SECURED CONVERTIBLE TERM NOTE

THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS.  THIS NOTE AND THE COMMON SHARES ISSUABLE UPON CONVERSION OF THIS NOTE MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THIS NOTE UNDER SAID ACT AND ANY APPLICABLE STATE SECURITIES LAWS OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO 360 GLOBAL WINE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.

SECURED CONVERTIBLE TERM NOTE

FOR VALUE RECEIVED, 360 GLOBAL WINE COMPANY, a Nevada corporation (the “ Parent ”), and the other companies listed on Exhibit A attached hereto (such other companies together with the Parent, each a “ Company ” and collectively, the “ Companies ”), jointly and severally, promises to pay to LAURUS MASTER FUND, LTD., c/o M&C Corporate Services Limited, P.O. Box 309 GT, Ugland House, South Church Street, George Town, Grand Cayman, Cayman Islands, Fax: 345-949-8080 (the “ Holder ”) or its registered assigns or successors in interest, the sum of Thirty Four Million Five Hundred Thousand Dollars ($34,500,000), together with any accrued and unpaid interest hereon, on July 7, 2008 (the “ Maturity Date ”) if not sooner paid.

Capitalized terms used herein without definition shall have the meanings ascribed to such terms in that certain Security and Purchase Agreement dated as of the date hereof by and between the Companies and the Holder (as amended, modified and/or supplemented from time to time, the “ Security Agreement ”).

The following terms shall apply to this Secured Convertible Term Note (this “ Note ”):

ARTICLE I
CONTRACT RATE AND AMORTIZATION

1.1

Contract Rate .  Subject to Sections 4.2 and 5.10, interest payable on the outstanding principal amount of this Note (the “ Principal Amount ”) shall accrue at a rate per annum equal to the “prime rate” published in The Wall Street Journal from time to time (the “ Prime Rate ”), plus two percent (2.0%) (the “ Contract Rate ”).  The Contract Rate shall be increased or decreased as the case may be for each increase or decrease in the Prime Rate in an amount equal to such increase or decrease in the Prime Rate; each change to be effective as of the day of the change in the Prime Rate.  Subject to Section 1.2, the Contract Rate shall not at any time be less than eight percent (8.0%) Interest shall be (i) calculated on the basis of a 360 day year, and (ii) payable monthly, in arrears, commencing on July 1, 2005, on the first business day of each consecutive calendar month thereafter through and including the Maturity Date, and on the Maturity Date, whether by acceleration or otherwise.

1.2

Contract Rate Adjustments and Payments .  The Contract Rate shall be calculated on the last business day of each calendar month hereafter (other than for increases or

decreases in the Prime Rate which shall be calculated and become effective in accordance with the terms of Section 1.1) until the Maturity Date (each a “ Determination Date ”) and shall be subject to adjustment as set forth herein.  If (i) the Parent shall have registered the shares of the Common Stock underlying the conversion of this Note, each Warrant and each Option on a registration statement declared effective by the Securities and Exchange Commission (the “ SEC ”), and (ii) the market price (the “ Market Price ”) of the Common Stock as reported by Bloomberg, L.P. on the Principal Market for the five (5) trading days immediately preceding a Determination Date exceeds the then applicable Fixed Conversion Price by at least twenty-five percent (25%), the Contract Rate for the succeeding calendar month shall automatically be reduced by 200 basis points (200 b.p.) (2.0%) for each incremental twenty-five percent (25%) increase in the Market Price of the Common Stock above the then applicable Fixed Conversion Price.  Notwithstanding the foregoing (and anything to the contrary contained herein), in no event shall the Contract Rate at any time be less than zero percent (0%).  

1.3

Principal Payments .  Amortizing payments of the aggregate principal amount outstanding under this Note at any time (the “ Principal Amount ”) shall be made by the Companies, on a joint and several basis, on November 1, 2005 and on the first business day of each succeeding month thereafter through and including the Maturity Date (each, an “ Amortization Date ”). Subject to Article III below, commencing on the first Amortization Date, the Companies shall, jointly and severally, make monthly payments to the Holder on each Repayment Date, according to the schedule below together with any accrued and unpaid interest on such portion of the Principal Amount plus any and all other unpaid amounts which are then owing under this Note, the Security Agreement and/or any other Ancillary Agreement (collectively, the “ Monthly Amount ”). Any outstanding Principal Amount together with any accrued and unpaid interest and any and all other unpaid amounts which are then owing by the Companies to the Holder under this Note, the Security Agreement and/or any other Ancillary Agreement shall be due and payable, on a joint and several basis, on the Maturity Date.

ARTICLE II
CONVERSION AND REDEMPTION

2.1

Payment of Monthly Amount.

(a)

Payment in Cash or Common Stock .  If the Monthly Amount (or a portion of such Monthly Amount if not all of the Monthly Amount may be converted into shares of Common Stock pursuant to Section 3.2) is required to be paid in cash pursuant to Section 2.1(b), then the Companies shall, on a joint and several basis, pay the Holder an amount in cash equal to 103% of the Monthly Amount (or such portion of such Monthly Amount to be paid in cash) due and owing to the Holder on the Amortization Date.  If the Monthly Amount (or a portion of such Monthly Amount if not all of the Monthly Amount may be converted into shares of Common Stock pursuant to Section 3.2) is required to be paid in shares of Common Stock pursuant to Section 2.1(b), the number of such shares to be issued by the Parent to the Holder on such Amortization Date (in respect of such portion of the Monthly Amount converted into shares of Common Stock pursuant to Section 2.1(b)), shall be the number determined by dividing (i) the portion of the Monthly Amount converted into shares of Common Stock, by (ii) the then applicable Fixed Conversion Price.  For purposes hereof, subject to Section 3.6 hereof, the initial “ Fixed Conversion Price ” means twenty five cents $0.25.

(b)

Monthly Amount Conversion Conditions . Subject to Sections 2.1(a), 2.2, and 3.2 hereof, the Holder shall convert into shares of Common Stock all or a portion of the Monthly Amount due on each Amortization Date if the following conditions (the “ Conversion Criteria ”) are satisfied: (i) the average closing price of the Common Stock as reported by Bloomberg, L.P. on the Principal Market for the five (5) trading days immediately preceding such Amortization Date shall be greater than or equal to 120% of the Fixed Conversion Price and (ii) the amount of such conversion does not exceed twenty five percent (25%) of the aggregate dollar trading volume of the Common Stock for the period of twenty-two (22) trading days immediately preceding such Amortization Date. If subsection (i) of the Conversion Criteria is met but subsection (ii) of the Conversion Criteria is not met as to the entire Monthly Amount, the Holder shall convert only such part of the Monthly Amount that meets subsection (ii) of the Conversion Criteria.  Any portion of the Monthly Amount due on an Amortization Date that the Holder has not been able to convert into shares of Common Stock due to the failure to meet the Conversion Criteria, shall be paid in cash by the Company at the rate of 103% of the Monthly Amount otherwise due on such Amortization Date, within three (3) business days of such Amortization Date.

2.2

No Effective Registration .  Notwithstanding anything to the contrary herein, none of the Companies obligations to the Holder may be converted into Common Stock unless (a) either (i) an effective current Registration Statement (as defined in the Registration Rights Agreement) covering the shares of Common Stock to be issued in connection with satisfaction of such obligations exists or (ii) an exemption from registration for resale of all of the Common Stock issued and issuable is available pursuant to Rule 144 of the Securities Act and (b) no Event of Default (as hereinafter defined) exists and is continuing, unless such Event of Default is cured within any applicable cure period or otherwise waived in writing by the Holder.

2.3

Optional Redemption in Cash .  The Companies may prepay this Note (“ Optional Redemption ”) by paying to the Holder a sum of money equal to one hundred twenty eight percent (128%) of the Principal Amount outstanding at such time together with accrued but unpaid interest thereon and any and all other sums due, accrued or payable to the Holder arising under this Note, the Security Agreement or any other Ancillary Agreement (the “ Redemption

Amount ”) outstanding on the Redemption Payment Date (as defined below).  The Companies shall collectively deliver to the Holder a written notice of redemption (the “ Notice of Redemption ”) specifying the date for such Optional Redemption (the “ Redemption Payment Date ”), which date shall be ten (10) business days after the date of the Notice of Redemption (the “ Redemption Period ”).  A Notice of Redemption shall not be effective with respect to any portion of this Note for which the Holder has previously delivered a Notice of Conversion (as hereinafter defined) or for conversions elected to be made by the Holder pursuant to Section 3.3 during the Redemption Period.  The Redemption Amount shall be determined as if the Holder’s conversion elections had been completed immediately prior to the date of the Notice of Redemption.  On the Redemption Payment Date, the Redemption Amount must be paid in good funds to the Holder.  In the event the Companies fail to pay the Redemption Amount on the Redemption Payment Date as set forth herein, then such Redemption Notice will be null and void.

ARTICLE III
HOLDER’S CONVERSION RIGHTS

3.1

Optional Conversion .  Subject to the terms set forth in this Article III, the Holder shall have the right, but not the obligation, to convert all or any portion of the issued and outstanding Principal Amount and/or accrued interest and fees due and payable into fully paid and nonassessable shares of Common Stock at the Fixed Conversion Price.  The shares of Common Stock to be issued upon such conversion are herein referred to as, the “ Conversion Shares. ”

3.2

Conversion Limitation . Notwithstanding anything contained herein to the contrary, the Holder shall not be entitled to convert pursuant to the terms of this Note an amount that would be convertible into that number of Conversion Shares which would exceed the difference between (i) 4.99% of the issued and outstanding shares of Common Stock and (ii) the number of shares of Common Stock beneficially owned by the Holder.  For purposes of the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Exchange Act and Regulation 13d-3 thereunder.  The Conversion Share limitation described in this Section 3.2 shall automatically become null and void following notice to the Company upon the occurrence and during the continuance of an Event of Default, or upon 75 days prior notice to the Parent, except that at no time shall the number of shares of Common Stock beneficially owned by the Holder a exceed 19.99% of the outstanding shares of Common StockNotwithstanding anything contained herein to the contrary, the provisions of this Section 3.2 are irrevocable and may not be waived by the Holder or the Parent.

3.3

Mechanics of Holder’s Conversion .  

In the event that the Holder elects to convert this Note into Common Stock, the Holder shall give notice of such election by delivering an executed and completed notice of conversion in substantially the form of Exhibit B hereto (appropriate completed)  (“ Notice of Conversion ”) to the Parent and such Notice of Conversion shall provide a breakdown in reasonable detail of the Principal Amo