Document:

EXHIBIT 10.a - 9.30.14

Exhibit 10.a

POLARIS INDUSTRIES INC. 
SUPPLEMENTAL RETIREMENT/SAVINGS PLAN
Effective July 1, 1995
As Amended and Restated Effective July 23, 2014
 

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POLARIS INDUSTRIES 
SUPPLEMENTAL RETIREMENT/SAVINGS PLAN
Effective July 1, 1995
As Amended and Restated Effective July 23, 2014

TABLE OF CONTENTS
	
				
	ARTICLE I DEFINITIONS
	1

	 
	 
	 
	 

	 
	1.01
	Account
	1

	 
	1.02
	Additional Credits
	1

	 
	1.03
	Administrator
	1

	 
	1.04
	Affiliated Company
	1

	 
	1.05
	Beneficiary
	1

	 
	1.06
	Board of Directors
	1

	 
	1.07
	Bonus Plan
	1

	 
	1.08
	Change of Control
	1

	 
	1.09
	Code
	2

	 
	1.10
	Committee
	2

	 
	1.11
	Compensation
	2

	 
	1.12
	Corporation
	2

	 
	1.13
	Corporation Voting Securities
	2

	 
	1.14
	Deferrals
	3

	 
	1.15
	Deferral Agreement
	3

	 
	1.16
	Distribution Option(s)
	3

	 
	1.17
	Effective Date
	3

	 
	1.18
	Eligible Executive
	3

	 
	1.19
	Exchange Act
	3

	 
	1.20
	Matching Contribution Credits
	3

	 
	1.21
	Member
	3

	 
	1.22
	Omnibus Plan
	3

	 
	1.23
	Participating Company
	3

	 
	1.24
	Plan
	3

	 
	1.25
	Plan Sponsor
	3

	 
	1.26
	Savings Plan
	3

	 
	1.27
	Valuation Date
	4

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	ARTICLE II Membership and Deferral Agreements
	4

	 
	 
	 
	 

	 
	2.01
	In General
	4

	 
	2.02
	Modification of Initial Deferral Agreement
	4

	 
	2.03
	Termination of Membership; Re-employment
	5

	
				
	ARTICLE III Deferrals
	5

	 
	 
	 
	 

	 
	3.01
	Filing Requirements
	5

	 
	3.02
	Maximum Deferral Amounts
	6

	 
	3.03
	Crediting of Deferrals
	7

	 
	3.04
	Changing Deferrals
	7

	 
	3.05
	Certain Additional Credits
	8

	 
	3.06
	Timing of Deferral Elections
	8

	
				
	ARTICLE IV Maintenance of Accounts
	8

	 
	 
	 
	 

	 
	4.01
	Accounts
	9

	 
	4.02
	Deemed Investments
	9

	 
	4.03
	Statement of Accounts
	9

	 
	4.04
	Vesting of Account
	9

	
				
	ARTICLE V Payment of Benefits
	9

	 
	 
	 
	 

	 
	5.01
	Commencement of Payment
	9

	 
	5.02
	Method of Payment
	10

	 
	5.03
	Unforeseeable Emergency
	11

	 
	5.04
	Designation of Beneficiary
	12

	 
	5.05
	Status of Account Pending Distribution
	12

	 
	5.06
	Change of Control
	12

	 
	5.07
	Election of Distribution Options for Subsequent Deferrals
	12

	
				
	ARTICLE VI Amendment or Termination
	13

	 
	 
	 
	 

	 
	6.01
	Right to Terminate
	13

	 
	6.02
	Right to Amend
	13

	 
	6.03
	Uniform Action
	13

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	ARTICLE VII General Provisions
	13

	 
	7.01
	No Funding
	13

	 
	7.02
	No Contract of Employment
	14

	 
	7.03
	Withholding Taxes
	14

	 
	7.04
	Nonalienation
	14

	 
	7.05
	Administration
	14

	 
	7.06
	Construction
	15

 

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Introduction
This Polaris Industries Inc. Supplemental Retirement/Savings Plan originally became effective July 1, 1995. On December 31, 1996, Polaris Industries Inc., a Delaware limited partnership, and the original sponsor of the Plan, was merged with and into Polaris Industries Inc., a Delaware corporation, which then became the new sponsor of the Plan.  The Plan was most recently amended and restated in its entirety as of December 31, 2008, and is hereby amended and restated in its entirety effective as of July 23, 2014.
This Plan generally is intended to provide certain executives who participate in the Polaris Industries Inc. 401(k) Retirement/Savings Plan, the Polaris Industries Inc. Senior Executive Annual Compensation Plan, and/or the Polaris Industries Inc. 2007 Omnibus Incentive Plan with an opportunity to defer a portion of their compensation until their retirement or other termination of employment and to have contributions credited as if such contributions had been made under the Savings Plan in order to restore contributions lost because of the application of Section 401(a)(17) of the Internal Revenue Code of 1986, as amended, to the Savings Plan. The Plan is unfunded and is maintained by Polaris Industries Inc. and Affiliated Companies and their respective successors primarily for the purpose of providing deferred compensation for a select group of management or highly-compensated employees.
ARTICLE I 
Definitions
		
	1.01
	Account.  “Account” means the bookkeeping account maintained for each Member to record his Deferrals and Additional Credits, as adjusted pursuant to Article IV.  The Administrator will establish such sub-accounts within a Member’s Account as it deems necessary to implement the provisions of the Plan, including, but not limited to, sub-accounts for all Deferrals and Additional Credits that are subject to a common Distribution Option election (i.e., the Deferrals and Additional Credits that will be paid at the same time or upon the same event and in the same form). 

		
	1.02
	Additional Credits.  “Additional Credits” means amounts credited to the Account of a Member pursuant to Section 3.05. 

		
	1.03
	Administrator.  “Administrator” means the Plan Sponsor. 

		
	1.04
	Affiliated Company.  “Affiliated Company” means the Corporation and any corporation, partnership or other entity directly or indirectly controlled by the Corporation. 

		
	1.05
	Beneficiary.  "Beneficiary" means the person or persons designated pursuant to Section 5.04 to receive benefits under the Plan in the event of a Participant's death. 

		
	1.06
	Board of Directors.  “Board of Directors” or “Board” means the Board of Directors of the Corporation. 

		
	1.07
	Bonus Plan.  “Bonus Plan” means the Polaris Industries Inc. Senior Executive Annual Compensation Plan. 

		
	1.08
	Change of Control.  “Change of Control” means any of the following: 

		
	(a)
	Any election has occurred of persons to the Board of Directors that causes at least one-half of the Board of Directors to consist of persons other than (i) persons who were members of the Board of Directors on July 1, 1995 and (ii) persons who were nominated for election by the Board of Directors as members of the Board of Directors at a time when more than one-half of the members of the Board of Directors consisted of persons who were members of the Board of Directors on July 1, 1995; provided, however, that any person nominated for election by the Board of Directors at a time when at least one-half of the members of the Board of Directors were persons described in clauses (i) and/or (ii) or by persons who were themselves nominated by such Board of Directors will, for this purpose, be deemed to have been nominated by a Board of Directors composed of persons described in clause (i) (persons described or deemed described in clauses (i) and/or (ii) are referred to herein as “Incumbent Directors”); or

		
	(b)
	The acquisition in one or more transactions, other than from the corporation, by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the Exchange Act) of a number of Corporation Voting Securities equal to or greater than 35% of Corporation Voting Securities unless such acquisition has been approved by the Incumbent Directors as an acquisition not constituting a Change in Control for purposes hereof; or

		
	(c)
	A sale or other disposition of all or substantially all of the assets of the Corporation unless, following such sale or disposition, at least one-half of the Board of Directors of the transferee consists of Incumbent Directors. 

Notwithstanding the foregoing, no event will constitute a Change of Control unless such event is a change in the ownership or effective control of the corporation, or in the ownership of a substantial portion of the assets of the Corporation within the meaning of Section 409A(2)(A)(v) of the Code and the regulations thereunder.
		
	1.09
	Code.  “Code” means the Internal Revenue Code of 1986, as amended from time to time. 

		
	1.10
	Committee.  “Committee” means the Compensation Committee of the Board of Directors. 

		
	1.11
	Compensation.  “Compensation” means the compensation of an Eligible Executive as defined for purposes of the Savings Plan, determined prior to any Deferrals under Article III and without application of the limit under Section 401(a)(17) of the Code. “Compensation” also includes (i) Incentive Compensation Awards, as defined in the Bonus Plan, and (ii) Restricted Stock Units, Performance Shares, Performance Units, and Cash-Based Awards, all as defined in the Omnibus Plan, but only to the extent that the Plan Sponsor designates such compensation as eligible for deferral in the Deferral Agreement form provided to the Eligible Executive. 

		
	1.12
	Corporation.  “Corporation” means Polaris Industries Inc., a Minnesota corporation, and any successor thereto by merger, purchase or otherwise. 

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	1.13
	Corporation Voting Securities.  “Corporation Voting Securities” means the combined voting power of all outstanding voting securities of the Corporation entitled to vote generally in the election of the Board of Directors. 

		
	1.14
	Deferrals.  “Deferrals” means the amounts credited to a Member’s Account under Section 3.03. 

		
	1.15
	Deferral Agreement.  “Deferral Agreement” means a completed agreement between an Eligible Executive and a Participating Company of which he is an employee under which the Eligible Executive agrees to defer Compensation under the Plan. The Deferral Agreement must be in the form and made in the manner prescribed by the Plan Sponsor or such agreement will not be effective.  The Deferral Agreement includes any amendments, attachments or appendices. 

		
	1.16
	Distribution Option(s).  “Distribution Option(s)” means the election by the Member of the event triggering the commencement of distribution and the method of distribution. A Distribution Option election must be made on the Eligible Executive’s initial Deferral Agreement, and in subsequent elections made in accordance with Section 5.07. 

		
	1.17
	Effective Date.  “Effective Date” means July 1, 1995 or with respect to the Eligible Executives of a company which adopts the Plan, the date such company becomes a Participating Company. 

		
	1.18
	Eligible Executive.  “Eligible Executive” means an employee of a Participating Company whose annual Compensation is in excess of the limitation in effect under Section 401(a)(17) of the Code, but only if the employee is also considered to be a part of a select group of management or highly compensated employees. 

		
	1.19
	Exchange Act.  “Exchange Act” means the Securities Exchange Act of 1934, as amended. 

		
	1.20
	Matching Contribution Credits.  “Matching Contribution Credits” means Additional Credits in a Member’s Account based on contributions that would be made to the Savings Plan absent application of the limit under Section 401(a)(17) of the Code. 

		
	1.21
	Member.  “Member” means, except as otherwise provided in Article II, each Eligible Executive who has executed a Deferral Agreement as described in Section 2.01. 

		
	1.22
	Omnibus Plan.  “Omnibus Plan” means the Polaris Industries Inc. 2007 Omnibus Incentive Plan, as amended from time to time. 

		
	1.23
	Participating Company.  “Participating Company” means the Corporation, the Plan Sponsor and any other Affiliated Company which is designated for participation in the Plan in accordance with Section 7.05(b). 

		
	1.24
	Plan.  “Plan” means this Polaris Industries Inc. Supplemental Retirement/Savings Plan, as amended from time to time. 

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	1.25
	Plan Sponsor.  “Plan Sponsor” means Polaris Industries Inc., a Delaware corporation and a wholly owned subsidiary of the Corporation, and any successor thereto by merger, purchase or otherwise. 

		
	1.26
	Savings Plan.  “Savings Plan” means the Polaris Industries Inc. 401(k) Retirement/Savings Plan, as amended from time to time. 

		
	1.27
	Valuation Date.  “Valuation Date” means each of the valuation dates under the Savings Plan and the date on which payment of an Incentive Compensation Award (as defined in the Bonus Plan) and/or Award (as defined in the Omnibus Plan) under the Bonus Plan, and/or the Omnibus Plan would otherwise be made under the terms of the Bonus Plan, and/or the Omnibus Plan, but for a Deferral of such Incentive Compensation Award or Award hereunder. 

