Document:

Exhibit 4.1

                               AMENDING AGREEMENT

THIS AMENDING AGREEMENT dated this 20th day of August, 2014

BETWEEN:

                             MAGNA EQUITIES II, LLC

                   (FORMERLY KNOWN AS HANOVER HOLDINGS I, LLC)

                                     - AND -

                                 TUNGSTEN CORP.

BACKGROUND

A.   Magna Equities II, LLC ("Holder") and Tungsten Corp. ("Company") completed
     a transaction involving the Senior Convertible Note (the "Note") dated
     January 2nd, 2014 in the Principal amount of $127,500.

B.   The parties desire to amend the Note on the terms and conditions set forth
     in this Amending Agreement for the Note, and any previous terms and
     conditions shall hereby be bound by the amendments set forth hereof.

     IN CONSIDERATION OF the Parties agreeing to amend their obligations in the
existing Note, and other valuable consideration, the receipt and sufficiency of
which is hereby acknowledged, both Parties agree to keep, perform and fulfill
the promises, conditions and agreements below:

AMENDMENTS

1.   The Agreement is amended as follows in regards to Section 3.b.ii:

     a.   "NEW CONVERSION PRICE" means, as of any Conversion Date or other date
          of determination, the lesser price of i) a 35% discount from the
          lowest Trading Price for the three (3) trading days prior to the day
          that the Holder requests conversion or ii) "CONVERSION PRICE" as
          stated in the Note.

     b.   All terms, conditions and rights afforded pursuant to the conditions
          of the Note shall remain in full force and effect.

IN WITNESS WHEREOF, the parties have caused this agreement to be duly executed
by an officer thereunto duly authorized, as of the date first written above.

Magna Equities II, LLC                             Tungsten Corp.

/s/ Joshua Sason                                   /s/ Guy Martin
-----------------------------                      -----------------------------
Joshua Sason                                       Name:  Guy Martin
Managing Member                                    Title: PresidentExhibit 4.2

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

PRINCIPAL AMOUNT: $51,500                            ISSUE DATE: AUGUST 20, 2014
PURCHASE PRICE: $51,500

                           CONVERTIBLE PROMISSORY NOTE

     FOR VALUE  RECEIVED,  TUNGSTEN  CORP.,  a NEVADA  corporation  (hereinafter
called the  "Borrower"),  hereby  promises to pay to the order of MAGNA EQUITIES
II, LLC, a New York corporation, or registered assigns (the "Holder") the sum of
Fifty One Thousand Dollars ($51,500),  on August 20, 2015 (the "Maturity Date"),
and to pay interest on the unpaid principal balance hereof at the rate of twelve
percent (12%) (the  "Interest  Rate") per annum from the date hereof (the "Issue
Date")  until the same  becomes  due and  payable,  whether at  maturity or upon
acceleration or by prepayment or otherwise,  compounded on a monthly basis. This
Note may not be prepaid in whole or in part except as otherwise  explicitly  set
forth in Section 1.9 hereof.  Any amount of  principal  or interest on this Note
which is not paid when due shall bear interest at the rate of twenty two percent
(22%)  per annum  from the due date  thereof  until  the same is paid  ("Default
Interest").  Interest  shall  commence  accruing  on the  Issue  Date,  shall be
computed on the basis of a 365-day year and the actual  number of days  elapsed.
All payments due hereunder (to the extent not converted into common stock,  (the
"Common  Stock") in  accordance  with the terms  hereof) shall be made in lawful
money of the  United  States  of  America.  All  payments  shall be made at such
address as the Holder shall  hereafter  give to the  Borrower by written  notice
made in  accordance  with the  provisions  of this  Note.  Whenever  any  amount
expressed  to be due by the  terms of this Note is due on any day which is not a
business day, the same shall instead be due on the next  succeeding day which is
a business  day and, in the case of any  interest  payment date which is not the
date on which this Note is paid in full,  the  extension of the due date thereof
shall not be taken  into  account  for  purposes  of  determining  the amount of
interest due on such date. As used in this Note,  the term  "business day" shall
mean any day other than a Saturday, Sunday or a day on which commercial banks in
the city of New York,  New York are  authorized  or required by law or executive
order to remain closed.  Each  capitalized  term used herein,  and not otherwise
defined,  shall have the meaning  ascribed  thereto in that  certain  Securities
Purchase  Agreement  dated  the date  hereof,  pursuant  to which  this Note was
originally issued (the "Purchase Agreement").

