Company  Redemption") or by any
combination of a Company Conversion and a Company Redemption so long as the
entire amount of such Installment Amount due shall be converted and/or redeemed
by the Company on the applicable Installment Date, subject to the provisions of
this Section 8; provided further that the Company shall not be entitled to
effect a Company Conversion with respect to any portion of such Installment
Amount and shall be required to pay the entire amount of such

Notice Due Date (defined below) or on the applicable Installment Date (as the
case may be) there is an

Equity Conditions Failure, and such failure is not waived by Holder as permitted
herein.

8.1.      General. On or prior to the date which is the twenty-third (23'd)
Trading Day prior to each Installment Date (each, a "Pre-Installment Notice Due
Date"), the Company shall deliver written notice to the Holder substantially in
the form attached hereto as Exhibit C-1 (each, a "Pre­ Installment Notice"), and
such Pre-Installment Notice shall (i) either (A) confirm that the applicable
Installment Amount of this Note shall be converted in whole pursuant to a
Company Conversion, or (B) (I) state that the Company elects to redeem, or is
required to redeem in accordance with the provisions of this Note, in whole or
in part, the applicable Installment Amount pursuant to a Company Redemption and
(2) specify the portion of the applicable Installment Amount which the Company
elects, or is required to redeem, pursuant to a Company Redemption (such amount
to be redeemed in cash, the "Company Redemption  Amount")  and the portion of
the applicable Installment Amount, if any, with respect to which the Company
will, and is permitted to, effect a Company Conversion (such amount of the
applicable Installment Amount so specified to be so converted pursuant to this
Section 8 is referred to herein as the "Company  Conversion  Amount"),  which
amounts when added together, must equal the entire applicable Installment Amount
and (ii) if the applicable Installment Amount is to be paid, in whole or in
part, pursuant to a Company Conversion, certify that there is not an Equity
Conditions Failure as of the Pre-Installment Notice Due Date. Each
Pre-Installment Notice shall be irrevocable and may not be revoked by the
Company. If the Company does not timely deliver a Pre-Installment Notice on an
applicable Pre-Installment Notice Due Date that complies with this Section 8,
then the Company shall be deemed to have delivered on such Pre-Installment
Notice Due Date an irrevocable Pre-Installment Notice confirming a Company
Conversion of the entire Installment Amount payable as required hereunder and
shall be deemed to have certified that there is not an Equity Conditions Failure
as of the applicable Pre­ Installment Notice Due Date. The applicable Company
Conversion Amount (whether set forth in the applicable Pre-Installment Notice or
by operation of this Section 8) shall be converted in accordance with Section
8.2 or Section 8.4, as applicable and the applicable Company Redemption Amount
shall be redeemed in accordance with Section 8.3.

8.2.      Mechanics of Company Conversion. Subject to Section 3.4,  if the
 Company delivers a Pre-Installment Notice and elects, or is deemed to have
delivered a Pre-Installment Notice and deemed to have elected, in whole or in
part, a Company Conversion in accordance with Section 8.1, then this Section 8.2
shall apply. Notwithstanding the foregoing, if an Equity Conditions Failure has
occurred as of the applicable Pre-Installment Notice Due Date, then the Company
shall identify each such Equity Conditions Failure in the Pre-Installment Notice
and request a waiver thereof from Holder pursuant to Section 8.6 hereof. (i) If
such waiver is obtained, and all DWAC Eligible Conditions are then satisfied and
a Company Conversion is not otherwise prohibited under any other provision of
this Note, then the remainder of this Section 8.2 shall apply to the Company
Conversion; (ii) if such waiver is obtained, but all DWAC Eligible Conditions
are not then satisfied, then the remainder of this Section 8.2 shall not apply
and the Company must deliver certificated Common Stock to Holder pursuant to
Section 8.4 hereof; or (iii) if such waiver is not obtained, then the remainder
of this Section 8.2 shall not apply and the Company must elect a Company
Redemption and deliver cash to the Holder in an amount equal to the Installment
Amount (or such lessor amount authorized by the Holder in writing) pursuant to
Section 8.3 hereof. To the extent applicable as set forth above:

(a)        No   later  than  three  (3)  Trading  Days  after  each  applicable
 Pre- Installment Notice Due Date, the Company shall deliver to the Holder's
 account the Pre-Installment Conversion Shares, and as to which the Holder shall
be the owner thereof as the applicable Pre­ Installment Notice Due Date.

Company shall deliver to the Holder's account a number of shares of Common Stock
equal to the amount, if any, by which the Post-Installment Conversion Shares
exceed the Pre-Installment Conversion Shares previously delivered to Holder,
registered in the name of the Holder or its designee. So long as no Event of
Default has occurred regarding payment, conversion or redemption under this Note
(each a "Payment Default"), if the Pre-Installment Conversion Shares on the
applicable Installment Date exceed the Post­ Installment Conversion Shares, then
the excess will be applied towards the next Conversion Shares to be issued by
the Company (unless the Outstanding Balance has been reduced to zero, in which
case Holder will return such excess shares to the Company). If a Payment Default
has occurred and the Pre­ Installment  Conversion  Shares  for  the  applicable
 Installment  Date  exceed  the  Post-Installment Conversion Shares, then Holder
shall not be required to return to the Company any of the excess shares or apply
such excess shares to any future issuance or conversion of shares hereunder. The
Company agrees to deliver to the Holder such information and calculations
required under this Section 8.2(b) substantially in the form attached hereto as
Exhibit C-2 (each, an "Installment Date Notice").

(c)        If  an   Event  of   Default  occurs  during  any  applicable
 Company Conversion Measuring Period (defined below), then Holder may elect to
either (i) return any Pre­ Installment Conversion Shares delivered in connection
with the applicable Installment Date, or (ii) retain such Pre-Installment
Conversion Shares and reduce the Outstanding Balance in connection therewith by
an amount equal to the Market Price of such retained Pre-Installment Conversion
Shares as of the Installment Date, but in no event shall such reduction be
greater than the Company Conversion Amount used to calculate such
Pre-Installment Conversion Shares. "Company  Conversion  Measuring Period" means
the period beginning on the applicable Pre-Installment Notice Due Date and
ending on the applicable Installment Date.

(d)        If no Equity Conditions Failure existed as of the Pre-Installment
Notice Due Date, but an Equity Conditions Failure exists as of the applicable
Installment Date, and such is not waived as permitted herein, or a Company
Conversion is not otherwise permitted as of the Installment Date under any other
provision of this Note, then, at the option of the Holder designated in writing
to the Company, the Holder may require the Company to do any one or more of the
following:

(i)         the Company must redeem all or any part designated by the Holder of
the Company Conversion Amount for which shares have not yet been delivered to
Holder (such designated amount is referred to as the "Designated  Redemption
 Amount")  and the Company shall pay to the Holder within three (3) Trading Days
of such Installment Date, by wire transfer of immediately available funds, an
amount in cash equal to the Redemption Premium multiplied by the Designated
Redemption Amount (the "Designated  Redemption Price") (if the Company fails to
pay the Designated Redemption Price by the third (3rd) Trading Day following
such written notice to the Company, then such failure to pay shall be an Event
of Default under Section 4.l(a) hereof), or

(ii)        the Company Conversion shall be null and void with respect to the
Company Conversion Amount for which shares have not yet been delivered to
Holder, and Holder shall be entitled to all the rights of a holder of this Note
with respect to such remaining Company Conversion Amount; provided, however, the
Conversion Price for such remaining Company Conversion Amount shall thereafter
be adjusted to equal the Jesser of (Y) the Default Conversion Price as in effect
on the date on which the Holder voided the Company Conversion and (Z) the
Default Conversion Price that would be in effect on the date on which the Holder
delivers a subsequent Conversion Notice relating thereto as if such date was an
Installment Date.