ARTICLE II 
Membership and Deferral Agreements
		
	2.01
	In General. 

		
	(a)
	Date of Membership. An Eligible Executive becomes a Member as of the date he files his initial Deferral Agreement with the Administrator. However, such Deferral Agreement is effective for purposes of deferring Compensation only as provided in Article III.

		
	(b)
	Form of Deferral Agreement. A Deferral Agreement must be in writing and properly completed in a form, which may include an agreement that is completed electronically, approved by the Administrator.  The Administrator will in its sole discretion determine whether an agreement is properly completed and will be recognized as a Deferral Agreement. A Deferral Agreement must provide for the deferral of Compensation, must specify the Distribution Options, and may include such other provisions as the Administrator deems appropriate. A Member’s Deferral Agreement may provide for separate Deferral elections with respect to the Member’s base pay and with respect to Compensation under the Bonus Plan and/or the Omnibus Plan, but the Administrator may at any time, and in its sole discretion, limit the number of separate Deferral elections that may be made under the Plan in order to facilitate administration. Matching Contribution Credits, as adjusted for Deemed Investment earnings and losses, will be paid in the same form and time as elected with respect to the base pay deferrals on which the Matching Contributions are based. A Deferral Agreement may not be revoked or modified with respect to the amount of prior deferrals. Distribution Options elected may not be modified or revoked except as provided in Section 5.01.

		
	(c)
	Additional Requirements for Membership. As a condition for membership the Administrator may require such other information as it deems appropriate.

		
	2.02
	Modification of Initial Deferral Agreement. A Member may elect to change, modify or revoke a Deferral Agreement as follows: 

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	(a)
	Change in Deferral Rate. A Member may change the rate of his Deferrals, as provided in Article III. A Member’s Deferrals will be suspended in the event of a distribution pursuant to an unforeseeable emergency or in the event of a distribution from the Savings Plan, as provided in Article III.

		
	(b)
	Change in Distribution Event. A Member may change the event entitling him to distribution, as designated on his election of Distribution Options, only as provided in Section 5.01(b).

		
	2.03
	Termination of Membership; Re-employment.

		
	(a)
	Termination. Membership ceases upon a Member’s termination of employment. 

		
	(b)
	Approved Leave of Absence. Membership continues during a leave of absence approved by the Participating Company employing the Eligible Executive.

		
	(c)
	Re-employment. Upon re-employment as an Eligible Executive, a former Member may become a Member again as follows:

		
	(i)
	No Account Balance at Re-employment. A former Member who has no Account balance at the time of reemployment may become a Member by executing a Deferral Agreement under Section 2.01 as though for all purposes of the Plan the Affiliated Companies had never employed the former Member. 

		
	(ii)
	Account Balance at Re-employment. A former Member who has an Account balance at the time of re-employment may become a Member by executing a Deferral Agreement under Section 2.01, but only if such former Member was not eligible to participate in the Plan at any time during the 24-month period ending on the date the Member again becomes eligible to participate in the Plan. Otherwise, such former Member may again become a Member by executing a Deferral Agreement under Section 2.01, which will become effective as described in Section 3.01(c) for Eligible Employees filing Deferral Agreements after initial eligibility.  

ARTICLE III 
Deferrals
		
	3.01
	Filing Requirements.

		
	(a)
	Deferral Agreements prior to Effective Date. 

		
	(i)  
	Base Pay and Other Non-Performance Based Pay.  An individual who is an Eligible Executive immediately prior to the Effective Date may file a Deferral Agreement with the Administrator with respect to Compensation that is base pay, and, in the Administrator’s discretion, for other Compensation that does not meet the requirements of Section 3.06(a), within the period prior to the Effective Date prescribed by the Administrator.  The Agreement will be effective for base pay for payroll periods beginning on or after the later of (i) 

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the Effective Date, or (ii) the first day of the month following the date the Deferral Agreement is filed with the Administrator and for other Compensation that does not meet the requirements of Section 3.06(a) only to extent earned after the Effective Date. 
		
	(ii)  
	Performance-Based Pay.  An individual who is an Eligible Executive immediately prior to the Effective Date may defer Compensation earned under the Bonus Plan and/or the Omnibus Plan that meets the requirements of Section 3.06(a) if the Eligible Executive files a Deferral Agreement with the Administrator no later than the date set forth in Section 3.06(a).  

		
	(b)
	Deferral Agreements upon Initial Eligibility. 

		
	(i)
	Base Pay and Other Non-Performance Based Pay.  An individual who becomes an Eligible Executive on or after the Effective Date may file a Deferral Agreement with the Administrator during the 30-day period beginning on the date he first becomes an Eligible Executive with respect to Compensation that is base pay, and, in the Administrator’s discretion, for other Compensation that does not meet the requirements of Section 3.06(a).  Such Deferral Agreement will be effective only for Compensation earned after the Deferral Agreement is filed, and, for base pay, the Agreement will be effective only for payroll periods beginning on or after the first day of the month following the date the Deferral Agreement is filed with the Administrator.  

		
	(ii)
	Performance-Based Pay.  An individual who becomes an Eligible Executive on or after the Effective Date may defer Compensation earned under the Bonus Plan and/or the Omnibus Plan that meets the requirements of Section 3.06(a) if the Eligible Executive files a Deferral Agreement no later than the date set forth in Section 3.06(a).  

		
	(c)
	Deferral Agreements after Initial Eligibility. To defer Compensation, an Eligible Executive who does not file a Deferral Agreement with the Administrator as provided in Sections 3.01(a) and 3.01(b) must file a Deferral Agreement as follows:

		
	(i)
	Base Pay. The Eligible Executive must file a Deferral Agreement in any subsequent month of December for the next calendar year with respect to base pay. 

		
	(ii)
	Performance-Based Pay. For Compensation that meets the requirements of Section 3.06(a) and is earned under the Bonus Plan and/or the Omnibus Plan, an Eligible Executive must file a Deferral Agreement no later than the date set forth in Section 3.06(a).   

		
	(iii)
	Other Non-Performance-Based Pay. For Compensation that does not meet the requirements of Section 3.06(a), the Deferral Agreement must be filed no later the last day of the year prior to the first year in which the Participant provides the services with respect to which such Compensation is paid. 

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	3.02
	Maximum Deferral Amounts. An Eligible Executive’s Deferral Agreement must authorize a reduction in his Compensation with respect to his Deferrals under the Plan. 

		
	(a)
	Base Pay. An Eligible Executive may defer up to 100% of his base pay.  The elected percentage will be applied to the gross amount of base pay for each payroll period, but will be limited for any payroll period within a calendar year to the gross amount of base pay for that pay period, reduced by the sum of:

		
	(i)
	the FICA tax withheld from the Eligible Executive’s base pay for the pay period, 

		
	(ii)
	the Eligible Executive’s contributions to a cafeteria plan, as defined in Section 125(d) of the Code, for the pay period, and

		
	(iii)
	the dollar amount of per pay period deductions (other than the deductions described in (i) and (ii)) in effect as of January 1 of the calendar year.  

Notwithstanding the preceding sentence, the Administrator, in its sole discretion, and prior to the first day of a calendar year, may further limit an Eligible Executive’s election to defer base pay for a calendar year in order to facilitate administration of the Plan and to prevent an Eligible Executive’s elected deferrals of base salary from exceeding the net cash payments of base pay that would otherwise be made to the Eligible Executive for a payroll period.
		
	(b)
	Bonus. An Eligible Executive may defer up to 100% of amounts payable under the Bonus Plan.

		
	(c)
	Omnibus Plan. An Eligible Executive may defer up to 100% of Compensation payable under the Omnibus Plan. 

		
	3.03
	Crediting of Deferrals.  On each Valuation Date following the effective date of an Eligible Executive’s Deferral Agreement, his Account will be credited with an amount of Deferral elected in his Deferral Agreement, if any, for each payroll period ending within the month in which such Valuation Date occurs.

		
	3.04
	Changing Deferrals.

		
	(a)
	Electing a Change in Deferrals.  An Eligible Executive’s election on his Deferral Agreement of the rate at which he authorizes Deferrals under the Plan will remain in effect in subsequent calendar years unless he files with the Administrator an amendment to his Deferral Agreement modifying or revoking such election. With respect to the Deferral of base pay, the amendment must be filed by December 31 and will be effective for payroll periods beginning on or after the following January 1. With respect to a Deferral of Compensation under the Bonus Plan and/or the Omnibus Plan that meets the requirements of Section 3.06(a), the Deferral Agreement must be filed on or before the date set forth in Section 3.06(a).  With respect to a Deferral of Compensation under the Bonus Plan and/or the Omnibus Plan that does 

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not meet the requirements of Section 3.06(a), the Deferral must be filed on or before the date set forth in Section 3.06(b).
		
	(b)
	Automatic Suspension of Deferrals.  Notwithstanding Section 3.04(a), if a Member receives a withdrawal pursuant to Section 5.03 due to an unforeseeable emergency or a financial hardship withdrawal from the Savings Plan, the Member’s Deferrals under this Plan will be suspended for the remainder of the calendar year in which such withdrawal or distribution occurs. Deferrals will resume for payroll periods beginning on or after the January 1 following the date of suspension in a time and manner determined by the Administrator, and the Administrator will approve a resumption only if the Administrator determines that the Eligible Executive is no longer subject to the unforeseeable emergency or incurring the financial hardship.

		
	3.05
	Certain Additional Credits. On each Valuation Date, the Account of an Eligible Executive will be credited with Additional Credits in an amount equal to the Deferrals described in Sections 3.02(a) and 3.02(b) credited to such Eligible Executive’s Account since the immediately preceding Valuation Date, to the extent such Deferrals do not exceed 5% of the Compensation eligible for deferral under Sections 3.02(a) and 3.02(b). As of December 31 of each calendar year, the Account of an Eligible Executive with be credited with an amount of Matching Contribution Credits equal to the matching contributions that would have been made to the Savings Plan since December 31 of the prior calendar year but for the limitation set forth in Section 401(a)(17) of the Code.

		
	3.06
	Timing of Deferral Elections. All elections with respect to Deferral of Compensation awarded under the Bonus Plan or the Omnibus Plan must be filed in accordance with the following requirements:

		
	(a)
	Performance-Based Compensation.  If the Compensation meets the requirements for “performance-based compensation” within the meaning of Treasury Regulation Section 1.409A-1(e), the Deferral Agreement must be filed no later than six months prior to the end of the Incentive Compensation Award Period (as defined in the Bonus Plan) or the Performance Period (as defined in the Omnibus Plan) with respect to which such Compensation is paid, or such earlier date as specified by the Administrator in its sole discretion, but not, in any event, on or after the date on which the amount of such Compensation becomes readily ascertainable.

		
	(b)
	Non-Performance Based Compensation.  If the Compensation does not meet the requirements for “performance-based compensation” within the meaning of Treasury Regulation Section 1.409A-1(e), the Deferral Agreement must be filed no later the last day of the year prior to the first year of the Incentive Compensation Award Period (as defined in the Bonus Plan) or the Performance Period (as defined in the Omnibus Plan) with respect to which such Compensation is paid.

An election under either (a) or (b) above will be irrevocable as of the last date on which a Deferral Agreement may be filed, as specified in (a) and (b), above.  To make an election as described in (a), above, the Eligible Executive   must be continuously employed from the later of the beginning of the Incentive Compensation Award Period (as defined in the Bonus Plan) or the Performance Period (as defined in the Omnibus Plan) or the date the Business 

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Criteria (as defined in the Bonus Plan) or Performance Measures (as defined in the Omnibus Plan) applicable to such Compensation are established, to the date of the election under this Section 3.06.
ARTICLE IV 
Maintenance of Accounts
		
	4.01
	Accounts.  An Account will be established for each Member. As of each Valuation Date, each Member’s Account will be credited with deemed investment earnings and losses pursuant to Section 4.02.