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

     The following terms shall apply to this Note:

                          ARTICLE I. CONVERSION RIGHTS

     1.1  Conversion  Right.  The Holder shall have the right from time to time,
and at any time during the period  beginning on the date of this Note and ending
on the  later of (i) the  Maturity  Date and  (ii)  the date of  payment  of the
Default Amount (as defined in Article III) pursuant to Section 1.6(a) or Article
III, each in respect of the remaining  outstanding principal amount of this Note

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to convert all or any part of the  outstanding  and unpaid  principal  amount of
this Note into fully paid and  non-assessable  shares of Common  Stock,  as such
Common Stock exists on the Issue Date,  or any shares of capital  stock or other
securities  of the  Borrower  into which such Common  Stock shall  hereafter  be
changed  or  reclassified  at the  conversion  price  (the  "Conversion  Price")
determined as provided herein (a "Conversion");  provided,  however,  that in no
event shall the Holder be entitled to convert any portion of this Note in excess
of that portion of this Note upon  conversion of which the sum of (1) the number
of shares of Common Stock  beneficially  owned by the Holder and its  affiliates
(other  than  shares of Common  Stock  which  may be deemed  beneficially  owned
through the ownership of the unconverted portion of the Notes or the unexercised
or  unconverted  portion  of any other  security  of the  Borrower  subject to a
limitation  on  conversion or exercise  analogous to the  limitations  contained
herein)  and (2) the  number  of  shares  of  Common  Stock  issuable  upon  the
conversion  of the portion of this Note with respect to which the  determination
of this  proviso is being made,  would  result in  beneficial  ownership  by the
Holder and its affiliates of more than 9.99% of the outstanding shares of Common
Stock.  For  purposes  of the  proviso to the  immediately  preceding  sentence,
beneficial ownership shall be determined in accordance with Section 13(d) of the
Securities   Exchange  Act  of  1934,  as  amended  (the  "Exchange  Act"),  and
Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such
proviso,  provided,  further, however, that the limitations on conversion may be
waived by the Holder upon, at the election of the Holder, not less than 61 days'
prior notice to the Borrower and the  provisions  of the  conversion  limitation
shall  continue to apply until such 61st day (or such later date,  as determined
by the Holder,  as may be  specified  in such  notice of waiver).  The number of
shares of Common Stock to be issued upon each  conversion  of this Note shall be
determined  by  dividing  the  Conversion  Amount  (as  defined  below)  by  the
applicable  Conversion  Price then in effect on the date specified in the notice
of  conversion,  in the form  attached  hereto  as  Exhibit  A (the  "Notice  of
Conversion"), delivered to the Borrower by the Holder in accordance with Section
1.4 below;  provided that the Notice of Conversion is submitted by facsimile (or
by other means resulting in, or reasonably expected to result in, notice) to the
Borrower  before 6:00 p.m., New York, New York time on such conversion date (the
"Conversion  Date").  The term  "Conversion  Amount" means,  with respect to any
conversion of this Note, the sum of (1) the principal  amount of this Note to be
converted in such  conversion  plus (2) at the  Borrower's  option,  accrued and
unpaid interest, if any, on such principal amount at the interest rates provided
in this Note to the Conversion Date, provided,  however,  that the Company shall
have the right to pay any or all  interest  in cash  plus (3) at the  Borrower's
option,  Default Interest, if any, on the amounts referred to in the immediately
preceding  clauses (1) and/or (2) plus (4) at the Holder's  option,  any amounts
owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.

