NEITHER
THE ISSUANCE
NOR SALE OF
THE SECURITIES REPRESENTED
BY THIS CERTIFICATE
NOR THE SECURITIES INTO WHICH
THESE SECURITIES ARE CONVERTIBLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT
BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I)
IN THE ABSENCE OF (A) AN EFFECTNE REGISTRATION STATEMENT FOR
THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR (B) AN OPINION
OF COUNSEL (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THAT REGISTRATION IS
NOT REQUIRED UNDER SAID ACT OR (ll) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT.
NOTWITHSTANDING THE FOREGOING, THE SECURJTIES MAY BE
PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOU NT OR OTHER LOAN OR FINANCING
ARRANGEMENT SECURED BY THE SECURITIES.


 


	Principal
                                         Amount: $121,000

        Purchase
        Price: $121,000
	Issue
                                         Date: March
                                         2, 2015

         



 


CONVERTIBLE
 PROMISSORY NOTE


 


FOR
VALU E RECEIVED,
WELL POWER, INC.,
a NEVADA
corporation (hereinafter
called the "Borrower"), hereby
promises to pay to the order of
MAGNA EQUITIES I, LLC, a New York corporation, or registered assigns (the "Holder")
the sum of One Hundred Twenty One Thousand
Dollars ($12 I ,000), on March 2, 2016 (the "Maturity Date"), and to pay
interest on the unpaid principal balance
hereof at the rate of twelve percent (12%) (the "Interest
Rate") per annum from the date hereof (the "Issue Date") until the same
becomes due and payable, whether at maturity
or upon acceleration or by
prepayment or otherwise, compounded on
a monthly basis.
This Note may not be prepaid in
whole or in part except as otherwise explicitly set forth in Section
1.9 hereof. Any amount of principal or interest on this
Note which is not paid when due shall bear interest at the rate
of twenty two percent (22%) per
annum from the due date thereof until the
same is paid ("Default Interest"). Interest shall commence accruing on
the Issue Date, shall be computed on the basis of a 365-day year and the actual
number of days elapsed. All payments due
hereunder (to the extent not converted into common
stock, (the "Common Stock") in accordance with the
terms hereof) shall be made in
lawful money of the United States of America. All payments
shall be made at such address
as the Holder shall hereafter
give to the Borrower by written notice
made in accordance with the provisions
of this Note. Whenever any amount expressed to be due by the terms
of this Note is due on any
day which is not a business day, the same
shall instead be due on the next succeeding day which is a business day and, in the
case of any interest payment date which is not
the date on which
this Note is
paid in full, the extension of the due
date thereof shall not be taken into account for purposes of determining the amount of interest
due on such date. As used in
this Note, the
term "business day" shall mean
any day other than a
Saturday, Sunday or a day on
which commercial banks in the
city of New York, New York are authorized or required by law
or executive order to remain closed.
Each capitalized term used herein, and not
otherwise defined, shall have the meaning ascribed thereto in that certain Securities
Exchange Agreement dated the date hereof, pursuant to which this Note was originally
issued (the "Exchange Agreement").


 


This
Note is
free from all taxes,
liens, claims and
encumbrances with respect
to the issue
thereof and shall
not be subject to
preemptive rights or other similar rights of shareholders of the Borrower and
will not impose personal liability upon the holder
thereof.


 


The
following terms shall
apply to this
Note:


 




    	 



    	 



    

 


ARTICLE
I. CONVERSION RIGHTS


 


1.1               
Conversion Right.
The Holder shall
have the right
from time to
time, and at
any time during
the period beginning on the date of
this Note and ending on the later of (i)
the Maturity Date and (ii) the date of
payment of the Default Amount (as defined
in Article III) pursuant to Section l.6(a) or Article III, each in respect of the remaining outstanding principal amount of this
Note to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid
and non-assessable shares of Common
Stock, as such Common Stock exists on the Issue
Date, or any shares of capital stock or other securities of
the Borrower into which
such
Common Stock shall hereafter be
changed or reclassified at
the conversion price (the "Conversion Price") determined
as provided herein (a "Conversion"); provided,
however, that in no event shall
the Holder be entitled to convert any portion of this Note in excess of that
portion of this Note upon conversion of which the sum
of (1) the number of shares of Common Stock beneficially owned by the Holder
and its affiliates (other than shares
of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or
the unexercised or unconverted portion of any other security of the Borrower subject
to a limitation on conversion or exercise analogous to the limitations contained
herein) and (2) the number of
shares of Common Stock issuable
upon the conversion of the portion
of this Note with respect to which the determination of this proviso is
being made, would result in beneficial ownership by the
Holder and its affiliates of more
than 4.99% of the outstanding shares
of Common Stock. For purposes of the proviso to the immediately preceding sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and Regulations 13D-G
thereunder , except as otherwise provided in clause (1) of such proviso, provided,
further,
however, that the limitations on conversion may be waived by
the Holder upon, at the
election of the Holder, not less
than 61 days' prior notice to
the Borrower and the provisions of the conversion
limitation shall continue
to apply until
such 61st day (or such later
date, as determined by the Holder,
as may be
specified in such
notice of waiver). The
number of shares of
Common Stock to be issued
upon each conversion of this Note
shall
be determined by dividing the Conversion
Amount (as defined below) by the applicable
Conversion Price then in effect on the date specified in the notice of conversion, in the form attached hereto as Exhibit A (the
"Notice of Conversion"), delivered to the Borrower by
the Holder in accordance with Section 1.4 below; provided
that the Notice of Conversion is submitted by facsimile (or by other means resulting in,
or reasonably expected to result in, notice) to the Borrower before
6:00 p.m., New York,
New York time on
such conversion date (the "Conversion
Date"). The term "Conversion Amount" means, with respect to any conversion
of this Note, the sum of (1) the principal amount of this Note to be converted in such
conversion plus (2)
at the Borrower's option,
accrued and unpaid interest, if
any, on such principal amount at the
interest rates provided in this Note to the Conversion Date, provided, however, that the Company shall
have the right to pay any or
all interest in cash plus (3) at the Borrower' s option, Default Interest, if any,
on the amounts referred to in the immediately
preceding clauses (I) and/or (2) (4) at the Holder 's option, any amounts owed to
the Holder pursuant to Sections 1.3 and l.4(g) hereof.


 


The
Holder agrees, unless
otherwise mutually agreed
upon,
that the Holder
shall not sell
Common Shares received through conversion
of the Note,
in any one given Trading
day, that in
aggregate shall sum to more
than the greater of i) $4,000
or ii) 20% of the specific Trading
Day's number of common shares traded on the applicable
trading market.


 


 


1.2               
Conversion Price.


 


(a)            
Calculation of
Conversion Price. The
conversion price
(the "Conversion
Price") shall be
the Variable Conversion Price (as defined herein)(subject to equitable adjustments for
stock splits, stock dividends or
rights offerings by the Borrower relating to the Borrower' s securities or the 
securities of any subsidiary of the Borrower, combinations, recapitalization,
reclassifications, extraordinary
distributions and similar events). The "Variable
Conversion Price" shall mean the  lower
 of  i) 
a 40% discount from the lowest  daily  VWAP
in the ten (10)  Trading Days prior  to
conversion and ii) $0.04. "Trading Price"
means, for any security as of any
date, the lowest trading price on the Over-the-Counter Bulletin Board, or
applicable trading market
(the "OTCQB") as reported by
a reliable reporting service ("Reporting Service") mutually acceptable to
Borrower and Holder (i.e. Bloomberg). I
f the Trading Price cannot be calculated
for such security on such date in the manner
provided above, the Trading Price shall
be the fair market value as mutually determined by the
Borrower and the holders of a majority in interest of the Notes being converted for
which the calculation of the Trading Price
is required in order
to determine the Conversion Price
of such Notes. "Trading Day"
shall mean any day on which the Common
Stock is traded for any period on the OTCQB,
or on the principal securities exchange or other securities
market on which the Common Stock is then being traded. If the Issuer's Common
stock is chilled for deposit at DTC and/or becomes
chilled at any point while this Agreement remains outstanding,
an additional 8% discount
will be attributed to the Conversion Price
defined hereof. If the Borrower is unable
to issue any shares under this provision due
to the fact that there is
an insufficient number of authorized and unissued shares
available, the Holder promises not to force the Borrower to issue these shares or trigger an Event of Default, provided
that Borrower takes immediate steps required to get the appropriate level of
approval from shareholders or the board of directors, where applicable to raise
the number of authorized shares to
satisfy the Notice of Conversion.