		
	4.02
	Deemed Investments. Each Member will have the same rights with respect to the deemed investment of his or her Account under this Plan as such Member has with respect to the investment of his or her Account under the Savings Plan, including available funds (with the exception of the Polaris Stock Fund), the frequency with which the Member may change deemed investments and default deemed investments.  As of each Valuation Date, deemed investment earnings and losses will be applied to each Member’s Account based upon the performance of the applicable investment funds.  Notwithstanding the foregoing, any credits made to a Member’s Account related to a Deferral of shares of Corporation common stock (“Polaris Stock”) to be received in settlement of Restricted Stock Units, as defined under the Omnibus Plan, will be deemed to be invested only in shares of Polaris Stock for the period ending six (6) months and one (1) day following the date on which the Deferral is first credited to the Member’s Account; thereafter, a Member may change the deemed investment of such Deferral, but once the deemed investment is changed, it may not again be deemed to be invested in shares of Polaris Stock under the Plan.  If a dividend is paid on Polaris Stock, a Member’s Account that is deemed invested in Polaris Stock on the record date for such dividend will be credited as of the dividend payment date with an additional amount equal to the dividend that would have been paid on an actual investment in Polaris Stock equal to the number of shares deemed credited to the Member’s Account as of the dividend record date, and such additional credited amount will be deemed to be invested, as of the dividend payment date, in a money market fund or similar fund available under the Savings Plan, as determined by the Administrator, until the Member changes the deemed investment of such amounts.

		
	4.03
	Statement of Accounts. A statement will be sent to each Member as to the balance of his Account at least once each calendar year.

		
	4.04
	Vesting of Account. Each Member will at all times be fully vested in his Account.

ARTICLE V 
Payment of Benefits
		
	5.01
	Commencement of Payment.

		
	(a)
	Distribution Options. The distribution of the Member’s or former Member’s Account will commence, pursuant to Section 5.02, on or after the occurrence of (i), (ii), (iii) or (iv) below, as designated by the Member as part of his Distribution Option election:

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	(i)
	either the date of the Member’s separation from service (within the meaning of Section 409A of the Code and the regulations thereunder) with the Affiliated Companies for any reason, whether with or without cause, or the first anniversary of such date,

		
	(ii)
	attainment of a designated age not earlier than age 591⁄2 nor later than age 701⁄2,

		
	(iii)
	the earlier of (i) or (ii) above, or

		
	(iv)
	the later of (i) or (ii) above.

In the event a Member elects either (ii) or (iii) above, he may not elect an age less than three (3) years subsequent to his current age. If a Member fails to designate a permissible payment event as part of his Distribution Option election, such Member will be deemed to have elected to have payment made upon the date the Member separates from Service.  A Member or former Member may not change his Distribution Option election of the designation of the event which entitles him to distribution of his Account, except as provided in Section 5.01(b) below. Notwithstanding the foregoing, if payment of a Member’s Account is to be made or is to commence upon separation from service and if, at the time of such separation from service, such Member is a specified employee (within the meaning of Section 409A(1)(B) of the Code), such payment will be made or will commence on the date that is six (6) months and one day following such Member’s separation from service.
		
	(b)
	Change in Payment Terms.  A Member or former Member may make a request to the Administrator to defer the Member’s designated distribution event under Section 5.01(a), as modified by a prior change pursuant to this Section 5.01(b). The request must be filed in writing with the Administrator at least one year prior to when distribution would commence based on the current designation and must defer distribution for at least five years following the date on which distribution would otherwise have been made. The deferral request must specify a distribution event described in Section 5.01(a), is subject to approval of the Administrator and, if approved, will be effective as of the date that is one year after the request is filed with the Administrator. If the Member’s current distribution event will occur upon his termination of employment and the Member’s employment terminates within one year after the deferral request is made, the deferral request will not be effective.

		
	(c)
	Death. Notwithstanding anything in this Section 5.01 to the contrary, a Member’s Account will be distributed upon his death.

		
	(d)
	Delay of Payment in Certain Circumstances. Notwithstanding the foregoing, in their sole and absolute discretion, the Participating Companies may delay payment of a benefit under this Plan to any Member to the extent required to avoid the nondeductibility of such benefit under Section 162(m) of the Code or to avoid a violation of federal securities laws or other applicable law, but if a Member’s payment is delayed, the Member’s Account will continue to be adjusted for earnings and losses associated with the Account’s Deemed Investments, pursuant to Section 

- 10 -

4.02. Payment will be made during the first taxable year in which the Participating Companies reasonably anticipate that Section 162(m) of the Code will not cause the payment to be nondeductible or that the payment will not violate federal securities laws or other applicable law.
		
	5.02
	Method of Payment. Distribution of a Member’s or former Member’s Account will commence as soon as administratively practicable following the date provided in the Member’s Distribution Option elected under Section 5.01 or his date of death, as the case may be, based upon the Member’s Account as of the Valuation Date immediately preceding the date of distribution. 

		
	(a)
	Timing Relative to Distribution Event. Payment must be made no later than the later of (i) the last day of the calendar year in which the distribution event occurs or (ii) 21⁄2 months following the date of such distribution event. 

		
	(b)
	Method of Payment. Such distribution will be made either (i) in a single lump sum payment or (ii) in substantially equal monthly, quarterly or annual payments over a period not in excess of ten (10) years. 

		
	(c)
	Adjustment of Account prior to Distribution. If the installment method is elected, the Member’s Account, until fully distributed, will continue to be credited with deemed investment earnings and losses in accordance with Section 4.02, and each installment payment will equal a fraction of the Account balance, as of the most recent Valuation Date, equal to one over the number of installment payments left. 

		
	(d)
	Elections and Deemed Election of Payment Method. A Member must elect the form of distribution to him or his Beneficiary at the time of commencement of his participation under this Plan and any such election is irrevocable and not subject to change except prospectively. If a Member fails to make a proper election as to the method of distribution of his Account, he will be deemed to have elected to have his Account distributed to him or his Beneficiary in a single lump sum.

		
	(e)
	Form of Payment. Payments will be made in cash, except that, in the Company’s sole discretion, payment of the portion of the Member’s Account that is deemed to be invested in shares of Polaris Stock may be made in shares of Polaris Stock, in cash or in a combination thereof, but the portion of a Member’s Account that is required to be deemed invested in shares of Polaris Stock and for which the deemed investment may not be changed, pursuant to Section 4.02 hereof, will be distributed only in shares of Polaris Stock. 

		
	5.03
	Unforeseeable Emergency. While employed by the Participating Companies, a Member or former Member may, in the event of an unforeseeable emergency, request a withdrawal from his Account in a time and manner determined by the Administrator.  Such a request is subject to approval by the Administrator.

		
	(a)
	Amount of Withdrawal. The request may not be for a greater amount than the amount reasonably necessary to satisfy the emergency need (including any federal, 

- 11 -

state, local or foreign taxes or penalties reasonably anticipated to result from the withdrawal).
		
	(b)
	Definition of Unforeseeable Emergency. For purposes of this Section 5.03 an unforeseeable emergency is a severe financial hardship to the Member resulting from (i) an illness or accident of the Member, the Member’s spouse, the Member’s Beneficiary, or the Member’s dependent (as defined in Section 152 of the Code, without regard to Sections 152(b)(1), (b)(2) and (d)(1)(B) of the Code), (ii) loss of the Member’s property due to casualty (including the need to rebuild a home following damage to a home not otherwise covered by insurance, for example, not as a result of a natural disaster), or (iii) other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Member. 

		
	(c)
	Consideration of other Resources to Meet Emergency Need. Notwithstanding the foregoing, a withdrawal on the basis of unforeseeable emergency is not permitted to the extent that such emergency is or may be relieved through reimbursement or compensation from insurance or otherwise, by liquidation of the Member’s assets, to the extent the liquidation of such assets would not cause severe financial hardship, or by cessation of deferrals under this Plan.

		
	5.04
	Designation of Beneficiary. A Member or former Member may, in a time and manner determined by the Administrator, designate a beneficiary and one or more contingent beneficiaries (which may include the Member’s or former Member’s estate) to receive any benefits which may be payable under this Plan upon his death. If the Member or former Member fails to designate a beneficiary or contingent beneficiary, or if the beneficiary and the contingent beneficiaries fail to survive the Member or former Member, such benefits will be paid to the Member’s or former Member’s estate. A Member or former Member may revoke or change any designation made under this Section 5.04 in a time and manner determined by the Administrator.

		
	5.05
	Status of Account Pending Distribution. Pending distribution, a former Member’s Account will continue to be credited with earnings and losses as provided in Section 4.02. The former Member will be entitled to apply for hardship withdrawals under Section 5.03 to the same extent as if he were a Member of the Plan.

		
	5.06
	Change of Control. If a Change of Control occurs, each Member or former Member will receive, and the Plan Sponsor will pay within 7 days of such Change of Control, a lump sum payment equal to the value of the Member’s or former Member’s Accounts (determined under Article IV) as of the Valuation Date coinciding with or next following the date of such Change of Control. The amount of each Member’s or former Member’s lump sum payment will be determined by the Plan Sponsor’s accountants after consultation with the entity then maintaining the Plan’s records, and will be projected, if necessary, to such Valuation Date from the last valuation of Member’s or former Member’s Accounts for which information is readily available.

		
	5.07
	Election of Distribution Options for Subsequent Deferrals. An Eligible Executive’s election of a Distribution Option will remain in effect with respect to Deferrals of Compensation for subsequent calendar years for base pay, subsequent Incentive 

- 12 -

Compensation Award Periods for Bonus Plan Compensation, and subsequent Performance Periods for Omnibus Plan Compensation until the Eligible Executive files with the Administrator a separate new election of a Distribution Option and method of payment with respect to subsequent Deferrals.  With respect to base pay and Compensation under the Bonus Plan or the Omnibus Plan that does not meet the requirements of Section 3.06(a), the new Distribution Option election must be filed by December 31 and will be effective for payroll periods beginning on or after the following January 1 for base pay and for Incentive Compensation Award Periods or Performance Periods beginning on or after such January 1. With respect to Compensation under the Bonus Plan or the Omnibus Plan that meets the requirements of Section 3.06(a), the new Distribution Option election must be filed no later than the date set forth in Section 3.06(a) applicable to the Incentive Compensation Award Period or Performance Period.  Prior elections of Distribution Options with respect to Deferrals of Compensation from prior periods will remain in effect unless amended in accordance with Section 5.01(b).   
ARTICLE VI 
Amendment or Termination
		
	6.01
	Right to Terminate. The Corporation may, in its sole discretion, terminate this Plan and the related Deferral Agreements at any time (other than at a time proximate to a downturn in the financial health of any Affiliated Company) provided that all deferred compensation plans that must be aggregated with this Plan for purposes of Section 409A of the Code, if any, are also terminated. In the event the Plan and related Deferral Agreements are terminated pursuant to the immediately preceding sentence, each Member, former Member or Beneficiary will receive a single sum payment equal to the balance in his Account no earlier than 12 months nor later than 24 months following such termination. The Corporation may also, in its sole discretion, terminate this Plan at any time within 12 months of a corporate dissolution taxed under Section 331 of the Code, or with the approval of a bankruptcy court pursuant to 11 U.S.C. Section 503(b)(1)(A). In the event the Plan and related Deferral Agreements are terminated pursuant to the immediately preceding sentence, each Member, former Member and Beneficiary will receive a single sum payment equal to the balance in his Account as soon as practicable thereafter.

		
	6.02
	Right to Amend. Each Participating Company, by proper action of its governing body, or by action of any person or committee to whom that authority has been delegated by such governing body, may, in its sole discretion, amend this Plan and the related Deferral Agreements with respect to the Members employed or formerly employed by such Participating Company. A Participating Company may not amend the Plan in a manner that has the effect of reducing any Member’s, former Member’s, or Beneficiary’s Account without such Member’s, former Member’s, or Beneficiary’s consent.

		
	6.03
	Uniform Action. Notwithstanding anything in the Plan to the contrary, any action to amend or terminate the Plan or the Deferral Agreements must be taken in a uniform and nondiscriminatory manner.