     1.2 Conversion Price.

     (a) Calculation of Conversion  Price. The conversion price (the "Conversion
Price") shall be the Variable  Conversion Price (as defined  herein)(subject  to
equitable  adjustments for stock splits,  stock dividends or rights offerings by
the Borrower  relating to the  Borrower's  securities  or the  securities of any
subsidiary of the Borrower, combinations,  recapitalization,  reclassifications,
extraordinary distributions and similar events). The "Variable Conversion Price"
shall mean a 35% Discount from the Lowest Trading Price in the Three (3) Trading
Days  prior to the day that the  Holder  requests  conversion.  "Trading  Price"
means,  for any  security  as of any  date,  the  lowest  trading  price  on the
Over-the-Counter  Bulletin Board, or applicable  trading market (the "OTCQB") as
reported  by  a  reliable  reporting  service  ("Reporting   Service")  mutually
acceptable to Borrower and Holder (i.e. Bloomberg).  If the Trading Price cannot
be calculated for such security on such date in the manner provided  above,  the
Trading  Price shall be the fair  market  value as  mutually  determined  by the
Borrower and the holders of a majority in interest of the Notes being  converted
for which the calculation of the Trading Price is required in order to determine
the  Conversion  Price of such Notes.  "Trading Day" shall mean any day on which
the Common  Stock is traded for any  period on the  OTCQB,  or on the  principal
securities exchange or other securities market on which the Common Stock is then
being traded.  If the Issuer's Common stock is chilled for deposit at DTC and/or
becomes  chilled  at any point  while this  Agreement  remains  outstanding,  an
additional  8% discount  will be  attributed  to the  Conversion  Price  defined
hereof.  If the Borrower is unable to issue any shares under this  provision due
to the fact that there is an  insufficient  number of  authorized  and  unissued
shares  available,  the Holder promises not to force the Borrower to issue these
shares or trigger an Event of Default,  provided that Borrower  takes  immediate
steps required to get the appropriate level of approval from shareholders or the
board of directors, where applicable to raise the number of authorized shares to
satisfy the Notice of Conversion.

     (b) Conversion Price During Major Announcements.  Notwithstanding  anything
contained in Section 1.2(a) to the contrary, in the event the Borrower (i) makes
a public  announcement  that it intends to  consolidate  or merge with any other
corporation  (other  than a merger in which the  Borrower  is the  surviving  or

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

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

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

     1.4 Method of Conversion.

     (a)  Mechanics  of  Conversion.  Subject to Section  1.1,  this Note may be
converted  by the Holder in whole or in part at any time from time to time after
the Issue Date, by : (A)  submitting to the Borrower a Notice of Conversion  (by
facsimile,  e-mail or other reasonable means of communication  dispatched on the
Conversion  Date prior to 6:00 p.m., New York, New York time) and (B) subject to
Section 1.4(b), surrendering this Note at the principal office of the Borrower.

     (b)  Surrender  of Note Upon  Conversion.  Notwithstanding  anything to the
contrary set forth herein,  upon  conversion of this Note in accordance with the
terms hereof, the Holder shall not be required to physically surrender this Note
to the Borrower  unless the entire  unpaid  principal  amount of this Note is so
converted.  The Holder and the  Borrower  shall  maintain  records  showing  the
principal  amount so converted  and the dates of such  conversions  or shall use
such other method, reasonably satisfactory to the Holder and the Borrower, so as
not to require physical surrender of this Note upon each such conversion. In the
event of any dispute or discrepancy,  such records of the Borrower shall,  PRIMA
FACIE,  be  controlling  and  determinative  in the absence of  manifest  error.
Notwithstanding  the  foregoing,  if any  portion of this Note is  converted  as
aforesaid,  the  Holder may not  transfer  this Note  unless  the  Holder  first
physically  surrenders  this Note to the  Borrower,  whereupon the Borrower will
forthwith  issue and  deliver  upon the  order of the  Holder a new Note of like

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tenor,  registered as the Holder (upon  payment by the Holder of any  applicable
transfer taxes) may request,  representing in the aggregate the remaining unpaid
principal  amount of this Note.  The Holder and any  assignee,  by acceptance of
this Note,  acknowledge  and agree  that,  by reason of the  provisions  of this
paragraph,  following  conversion  of a portion  of this  Note,  the  unpaid and
unconverted  principal  amount of this Note represented by this Note may be less
than the amount stated on the face hereof.