 




    	2



    	 



    

 


(b)            
Conversion Price
During Major Announcements.
Notwithstanding anything
contained in
Section I.2(a)
to the contrary,
in the event the Borrower (i)
makes a public announcement
that it intends to
consolidate or merge with any other corporation (other than a merger
in which the Borrower
is the surviving or continuing corporation
and its capital stock
is unchanged) or sell
or transfer all or substantially
all of the
assets of the Borrower or
(ii) any person, group or entity
(including the
Borrower) publicly announces a tender
offer to purchase 50% or
more of the
Borrower's Common Stock (or any other takeover scheme)
(the date of the announcement referred
to in clause (i) or (ii) is
hereinafter referred to as the
"Announcement Date"), then the
Conversion Price shall, effective
upon the Announcement Date and continuing
through the Adjusted Conversion Price
Termination Date (as defined below),
be equal to the lower
of (x) the Conversion Price which would have been
applicable for a Conversion occurring
on the Announcement Date and (y)
the Conversion Price that would otherwise be in effect. From
and after the Adjusted Conversion
Price Termination Date, the Conversion Price shall
be determined as set forth in this
Section I.2(a). For purposes
hereof, "Adjusted
Conversion Price Termination Date"
shall mean, with respect to any proposed
transaction or tender offer
(or takeover scheme) for which
a public announcement as contemplated by
this Section 1.2(b) has been
made, the date upon which the Borrower (in
the case of clause (i)
above) or the person, group or entity (in the
case of clause (ii) above) consummates or publicly
announces the termination or abandonment of the proposed
transaction or tender offer
(or takeover scheme) which
caused this Section l.2(b) to
become operative.


 


1.3Authorized
Shares. The
Borrower covenants that
during the
period the
conversion right exists, the
Borrower will reserve from its
authorized and unissued Common Stock
a sufficient number of shares,
free from preemptive rights, to provide for the issuance
of Common Stock upon the full conversion
of this Note issued pursuant to the Exchange
Agreement. The Borrower is required
at all times to have authorized and reserved
five times the
number of shares that is actually issuable upon full
conversion of the Note (based
on the Conversion Price of the Notes in effect from
time to time) (the "Reserved
Amount''). The Reserved Amount shall be increased
from time to time in accordance with the Borrower's
obligation s pursuant
to Section 4(g) of the Exchange Agreement. Commencing on
the expiration of
the first month from the issue
date of this Note, the Reserved
Amount shall be recalculated each
month based upon the Variable
Conversion Price and the Company shall notify
the Transfer Agent and the Holder
in writing by the
fifth day of the following month
of the
new Reserved Amount. In the event
the Company does not notify the Transfer Agent
of the new Reserved Amount in a
timely manner,
the
Holder shall have
the absolute
right to
notify the Transfer Agent,
without any further action by the
Company. Notwithstanding
the foregoing, in no event
shall the
Reserved Amount be lower than
the initial Reserved Amount,
regardless of any prior conversions.
The Borrower represents that upon issuance,
such shares
will be duly
and validly issued, fully
paid and non-assessable. In addition,
if the Borrower shall issue any securities
or make any
change to its capital structure
which would change the number
of shares of Common Stock into
which
the Notes shall be
convertible at
the then current Conversion
Price, the Borrower
shall at the same time
make proper provision so that thereafter there shall
be a sufficient number of shares
of Common Stock authorized and reserved,
free from preemptive rights, for conversion
of the outstanding Notes. The Borrower
(i) acknowledges that it has irrevocably instructed
its transfer agent to issue
certificates for the Common Stock
issuable
upon conversion of this Note, and (ii)
agrees that its issuance of this
Note shall constitute full authority to
its officers and agents who
are charged with the duty of executing
stock certificates to execute and issue the
necessary certificates for shares of Common Stock in accordance with the
terms and conditions of this Note.


 


If,
at any
time the Borrower
does not
maintain
the Reserved Amount it will be
considered an Event of Default under Section 3.2 of the Note.


 


1.4Method
of Conversion.


 


		(a)	Mechanics
                                         of Conversion.
                                         Subject
                                         to Section
                                         1.1, this
                                         Note may be converted
                                         by the Holder in whole
                                         or in part at any time from time
                                         to time
                                         after the Issue Date, by: (A) submitting to
                                         the Borrower a Notice of Conversion (by facsimile, e-mail or
                                         other reasonable means of communication
                                         dispatched on the Conversion Date prior to
                                         6:00, New York, New York time) and (B) subject to Section l.4 (b),
                                         surrendering this Note at
                                         the principal
                                         office of the Borrower.



 


(b)            
Surrender of
Note Upon Conversion.
Notwithstanding anything
to the
contrary set forth
herein,
upon conversion
of this Note
in accordance with the
terms hereof, the
Holder shall not be required to physically
surrender this Note to the Borrower
unless the entire
unpaid principal amount of this
Note is so converted. The
Holder and the Borrower shall
maintain records showing
the principal amount so converted and
the dates of such conversions or shall
use such other method, reasonably satisfactory
to the Holder and the
Borrower, so as not to require
physical surrender of this Note
upon each such conversion. In the
event of any dispute or discrepancy, such records of the
Borrower shall, prima facie, be controlling and determinative in the
absence of manifest error. Notwithstanding the
foregoing, if any portion of
this Note is converted as aforesaid,
the Holder may not transfer this Note unless the
Holder first physically surrenders this
Note to the Borrower, whereupon
the Borrower will forthwith issue and
deliver upon the order of the Holder
a new Note of like
tenor, registered as the Holder (upon
payment by the Holder of any applicable transfer taxes) may request, representing
in the aggregate the
remaining unpaid principal amount of this Note. The Holder and any
assignee, by acceptance of this Note, acknowledge
and agree that,
by reason of the provisions of this
paragraph, following conversion of a portion
of this Note, the unpaid and unconverted
principal amount of this Note
represented by this Note
may be less
than the amount stated
on the face hereof.


 




    	3



    	 



    

 


(c)             
Payment of
Taxes. The Borrower
shall not be
required to pay
any tax which
may be payable in
respect of any transfer involved in the issue and delivery of shares of Common Stock or other securities or property on
conversion of this Note in a name other than that of the Holder (or in street name), and the
Borrower shall not be required to issue or deliver any such shares or other securities or property unless and until the
person or persons (other than the Holder or the
custodian in whose street name such shares are to be
held for the Holder's account) requesting
the issuance thereof shall have
paid to the Borrower the amount of any such tax or shall have established to the satisfaction
of the Borrower that such tax has been paid.


 


(d)            
Delivery of
Common Stock
Upon Conversion. Upon
receipt by the
Borrower from the
Holder of a facsimile transmission or e-mail (or other reasonable means of
communication) of a Notice of Conversion meeting the requirements for conversion as provided
in this Section 1.4, the Borrower shall
issue and deliver or cause to be issued and delivered to or upon the order of the Holder
certificates for the Common Stock issuable upon such conversion with in three (3) business days after such
receipt ( but in any event the fifth (5th) business day being hereinafter referred to as
the "Deadline") (and, solely
in the case of conversion of the entire
unpaid principal amount hereof, surrender
of the this Note) in accordance with the terms hereof and the Exchange Agreement.


