f10k2008ex10xx_fund.htm


    Exhibit 10.20

     

    
       

      EXHIBIT C

       

      REVOLVING CREDIT CONVERTIBLE NOTE

       

      THIS
NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES
LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF
SUCH ACT OR SUCH LAWS.

       

      FUND.COM INC..

      a
Delaware Corporation

       

      
        
          
            	
                    New
      York. New York

                  	
                    $1,
343,000.00

                  
	
                    April
      __ 2009

                  	 
      


          

        

      

       

                 FOR VALUE RECEIVED, the
undersigned, FUND.COM
INC. (herein called the “Company”), a
corporation organized and existing under the laws of the State of Delaware,
promises to pay to the order of IP GLOBAL INVESTORS LTD., a Nevada
corporation (the “Lender”) or its
registered assigns (together with the Lender, the “Holder”), the principal sum of ONE
MILLION THREE HUNDRED AND FORTY THREE THOUSAND DOLLARS (US$1,343,000) or such
lesser amount as may be outstanding from time to time on the Maturity
Date (as defined below).

      


      This
Revolving Credit Convertible Note (this “Note”) is issued by
the Company to the Holder pursuant to the terms and conditions of a revolving
credit loan agreement, dated the date of this Note (the “Loan
Agreement”).  Unless otherwise separately defined herein, all
capitalized terms, when used in this Note shall have the same meaning as is
defined in the Loan Agreement.  This Note replaces and supercedes in
its entirety the Prior Note, as defined in the Loan Agreement.

      


      The
Company represents and warrants to the Holder that this Note is free from all
taxes, liens, claims and encumbrances with respect to the issue thereof and
shall not be subject to preemptive rights or other similar rights of Stock
holders of the Company and will not impose personal liability upon the
Holder.

      


      1.           Principal and
Interest.   To the extent not converted into Class A
Common Stock as contemplated herein, the entire principal amount of this Note
shall be due and payable on the Maturity Date, together with accrued and unpaid
interest on the unpaid principal amount of this Note at the annual compounded
rate of nine percent (9%) (computed on the basis of a 360-day year and the
actual days elapsed) from the Issue Date until all amounts due and owing
hereunder by the Company to the Holder have been paid in full.  The
Company shall pay interest on this Note, at the Interest Rate, as provided in
the Loan Agreement.

      


      2.           Place of
Payment.  All amounts payable hereunder shall be payable at the
address designated by the Holder.  

      


      3.           Prepayment.  The
Company shall not have the right to prepay this Note, whether in whole or in
part, without the prior written consent of the Holder; provided, however, that
if the Borrower shall be permitted to terminate the Loan Agreement, as provided
in Section 8(c) of the Loan Agreement, the Company may prepay this Note in full,
without prepayment premium or penalty.

       

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
 

      4.           Covenants.  The
Company covenants that so long as any of the Notes are outstanding, unless the
Holder of
this Note consents in writing (which consent shall not be unreasonably
withheld or delayed):

      


      (a)           Liens.  The
Company will not, and will not permit any Subsidiary to, and cause such
Subsidiary not to, permit to exist, create, assume or incur, directly or
indirectly, any Lien on its properties or assets, whether now owned or hereafter
acquired, except:

      


                 (i)           liens
existing on property or assets of the Company or any Subsidiary as of the date
of this Agreement, as set forth on Schedule
4(a);

      


                 (ii)           liens
for taxes, assessments or governmental charges not then due and
delinquent;

      


                 (iii)          encumbrances
in the nature of leases, subleases, zoning restrictions, easements, rights of
way, minor survey exceptions and other rights and restrictions of record on the
use of real property and defects in title arising or incurred in the ordinary
course of business, which, individually and in the aggregate, do not materially
impair the use or value of the property or assets subject thereto or which
relate only to assets that in the aggregate are not material;

      


                 (iv)          liens
incidental to the conduct of business or the ownership of properties and assets
(including landlords’, lessors’, carriers’, warehousemen’s, mechanics’,
materialmen’s and other similar liens) and liens to secure the performance of
bids, tenders, leases or trade contracts, or to secure statutory obligations
(including obligations under workers compensation, unemployment insurance and
other social security legislation), surety or appeal bonds or other liens of
like general nature incurred in the ordinary course of business and not in
connection with the borrowing of money;

      


                                
(v)           liens incurred to secure institutional financing
obtained by the Company and/or its Subsidiaries pursuant to arms-length
transactions; and

      


                                
(vi)         
liens incurred in connection with purchase-money transactions.

      


      (b)           Mergers, Consolidations,
Etc. The Company will not, and will not permit any Subsidiary to, and
cause such Subsidiary not to, consolidate with or merge with any other Person or
convey, transfer, sell or lease all or substantially all of its assets in a
single transaction or series of transactions to any Person (collectively, a “Sale”).

