NEITHER THE ISSUANCE AND 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: $48,000.00

Issue Date: September 1, 2014

Debt Settlement Price: $48,000.00

CONVERTIBLE PROMISSORY NOTE

Source Gold Corp.,  a  Nevada  corporation (hereinafter  called  the “Borrower”),  hereby  promises  to  pay  to  the  order  of  Syndication Capital LLC, a Nevada corporation, or registered assigns (the “Holder”) the sum of $48,000.00 together with any interest as set forth herein, on March 1, 2015 (the “Maturity Date”), and to pay interest on the unpaid principal balance hereof at the rate of eight percent (8%) (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.  This Note may not be prepaid in whole or in part except as otherwise explicitly set forth herein. 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 date that the Note is fully paid and 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 free trading stock, $0.001par value per share (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 Las Vegas, Nevada 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 Debt Settlement Agreement dated the date hereof, pursuant to which this Note was originally issued (the “Debt Settlement Agreement”).

1

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, which is one hundred eighty (180) days,
following the dates listed on the note.  The Maturity Dates for the Invoice is March 1, 2015 (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 to convert all or any part of the outstanding and unpaid principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed or reclassified at the conversion price (the “Conversion Price”) determined as provided herein (a “Conversion”); provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted portion of the Notes or the unexercised or unconverted portion of any other security of the Borrower subject to a limitation on conversion or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result in beneficial ownership by the Holder and its affiliates of more than 4.99% of the outstanding shares of Common Stock.

For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be
determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended  (the “Exchange Act”), and  Regulations 13D-G  thereunder,  except  as  otherwise

provided in clause (1) of such proviso, provided, further, however, that the limitations on
conversion may be waived by the Holder upon, at the election of the Holder, not less than 61
days’ prior notice to the Borrower, and the provisions of the conversion limitation shall continue
to apply until such 61st day (or such later date, as determined by the Holder, as may be specified
in such notice of waiver).  The number of shares of Common Stock to be issued upon each
conversion of this Note shall be determined by dividing the Conversion Amount (as defined
below) by the applicable Conversion Price then in effect on the date specified in the notice of
conversion, in the form attached hereto as Exhibit A (the “Notice of Conversion”), delivered to
the Borrower by the Holder in accordance with Section 1.4 below; provided that the Notice of
Conversion is submitted by facsimile or e-mail (or by other means resulting in, or reasonably
expected to result in, notice) to the Borrower before 6:00 p.m., Las Vegas, Nevada time on
such conversion date (the “Conversion Date”).  

2

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, 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 equal 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 "Conversion Price" shall mean par .001 multiplied by the number of Common Stock converted at the time.

(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 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 Debt Settlement Agreement.
The Borrower is required at all times to have authorized and reserved two 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”).  

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The Reserved Amount shall be increased from time to time in accordance with the Borrower’s obligations pursuant to Section
4(g) of the Debt Settlement Agreement.  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 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

4

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 (the “Deadline”) (and, solely in the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof and the Debt Settlement 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., Las Vegas, Nevada
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  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.

5

(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 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 Debt Settlement Agreement).
Except as otherwise provided in the Debt Settlement 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

6

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 Regulation 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.

(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

7

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.

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

8

Convertible Securities, if applicable).  No further adjustment to the Conversion Price will be
made upon the actual issuance of such Common Stock upon the exercise of such Options or upon
the conversion or exchange of Convertible Securities issuable upon exercise of such Options.

Additionally, the Borrower shall be deemed to have issued or sold shares

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

(e)

Share Purchase Rights.  If, at any time when any Notes are issued and

outstanding, the Borrower issues any convertible securities or rights to Common 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 Share Purchase Rights, the aggregate Share 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 Debt Settlement 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 Debt Settlement 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 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 Debt Settlement 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 4.99% of the total shares outstanding on the Closing
Date (as defined in the Debt Settlement Agreement), subject to equitable adjustment from time to time

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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 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, 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 addresses 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
140%, 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 an Optional Prepayment Notice and fails to pay the Optional Prepayment

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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.

Notwithstanding anything to the contrary contained in this Note, at any time
during the period beginning  on the date of the invoices listed on Exhibit B, which is ninety-one (91) days following the issue date and ending on the date of the invoices listed on Exhibit B, which is one hundred fifty (150) 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 Optional Prepayment Notice shall be delivered to the Holder of the Note at its registered addresses 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 Optional Prepayment Date, the Borrower shall make payment of the Second 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 “Second Optional Prepayment Amount”) equal to 145%, 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 an Optional Prepayment Notice and fails to pay the Second 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.

Notwithstanding anything to the contrary contained in this Note, at any time
during the period beginning  on the date of the invoices listed on Exhibit B, which is one hundred fifty-one (151) days following the issue date and ending on the date which is one hundred eighty (180) days following the issue date of the invoices listed on Exhibit B, 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 Optional Prepayment Notice shall be delivered to the Holder of the Note at its registered addresses 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 Optional Prepayment Date, the Borrower shall make payment of the Third 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 “Third 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 an Optional Prepayment Notice and fails to pay the Third 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.

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After the expiration of one hundred eighty (180) following the date of the Note, the Borrower shall have no right of prepayment.

