EXHIBIT 10.13

THIS NOTE AND THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE SOLD,
OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE
REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR AN OPINION OF
COUNSEL SATISFACTORY TO THE CORPORATION THAT SUCH REGISTRATION IS NOT REQUIRED.
 
CELLYNX, INC.
 
CONVERTIBLE PROMISSORY NOTE
 

$10,000.00 
Issue Date: October 25, 2007
 
Laguna Niguel, California

 
FOR VALUE RECEIVED, Cellynx, Inc., a California corporation (the "Company")
promises to pay to Daniel Ash ("Investor"), or its registered assigns, in lawful
money of the United States of America, the principal sum of $10,000.00, or such
lesser amount as shall equal the outstanding principal amount hereof, together
with interest from the date of this Convertible Promissory Note ("Note") on the
unpaid principal balance at a rate equal to 4.00% per annum, computed on the
basis of the actual number of days elapsed and a year of 365 days. All unpaid
principal, together with any then unpaid and accrued interest and any other
amounts payable hereunder, shall be due and payable on the earlier of (i) that
date which is two years after the Issue Date listed above, or (ii) when, upon or
after the occurrence of an Event of Default (as defined below), such amounts are
declared due and payable by Investor or made automatically due and payable in
accordance with the terms hereof.
 
The following is a statement of the rights of Investor and the conditions to
which this Note is subject, and to which Investor, by the acceptance of this
Note, agrees:
 
1.  Definitions. As used in this Note, the following capitalized terms have the
following meanings:
 
(a)  "Obligations" shall mean and include all loans, advances, debts,
liabilities and obligations, howsoever arising, owed by the Company to Investor
of every kind and description (whether or not evidenced by any note or
instrument and whether or not for the payment of money), now existing or
hereafter arising under or pursuant to the terms of this Note, including, all
interest, fees, charges, expenses, attorneys' fees and costs and accountants'
fees and costs chargeable to and payable by the Company hereunder, in each case,
whether direct or indirect, absolute or contingent, due or to become due, and
whether or not arising after the commencement of a proceeding under Title 11 of
the United States Code (11 U. S. C. Section 101 et seq.), as amended from time
to time (including post-petition interest) and whether or not allowed or
allowable as a claim in any such proceeding.
 

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(b)  "Person" shall mean and include an individual, a partnership, a corporation
(including a business trust), a joint stock company, a limited liability
company, an unincorporated association, a joint venture or other entity or a
governmental authority.
 
(c)  "Securities Act" shall mean the Securities Act of 1933, as amended.
 
2.  Prepayment. The Company may prepay this Note in whole or in part at any time
without penalty; provided that any such prepayment will be applied first to the
payment of expenses due under this Note, second to interest accrued on this Note
and third, if the amount of prepayment exceeds the amount of all such expenses
and accrued interest, to the payment of principal of this Note.
 
3.  Events of Default. The occurrence of any of the following shall constitute
an "Event of Default" under this Note:
 
(a)  Failure to Pay. The Company shall fail to pay (i) when due any principal or
interest payment on the due date hereunder or (ii) any other payment required
under the terms of this Note on the date due and such payment shall not have
been made within five days of the Company's receipt of Investor's written notice
to the Company of such failure to pay;
 
(b)  Voluntary Bankruptcy or Insolvency Proceedings. The Company shall (i) apply
for or consent to the appointment of a receiver, trustee, liquidator or
custodian of itself or of all or a substantial part of its property, (ii) be
unable, or admit in writing its inability, to pay its debts generally as they
mature, (iii) make a general assignment for the benefit of its or any of its
creditors, (iv) be dissolved or liquidated, (v) become insolvent (as such term
may be defined or interpreted under any applicable statute), (vi) commence a
voluntary case or other proceeding seeking liquidation, reorganization or other
relief with respect to itself or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or consent to any such relief or to
the appointment of or taking possession of its property by any official in an
involuntary case or other proceeding commenced against it, or (vii) take any
action for the purpose of effecting any of the foregoing; or
 
(c)  Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the
appointment of a receiver, trustee, liquidator or custodian of the Company or of
all or a substantial part of the property thereof, or an involuntary case or
other proceedings seeking liquidation, reorganization or other relief with
respect to the Company or the debts thereof under any bankruptcy, insolvency or
other similar law now or hereafter in effect shall be commenced and an order for
relief entered or such proceeding shall not be dismissed or discharged within 30
days of commencement.
 
4.  Rights of Investor upon Default. Upon the occurrence or existence of any
Event of Default described in Section 3(a) and at any time thereafter during the
continuance of such Event of Default, Investor may, by written notice to the
Company, declare all outstanding Obligations payable by the Company hereunder to
be immediately due and payable without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived. Upon the
occurrence or existence of any Event of Default described in Sections 3(b) and
3(c), immediately and without notice, all outstanding Obligations payable by the
Company hereunder shall automatically become immediately due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived. In addition to the foregoing remedies, upon
the occurrence or existence of any Event of Default, Investor may exercise any
other right power or remedy granted to it by law, either by suit in equity or by
action at law, or both.
 
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5.  Conversion.
 
(a)  Optional Conversion; Number of Shares Issuable Upon Conversion. All or a
portion of the outstanding principal amount of and all accrued interest under
this Note shall be convertible at the option of the Investor into that number of
shares of the Company's Common Stock as is determined by dividing the principal
amount and accrued interest on the date of conversion by $0.10 per share
(adjusted to reflect subsequent stock dividends, stock splits, combinations or
recapitalizations).
 
(b)  Conversion Procedure. Before Investor shall be entitled to convert this
Note into shares of Common Stock under this Section 5, the Investor shall, at
the request of the Company, execute and deliver to the Company a common stock
purchase agreement reasonably acceptable to the Company containing customary
representations and warranties and transfer restrictions (including a 180-day
lock-up agreement in connection with an initial public offering). In addition,
before Investor shall be entitled to convert this Note into shares of Common
Stock under this Section 5, it shall surrender this Note, duly endorsed, at the
office of the Company and shall give written notice to the Company at its
principal corporate office, of the election to convert the same pursuant to this
Section 5, and shall state therein the amount of the unpaid principal amount of
this Note to be converted and the name or names in which the certificate or
certificates for shares of Common Stock are to be issued. If this Note has been
lost, stolen, destroyed or mutilated, then, in the case of loss, theft or
destruction, the Holder shall deliver an indemnity agreement reasonably
satisfactory in form and substance to the Company or, in the case of mutilation,
the Holder shall surrender and cancel this Note. The Company shall, as soon as
practicable thereafter, issue and deliver at such office to. Investor a
certificate or certificates for the number of shares of Common Stock to which
Investor shall be entitled upon conversion (bearing such legends as are required
by the common stock purchase agreement, and applicable state and federal
securities laws in the opinion of counsel to the Company), together with a
replacement Note (if any principal amount is not converted) and any other
securities and property to which Investor is entitled upon such conversion under
the terms of this Note, including a check payable to Investor for any cash
amounts payable as described in Section 5(c). 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 Common Stock upon such conversion shall be treated for all purposes as the
record Investor or Investors of such shares of Common Stock as of such dale.
 
(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 Investor upon the conversion of this Note, the Company
shall pay to Investor an amount equal to the product obtained by multiplying the
conversion price by the fraction of a share not issued pursuant to the previous
sentence. Upon conversion of this Note in full and the payment of any amounts
specified in this Section 5(c), the Company shall be forever released from all
its obligations and liabilities under this Note.
 
6.  Successors and Assigns. Subject to the restrictions on transfer described in
Sections 8 and 9 below, the rights and obligations of the Company and Investor
shall be binding upon and benefit the successors, assigns, heirs, administrators
and transferees of the parties.
 
7.  Waiver and Amendment. Any provision of this Note may be amended, waived or
modified upon the written consent of the Company and the Investor.
 
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8.  Market Stand-Off Covenant. Investor hereby agrees that it will not, without
the prior written consent of the managing underwriter, during the period
commencing on the date of the final prospectus relating to the Company's initial
public offering and ending on the date specified by the Company and the managing
underwriter (such period not to exceed one hundred eighty (180) calendar days)
(1) lend, offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or
warrant to purchase, or otherwise transfer or dispose of, directly or
indirectly, any securities of the Company, whether now owned or hereafter
acquired, or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
any securities of the Company, whether now owned or hereafter acquired, whether
any such transaction described in clause (i) or (ii) above is to be settled by
delivery of securities, in cash or otherwise. The foregoing covenants shall
apply only to the Company's initial public offering of equity securities, shall
not apply to the sale of any shares by Investor to an underwriter pursuant to an
underwriting agreement. Investor agrees to execute an agreement(s) reflecting
(1) and (ii) above as may be requested by the managing underwriters at the time
of the initial public offering, and further agrees that the Company may impose
stop transfer instructions with its transfer agent in order to enforce the
covenants in (i) and (ii) above. The underwriters in connection with the
Company's initial public offering are intended third party beneficiaries of the
covenants in this Section 8 and shall have the right, power and authority to
enforce such covenants as though they were a party hereto.
 
9.  Assignment. Neither this Note nor any of the rights, interests or
obligations hereunder may be assigned, by operation of law or otherwise, in
whole or in part, by the Company or the Investor without the prior written
consent of the other party.
 
10.  Notices. All notices, requests, demands, consents, instructions or other
communications required or permitted hereunder shall in writing and faxed,
mailed or delivered to each party at the following addresses, or at such other
address(es) or facsimile number(s) as the Company or Investor shall have
furnished to the other in writing:
 
If to Company: 
27795 Country Lane, Suite B1    Laguna Niguel, California 92677
Attention: President
Telephone: (949) 305-5389
Facsimile: (949) 305-5718
    If to Investor:    Daniel Ash  
27821 Trellis Way
Laguna Niguel, California 92677
Telephone: _______________
Facsimile: _______________

 
All such notices and communications will be deemed effectively given the earlier
of (i) when received, (ii) when delivered personally, (iii) one business day
after being delivered by facsimile (with receipt of appropriate confirmation),
(iv) one business day after being deposited with an overnight courier service of
recognized standing or (v) four days after being deposited in the U.S. mail,
first class with postage prepaid.
 
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11.  Usury. In the event any interest is paid on this Note which is deemed to be
in excess of the then legal maximum rate, then that portion of the interest
payment representing an amount in excess of the then legal maximum rate shall be
deemed a payment of principal and applied against the principal of this Note.
 
12.  Waivers. The Company hereby waives notice of default, presentment or demand
for payment, protest or notice of nonpayment or dishonor and all other notices
or demands relative to this instrument.
 
13.  Governing Law. This Note and all actions arising out of or in connection
with this Note be governed by and construed in accordance with the laws of the
State of California, without regard to the conflicts of law provisions of the
State of California, or of any other state.
 
(Signature Page Follows)
 
 
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The Company has caused this Convertible Promissory Note to be issued as of the
date first written above.
 
 

 
CELLYNX, INC.
a California corporation 
      By:       /s/ Tareq Risheq                              Name:  Tareq
Risheq                                   
Title:    CEO                                                

 
 
 
 
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EXHIBIT A
 
INVESTMENT REPRESENTATION STATEMENT
 

 

PURCHASER  Daniel Ash      COMPANY  Cellynx, Inc.      SECURITY  Common Stock   
  AMOUNT  150,000 shares      DATE       March 27, 2007    

 

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In connection with the purchase of the above-listed shares, I, the undersigned
purchaser, represent to the Company as follows:
 
1.    The Company may rely on these representations. I understand that the
Company's sale of the shares to me has not been registered under the Securities
Act of 1933, as amended (the "Securities Act"), because the Company believes,
relying in part on my representations in this document, that an exemption from
such registration requirement is available for such sale. I understand that the
availability of this exemption depends upon the representations I am making to
the Company in this document being true and correct.
 
2.   I am purchasing for investment. I am purchasing the shares solely for
investment purposes, and not for further distribution. My entire legal and
beneficial ownership interest in the shares is being purchased and shall be held
solely for my account, except to the extent I intend to hold the shares jointly
with my spouse. I am not a party to, and do not presently intend to enter into,
any contract or other arrangement with any other person or entity involving the
resale, transfer, grant of participation with respect to or other distribution
of any of the shares. My investment intent is not limited to my present
intention to hold the shares for the minimum capital gains period specified
under any applicable tax law, for a deferred sale, for a specified increase or
decrease in the market price of the shares, or for any other fixed period in the
future.
 
3.  I can protect my own interests. I can properly evaluate the merits and risks
of an investment in the shares and can protect my own interests in this regard,
whether by reason of my own business and financial expertise, the business and
financial expertise of certain professional advisors unaffiliated with the
Company with whom I have consulted, or my preexisting business or personal
relationship with the Company or any of its officers, directors or controlling
persons.
 
4.  I am informed about the Company. I am sufficiently aware of the Company's
business affairs and financial condition to reach an informed and knowledgeable
decision to acquire the shares. I have had opportunity to discuss the plans,
operations and financial condition of the Company with its officers, directors
or controlling persons, and have received all information I deem appropriate for
assessing the risk of an investment in the shares.
 
 
 
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5.   I recognize my economic risk I realize that the purchase of the shares
involves a high degree of risk, and that the Company's future prospects are
uncertain. I am able to hold the shares indefinitely if required, and am able to
bear the loss of my entire investment in the shares.
 
6.   I know that the shares are restricted securities. I understand that the
shares are "restricted securities" in that the Company's sale of the shares to
me has not been registered under the Securities Act in reliance upon an
exemption for non-public offerings. In this regard, I also understand and agree
that:
 
A.    I must hold the shares indefinitely, unless any subsequent proposed resale
by me is registered under the Securities Act, or unless an exemption from
registration is otherwise available (such as Rule 144);
 
B.    the Company is under no obligation to register any subsequent proposed
resale of the shares by me; and
 
C.    the certificate evidencing the shares will be imprinted with a legend
which prohibits the transfer of the shares unless such transfer is registered or
such registration is not required in the opinion of counsel for the Company.
 
7.   I am familiar with Rule 144. I am familiar with Rule 144 adopted under the
Securities Act, which in some circumstances permits limited public resales of
"restricted securities" like the shares acquired from an issuer in a non-public
offering. I understand that my ability to sell the shares under Rule 144 in the
future is uncertain, and will depend upon, among other things: (i) the
availability of certain current public information about the Company; (ii) the
resale occurring more than one year after my purchase and full payment (within
the meaning of Rule 144) for the shares; and (iii) if I am an affiliate of the
Company, or a non-affiliate who has held the shares less than two years after my
purchase and full payment: (A) the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker, as said term is defined wider the Securities Exchange Act of 1934, as
amended, (B) the amount of shares being sold during any three-month period not
exceeding the specified limitations stated in Rule 144, and (C) timely filing of
a notice of proposed sale on Form 144, if applicable.
 
8.   I know that Ride 144 may never be available. I understand that the
requirements of Rule 144 may never be met, and that the shares may never be
saleable. I further understand that at the time I wish to sell the shares, there
may be no public market for the Company's stock upon which to make such a sale,
or the current public information requirements of Rule 144 may not be satisfied,
either of which would preclude me from selling the shares under Rule 144 even if
the one-year minimum holding period had been satisfied.
 
9.   I know that I am subject to further restrictions on resale. I understand
that in the event Rule 144 is not available to me, any future proposed sale of
any of the shares by me will not be possible without prior registration under
the Securities Act, compliance with some other registration exemption (which may
or may not be available), or each of the following: (i) my written notice to the
Company containing detailed information regarding the proposed sale, (ii) my
providing an opinion of my counsel to the effect that such sale will not require
registration, and (iii) the Company notifying me in writing that its counsel
concurs in such opinion. I understand that neither the Company nor its counsel
is obligated to provide me with any such opinion. I understand that although
Rule 144 is not exclusive, the Staff of the SEC has stated that persons
proposing to sell private placement securities other than in a registered
offering or pursuant to Rule 144 will have a substantial burden of proof in
establishing that an exemption from registration is available for such offers or
sales, and that such persons and their respective brokers who participate in
such transactions do so at their own risk.
 
 
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10.   I know that I may have tax liability due to the uncertain value of the
shares. 1 understand that the Board of Directors believes its valuation of the
shares represents a fair appraisal of their worth, but that it remains possible
that, with the benefit of hindsight, the Internal Revenue Service may
successfully assert that the value of the shares on the date of my purchase is
substantially greater than the Board's appraisal. I understand that any
additional value ascribed to the shares by such an IRS determination will
constitute ordinary income to me as of the purchase date, and that any
additional taxes and interest due as a result will be my sole responsibility
payable only by me, and that the Company need not and will not reimburse me for
that tax liability. I understand that if such additional value represents more
than 25% of my gross income for the year in which the value of the shares is
taxable, the IRS will have 6 years from the due date for filing the return (or
the actual filing date of the return if filed thereafter) within which to assess
me the additional tax and interest due.
 
11.   Residence. The address of my principal residence is set forth on the
signature page below.
 
By signing below, I acknowledge my agreement with each of the statements
contained in this Investment Representation Statement as of the date first set
forth above, and my intent for the Company to rely on such statements in issuing
the shares to me.
 
 

 

                   /s/ Daniel Ash                                   Purchaser's
Signature        Daniel
Ash                                                          Print Name 

 
 
Address of Purchaser's Principal Residence:
 
271321 Trellis Way
Laguna Niguel, California 92677
 
 
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