Document:

NEITHER
 THIS  NOTE 
NOR  THE  SECURITIES 
INTO  WIDCH  TIDS 
NOTE  IS CONVERTIBLE HAVE
BEEN REGISTERED WITH
THE SECURITIES AND EXCHANGE COMMISSION OR
THE SECURITIES COMMISSION OF ANY STATE.  THESE
SECURITIES HAVE BEEN SOLD 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.

 

ALKAME
HOLDINGS, INC.

 

CONVERTIBLE
NOTE

 

	
        Original
        Principal Amount:  $250,000

        Consideration Paid
        at Close: $30,000
	
        Issuance
        Date:  October 17, 2014

        Note
        No. 1868-1

 

FOR
VALUE RECEIVED, ALKAME
HOLDINGS, INC., a
Nevada corporation  (the "Company"),
hereby promises to
pay to the
order of Cardinal Capital Group, Inc. or
registered assigns (the "Holder") the amount 
set out above as the Original Principal Amount
(as reduced pursuant to the terms hereof pursuant to redemption, conversion or
otherwise, the "Principal") when due, whether upon the Maturity Date (as
defined below), acceleration, redemption or otherwise  (in each case in
accordance with the terms hereof)  and
to pay interest ("Interest") on any
outstanding  Principal at the applicable
Interest Rate from the date set out above as the 
Issuance Date (the "Issuance Date")  until the 
same becomes due and payable, upon the Maturity Date or
acceleration, conversion, redemption  or
otherwise (in each case in accordance with
the terms hereof).

 

The
Original  Principal  Amount 
is $250,000  (two
hundred  fifty thousand) 
plus accrued and  unpaid 
interest  and  any 
other  fees.  The Consideration is
$225,000 (two  hundred twenty five thousand)  payable
by wire transfer (there exists a $25,000 original 
issue discount  (the "OlD")). The
Holder shall pay $30,000 of Consideration upon closing
of this Note. The Holder may pay
additional Consideration to the Company  in
such amounts  and  at
such dates  as Holder  may choose
in its sole discretion. For purposes hereof,
the term "Outstanding Balance" means the Original Principal Amount,
as reduced or increased, as the case
may be, pursuant to the terms hereof for conversion, breach hereof or otherwise, plus
any accrued but
unpaid interest, collection and enforcements costs,
and any other fees
or charges incurred under this Note. The Original Principal Amount
due to Holder shall be prorated
based on the Consideration paid by Holder (plus 
an approximate 10% Original Issue 
Discount that is prorated based on the Consideration 
paid by  the Holder as well  as
 any  other interest or fees) 
such that the Company is only required 
to repay  the amount funded and the Company is not required to repay any unfunded
portion of this Note.

 

(1)
GENERAL TERMS

 

(a)
 Payment of
Principal.  The "Maturity Date"
shall be two
years from the date
of each payment
of Consideration, as
may be extended at the option of
the Holder in the event
that, and for so long
as, an Event of
Default (as defined below) shall not have occurred and
be continuing on the Maturity Date (as
may be extended pursuant to this Section 1) or any
event shall not have occurred

and
be continuing  on
the Maturity  Date
(as may be
extended  pursuant  to
this Section  1)
that with the passage
of time and the
failure to cure would result in an
Event of Default.

 

(b)
 Interest.  A
one-time interest charge
of twelve percent
(12%) ("Interest Rate") shall
be applied on
the Issuance Date to the Original
Principal Amount. Interest hereunder
shall be paid on the Maturity Date (or sooner as provided herein) to the
Holder or its assignee
in whose name this Note is registered on
the records of the Company regarding registration and transfers of Notes in
cash or converted into Common
Stock at the Conversion Price provided the Equity Conditions are satisfied.
pledged to the Holder

    	 

    	 

    

 

(c)
Security.  This Note
shall not be
secured by any
collateral or any
assets

 

(2)
EVENTS OF DEFAULT.

 

(a)
 An "Event 
of  Default",  wherever
 used  herein, 
means  any  one 
of  the following  events
(whatever  the reason
and whether it
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)
 The  Company's 
failure  to  pay 
to  the  Holder 
any  amount  of Principal,
Interest, or other
amounts when and
as due under this Note
(including, without limitation, the Company's failure
to pay any redemption payments or amounts
hereunder) or any other Transaction Document;

 

(ii)
A Conversion Failure
as defined in
section 3(b)(ii)

 

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

 

(iv)
 The Company
or any subsidiary
of the Company
shall default in any
of its obligations
under any other
Note or any
mortgage, credit agreement or other facility,
indenture agreement, factoring agreement or other instrument under
which there may be issued, or by which there
may be secured or evidenced any
indebtedness for borrowed money or money due
under any long term

    	2

    	 

    

leasing
or factoring arrangement
of the Company
or any subsidiary
of the Company
in an  amount exceeding
$100,000,
whether such
indebtedness now exists or shall hereafter be created;
and

 

(v) The Common Stock is suspended or delisted for trading on the Over the Counter Bulletin Board market (the "Primary
Market").