 


(e)             
Obligation of
Borrower to Deliver
Common Stock. Upon
receipt by the
Borrower of a Notice
of Conversion,
the Holder shall
be deemed to be the holder of record
of the Common Stock issuable upon such conversion,
the outstanding principal amount and the amount of accrued and unpaid interest on this
Note shall be reduced to reflect such conversion, and, unless
the Borrower defaults on its
obligations under this Article I, all
rights with respect to the portion of this Note being so converted shall forthwith
terminate except the right to
receive the Common Stock or
other securities, cash or
other assets, as
herein provided , on such conversion.
If the Holder shall have given a Notice of Conversion
as provided herein, the Borrower's obligation to
issue and deliver the certificates
for Common Stock shall be absolute
and unconditional , irrespective of the
absence of any action by the Holder to enforce the same,
any waiver or consent with respect
to any provision thereof, the recovery of any jud gment
against any person or any action
to enforce the same,
any failure or delay in the enforcement
of any other obligation of
the Borrower to the holder of record,
or any setoff, counterclaim, recoupment, l imitation
or termination , or any breach or alleged breach by the
Holder of any obligation to the Borrower,
and irrespective of any other circumstance which
might otherwise limit such
obligation of the Borrower to the Holder in connection
with such conversion. The Conversion Date specified in the
Notice of Conversion shall be the Conversion
Date so long as the Notice
of Conversion is received by the
Borrower before 6:00 p.m., New York, New
York time, on such
date.


 


(t)De
livery of  Common  Stock 
by  Electronic  Transfer.
In  lieu 
of  delivering  physical
certificates representing the
Common Stock issuable upon
conversion, provided the Borrower's
transfer agent is participating in the
Depository Trust Company ("OTC")
Fast Automated Securities Transfer ("FAST')
program, upon request of the Holder and its compliance
with the provisions contained in Section
I .I and in this Section
1.4, the Borrower shall use its
best efforts to cause its transfer
agent to electronically
transmit the Common Stock issuable upon conversion to the
Holder by crediting the account
of Holder's
Prime Broker with OTC through its Deposit Withdrawal Agent Commission ("DWAC")
system.


 


(g)Failure
to Deliver  Common 
Stock  Prior  to 
Deadline. Without 
in any way
limiting  the Holder
's right to pursue other remedies,
including actual damages and/or equitable relief,
the parties agree that if delivery  of
the Common Stock issuable upon conversion of this Note is
not delivered by the
Deadline (other than a failure due to the circumstances
described in Section
1.3 above, which failure shall be
governed by such Section) the Borrower
shall pay to the Holder $2,000 per day in cash, for each day
beyond the Deadline
that the Borrower fails to deliver such Common Stock. Such cash amount shall
be paid to Holder by the fifth day of the month
following the month in which
it has accrued or,
at the option of the
Holder (by written notice to the
Borrower by the first day of the month following
the month in which it has accrued), shall be
added to the principal amount of this Note, in which event interest shall accrue thereon
in accordance with the terms of
th is Note and such
additional principal amount
shall be convertible into Common Stock in
accordance with the
terms of this Note. The Borrower agrees that
the right to convert is
a valuable right to the
Holder. The damages resulting
from a failure, attempt to frustrate,
interference with such conversion
right are difficult if not impossible
to qualify. Accordingly the parties acknowledge
that the liquidated damages provision
contained in this Section l.4(g) are
justified.




    	4



    	 



    

 


1.5                
Concerning
the Shares.
The shares of
Common Stock issuable
upon conversion of
this Note may not
be sold or transferred
unless (i) such shares
are sold pursuant
to an effective
registration statement under the Act or (ii) the Borrower or its transfer
agent shall have been
furnished with an opinion
of counsel (which opinion shall
be in form, substance and scope customary for opinions
of counsel in comparable transactions)
to the effect that the
shares to be sold
or transferred may
be sold or transferred pursuant
to an exemption
from such registration
or (iii) such shares
are sold or transferred
pursuant to Rule 144 under
the Act (or a successor rule) ("Rule
144") or (iv) such shares are transferred
to an "affiliate"
(as defined in Rule
144) of the Borrower who agrees
to sell or otherwise transfer the shares
only in accordance with
this Section 1.5 and who
is an Accredited Investor
(as defined in the Exchange Agreement).
Except as otherwise provided
in the Exchange Agreement (and subject
to the removal provisions set forth
below), until such
time as the shares
of Common Stock issuable
upon conversion of this Note
have been registered under the Act
or otherwise may be sold pursuant to Rule
144 without any restriction as to the number of
securities
as of a particular date that can
then be
immediately sold, each
certificate for
shares of Common Stock issuable
upon conversion of this Note that has
not been so included in an effective
registration
statement or that has not
been sold pursuant to an effective registration
statement or an exemption
that permits removal of the legend,
shall bear a legend substantially
in the following form,
as appropriate:


 


"NEITHER
THE ISSUA NCE
AND SALE OF
THE SECURITIES REPRESENTED BY
THIS CERTIFICATE NOR THE 
SECURITIES INTO  WHICH 
THESE  SECURITIES  ARE EXERCISABLE
HAVE BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED,
OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY
NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF
(A) AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR (B) AN OPINION OF COUNSEL
(WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER),
IN A GENERALLY ACCEPTABLE FORM,
THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR
(II) UNLESS SOLD PURSUANT TO RULE 144 OR RULE 144A
UNDER SAID ACT. NOTWITHSTANDING
THE FOREGOING, THE SECURITIES MAY BE PLEDGED
IN CONNECTION WITH A BONA FIDE MARGIN ACCOU NT OR
OTHER LOAN OR FINANCING ARRANGEMENT SECURED
BY THE SECURITIES."


 


The
legend
set
forth above shall
be removed
and the Borrower
shall issue to the Holder
a new certificate therefore free
of any transfer legend
if (i) the Borrower or its transfer agent
shall have received
an opinion of counsel, in form, substance
and scope customary for opinions of
counsel in comparable transactions,
to the effect
that a public sale or transfer of
such
Common Stock
may be made without registration
under the Act, which
opinion shall
be accepted by the Company so that the sale
or transfer is
effected or (ii) in the case of
the Common
Stock issuable
upon conversion of this Note,
such security is registered
for sale
by the Holder under an
effective registration statement
filed under the Act or otherwise
may be sold pursuant
to Rule 144 without any restriction as to the number
of securities as of a particular date
that can then be immediately sold.
In the event that the
Company does not accept
the opinion of counsel
provided by the Buyer
with respect
to the transfer of Securities
pursuant to an exemption from registration, such
as Ru le 144 or Regulations S, at the Deadline, it will be considered
an Event of Default pursuant
to Section
3.2 of the Note.


 




    	5



    	 



    

 


1.6Effect
of Certain Events.


 


(a)             Effect of Merger. Consolidation, Etc.
At the option of the Holder, the sale, conveyance or disposition of all or substantially all of
the assets of the Borrower, the effectuation
by the Borrower of a transaction or series of related transactions
in which more
than 50% of the voting
power of the Borrower is disposed of,
or the consolidation, merger or
other business combination of the
Borrower with or into any other Person (as
defined below) or Persons when
the Borrower is not the survivor shall either:
(i) be deemed to be an Event of Default (as defined in Article III) pursuant to
which the Borrower shall be required to pay
to the Holder upon the
consummation of and as a condition
to such transaction an amount equal
to the Default Amount (as defined
in Article III) or (ii) be treated
pursuant to Section l.6 (b) hereof.
"Person" shall mean any individual,
corporation, limited liability company, partnership, association,
trust or other entity or
organization.


