REVOLVING CREDIT CONVERTIBLE NOTE

REVOLVING CREDIT CONVERTIBLE NOTE

THIS NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE SECURITIES LAWS OR AN APPLICABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF SUCH ACT OR SUCH LAWS.

            FOR VALUE RECEIVED , the undersigned, FUND.COM INC. (herein called the “ Company ”), a corporation organized and existing under the laws of the State of Delaware, promises to pay to the order of IP GLOBAL INVESTORS LTD . and/or EQUITIES MEDIA ACQUISITION CORP. INC. (each a “ Lender ” and collectively, the “ Lenders ”) or its registered assigns (together with the Lenders the “ Holders ” ), the principal sum of TWO MILLION FIVE HUNDRED THOUSAND DOLLARS ($2,500,000) or such lesser amount as may be outstanding from time to time on the Maturity Date (as defined below).

This Revolving Credit Convertible Note (this “ Note ”) is issued by the Company to the Holders pursuant to the terms and conditions of a revolving credit loan agreement, dated as of July 27, 2009 (the “ Loan Agreement ”).  Unless otherwise separately defined herein, all capitalized terms, when used in this Note shall have the same meaning as is defined in the Loan Agreement.

This Note replaces and supercedes in its entirety the Prior Note, as defined in the Loan Agreement, and a revolving credit convertible note in the amount of $1,343,000 issued by the Company to IP Global Investors Ltd. in April 2009.

The Company represents and warrants to the Holders that 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 Stock holders of the Company and will not impose personal liability upon the Holders.

1.            Principal and Interest .   To the extent not converted into Class A Common Stock as contemplated herein, the entire principal amount of this Note shall be due and payable on the Maturity Date, together with accrued and unpaid interest on the unpaid principal amount of this Note at the annual compounded rate of nine percent (9%) (computed on the basis of a 360-day year and the actual days elapsed) from the Issue Date until all amounts due and owing hereunder by the Company to the Holders have been paid in full.  The Company shall pay interest on this Note, at the Interest Rate, as provided in the Loan Agreement.

2.            Place of Payment .  All amounts payable hereunder shall be payable at the address designated by the Holders.

3.            Prepayment .  The Company shall not have the right to prepay this Note, whether in whole or in part, without the prior written consent of the Holders; provided, however, that if the Borrower shall be permitted to terminate the Loan Agreement, as provided in Section 8(c) of the Loan Agreement, the Company may prepay this Note in full, without prepayment premium or penalty.

4.            Covenants .  The Company covenants that so long as any of the Notes are outstanding, unless the Holders of this Note consents in writing (which consent shall not be unreasonably withheld or delayed):

(a)            Liens .  The Company will not, and will not permit any Subsidiary to, and cause such Subsidiary not to, permit to exist, create, assume or incur, directly or indirectly, any Lien on its properties or assets, whether now owned or hereafter acquired, except:

           (i)           liens existing on property or assets of the Company or any Subsidiary as of the date of this Agreement, as set forth on Schedule 4(a) ;

           (ii)           liens for taxes, assessments or governmental charges not then due and delinquent;

           (iii)           encumbrances in the nature of leases, subleases, zoning restrictions, easements, rights of way, minor survey exceptions and other rights and restrictions of record on the use of real property and defects in title arising or incurred in the ordinary course of business, which, individually and in the aggregate, do not materially impair the use or value of the property or assets subject thereto or which relate only to assets that in the aggregate are not material;

           (iv)           liens incidental to the conduct of business or the ownership of properties and assets (including landlords’, lessors’, carriers’, warehousemen’s, mechanics’, materialmen’s and other similar liens) and liens to secure the performance of bids, tenders, leases or trade contracts, or to secure statutory obligations (including obligations under workers compensation, unemployment insurance and other social security legislation), surety or appeal bonds or other liens of like general nature incurred in the ordinary course of business and not in connection with the borrowing of money;

                           (v)           liens incurred to secure institutional financing obtained by the Company and/or its Subsidiaries pursuant to arms-length transactions; and

                           (vi)           liens incurred in connection with purchase-money transactions.

       (b)           Mergers, Consolidations, Etc. The Company will not, and will not permit any Subsidiary to, and cause such Subsidiary not to, consolidate with or merge with any other Person or convey, transfer, sell or lease all or substantially all of its assets in a single transaction or series of transactions to any Person (collectively, a “Sale”).