(e)        Notwithstanding anything to the contrary in this Section 8.2, but
subject to  Section 3.4,  until the  Company delivers Common Stock  representing
the  Company  Conversion Amount to the Holder pursuant to the terms of this
Section 8.2, the Company Conversion Amount may be converted by the Holder into
Common Stock pursuant to Section 3. In the event that the Holder elects to
convert the Company Conversion Amount prior to the applicable Installment Date
as set forth in the immediately preceding sentence, the Company Conversion
Amount so converted shall be deducted from the Installment Amount(s) relating to
the applicable Installment Date(s) as set forth in the applicable Conversion
Notice.

(f)        All Common Stock to be delivered to the Holder under this Section 8.2
shall be transferred via the DWAC system.  Failure to do so shall constitute an
Event of Default under Section 4.l(b)  hereof.

8.3.      Mechanics of Company Redemption. If the Company elects, or is required
to elect, a Company Redemption, in whole or in part, in accordance with Section
8.1 or Section 8.2, then the Company Redemption Amount, if any, which is to be
paid to the Holder on the applicable Installment Date shall  be redeemed by the
 Company on such Installment Date in an amount of  cash, and the Company shall
pay to the Holder on such Installment Date, by wire transfer of immediately
available funds an amount, equal to the applicable Company Redemption Amount. If
the Company fails to pay the applicable Company Redemption Amount on the
applicable Installment Date, then, at the option of the Holder designated in
writing to the Company (any such designation shall be a "Conversion Notice" for
purposes of this Note), the Holder may require the Company to convert all or any
part of the Company Redemption Amount at the Default Conversion Price
(determined as of the date of such designation as if such  date  were an
 Installment Date). Conversions required  by this  Section  8.3  shall  be  made
 in accordance  with  the  provisions  of  Section 3.3.  Notwithstanding
 anything  to  the  contrary  in  this Section 8.3, but subject to Section 3.4
and the Holder's right to require the Company to convert all or any part of the
Company Redemption Amount at the Default Conversion Price as set forth above,
until the Company Redemption Amount (together with any Late Charges thereon) is
paid in full, the Company Redemption Amount (together with any Late Charges
thereon) may be converted, in whole or in part, by the Holder into Common Stock
pursuant to Section 3. In the event the Holder elects to convert all or any
portion of the Company Redemption Amount prior to the applicable Installment
Date as set forth in the immediately preceding sentence, the Company Redemption
Amount so converted shall be deducted from the  Installment Amounts relating to
the applicable Installment Date(s) as set forth in the applicable Conversion
Notice.

8.4.      DWAC Eligibilitv. If, when the Company delivers a Pre-Installment
Notice and elects, or is deemed to have delivered a Pre-Installment Notice and
deemed to have elected, in whole or in part, a Company Conversion in accordance
with Section 8.1, and the DWAC Eligible Conditions are not then satisfied but
Holder waives the corresponding Equity Conditions Failure pursuant to Section
8.6, then, in accordance with Section 8.2, although such status will constitute
an Event of Default hereunder, shares required to be issued to the Holder under
this Section 8 shall be issued (without limiting any of Holder's rights with
respect to the Event of Default) as follows:

(a)        No later than three (3) Trading Days after delivery or deemed
delivery (as applicable) of the applicable Pre-Installment Notice setting forth
a Company Conversion Amount, the Company shall deliver to the Holder or its
broker, via reputable overnight courier, the Pre-Installment Certificated Shares
by original share certificate, registered in the name of the Holder or its
designee; provided, however, that so long as shares are not provided
electronically to the Holder under Section 8, the  Pre-Installment  Certificated
 Shares  shall  equal  two  (2)  times  the  number  of  Pre-Installment
Conversion Shares that would otherwise be transferred electronically to the
Holder.

become Free Trading (the first date such occurs, the "Free  Trading Date"). The
Holder will notify the

Company of the Free Trading Date via email within two (2) Trading Days after the
occurrence of the Free

Trading Date.

(c)        Provided that there is no Equity Conditions Failure as of the date
that is twenty-eight (28) Trading Days after the applicable Free Trading Date
(the "Certificated Shares Installment Date") (or such failure is waived as
permitted herein) and a Company Conversion is not otherwise prohibited under any
other provision of this Note, no later than three (3) Trading Days after the
applicable Certificated Shares Installment Date, the Company shall deliver to
the Holder or its broker via reputable overnight courier the Post-Installment
Certificated Shares, less the Pre-Installment Certificated Shares previously
delivered to the Holder, by original share certificate, registered in the name
of the Holder or its designee. So long as no Payment Default has occurred, if
the Pre-Installment Certificated Shares for the applicable Certificated Shares
Installment Date exceed the Post-Installment Certificated Shares, then the
excess will be applied towards the next Conversion Shares to be issued by the
Company (unless the Outstanding Balance has been reduced to zero, in which case
Holder will return such excess shares to the Company). If a Payment Default has
occurred and the Pre-Installment Certificated Shares for the applicable
Certificated Shares Installment Date exceed the Post-Installment Certificated
Shares, then Holder shall not be required to return to the Company any of the
excess shares or apply such excess shares to any future issuance or conversion
of shares hereunder.

8.5.      Deemed Issuance. If Company fails to deliver shares as required by any
portion of this Section 8, in addition to such failure to act being considered
an Event of Default hereunder, for purposes of Section 7.l, the Company shall
also be deemed to have issued the Pre-Installment Conversion Shares,
Post-Installment Conversion Shares, Pre-Installment Certificated Shares, or
Post-Installment Certificated Shares, as applicable, to Holder on the latest
possible permitted date pursuant to the terms set forth in this Section 8, with
Holder entitled to all the rights and privileges associated with such deemed
issued shares (the "Deemed Installment Issuance").

8.6.      Waiver of Equitv Conditions Failure. Notwithstanding anything in this
Note to the Contrary, the Holder may waive in writing any Equity Conditions
Failure, except for the Non­ Waivable Equity Conditions (defined below).  For
purposes of this Section 8, "Non-Waivable Equity Conditions" refers to (A) the
Equity Condition set forth in Section 27.20(iv) (indicating that Holder may not
own more than the Maximum Percentage set forth in Section 3.4 of this Note), and
(B) the Equity Condition set forth in Section 27.20(v) (Common Stock may be
issued without violating the rules of the Eligible Market). Any such waiver
shall only be made for the purposes of permitting a Company Conversion to occur
under this Section 8 and shall not be deemed a waiver of the underlying default
or a continuing waiver of a future Equity Conditions Failure. Any such waiver
shall not excuse the Company from the performance of any of its current or
future obligations under this Note.