      


      (c)           Sale of
Assets.  Except as otherwise set
forth herein, the Company will not, and will not permit any Subsidiary
to, and cause such Subsidiary not to, sell, lease, transfer or otherwise dispose
of, including by way of merger (collectively, a "Disposition"), any
material assets of any Subsidiary or any of the shares of capital
Stock  of any Subsidiary, in one or a series of transactions, to any
Person, other than Dispositions of inventory and products sold by such
Subsidiaries in the ordinary course of business.

      


      (d)           Nature of
Business.  Except as set forth on Schedule 4(d) hereto,
the Company will not, and will not permit any Subsidiary to, and cause such
Subsidiary not to, engage in any business if, as a result, the general nature of
the business in which the Company and its Subsidiaries, taken as a whole, would
then be engaged would be substantially changed from the general nature of the
business in which the Company and its Subsidiaries, taken as a whole, are
engaged on the date of this Agreement.

       

       

      
        
          
          

        

        
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(e)           Transactions with
Affiliates.  Excepting for existing transactions set forth on
Schedule 4(e),
the Company will not, and will not permit any Subsidiary to, and cause such
Subsidiary not to, enter into directly or indirectly any transaction or material
group of related transactions (including without limitation the purchase, lease,
sale or exchange of properties of any kind or the rendering of any service) with
any Affiliate (other than the Company or another Subsidiary), except upon fair
and reasonable terms no less favorable to the Company or such Subsidiary than
would be obtainable in a comparable arm's-length transaction with a Person not
an Affiliate.  Furthermore, none of the terms or conditions of the
arrangements described in Schedule 4(e) will be
modified, terminated or amended or revised in a manner more favorable to
the Affiliate, except to the extent that any such modification, termination,
amendment or revision is (i) upon fair and reasonable terms no less favorable to
the Company or such Subsidiary than would be obtainable in a comparable
arm's-length transaction with a Person not an Affiliate and (ii) approved by a
majority of the independent directors of the
Company.  Additionally, the Company represents and warrants that,
except as set forth on Schedule 4(e), there
is no existing or contingent liability to the Company and/or any of its
Subsidiaries resulting from the termination of any agreements or arrangements
previously in existence between the Company and/or its Subsidiaries, on one
hand, and an Affiliate thereof, on the other hand.

      


      (f)           Distributions and
Stock  Repurchases.  The Company will not, and will
not permit any Subsidiary to, and cause such Subsidiary not to, redeem,
repurchase or otherwise acquire (whether for cash or in exchange for property or
other securities or otherwise) in any one transaction or series of related
transactions any shares of capital stock of the Company or any Subsidiary or any
warrants, rights or options to purchase or acquire any such
shares.  Except as set forth on Schedule 4(f), the
Company will not and will not permit any Subsidiary to make any distribution or
dividend of cash or other property with respect to its capital
stock.

      


                    
 (g)           Investments.  Except
for: (i) the Investment in National Holdings Corporation (“NHC”) as contemplated
by that certain Securities Purchase Agreement dated April 7, 2009 between the
Company and NHC, and (ii) the Investment in AdvisorShares Investments, LLC
(“AdvisorShares”) as
contemplated by that certain Securities Purchase Agreement dated October 31,
2008 between the Company and AdvisorShares, the Company will not, and will not
permit any Subsidiary to, and cause such Subsidiary not to, make any loan or
advance to any Person or entity, or purchase or otherwise acquire any capital
stock , assets, obligations, or other securities of, make any capital
contribution to, or otherwise invest in or acquire any interest in any Person or
entity (collectively, “Investments”), except
Investments in direct obligations of the United States or any agency thereof,
bonds, and certificates of deposit in commercial or savings banks of recognized
standing.

      


      (h)           Acquisitions.  Except
for the Investment in NHC, the Company shall not, and shall not permit any of
the Subsidiaries to, acquire the capital stock or assets of any Person, whether
by asset purchase, stock purchase, merger or like combination or consolidation
(an “Acquisition”).  

      


      5.           Events of Default. An
“Event of
Default” under this Note shall exist if any Event of Default under
Section 9 of the Loan Agreement shall occur and be continuing.

      


      6.           Default
Interest.  During any period that an Event of Default has
occurred and is continuing, any amount of principal on this Note then
outstanding shall bear interest (the “Default Interest”),
and the Company shall pay to the Holder hereof in cash as liquidated damages and
not as a penalty, at an annual rate equal to (i) two percent (2%) for the first
thirty (30) days, or fraction thereof, after such Event of Default has occurred
and (ii) thereafter at an annual rate equal to three and one-half percent (3.5%)
for each thirty (30) day period, or fraction thereof, until the earlier of (A)
this Note, including accrued but unpaid interest thereon, are paid in full or
(B) such Default or Event of Default, if curable under the terms of this Note or
the Loan Agreement, has been cured.  Such Default Interest shall be
paid to the Holder of this Note by the fifteenth (15th) day of
the month following the month in which it has accrued or, if not so paid, shall
be added to the principal amount of this Note, in which event interest shall
accrue thereon in accordance with the terms of this Note.