(c)            Sale of Assets .  Except as otherwise set forth herein, the Company will not, and will not permit any Subsidiary to, and cause such Subsidiary not to, sell, lease, transfer or otherwise dispose of, including by way of merger (collectively , a " Disposition "), any material assets of any Subsidiary or any of the shares of capital Stock  of any Subsidiary, in one or a series of transactions, to any Person, other than Dispositions of inventory and products sold by such Subsidiaries in the ordinary course of business.

(d)            Nature of Business .  Except as set forth on Schedule 4(d) hereto, the Company will not, and will not permit any Subsidiary to, and cause such Subsidiary not to, engage in any business if, as a result, the general nature of the business in which the Company and its Subsidiaries, taken as a whole, would then be engaged would be substantially changed from the general nature of the business in which the Company and its Subsidiaries, taken as a whole, are engaged on the date of this Agreement.

        (e)            Transactions with Affiliates .  Excepting for existing transactions set forth on Schedule 4(e) , the Company will not, and will not permit any Subsidiary to, and cause such Subsidiary not to, enter into directly or indirectly any transaction or material group of related transactions (including without limitation the purchase, lease, sale or exchange of properties of any kind or the rendering of any service) with any Affiliate (other than the Company or another Subsidiary), except upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm's-length transaction with a Person not an Affiliate.  Furthermore, none of the terms or conditions of the arrangements described in Schedule 4(e) will be modified, terminated or amended or revised in a manner more favorable to the Affiliate, except to the extent that any such modification, termination, amendment or revision is (i) upon fair and reasonable terms no less favorable to the Company or such Subsidiary than would be obtainable in a comparable arm's-length transaction with a Person not an Affiliate and (ii) approved by a majority of the independent directors of the Company.  Additionally, the Company represents and warrants that, except as set forth on Schedule 4(e) , there is no existing or contingent liability to the Company and/or any of its Subsidiaries resulting from the termination of any agreements or arrangements previously in existence between the Company and/or its Subsidiaries, on one hand, and an Affiliate thereof, on the other hand.

(f)            Distributions and Stock  Repurchases .  The Company will not, and will not permit any Subsidiary to, and cause such Subsidiary not to, 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 Company or any Subsidiary or any warrants, rights or options to purchase or acquire any such shares.  Except as set forth on Schedule 4(f) , the Company will not and will not permit any Subsidiary to make any distribution or dividend of cash or other property with respect to its capital stock.

           (g)            Investments .  Except for the Investment in AdvisorShares Investments, LLC (“ AdvisorShares ”) as contemplated by that certain Securities Purchase Agreement dated October 31, 2008 between the Company and AdvisorShares, the Company will not, and will not permit any Subsidiary to, and cause such Subsidiary not to, make any loan or advance to any Person or entity, or purchase or otherwise acquire any capital stock , assets, obligations, or other securities of, make any capital contribution to, or otherwise invest in or acquire any interest in any Person or entity (collectively, “ !Investments ”), except Investments in direct obligations of the United States or any agency thereof, bonds, and certificates of deposit in commercial or savings banks of recognized standing.

(h)            Acquisitions .  Except for the Investment in AdvisorShares, the Company shall not, and shall not permit any of the Subsidiaries to, acquire the capital stock or assets of any Person, whether by asset purchase, stock purchase, merger or like combination or consolidation (an “ Acquisition ”).

5.            Events of Default . An “ Event of Default ” under this Note shall exist if any Event of Default under Section 9 of the Loan Agreement shall occur and be continuing.

6.            Default Interest .  During any period that an Event of Default has occurred and is continuing, any amount of principal on this Note then outstanding shall bear interest (the “ Default Interest ”), and the Company shall pay to the Holders hereof in cash as liquidated damages and not as a penalty, at an annual rate equal to (i) two percent (2%) for the first thirty (30) days, or fraction thereof, after such Event of Default has occurred and (ii) thereafter at an annual rate equal to three and one-half percent (3.5%) for each thirty (30) day period, or fraction thereof, until the earlier of (A) this Note, including accrued but unpaid interest thereon, are paid in full or (B) such Default or Event of Default, if curable under the terms of this Note or the Loan Agreement, has been cured.  Such Default Interest shall be paid to the Holders of this Note by the fifteenth (15 th ) day of the month following the month in which it has accrued or, if not so paid, 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.