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

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

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

     (f) Delivery of Common Stock by Electronic Transfer.  In lieu of delivering
physical  certificates  representing  the Common Stock issuable upon conversion,
provided the Borrower's  transfer agent is participating in the Depository Trust
Company  ("DTC") Fast  Automated  Securities  Transfer  ("FAST")  program,  upon
request  of the Holder  and its  compliance  with the  provisions  contained  in
Section 1.1 and in this Section 1.4, the Borrower  shall use its best efforts to
cause its transfer  agent to  electronically  transmit the Common Stock issuable
upon  conversion to the Holder by crediting the account of Holder's Prime Broker
with DTC through its Deposit Withdrawal Agent Commission ("DWAC") system.

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

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Note.  The Borrower  agrees that the right to convert is a valuable right to the
Holder. The damages resulting from a failure, attempt to frustrate, interference
with  such  conversion  right  are  difficult  if  not  impossible  to  qualify.
Accordingly  the  parties  acknowledge  that the  liquidated  damages  provision
contained in this Section 1.4(g) are justified.

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

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

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

     1.6 Effect of Certain Events.

     (a) Effect of Merger, Consolidation,  Etc. At the option of the Holder, the
sale, conveyance or disposition of all or substantially all of the assets of the
Borrower, the effectuation by the Borrower of a transaction or series of related
transactions  in which  more than 50% of the  voting  power of the  Borrower  is
disposed of, or the consolidation,  merger or other business  combination of the
Borrower  with or into any other  Person (as defined  below) or Persons when the
Borrower  is not the  survivor  shall  either:  (i) be  deemed to be an Event of
Default (as defined in Article  III)  pursuant  to which the  Borrower  shall be
required to pay to the Holder  upon the  consummation  of and as a condition  to
such  transaction  an amount equal to the Default  Amount (as defined in Article
III) or (ii) be treated  pursuant to Section 1.6(b) hereof.  "Person" shall mean
any   individual,   corporation,   limited   liability   company,   partnership,
association, trust or other entity or organization.

                                       5
<PAGE>
     (b) Adjustment Due to Merger, Consolidation, Etc. If, at any time when this
Note is issued  and  outstanding  and prior to  conversion  of all of the Notes,
there shall be any merger, consolidation,  exchange of shares, recapitalization,
reorganization,  or other similar  event,  as a result of which shares of Common
Stock of the Borrower  shall be changed  into the same or a different  number of
shares of another  class or classes of stock or  securities  of the  Borrower or
another entity, or in case of any sale or conveyance of all or substantially all
of the assets of the Borrower  other than in connection  with a plan of complete
liquidation of the Borrower,  then the Holder of this Note shall thereafter have
the right to receive upon  conversion of this Note,  upon the basis and upon the
terms and conditions  specified herein and in lieu of the shares of Common Stock
immediately  theretofore  issuable upon  conversion,  such stock,  securities or
assets which the Holder would have been entitled to receive in such  transaction
had this Note  been  converted  in full  immediately  prior to such  transaction
(without regard to any  limitations on conversion set forth herein),  and in any
such case  appropriate  provisions  shall be made with respect to the rights and
interests  of the  Holder  of this  Note to the end that the  provisions  hereof
(including,  without  limitation,  provisions  for  adjustment of the Conversion
Price and of the number of shares  issuable  upon  conversion of the Note) shall
thereafter be  applicable,  as nearly as may be  practicable  in relation to any
securities or assets  thereafter  deliverable  upon the conversion  hereof.  The
Borrower  shall not affect any  transaction  described  in this  Section  1.6(b)
unless (a) it first  gives,  to the extent  practicable,  thirty (30) days prior
written  notice  (but in any  event at least  fifteen  (15) days  prior  written
notice) of the record date of the special meeting of shareholders to approve, or
if  there  is  no  such  record  date,   the   consummation   of,  such  merger,
consolidation,  exchange of shares,  recapitalization,  reorganization  or other
similar event or sale of assets  (during which time the Holder shall be entitled
to convert this Note) and (b) the  resulting  successor or acquiring  entity (if
not the Borrower) assumes by written  instrument the obligations of this Section
1.6(b). The above provisions shall similarly apply to successive consolidations,
mergers, sales, transfers or share exchanges.