ARTICLE II.  CERTAIN COVENANTS

2.1

Distributions on Capital Stock.  So long as the Borrower shall have any

obligation under this Note, the Borrower shall not without the Holder’s written consent (a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities) on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock except for distributions pursuant to any shareholders’ rights plan which is approved by a majority of the Borrower’s disinterested directors.

2.2

Restriction on Stock Repurchase.  So long as the Borrower shall have any

obligation under this Note, the Borrower shall not without the Holder’s written consent redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options to purchase or acquire any such shares.

2.3

Borrowings.  So long as the Borrower shall have any obligation under this

Note, the Borrower shall not, without the Holder’s written consent, create, incur, assume
guarantee, endorse,  contingently  agree  to  purchase or otherwise become  liable  upon  the
obligation  of  any  person,  firm,  partnership,  joint  venture  or  corporation,  except  by  the
endorsement of negotiable instruments for deposit or collection, or suffer to exist any liability for
borrowed money, except (a) borrowings in existence or committed on the date hereof and of
which the Borrower has informed Holder in writing prior to the date hereof, (b) indebtedness to
trade creditors or financial institutions incurred in the ordinary course of business or (c)

borrowings, the proceeds of which shall be used to repay this Note.

2.4

Sale of Assets.  So long as the Borrower shall have any obligation under

this Note, the Borrower shall not, without the Holder’s written consent, sell, lease or otherwise
dispose of any significant portion of its assets outside the ordinary course of business.  Any
consent to the disposition of any assets may be conditioned on a specified use of the proceeds of
disposition.

2.5

Advances and Loans.  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 $500,000.

ARTICLE III.  EVENTS OF DEFAULT

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

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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.  It is an obligation of the Borrower to remain current in
its obligations to its transfer agent. It shall be an event of default of this Note, if a conversion of
this Note is delayed, hindered or frustrated due to a balance owed by the Borrower to its transfer
agent. If at the option of the Holder, the Holder advances any funds to the Borrower’s transfer
agent in order to process a conversion, such advanced funds shall be paid by the Borrower to the
Holder within forty eight (48) hours of a demand from the Holder.

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 Debt Settlement 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 Debt Settlement 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 Debt Settlement Agreement.

3.5

Receiver or Trustee.  The Borrower or any subsidiary of the Borrower

shall make an assignment for the benefit of creditors, or apply for or consent to the appointment of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise be appointed.

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

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twenty (20) days unless otherwise consented to by the Holder, which consent will not be unreasonably withheld.

3.7

Bankruptcy.    Bankruptcy,  insolvency,  reorganization  or  liquidation

proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or any law for the relief of debtors shall be instituted by or against the Borrower or any subsidiary of the Borrower.

3.8

Delisting of Stock.  The Borrower shall fail to maintain the

listing of the Stock on at least one of the OTCBB or an equivalent replacement exchange, the Nasdaq National Market, the Nasdaq SmallCap Market, the New York Stock Exchange, or the American Stock Exchange.

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.

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 Debt Settlement
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, a fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Debt Settlement Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stock in the Reserved Amount) signed by the successor transfer agent to Borrower and the Borrower.

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3.16

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 Holder, 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.

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 OBLIGATIONS
HEREUNDER, AN AMOUNT EQUAL TO: (Y) THE DEFAULT SUM (AS DEFINED
HEREIN); MULTIPLIED BY (Z) TWO (2). Upon the occurrence and during the continuation of
any Event of Default specified in Sections 3.1 (solely with respect to failure to pay the principal
hereof or interest thereon when due on this Note upon a Trading Market Prepayment Event
pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11, 3.12, 3.13, 3.14, and/or

3. 15 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 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 a 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,

15

including, without limitation, legal fees and expenses, of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law 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:

If to the Borrower, to:

Source Gold Corp.

1155 Camino Del Mar #162

Del Mar, California 92014

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If to the Holder:

Syndication Capital LLC

1401 Camino Del Mar #202

Del Mar, California 92014

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 Debt Settlement 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

Governing Law.  This Note shall be governed by and construed in

accordance with the laws of the State of Nevada 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 Nevada or in the federal
courts located in the state and county of Clark.  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.  

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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 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

Debt Settlement Agreement.  By its acceptance of this Note, each party agrees to

be bound by the applicable terms of the Debt Settlement 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.

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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.

IN WITNESS WHEREOF, Borrower has caused this Note to be signed in its name by its duly authorized officer this date September 1, 2014

Source Gold Corp.

Signed: __ Edward Aruda __________

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EXHIBIT A

NOTICE OF CONVERSION

The undersigned hereby elects to convert $_________________ principal amount
of the Note (defined below) into that number of shares of Common Stock to be issued pursuant

to the conversion of the Note (“Common Stock”) as set forth below, of Source Gold Corp., a Nevada corporation (the “Borrower”) according to the conditions of the convertible note of the Borrower dated as of September 1, 2014 (the “Note”), as of the date written below.  No fee will be charged to the Holder 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 or, if additional space is necessary, on an attachment
hereto:

Syndication Capital LLC

Del Mar, CA 92014

Attention: Certificate Delivery

Date of Conversion:

_____________

Applicable Conversion Price:

$.001

Number of Shares of Common Stock to be Issued

Pursuant to Conversion of the Notes:

______________

Amount of Principal Balance Due remaining

Under the Note after this conversion:

______________

By:_____________________________

Title:  President.

Date:  ______________

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