ARTICLE VII 
General Provisions

- 13 -

		
	7.01
	No Funding. Nothing contained in this Plan or in a Deferral Agreement will cause this Plan to be a funded retirement plan. Neither the Member, former Member, his Beneficiary, contingent beneficiaries, heirs or personal representatives will have any right, title or interest in or to any funds of the Affiliated Companies on account of this Plan or on account of having completed a Deferral Agreement. Each Member or former Member will have the status of a general unsecured creditor of the Affiliated Companies and this Plan constitutes a mere promise by the Affiliated Companies to make benefit payments in the future. The Plan Sponsor, in its sole discretion, may establish a grantor trust, insurance contract or other investment vehicle to assist in its meeting its obligations under this Plan; provided, that no Member or Beneficiary will at any time have any right to any portion of the assets thereof and such assets will at all times be subject to the claims of the creditors of the Plan Sponsor in bankruptcy.

		
	7.02
	No Contract of Employment. The existence of this Plan or of a Deferral Agreement does not constitute a contract for continued employment between an Eligible Executive or a Member and an Affiliated Company. The Affiliated Companies reserve the right to modify an Eligible Executive’s or Member’s remuneration and to terminate an Eligible Executive or a Member for any reason and at any time, notwithstanding the existence of this Plan or of a Deferral Agreement.

		
	7.03
	Withholding Taxes.  All payments under this Plan will be net of an amount sufficient to satisfy any federal, state or local withholding tax requirements.

		
	7.04
	Nonalienation. The right to receive any benefit under this Plan may not be transferred, assigned, pledged or encumbered by a Member, former Member, Beneficiary or contingent beneficiary in any manner and any attempt to do so will be void. No such benefit may be subject to garnishment, attachment or other legal or equitable process without the prior written consent of the Affiliated Companies.

		
	7.05
	Administration.

		
	(a)
	This Plan will be administered by the Committee. Certain administrative functions, as set forth in the Plan, will be the responsibility of the Administrator. The Administrator will interpret the Plan, establish regulations to further the purposes of the Plan and take any other action necessary to the proper operation of the Plan in accordance with guidelines established by the Committee or, if there are no such guidelines, consistent with furthering the purpose of the Plan.

		
	(b)
	The Corporation, by proper action of the Board, in its sole discretion and upon such terms as it may prescribe, may permit any Affiliated Company to participate in the Plan.

		
	(c)
	Prior to paying any benefit under this Plan, the Administrator may require the Member, former Member, Beneficiary or contingent beneficiary to provide such information or material as the Administrator, in its sole discretion, deems necessary for it to make any determination it may be required to make under this Plan. The Administrator may withhold payment of any benefit under this Plan until it receives 

- 14 -

all such information and material and is reasonably satisfied of its correctness and genuineness.
		
	(d)
	The Administrator will provide adequate notice in writing to any Member, former Member, Beneficiary or contingent beneficiary whose claim for benefits under this Plan has been denied, setting forth the specific reasons for such denial. The Administrator will provide a reasonable opportunity to any such Member, former Member, Beneficiary or contingent beneficiary for a full and fair review by the Administrator of its decision denying the claim. The Administrator’s decision on any such review will be final and binding on the Member, former Member, Beneficiary or contingent beneficiary and all other interested persons.

		
	(e)
	All acts and decisions of the Administrator will be final and binding upon all Members, former Members, beneficiaries, contingent beneficiaries and employees of the Affiliated Companies.

		
	7.06
	Construction.

		
	(a)
	The Plan is intended to constitute an unfunded deferred compensation arrangement for a select group of management or highly compensated employees and all rights hereunder will be governed by and construed in accordance with the laws of the State of Minnesota to the extent not preempted by federal law.

		
	(b)
	The masculine pronoun means the feminine wherever appropriate.

		
	(c)
	The captions inserted herein are inserted as a matter of convenience and will not affect the construction of the Plan.

- 15 -Exhibit 4.1

 

NEITHER
THIS SECURITY NOR THE SECURITIES INTO WHICH THIS SECURITY IS CONVERTIBLE HAS NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY A
LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO BORROWER.
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR”
AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

Original
Issue Date: October __, 2014

Principal
Amount: $[________]

  

CONVERTIBLE
NOTE

DUE APRIL 23, 2015

 

THIS
CONVERTIBLE NOTE is one of a series of duly authorized and validly issued Notes of Wally World Media, Inc., a Nevada corporation,
(the “Borrower”), having its principal place of business at 65 Church Street, 2nd Floor, New Brunswick,
NJ 08901, due April 22, 2015 (this note, the “Note” and, collectively with the other notes of such series,
the “Notes”).

 

FOR
VALUE RECEIVED, Borrower promises to pay to [_____________] or its registered assigns (the “Holder”), or shall
have paid pursuant to the terms hereunder, the principal sum of [______________] ($[______]) on April 23, 2015 (the
“Maturity Date”) or such earlier date as this Note is required or permitted to be repaid as provided hereunder,
and to pay interest, if any, to the Holder on the aggregate unconverted and then outstanding principal amount of this Note in
accordance with the provisions hereof.

 

This
Note is subject to the following additional provisions:

 

Section
1.        Definitions. For the purposes hereof, in addition to
the terms defined elsewhere in this Note, (a) capitalized terms not otherwise defined herein shall have the meanings set forth
in the Purchase Agreement and (b) the following terms shall have the following meanings:

 

“Alternate
Consideration” shall have the meaning set forth in Section 5(e).

 

“Bankruptcy
Event” means any of the following events: (a) Borrower or any Subsidiary thereof commences a case or other proceeding
under any bankruptcy, reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction relating to Borrower or any Subsidiary thereof, (b) there is commenced against Borrower or
any Subsidiary thereof any such case or proceeding that is not dismissed within 60 days after commencement, (c) Borrower or any
Subsidiary thereof is adjudicated insolvent or bankrupt or any order of relief or other order approving any such case or proceeding
is entered, (d) Borrower or any Subsidiary thereof suffers any appointment of any custodian or the like for it or any substantial
part of its property that is not discharged or stayed within 60 calendar days after such appointment, (e) Borrower or any Subsidiary
thereof makes a general assignment for the benefit of creditors, (f) Borrower or any Subsidiary thereof calls a meeting of its
creditors with a view to arranging a composition, adjustment or restructuring of its debts or (g) Borrower or any Subsidiary thereof,
by any act or failure to act, expressly indicates its consent to, approval of or acquiescence in any of the foregoing or takes
any corporate or other action for the purpose of effecting any of the foregoing.

 

    	 

    	 

    

 

“Base
Conversion Price” shall have the meaning set forth in Section 5(b).

 

“Beneficial
Ownership Limitation” shall have the meaning set forth in Section 4(d).

 

“Business
Day” means any day except any Saturday, any Sunday, any day which is a federal legal holiday in the United States or
any day on which banking institutions in the State of New York are authorized or required by law or other governmental action
to close.

 

“Buy-In”
shall have the meaning set forth in Section 4(c)(v).

 

“Change
of Control Transaction” means, other than by means of conversion or exercise of the Notes and the Securities issued
together with the Notes, the occurrence after the date hereof of any of (a) an acquisition after the date hereof by an individual
or legal entity or “group” (as described in Rule 13d-5(b)(1) promulgated under the Exchange Act) of effective control
(whether through legal or beneficial ownership of capital stock of Borrower, by contract or otherwise) of in excess of 50% of
the voting securities of Borrower, (b) Borrower merges into or consolidates with any other Person, or any Person merges into or
consolidates with Borrower and, after giving effect to such transaction, the stockholders of Borrower immediately prior to such
transaction own less than 50% of the aggregate voting power of Borrower or the successor entity of such transaction, (c) Borrower
sells or transfers all or substantially all of its assets to another Person and the stockholders of Borrower immediately prior
to such transaction own less than 50% of the aggregate voting power of the acquiring entity immediately after the transaction,
(d) a replacement at one time or within a three year period of more than one-half of the members of the Board of Directors which
is not approved by a majority of those individuals who are members of the Board of Directors on the Original Issue Date (or by
those individuals who are serving as members of the Board of Directors on any date whose nomination to the Board of Directors
was approved by a majority of the members of the Board of Directors who are members on the date hereof), or (e) the execution
by Borrower of an agreement to which Borrower is a party or by which it is bound, providing for any of the events set forth in
clauses (a) through (d) above.

 

“Closing
Price” means on any particular date (a) the last reported closing bid price per share of Common Stock on such date
on the Trading Market (as reported by Bloomberg L.P. at 4:15 p.m. (New York City time)), or (b) if there is no such price on such
date, then the closing bid price on the Trading Market on the date nearest preceding such date (as reported by Bloomberg L.P.
at 4:15 p.m. (New York City time)), or (c)  if the Common Stock is not then listed or quoted on a Trading Market and if prices
for the Common Stock are then reported in the “pink sheets” published by Pink OTC Markets, Inc. (or a similar organization
or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported,
or (d) if the shares of Common Stock are not then publicly traded the fair market value of a share of Common Stock as determined
by an independent appraiser selected in good faith by the Holder and reasonably acceptable to Borrower, the fees and expenses
of which shall be paid by Borrower.

 

    	2

    	 

    

 

“Conversion”
shall have the meaning ascribed to such term in Section 4.

 

“Conversion
Date” shall have the meaning set forth in Section 4(a).

 

“Conversion
Price” shall have the meaning set forth in Section 4(b).

 

“Conversion
Shares” means, collectively, the shares of Common Stock issuable upon conversion of this Note in accordance with the
terms hereof.

 

“Dilutive
Issuance” shall have the meaning set forth in Section 5(b).

 

“Dilutive
Issuance Notice” shall have the meaning set forth in Section 5(b).

 

“Equity
Conditions” means, during the period in question, (a) Borrower shall have duly honored all conversions scheduled to
occur or occurring by virtue of one or more Notices of Conversion of the applicable Holder on or prior to the dates so requested
or required, if any, (b) Borrower shall have paid all liquidated damages and other amounts owing to the applicable Holder in respect
of this Note and the other Transaction Documents, (c)(i) there is an effective registration statement pursuant to which the Holders
are permitted to utilize the prospectus thereunder to resell all of the Underlying Shares (and Borrower believes, in good faith,
that such effectiveness will continue uninterrupted for the foreseeable future), or (ii) all of the Underlying Shares (and shares
issuable in lieu of cash payments of interest) may be resold pursuant to Rule 144 without volume or manner-of-sale restrictions
or current public information requirements as determined by the counsel to Borrower as set forth in a written opinion letter to
such effect, addressed and acceptable to the Transfer Agent and the affected Holders, (d) the Common Stock is trading on a Trading
Market and all of the shares issuable pursuant to the Transaction Documents are listed or quoted for trading on such Trading Market
(and Borrower believes, in good faith, that trading of the Common Stock on a Trading Market will continue uninterrupted for the
foreseeable future), (e) there is a sufficient number of authorized, but unissued and otherwise unreserved, shares of Common Stock
for the issuance of all of the shares then issuable pursuant to the Transaction Documents, (f) an Event of Default has not occurred,
whether or not such Event of Default has been cured, (g) there is no existing Event of Default and no existing event which, with
the passage of time or the giving of notice, would constitute an Event of Default, (h) the issuance of the shares in question
(or, in the case of an Optional Redemption, the shares issuable upon conversion in full of the Optional Redemption Amount) to
the applicable Holder would not exceed the Beneficial Ownership Limitation, (i) there has been no public announcement of a pending
or proposed Fundamental Transaction or Change of Control Transaction that has not been consummated, (j) the applicable Holder
is not in possession of any information provided by Borrower that constitutes, or may constitute, material non-public information,
and (k) for each Trading Day during a period of 5 consecutive Trading Days prior to the Mandatory Conversion Notice Date, the
daily VWAP for the Common Stock on the principal Trading Market is equal to or greater than the Conversion Price.

 

“Event
of Default” shall have the meaning set forth in Section 8(a).

 

“Fundamental
Transaction” shall have the meaning set forth in Section 5(e).