 


(b)Adjustment
Due to Merger.
Consolidation,
Etc. If, at
any time when
this Note
is issued
and outstanding and prior to
conversion of all of the Notes, there
shall be any
merger, consolidation, exchange
of shares, recapitalization, reorganization ,
or other similar event, as a result
of which shares of Common Stock of the
Borrower shall be changed into
the same or
a different number of shares of
another class or classes of stock or
securities of the Borrower or another entity,
or in case of any sale or conveyance of all or substantially
all of the assets of the Borrower other than in connection with
a plan of complete liquidation
of the Borrower, then
the Holder of this Note shall
thereafter have the right to receive
upon conversion of this Note, upon the basis and
upon the terms and conditions specified herein and in lieu of
the shares of Common Stock immediately
theretofore issuable upon conversion, such
stock, securities or assets which the
Holder would have been entitled to receive
in such
transaction had this
Note been converted in full immediately
prior to such transaction (without regard
to any limitations on conversion set forth
herein), and in any such case appropriate
provisions shall be made with respect
to the rights and interests of the
Holder of this Note
to the end that the provisions hereof
(including, without limitation,
provisions for adjustment of the Conversion Price and of the number of
shares issuable upon conversion
of the Note) shall
thereafter be applicable, as nearly
as may be practicable in relation to any securities or assets thereafter deliverable
upon the conversion hereof. The Borrower shall
not affect any transaction described in
this Section I.6(b) unless it
first gives, to the extent practicable, thirty (30) days
prior written notice (but in any event at least fifteen (15) days
prior written notice) of the record date of the special meeting of shareholders
to approve, or if there is no such
record date, the consummation of,
such merger, consolidation, exchange of shares, recapitalization, reorganization
or other sim ilar event or
sale of assets (during which
time the Holder shall be entitled to convert
this Note) and (b) the resulting
successor or acquiring entity (if not
the Borrower) assumes by written instrument the
obligations of this Section l.6(b).
The above provisions shall similarly
apply to successive consolidations, mergers,
sales, transfers or share exchanges.


 


(c)             
Adjustment Due
to Distribution .
If the Borrower
shall declare
or make any
distribution of its
assets (or rights
to acquire its
assets) to holders of
Common Stock as a dividend, stock repurchase,
by way of return of capital or otherwise
(including any dividend or distribution to the Borrower's shareholders in cash
or shares (or rights to acquire shares) of capital stock of a subsidiary (i.e., a spin-off))
(a "Distribution"), then the Holder of this Note shall be entitled,
upon any conversion of this Note
after the date
of record for determining shareholders
entitled to such Distribution , to receive
the amount of such assets which would have been payable to the Holder with
respect to the
shares of Common Stock issuable
upon such conversion had such Holder
been the bolder
of such shares of Common Stock
on the record date for the determination
of shareholders entitled to such Distribution.


 


(d)            
Adjustment
Due to
Dilutive Issuance.
If, at
any time when
any Notes are
issued and outstanding, the Borrower
issues or sells, or in accordance with this Section
1.6(d) hereof is deemed to have issued
or sold, any shares of Common
Stock for no consideration or for a consideration per share (before deduction
of reasonable expenses or commissions or
underwriting discounts or allowances in
connection therewith) less
than the Conversion Price in effect on
the date of such issuance (or deemed issuance) of such shares of Common
Stock (a "Dilutive Issuance"), then immediately upon the
Dilutive Issuance, the Conversion
Price will be reduced to the amount of the
consideration per share
received by the Borrower in such
Dilutive Issuance, but in no
event shall the Conversion
Price be above the
original Conversion Price.


 




    	6



    	 



    

 


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


 


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


 


(e)                
Purchase
Rights. If, at
any time when
any Notes are
issued
and outstanding, the
Borrower issues any
convertible securities or rights
to purchase stock, warrants, securities
or other property (the "Purchase Rights") pro rata to the record holders
of any class of Common Stock,
then the Holder of this Note will be entitled to acquire, upon the
terms applicable to such Purchase Rights,
the aggregate Purchase Rights which such Holder could have acquired if such Holder
had held the number
of shares of Common Stock acquirable
upon complete conversion of this Note (without regard to any limitations
on conversion contained herein) immediately before the date on which a
record is taken
for the grant, issuance or sale
of such Purchase
Rights or,
if no such
record is taken, the date as
of which the record holders of Common
Stock are to be determined for the grant, issue or sale
of such Purchase Rights.


 


(f)                 
Notice of
Adjustments. Upon the
occurrence of each
adjustment or readjustment
of the Conversion
Price as a
result of the events described in this
Section 1.6, the Borrower, at
its expense, shall promptly compute
such adjustment or readjustment and prepare
and furnish to the Holder of a
certificate setting forth such adjustment or readjustment and
showing in detail the facts
upon which such adjustment or readjustment is
based. The Borrower shall,
upon the written request
at any time of
the Holder, furnish
to such Holder a like certificate
setting forth (i) such
adjustment or readjustment, (ii)
the Conversion Price at the time in effect
and (iii) the number of shares of Common Stock and the amount, if any,
of other securities or property which at the time would be received upon
conversion of the Note.


 


1.7               
Trading Market
Limitations. Unless permitted
by the applicable
rules and regulations
of  the principal securities
market on which
the Common Stock
is then listed or traded,
in no event shall the Borrower issue upon
conversion of or otherwise pursuant to
this Note and the other Notes issued pursuant
to the Exchange Agreement
more than the maximum number of shares
of Common Stock that the Borrower can issue pursuant to any rule of the principal United States
securities market on which the Common
Stock is then traded (the "Maxim um
Share Amount''), which shall be 9.99% of
the total shares outstanding on the Closing Date
(as defined in the Exchange
Agreement), subject to equitable adjustment
from time to time for stock
splits, stock dividends, combinations,
capital reorganizations and
similar events relating to the Common Stock
occurring after the date hereof. Once the
Maximum Share Amount has been issued, if
the Borrower fails to eliminate any prohibitions
under applicable law or the rules or
regulations of any stock exchange, interdealer
quotation system or other self-regulatory organization with jurisdiction 
over the Borrower or any of its securities on the Borrower's ability
to issue shares of Common Stock in excess of the Maximum Share
Amount, in lieu of any further right
to convert this Note, this will
be considered an Event of Default under
Section 3.3 of the Note.


 




    	7



    	 



    

 


1.8           
Status as
Shareholder. Upon submission
of a Notice
of Conversion
by a Holder,
(i) the shares covered thereby
(other than the shares, if any,
which cannot be issued
because their issuance
would exceed such
Holder's allocated portion of the Reserved Amount
or Maximum Share Amount) shall
be deemed converted into shares of Common Stock and (ii) the
Holder's rights as a Holder of such
converted portion of this Note shall cease and terminate, excepting
only the right to receive
certificates for such shares of Common Stock and to any remedies provided
herein or otherwise available at law
or in equity to such
Holder because of a failure by
the Borrower to comply with the terms
of this Note. Notwithstanding the foregoing, if a Holder has not
received certificates for all shares
of Common Stock prior to the tenth (10th)
business day after the expiration of the
Deadline with respect to a conversion of
any portion of this Note for any reason, then
(unless the Holder otherwise elects to retain its
status as a holder of Common Stock by so
notifying the Borrower) the Holder shall regain the rights of a Holder
of this Note with respect to such
unconverted portions of this Note and the Borrower
shall, as soon as practicable, return
such unconverted Note to the Holder or,
if the Note has not been surrendered, adjust its records to reflect that such portion
of this Note has not been converted. In all cases,
the Holder shall retain all of
its rights and remedies (including,
without limitation, (i) the right to receive
Conversion Default Payments pursuant to
Section 1.3 to the extent required thereby for such Conversion Default and any subsequent
Conversion Default and (ii) the right
to have the Conversion Price with respect
to subsequent conversions determined in accordance with Section 1 .3) for
the Borrower's failure to convert
this Note.


 


1.9           
Prepayment. Notwithstanding
anything to the
contrary contained in
this Note, so
long as the
Borrower has not
received a Notice of
Conversion from the Holder, then
at any time during the period beginning on
the Issue Date and ending on the date
which is ninety (90) days following the issue
date, the Borrower shall have the
right, exercisable on not less
than three (3) Trading Days prior written notice to the Holder of the Note
to prepay the outstanding Note (principal and accrued interest), in
full, in accordance
with this Section 1.9. Any notice of prepayment hereunder (an "Optional
Prepayment Notice") shall be delivered
to the Holder of the Note
at its registered address and shall
state: (1) that the Borrower
is exercising its right to prepay
the Note, and (2) the date
of prepayment which shall be not
more than three (3) Trading Days from
the date of the Optional Prepayment Notice.
On the date fixed for prepayment (the "Optional Prepayment
Date"), the Borrower shall
make payment of the Optional Prepayment Amount (as defined below) to
or upon the order of the Holder
as specified by the Holder in writing to the Borrower at least one (1)
business day prior to the Optional Prepayment Date.
If the Borrower exercises its right to prepay the Note, the Borrower shall make
payment to the Holder of an amount in cash (the "Optional
Prepayment Amount") equal to 150%,
multiplied by the sum of: (w)
the then outstanding principal amount of
this Note (x) accrued and unpaid interest on the unpaid principal amount of
this Note to the Optional Prepayment
Date plus (y)
Default Interest, if any, on the amounts referred to in clauses (w) and
(x) plus
(z) any amounts owed to the Holder pursuant
to Sections 1.3 and 1.4(g)
hereof. If the Borrower delivers and
Optional Prepayment Notice and fails to
pay the Optional Prepayment Amount due to the
Holder of the Note within two (2)
business days following
the Optional Prepayment Date, the Borrower shall forever forfeit
its right to prepay the Note pursuant
to this Section 1.9.