       

       

      
        
          
          

        

        
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      7.           Conversion.

      


          (a)           Conversion by
Holder.  At any time or from time to time on or before the
Maturity Date of this Note, the Holder shall have the right, at such Holder’s
option and by written notice to the Company,
to convert this Note, in whole or in part, into fully paid and
nonassessable shares of Class A Common Stock  of the Company at the “Conversion
Price” (as defined below) then in effect; such conversion to be
effective as of the Conversion Date.  The number
of shares of Class A Common Stock  into which this Note may be
converted (the “Conversion Shares”)
shall equal to the result of dividing (i) the principal amount of this Note to
be converted, plus all accrued interest on the principal amount of this Note to
be converted, by (ii) the Conversion Price, Subject to adjustment as provided
below, the Conversion Price shall be Sixty Cents (US $0.60).

      


      The
Conversion Shares and the Conversion Price are subject to adjustment in
accordance with this Section
7.

      


                 (b)           Conversion
Procedure.  Before the Holder shall be entitled to convert this
Note into shares of Common Stock , he or it shall give written notice in
substantially the same form as Exhibit I, postage prepaid, to the Company at its
principal corporate office, of the election to convert the same pursuant to
Section 7(a),
and shall state therein the amount of the unpaid amount of this Note to be
converted, the name or names in which the certificate or certificates for shares
of Class A Common Stock are to be issued, the number of Conversion Shares to be
issued and the Conversion Price per share (the “Conversion
Notice”).  In addition the Holder shall surrender this Note,
duly endorsed, at the office of the Company and the Company shall, as soon as
practicable thereafter (but in any event within five (5) Business Days
thereafter), issue and deliver to the Holder of this Note a certificate or
certificates for the number of shares of the Class A Common Stock  to
which the Holder shall be entitled upon conversion (bearing such legends as are
required by applicable state and federal securities laws), together with a
replacement Note (if any amount is not converted) and any other securities and
property to which the Holder is entitled upon such conversion under the terms of
this Note.  The conversion shall be deemed to have been made
immediately prior to the close of business on the date of the surrender of this
Note, and the Person or Persons entitled to receive the shares of Class A Common
Stock  upon such conversion shall be treated for all purposes as
the record holder or holders of such shares of Class A Common
Stock  as of such date.

      


                 (c)           Fractional Shares; Interest;
Effect of Conversion.  No fractional shares shall be issued
upon conversion of this Note.  In lieu of the Company issuing any
fractional shares to which the Holder would otherwise be entitled, the Company
shall round the number of shares to be issued upon conversion up to the nearest
whole number of shares.

      


                 (d)           Effect of Certain
Events.

      


                            (i)           Adjustment Due to Merger,
Consolidation, Etc.  If, at any time when this Note is issued
and outstanding, there shall be any merger, consolidation, exchange of shares,
recapitalization, reorganization, or other similar event, as a result of which
shares of Class A Common Stock  of the Company shall be changed into
the same or a different number of shares of another class or classes of
Stock  or securities of the Company or another entity, or in case of
any sale or conveyance of all or substantially all of the assets of the Company
other than in connection with a plan of complete liquidation of the Company,
then the Holder of this Note shall thereafter have the right to receive upon
conversion of the Holder’s Note, upon the basis and upon the terms and
conditions specified herein and in lieu of the shares of Class A Common
Stock  immediately theretofore issuable upon conversion, such Stock ,
securities or assets which the holder would have been entitled to receive in
such transaction had the Holder’s Note been converted in full immediately prior
to such transaction (without regard to any limitations on conversion set
forth herein), and in any such case appropriate provisions shall be made with
respect to the rights and interests of the holder of the Holder’s Note to the
end that the provisions hereof (including, without limitation, provisions for
adjustment of the Conversion Price and of the number of shares issuable upon
conversion of the Note) shall thereafter be applicable, as nearly as may be
practicable in relation to any securities or assets thereafter deliverable upon
the conversion hereof.  The Company shall not effect any transaction
described in this Section 7(d)(i) unless (a) it first gives, to the extent
practicable, thirty (30) days prior written notice (but in any event at least
fifteen (15) days prior written notice) of the record date of the special
meeting of Stock holders to approve, or if there is no such record date, the
consummation of, such merger, consolidation, exchange of shares,
recapitalization, reorganization or other similar event or sale of assets
(during which time the holder shall be entitled to convert the Holder’s Note
notwithstanding Section 7(d)(iii)), and (b)
the resulting successor or acquiring entity (if not the Company) assumes by
written instrument the obligations of this Section 7(d)(i).  The above
provisions shall similarly apply to successive consolidations, mergers, sales,
transfers or share exchanges.