 

“Interest
Payment Date” shall have the meaning set forth in Section 2(a).

 

“Interest
Share Amount” shall have the meaning set forth in Section 2(a).

 

    	3

    	 

    

 

“Mandatory
Default Amount” means the sum of (a) the greater of (i) the outstanding principal amount of this Note divided by the
Conversion Price on the date the Mandatory Default Amount is either (A) demanded (if demand or notice is required to create an
Event of Default) or otherwise due or (B) paid in full, whichever has a lower Conversion Price, multiplied by the VWAP on the
date the Mandatory Default Amount is either (x) demanded or otherwise due or (y) paid in full, whichever has a higher VWAP, or
(ii) 115% of the outstanding principal amount of this Note and (b) all other amounts, costs, expenses and liquidated damages due
in respect of this Note.

 

“New
York Courts” shall have the meaning set forth in Section 9(d).

 

“Note
Register” shall have the meaning set forth in Section 2(c).

 

“Notice
of Conversion” shall have the meaning set forth in Section 4(a).

 

“Optional
Redemption” shall have the meaning set forth in Section 6(b).

 

“Optional
Redemption Amount” means if the Optional Redemption Date occurs prior to March 1, 2015, the sum of (i) 105% of the then
outstanding principal amount of this Note and all accrued but unpaid interest thereon, plus (ii) an amount equal to all interest
which would have accrued hereunder after the Optional Redemption Date through the Maturity Date had this Note not been subject
to an Optional Redemption, plus (iii) all liquidated damages and other amounts due in respect of this Note.

 

“Optional
Redemption Date” shall have the meaning set forth in Section 6(b).

 

“Optional
Redemption Notice” shall have the meaning set forth in Section 6(b).

 

“Optional
Redemption Notice Date” shall have the meaning set forth in Section 6(b).

 

“Original
Issue Date” means the date of the first issuance of the Notes, regardless of any transfers of any Note and regardless
of the number of instruments which may be issued to evidence such Notes.

 

“Other
Holders” means holders of Other Notes.

 

“Other
Notes” means Notes nearly identical to this Note issued to Other Holders pursuant to the Purchase Agreement.

 

“Permitted
Indebtedness” means (x) any liabilities for borrowed money or amounts owed not in excess of $100,000 in the aggregate
(other than trade accounts payable incurred in the ordinary course of business), (y) all guaranties, endorsements and other contingent
obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Borrower’s consolidated
balance sheet (or the notes thereto) not affecting more than $100,000 in the aggregate, except guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the ordinary course of business; and (z) the present value of
any lease payments not in excess of $100,000 due under leases required to be capitalized in accordance with GAAP. Neither the
Borrower nor any Subsidiary is in default with respect to any Indebtedness.

 

    	4

    	 

    

 

“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 Borrower) have
been established in accordance with GAAP, (b) Liens imposed by law which were incurred in the ordinary course of Borrower’s
business, such as carriers’, warehousemen’s and mechanics’ Liens, statutory landlords’ Liens, and other
similar Liens arising in the ordinary course of 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 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,
and (c) Liens incurred prior to the Closing Date in connection with Permitted Indebtedness under clauses (a), (b) thereunder,
and Liens incurred in connection with Permitted Indebtedness under clause (c) thereunder, provided that such Liens are not secured
by assets of Borrower or its Subsidiaries other than the assets so acquired or leased.

 

“Purchase
Agreement” means the Securities Purchase Agreement, dated as of October [ ], 2014 among Borrower and the original Holders,
as amended, modified or supplemented from time to time in accordance with its terms.

 

“Securities
Act” means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

“Share
Delivery Date” shall have the meaning set forth in Section 4(c)(ii).

 

“Successor
Entity” shall have the meaning set forth in Section 5(e).

 

“Threshold
Period” shall have the meaning set forth in Section 6(b).

 

“Trading
Day” means a day on which the principal Trading Market is open for trading.

 

“Trading
Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on
the date in question: the NYSE MKT, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, the
New York Stock Exchange, the OTC Bulletin Board, the OTCQB, or the OTCQX (or any successors to any of the foregoing).

 

“Underlying
Shares” means all of the Conversion Shares and all of the Warrant Shares issuable upon exercise of the Warrants issued
pursuant to the Purchase Agreement.

 

“VWAP”
means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then
listed or quoted on a Trading Market, the daily volume weighted average price of the Common Stock for such date (or the nearest
preceding date) on the Trading Market on which the Common Stock is then listed or quoted as reported by Bloomberg L.P. (based
on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b)  if the OTC Bulletin Board is
not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the
OTC Bulletin Board, (c) if the Common Stock is not then listed or quoted for trading on the OTC Bulletin Board and if prices for
the Common Stock are then reported on the OTCQX, OTCQB or OTC Pink Marketplace maintained by the OTC Markets Group, Inc. (or a
similar organization or agency succeeding to its functions of reporting prices), the volume weighted average price of the Common
Stock on the first such facility (or a similar organization or agency succeeding to its functions of reporting prices), or (d) in
all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith
by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to Borrower, the fees
and expenses of which shall be paid by Borrower.

 

    	5

    	 

    

 

Section
2.         Interest.

 

a)Interest
in Cash or in Kind. Holders shall be entitled to receive, and Borrower shall pay, cumulative interest on the outstanding principal
amount of this Note compounded annually at the annual rate of 10% (all subject to increase as set forth in this Note) from the
Original Issue Date through the Maturity Date. Interest shall be payable on the Maturity Date (the “Interest Payment
Date”) (if any Interest Payment Date is not a Trading Day, the applicable payment shall be due on the next succeeding
Trading Day) in cash or at the election of the Holder, such interest may be paid in duly authorized, validly issued, fully paid
and non-assessable shares of Common Stock as set forth in this Section 2(a), or a combination thereof in each case as provided
in the next sentence (the amount to be paid in shares of Common Stock, the “Interest Share Amount”). The Holders
shall have the same rights and remedies with respect to the delivery of any such shares as if such shares were being issued pursuant
to Section 6. Borrower may not pay interest by delivery of Common Stock without the consent of the Holder in the event that the
Equity Conditions are not in effect on each day from the relevant Interest Payment Date through the date the Interest Share Amount
is delivered to the Holder. The Holder may elect to receive the Interest Share Amount in lieu of cash by notifying Borrower any
time prior to the relevant Interest Payment Date. Borrower may not pay any Interest Share Amount in excess of the Beneficial Ownership
Limitation, unless waived by Holder pursuant to Section 4(d) hereof.

 

b)Payment
Grace Period. The Borrower shall not have any grace period to pay any monetary amounts due under this Note.

 

c)Conversion
Privileges. The Conversion Rights set forth in Section 4 shall remain in full force and effect immediately from the date hereof
and until the Note is paid in full regardless of the occurrence of an Event of Default. This Note shall be payable in full on
the Maturity Date, unless previously converted into Common Stock in accordance with Section 4 hereof.

 

d)Application
of Payments. Interest on this Note shall be calculated on the basis of a 360-day year and the actual number of days elapsed.
Payments made in connection with this Note shall be applied first to amounts due hereunder other than principal and interest,
thereafter to interest and finally to principal.

 

e)Pari
Passu. Except as otherwise set forth herein, all payments made on this Note and the Other Notes and all actions taken by the
Borrower with respect to this Note and the Other Notes, including but not limited to Mandatory Conversion, shall be made and taken
pari passu with respect to this Note and the Other Notes. Notwithstanding anything to the contrary contained herein or
in the Transaction Documents, it shall not be considered non-pari passu for a Holder or Other Holder to elect to receive interest
paid in shares of Common Stock or for the Borrower to actually pay interest in shares of Common Stock to such electing Holder
or Other Holder.

 

f)Manner
and Place of Payment. Principal and interest on this Note and other payments in connection with this Note shall be payable
at the Holder’s offices as designated above in lawful money of the United States of America in immediately available funds
without set-off, deduction or counterclaim. Upon assignment of the interest of Holder in this Note, Borrower shall instead make
its payment pursuant to the assignee’s instructions upon receipt of written notice thereof. Except as set forth herein,
this Note may not be prepaid or mandatorily converted without the consent of the Holder.

 

    	6

    	 

    

 

Section
3.         Registration of Transfers and Exchanges.

 

a) Different
Denominations. This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized
denominations, as requested by the Holder surrendering the same. No service charge will be payable for such registration of
transfer or exchange.

 

b)
Investment Representations. This Note has been issued subject to
certain investment representations of the original Holder set forth in the Purchase Agreement and may be transferred or exchanged
only in compliance with the Purchase Agreement and applicable federal and state securities laws and regulations.

 

c) Reliance
on Note Register. Prior to due presentment for transfer to Borrower of this Note, Borrower and any agent of Borrower may
treat the Person in whose name this Note is duly registered on the Note Register as the owner hereof for the purpose of
receiving payment as herein provided and for all other purposes, whether or not this Note is overdue, and neither Borrower
nor any such agent shall be affected by notice to the contrary.

 

Section
4.         Conversion.

 

a) Voluntary
Conversion. At any time after the Original Issue Date until this Note is no longer outstanding, this Note shall be
convertible, in whole or in part, into shares of Common Stock at the option of the Holder, at any time and from time to time
(subject to the conversion limitations set forth in Section 4(d) hereof). The Holder shall effect conversions by
delivering to Borrower a Notice of Conversion, the form of which is attached hereto as Annex A (each, a
“Notice of Conversion”), specifying therein the principal amount of this Note to be converted and the date
on which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is
specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered
hereunder. To effect conversions hereunder, the Holder shall not be required to physically surrender this Note to Borrower
unless the entire principal amount of this Note has been so converted. Conversions hereunder shall have the effect of
lowering the outstanding principal amount of this Note in an amount equal to the applicable conversion. The Holder and
Borrower shall maintain records showing the principal amount(s) converted and the date of such conversion(s). Borrower may
deliver an objection to any Notice of Conversion within one (1) Business Day of delivery of such Notice of Conversion. In the
event of any dispute or discrepancy, the records of the Holder shall be controlling and determinative in the absence of
manifest error. 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 may be less than the amount stated on the face hereof.

 

b) Conversion
Price. The conversion price for the principal and interest in connection with voluntary conversions by the Holder
shall be equal to the lessor of (i) $0.0375, and (ii) 75% of the lowest closing bid prices for the 20 consecutive trading
days preceding a Conversion Date, subject to adjustment herein (the “Conversion Price”).

 

    	7

    	 

    

 

c)
         Mechanics of Conversion.

 

i. Conversion
Shares Issuable Upon Conversion of Principal Amount. The number of Conversion Shares issuable upon a conversion hereunder
shall be determined by the quotient obtained by dividing (x) the outstanding principal amount of this Note to be converted
plus interest elected by the Holder to be converted by (y) the Conversion Price.

 

ii. Delivery
of Certificate Upon Conversion. Not later than three (3) Trading Days after each Conversion Date (the “Share
Delivery Date”), Borrower shall deliver, or cause to be delivered, to the Holder a certificate or certificates
representing the Conversion Shares which, on or after the earlier of (i) the six month anniversary of the Original Issue Date
or (ii) the Effective Date, shall be free of restrictive legends and trading restrictions (other than those which may then be
required by the Purchase Agreement) representing the number of Conversion Shares being acquired upon the conversion of this
Note. On or after the earlier of (i) the six month anniversary of the Original Issue Date or (ii) the Effective Date,
Borrower shall use its best efforts to deliver any certificate or certificates required to be delivered by Borrower under
this Section 4(c) electronically through the Depository Trust Company or another established clearing corporation performing
similar functions.

 

iii. Failure
to Deliver Certificates. If, in the case of any Notice of Conversion, such certificate or certificates are not
delivered to or as directed by the applicable Holder by the Share Delivery Date, the Holder shall be entitled to elect by
written notice to Borrower at any time on or before its receipt of such certificate or certificates, to rescind such
Conversion, in which event Borrower shall promptly return to the Holder any original Note delivered to Borrower and the
Holder shall promptly return to Borrower the Common Stock certificates issued to such Holder pursuant to the rescinded
Conversion Notice.