8.7.      Preparation of!nstallment Notices. Because of the complexity of the
calculations contemplated under this Note, the Holder may, at its sole
discretion, prepare the Pre-Installment Notice and/or the Installment Date
Notice for the benefit of the Company, including the calculation of Pre­
Installment Conversion Shares, Post-Installment Conversion Shares,
Pre-Installment Certificated Shares, Post-Installment Certificated Shares;
provided, however, that no error or mistake in the preparation of such notices
or information may be deemed a waiver of the Holder's right to enforce the terms
of this Note, even if such error or mistake arises from the Holder's own
calculation, provided that no penalties as described above or Events of Default
may be deemed to have occurred as the result of any error or mistake that arises
solely from the Holder's own calculation. Nothing in this Section shall be
deemed an obligation of the Holder to prepare any such notices or information,
or a waiver of any of its rights and remedies under this Note.

similar taxes that may be payable with respect to the issuance and delivery of
Pre-Installment Conversion Shares, Post-Installment Conversion Shares,
Pre-Installment Certificated Shares, and Post-Installment Certificated Shares.

9.         NONCIRCUMVENTION. The Company hereby covenants and agrees that the
Company will not, by amendment of its Certificate of Incorporation (as defined
in the Agreement), bylaws, or through any reorganization, transfer of assets,
consolidation, merger, scheme of arrangement, dissolution, issue or sale of
securities, or any other voluntary action, avoid or seek to avoid the observance
or performance of any of the terms of this Note, and will at all times in good
faith carry out all of the provisions of this Note and take all action as may be
required to protect the rights of the Holder of this Note. Without limiting the
generality of the foregoing, the Company (i) shall not increase the par value of
any shares of Common Stock receivable upon conversion of this Note above the
Conversion Price then in effect, (ii) shall take all such actions as may be
necessary or appropriate in order that the Company may validly and legally issue
fully paid and non-assessable shares of Common Stock upon the conversion of this
Note, and (iii) shall, so long as this Note is outstanding, take all action
necessary to maintain the Share Reserve (as defined in the Agreement).

10.       HOLDER'S REDEMPTIONS. If the Holder has submitted to Company an Event
of Default Redemption Notice in accordance with Section 4.2(b), then the Company
shall pay to Holder in cash within ten (10) Trading Days after the Company's
receipt of such Event of Default Redemption Notice an amount equal to the
Default Redemption Amount multiplied by the Redemption Premium (the "Event  of
Default Redemption  Price"); provided, however, that the Redemption Premium may
only be applied in computing the Event of Default Redemption Price with respect
to the first two Events of Default under this Note, and not to any subsequent
Events of Default. If the Holder has submitted to Company a Fundamental
Transaction Redemption Notice in accordance with Section 5.2, then the Company
shall pay to Holder in cash prior to the consummation of such Fundamental
Transaction if such notice is received prior to the consummation of such
Fundamental Transaction and within ten (1 0) Trading Days after the Company's
receipt of such notice otherwise, an amount equal to the Fundamental Transaction
 Redemption  Amount  multiplied  by  the   Redemption  Premium  (the
  "Fundamental Transaction Redemption  Price"). Notwithstanding anything in this
Note to the contrary, such failure of the Company to pay the Redemption Price
under this Section I 0 shall not be considered a separate Event of Default
hereunder. In the event that the Company does not pay the applicable Redemption
Price to the Holder within the time period required, at any time thereafter and
until the Company pays such unpaid Redemption Price in full, the Holder shall
have the option, in lieu of redemption, to cancel the Event of Default
Redemption Notice or the Fundamental Transaction Redemption Notice, as
applicable, by written notice to the Company (the "Redemption Cancellation
 Notice"). Upon the Company's  receipt of a Redemption Cancellation Notice, (x)
the Outstanding Balance of this Note as of the date of the Redemption Notice
shall  be  increased by an  amount equal to  (I) the  applicable Event of
 Default Redemption Price, or Fundamental Transaction Redemption Price (as the
case may be), minus (2) the principal portion of the Outstanding Balance
submitted for redemption; (y) this Note shall thereafter be due and payable upon
demand, with payment of the Outstanding Balance due ten (10) Trading Days after
written demand from the Holder, and (z) the Conversion Price of this Note shall
be automatically adjusted with respect to each conversion under this Note
effected thereafter by the Holder to the lowest of (A) 70% of the lowest Closing
Bid Price of the Common Stock during the period beginning on and including the
date on  which the applicable Redemption Notice is delivered to the Company and
ending on and including the date of the Redemption Cancellation Notice, (B) the
Market Price as of the date of the Redemption Cancellation Notice, (C) the then
current Market Price, and (D) the then current Conversion Price. The Holder's
delivery of a Redemption Cancellation Notice and exercise of its rights
following such notice shall not affect the Company's obligations to make any
payments of Late Charges which have accrued prior to the date of such Redemption
Cancellation Notice.

except as required by law and as expressly provided in this Note.

12.       AMENDING THE TERMS OF THIS NOTE. The prior written consent of the
Holder and the Company shall be required for any change or amendment to this
Note.

13.

TRANSFER. This Note and any shares of Common Stock issued upon conversion of
this

Note may be offered, sold, assigned or transferred by the Holder without the
consent of the Company.

14.

REISSUANCE OF THIS NOTE.

14.1.    Transfer. If this Note is to be transferred, the Holder shall surrender
this Note to the Company, whereupon the Company will forthwith issue and deliver
upon the order of the Holder a new Note (in accordance with Section 14.4),
registered as the Holder may request, representing the Outstanding Balance being
transferred by the Holder and, if less than the entire Outstanding Balance is
being  transferred,  a  new  Note  (in  accordance  with  Section 14.4)  to  the
 Holder  representing the Outstanding Balance not being transferred.

14.2.   Lost  Stolen or Mutilated Note. Upon receipt by the Company of evidence
reasonably satisfactory to the Company of the loss, theft, destruction or
mutilation of this Note (as to which a written certification and the
indemnification contemplated below shall suffice as such evidence), and, in the
case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary and reasonable form and, in the case of
mutilation, upon surrender and cancellation of this Note, the Company shall
execute and deliver to the Holder a new Note (in accordance with Section 14.4)
representing the Outstanding Balance.

14.3.    Note Exchangeable for  Different Denominations. This  Note is
exchangeable, upon the surrender hereof by the Holder at the principal office of
the Company, for a new Note or Notes (in  accordance with  Section 14.4 and  in
principal amounts of  at  least $1,000)  representing in the aggregate the
Outstanding Balance of this Note, and each such new Note will represent such
portion of such Outstanding Balance as is designated by the Holder at the time
of such surrender.

14.4.    Issuance  of  New  Notes. Subject  to  Section  10,  whenever  the
 Company  is required to issue a new Note pursuant to the terms of this Note,
such new Note (i) shall be of like tenor with this Note, (ii) shall represent,
as indicated on the face of such new Note, the Outstanding Balance (or in the
case of a new Note being issued pursuant to Section 14.1 or Section 14.3, the
portion of the Outstanding Balance designated by the Holder which, when added to
the outstanding balance represented by the other new Notes issued in connection
with such issuance, does not exceed the Outstanding Balance under this Note
immediately prior to such issuance of new Notes), (iii) shall have an issuance
date, as indicated on the face of such new Note, which is the same as the
Issuance Date of this Note, (iv) shall have the same rights and conditions as
this Note, and (v) shall represent accrued and unpaid Interest and Late Charges
and other increases to the Outstanding Balance as permitted hereunder from the
Issuance Date.