 


ARTICLE
II. CERTAIN COVENANTS


 


2.1Negative
Covenants  As long
as any portion
of this
Note remains outstanding,
unless the holders of all
of the outstanding Notes shall
have otherwise given prior written consent,
the Borrower shall not, and shall not permit
any of its subsidiaries
(whether or not a subsidiary on
the Issue Date) to, directly or indirectly:


 


(a)            
other than
indebtedness existing
as of the
Initial Date or
incurred in the
ordinary course of
business for trade expenses
(not borrowed money) ("Permitted
Indebtedness"), enter into, create,
incur, assume, guarantee or suffer to
exjst any indebtedness for borrowed money
of any kind, including, but not
limited to, a guarantee, on or with respect
to any of its property or assets now owned
or hereafter acquired or any interest therein or any income or profits therefrom,
which indebtedness shall
be senior is respect
to security to this Note;


 


(b)            
other than
Permitted Liens (as
defined below), enter
into, create, incur,
assume or suffer
to exist any
liens,
charges or encumbrances of any kind or nature
("Liens"), on or with
respect to any of its property or assets
now owned or hereafter acquired
or any interest therein or any
income or profits therefrom . "Permitted Lien" means
the individual and collective reference
to the following: (a) Liens
for taxes, assessments and
other governmental charges or levies
not yet due or Liens
for taxes, assessments and
other governmental charges or levies being contested in good faith and by appropriate proceedings for which
adequate reserves (in the good
faith judgment of the management of the
Borrower) have been established in accordance
with GAAP; (b) Liens
imposed by
law which were incurred in the ordinary
course of the Borrower 's business, such as carriers',
warehousemen 's and mechanics' Liens, statutory
landlords' Liens, and
other similar Liens
arising in the ordinary course
of the Borrower's business, and which (x) do
not individually or
in the aggregate
materially detract from the value
of such property or
assets or materially impair the use
thereof in the operation of the business
of the Borrower and its consolidated
subsidiaries or (y) are being contested in good faith by
appropriate proceedings, which proceedings have the effect of preventing for the foreseeable
future the forfeiture or sale of the property or asset subject to
such Lien; (c) Liens incurred in connection
with Permitted Indebtedness under clauses
(a), and (b) thereunder; and
(d) Liens incurred in connection with Permitted Indebtedness under
clause (c) thereunder, provided that such
Liens are not secured by assets
of the Borrower or its
subsidiaries other than the assets
so acquired or
leased.


 




    	8



    	 



    

 


(c)             
amend its
charter documents, including, without
limitation , its
certificate of incorporation
and bylaws, in
any manner that
materially and adversely affects any rights of the Holder;


 


(d)            
repay, repurchase
or offer to
repay, repurchase
or otherwise acquire more
than a de
minimis number
of shares of
its Common Stock or Common
Stock equivalents;


 


(e)             
repay, repurchase
or offer to
repay, repurchase
or otherwise acquire
any indebtedness, other
than the Notes
if on a
pro-rata basis, other
than regularly scheduled principal and interest payments as
such terms are in
effect as of the Issue Date, provided
that such payments shall not be permitted
if, at such time, or after giving effect
to such payment, any Event of Default
exist or occur;


 


(f)             
pay cash
dividends or distributions
on any equity
securities of the
Borrower;


 


(g)             
sell, lease
or otherwise dispose
of any portion
of its
assets outside the
ordinary course of business, other
than de minimis sales. Any consent to the disposition of any assets
may be conditioned on a specified use
of the proceeds of disposition ;


 


(h)            
so long
as the Borrower
shall
have any obligation
under this Note,
the Borrower shall
not, without the Holder's
written consent, lend money , give credit or
make advances to any person, firm, joint venture or corporation,
including, without limitation, officers,
directors, employees, subsidiaries and affiliates
of the Borrower, except loans,
credits or advances (a) in existence
or committed on the date hereof and which
the Borrower has informed Holder in writing
prior to the date hereof, (b) made
in the ordinary course of business or (c) not in excess of $1,000;


 


(i)               enter into any transaction with any affiliate of the Borrower which would be required to be disclosed
in any public filing with the Commission, unless such transaction is made on an arm's
length basis and expressly approved
by a majority of the disinterested
directors of the Borrower (even if
less than a quorum otherwise required for
board approval); or


 


(j)enter
into any agreement with
respect to any
of the foregoing.


 


ARTICLE
III. EVENTS
OF DEFAULT


 


If
any of the
following events of
default (each, an "Event
of Default") shall
occur:


 


3.1               
Failure to Pay
Principal or Interest.
The Borrower fails
to pay the
principal
hereof or interest
thereon when due on this Note, whether
at maturity, upon acceleration or
otherwise.


 


3.2               
Conversion and the
Shares. The Borrower
fails to issue
shares of Common
Stock to the
Holder (or allowances or
threatens in writing
that it will not
honor its obligation to
do so) upon exercise by the Holder
of the conversion rights of the Holder
in accordance with the terms of this Note, fails
to transfer or cause its
transfer agent to transfer (issue)
(electronically or in certificated form)
any certificate for shares of Common Stock issued
to the Holder upon conversion of or otherwise pursuant
to this Note as and when
required by this Note, the Borrower directs its
transfer agent not to transfer or delays,
impairs, and/or hinders its transfer
agent in transferring (or issuing( electronically
or in certificated form) any
certificate for shares of
Common Stock to be issued to the Holder
upon conversion of or otherwise pursuant to this
Note as and when required by this
Note, or fails to remove (
or directs its transfer agent not
to remove or impairs, delays, and/or hinders
its transfer agent from removing) any
restrictive legend
(or to withdraw any stop transfer
instructions in respect
thereof) on any certificate for
any shares of
Common Stock issued to the Holder
upon conversion of or otherwise pursuant
to this Note as
and when required by this Note (or makes any written announcement, statement
or threat that it does not intend
to honor the obligations described in this
paragraph) and any such
failure shall continue uncured
(or any written announcement, statement
or threat not to honor its obligations shall
not be rescinded in writing) for
three (3) business days after the Holder
shall have delivered a Notice of Conversion.


 




    	9



    	 



    

 


3.3               
Breach  of  Covenants. 
The  Borrower  breaches 
any  material  covenant 
or  other  material
 term  or
condition contained in
this Note and any
collateral documents including but not limited to the
Exchange Agreement and such breach continues
for a period of ten
(10) days after written notice
thereof to the Borrower from the
Holder;


 


3.4               
Breach of Representations
and Warranties. Any
representation or warranty
of the Borrower
made herein or in any
agreement, statement or
certificate given in writing
pursuant hereto or in connection herewith
(including, without l imitation, the Exchange Agreement), shall
be false or misleading in any material respect when made
and the breach of which has
(or with the passage of time will
have) a material adverse effect
on the rights of the
Holder with respect to this Note
or the Exchange Agreement;


 