 

iv. Obligation
Absolute; Partial Liquidated Damages. Borrower’s obligations to issue and deliver the Conversion Shares upon
conversion of this Note in accordance with the terms hereof are absolute and unconditional, irrespective of any action or
inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any
judgment against any Person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or
termination, or any breach or alleged breach by the Holder or any other Person of any obligation to Borrower or any violation
or alleged violation of law by the Holder or any other Person, and irrespective of any other circumstance which might
otherwise limit such obligation of Borrower to the Holder in connection with the issuance of such Conversion Shares; provided, however,
that such delivery shall not operate as a waiver by Borrower of any such action Borrower may have against the Holder. In the
event the Holder of this Note shall elect to convert any or all of the outstanding principal amount hereof, Borrower may not
refuse conversion based on any claim that the Holder or anyone associated or affiliated with the Holder has been engaged in
any violation of law, agreement or for any other reason, unless an injunction from a court, on notice to Holder, restraining
and or enjoining conversion of all or part of this Note shall have been sought and obtained, and Borrower posts a surety bond
for the benefit of the Holder in the amount of 150% of the outstanding principal amount of this Note, which is subject to the
injunction, which bond shall remain in effect until the completion of arbitration/litigation of the underlying dispute and
the proceeds of which shall be payable to the Holder to the extent it obtains judgment. In the absence of such injunction,
Borrower shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. If Borrower fails for any
reason to deliver to the Holder such certificate or certificates pursuant to Section 4(c)(ii) by the Share Delivery Date,
Borrower shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of principal amount
being converted, $10 per Trading Day (increasing to $20 per Trading Day on the fifth (5th) Trading Day after such
liquidated damages being to accrue) for each Trading Day after such Share Delivery Date until such certificates are delivered
or Holder rescinds such conversion. Nothing herein shall limit a Holder’s right to pursue actual damages or declare an
Event of Default pursuant to Section 8 hereof for Borrower’s failure to deliver Conversion Shares within the period
specified herein and the Holder shall have the right to pursue all remedies available to it hereunder, at law or in equity
including, without limitation, a decree of specific performance and/or injunctive relief. The exercise of any such rights
shall not prohibit the Holder from seeking to enforce damages pursuant to any other Section hereof or under applicable
law.

 

    	8

    	 

    

 

v. Compensation
for Buy-In on Failure to Timely Deliver Certificates Upon Conversion. In addition to any other rights available to the
Holder, if Borrower fails for any reason to deliver to the Holder such certificate or certificates by the Share Delivery Date
pursuant to Section 4(c)(ii), and if after such Share Delivery Date the Holder is required by its brokerage firm to purchase
(in an open market transaction or otherwise), or the Holder or Holder’s brokerage firm otherwise purchases, shares of
Common Stock to deliver in satisfaction of a sale by the Holder of the Conversion Shares which the Holder was entitled to
receive upon the conversion relating to such Share Delivery Date (a “Buy-In”), then Borrower shall (A) pay
in cash to the Holder (in addition to any other remedies available to or elected by the Holder) the amount, if any, by which
(x) the Holder’s total purchase price (including any brokerage commissions) for the Common Stock so purchased exceeds
(y) the product of (1) the aggregate number of shares of Common Stock that the Holder was entitled to receive from the
conversion at issue multiplied by (2) the actual sale price at which the sell order giving rise to such purchase obligation
was executed (including any brokerage commissions) and (B) at the option of the Holder, either reissue (if surrendered) this
Note in a principal amount equal to the principal amount of the attempted conversion (in which case such conversion shall be
deemed rescinded) or deliver to the Holder the number of shares of Common Stock that would have been issued if Borrower had
timely complied with its delivery requirements under Section 4(c)(ii). For example, if the Holder purchases Common Stock
having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted conversion of this Note with respect
to which the actual sale price of the Conversion Shares (including any brokerage commissions) giving rise to such purchase
obligation was a total of $10,000 under clause (A) of the immediately preceding sentence, Borrower shall be required to pay
the Holder $1,000. The Holder shall provide Borrower written notice indicating the amounts payable to the Holder in respect
of the Buy-In and, upon request of Borrower, evidence of the amount of such loss. Nothing herein shall limit a Holder’s
right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of
specific performance and/or injunctive relief with respect to Borrower’s failure to timely deliver
certificates representing shares of Common Stock upon conversion of this Note as required pursuant to the terms
hereof.

 

    	9

    	 

    

 

vi. Reservation
of Shares Issuable Upon Conversion. Borrower covenants that it will at all times reserve and keep available out of its
authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of this Note as herein
provided, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holder (and
the other holders of the Notes), not less than such aggregate number of shares of the Common Stock as shall (subject to the
terms and conditions set forth in the Purchase Agreement) be issuable (taking into account the adjustments and restrictions
of Section 5) upon the conversion of the then outstanding principal amount of this Note and interest which has accrued and
would accrue on such principal amount, assuming such principal amount was not converted through the Maturity Date. Borrower
covenants that all shares of Common Stock that shall be so issuable shall, upon issue, be duly authorized, validly issued,
fully paid and nonassessable.

 

vii. Fractional
Shares. No fractional shares or scrip representing fractional shares shall be issued upon the conversion of this Note.
As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such conversion, Borrower shall
at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction
multiplied by the Conversion Price or round up to the next whole share.

 

viii. Transfer
Taxes and Expenses. The issuance of certificates for shares of the Common Stock on conversion of this Note shall be made
without charge to the Holder hereof for any documentary stamp or similar taxes that may be payable in respect of the issue or
delivery of such certificates, provided that, Borrower shall not be required to pay any tax that may be payable in respect of
any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the
Holder of this Note so converted and Borrower shall not be required to issue or deliver such certificates unless or until the
Person or Persons requesting the issuance thereof shall have paid to Borrower the amount of such tax or shall have
established to the satisfaction of Borrower that such tax has been paid. Borrower shall pay all Transfer Agent fees required
for same-day processing of any Notice of Conversion.

 

    	10

    	 

    

 

d) Holder’s
Conversion Limitations. Borrower shall not effect any conversion of this Note, and a Holder shall not have the right to
convert any portion of this Note, to the extent that after giving effect to the conversion set forth on the applicable Notice
of Conversion, the Holder (together with the Holder’s Affiliates, and any Persons acting as a group together with the
Holder or any of the Holder’s Affiliates) would beneficially own in excess of the Beneficial Ownership Limitation (as
defined below).  For purposes of the foregoing sentence, the number of shares of Common Stock beneficially owned by the
Holder and its Affiliates shall include the number of shares of Common Stock issuable upon conversion of this Note with
respect to which such determination is being made, but shall exclude the number of shares of Common Stock which are issuable
upon (i) conversion of the remaining, unconverted principal amount of this Note beneficially owned by the Holder or any of
its Affiliates and (ii) exercise or conversion of the unexercised or unconverted portion of any other securities of Borrower
subject to a limitation on conversion or exercise analogous to the limitation contained herein (including, without
limitation, any other Notes or the Warrants) beneficially owned by the Holder or any of its Affiliates.  Except as set
forth in the preceding sentence, for purposes of this Section 4(d), beneficial ownership shall be calculated in
accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. To the extent that
the limitation contained in this Section 4(d) applies, the determination of whether this Note is convertible (in relation to
other securities owned by the Holder together with any Affiliates) and of which principal amount of this Note is convertible
shall be in the sole discretion of the Holder, and the submission of a Notice of Conversion shall be deemed to be the
Holder’s determination of whether this Note may be converted (in relation to other securities owned by the Holder
together with any Affiliates) and which principal amount of this Note is convertible, in each case subject to the Beneficial
Ownership Limitation. To ensure compliance with this restriction, the Holder will be deemed to represent to Borrower each
time it delivers a Notice of Conversion that such Notice of Conversion has not violated the restrictions set forth in this
paragraph and Borrower shall have no obligation to verify or confirm the accuracy of such determination. In addition, a
determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the
Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 4(d), in determining the
number of outstanding shares of Common Stock, the Holder may rely on the number of outstanding shares of Common Stock as
stated in the most recent of the following: (i) Borrower’s most recent periodic or annual report filed with the
Commission, as the case may be, (ii) a more recent public announcement by Borrower, or (iii) a more recent written notice by
Borrower or Borrower’s transfer agent setting forth the number of shares of Common Stock outstanding.  Upon the
written or oral request of a Holder, Borrower shall within two Trading Days confirm orally and in writing to the Holder
the number of shares of Common Stock then outstanding.  In any case, the number of outstanding shares of Common Stock
shall be determined after giving effect to the conversion or exercise of securities of Borrower, including this Note, by the
Holder or its Affiliates since the date as of which such number of outstanding shares of Common Stock was reported. The
“Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the Common Stock outstanding
immediately after giving effect to the issuance of shares of Common Stock issuable upon conversion of this Note held by the
Holder. The Holder may decrease the Beneficial Ownership Limitation at any time and the Holder, upon not less than 61
days’ prior notice to Borrower, may increase the Beneficial Ownership Limitation provisions of this Section 4(d),
provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock
outstanding immediately after giving effect to the issuance of shares of Common Stock upon conversion of this Note held by
the Holder and the Beneficial Ownership Limitation provisions of this Section 4(d) shall continue to apply. Any such increase
will not be effective until the 61st day after such notice is delivered to Borrower. The Beneficial Ownership
Limitation provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity
with the terms of this Section 4(d) to correct this paragraph (or any portion hereof) which may be defective or inconsistent
with the intended Beneficial Ownership Limitation contained herein or to make changes or supplements necessary or desirable
to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of
this Note.

 

Section
5.         Certain Adjustments.

 

a) Stock
Dividends and Stock Splits. If Borrower, at any time while this Note is outstanding: (i) pays a stock dividend or
otherwise makes a distribution or distributions payable in shares of Common Stock on shares of Common Stock or any Common
Stock Equivalents (which, for avoidance of doubt, shall not include any shares of Common Stock issued by Borrower upon
conversion of the Notes), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines
(including by way of a reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv)
issues, in the event of a reclassification of shares of the Common Stock, any shares of capital stock of Borrower, then the
Conversion Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock
(excluding any treasury shares of Borrower) outstanding immediately before such event, and of which the denominator shall be
the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to this
Section shall become effective immediately after the record date for the determination of stockholders entitled to receive
such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision,
combination or re-classification.

 

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b) Subsequent
Equity Sales. If, at any time while this Note is outstanding, Borrower or any Subsidiary, as applicable, sells or grants
any option to purchase or sells or grants any right to reprice, or otherwise disposes of or issues (or announces any sale,
grant or any option to purchase or other disposition), any Common Stock or Common Stock Equivalents entitling any Person to
acquire shares of Common Stock at an effective price per share that is lower than the Conversion Price (such lower price, the
“Base Conversion Price” and such issuances, collectively, a “Dilutive Issuance”) (if
the holder of the Common Stock or Common Stock Equivalents so issued shall at any time, whether by operation of purchase
price adjustments, reset provisions, floating conversion, exercise or exchange prices or otherwise, or due to warrants,
options or rights per share which are issued in connection with such issuance, be entitled to receive shares of Common Stock
at an effective price per share that is lower than the Conversion Price, such issuance shall be deemed to have occurred for
less than the Conversion Price on such date of the Dilutive Issuance), then the Conversion Price shall be reduced to equal
the Base Conversion Price. Such adjustment shall be made whenever such Common Stock or Common Stock Equivalents are issued.
Notwithstanding the foregoing, no adjustment will be made under this Section 5(b) in respect of an Exempt Issuance. If
Borrower enters into a Variable Rate Transaction, despite the prohibition set forth in the Purchase Agreement, Borrower
shall be deemed to have issued Common Stock or Common Stock Equivalents at the lowest possible conversion price at which such
securities may be converted or exercised. Borrower shall notify the Holder in writing, no later than the Trading Day
following the issuance of any Common Stock or Common Stock Equivalents subject to this Section 5(b), indicating therein the
applicable issuance price, or applicable reset price, exchange price, conversion price and other pricing terms (such notice,
the “Dilutive Issuance Notice”). For purposes of clarification, whether or not Borrower provides a
Dilutive Issuance Notice pursuant to this Section 5(b), upon the occurrence of any Dilutive Issuance, the Holder is entitled
to receive a number of Conversion Shares based upon the Base Conversion Price on or after the date of such Dilutive Issuance,
regardless of whether the Holder accurately refers to the Base Conversion Price in the Notice of Conversion.