15.       REMEDIES, CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND
INJUNCTIVE RELIEF. The remedies, including without limitation the Redemption
Premium, Prepayment Premium, and all other charges, fees, and collection costs
provided for in this Note, shall be cumulative  and  in  addition to  all  other
 remedies available  under this  Note  and  any  of  the  other Transaction
Documents at law or in equity (including a decree of specific performance and/or
other injunctive relief), and nothing herein shall limit the Holder's  right to
pursue actual and consequential damages for any failure by the Company to comply
with the terms of this Note. The Company covenants

to the Holder that there shall be no characterization concerning this instrument
other than as expressly provided herein. Amounts set forth or provided for
herein with respect to payments, conversion and the like (and the computation
thereof) shall be the amounts to be received by the Holder and shall not, except
as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of
its obligations hereunder will cause irreparable harm to the Holder and that the
remedy at law for any such breach may be inadequate. The Company therefore
agrees that, in the event of any such breach or threatened breach, the Holder
shall be entitled, in addition to all other available remedies, to an injunction
restraining any such breach or any such threatened breach, without the necessity
of showing economic loss and without any bond or other security being required.
The Company shall provide all information and documentation to the Holder that
is requested by the Holder to enable the Holder to confirm the Company's
compliance with the terms and conditions of this Note (including, without
limitation, compliance with Section 7).

16.       PAYMENT OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note
is placed in the hands of an attorney for collection or enforcement or is
collected or enforced through any legal proceeding or the Holder otherwise takes
action to collect amounts due under this Note or to enforce the provisions of
this Note or (b) there occurs any bankruptcy, reorganization, receivership of
the Company or other proceedings affecting Company creditors' rights and
involving a claim under this Note, then the Company shall pay the costs incurred
by the Holder for such collection, enforcement or  action  or  in  connection
with such  bankruptcy, reorganization, receivership or  other  proceeding,
including, without limitation, reasonable attorneys' fees and disbursements. The
Company expressly acknowledges and agrees that no amounts due under this Note
shall be affected, or limited, by the fact that the Purchase Price paid for this
Note was less than the Original Principal Amount.

17.       CONSTRUCTION: HEADINGS. This Note shall be deemed to be jointly
drafted by the Company and the Holder and shall  not be construed against any
Person as the drafter hereof. The headings of this Note are for convenience of
reference and shall not form part of, or affect the interpretation of, this
Note. Terms used in this Note but defined in the other Transaction Documents
shall have the meanings ascribed to such terms on the Issuance Date in such
other Transaction Documents unless otherwise consented to in writing by the
Holder.

18.       FAILURE OR INDULGENCE NOT WAIVER. No failure or delay on the part of
the Holder in the exercise of any power, right or privilege hereunder shall
operate as a waiver thereof, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise thereof or of
any other right, power or privilege. No waiver shall be effective unless it is
in writing and signed by an authorized representative of the waiving party.

19.      DISPUTE RESOLUTION. In the case of a dispute as to the determination of
the Conversion Price, Default Conversion Price, Pre-Installment Conversion
Price, Conversion Rate, the Closing Bid Price, the Closing Sale Price, VWAP or
fair market value (as the case may be) or the arithmetic calculation of
Conversion Shares or the applicable Redemption Price (as the case may be), the
Company or the Holder (as the case may be) shall submit the disputed
determinations or arithmetic calculations (as the case may be) via facsimile (i)
within two (2) Trading Days after receipt of the applicable notice giving rise
to such dispute to the Company or the Holder (as the case may be) or (ii) if no
notice gave rise to such dispute, at any time after the Holder learned of the
circumstances giving rise to such dispute (including, without limitation, as to
whether any issuance or sale or deemed issuance or sale was an  issuance or sale
or deemed issuance or sale of Excluded Securities). If the Holder and the
Company are unable to agree upon such determination or calculation within two
(2) Trading Days of such disputed determination or arithmetic calculation (as
the case may be) being submitted to the Company or the Holder (as the case may
be), then the Company shall, within two (2) Trading Days, submit via facsimile
 (a) the  disputed  determination  of  the  Conversion  Price,  Default
 Conversion  Price,  Pre-

fair  market  value (as the  case  may be) to an  independent,  reputable
 investment  bank selected  by the Holder or (b) the disputed arithmetic
calculation  of the Conversion  Shares or any Redemption  Price (as the case
 may be) to the Company's  independent,  outside  accountant.  The  Company
 shall  cause  at  its expense the investment bank or the accountant (as the
case may be) to perform the determinations or calculations (as the case may be)
and notify the Company and the Holder of the results no later than ten (10)
Trading Days from the time it receives such disputed determinations or
calculations (as the case may be). Such investment bank's  or accountant's
 determination or calculation with respect to the disputes set forth in this
Section 19 (as the case may be) shall be binding upon all parties absent
demonstrable error.

20.

NOTICES: PAYMENTS.

20.1.     Notices.  Whenever  notice  is  required  to  be  given  under  this
 Note,  unless otherwise provided herein, such notice shall be given in
accordance with the subsection of the Agreement titled "Notices."   The Company
shall provide the Holder with prompt written notice of all actions taken
pursuant to this Note, including in reasonable detail a description of such
action and the reason therefore. Without  limiting  the generality  of the
foregoing,  the Company  will give written  notice to the  Holder (i)
immediately  upon  any  adjustment  of the  Conversion  Price,  setting  forth
 in reasonable  detail,  and certifying, the calculation  of such adjustment
 and (ii) at least fifteen (15) Trading Days prior to the date on which the
Company closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any grant, issuances, or
sales of any Options, Convertible Securities  or rights to purchase stock,
warrants, securities  or other property  to all holders of shares of Common
 Stock,  or  (C) for  determining  rights  to  vote  with  respect  to  any
 Fundamental  Transaction, dissolution or liquidation, provided in each case
that such information shall be made known to the public prior to or in
conjunction with such notice being provided to the Holder.

20.2.     Currency. All dollar amounts referred to in this Note are in United
States Dollars ("U.S. Dollars"), and all amounts owing under this Note shall be
paid in U.S. Dollars. All amounts denominated in other currencies (if any) shall
be converted into the U.S. Dollar equivalent amount in accordance with the
Exchange Rate on the date of calculation. "Exchange Rate" means, in relation to
any amount of currency to be converted into U.S. Dollars pursuant to this Note,
the U.S. Dollar exchange rate as published  in The Wall Street Journal on the
 relevant date  of calculation  (it  being understood  and agreed  that  where
 an  amount  is calculated  with  reference  to, or  over,  a  period  of  time,
 the  date  of calculation shall be the final date of such period of time).

20.3.     Payments. Whenever any payment of cash is to be made by the Company to
any Person pursuant to this Note, unless otherwise expressly set forth herein,
such payment shall be made in lawful money of the United States of America by
wire transfer of immediately available funds pursuant to wire transfer
 instructions  delivered  to Company  by Holder  from time  to time.  Whenever
 any amount expressed  to be due by the terms of this Note is due on any day
which is not a Trading Day, the same shall  instead  be due on the  next
succeeding  day which  is a Trading  Day. Any  amount  due under the Transaction
 Documents  which  is not paid  when  due  shall  result  in a  late charge
 being  incurred  and payable by the Company in an amount equal to interest on
such amount at the rate of eighteen  percent (18%) per annum from the date such
amount was due until the same is paid in full ("Late Charge").