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

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

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

                                       6
<PAGE>
the Conversion  Price will be made upon the actual issuance of such Common Stock
upon  the  exercise  of such  Options  or upon the  conversion  or  exchange  of
Convertible Securities issuable upon exercise of such Options.

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

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

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

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

     1.8 Status as  Shareholder.  Upon submission of a Notice of Conversion by a
Holder,  (i) the shares covered  thereby  (other than the shares,  if any, which
cannot be issued  because their  issuance  would exceed such Holder's  allocated
portion  of the  Reserved  Amount  or  Maximum  Share  Amount)  shall be  deemed
converted  into shares of Common Stock and (ii) the Holder's  rights as a Holder
of such converted portion of this Note shall cease and terminate, excepting only
the right to receive  certificates  for such  shares of Common  Stock and to any
remedies  provided  herein or  otherwise  available  at law or in equity to such
Holder  because of a failure by the  Borrower  to comply  with the terms of this
Note.  Notwithstanding the foregoing,  if a Holder has not received certificates
for all shares of Common Stock prior to the tenth (10th)  business day after the
expiration  of the Deadline  with respect to a conversion of any portion of this
Note for any  reason,  then  (unless the Holder  otherwise  elects to retain its
status as a holder of Common  Stock by so  notifying  the  Borrower)  the Holder

                                       7
<PAGE>
shall  regain  the  rights  of a  Holder  of  this  Note  with  respect  to such
unconverted   portions  of  this  Note  and  the  Borrower  shall,  as  soon  as
practicable,  return such unconverted Note to the Holder or, if the Note has not
been  surrendered,  adjust its records to reflect that such portion of this Note
has not been converted.  In all cases, the Holder shall retain all of its rights
and remedies (including, without limitation, (i) the right to receive Conversion
Default Payments pursuant to Section 1.3 to the extent required thereby for such
Conversion  Default and any subsequent  Conversion Default and (ii) the right to
have the Conversion Price with respect to subsequent  conversions  determined in
accordance with Section 1.3) for the Borrower's failure to convert this Note.

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

                          ARTICLE II. CERTAIN COVENANTS

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

     (a) other than indebtedness  existing as of the Initial Date or incurred in
the  ordinary  course  of  business  for trade  expenses  (not  borrowed  money)
("Permitted  Indebtedness"),  enter into, create,  incur,  assume,  guarantee or
suffer to 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,  which  indebtedness  shall be senior is respect to  security to this
Note;

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

                                       8
<PAGE>
     (c)  amend  its  charter  documents,  including,  without  limitation,  its
certificate  of  incorporation  and bylaws,  in any manner that  materially  and
adversely affects any rights of the Holder;

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

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

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

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

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

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

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

                         ARTICLE III. EVENTS OF DEFAULT

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

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

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

                                       9
<PAGE>
     3.3 Breach of  Covenants.  The Borrower  breaches any material  covenant or
other  material  term or  condition  contained  in this Note and any  collateral
documents  including  but not limited to the Purchase  Agreement and such breach
continues  for a period of ten (10) days  after  written  notice  thereof to the
Borrower from the Holder;