 

c) Subsequent
Rights Offerings. In addition to any adjustments pursuant to Section 5(a) above, if at any time Borrower grants, issues
or sells any Common Stock Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the
record holders of any class of shares of Common Stock (the “Purchase Rights”), then the Holder will be
entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could
have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion of this Note
(without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation)
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 shares of Common Stock are to be determined for the grant,
issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any
such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be
entitled to participate in such Purchase Right to such extent (or beneficial ownership of such shares of Common Stock as
a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the
Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership
Limitation).

 

    	12

    	 

    

 

d)Pro
Rata Distributions. During such time as this Note is outstanding, if Borrower shall declare or make any dividend or other
distribution of its assets (or rights to acquire its assets) to holders of shares of Common Stock, by way of return of capital
or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of
a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”),
at any time after the issuance of this Note, then, in each such case, the Holder shall be entitled to participate in such Distribution
to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock
acquirable upon complete exercise of this Note (without regard to any limitations on exercise hereof, including without limitation,
the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such
record is taken, the date as of which the record holders of shares of Common Stock are to be determined for the participation
in such Distribution (provided, however, to the extent that the Holder's right to participate in any such Distribution
would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate
in such Distribution to such extent (or in the beneficial ownership of any shares of Common Stock as a result of such Distribution
to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time,
if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).

 

e) Fundamental
Transaction. If, at any time while this Note is outstanding, (i) Borrower, directly or indirectly, in one or more related
transactions effects any merger or consolidation of Borrower with or into another Person, (ii) Borrower, directly or
indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially
all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or
exchange offer (whether by Borrower or another Person) is completed pursuant to which holders of Common Stock are permitted
to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50%
or more of the outstanding Common Stock, (iv) Borrower, directly or indirectly, in one or more related transactions effects
any reclassification, reorganization or recapitalization of the Common Stock or any compulsory share exchange pursuant to
which the Common Stock is effectively converted into or exchanged for other securities, cash or property, (v) Borrower,
directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement)
with another Person whereby such other Person acquires more than 50% of the outstanding shares of Common Stock (not including
any shares of Common Stock held by the other Person or other Persons making or party to, or associated or affiliated with the
other Persons making or party to, such stock or share purchase agreement or other business combination) (each a
“Fundamental Transaction”), then, upon any subsequent conversion of this Note, the Holder shall have the
right to receive, for each Conversion Share that would have been issuable upon such conversion immediately prior to the
occurrence of such Fundamental Transaction (without regard to any limitation in Section 4(d) and Section 4(e) on the
conversion of this Note), the number of shares of Common Stock of the successor or acquiring corporation or of Borrower, if
it is the surviving corporation, and any additional consideration (the “Alternate Consideration”)
receivable as a result of such Fundamental Transaction by a holder of the number of shares of Common Stock for which this
Note is convertible immediately prior to such Fundamental Transaction (without regard to any limitation in Section 4(d) and
Section 4(e) on the conversion of this Note). For purposes of any such conversion, the determination of the Conversion Price
shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate
Consideration issuable in respect of one (1) share of Common Stock in such Fundamental Transaction, and Borrower shall
apportion the Conversion Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any
different components of the Alternate Consideration. If holders of Common Stock are given any choice as to the securities,
cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the
Alternate Consideration it receives upon any conversion of this Note following such Fundamental Transaction. Borrower shall
cause any successor entity in a Fundamental Transaction in which Borrower is not the survivor (the “Successor
Entity”) to assume in writing all of the obligations of Borrower under this Note and the other Transaction
Documents (as defined in the Purchase Agreement) in accordance with the provisions of this Section 5(e) pursuant to written
agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable
delay) prior to such Fundamental Transaction and shall, at the option of the holder of this Note, deliver to the Holder in
exchange for this Note a security of the Successor Entity evidenced by a written instrument substantially similar in form and
substance to this Note which is convertible for a corresponding number of shares of capital stock of such Successor Entity
(or its parent entity) equivalent to the shares of Common Stock acquirable and receivable upon conversion of this Note
(without regard to any limitations on the conversion of this Note) prior to such Fundamental Transaction, and with a
conversion price which applies the conversion price hereunder to such shares of capital stock (but taking into account the
relative value of the shares of Common Stock pursuant to such Fundamental Transaction and the value of such shares of
capital stock, such number of shares of capital stock and such conversion price being for the purpose of protecting the
economic value of this Note immediately prior to the consummation of such Fundamental Transaction), and which is reasonably
satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor
Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the
provisions of this Note and the other Transaction Documents referring to the “Company” shall refer instead to the
Successor Entity), and may exercise every right and power of Borrower and shall assume all of the obligations of Borrower
under this Note and the other Transaction Documents with the same effect as if such Successor Entity had been named as
Borrower herein.

 

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f) Calculations.
All calculations under this Section 5 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may
be. For purposes of this Section 5, the number of shares of Common Stock deemed to be issued and outstanding as of a given
date shall be the sum of the number of shares of Common Stock (excluding any treasury shares of Borrower) issued and
outstanding.

 

g) Notice
to the Holder.

 

i. Adjustment
to Conversion Price. Whenever the Conversion Price is adjusted pursuant to any provision of this Section 5, Borrower
shall promptly deliver to each Holder a notice setting forth the Conversion Price after such adjustment and setting forth a
brief statement of the facts requiring such adjustment.

 

ii. Notice
to Allow Conversion by Holder. If (A) Borrower shall declare a dividend (or any other distribution in whatever form) on
the Common Stock, (B) Borrower shall declare a special nonrecurring cash dividend on or a redemption of the Common Stock, (C)
Borrower shall authorize the granting to all holders of the Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of Borrower shall be required
in connection with any reclassification of the Common Stock, any consolidation or merger to which Borrower is a party, any
sale or transfer of all or substantially all of the assets of Borrower, or any compulsory share exchange whereby the
Common Stock is converted into other securities, cash or property or (E) Borrower shall authorize the voluntary or
involuntary dissolution, liquidation or winding up of the affairs of Borrower, then, in each case, Borrower shall cause to be
filed at each office or agency maintained for the purpose of conversion of this Note, and shall cause to be delivered to the
Holder at its last address as it shall appear upon the Note Register, at least twenty (20) calendar days prior to the
applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for
the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of
which the holders of the Common Stock of record to be entitled to such dividend, distributions, redemption, rights or
warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share
exchange is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock
of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable
upon such reclassification, consolidation, merger, sale, transfer or share exchange, provided that the failure to deliver
such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required
to be specified in such notice. To the extent that any notice provided hereunder constitutes, or contains, material,
non-public information regarding Borrower or any of the Subsidiaries, Borrower shall simultaneously file such notice with the
Commission pursuant to a Current Report on Form 8-K. The Holder shall remain entitled to convert this Note during the 20-day
period commencing on the date of such notice through the effective date of the event triggering such notice except as
may otherwise be expressly set forth herein.

 

    	14

    	 

    

 

Section
6.        Prepayment/Redemption.

 

a) General.
Except as otherwise provided herein, the Borrower may not prepay or redeem this Note in whole or in part without the prior
written consent of the Holder, and to the extent the Borrower agrees with Other Holders to prepay or redeem Other Notes in
whole or in part, the Borrower shall offer such prepayment or redemption of this Note on a pro rata basis on the same terms
and conditions as agreed upon by the Holder and all Other Holders for such Other Notes.

 

b) Optional
Redemption at Election of Borrower. Subject to the provisions of this Section 6 and provided the Equity Conditions are
all in effect each day from the Optional Redemption Notice Date through the Optional Redemption Date (except as waived by
Holder), the Borrower may deliver a notice to the Holder (an “Optional Redemption Notice” and the date
such notice is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable
election to redeem the entire outstanding principal amount of this Note for cash in an amount equal to the Optional
Redemption Amount on the 20th Trading Day following the Optional Redemption Notice Date (such date, the “Optional
Redemption Date” and such redemption, the “Optional Redemption”). The Optional Redemption Amount
is payable in full on the Optional Redemption Date. The Borrower covenants and agrees that it will honor all Notices of
Conversion tendered from the Optional Redemption Notice Date through the date all amounts owing on the Optional
Redemption Date are paid in full.

 

c) Redemption
Procedure. The payment of cash pursuant to an Optional Redemption shall be payable on the Optional Redemption Date. If
any portion of the payment pursuant to an Optional Redemption shall not be paid by the Borrower by the applicable due date,
interest shall accrue thereon at an interest rate equal to the lesser of 21% per annum or the maximum rate permitted by
applicable law until such amount is paid in full. Notwithstanding anything herein contained to the contrary, if any portion
of the Optional Redemption Amount remains unpaid after such date, the Holder may elect, by written notice to the Borrower
given at any time thereafter, to invalidate such Optional Redemption, with respect to the unpaid portion of the Optional
Redemption Amount, and the Borrower shall have no further right to exercise such Optional Redemption and the Holder will be
entitled to receive interest which may have accrued at the rate stated above and declare the failure to timely pay the
Optional Redemption Amount as an Event of Default.

 

    	15

    	 

    

 

Section
7.       Negative Covenants. As long as any portion of this Note
remains outstanding, unless the holders of at least 51% in principal amount of the then outstanding Notes shall have otherwise
given prior written consent, Borrower shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:

 

a)
other than Permitted Indebtedness, enter into, create, incur, assume, guarantee or suffer to exist 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;

 

b) other than Permitted Liens, enter into, create, incur, assume or suffer
to exist any Liens of any kind, 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;

 

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 other than as to the Conversion
Shares or Warrant Shares as permitted or required under the Transaction Documents;

 

e)
redeem, defease, repurchase, repay or make any payments in respect of, by the payment of cash or cash equivalents (in whole
or in part, whether by way of open market purchases, tender offers, private transactions or otherwise), all or any portion of
any Indebtedness (other than the Notes if on a pro-rata basis), whether by way of payment in respect of principal of (or
premium, if any) or interest on, such Indebtedness;

 

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

 

g)
enter into any transaction with any Affiliate of 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 Borrower (even if less than a quorum otherwise required for board approval);

 

h)
any material damage to, or loss, theft or destruction of, any Collateral, whether or not insured, or any strike, lockout,
labor dispute, embargo, condemnation, or other casualty which causes, for more than fifteen (15) consecutive days, the
cessation or substantial curtailment of revenue producing activities at any facility of Borrower or any Subsidiary, if any
such event or circumstance could have a Material Adverse Effect; or

 

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

 

    	16

    	 

    

 

Section
8.       Events of Default.