21.        CANCELLATION.  After  repayment  or conversion  of the  entire
 Outstanding  Balance, this Note shall automatically  be deemed canceled, shall
be surrendered to the Company for cancellation and shall not be reissued.

waives demand, notice, presentment, protest and all other demands and notices in
connection with the

delivery, acceptance, performance, default or enforcement of this Note and the
Agreement.

23.       GOVERNING LAW. This Note shall be construed and enforced in accordance
with, and all questions concerning the construction, validity, interpretation
and performance of this Note shall be governed by, the internal laws of the
State of Utah, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of Utah or any other jurisdictions) that
would cause the application of the laws of any jurisdictions other than the
State of Utah. The Company hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in Salt Lake City for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein, and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, that
such suit, action or proceeding is brought in an inconvenient forum or that the
venue of such suit, action or proceeding is improper. Nothing contained herein
shall be deemed to limit in any way any right to serve process in any manner
permitted by law. In  the event that any provision of this Note 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 this Note.
Nothing contained herein shall be deemed or operate to preclude the Holder from
bringing suit or taking other legal action against the Company or any of its
Subsidiaries in any other jurisdiction to collect on the Company's obligations
to the Holder, to realize on any collateral or any other security for such
obligations, or to enforce a judgment or other court ruling in favor of the
Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT  IT MAY HAVE TO, AND
AGREES  NOT TO REQUEST,  A JURY TRIAL  FOR THE ADJUDICATION OF ANY DISPUTE
HEREUNDER  OR IN CONNECTION  WITH  OR ARISING OUT OF THIS NOTE OR ANY
TRANSACTION CONTEMPLATED HEREBY.

24.        SEVERABILITY. If  any  provision of  this  Note  is  prohibited  by
 law or  otherwise determined to be invalid or unenforceable by a court of
competent jurisdiction, the provision that would otherwise be prohibited,
invalid or unenforceable shall be deemed amended to apply to the broadest extent
that it would be valid and enforceable, and the invalidity or unenforceability
of such provision shall not affect the validity of the remaining provisions of
this Note so long as this Note as so modified continues to express, without
material change, the original intentions of the parties as to the subject matter
hereof and the prohibited nature, invalidity or unenforceability of the
provision(s) in question does not substantially impair the respective
expectations or reciprocal obligations of the parties or the practical
realization of the benefits that would otherwise be conferred upon the parties.
The parties will endeavor in good faith negotiations to replace the prohibited,
invalid or unenforceable provision(s) with one or more valid provisions, the
effect of which comes as close as possible to that of the prohibited, invalid or
unenforceable provision(s).

25.        FEES AND CHARGES. The parties acknowledge and agree that upon
Company's failure to comply with the provisions of this Note, the Holder's
damages would be uncertain and difficult to estimate because of the parties'
inability to predict future interest rates, the Holder's increased risk, and the
uncertainty of the availability of a suitable substitute investment opportunity
for the Holder. Accordingly, any fees, charges, and interest due under this
Note, including without limitation the Prepayment Premium and the Redemption
Premium, are intended by the parties to  be, and shall be deemed, a reasonable
estimate of the Holder's actual loss of its investment opportunity and not a
penalty, and shall not be deemed in any way to limit any other right or remedy
Holder may have hereunder, at law or in equity.

26.       UNCONDITIONAL OBLIGATION. Subject to the terms of the Agreement, 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 coin or currency or where
contemplated herein in shares of its Common Stock, as applicable, as herein
prescribed. This Note is the direct obligation of the Company and not subject to
offsets, counterclaims, defenses, credits or deductions.

27.        CERTAIN DEFINITIONS. For purposes of this Note, the following terms
shall have the following meanings:

27.1.     "Affiliate" means, with respect to any Person, any other Person that
directly or indirectly controls, is controlled by, or is under common control
with, such Person, it being understood for purposes of this definition that
"control" of a Person means the power directly or indirectly either to vote I 0%
or more of the stock having ordinary voting power for the election of directors
of such Person or direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.

27.2.     "Agreement" means that certain Securities Purchase Agreement, dated as
of November 30, 2012, as may be amended from time to time, by and between the
Company and the Holder, pursuant to which the Company issued this Note.

27.3.     "Approved  Stock Plan" means any stock option plan which has been
approved by the Board of Directors of the Company, pursuant to which the
Company's securities may be issued to any employee, officer or director for
services provided to the Company.

27.4.     "Black Scholes Consideration  Value" means the value of the applicable
Option or Convertible Security (as the case may be) as of the date of issuance
thereof calculated using the Black Scholes Option Pricing Model obtained from
the "OV" function on Bloomberg utilizing (i) an underlying price per share equal
to the Closing Sale Price of the Common Stock on the Trading Day immediately
preceding the public announcement of the execution of definitive documents with
respect to the issuance of such Option or Convertible Security (as the case may
be), (ii) a risk-free interest rate corresponding to the U.S. Treasury rate for
a period equal to the remaining term of such Option or Convertible Security (as
the case may be) as of the date of issuance of such Option or Convertible
Security (as the case may be), and (iii) an expected volatility equal to the
greater of I 00% and the I 00 day volatility obtained from the HVT function on
Bloomberg (determined utilizing a 365 day annualization factor) as of the
Trading Day immediately following the date of issuance of such Option or
Convertible Security (as the case may be).

27.5.

"Bloomberg" means Bloomberg, L.P.

27.6.     "Closing Bid Price" and "Closing Sale Price" means, for any security
as of any date, the last closing bid price and last closing trade price,
respectively, for such security on the Principal Market, as reported by
Bloomberg, or, if the Principal Market begins to operate on an extended hours
basis and does not designate the closing bid price or the closing trade price
(as the case may be) then the last bid price or last trade price, respectively,
of such security prior to 4:00:00 p.m., New York time, as reported by Bloomberg,
or, if the Principal Market is not the principal securities exchange or trading
market for such security, the last closing bid price or last trade price,
respectively, of such security on the principal securities exchange or trading
market where such security is listed or traded as reported by Bloomberg, or if
the foregoing do not apply, the last closing bid price or last trade price,
respectively, of such security in the over-the-counter market on the electronic
bulletin board for such security as reported by Bloomberg, or, if no closing bid
price or last trade price, respectively, is reported for such security by
Bloomberg, the average of the bid prices, or the ask prices, respectively, of
any market makers for such

security as reported in "OTC Pink" by Pink OTC Markets Inc. (formerly Pink
Sheets LLC), and any successor thereto. If the Closing Bid Price or the Closing
Sale Price cannot be calculated for a security on a particular date on any of
the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the
case may be) of such security on such date shall be the fair market value as
mutually determined by the Company and the Holder. If the Company and the Holder
are unable to agree upon the fair market value of such security, then such
dispute shall be resolved in accordance with the procedures in Section 19. All
such determinations shall be appropriately adjusted for any stock dividend,
stock split, stock combination or other similar transaction during such period.

27.7.     "Common  Stock" means (i) the Company's shares of common stock, $0.001
par value per share, and (ii) any capital stock into which such common stock
shall have been changed or any share capital resulting from a reclassification
of such common stock.

27.8.    "Contingent Obligation" means as to any Person, any direct or indirect
liability, contingent or otherwise, of that Person with respect to any
Indebtedness, lease, dividend or other obligation of another Person if the
primary purpose or intent of the Person incurring such liability, or the primary
effect thereof, is to provide assurance to the obligee of such liability that
such liability will be paid or discharged, or that any agreements relating
thereto will be complied with, or that the holders of such liability will be
protected (in whole or in part) against loss with respect thereto.