       

       

      
        
          
          

        

        
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                            (ii)           Adjustment Due to
Distribution.  If, at any time when this Note is issued and
outstanding, the Company shall declare or make any distribution of its assets
(or rights to acquire its assets) to holders of Class A Common
Stock  as a dividend, stock  repurchase, by way of return of
capital or otherwise (including any dividend or distribution to the Company’s
shareholders in cash or shares (or rights to acquire shares) of capital
Stock  of a subsidiary (i.e., a spin-off)) (a “Distribution”), then
the Holder of this Note shall be entitled, upon any conversion of the Holder’s
Note after the date of record for determining shareholders entitled to such
Distribution, to receive the amount of such assets which would have been payable
to the holder with respect to the shares of Class A Common Stock issuable upon
such conversion had such Holder been the holder of such shares of Class A Common
Stock on the record date for the determination of shareholders entitled to such
Distribution and the Note shall be deemed repaid by the amount of the fair value
of the Distribution.

      


            (iii)           Adjustment Due to Dilutive
Issuance.  If, at any time when this Note is issued and
outstanding, the Company issues or sells, or in accordance with this Section
7(d) is deemed to have issued or sold, any shares of Class A Common Stock for no
consideration or for a consideration per share (before deduction of reasonable
expenses or commissions or underwriting discounts or allowances in connection
therewith) less than the Conversion Price in effect on the date of such issuance
(or deemed issuance) of such shares of Class A Common Stock (a “Dilutive Issuance”), then
immediately upon the Dilutive Issuance, the Conversion Price will be reduced to
the lower of (i) the amount of the consideration per share received by the
Company in such Dilutive Issuance and (ii) the price determined by multiplying
the Conversion Price in effect immediately prior to the Dilutive Issuance by a
fraction, (A) the numerator of which is an amount equal to the sum of (x) the
number of shares of Class A Common Stock actually outstanding immediately prior
to the Dilutive Issuance, plus (y) the quotient of the aggregate consideration,
calculated as set forth in Section 7(e)(vi) hereof, received by the Company upon
such Dilutive Issuance divided by the Conversion Price in effect immediately
prior to the Dilutive Issuance, and (B) the denominator of which is the Class A
Common Stock Deemed Outstanding (as defined below) immediately after the
Dilutive Issuance; provided that only one adjustment will be made for each
Dilutive Issuance.  The term “Class A Common Stock Deemed
Outstanding” shall mean the number of shares of Class A Common Stock
actually outstanding (not including shares of Class A Common Stock held in the
treasury of the Company), plus (i) pursuant to Section 7(e)(i) hereof, the
maximum total number of shares of Class A Common Stock issuable upon the
exercise of Options, as of the date of such issuance or grant of such Options,
if any, and (ii) pursuant to Section 7(e)(ii) hereof, the maximum total number
of shares of Class A Common Stock issuable upon conversion or exchange of
Convertible Securities, as of the date of issuance of such Convertible
Securities, if any.  No adjustment to the Conversion Price shall have
the effect of increasing the Conversion Price above the Conversion Price in
effect immediately prior to such adjustment.

       

       

      
        
          
          

        

        
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                 (e)           Effect on Conversion Price
of Certain Events.  For purposes of determining the adjusted
Conversion Price, the following will be applicable:

      


                 (i)           Issuance of Rights or
Options.  If the Company in any manner issues or grants any
warrants, rights or options, whether or not immediately exercisable, to
subscribe for or to purchase Class A Common Stock or other securities
convertible into or exchangeable for Class A Common Stock (“Convertible
Securities”) (such warrants, rights and options to purchase Class A
Common Stock or Convertible Securities are hereinafter referred to as “Options”)
and the price per share for which Class A Common Stock is issuable upon the
exercise of such Options is less than the Conversion Price on the date of
issuance or grant of such Options, then the maximum total number of shares of
Class A Common Stock issuable upon the exercise of all such Options will, as of
the date of the issuance or grant of such Options, be deemed to be outstanding
and to have been issued and sold by the Company for such price per
share.  For purposes of the preceding sentence, the “price per share
for which Class A Common Stock is issuable upon the exercise of such Options” is
determined by dividing (i) the total amount, if any, received or receivable by
the Company as consideration for the issuance or granting of all such Options,
plus the minimum aggregate amount of additional consideration, if any, payable
to the Company upon the exercise of all such Options, plus, in the case of
Convertible Securities issuable upon the exercise of such Options, the minimum
aggregate amount of additional consideration payable upon the conversion or
exchange thereof at the time such Convertible Securities first become
convertible or exchangeable, by (ii) the maximum total number of shares of
Class A Common Stock issuable upon the exercise of all such Options (assuming
full conversion of Convertible Securities, if applicable).  No further
adjustment to the Conversion Price will be made upon the actual issuance of
such Class A Common Stock upon the exercise of such Options or upon the
conversion or exchange of Convertible Securities issuable upon exercise of such
Options.