 

a)
“Event of Default” means, wherever used herein, any
of the following events (whatever the reason for such event and whether such event shall be voluntary or involuntary or effected
by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative
or governmental body):

 

i.
any default in the payment of (A) the principal amount of any Note or (B) liquidated damages and other amounts owing to a
Holder on any Note, as and when the same shall become due and payable (whether on a Conversion Date or the Maturity Date or
by acceleration or otherwise) which default, solely in the case of a default under clause (B) above, is not cured within 3
Trading Days after Borrower has become or should have become aware of such default;

 

ii.
Borrower shall fail to observe or perform any other covenant or agreement contained in the Notes (other than a breach by
Borrower of its obligations to deliver shares of Common Stock to the Holder upon conversion, which breach is addressed in
clause (x) below) which failure is not cured, if possible to cure, within the earlier to occur of (A) 5 Trading Days after
notice of such failure sent by the Holder or by any Other Holder to Borrower and (B) 10 Trading Days after Borrower has
become or should have become aware of such failure;

 

iii.
a default or event of default (subject to any grace or cure period provided in the applicable agreement, document or
instrument) shall occur under (A) any of the Transaction Documents, including but not limited to failure to strictly comply
with the provisions of the Warrants, or (B) any other material agreement, lease, document or instrument to which Borrower or
any Subsidiary is obligated (and not covered by clause (vi) below);

 

iv. any
representation or warranty made in this Note, any other Transaction Documents, any written statement pursuant hereto or thereto
or any other report, financial statement or certificate made or delivered to the Holder or any Other Holder shall be untrue or
incorrect in any material respect as of the date when made or deemed made;

 

v.
Borrower or any Subsidiary (as such term is defined in Rule 1-02(w) of Regulation S-X) shall be subject to a Bankruptcy
Event;

 

vi.
Borrower or any Subsidiary shall default on any of its obligations under 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
that (a) involves an obligation greater than $50,000, whether such indebtedness now exists or shall hereafter be created, and
(b) results in such indebtedness becoming or being declared due and payable prior to the date on which it would otherwise
become due and payable;

 

vii.
Borrower shall be a party to any Change of Control Transaction or Fundamental Transaction or shall agree to sell or dispose
of all or in excess of 30% of its assets in one transaction or a series of related transactions (whether or not such sale
would constitute a Change of Control Transaction);

 

viii.
Borrower does not meet the current public information requirements under Rule 144;

 

    	17

    	 

    

 

ix.
Borrower shall fail for any reason to deliver certificates to a Holder prior to the fifth Trading Day after a Conversion Date
pursuant to Section 4(c) or Borrower shall provide at any time notice to the Holder, including by way of public
announcement, of Borrower’s intention to not honor requests for conversions of any Notes in accordance with the terms
hereof;

 

x.
any Person shall breach any agreement delivered to the initial Holders pursuant to Section 2.2 or 2.5 of the Purchase
Agreement;

 

xi.
any monetary judgment, writ or similar final process shall be entered or filed against Borrower, any subsidiary or any
of their respective property or other assets for more than $50,000, and such judgment, writ or similar final process shall
remain unvacated, unbonded or unstayed for a period of 90 calendar days;

 

xii.any
dissolution, liquidation or winding up by Borrower or a material Subsidiary of a substantial portion of their business;

 

xiii.cessation
of operations by Borrower or a material Subsidiary;

 

xiv.The
failure by Borrower or any material Subsidiary to maintain any material intellectual property rights, personal, real property,
equipment, leases or other assets which are necessary to conduct its business (whether now or in the future) and such breach is
not cured with twenty (20) days after written notice to the Borrower from the Holder;

 

xv.An
event resulting in the Common Stock no longer being listed or quoted on a Trading Market, or notification from a Trading Market
that the Borrower is not in compliance with the conditions for such continued quotation and such non-compliance continues for
twenty (20) days following such notification;

 

xvi.a
Commission or judicial stop trade order or suspension from its Principal Trading Market;

 

xvii.the
restatement after the date hereof of any financial statements filed by the Borrower with the Commission for any date or period
from two years prior to the Original Issue Date and until this Note is no longer outstanding, if the result of such restatement
would, by comparison to the unrestated financial statements, have constituted a Material Adverse Effect. For the avoidance of
doubt, any restatement related to new accounting pronouncements shall not constitute a default under this Section;

 

xviii.the
Borrower effectuates a reverse split of its Common Stock without ten (10) days prior written notice to the Holder;

 

xix.a
failure by Borrower to notify Holder of any material event of which Borrower is obligated to notify Holder pursuant to the terms
of this Note or any other Transaction Document;

 

xx.a
default by the Borrower of a material term, covenant, warranty or undertaking of any other agreement to which the Borrower and
Holder are parties, or the occurrence of an event of default under any such other agreement to which Borrower and Holder are parties
which is not cured after any required notice and/or cure period;

 

    	18

    	 

    

 

xxi.the
occurrence of an Event of Default under any Other Note;

 

xxii.any
material provision of any Transaction Document shall at any time for any reason (other than pursuant to the express terms thereof)
cease to be valid and binding on or enforceable against the parties thereto, or the validity or enforceability thereof shall be
contested by any party thereto, or a proceeding shall be commenced by Borrower or any Subsidiary or any governmental authority
having jurisdiction seeking to establish the invalidity or unenforceability thereof, or Borrower or any Subsidiary shall deny
in writing that it has any liability or obligation purported to be created under any Transaction Document; or

 

xxiii.Borrower
fails to pay the Optional Redemption Amount when due.

 

b) Remedies Upon Event of Default, Fundamental Transaction and Change of
Control Transaction. If any Event of Default or a Fundamental Transaction or a Change of Control Transaction occurs, the outstanding
principal amount of this Note, liquidated damages and other amounts owing in respect thereof through the date of acceleration,
shall become, at the Holder’s election, immediately due and payable in cash at the Mandatory Default Amount. Commencing
on the Maturity Date and also five (5) days after the occurrence of any Event of Default interest on this Note shall accrue at
an interest rate equal to the lesser of 21% per annum or the maximum rate permitted under applicable law. Upon the payment in
full of the Mandatory Default Amount, the Holder shall promptly surrender this Note to or as directed by Borrower. In connection
with such acceleration described herein, the Holder need not provide, and Borrower hereby waives, any presentment, demand, protest
or other notice of any kind, and the Holder may immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under applicable law. Such acceleration may be rescinded
and annulled by Holder at any time prior to payment hereunder and the Holder shall have all rights as a holder of the Note until
such time, if any, as the Holder receives full payment pursuant to this Section 8(b). No such rescission or annulment shall affect
any subsequent Event of Default or impair any right consequent thereon.

 

Section
9.         Miscellaneous.

 

a) 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: (i) if
to Borrower, to: Wally World Media, Inc., 65 Church Street, 2nd Floor, New Brunswick, NJ 08901, Attn: Darin Myman,
Chief Executive Officer, facsimile: 732-246-0439 with a copy by fax only to (which shall not constitute notice): Szaferman,
Lakind, Blumstein & Blader, P.C., 101 Grovers Mill Road, Suite 200, Lawrenceville, NJ 08648, Attn: Gregg Jaclin, Esq.,
facsimile: (609) 275-4511, and (ii) if to the Holder, to: the address and fax number indicated on the front page of this
Note, with an additional copy by fax only to (which shall not constitute notice): Grushko & Mittman, P.C., 515 Rockaway
Avenue, Valley Stream, New York 11581, facsimile: (212) 697-3575.

 

    	19

    	 

    

 

b)
Absolute Obligation. Except as expressly provided herein, no provision of this Note shall alter or impair the obligation
of Borrower, which is absolute and unconditional, to pay the principal of, liquidated damages and accrued interest, as applicable,
on this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct debt obligation
of Borrower. This Note ranks pari passu with all other Notes now or hereafter issued under the terms set forth herein.

 

c) Lost
or Mutilated Note. If this Note shall be mutilated, lost, stolen or destroyed, Borrower shall execute and deliver, in
exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen
or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed, but only upon
receipt of evidence of such loss, theft or destruction of such Note, and of the ownership hereof, reasonably satisfactory to
Borrower.

 

d) Governing
Law. All questions concerning the construction, validity, enforcement and interpretation of this Note shall be governed
by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles
of conflict of laws thereof. Each party agrees that all legal proceedings concerning the interpretation, enforcement and
defense of the transactions contemplated by any of the Transaction Documents (whether brought against a party hereto or its
respective Affiliates, directors, officers, shareholders, employees or agents) shall be commenced in the state and federal
courts sitting in the City of New York, Borough of Manhattan (the “New York Courts”). Each party hereto
hereby irrevocably submits to the exclusive jurisdiction of the New York Courts for the adjudication of any dispute hereunder
or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the
enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of such New York Courts, or such New
York Courts are improper or inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of
process and consents to process being served in any such suit, action or proceeding 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 Note 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
applicable law. Each party hereto hereby irrevocably waives, to the fullest extent permitted by applicable law, any and all
right to trial by jury in any legal proceeding arising out of or relating to this Note or the transactions contemplated
hereby. If any party shall commence an action or proceeding to enforce any provisions of this Note, then the prevailing party
in such action or proceeding shall be reimbursed by the other party for its attorneys fees and other costs and expenses
incurred in the investigation, preparation and prosecution of such action or proceeding. This Note shall be deemed an
unconditional obligation of Borrower for the payment of money and, without limitation to any other remedies of Holder, may be
enforced against Borrower by summary proceeding pursuant to New York Civil Procedure Law and Rules Section 3213 or any
similar rule or statute in the jurisdiction where enforcement is sought. For purposes of such rule or statute, any other
document or agreement to which Holder and Borrower are parties or which Borrower delivered to Holder, which may be convenient
or necessary to determine Holder’s rights hereunder or Borrower’s obligations to Holder are deemed a part of this
Note, whether or not such other document or agreement was delivered together herewith or was executed apart from this
Note.

 

    	20

    	 

    

 

e) Waiver.
Any waiver by Borrower or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a
waiver of any other breach of such provision or of any breach of any other provision of this Note. The failure of Borrower or
the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver
or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note on
any other occasion. Any waiver by Borrower or the Holder must be in writing.

 

f) 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.

 

g) Usury.
If it shall be found that any interest or other amount deemed interest due hereunder violates the applicable law governing
usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum rate of interest
permitted under applicable law. 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 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 Note, and 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 impede 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.

 

h) Next Business Day. Whenever any payment or other obligation hereunder shall be
due on a day other than a Business Day, such payment shall be made on the next succeeding Business Day.

 

i) Headings.
The headings contained herein are for convenience only, do not constitute a part of this Note and shall not be deemed to
limit or affect any of the provisions hereof.

 

j) Amendment.
Unless otherwise provided for hereunder, this Note may not be modified or amended or the provisions hereof waived without
the written consent of Borrower and the Holder.

 

    	21

    	 

    

 

k) Facsimile
Signature. In the event that the Borrower’s signature is delivered by facsimile transmission, PDF, electronic
signature or other similar electronic means, such signature shall create a valid and binding obligation of the Borrower with
the same force and effect as if such signature page were an original thereof.

 

*********************

 

(Signature
Pages Follow)

 

    	22

    	 

    

 

IN
WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by an authorized officer as of the _____ day of September,
2014. 

 

	 	WALLY WORLD MEDIA, INC.
	 	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

WITNESS:

 

______________________________________

    	23

    	 

    

ANNEX
A

 

NOTICE
OF CONVERSION

 

The
undersigned hereby elects to convert principal under the Convertible Note due March 22, 2015 of Wally World Media, Inc.,
a Nevada corporation (the “Borrower”), into shares of common stock (the “Common Stock”),
of Borrower according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the
name of a person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by Borrower in accordance therewith. No fee will be charged to
the holder for any conversion, except for such transfer taxes, if any.

 

By
the delivery of this Notice of Conversion the undersigned represents and warrants to Borrower that its ownership of the Common
Stock does not exceed the amounts specified under Section 4 of this Note, as determined in accordance with Section 13(d) of the
Exchange Act.

 

The
undersigned agrees to comply with the prospectus delivery requirements under the applicable securities laws in connection with
any transfer of the aforesaid shares of Common Stock.

 

Conversion
calculations:

 

	 	Date
    to Effect Conversion: ____________________________
	 	 
	 	Principal
    Amount of Note to be Converted: $_______________
	 	 
	 	Number
    of shares of Common Stock to be issued: ___________
	 	 
	 	Signature:
    _________________________________________
	 	 
	 	Name:
    ____________________________________________
	 	 
	 	Address
    for Delivery of Common Stock Certificates: __________
	 	__________________________________________________
	 	__________________________________________________
	 	 
	 	Or
	 	 
	 	DWAC
    Instructions: _________________________________
	 	 
	 	Broker
    No:_____________
	 	Account
    No: _______________

  

 

24

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