27.9.

[Reserved}

27.I 0.  "Conversion  Shares" means shares of Common Stock issuable by the
Company upon any conversion of this Note, including without limitation, Section
3 Conversion Shares, Pre­ Installment Conversion Shares, Post-Installment
Conversion Shares, Pre-Installment Certificated Shares, and Post-Installment
Certificated Shares.

27.11.   "Convertible Securities"  means any stock, preferred stock, stock
appreciation rights, phantom stock, equity related rights, equity linked rights,
or other security (other than Options) that is at any time and under any
circumstances, directly or indirectly, convertible into, exercisable or
exchangeable for, or which otherwise entitles the holder thereof to acquire, any
shares of Common Stock.

27.12.   "Current Subsidiary" means any Person in which the Company on the
Issuance Date, directly or indirectly, (i) owns any of the outstanding capital
stock or holds any equity or similar interest of such Person or (ii) controls or
operates all or any part of the business, operations or administration of such
Person, and all of the foregoing, collectively, "Current Subsidiaries."

27.13.   "Deemed  Issuance"  means (i) a  Deemed Conversion Issuance as defined
 in Section 3.3(b) hereof, (ii) a Deemed Installment Issuance as defined in
Section 8.5 hereof, and (iii) a Deemed Warrant Issuance as defined in Section
7.I(e) hereof.

27.14. "Default  Conversion  Price" means, with respect to a particular date of
determination, the lower of (i) the Conversion Price then in effect and (ii) the
Market Price as of the specified Pre-Installment Notice Due Date or the
Installment Date, as applicable. All such determinations to be appropriately
adjusted for any stock split, stock dividend, stock combination or other similar
transaction during any applicable Measuring Period.

27.15.   "DTC" means the Depository Trust Company.

Program.

27.16.   "DTC/FAST  Program" means the DTC's  Fast Automated Securities Transfer

27.17.   "DWAC" means Deposit Withdrawal at Custodian as defined by the DTC.

27.18.   "DWAC  Eligible Conditions"  means that (i) the Common Stock is
eligible at DTC for full services pursuant to DTC's Operational Arrangements,
including without limitation transfer through DTC's DWAC system, (ii) the
Company has been approved (without revocation) by the DTC's underwriting
department, and (iii) the Transfer Agent is approved as an agent in the DTC/FAST
Program.

27.19.   "Eligible  Market" means The New York Stock Exchange, NYSE Amex, the
Nasdaq Global Select Market, the Nasdaq Global Market, the Nasdaq Capital
Market, the OTC Bulletin Board, the OTCQX or the OTCQB, or the Principal Market.
In no event shall quotations provided in OTC Pink by Pink OTC Markets Inc., or
its successor, be considered an Eligible Market.

27.20.   "Equity  Conditions"   means:   (i) with   respect  to   the
  applicable  date   of determination all of the Conversion Shares are freely
tradable under Rule 144 or without the need for registration under any
applicable federal or state securities laws (in each case, disregarding any
limitation on  conversion of this  Note); (ii) on  each day  during the  period
beginning one  month prior to  the applicable date of determination and ending
on and including the applicable date of determination (the "Equity Conditions
Measuring Period"), the Common Stock (including all of the Conversion Shares) is
listed or designated for quotation (as applicable) on an Eligible Market and
shall not have been suspended from trading on an Eligible Market (other than
suspensions of not more than two (2) Trading Days and occurring prior to the
applicable date of determination due to business announcements by the Company);
(iii) on each day during the Equity Conditions Measuring Period, the Company
shall have delivered all shares of Common Stock issuable upon conversion of this
Note on a timely basis as set forth in Section 3 hereof and all other shares of
capital stock required to be delivered by the Company on a timely basis as set
forth in the other Transaction Documents; (iv) any shares of Common Stock to be
issued in connection with the event requiring determination may be issued in
full without violating Section 3.4 hereof (the Holder acknowledges that the
Company shall be entitled to assume that this condition has been met for all
purposes hereunder absent written notice from the Holder); (v) any shares of
Common Stock to be issued in connection with the event requiring determination
may be issued in full without violating the rules or regulations of the Eligible
Market on which the Common Stock is then listed or designated for quotation (as
applicable); (vi) on each day during the Equity Conditions Measuring Period, no
public announcement of a pending, proposed or intended Fundamental Transaction
shall have occurred which has not been abandoned, terminated or consummated;
(vii) the Company shall have no knowledge of any fact that would reasonably be
expected to cause any of the Conversion Shares to not be freely tradable without
the need for registration under any applicable state securities laws (in each
case, disregarding any limitation on conversion of this Note); (viii) on each
day during the Equity Conditions Measuring Period, the Company otherwise shall
have been in material compliance with each, and shall not have breached any,
term, provision, covenant, representation or warranty of any Transaction
Document; (ix) without limiting clause (viii) above, on each day during the
Equity Conditions Measuring Period, there shall not have occurred an Event of
Default or an event that with the  passage of time or giving of  notice would
constitute an Event of Default; (x) all DWAC Eligible Conditions shall be
satisfied as of each applicable Pre-Installment Notice Due Date and Installment
Date; (xi) on each Pre-Installment Notice Due Date and each Installment Date,
the average and median daily dollar volume of the Common Stock on its Principal
Market for the previous twenty-three (23) Trading Days shall be greater than
$15,000.00; and (xii) the ten (10) day average VWAP of the Common Stock is
greater than $0.01.

27.21.  "Equity Conditions  Failure" means, with respect to a particular date of
determination,  that  on  any  day  during  the  period  commencing  twenty
 three  (23) Trading  Days immediately prior to such date of determination and
ending on such date of determination, the Equity Conditions have not been
satisfied (or waived in writing by the Holder). If an Equity Conditions Failure
is

the result of an Event of Default, then the Equity Conditions Failure shall be
deemed permanent and may not be cured by the Company.

27.22. "Excluded Securities" means any shares of Common Stock, options, or
convertible securities issued or issuable (i) in connection with any Approved
Stock Plan; provided that the option term, exercise price or similar provisions
of any issuances pursuant to such Approved Stock Plan are not amended, modified
or changed on or after the Issuance Date; and (ii)  in connection with mergers,
acquisitions, strategic licensing arrangements, strategic business partnerships
or joint ventures, in each case with non-affiliated third parties and otherwise
on an arm's-length basis, the purpose of which is not to  raise additional
capital; provided, that such  third  parties are  not granted any  registration
rights. Notwithstanding the foregoing, any Common Stock issued or issuable to
raise capital for the Company or its Subsidiaries, directly or indirectly, in
connection with any transaction contemplated by clause (ii) above, including,
without limitation, securities issued in one or more related transactions or
that result in similar economic consequences, shall not be deemed to be Excluded
Securities.

27.23.   "Free Trading" means that (i) the certificate representing the
applicable shares of Common Stock has been cleared and approved for public
resale by the compliance departments of Holder's brokerage firm and the clearing
firm servicing such brokerage, and (ii) such shares are held in the name of the
clearing firm servicing Holder's  brokerage firm and have been deposited into
such clearing firm's account for the benefit of Holder.