      


                 (ii)           Issuance of Convertible
Securities.  If the Company in any manner issues or sells any
Convertible Securities, whether or not immediately convertible (other than where
the same are issuable upon the exercise of Options) and the price per share for
which Class A Common Stock is issuable upon such conversion or exchange is less
than the Conversion Price on the date of issuance, then the maximum total number
of shares of Class A Common Stock issuable upon the conversion or exchange of
all such Convertible Securities will, as of the date of the issuance of such
Convertible Securities, be deemed to be outstanding and to have been issued and
sold by the Company for such price per share.  For the purposes of the
preceding sentence, the “price per share for which Class A Common Stock is
issuable upon such conversion or exchange” is determined by dividing (i) the
total amount, if any, received or receivable by the Company as consideration for
the issuance or sale of all such Convertible Securities, plus the minimum
aggregate amount of additional consideration, if any, payable to the Company
upon the conversion or exchange thereof at the time such Convertible Securities
first become convertible or exchangeable, by (ii) the maximum total number of
shares of Class A Common Stock issuable upon the conversion or exchange of all
such Convertible Securities.  No further adjustment to the Conversion
Price will be made upon the actual issuance of such Class A Common Stock upon
conversion or exchange of such Convertible Securities.

      


                               
(iii)           Change in Option Price or
Conversion Price.  If there is a change at any time in (i) the
amount of additional consideration payable to the Company upon the exercise of
any Options; (ii) the amount of additional consideration, if any, payable to the
Company upon the conversion or exchange of any Convertible Securities; or (iii)
the rate at which any Convertible Securities are convertible into or
exchangeable for Class A Common Stock (other than under or by reason of
provisions designed to protect against dilution), the Conversion Price in effect
at the time of such change will be readjusted to the Conversion Price which
would have been in effect at such time had such Options or Convertible
Securities still outstanding provided for such changed additional consideration
or changed conversion rate, as the case may be, at the time initially granted,
issued or sold.

       

       

      
        
          
          

        

        
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                 (iv)           Subdivision or Combination
of Common Stock .  If the Company at any time subdivides (by
any Stock  split, Stock  dividend, recapitalization,
reorganization, reclassification or otherwise) the shares of Class A Common
Stock acquirable hereunder into a greater number of shares, then, after such
date of record for effecting such subdivision, the Conversion Price in effect
immediately prior to such subdivision will be proportionately
reduced.  If the Company at any time combines (by reverse
Stock  split, recapitalization, reorganization, reclassification or
otherwise) the shares of Class A Common Stock acquirable hereunder into a
smaller number of shares, then, after the date of record for effecting such
combination, the Conversion Price in effect immediately prior to such
combination shall be proportionately increased.

      


                                
(v)           Treatment of Expired Options
and Unexercised Convertible Securities.  If, in any case, the
total number of shares of Class A Common Stock issuable upon exercise of any
Option or upon conversion or exchange of any Convertible Securities is not, in
fact, issued and the rights to exercise such Option or to convert or exchange
such Convertible Securities shall have expired or terminated, the Conversion
Price then in effect will be readjusted to the Conversion Price which would
have been in effect at the time of such expiration or termination had such
Option or Convertible Securities, to the extent outstanding immediately prior to
such expiration or termination (other than in respect of the actual number of
shares of Class A Common Stock issued upon exercise or conversion thereof),
never been issued.

      


                 (vi)           Calculation of Consideration
Received.  If any Common Stock, Options or Convertible
Securities are issued, granted or sold for cash, the consideration received
therefor for purposes of the Holder’s Note will be the amount received by the
Company therefor, before deduction of reasonable commissions, underwriting
discounts or allowances or other reasonable expenses paid or incurred by the
Company in connection with such issuance, grant or sale.  In case any
Common Stock , Options or Convertible Securities are issued or sold for a
consideration part or all of which shall be other than cash, the amount of the
consideration other than cash received by the Company will be the fair value of
such consideration, except where such consideration consists of securities, in
which case the amount of consideration received by the Company will be the
market price thereof as of the date of receipt.  In case any Common
Stock , Options or Convertible Securities are issued in connection with any
acquisition, merger or consolidation in which the Company is the surviving
corporation, 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
corporation as is attributable to such Common Stock , Options or Convertible
Securities, as the case may be.  The fair value of any consideration
other than cash or securities will be determined in good faith by the Board of
Directors of the Company.