     3.4  Breach  of  Representations  and  Warranties.  Any  representation  or
warranty  of  the  Borrower  made  herein  or in  any  agreement,  statement  or
certificate  given  in  writing  pursuant  hereto  or  in  connection   herewith
(including,  without  limitation,  the  Purchase  Agreement),  shall be false or
misleading  in any  material  respect  when made and the breach of which has (or
with the passage of time will have) a material  adverse  effect on the rights of
the Holder with respect to this Note or the Purchase Agreement;
     3.5 Bankruptcy,  Receiver or Trustee. The Borrower or any subsidiary of the
Borrower shall commence, or there shall be commenced against the Borrower or any
subsidiary of the Borrower under any applicable bankruptcy or insolvency laws as
now or  hereafter  in effect or any  successor  thereto,  or the Borrower or any
subsidiary   of  the  Borrower   commences  any  other   proceeding   under  any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency  or  liquidation  or similar law of any  jurisdiction  whether now or
hereafter in effect  relating to the Borrower or any  subsidiary of the Borrower
or there is commenced against the Borrower or any subsidiary of the Borrower any
such bankruptcy,  insolvency or other proceeding which remains undismissed for a
period  of 61  days;  or the  Borrower  or any  subsidiary  of the  Borrower  is
adjudicated  insolvent  or  bankrupt;  or any  order of  relief  or other  order
approving  any such  case or  proceeding  is  entered;  or the  Borrower  or any
subsidiary of the Borrower suffers any appointment of any custodian,  private or
court  appointed  receiver  or the  like for it or any  substantial  part of its
property which continues undischarged or unstayed for a period of sixty one (61)
days;  or the  Borrower  or any  subsidiary  of the  Borrower  makes  a  general
assignment  for the benefit of creditors;  or the Borrower or any  subsidiary of
the  Borrower  shall fail to pay,  or shall  state that it is unable to pay,  or
shall be unable to pay, its debts  generally as they become due; or the Borrower
or any  subsidiary of the Borrower  shall call a meeting of its creditors with a
view to arranging a composition,  adjustment or  restructuring  of its debts; or
the Borrower or any  subsidiary  of the Borrower  shall by any act or failure to
act expressly indicate its consent to, approval of or acquiescence in any of the
foregoing;  or any  corporate  or other  action is taken by the  Borrower or any
subsidiary of the Borrower for the purpose of effecting any of the foregoing;

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

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

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

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

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

                                       10
<PAGE>
     3.11  Cessation of  Operations.  Any cessation of operations by Borrower or
Borrower admits it is otherwise  generally unable to pay its debts as such debts
become due, provided,  however, that any disclosure of the Borrower's ability to
continue as a "going concern" shall not be an admission that the Borrower cannot
pay its debts as they become due.

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

     3.13  Financial  Statement  Restatement.  The  restatement of any financial
statements  filed by the  Borrower  with the SEC for any date or period from two
years  prior to the Issue  Date of this  Note and  until  this Note is no longer
outstanding,  if the result of such  restatement  would,  by  comparison  to the
unrestated  financial  statement,  have constituted a material adverse effect on
the rights of the Holder with respect to this Note or the Purchase Agreement.

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

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

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

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

     3.18 Cross-Default.  Notwithstanding  anything to the contrary contained in
this Note or the other  related or companion  documents,  a breach or default by
the Borrower of any covenant or other term or condition  contained in any of the
Other  Agreements,  after the passage of all applicable notice and cure or grace
periods,  shall,  at the option of the  Borrower,  be considered a default under
this Note and the Other Agreements,  in which event the Holder shall be entitled
(but in no event  required) to apply all rights and remedies of the Holder under
the  terms of this Note and the Other  Agreements  by reason of a default  under
said Other Agreement or hereunder.  "Other Agreements" means  collectively,  all
agreements and instruments between,  among or by: (1) the Borrower,  and, or for
the  benefit  of, (2) the Holder and any  affiliate  of the  Holder,  including,
without  limitation,  promissory  notes;  provided,  however,  the  term  "Other
Agreements"  shall not include the related or companion  documents to this Note.
Each of the loan  transactions  will be  cross-defaulted  with each  other  loan
transaction  and with all other  existing  and future  debt of  Borrower  to the
Holder.