27.24.  "Fundamental Transaction" means that (i)  (I) the  Company  or  any of
 its Subsidiaries shall, directly or indirectly, in one or more related
transactions, consolidate or merge with or into (whether or not the Company or
any of its Subsidiaries is the surviving corporation) any other Person, or (2)
the Company or any of its Significant Subsidiaries shall, directly or
indirectly, in one or more related transactions, sell, lease, license, assign,
transfer, convey or otherwise dispose of all or substantially all of its
respective properties or assets to any other Person, or (3) the Company or any
of its Subsidiaries shall, directly or indirectly, in one or more related
transactions, allow any other Person to make a purchase, tender or exchange
offer that is accepted by the holders of more than 50% of the outstanding shares
of Voting Stock of the Company (not including any shares of Voting Stock of the
Company held by the Person or Persons making or party to, or associated or
affiliated with the Persons making  or  party  to,  such  purchase, tender  or
 exchange offer),  or  (4) the  Company or  any  of  its Subsidiaries shall,
directly or indirectly, in one or more related transactions, consummate a stock
or share purchase agreement or other business combination (including, without
limitation, a reorganization, recapitalization, spin-off or scheme of
arrangement) with any other Person whereby such other Person acquires more than
50% of the outstanding shares of Voting Stock of the Company (not including any
shares of Voting Stock of the Company held by the other Person or other Persons
making or party to, or associated or affiliated with the other Persons making or
party to, such stock or share purchase agreement or other business combination),
or (5) the Company or any of its Subsidiaries shall, directly or indirectly, in
one or more related transactions, reorganize, recapitalize or reclassifY the
Common Stock, other than an increase in the number of authorized shares of the
Company's Common Stock, or (ii) any "person" or "group" (as these terms are used
for purposes of Sections 13(d) and 14(d) of the 1934 Act and the rules and
 regulations promulgated thereunder)  is or  shall  become the "beneficial
 owner" (as  defined  in Rule 13d-3 under the 1934 Act), directly or indirectly,
of 50% of the aggregate ordinary voting power represented by issued and
outstanding Voting Stock of the Company.

27.25. "GAAP" means United States generally accepted accounting principles,
consistently applied.

27.26.  "Indebtedness" of any Person means, without duplication (i) all
indebtedness for borrowed money, (ii) all obligations issued, undertaken or
assumed as the deferred purchase price of

property or services, including, without limitation, "capital leases" in
accordance with GAAP (other than trade payables entered into in the ordinary
course of business), (iii) all reimbursement or payment obligations with respect
to letters of credit, surety bonds and other similar instruments, (iv) all
obligations evidenced by notes, bonds, debentures or similar instruments,
including obligations so evidenced incurred in connection with the acquisition
of property, assets or businesses, (v) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred as
financing, in either case with respect to any property or assets acquired with
the proceeds of such indebtedness (even though the rights and remedies of the
seller or bank under such agreement in the event of default are limited to
repossession or sale of such property), (vi) all monetary obligations under any
leasing or similar arrangement which, in connection with GAAP, consistently
applied for the periods covered thereby, is classified as a capital lease, (vii)
all indebtedness referred to in clauses (i) through (vi) above secured by (or
for which the holder of such  Indebtedness has an existing  right, contingent or
 otherwise, to  be secured  by) any mortgage, lien, pledge, charge, security
interest or other encumbrance upon or in any property or assets (including
accounts and contract rights) owned by any Person, even though the Person which
owns such assets or property has not assumed or become liable for the payment of
such indebtedness, and (viii) all Contingent Obligations in respect of
indebtedness or obligations of others of the kinds referred to in clauses (i)
through (vii) above.

27.27.   "Installment Amount"  means the greater of (i) $35,000.00 ($280,000.00
+ 8), plus the sum of any accrued and unpaid Interest as of the applicable
Installment Date and accrued and unpaid Late Charges, if any, under this Note as
of the applicable Installment Date, and any other amounts accruing or owing to
Holder under this Note as of such Installment Date, and (ii) the then
Outstanding Balance divided by the number of Installment Dates remaining prior
to the Maturity Date. In the event the Holder shall sell or otherwise transfer
any portion of this Note, the transferee shall be allocated a pro rata portion
(based on the portion of this Note transferred compared with the Outstanding
Balance of this Note as of the transfer date) of each unpaid Installment Amount
hereunder.

27.28.   "Installment Date" means the Initial Installment Date and the same day
on each of the following calendar months following the Initial Installment Date,
regardless of the occurrence of any Event of  Default (or the  issuance of any
Redemption Cancellation Notice). If the Outstanding Balance is not paid on the
Maturity Date, then in addition to any remedies available under the Transaction
Documents, the Installment Dates will continue on the same day of each calendar
month until the Outstanding Balance is paid in full, thus requiring the Company
to continue to provide Pre-Installment Notices to the Holder pursuant to Section
8 hereof.

27.29.   "Market Price"  means 55% of the arithmetic average of the three (3)
lowest Closing Bid Prices of the shares of Common Stock during the twenty (20)
consecutive Trading Day period immediately preceding the date of such
determination (the "Measuring Period").  All such determinations are to be
appropriately adjusted for any stock split, stock dividend, stock combination or
other similar transaction during such Measuring Period.

Issuance Date.

27.30.   "Maturity Date"  shall  mean the  date that  is fourteen (14)  months
after the

27.31.   "New Subsidiary" means, as of any date of determination, any Person in
which the Company after the Issuance Date, directly or indirectly, (i) owns or
acquires any of the outstanding capital stock or holds any equity or similar
interest of such Person or (ii) controls or operates all or any part of the
business, operations or administration of such Person, and all of the foregoing,
collectively, "New Subsidiaries."

27.32.   "Options" means any rights, warrants or options to subscribe for or
purchase shares of Common Stock or Convertible Securities.

27.33.   "Parent Entity" of a Person means an entity that, directly or
indirectly, controls the applicable Person and whose common stock or equivalent
equity security is quoted or listed on an Eligible Market, or, if there is more
than one such Person or Parent Entity, the Person or Parent Entity with the
largest public market capitalization as of the date of consummation of the
Fundamental Transaction.

27.34.  "Person" means an individual, a limited liability company, a
partnership, a joint venture, a corporation, a trust, an unincorporated
organization, any other entity or a government or any department or agency
thereof.

27.35.  "Post-Installment Certificated  Shares"  means a number of shares of
Common Stock equal to one (I) times the greater of (i) the Post-Installment
Conversion Shares calculated using the applicable Installment Date, and (ii) the
Post-Installment Conversion Shares calculated using the Certificated Shares
Installment Date (as if such date were the designated Installment Date).

27.36.   "Post-Installment Conversion Price" means, with respect to a particular
date of determination, the lower of (i) the Conversion Price then in effect and
(ii) the Market Price for the applicable Installment Date. All such
determinations to be appropriately adjusted for any stock split, stock dividend,
stock combination or other similar transaction during any applicable Measuring
Period.

27.37.  "Post-Installment  Conversion   Shares"   means  that  number  of
 shares  of Common Stock that would be required to be delivered pursuant to
Section 8 on an applicable Installment Date without taking into account the
delivery of any Pre-Installment Conversion Shares. The Post­ Installment
Conversion Shares are equal to the quotient of (i) the Company Conversion Amount
divided by (ii) the Post-Installment Conversion Price as of the applicable
Installment Date.