 

(vi) The Company loses its ability to deliver shares via "DWAC/FAST"
electronic transfer.

 

(vii)
The Company loses
its status as
"DTC Eligible."

 

(viii)
The Company shall become
late or delinquent
in its filing requirements
as a fully-reporting issuer
registered with the
Securities & Exchange
Commission.

 

(b)
 Upon the
occurrence of any
Event of Default,
the Outstanding Balance shall immediately
increase to 120%
of the Outstanding
Balance immediately prior
to the occurrence
of the Event of Default (the
"Default Effect").
The Default
Effect shall automatically apply upon the
occurrence of an Event of Default
without the need for any party
to give any notice or take any other
action.

 

(3) CONVERSION OF NOTE. This Note
shall be convertible into shares of the Company's Common Stock, on the terms and conditions set forth in this
Section 3.

 

(a)
 Conversion Right. 
Subject to the
provisions of Section
3(c), at any
time or times on
or after the
Issuance Date, the Holder shall
be entitled to convert any portion
of the outstanding and unpaid Conversion
Amount (as defined below) into fully paid
and nonassessable shares of Common Stock in accordance with Section 3(b),
at the Conversion Price (as defined below). The number of shares of
Common Stock issuable upon conversion of any Conversion Amount pursuant to
this Section 3(a) shall
be equal to the quotient of dividing the Conversion Amount
by the Conversion Price. The Company
shall not issue any fraction
of a share of Common Stock upon any
conversion. If the issuance
would result in the issuance of
a fraction of a share of
Common Stock, the Company shall round such
fraction of a share of Common Stock up to the nearest whole
share. The Company shall pay any and all transfer agent fees, legal fees,
costs and any other fees or costs that may be incurred
or charged in connection
with the issuance of
shares of the Company's Common Stock
to the Holder arising out
of or relating to the conversion of this
Note.

 

(i)
 "Conversion  Amount" 
means  the  portion 
of  the  Original Principal
Amount and Interest
to be converted,
plus any penalties, redeemed or otherwise
with respect to which this determination is being made.

 

(ii)
 "Conversion Price"
shall equal the lesser
of(a)  $0.15 or
(b) 60%
of  the  lowest
 trade  occurring 
during  the  twenty 
five  (25)  consecutive Trading
Days immediately preceding the applicable Conversion
Date on which the Holder
elects to convert
all or part
of this Note,
subject to adjustment as provided in this Note.

 

(b)
Mechanics of Conversion.

 

(i)
 Optional Conversion.
 To convert
any Conversion Amount into shares
of Common Stock
on any date
(a "Conversion Date"),
the Holder shall (A)
transmit by email, facsimile (or otherwise deliver), for
receipt on or prior to 11:59
p.m., New
York, NY
Time, on such date,
a copy of an executed notice of conversion
in the form attached hereto as
Exhibit A (the "Conversion Notice") to the Company. On
or before the third Business Day following
the date of receipt of a

    	3

    	 

    

Conversion
Notice (the "Share
Delivery Date"), the
Company shall (A)
if legends are
not required to
be placed on certificates
of Common Stock pursuant to the then
existing provisions of Rule 144 of the Securities  Act 
of  1933  ("Rule 144") 
and  provided  that 
the  Transfer  Agent is participating
in  the Depository Trust Company's ("DTC") Fast Automated Securities
Transfer Program, credit such aggregate number of
shares of Common Stock to which the
Holder shall be entitled to the Holder's
or its designee's balance account with DTC
through its Deposit Withdrawal
Agent Commission system or (B) if
the Transfer Agent is not participating in the DTC
Fast Automated Securities Transfer Program,
issue and deliver to the address as specified in the Conversion
Notice, a certificate, registered
in the name of the Holder
or its designee, for
the number of shares
of Common Stock to which the Holder
shall be entitled which certificates shall not bear any
restrictive legends unless required pursuant the Rule 144.
If this Note is physically surrendered
for conversion and the outstanding Principal of this Note is greater than the Principal portion
of the Conversion Amount being converted, then the Company shall,
upon request of the Holder,
as soon as practicable and in no
event later than three (3) Business Days after
receipt of this Note and at its own
expense, issue
and deliver to the holder
a new Note
representing the outstanding Principal
not converted. The Person or Persons
entitled to receive the shares of
Common Stock issuable
upon a conversion of this Note
shall be treated for all
purposes as the record holder or holders of such
shares of Common Stock upon the transmission of a Conversion Notice.