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

Upon the  occurrence  and  during  the  continuation  of any  Event  of  Default
specified in Section 3.1 (solely  with  respect to failure to pay the  principal
hereof or interest thereon when due at the Maturity Date), the Note shall become
immediately  due and payable and the Borrower  shall pay to the Holder,  in full
satisfaction  of its obligations  hereunder,  an amount equal to the Default Sum
(as defined  herein).  UPON THE  OCCURRENCE AND DURING THE  CONTINUATION  OF ANY
EVENT OF DEFAULT SPECIFIED IN SECTION 3.2, THE NOTE SHALL BECOME IMMEDIATELY DUE
AND PAYABLE AND THE BORROWER SHALL PAY TO THE HOLDER,  IN FULL  SATISFACTION  OF
ITS OBLIGTAIONS  HEREUNDER,  AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED
HEREIN);  MULTIPLIED  BY (Z)  TWO  (2).  Upon  the  occurrence  and  during  the

                                       11
<PAGE>
continuation  of any Event of Default  specified  in Sections  3.1 (solely  with
respect to failure to pay the principal  hereof or interest  thereon when due on
this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon
acceleration),  3.3, 3.4, 3.6, 3.8, 3.9, 3.11,  3.12,  3.13,  3.14,  3.15, 3.16,
3.17, 3.18, 3.19, and/or 3.20 exercisable through the delivery of written notice
to the Borrower by such Holders (the "Default Notice"),  and upon the occurrence
of an Event of Default  specified  in the  remaining  sections of  Articles  III
(other  than  failure to pay the  principal  hereof or  interest  thereon at the
Maturity  Date  specified  in  Section  3.1  hereof),   the  Note  shall  become
immediately  due and payable and the Borrower  shall pay to the Holder,  in full
satisfaction of its obligations hereunder, an amount equal to the greater of (i)
150%  times the sum of (w) the then  outstanding  principal  amount of this Note
plus (x) accrued and unpaid interest on the unpaid principal amount of this Note
to the date of  payment  (the  "Mandatory  Prepayment  Date")  plus (y)  Default
Interest,  if any, on the amounts referred to in clauses (w) and/or (x) plus (z)
any amounts owed to the Holder  pursuant to Sections 1.3 and 1.4(g)  hereof (the
then  outstanding  principal amount of this Note to the date of payment plus the
amounts  referred to in clauses (x), (y) and (z) shall  collectively be known as
the "Default  Sum") or (ii) the "parity value" of the Default Sum to be prepaid,
where  parity  value  means (a) the  highest  number  of shares of Common  Stock
issuable  upon  conversion  of or  otherwise  pursuant  to such  Default  Sum in
accordance  with Article I, treating the Trading Day  immediately  preceding the
Mandatory  Prepayment Date as the "Conversion  Date" for purposes of determining
the lowest  applicable  Conversion  Price,  unless the Default Event arises as a
result of such  breach in respect of a  specific  Conversion  Date in which case
such Conversion Date shall be the Conversion Date, multiplied by (b) the highest
Closing  Price for the Common Stock  during the period  beginning on the date of
first  occurrence  of the  Event of  Default  and  ending  one day  prior to the
Mandatory  Prepayment Date (the "Default  Amount") and all other amounts payable
hereunder  shall  immediately  become  due  and  payable,  all  without  demand,
presentment or notice,  all of which hereby are expressly waived,  together with
all  costs,  including,   without  limitation,   legal  fees  and  expenses,  of
collection,  and the Holder  shall be entitled to exercise  all other rights and
remedies available at low or in equity.

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

                            ARTICLE IV. MISCELLANEOUS

     4.1 Failure or  Indulgence  Not Waiver.  No failure or delay on the part of
the Holder in the  exercise of any power,  right or  privilege  hereunder  shall
operate as a waiver  thereof,  nor shall any single or partial  exercise  of any
such power,  right or privilege preclude other or further exercise thereof or of
any other right, power or privileges. All rights and remedies existing hereunder
are  cumulative  to, and not  exclusive  of, any  rights or  remedies  otherwise
available.