27.38.  "Pre-Installment Certificated  Shares" means the number of shares of
Common Stock to be delivered pursuant to Section 8.4(a). The Pre-Installment
Certificated Shares are equal to two (2) times the number of Pre-Installment
Conversion Shares that would otherwise be required to be delivered to the Holder
pursuant to Section 8.2(a) under the applicable Pre-Installment Notice.

27.39.   "Pre-Installment Conversion Price" means, with respect to a particular
date of determination, the lower of (i) the Conversion Price then in effect and
(ii) the Market Price for the applicable Pre-Installment Notice Due Date. All
such determinations to be appropriately adjusted for any stock split, stock
dividend, stock combination or other similar transaction during any applicable
Measuring Period.

27.40.  "Pre-Installment Conversion Shares" means the number of shares of Common
Stock to be delivered pursuant to Section 8.1. The Pre-Installment Conversion
Shares are equal to the quotient of (i) the Company Conversion Amount divided by
(ii) the Pre-Installment Conversion Price as of the applicable Pre-Installment
Notice Due Date.

27.41.   "Principal Market" means OTCQB.

27.42.  "Redemption  Notices"  means,  collectively,  Event  of  Default
 Redemption Notices and Fundamental Transaction Redemption Notices, and each of
the foregoing, individually, a "Redemption Notice."

27.43.   "Redemption  Premium" means 135%.

27.44.  "Redemption  Price" means either the Event of Default Redemption Price
or the

Fundamental Transaction Redemption Price, as the context requires or permits.

27.45.   "SEC"  means the United States Securities and Exchange Commission or
the successor thereto.

27.46.  "Significant  Subsidiaries" means, as of any date of determination,
collectively, all  Subsidiaries that  would constitute a "significant
 subsidiary" under Rule 1-02 of  Regulation S-X promulgated by the SEC, and each
of the foregoing, individually, a "Significant Subsidiary."

27.47.   "Subsidiaries" means, as of any date of determination, collectively,
all Current

Subsidiaries and all New Subsidiaries, and each of the foregoing, individually,
a "Subsidiary."

27.48.   "Successor Entity" means the Person, which may be the Company, formed
by, resulting from or surviving any Fundamental Transaction or the Person with
which such Fundamental Transaction shall have been made, provided  that  if such
Person is not a publicly traded entity whose common stock or equivalent equity
security is quoted or listed for trading on an Eligible Market, Successor Entity
shall mean such Person's Parent Entity.

27.49.   "Trading Day" means any day on which the Common Stock is traded on the
Principal Market, or, if the Principal Market is not the principal trading
market for the Common Stock, then on the principal securities exchange or
securities market on which the Common Stock is then traded, provided that
"Trading Day" shall not include any day on which the Common Stock is scheduled
to trade on such exchange or market for less than 4.5 hours or any day that the
Common Stock is suspended from trading during the final hour of trading on such
exchange or market (or if such exchange or market does not designate in advance
the closing time of trading on such exchange or market, then during the hour
ending at 4:00:00 p.m., New York time) unless such day is otherwise designated
as a Trading Day in writing by the Holder.

27.50.  "Voting  Stock" of a Person means capital stock of such Person of the
class or classes pursuant to which the holders thereof have the general voting
power to elect, or the general power to appoint, at least a majority of the
board of directors, managers, trustees or other similar governing body of such
Person (irrespective of whether or not at the time capital stock of any other
class or classes shall have or might have voting power by reason of the
happening of any contingency).

27.51.  "VWAP"  means, for any security as of any date, the dollar
volume-weighted average price for such security on the Principal Market (or, if
the Principal Market is not the principal trading market for such security, then
on the principal securities exchange or securities market on which such security
is then traded) during the period beginning at 9:30:01 a.m., New York time, and
ending at

4:00:00 p.m., New York time, as reported by Bloomberg through its "Volume at
Price" function or, if the foregoing does not apply, the dollar volume-weighted
average price of such security in the over-the­ counter  market on  the
 electronic  bulletin board for  such  security  during the  period  beginning
at

9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as
reported by Bloomberg, or,

if no dollar volume-weighted average price is reported for such security by
Bloomberg for such hours, the average of the highest closing bid price and the
lowest closing ask price of any of the market makers for such security as
reported in "OTC Pink" by Pink OTC Markets Inc. (formerly Pink Sheets LLC), and
any successor thereto. If the VWAP cannot be calculated for such security on
such date on any of the foregoing bases, the VWAP of such security on such date
shall be the fair market value as mutually determined by the Company and the
Holder. If the Company and the Holder are unable to agree upon the

fair market value of such security, then such dispute shall be resolved in
accordance with the procedures in Section 19. All such determinations shall be
appropriately adjusted for any stock dividend, stock split, stock combination or
other similar transaction during such period.

28.        DISCLOSURE. Upon receipt or delivery by the Company of any notice in
accordance with the terms of this Note, unless the Company has in good faith
determined that the matters relating to such notice do not constitute material,
non-public information relating to the Company or any of its Subsidiaries, the
Company shall within one (I) Trading Day after any such receipt or delivery,
publicly disclose such material, non-public information on a Current Report on
Form 8-K or otherwise. In the event that the Company believes that a notice
contains material, non-public information relating to the Company or any of its
Subsidiaries, the Company so shall indicate to such Holder contemporaneously
with delivery of such notice, and in the absence of any such indication, the
Holder shall be allowed to presume that all matters relating to such notice do
not constitute material, non-public information relating to the Company or its
Subsidiaries.

29.        MAXIMUM PAYMENTS. Nothing contained in this Note shall, or shall be
deemed to, establish or require the payment of a rate of interest or other
charges in excess of the maximum permitted by applicable law. In the event that
the rate of interest required to be paid or other charges under this Note
exceeds the maximum permitted by such law, any payments in excess of such
maximum shall be credited against amounts owed by the Company to the Holder and
thus refunded to the Company.

30.        SECURITY. This Note is secured by (a) that certain Security Agreement
of even date herewith (as the same may be amended from time to time, the
"Security  Agreement"),  executed by Burgoyne Internet Services, LLC, a  Utah
limited liability company ("Burgoyne")  (which  became a wholly owned subsidiary
of  the  Company when the  Holder sold  its  I 00%  membership  interest in
Burgoyne (the "Interest") to the Company in connection with consummation of the
Agreement), in favor of the Holder encumbering all of the assets of Burgoyne, as
more specifically set forth in such Security Agreement, all the terms and
conditions of which are hereby incorporated into and made a part of this Note,
and (b) that certain Membership Interest Pledge Agreement of even date herewith
(as the same may be amended from time to time, the "Pledge  Agreement"),
 executed by the Company in favor of the Holder encumbering the Interest, as
more specifically set forth in such Pledge Agreement, all the terms and
conditions of which are hereby incorporated into and made a part of this Note.

[Remainder of page intentionally left blank]

IN  WITNESS  WHEREOF,  the  Company  has  caused  this  Note  to  be  duly
 executed  as  of  the

Issuance Date set forth above.

THE COMPANY:

NOVAT!ON HOLDINGS, INC.

By:  /s/ Michael Gelmon

Name: Michaell Gelmon

Title:

Chairman and CEO

ACKNOWLEDGED. ACCEPTED AND AGREED:

ISP HOLDINGS, LLC

By: Fife Trading, Inc., its Manager

By:

/s/ John Fife

[Signature page to Secured Convertible Promissory Note]