      


                                
(vii)           Exceptions to Adjustment of
Conversion Price.  No adjustment to the Conversion Price will
be made (A) upon the issuance of shares of Class A Common Stock or options or
warrants to purchase Class A Common Stock to employees of the Company pursuant
to any Stock  or option plan duly adopted by the Board of Directors of
the Company on or before the date hereof, (B) the issuance of shares of Class A
Common Stock upon exercise of any of the Warrants or (C) the issuance of
securities pursuant to and as contemplated by the Securities Purchase Agreement
between the Company, Amalphis Group Inc., and Global Asset Fund
Limited.

       

       

      
        
          
          

        

        
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          (f)           Notice of
Adjustments.  Upon the occurrence of any event which requires
any adjustment of the Conversion Price, then, and in each such case, the
Corporation shall give notice thereof to the Holder of this Note, which notice
shall state the Conversion Price resulting from such adjustment and the number
of shares of Class A Common Stock and the amount, if any, of other securities or
property which at the time would be received upon conversion of such Holder’s
Note, setting forth in reasonable detail the method of calculation and the facts
upon which such calculation is based.  Such calculation shall be
certified by the Chief Financial Officer of the Corporation.

      


                 (g)           Status as
Shareholder.  Upon submission of a Conversion Notice by a
holder of a Note, (i) the shares covered thereby shall be deemed converted into
shares of Class A Common Stock and (ii) the holder’s rights as a holder of such
converted portion of the Holder’s Note shall cease and terminate, excepting only
the right to receive certificates for such shares of Class A Common Stock and to
any remedies provided herein or otherwise available at law or in equity to such
holder because of a failure by the Company to comply with the terms of the
Holder’s Note.  Notwithstanding the foregoing, if a holder has not
received certificates for all shares of Class A Common Stock on or prior to the
fifth (5th) Business Day after the Conversion Notice with respect to a
conversion of any portion of the Holder’s Note for any reason, then the holder
may elect at such holder’s option to regain the rights of a holder of the
Holder’s Note with respect to such attempted converted portions of the Holder’s
Note and the Company shall, as soon as practicable, return such attempted
converted Note to the holder or, if the Note has not been surrendered, adjust
its records to reflect that such portion of the Holder’s Note has not been
converted.  In all cases, the holder shall retain all of its rights
and remedies for the Company’s failure to convert the Holder’s
Note.

      


      8.           Notices of Record Date,
etc.   Upon:

      


                 (a)           Any
taking by the Company of a record of the holders of any class of securities of
the Company for the purpose of determining the holders thereof who are entitled
to receive any dividend (other than a cash dividend payable out of earned
surplus at the same rate as that of the last such cash dividend theretofore
paid) or other distribution, or any right to subscribe for, purchase or
otherwise acquire any shares of Stock  of any class or any other
securities or property, or to receive any other right; or

      


                 (b)           Any
capital reorganization of the Company, any reclassification or recapitalization
of the capital Stock  of the Company or any transfer of all or
substantially all of the assets of the Company to any other Person or any
consolidation or merger involving the Company; or

      


                 (c)           Any
voluntary or involuntary dissolution, liquidation or winding-up of the Company
(including any deemed liquidation pursuant to the Articles),

      


      then, the
Company will mail to the Holder of this Note at least twenty (20) days prior to
the earliest date specified above, a notice specifying (i) the date on which any
such record is to be taken for the purpose of such dividend, distribution or
right, and the amount and character of such dividend, distribution or right; and
(ii) the date on which any such reorganization, reclassification, transfer,
consolidation, merger, dissolution, liquidation or winding-up is expected to
become effective and the record date for determining Stock holders entitled to
vote thereon. 

      


      9.           Reservation of
Stock  Issuable upon
Conversion.  The Company shall at all times reserve and keep
available out of each series of its authorized but unissued shares of the Class
A Common Stock enough shares solely for the purpose of effecting the conversion
of this Note into such number of shares of the Class A Common Stock and if at
any time the number of authorized but unissued shares of the Class A Common
Stock shall not be sufficient to effect the conversion of the entire outstanding
principal amount of this Note, and any accrued interest, without limitation of
such other remedies as shall be available to the Holder of this Note, the
Company will take such corporate action as may, in the opinion of counsel, be
necessary to increase its authorized but unissued shares of the Class A Common
Stock to such number of shares as shall be sufficient for such
purposes.  