7.            Conversion .

           (a)           Conversion by Holders.  At any time or from time to time during the period commencing on a date which shall be sixty-one (61) days after the date of this Note and ending on the Maturity Date of this Note (the “Conversion Period”), the Holders shall have the right, at such Holders’ option and by written notice to the Company, to convert this Note, in whole or in part, into fully paid and non-assessable shares of Class B Common Stock  of the Company at the “Conversion Price” (as defined below) then in effect; such conversion to be effective as of the Conversion Date.  The number of shares of Class B Common Stock into which this Note may be converted (the “ Class B Conversion Shares ”) shall equal to the result of dividing (i) the principal amount of this Note to be converted, plus all accrued interest on the principal amount of this Note to be converted, by (ii) the Conversion Price.

Subject to adjustment as provided below, the “ Conversion Price ” shall be twenty-one cents ($0.21) per share.

The Class B Conversion Shares may be converted by the Holders at any time into shares of Class A Common Stock of the Company on the basis of each full Class B Conversion Share being convertible into ten (10) full shares of Class A Common Stock (the “ Class A Conversion Shares ”).

For purposes of this Section 7 , the Class A Common Stock of the Company and the Class B Common Stock of the Company are collectively referred to as the “ Common Stock, ” and the Class A Conversion Shares and the Class B Conversion Shares are collectively referred to as the “ Conversion Shares .”

The Class A Conversion Shares, the Class B Conversion Shares and the Conversion Price are subject to adjustment in accordance with this Section 7 .

           (b)            Conversion Procedure .  Before the Holders shall be entitled to convert this Note into shares of Common Stock , he or it shall give written notice in substantially the same form as Exhibit I, postage prepaid, to the Company at its principal corporate office, of the election to convert the same pursuant to Section 7(a) , and shall state therein the amount of the unpaid amount of this Note to be converted, the name or names in which the certificate or certificates for shares of Class B Common Stock are to be issued, the number of Conversion Shares to be issued and the Conversion Price per share (the “ Conversion Notice ”).  In addition the Holders shall surrender this Note, duly endorsed, at the office of the Company and the Company shall, as soon as practicable thereafter (but in any event within five (5) Business Days thereafter), issue and deliver to the Holders of this Note a certificate or certificates for the number of shares of the Class B Common Stock  to which the Holders shall be entitled upon conversion (bearing such legends as are required by applicable state and federal securities laws), together with a replacement Note (if any amount is not converted) and any other securities and property to which the Holders is entitled upon such conversion under the terms of this Note.  The conversion shall be deemed to have been made immediately prior to the close of business on the date of the surrender of this Note, and the Person or Persons entitled to receive the shares of Class B Common Stock upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Class B Common Stock as of such date.

           (c)            Fractional Shares; Interest; Effect of Conversion .  No fractional shares shall be issued upon conversion of this Note.  In lieu of the Company issuing any fractional shares to which the Holders would otherwise be entitled, the Company shall round the number of shares to be issued upon conversion up to the nearest whole number of shares.

   (d)            Effect of Certain Events .

                          (i)            Adjustment Due to Merger, Consolidation, Etc.   If, at any time when this Note is issued and outstanding, 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 Company shall be changed into the same or a different number of shares of another class or classes of Stock  or securities of the Company or another entity, or in case of any sale or conveyance of all or substantially all of the assets of the Company other than in connection with a plan of complete liquidation of the Company, then the Holders of this Note shall thereafter have the right to receive upon conversion of the Holders’ 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 the Holders’ 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 the Holders’ 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 Company shall not effect any transaction described in this Section 7(d)(i) 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 Stock holders 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 the Holders’ Note notwithstanding Section 7(d)(iii)) , and (b) the resulting successor or acquiring entity (if not the Company) assumes by written instrument the obligations of this Section 7(d)(i).  The above provisions shall similarly apply to successive consolidations, mergers, sales, transfers or share exchanges.

                          (ii)            Adjustment Due to Distribution .  If, at any time when this Note is issued and outstanding, the Company 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 Company’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 Holders of this Note shall be entitled, upon any conversion of the Holders’ 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 Holders been the holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution and the Note shall be deemed repaid by the amount of the fair value of the Distribution.

           (iii)            Adjustment Due to Dilutive Issuance .