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

                                       12
<PAGE>
     If to the Borrower, to:
     TUNGSTEN CORP.
     1671 SW 105 LANE
     DAVIE, FL 33324
     Attn: Mr. Guy Martin, CEO

     If to the Holder:
     MAGNA GROUP
     5 HANOVER SQUARE
     NEW YORK, NY 10004
     Attn: Joshua Sason, Managing Member

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

     4.4  Assignability.  This Note shall be binding  upon the  Borrower and its
successors and assigns,  and shall inure to be the benefit of the Holder and its
successors  and assigns.  Each  transferee  of this Note must be an  "accredited
investor" (as defined in Rule 501(a) of the 1933 Act).  Notwithstanding anything
in this  Note to the  contrary,  this  Note  may be  pledged  as  collateral  in
connection with a bona fide margin account or other lending arrangement.

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

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

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

     4.7  Certain  Amounts.  Whenever  pursuant  to this  Note the  Borrower  is
required to pay an amount in excess of the outstanding  principal amount (or the
portion  thereof  required  to be paid at that  time)  plus  accrued  and unpaid
interest  plus Default  Interest on such  interest,  the Borrower and the Holder
agree that the actual  damages to the Holder from the receipt of cash payment on
this Note may be  difficult  to  determine  and the  amount to be so paid by the
Borrower  represents  stipulated  damages  and not a penalty  and is intended to
compensate  the Holder in part for loss of the  opportunity to convert this Note

                                       13
<PAGE>
and to earn a return  from the sale of  shares  of Common  Stock  acquired  upon
conversion  of this Note at a price in excess of the price paid for such  shares
pursuant to this Note. The Borrower and the Holder hereby agree that such amount
of stipulated  damages is not plainly  disproportionate  to the possible loss to
the Holder from the receipt of a cash payment without the opportunity to convert
this Note into shares of Common Stock.

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

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

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

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

                            (Signature Pages Follow)

                                       14
<PAGE>
     IN WITNESS WHEREOF,  Borrower has caused this Note to be signed in its name
by its duly authorized officer this August 20, 2014.

                                        TUNGSTEN CORP.

                                        By: /s/ Guy Martin
                                           ------------------------------
                                           Guy Martin, CEO

                                       15
<PAGE>
Exhibit A.

                              NOTICE OF CONVERSION

     The undersigned hereby elects to convert $________________ of the principal
amount of the Note  (defined  below)  into  Shares of Common  Stock of  TUNGSTEN
CORP., a(n) NEVADA  Corporation (the "BORROWER")  according to the conditions of
the  Convertible  Note of the Borrower dated as of August 20, 2014 (the "NOTE").
No fee will be charged to the Holder or Holder's  Custodian for any  conversion,
except for transfer taxes, if any.

Box Checked as to applicable instructions:

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

     Name of DTC Prime Broker:
                              ------------------------------------------------

     Account Number:
                              ------------------------------------------------

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

          Magna Equities II, LLC
          EIN #: 45-2043511

Date of Conversion:          ------------------------------------

Conversion Price:            ------------------------------------

Shares to Be Delivered:      ------------------------------------

Remaining Principal Balance Due
After This Conversion:       ------------------------------------

Signature                    ------------------------------------

Print Name:                  Joshua Sason
                             ------------------------------------

                                       16
<PAGE>
                              FORM OF LEGAL OPINION

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

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

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

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

     5. To our knowledge,  the Company has filed all reports (the "SEC Reports")
required to be filed by it under Sections 13(a) and 15(d) of the Exchange Act of
1934, as amended (the "Exchange Act"). As of their respective  filing dates, the
SEC Reports  complied in all material  respects as to form with the requirements
of the Exchange Act and the rules and regulations of the Commission  promulgated
thereunder.

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

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

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

                                       17
<PAGE>
     9. In connection with the valid execution,  delivery and performance by the
Company of the Transaction  Documents,  or the offer, sale, issuance or delivery
of the Notes and the Underlying  Shares or the  consummation of the transactions
contemplated  thereby,  no  consent,   license,   permit,  waiver,  approval  or
authorization of, or designation,  declaration, registration or filing with, any
court, governmental or regulatory authority, or self-regulatory organization, is
required.

                                       18

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