       

       

      
        
          
          

        

        
          - 8- 

          
            

          

        

        
          
          

        

      

      
 

      10.           Indemnification.

      


                     (a)           Survival.  All
representations, warranties and covenants of the Company in the Transaction
Documents will survive the Issuance Date.  The right to
indemnification, payment of Damages (as defined below) or other remedy based on
such representations, warranties and covenants will not be affected by any
investigation conducted with respect to, or any knowledge acquired (or capable
of being acquired) at any time, whether before or after the execution and
delivery of this Agreement or the Closing, with respect to the accuracy or
inaccuracy of or compliance with, any such representation, warranty or
covenant.  The waiver of any condition based on the accuracy of any
representation or warranty, or on the performance of or compliance with any
covenant, shall not affect the right to indemnification, payment of Damages, or
other remedy based on such representations, warranties and
covenants.

      


      (b)           Indemnification.  The
Company will indemnify and hold harmless the Holder, and each of its officers,
partners, managers, and all Persons who control (as such term is defined under
the Securities Act or the 34 Act) the Holder (each an “Indemnified Party”
and collectively the “Indemnified
Parties”), and will pay to the Indemnified Parties the amount of, any
loss, liability, claim, damage, expense, including costs of investigation and
defense and reasonable attorneys’ fees, (collectively, “Damages”) arising,
directly or indirectly, from or in connection with (i) any breach of any
representation or warranty made by the Company in this Note or the other
Transaction Documents or (ii) any breach by the Company of any covenant or
obligation of the Company in this Note and the other Transaction
Documents.

      


      (c)           Time
Limitations.  The Company shall have no liability (for
indemnification or otherwise) with respect to any breach of any representation
or warranty, unless on or before the date that is one (1) year from the
Effective Date under the Loan Agreement, an Indemnified Party notifies the
Company of a claim specifying the factual basis of that claim in reasonable
detail to the extent then known by such Indemnified Party.

      


                   
 (d)           Procedure for
Indemnification.  If a claim is to be made against the Company
under Section 10(b), the Indemnified Party shall give notice to the Company of
such claim.  In the event that the Company objects in writing to any
claim for Damages, the Indemnified Party and the Company shall attempt in good
faith to resolve the dispute.  The remedies provided in this Section
10 will not be exclusive of or limit any other remedies that may be available to
the Buyers.  When determining Damages under this Section 10 all
materiality qualifiers will be disregarded.

      


      11.           Governing Law; Jury
Trial.

      


                    
(a)           Governing
Law.  The validity and interpretation of this Agreement shall
be governed by, and construed and enforced in accordance with, the laws of the
State of New York.  The Company hereby consents to the non-exclusive
jurisdiction and venue of the Courts of the State of New York, located in the
City and County of New York and the United States District Court, Southern
District, for the State of New York with respect to any matter relating to this
Note and performance of the parties’ obligations hereunder, the Transaction
documents and instruments executed and delivered concurrently herewith or
pursuant hereto and performance of the Company’s obligations hereunder and
thereunder and the Company hereby consents to the personal jurisdiction of such
courts and shall subject itself to such personal jurisdiction.  Any
action, suit or proceeding relating to such matters shall be commenced, pursued,
defended and resolved only in such courts and any appropriate appellate court
having jurisdiction to hear an appeal from any judgment entered in such
courts.  The Company irrevocably waives the defense of an inconvenient
forum to the maintenance of such suit or proceeding.  Service of
process in any action, suit or proceeding relating to such matters may be made
and served within or outside the State of New York by registered or certified
mail to the parties and their representatives at their respective addresses
specified in this Note or the Subscription Agreement, provided that a reasonable
time, not less than thirty (30) days, is allowed for
response.  Service of process may also be made in such other manner as
may be permissible under the applicable court rules.

       

       

       

      
        
          
          

        

        
          - 9- 

          
            

          

        

        
          
          

        

      

      
 

                   
 (b)           Waiver of Jury
Trial.  The Company hereby agrees to waive its respective
rights to a jury trial of any claim or cause of action based upon or arising out
of this Agreement.  The scope of this waiver is intended to be all
encompassing of any disputes that may be filed in any court and that relate to
the subject mater of this Note, including without limitation contract claims,
tort claims, breach of duty claims and all other common law and statutory
claims.  The Company acknowledges that this waiver is a material
inducement for each party to enter into a business relationship, that each party
has relied on this waiver in entering into this Note and that the Holder will
continue to rely on this waiver in their related future dealings.  The
Company further warrants and represents that it has reviewed this waiver with
its legal counsel, and that it has knowingly and voluntarily waived its rights
to a jury trial following such consultation.  This waiver is
irrevocable, meaning that, notwithstanding anything herein to the contrary, it
may not be modified either orally or in writing, and this waiver shall apply to
any subsequent amendments, renewals and supplements or modifications to this
agreement.  In the event of litigation, this Note may be filed as a
written consent to a trial by the court. 

      


      12..           Successors and
Assigns.  Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by the Company without the prior written consent of the
Holder.  Subject to the foregoing, the rights and obligations of
the Company and the Holder shall be binding upon and benefit the successors and
assigns of the parties.