3.5               
Bankruptcy,  Receiver  or 
Trustee.  The  Borrower 
or  any  subsidiary
 of  the 
Borrower  shall commence,
or there shall be commenced against the Borrower or any subsidiary 
of the Borrower under  any  applicable
bankruptcy or insolvency laws as now or hereafter in effect or
any successor thereto, or the Borrower
or any subsidiary of the Borrower commences
 any  other 
proceeding under  any reorganization, arrangement, adjustment 
of debt, relief of debtors, dissolution, insolvency or 
liquidation  or similar 
law of any jurisdiction  whether
 now or hereafter  in effect
relating to the Borrower
or any subsidiary of
the Borrower or there is
commenced against the Borrower or
any subsidiary of the Borrower
any such bankruptcy, insolvency or other
proceeding which remains undismissed for a
period of 61 days; or the Borrower
or any subsidiary of
the Borrower is
adjudicated insolvent or bankrupt;
or any order of relief or other order approving
any such case or proceeding is entered;
or the Borrower or any subsidiary of the Borrower suffers any
appointment of any custodian,
private or court appointed receiver or
the like for it or any
substantial part of its property which
continues undischarged
or unstayed for a period of sixty one (61) days; or the Borrower or any subsidiary
of the Borrower
makes a general assignment for the
benefit of creditors; or the Borrower
or any subsidiary of the Borrower
shall fail to pay, or shall
state that it is unable to pay, or
shall be unable to pay, its debts generally as they become
due; or the
Borrower or any subsidiary of
the Borrower shall call
a meeting of its creditors with a view to arranging
a composition, adjustment or restructuring of its debts; or the Borrower or any subsidiary
of the Borrower shall by any act or
failure to act expressly indicate its consent
to, approval of or acquiescence in any
of the foregoing; or any
corporate or other action is taken by
the Borrower or any subsidiary of the Borrower for the purpose of
effecting any of the foregoing;


 


3.6               
Judgments.
Any money judgment,
writ or similar
process shall
be entered or
filed against the Borrower or any subsidiary of
the Borrower or any of its
property or other assets for more
than $50,000, and shall remain unvacated, unbonded or unstayed for a period of twenty (20) days unless
otherwise consented to by the Holder,
which consent will not be unreasonably
withheld;


 


3.7               
Indebtedness Default.
The Borrower or
any subsidiary of
the Borrower shall
default
in any of its obligations under any
other Note or any mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument
under which there may be issued, or
by which there may be
secured or evidenced any indebtedness for borrowed
money or money due under any long
term leasing or factoring arrangement of
the Borrower or any subsidiary of the Borrower
in an amount exceeding $25,000, whether such
indebtedness now exists or shall hereafter
be created and such default shall result in such
indebtedness becoming
or being declared due
and payable prior to the date on
which it would otherwise become due and payable;


 


3.8               
Delisting  of  Common
 Stock;  OTC 
Chill. 
The Borrower  shall
 fail to
maintain  the  listing
of  the Common Stock on at
least one of the OTCQB
or an equivalent
replacement exchange, the Nasdaq National
Market, the Nasdaq SmaUCap
Market, the New York
Stock Exchange, or the American
Stock Exchange or there
shall be no bid price for the stock for a period of one business
day OR the Depository Trust Company places a chill on new deposits
of Common Stock, which is not removed within ten
(10) trading days;


 


3.9               
Failure to Comply
with the Exchange
Act. The Borrower
shall fail
to comply
with the reporting requirements of
the Exchange Act; and/or the Borrower shall cease to be subject to the reporting
requirements of the Exchange Act.


 




    	10



    	 



    

 


3.10           
Liquidation. Any dissolution,
Liquidation, or winding
up of Borrower
or any substantial
portion of its business.


 


3.11           
Cessation  of  Operations.
Any cessation  of
operations by Borrower 
or Borrower admits 
it  is otherwise
generally
unable to pay its debts as such
debts become due, ·provided, however,
that any disclosure of the Borrower's ability to continue
as a "going concern" shall not be an admission
that the Borrower cannot pay its debts as they become due.


 


3.12           
Maintenance of Assets.
The failure by
Borrower to maintain
any material intellectual
property rights, personal,
real
property or other assets which are
necessary to conduct its business (whether now
or in the future).


 


3.13           
Financial Statement Restatement.
The restatement of
any financial statements
filed by the
Borrower with
the SEC for any
date or period from two years
prior to the Issue
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 Holder with respect to this
Note or the Exchange Agreement.


 


3.14           
Reverse Splits. The Borrower
effectuates a reverse
split
of its Common
Stock without twenty
(20) days prior
written notice to
the Holder.


 


3.15           
Replacement of Transfer
Agent. In the
event that the
Borrower proposes
to replace its
transfer agent, the
Borrower fails
to provide, prior to the effective date
of such replacement, fully executed Irrevocable
Transfer Agent
Instructions in a form as initially
delivered pursuant to the Exchange Agreement
(including but not limited
to the provision to irrevocable reserve shares of Common Stock in the Reserved
Amount) signed by the successor transfer agent to Holder and
the Borrower.


 


3.16           
Failure to Pay
Post-Closing Expenses. The
failure by Borrower
to pay any
and all Post-Closing
Expenses as defined
in section 4.6.


 


3.17           
Delisting. From and after
the initial trading,
listing or quotation
of the Common
Stock on a
Principal Market,
an event resulting in the Common
Stock no longer being traded, listed
or quoted on a Principal Market; failure
to comply with the requirements for continued quotation on a Principal
Market; or notification from a Principal Market
that the Borrower is not in compliance
with the conditions
for such continued quotation
and such non-compliance continues for seven
(7) trading days following such notification.


 


3.18           
Cross-Default.
Notwithstanding anything to
the contrary
contained in this
Note or the
other
related or companion documents, a breach or default
by the Borrower of any covenant
or other term or
condition contained in any of the
Other Agreements,
after the passage of all applicable notice and cure or grace periods,
shall, at the option of the Borrower,
be considered a default under
this Note and the Other Agreements,
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 and the Other Agreements by reason of a default under said Other Agreement
or hereunder. "Other Agreements" means collectively, all agreements
and instruments between, among
or by: (1) the Borrower,
and, or for the benefit of,
(2) the Holder and any affiliate
of the Holder, including, without limitation,
promissory notes; provided , however, the term "Other Agreements" shall
not include the related or
companion documents to this Note.
Each of the loan transactions will be cross-defaulted with each
other loan transaction and with all other
existing and future debt of Borrower
to the Holder.


 


3.19           
Consecutive Late Filings.
If the Company
files a
late notification (NT
10-Q or NT
10-K) for any quarterly or annual
report for any
two (2) consecutive periods.


 




    	11



    	 



    

 


Upon
the occurrence and
during the continuation
of any Event
of Default specified
in Section 3.1
(solely with
respect to failure
to pay the principal hereof or interest thereon when due at the Maturity Date),
the Note shall become immediately due and payable and the Borrower shall
pay to the Holder, in full satisfaction of its
obligations hereunder, an amount
equal to the Default Sum (as defined
herein). UPON THE OCCURRENCE AND DURING THE CONTJNUATION OF ANY EVENT OF DEFAULT
SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER, IN
FULL SATISFACTION OF ITS OBLIGTATIONS HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT
 SUM (AS DEFINED HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during
the continuation of any Event of Default specified in Sections 3.1 (solely
with respect to failure to pay the
principal hereof or interest thereon
when due
on this Note upon a Trading Market
Prepayment Event pursuant to Section
1.7 or upon acceleration), 3.3,
3.4, 3.6,  3.8,  3.9, 
3.11, 3.12, 3.13, 3.14, 3.15,
3.16, 3.17, 3.18, 3.19, and/or 3.20 exercisable through the delivery
of written notice to the Borrower by such Holders
(the "Default Not ice"), and
upon the occurrence of an Event of Default specified in the remaining sections of
Articles III (other than failure to pay
the principal hereof or interest thereon at the Maturity
Date specified in Section 3.1
hereof), the Note shall
become immediately due and payable
and the Borrower shall pay to the Holder,
in full satisfaction of its obligations
hereunder, an amount equal to the greater
of (i) 150% times the
sum of (w) the
then outstanding principal amount
of this Note plus
(x) accrued and unpaid interest on the unpaid principal amount of this Note
to the date of payment (the "Mandatory Prepayment Date")
plus (y) Default Interest, if
any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts
owed to the Holder pursuant to Sections
1.3 and l .4(g) hereof (the then outstanding
principal amount of th.is Note to the date of payment plus the amounts referred to in clauses (x),
(y) and (z) shall collectively
be known as the "Default Sum")
or (ii) the "parity value" of the Default Sum
to be prepaid,
where parity
value means
(a) the highest
number of shares of Common Stock issuable
upon conversion of or otherwise pursuant to such Default Sum in accordance
with Article II treating the Trading Day immediately preceding the Mandatory Prepayment
Date as the "Conversion Date" for purposes
of determining the lowest applicable Conversion
Price, unless the Default Event arises
as a result of such
breach in respect of a specific Conversion Date in which
case such Conversion Date shall be the Conversion
Date, multiplied by (b) the highest Closing Price for the Common Stock during
the period beginning on the date of first occurrence of
the Event of
Default and ending
one day prior to the
Mandatory Prepayment Date (the "Default Amount") and all other amounts
payable hereunder shall immediately become due and payable, all without demand,
presentment or notice, all of which
hereby are expressly waived,
together with all costs, including, without limitation,
legal fees
and expenses, of collection, and the Holder shall be entitled to exercise all
other rights and remedies available at low or in
equity.


 


If
the Borrower fails
to pay the
Default
Amount within five
(5) business
days of written
notice that such amount is due and
payable , then the Holder shall
have the right at any time,
so long as
the Borrower remains in default (and so
long and to the extent that there are sufficient authorized shares), to require
the Borrower,
upon written notice, to immediately
issue, in lieu of the Default
Amount, the number
of shares of Common Stock of the Borrower equal
to the Default Amount divided by the
Conversion Price then in effect.


 


ARTICLE
IV. MISCELLANEOUS


 


4.1               
Fai lure
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 privileges. All rights and remedies
existing hereunder are cumulative
to, and not exclusive
of, any rights or remedies
otherwise available.


 


4.2               
Notices.
 All notices,
demands, requests, 
consents, approvals, and
other communications  required
or permitted hereunder shall
be in writing and, unless otherwise specified herein, shall be (i) personally
served, (ii) deposited in the mail, registered
or certified, return receipt requested,
postage prepaid , (iii) delivered
by reputable air
courier service with charges prepaid , or
(iv) transmitted by hand delivery, telegram, or facsimile,
addressed as set forth below or
to such other address as such party shall
have specified most recently by written
notice. Any notice or other communication
required or permitted to be given hereunder shall
be deemed effective (a) upon hand delivery
or delivery by facsimile, with accurate
confirmation generated by the transmitting
facsimile machine, at the address or number
designated below
(if delivered on a business
day during normal business hours
where such notice is to be received), or the
first business
day following such delivery (if
delivered
other than on a business
day during normal business hours
where such notice is to be received) or
(b) on the second business day following
the date of mailing by express courier
service, fully prepaid, addressed to such
address, or upon actual receipt
of such mailing, whichever shall first
occur. The addresses for such
communications shall be:


 




    	12



    	 



    

 


If
to the Borrower,
to:


WELL
POWER, INC.


11111 KATY FREEWAY SUITE #9 10


HOUSTON,
TX 77079


Attn:
Mr. Dan Patience,
President, CFO


 


If
to the Holder:


MAGNA
EQUITIES I, LLC



5
HANOVER SQUARE NEW YORK,
NY I 0004


Attn:
Joshua
Sason, Managing
Member


 


4.3               
Amendments. This
Note and any
provision
hereof may only
be amended by
an instrument in writing signed
by the Borrower and the Holder. The term "Note" and all reference thereto,
as used throughout this instrument, shall mean this instrument (and
the other Notes issued pursuant to the Exchange Agreement) as originally executed, or if later
amended or supplemented, then as so amended or supplemented.


 


4.4               
Assignability.
This Note
shall
be binding
upon the Borrower
and its successors
and assigns, and
shall inure to be the benefit
of the Holder and its successors and
assigns. Each transferee of
th is Note must
be an "accredited investor" (as
defined in Rule 50l(a) of the 1933 Act). Notwithstanding
anything in this Note to the
contrary, this Note may be pledged as
collateral in connection with a bona fide
margin account or other lending arrangement.


 


4.5               
Cost  of 
Collection. If default is
made in the
payment of this
Note, the Borrower
shall pay  the
Holder hereof costs of collection,
including reasonable attorneys' fees.


 


4.6                                                          
Post-Closing Expenses.
The Issuer
will bear any
and all miscellaneous
expenses that may
arise as a
result of this Agreement post-closing.
These expenses include, but are not limited
to, the cost of legal opinion production,
transfer agent fees, equity
issuance fees, etc.
The failure
to pay any and all Post-Closing
Expenses will be deemed a default as described
in Section 2.6.10 herein.


 


4.6Governing
Law. This Note
shall
be governed by
and construed in
accordance with
the laws of
the State of New York without regard
to principles of conflicts of laws. Any
action brought by either party against
the other concerning the transactions
contemplated by
this Note shall be brought only
in the state courts
of New York or in the
federal courts located in the state and county of
New York. The parties to this Note
hereby irrevocably waive any objection to jurisdiction
and venue of any action instituted hereunder and
shall not assert any defense based
on lack of jurisdiction
or venue or based uponforum
non conveniens. The Borrower and
Holder waive trial by jury. The prevailing
party shall be entitled to recover
from the other party
its reasonable attorney's fees
and costs. In the event that any
provision of this Note
or any other agreement
delivered in connection herewith is invalid or unenforceable under any applicable
statute or rule of Jaw, then such provision
shall be
deemed inoperative to
the extent that it may
conflict therewith and shall be deemed modified
to conform with such
statute or rule of law. Any such
provision which may prove invalid
or unenforceable under any law shall
not affect the validity or enforceability
of any other provision of any agreement. Each party hereby irrevocably waives
personal service of process and consents
to process being served in any suit, action
or proceeding in connection with
this Agreement or any other Transaction Document
by mailing a copy thereof via registered
or certified mail or
overnight delivery (with evidence
of delivery) to such party at the address in effect for notices to
it under this Agreement and agrees
that such service shall constitute good and
sufficient service of process and notice thereof.
Nothing contained herein shall
be deemed to limit in
any way any right to serve process in any other manner permitted by law.


 




    	13



    	 



    

 


4.7               
Certain
Amounts. Whenever pursuant
to this
Note the Borrower
is
required to
pay an amount in excess of the outstanding
principal amount (or the portion thereof required
to be paid
at that time) plus
accrued and unpaid interest plus
Default Interest on such
interest, the Borrower and the Holder
agree that the actual
damages to the Holder
from the receipt of cash payment
on this Note may be difficult to determine
and the amount
to be so paid by the Borrower represents
stipulated damages and
not a penalty and is
intended to compensate the Holder
in part for loss of the opportunity
to convert this Note and
to earn a return from the sale of shares
of Common Stock acquired upon conversion
of this Note at
a price in excess of the price paid for such shares pursuant to this Note.
The Borrower and
the Holder hereby agree that such
amount of stipulated damages
is not plainly disproportionate to the
possible loss to
the Holder from the receipt of
a cash payment
without the opportunity to convert this Note into
shares of Common Stock.


 


4.8               
Exchange Agreement.
By its
acceptance of this
Note, each party
agrees
to be bound by the applicable
terms of the Exchange Agreement.


 


4.9               
Notice of Corporate
Events. Except as
otherwise provided below,
the Holder of
this Note shall
have no rights
as a Holder of Common
Stock unless and
only to the extent that it converts
this Note into Common Stock. The
Borrower shall provide the Holder with prior notification of any meeting of the Borrower
's shareholders (and copies
of proxy material s and other information sent to shareholders).
In the event of any taking by the Borrower of a record of its shareholders
for the purpose of
determining shareholders who are
entitled to receive payment of any dividend
or other distribution, any right to subscribe for, purchase or otherwise acquire (including
by way of merger,
consolidation , reclassification or recapitalization) any share of
any class or any other securities
or property, or to receive
any other right, or for the
purpose of determining shareholders
who are entitled to vote in connection with
any proposed sale, lease
or conveyance of all or substantially
all of the assets of the Borrower or any proposed liquidation, dissolution
or winding up of the Borrower, the Borrower shall mail a notice to
the Holder, at least twenty {20) days
prior to the record date specified therein
(or thirty (30) days prior to the consummation of the
transaction or event, whichever is earlier), of the date on which any such record
is to be taken for the
purpose of such dividend, distribution,
right or other event, and
a brief statement regarding the
amount and character of such dividend, distribution,
right
or other event
to the extent known at such time.
The Borrower shall make a public
announcement of
any event
requiring notification to the Holder
hereunder substantially simultaneously
with the
notification to the Holder in accordance
with the terms of this Section 4.9.


 


4.10           
Remedies. The Borrower
acknowledges that a
breach by
it of its
obligations hereunder will cause
irreparable
harm to the
Holder, by vitiating the
intent and purpose
of the transaction contemplated
hereby. Accordingly , the Borrower acknowledges
that the remedy at law for
a breach of its obligations
under this Note
will be inadequate
and agrees, in the
event of a breach or
threatened breach by the Borrower
of the
provisions of
this Note, that the
Holder shall
be entitled,
in addition to all other
available remedies at law
or in equity, and in
addition to the penalties
assessable herein, to
an injunction or injunctions
restraining, preventing
or curing any breach of this Note and to enforce specifically the
terms and provisions thereof, without
the necessity of showing economic
loss and without
any bond or other security
being required.


 


4.11           
Severability. If
any provision
of this Note
is
invalid,
illegal or unenforceable,
the balance of
this Note shall remain in effect,
and if any provision is inapplicable
to any person or circumstance,
it shall
nevertheless remain applicable
to all other persons and circumstances.
If it shall be found that any interest
or other amount deemed interest
due hereunder shall violate applicable
laws govern ing usury, the applicable
rate of interest
due hereunder
shall
automatically be lowered to equal the
maximum permitted rate of interest.
The Borrower covenants (to the extent that it may lawfully do so) that it
shall not
at any time insist upon, plead,
or in any manner whatsoever claim
or take the benefit or advantage
of, any stay, extension or usury law
or other law which
would prohibit or forgive the Borrower from paying all
or any portion of the principal of or
interest on this
Note as contemplated
herein, wherever enacted, now or at
any time hereafter in force, or
which may affect the covenants or the
performance of this indenture, and
the Borrower (to the
extent it may lawfully
do so) hereby expressly waives
all
benefits or advantage of any
such law, and covenants that it
will not, by resort to any such
law, hinder, delay
or impeded
the execution of any power herein
granted to the Holder, but will
suffer and permit
the execution of every such
as though no such law has been
enacted.


 


(Signature
Pages Follow)




    	14



    	 



    

 


IN
WITNESS WHEREOF,
Borrower has caused
this Note
to be
signed in its
name
by its duly authorized officer
this March
2, 20 15.


 


WELL
POWER, INC.


 


 


/s/
Dan Patience


Dan
 Patience, President,
CFO




    	15



    	 



    

 


Exhibit
A.


 


NOTICE
OF CONVERSION


 


 


The
undersigned hereby elects to convert $_________ of the principal amount of the Note (defined below) into Shares of Common Stock
of WELL POWER, INC., a(n) NEVADA Corporation (the "Borrower") according to the conditions of the Convertible Note of
the Borrower dated as of March 2, 20 15 (the "Note"). No fee will be charged to the Holder or Holder's Custodian for
any conversion, except for transfer taxes, if any.


 


Box
Checked as to applicable instructions:


 


[
]The Borrower shall electronically transmit the Common Stock issuable pursuant to this Notice of Conversion to the account
of the undersigned or its nominee with DTC through its Deposit Withdrawal Agent Commission system ("DWAC Transfer").


 


Name
of DTC Prime Broker: _________


 


Account
Number: _________


 


[
]The undersigned hereby requests that the Borrower issue a certificate or certificates for the number of shares of Common
Stock set forth below (which numbers are based on the Holder's calculation attached hereto) in the name(s) specified immediately
below:


 


Magna Equities
I, LLC


EIN #: 45-2043511


 


Date of
Conversion: _________


Conversion
Price: _________


Shares to
Be Delivered: _________


 


Remaining
Principal Balance Due


After This
Conversion: _________


 


 


Signature
_________


 


Print Name:
Joshua Sason




    	16



    	 



    

 


FORM
OF LEGAL OPINION


 


1.                  
The Company is a corporation duly organized, validly existing and in good standing under the laws of [_________]. The Company
has all requisite power and authority, and all material governmental licenses, authorizations, consents and approvals, that are
required to own and operate its properties and assets and to carry on its business as now conducted and as proposed to be conducted
(all as described in the Company's filings with the SEC). The Company is duly qualified to transact business and is in good standing
in each jurisdiction in which the failure to qualify could have a Material Adverse Effect on the Company.


 


2.                  
Each of the following subsidiaries of the Company (the "Subsidiaries") is a corporation, duly organized and in good
standing under the laws of its state of organization, as noted: [_________].


 


3.                  
The Company has all requisite power and authority (i) to execute, deliver and perform the Transaction Documents, (ii) to issue,
sell and deliver the Notes, and the Underlying Shares pursuant to the Transaction Documents and (iii) to carry out and perform
its obligations under, and to consummate the transactions contemplated by, tbe Transaction Documents.


 


4.                  
All action on the part of the Company, its directors and its stockholders necessary for the authorization, execution and delivery
by the Company of the Transaction Documents, the authorization, issuance, sale and delivery of the Notes pursuant to the Agreement,
the issuance and delivery the Underlying Shares and the consummation by the Company of the transactions contemplated by the Transaction
Documents bas been duly taken. The Transaction Documents have been duly and validly executed and delivered by the Company and
constitute the legal, valid and binding obligation of the Company, enforceable against the Company in accordance with their terms,
except that (a) such enforceability may be limited by bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights in general and (b) the remedies of specific performance and injunctive and other forms of injunctive relief
may be subject to equitable defenses.


 


5.                  
To our knowledge, the Company has filed all reports (the "SEC Reports") required to be filed by it under Sections I
3(a) and l5(d) of the Exchange Act of 1934, as amended (the "Exchange Act"). As of their respective filing dates, the
SEC Reports complied in all material respects as to form with the requirements of the Exchange Act and the rules and regulations
of the Commission promulgated thereunder.


 


6.                  
Based in part upon the representations of the Purchasers contained in the Agreement, the Notes and the Underlying Shares may be
issued to the Purchasers without registration under the Securities Act of 1933, as amended.


 


7.                  
The execution, delivery and performance by the Company of, and the compliance by the Company with the terms of, the Transaction
Documents and the issuance, sale and delivery of the Notes and the Underlying Shares pursuant to the Agreement do not (a) conflict
with or result in a violation of any provision of law, rule or regulation applicable to the Company or its Subsidiaries or of
the certificate of incorporation or by-laws or other similar organizational documents of the Company or its Subsidiaries, (b)
conflict with, result in a breach of or constitute a default (or an event which with notice or lapse of time or both would become
a default) under, or result in or permit the termination or modification of, any agreement, instrument, order, writ, judgment
or decree known to us to which the Company of its Subsidiaries is a party or is subject or (c) result in the creation or imposition
of any lien, claim or encumbrance on any of the assets or properties of the Company or its Subsidiaries.


 


8.                  
To our knowledge, except as set forth in the Agreement, there is no claim, action, suit, proceeding, arbitration , investigation
or inquiry, pending or threatened, before any court or governmental or administrative body or agency, or any private arbitration
tribunal, against the Company or its Subsidiaries, or any of the officers, directors or employees (in connection with the discharge
of their duties as officers, directors and employees) of the Company or its Subsidiaries, or affecting any of its properties or
assets.


 


9.                  
In connection with the valid execution, delivery and performance by the Company of the Transaction Documents, or the offer, sale,
issuance or delivery of the Notes and the Underlying Shares or the consummation of the transactions contemplated thereby, no consent,
license, permit, waiver, approval or authorization of, or designation, declaration, registration or filing with, any court, governmental
or regulatory authority, or self-regulatory organization, is required.



    	17