 

(ii)
  Company's
Failure to Timely
Convert. If within
two (2) Trading Days
after the Company's
receipt of the facsimile or
email copy of a Conversion Notice the
Company shall fail to issue and deliver
to Holder via "OWAC/FAST"
electronic transfer the number of shares of Common
Stock to which the Holder is
entitled upon such holder's conversion of
any Conversion Amount (a "Conversion
Failure"), the Original Principal Amount of
the Note shall increase by
$2,000 per day until the Company issues
and delivers a certificate to the
Holder or credit the Holder's balance account with DTC for the number of shares of Common Stock
to which the Holder is entitled upon such
holder's conversion of any Conversion Amount (under Holder's
and Company's expectation that any damages will tack back to the Issuance
Date). Company will not be subject to any penalties once its transfer
agent processes the
shares to the DWAC system.
If the
Company fails to deliver shares in accordance with
the timeframe stated in this Section, resulting
in a Conversion Failure, the Holder,
at any time prior to selling all of those shares,
may rescind any portion,
in whole or in part,
of that particular conversion attributable to
the unsold shares and have the rescinded
conversion amount returned to the Outstanding
Balance with the rescinded conversion
shares returned to the Company (under Holder's and Company's expectations that any
returned conversion amounts will tack back
to the original date of the Note).

 

(iii)
  DWACIF
AST Eligibility.
 If  the 
Company  fails  for 
any reason to deliver
to the Holder the
Shares by DWACIFAST electronic
transfer (such as by delivering
a physical stock certificate), or if there is a Conversion Failure
as defined in Section 3(b)(ii), and if the Holder
incurs a Market Price Loss, then
at any time subsequent to incurring the loss the Holder may provide the
Company written notice indicating
the amounts payable to the Holder in respect of the Market Price
Loss and the Company
must make the Holder whole by
either of the following
options at Holder's election:

 

Market
Price Loss [(High
trade price for
the period between
the day of
conversion and the
day the shares clear
in the Holder’s brokerage
account) x (Number of shares receivable
from the conversion)] - [(Net Sales price
realized by Holder) x (Number of shares receivable from the conversion)].

 

Option
A - Pay
Market Price Loss
in Cash. The
Company must pay
the Market Price
Loss by cash payment,
and any such
cash payment must
be made by the third business day from the
time of the Holder's written notice to
the Company.

    	4

    	 

    

Option B - Add Market Price Loss to Outstanding Balance. The Company must pay the Market
Price Loss by adding the Market Price Loss to the Outstanding Balance (under Holder's
and the Company's expectation that any Market
Price Loss amounts will tack back to the Issuance Date).

 

In the case that conversion shares
are not deliverable by DWAC/FAST
electronic transfer an additional
10% discount to the Conversion Price will apply.

 

(iv)
DTC Eligibility &
Sub-Penny. If the
Company fails to
maintain its status as
"DTC Eligible" for
any reason, or, if the
Conversion Price is
less than $0.01,
the Principal Amount of the Note
shall increase by ten thousand
dollars ($10,000) (under Holder's
and Company's expectation that any Principal
Amount increase will tack back to
the Issuance Date). In
addition, the Conversion Price shall
be redefined to
equal the lesser of (a) $0.15
or (b) 50% of the lowest
trade occurring during the twenty
five (25) consecutive Trading Days immediately
preceding the applicable Conversion
Date on which the
Holder elects to
convert all or part
of this Note, subject to adjustment as
provided in this Note.

 

(v)
 Book-Entry. Notwithstanding
anything to the
contrary set forth herein,
upon conversion
of any portion
of this Note
in accordance with
the terms hereof,
the Holder shall not be required to physically
surrender this Note
to the Company unless (A)
the full Conversion
Amount represented by this Note is being converted or (B) the Holder has provided the
Company with prior written notice (which
notice may be included in
a Conversion Notice) requesting reissuance of this
Note upon physical surrender of
this Note. The Holder
and the Company shall
maintain records showing the Principal and Interest converted and the dates
of such conversions or shall use such
other method, reasonably satisfactory
to the Holder and the Company, so
as not to require physical surrender
of this Note upon conversion.

 

(c) 
Limitations on Conversions
or Trading.

 

(i)
  Beneficial 
Ownership.  The  Company 
shall  not  effect 
any conversions of this
Note and the
Holder shall not
have the right to convert
any portion of this
Note or receive shares of Common Stock as payment of interest hereunder to the
extent that after giving effect to such conversion or receipt of
such interest payment, the Holder,
together with any affiliate thereof, would
beneficially own (as determined in accordance
with Section 13(d) of the Exchange Act
and the rules promulgated thereunder) in excess of 9.99% of the number of shares of
Common Stock outstanding immediately after giving effect to
such conversion or receipt of shares
as payment of interest. Since the Holder will not
be obligated to report to the
Company the number of shares of
Common Stock it may hold at the time
of a conversion hereunder, unless the conversion at issue
would result in the issuance of shares of Common Stock in excess of 9.99%
of the then outstanding shares of Common Stock without regard
to any other shares
which may be beneficially owned
by the Holder or
an affiliate thereof, the Holder shall have the authority and obligation to
determine whether the restriction contained in this Section will
limit any particular conversion hereunder and
to the extent that the
Holder determines that the limitation contained in this Section applies, the determination of 
which portion of the principal amount of this
Note is convertible shall be the responsibility and obligation of the Holder.
If the Holder has delivered a Conversion
Notice for a principal amount of this Note
that, without regard to any
other shares that the Holder or its affiliates may
beneficially own, would result in the issuance in
excess of the permitted amount hereunder, the Company shall notify the Holder of this
fact and shall honor the conversion for the
maximum principal amount permitted to be
converted on such Conversion Date
in accordance with Section  3(a) and, any principal amount tendered for conversion
in excess of  the permitted amount hereunder shall remain outstanding under this Note.
The provisions of this Section may be waived by Holder upon written notification to the Company.

 

(d)
 Other Provisions.

(i)
  Share
Reservation.  The Company
shall at all
times reserve and keep
available out of
its authorized Common
Stock the full number of
shares of Common Stock issuable upon conversion of all outstanding amounts under
this Note; and within five (5) Business Days following the receipt by the
Company of a Holder's notice that
such minimum number of Underlying
Shares is not so reserved, the Company shall promptly reserve a sufficient number of shares of Common Stock
to comply with such requirement. The Company will at all times reserve at least 5,000,000 shares of Common Stock for conversion.

 

(ii)
 Prepayment.  At 
any  time within  the 
90  day  period immediately

    	5

    	 

    

following
the Issuance
Date, the
Company
shall have
the option,
upon 10
business
days' notice
to Holder,
to pre-pay
the entire
remaining outstanding principal amount of
this Note
in cash, provided that
(i) the
Company shall pay the Holder 135% of
the Outstanding Balance, (ii) such amount must be paid in cash on the
next business day following such 10 business day notice period, and
(iii) the Holder may still convert this Note pursuant to the terms hereof at all times until such prepayment amount has
been received in
full.  Except
as set forth
in this Section
the Company may not
prepay this Note in whole or in part.

 

 

(iii)
  Terms
of Future Financings.
So long as this
Note is outstanding, upon any
issuance by the
Company or any
of its subsidiaries of
any security with any term
more favorable to the holder of such
security or with a term in
favor of the holder of such security
that was not similarly provided to the Holder
in this Note, then
the Company shall notify the Holder
of such additional or more favorable term and such term,
at Holder's option, shall become a
part of the transaction
documents with the Holder. The types of terms contained in another security
that may be more
favorable to the holder of such security
include, but are not limited to,
terms addressing conversion discounts, conversion lookback periods, interest
rates, original
issue discounts, stock sale price, private placement price per share, and warrant coverage.

 

(iv)
All calculations under
this Section 3
shall be rounded
up to the nearest
$0.00001
or whole share.

 

(v)
 Nothing  herein
shall  limit  a 
Holder's right  to 
pursue  actual damages or
declare an Event
of Default pursuant to Section 2
herein for the Company's
failure to deliver certificates
representing shares of Common Stock upon
conversion within the period specified herein
and such Holder shall have the right to pursue all remedies available to it at law or in equity including,
without limitation, a decree of specific performance
and/or injunctive relief,
in each case without the need to post a
bond or provide other security. 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.

 

(4)
 SECTION 3(A)C9)
OR 3(A)00) TRANSACTION.  So
long as this Note
is outstanding, the
Company shall not
enter into any
transaction or arrangement structured
in accordance with, based upon, or related or pursuant to, in
whole or in part, either Section 3(a)(9) of the Securities Act (a "3(a)(9)
Transaction") or Section 3(a)(l0) of the Securities Act (a "3(a)(l0)
 Transaction"). In the event that the
Company does enter into, or makes
any issuance of
Common Stock related to
a 3(a)(9) Transaction or a 3(a)(l0)
Transaction while this note is outstanding, a liquidated damages charge of25% of the
outstanding principal balance of this
Note, but not less than
$25,000, will be assessed
and will become immediately due and payable to
the Holder at its election in the form of
cash payment or addition to the balance
of this Note.

 

(5)
  PIGGYBACK
REGISTRATION RIGHTS.  The
Company shall include
on the next registration
statement the Company
files with SEC
(or on the subsequent registration
statement if

such
registration statement is
withdrawn) all shares
issuable upon conversion
of this Note. 
Failure to do so
will result in
liquidated damages of
25% of the
outstanding principal balance of
this Note, but not less than $25,000,
being immediately due and payable to the
Holder at its election in the
form of cash
payment or addition to the balance
of this Note.

 

(6)
REISSUANCE OF THIS
NOTE.

 

(a)
 Assignability. The Company
may not assign this Note.
This Note will
be binding upon  the
Company and  its
successors and  will inure to the
benefit of the Holder
and  its successors and assigns and may be assigned by the
Holder to anyone of its choosing without
Company's approval.

 

(b)
 Lost,  Stolen 
or  Mutilated  Note. 
Upon  receipt  by 
the  Company  of evidence
reasonably satisfactory to
the Company of
the loss, theft, destruction or
mutilation of this Note, and, in the case
of loss, theft or destruction,
of any indemnification undertaking by the Holder
to the Company in customary
form and, in
the case of mutilation, upon surrender
and cancellation of this
Note, the Company shall execute and deliver to the Holder a
new Note representing the outstanding Principal. 

 

(7)
 APPLICABLE LAW 
AND  VENUE.  This 
Note  shall  be 
governed  by  and construed
in accordance with
the laws of
the State of
Nevada, without
giving effect to conflicts
of laws thereof. 
Any

    	6

    	 

    

action
brought by either
party against the
other concerning the transactions
contemplated by this Agreement shall
be brought only in
the state courts
of Nevada or in the
federal courts located in the city
and county of San Diego, in the State of California. Both parties and the individuals
signing this Agreement agree to submit to the jurisdiction of
such courts.

 

(a)
 WAIVER.  Any
waiver by 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
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. Any waiver must
be in writing.

 

 

 

[Signature
Page Follows]

 

    	7

    	 

    

 

IN
WITNESS WHEREOF, the
Company has caused
this Convertible Note
to be duly
executed by a duly
authorized officer as of the date
set forth above.

 

 

 

COMPANY:

 

ALKAME HOLDINGS, INC.

 

By: /s/ Robert Eakle

Name: Robert Eakle

Title: Chief Executive Officer

 

 

 

[Signature
Page to Convertible
Note No.
1868-1] 

    	8

    	 

    

 

EXHIBIT
A NOTICE OF CONVERSION

 

Robert
Eakle, Chief Executive
Officer

Alkame
Holdings,
Inc.

3654
Lindell Road,
Suite D
#356

Las
Vegas,
NV 89103

 

 

The
undersigned hereby elects
to convert a
portion of the
$250,000 Convertible Note
No.1868-1 issued to
Cardinal Capital Group,
Inc. on October 17, 2014
into Shares of Common Stock of
Alkame Holdings, Inc. according
to the conditions set forth in such
Note as of the date written
below.

 

 

By
accepting this notice
of conversion, you
are acknowledging that
the number of
shares to be delivered
represents less than
10% (ten percent) of the common stock
outstanding. If the number of shares to be delivered
represents more than 9.99% of the common
stock outstanding, this conversion notice shall
immediately automatically extinguish and debenture Holder must
be immediately notified.

 

 

 

	Date of Conversion:	_________________
	Conversion Amount:	_________________
	Conversion Price:	_________________
	Shares to be Delivered:	_________________

 

 

 

Shares
delivered in name
of:

 

CARDINAL
CAPITAL GROUP, INC.

 

 

 

 

 

Signature:

 

By: Title:

Cardinal Capital Group, Inc.

    	9THE SECURITIES OFFERED HEREBY HAVE NOT BEEN
AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE
PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 3(b) OF THE SECURITIES ACT OF 1933, AS AMENDED, AND THE RULES AND
REGULATIONS PROMULGATED THEREUNDER (THE "1933 ACT)

 

 

us $55;000.00

ALKAME HOLDINGS, INC.

8% CONVERTIBLE REDEEMABLE NOTE

DUE OCTOBER 29, 2015

 

FOR VALUE RECEIVED, Alkame
Holdings, Inc., (the “Company” promises to pay to the order of UNION CAPITAL, LLC and its authorized successors and
permitted assigns (“Holder”), the aggregate principal face amount of Fifty Five Thousand Dollars exactly (U.S $55,000.00)
on October 29, 2015 (“Maturity Date”) and to pay interest on the principal amount outstanding hereunder at the rate
of 8% per annum commencing on October 29, 2014. This Note contains a 10% OID such that the purchase price shall be $50,000.00.
The interest will be paid to the Holder in whose name this Note is registered on the records of the Company regarding registration
and transfers of this Note. The principal of and interest on this Note are payable at 338 Crown Street, Brooklyn, NY 11225 initially,
and if changed, last appearing on the records of the Company has designated in writing by the Holder hereof from time to time.
The Company will pay each interest payment and the outstanding principal due upon this Note before or on the Maturity Date less
any amounts required by law to be deducted or withheld to the Holder of this Note by check or wire transfer addressed to such Holder
at the last address appearing on the records of the Company. The forwarding of such check or wire transfer shall constitute a payment
of outstanding principal hereunder and shall satisfy and discharge the liability for principal on this Note to the extent of the
sum represented by such check or wire transfer. Interest shall be payable in Common Stock (as defined below) pursuant to paragraph
4(b) herein.

 

This Note is subject to
the following additional provisions:

 

1.                  
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 made for such registration or transfer
or exchange, except that Holder shall pa any tax or other governmental charges payable in connection therewith.

 

2.                  
The Company shall be entitled to withhold from all payments any amounts required to be withheld
under applicable laws.

    	 

    	 

    

 

3.                  
This Note may be transferred or exchanged only in compliance with the Securities Act of 1933.
as amended ("Ad") and applicable state securities laws. Any attempted transfer to a non-qualifying party shall be treated
by the Company as void. Prior to due presentment for transfer of this Note, the Company and any agent of the Company may treat
the person in whose name this Note is duly registered on the Company's records as the owner hereof for all other purposes, whether
or not this Note be overdue, and neither the Company nor any such agent shall be affected or bound by notice to the contrary. Any
Holder of this Note electing to exercise the right of conversion set forth in Section 4(a) hereof, in addition to the requirements
set forth in Section 4(a), and any prospective transferee of this Note, also is required to give the Company written confirmation
that this Note is being converted ("Notice of Conversion") in the form annexed hereto as Exhibit A. The date of receipt
(includes receipt by telecopy of such Notice of Conversion shall be the Conversion Date.

 

4.                  
(a) The Holder of this Note is entitled at its option at any time after 180 days, and after
full cash payment for the shares convertible hereunder, to convert all or any amount of the principal face amount of this Note
then outstanding into shares of the Company’s common stock (the “Common Stock”) without restrictive legend of
any nature at a price (“Conversion Price”) for each share of Common Stock equal to the lower of (i) 60% of the lowest
trading price of the Common Stock as reported on the National Quotations Bureau OTCQB exchange which the Company’s shares
are traded or any exchange upon which the Common Stock may be traded in the future (“Exchange”), for the twenty five
prior trading days including the day upon which a Notice of Conversion is received by the Company (provided such Notice of Conversion
is delivered by fax or other electronic method of communication to the Company after 4 P.M. Eastern Standard or Daylight Savings
Time if the Holder wishes to include the same day closing price) or (ii) $0.10 per share. If the shares have not been delivered
within 3 business days, the Notice of Conversion may be rescinded. Such conversion shall be effectuated by the Company delivering
the shares of Common Stock to the Holder within 3 business days of receipt by the Company of the Notice of Conversion. Once the
Holder has received such shares of Common Stock, the Holder shall surrender this Note to the Company, executed by the Holder evidencing
such Holder’s intention to convert this Note or a specified portion hereof and accompanied by proper assignment hereof in
blank. Accrued but unpaid interest shall be subject to conversion. No fractional shares or scrip representing fractions of shares
will be issued on conversion but the number of shares issuable shall be rounded to the nearest whole share. In the event the Company
experiences a DTC “Chill” on its shares, the conversion price shall be decreased to 50% instead of 60% while that “Chill”
is in effect. In no event shall the Holder be allowed to effect a conversion if such conversion, along with all other shares of
Company Common Stock beneficially owned by the Holder and its affiliated would exceed 9.9% of the outstanding shares of the Common
Stock of the Company.

 

(b)                    
Interest on any unpaid balance of this Note shall be paid at the rate of 8% per annum. Interest
shall be paid by the Company in Common Stock (“Interest Shares”). The dollar amount converted into Interest Shares
shall be all or a portion of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice.

    	2

    	 

    

 

(c)                     
During the first 90 days after the Note has been issued, it may be prepaid at 115% of the
face amount plus any accrued interest This Note may not be prepaid after the 91st day. The redemption must be closed and paid for
within 3 business days of the Company sending the redemption demand or the redemption will be invalid and the Company may not redeem
this Note.

 

(d)                    
Upon (i) a transfer of all or substantially all of the assets of the Company to any person
in a single transaction or series of related transactions, (ii) a reclassification, capital reorganization or other change or exchange
of outstanding shares of the Common Stock, or (iii) any consolidation or merger of the Company with or into another person or entity
in which the Company is not the surviving entity (other than a merger which is effected solely to change the jurisdiction of incorporation
of the Company and results in a reclassification, conversion or exchange of shares of Common Stock solely into shares of Common
Stock) (each of items (i), (ii) and (iii) being referred to as a “Sale Event”) then in each case, the Company shall
upon request of the Holder redeem this Note in cash for 150% of the principal amount plus accrued but unpaid interest through the
date of redemption or at the election of the Holder, such Holder may convert the unpaid principal amount of this Note (together
with the amount of accrued but unpaid interest) into shares of Common Stock immediately prior to such Sale Event at the Conversion
Price.

 

(e)                     
In case of any Sale Event in connection with which this Note is not redeemed or converted,
the Company shall cause effective provision to be made so that the Holder of this Note shall have the right thereafter, by converting
this Note, to purchase or convert this Note into the kind and number of shares of stock or other securities or property (including
cash) receivable upon such reclassification, capital reorganization or other change, consolidation or merger by a holder of the
number of shares of Common Stock that could have been purchased upon exercise of the Note and at the same Conversion Price as defined
in this Note immediately prior to such Sale Event. The foregoing provisions shall similarly apply to successive Sale Events. If
the consideration received by the holders of Common Stock is other than cash, the value shall be as determined by the Board of
Directors of the Company or successor person or entity acting in good faith.

 

5.                  
No provision of this Note shall alter or impair the obligation of the Company, which is absolute
and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.

 

6.                  
The Company hereby expressly waives demand and presentment for payment, notice of non-payment,
protest, notice of protest, notice of dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action
to collect amounts called for hereunder and shall be directly and primarily liable for the payment of all sums owing and to be
owing hereto.

 

7.                  
The company agrees to pay all costs and expenses, including reasonable attorneys’ fees
and expenses, which may be incurred by the Holder in collecting any amount due under this Note.

    	3

    	 

    

 

8.                  
If one or more of the following described "Events of Default" shall occur:

 

(a)                 
The Company shall default in the payment of principal or interest on this Note or any other
note issued to the Holder by the Company; or

 

(b)                 
Any of the representations or warranties made by the Company herein or in any certificate
or financial or other written statements heretofore or hereafter furnished by or on behalf of the Company in connection with the
execution and delivery of this Note, or the Securities Purchase Agreement under which this note was issued shall be false or misleading
in any respect; or

 

(c)                  
The Company shall fail to perform or observe, in any respect, any covenant, term, provision,
condition, agreement or obligation of the Company under this Note or any other note issued to the Holder, and not cure such failure
within 10 days of such event; or

 

(d)                 
The Company shall (1) become insolvent; (2) admit in writing its inability to pay its debts
generally as they mature; (3) make an assignment for the benefit of creditors or commence proceedings for its dissolution; (4)
apply for or consent to the appointment of a trustee, liquidator or receiver for its or for a substantial part of its property
or business; (5) file a petition for bankruptcy relief, consent to the filing of such petition or have filed against it an involuntary
petition for bankruptcy relief. all under federal or state laws as applicable; or

 

(e)                  
A trustee, liquidator or received shall be appointed for the Company or for a substantial
part of its property or business without its consent and shall not be discharged within thirty (30) days after such appointment;
or

 

(f)                  
Any governmental agency or any court of competent jurisdiction at the instance of the governmental
agency shall assume custody or control of the whole or any substantial portion of the properties or assets of the Company; or

 

(g)                  
One or
more money judgments,
writs or warrants
of attachment, or
similar process, in excess
of fifty thousand
dollars ($50,000) in the
aggregate, shall be entered or filed
against the Company or any of its
properties or other assets and shall
remain unpaid, unvacated, unbonded or unstayed
for a period of fifteen (15)
days or in any event later than five
(5) days prior to the date of any proposed sale thereunder;
or

 

(h)                 
Defaulted on
or breached any
term of any
other note of
similar debt instrument
into which the
Company has entered
and failed to
cure such default within the
appropriate grace period; or

 

(i)                   
The Company
shall have its
Common Stock delisted
from an exchange
(in- cluding the OTCBB
exchange) or, if
the Common Stock
trades on an
exchange, then trading in the Common Stock shall be suspended
for more than 10 consecutive days;

 

(j)                   
Intentionally Deleted

    	4

    	 

    

 

(k)                 
The Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein
without restrictive legend within 3 business days of its receipt of a Notice of Conversion; or

 

(l)                   
The Company shall not replenish the reserve set forth in Section 12, within 3 business days
of the request of the Holder.

 

(m)                
The Company shall not be "current" in its filings with the Securities and Exchange
Commission; or

 

(n)                 
The Company shall lose the "bid" price for its stock in a market (including the
OTCQB marketplace or other exchange).

 

Then, or at any time thereafter, unless cured,
and in each and every such case, unless such Event of Default shall have been waived in writing by the Holder (which waiver shall
not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder's sole discretion, the Holder
may consider this Note immediately due and payable, without presentment, demand, protest or (further) notice of any kind (other
than notice of acceleration), all of which are hereby expressly waived, anything herein or in any note or other instruments contained
to the contrary notwithstanding, and the Holder may immediately, and without expiration of any period of grace, enforce any and
all of the Holder's rights and remedies provided herein or any other rights or remedies afforded by law. Upon an Event of Default,
interest shall accrue at a default interest rate of 24%;o per annum or, if such rate is usurious or not permitted by current law,
then at the highest rate of interest permitted by law. In the event of a breach of Section 8(k) the penalty shall be $250 per day
the shares are not issued beginning on the 4th day after the conversion notice was delivered to the Company. This penalty shall
increase to $500 per day beginning on the 10th day. The penalty for a breach of Section 8(n) shall be an increase of the outstanding
principal amounts by 20%. In case of a breach of Section 8(i), the outstanding principal due under this Note shall increase by
50%. If this Note is not paid at maturity, the outstanding principal due under this Note shall increase by 10%.

 

If the Holder shall commence an action or proceeding
to enforce any provisions of this Note, including, without limitation, engaging an attomey, then if the Holder prevails in such
action, the Holder shall be reimbursed by the Company for its attorneys' fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or proceeding.

 

9.                  
In case any provision of this Note is held by a court of competent jurisdiction to be excessive
in scope or otherwise invalid or unenforceable, such provision shall be adjusted rather than voided, if possible, so that it is
enforceable to the maximum extent possible, and the validity and enforceability of the remaining provisions of this Note will not
in any way be affected or impaired thereby.

 

10.               
Neither this Note nor any term hereof may be amended, waived, discharged or terminated other
than by a written instrument signed by the Company and the Holder.

    	5

    	 

    

11.               
The Company represents that it is not a "shell" issuer and has never been a “shell"
issuer or that if it previously has been a "shell" issuer that at least 1 2 months have passed since the Company has
reported form 10 type information indicating it is no longer a "shell issuer. Further. The Company will instruct its counsel
to either (i) write a 144- 3(a)(9) opinion to allow for salability of the conversion shares or (ii) accept such opinion from Holder's
counsel.

 

12.               
The Company shall issue irrevocable transfer agent instructions reserving 2,745,000 shares
of its Common Stock for conversions under this Note (the "Share Reserve"). The reserve shall be replenished as needed
to allow for conversions of this Note. Upon full conversion of this Note, any shares remaining in the Share Reserve shall be cancelled.
The Company shall pay all costs associated with issuing and delivering the shares. The company should at all times reserve a minimum
of four times the amount of shares required if the note would be fully converted. The Holder may reasonably request increases from
time to time to reserve such amounts.

 

13.               
The Company will give the Holder direct notice of any corporate actions including but not
limited to name changes, stock splits, recapitalizations etc. This notice shall be given to the Holder as soon as possible under
law.

 

14.               
This Note shall be governed by and construed in accordance with the laws of New York applicable
to contracts made and wholly to be performed within the State of New York and shall be binding upon the successors and assigns
of each party hereto. The Holder and the Company hereby mutually waive trial by jury and consent to exclusive jurisdiction and
venue in the courts of the State of New York. This Agreement may be executed in counterparts, and the facsimile transmission of
an executed counterpart to this Agreement shall be effective as an original.

    	6

    	 

    

 

IN WITNESS WHEREOF, the Company has
caused this Note to be duly executed by an officer thereunto duly authorized.

 

Dated: 10/29/14

 

 

 

ALKAME HOLDINGS, INC.

 

By: /s/ Robert K. Eakle

Title: CEO

    	7

    	 

    

 

EXHIBIT A

 

NOTICE OF CONVERSION

 

(To be Executed by the Registered
Holder in order to Convert the Note)

 

The undersigned hereby irrevocably
elects to convert $____________of the above Note into Shares of Common Stock of Alkame Holdings, Inc, ("Shares") according
to the conditions set forth in such Note. as of the date written below.

 

If Shares are to be issued in the
name of a person other than the undersigned, the undersigned will pay all transfer and other taxes and charges payable with respect
thereto.

 

Date of Conversion: _____________________

Applicable Conversion Price: _____________________

Signature: _____________________

[Print Name of Holder and Title of Signer]

Address: _____________________

_____________________

 

SSN or EIN: [Print Name of Holder and Title of Signer]

Shares are to be registered in the following name: [Print
Name of Holder and Title of Signer]

 

Name: _____________________

Address: _____________________

Tel: _____________________

Fax: _____________________

SSN or EIN: _____________________

 

Shares are to be sent or delivered to the following account:

 

Account Name: _____________________

Address: _____________________

    	8

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