      


      13.           Waiver and
Amendment.  Any provision of this Note may be amended, waived
or modified upon the written consent of the Company and the Holder.

      


      13.           Notices. Any notice,
request or other communication required or permitted hereunder shall be in
writing and shall be deemed to have been duly given if given in accordance with
the Loan Agreement.

      


      14.           Payment.  Payment
shall be made in lawful tender of the United States.  

      


      15.           Usury.  Anything
in this Note to the contrary notwithstanding, the Company shall never be
required to pay interest on this Note at a rate in excess of the Highest Lawful
Rate (as hereinafter defined), and if the effective rate of interest which would
otherwise be payable under this Note would exceed the Highest Lawful Rate, then
(a) the amount of interest which would otherwise be payable under this Note
shall be reduced to the maximum amount allowed under applicable law, and (b) any
interest paid by the Company in excess of the Highest Lawful Rate shall be
credited to the principal of this Note.  It is further agreed that,
without limitation of the foregoing, all calculations of the rate of interest
contracted for, charged, or received by the Holder under this Note that are made
for the purpose of determining whether such rate exceeds the Highest Lawful
Rate, shall be made to the extent permitted by applicable usury laws (now or
hereafter enacted), by amortizing, prorating, and spreading in equal parts
during the period of the full stated term of this Note all interest at any time
contracted for, charged or received by the Holder in connection
herewith.  The “Highest Lawful Rate”
shall mean the maximum rate of interest which the Holder is permitted by the
laws of the State of New York to contract for, charge, or receive.

       

       

      
        
          
          

        

        
          - 10- 

          
            

          

        

        
          
          

        

      

       

      
 

      16.           Replacement
Note.  Upon receipt by the Company of evidence reasonably
satisfactory to them of the ownership of and the loss, theft, destruction or
mutilation of any Note and (a) in the case of loss, theft or destruction, of
indemnity reasonably satisfactory to them; or (b) in the case of mutilation,
upon surrender thereof; the Company, at its expense, will execute and deliver in
lieu thereof a new debenture executed in the same manner as this
Note.

      


      17.           Waiver; Presentment.
Presentment for payment, demand, notice of dishonor, protest, notice of protest,
stay of execution and all other defenses to payment generally and notices in
connection with the delivery, acceptance, performance, default or enforcement of
the payment of this Note are hereby waived by the Company and its permitted
successors and assigns.  Neither extension nor indulgence granted from
time to time shall be construed as a novation of this Note or as a waiver of the
rights of the Holder herein.  The liability of the Company shall be
unconditional, without regard to the liability of any other party, and shall not
be in any manner affected by any forbearance, partial action or delay on the
part of the Holder in regard to the exercise of any right, power or remedy under
this Note.

      


      18.           Section
Headings.  The headings of Sections shall not be taken into
account in interpreting the terms of this Note.

      


      (remainder
of page intentionally left blank – signature page follows)

       

       

       

      
        
          
          

        

        
          - 11- 

          
            

          

        

        
          
          

        

      

       

       

       

      In Witness
Whereof, the Company has caused this Note to be issued as of the date
first written above.

      


      FUND.COM
INC.

      (a
Delaware corporation)

      


      


      


      By: /s/  Gregory Webster                

                 Gregory
Webster,

                 Chief
Executive Officer and President

       

       

      
        
          
          

        

        
          - 12- 

          
            

          

        

        
          
          

        

      

       

       

       

      EXHIBIT
I

      


      FUND.COM
INC.

      CONVERSION
NOTICE

      


      Reference
is made to the Revolving Credit Convertible Note (the “Note”) of Fund.Com Inc.
(the "Company").  In accordance with and pursuant to the Note, the
undersigned hereby elects to convert the amount (“Conversion Amount”) indicated
below into shares of Class A Common Stock, par value $0.001 per share (the
"Common Stock"), of the Company, by tendering the Note representing the
Conversion Amount as of the date specified below.

      


      


      
        
          
            
              	
                      Amount
      of Loan to be Converted

                    	
                      Conversion
      Price

                    	
                      Number
      of shares of Common Stock to be issued

                    
	
                       
      

                       

                    	 
      	 
      


            

          

        

      

      


      


      


      Please
issue the Common Stock in the following name and to the following
address:

       

       

      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              	
                                      Issue
      to:

                                    	 
      
	 
      	 
      
	 
      	 
      
	
                                      Facsimile
      Number:

                                    	 
      
	 
      	 
      
	
                                      Authorization:

                                    	 
      
	 
      	 
      
	 
      	
                                      By:

                                    
	 
      	 
      
	 
      	
                                       

                                    
	 
      	
                                      Please
      print name:

                                    
	 
      	
                                      Title:

                                    


                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

      
 

      Dated: