Exhibit
10.59


 


THE
SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL NOT BE REGISTERED WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES
COMMISSION OF ANY STATE PURSUANT TO AN EXEMPTION FROM REGISTRATION PROVIDED BY SECTION 3(b) OF THE SECURITIES ACT OF 1933, AS AMENDED,
AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER (THE “1933 ACT)


 


us
$40,000.00


 


REPLACEMENT
NOTE- ORIGINALLY ISSUED 7-20-2006 IN THE AMOUNT OF $1,250,000.00 AND RE-ASSIGNED ON 12-31-10 IN THE AMOUNT OF $341,123.00
IN PRINCIPAL AND $227,140 IN ACCRUED INTEREST


 


COROWARE,
INC.


12%
CONVERTIBLE REDEEMABLE NOTE


DUE MARCH 11, 2015


 


FOR
VALUE RECEIVED, Coroware, Inc. (the “Company”) promises to pay to the order of LG CAPITAL FUNDING, LLC and its authorized
successors and permitted assigns (“Holder”), the aggregate principal face amount of Forty Thousand dollars exactly
(U.S. $40,000.00) on March 11, 2015 (“Maturitv Date”) and to pay interest on the principal amount outstanding here-
under at the rate of 12% per annum commencing on March 11, 2014. The interest will be paid to the Holder in whose name this Note is registered
on the records of the Company regarding registration and transfers of this Note. The principal of, and interest on, this Note are payable
at 1218 Union Street, Suite #2, Brooklyn, NY 11225 initially, and if changed, last appearing on the records of the Company as designated
in writing by the Holder hereof from time to time. The Company will pay each interest payment and the outstanding principal due upon
this Note before or on the Maturity Date, less any amounts required by law to be deducted or withheld, to the Holder of this Note by
check or wire transfer addressed to such Holder at the last address appearing on the records of the Company. The forwarding of such
check or wire transfer shall constitute a payment of outstanding principal hereunder and shall satisfy and discharge the liability for
principal on this Note to the extent of the sum represented by such check or wire transfer. Interest shall be payable in Common Stock
(as defined below) pursuant to paragraph 4(b) herein.


 


This
Note is subject to the following additional provisions:


 


1.
This Note is exchangeable for an equal aggregate principal amount of Notes of different authorized denominations, as requested by the
Holder surrendering the same. No service charge will be made for such registration or transfer or exchange, except that Holder shall
pay any tax or other governmental charges payable in connection therewith.


 




    	 



    	 



    

 


2.
The Company shall be entitled to withhold from all payments any amounts required to be withheld under applicable laws.


 


3.
This Note may be transferred or exchanged only in compliance with the Securities Act of 1933, as amended (“Act”) and
applicable state securities laws. Any attempted transfer to a non-qualifying party shall be treated by the Company as void. Prior to
due presentment for transfer of this Note, the Company and any agent of the Company may treat the person in whose name this Note is
duly registered on the Company’s records as the owner hereof for all other purposes, whether or not this ote be overdue, and neither
the Company nor any such agent shall be affected or bound by notice to the contrary. Any Holder of this Note electing to exercise the
right of conversion set forth in Section 4(a) hereof, in addition to the requirements set forth in Section 4(a), and any prospective
transferee of this Note, also is required to give the Company written confirmation that this Note is being converted (“Notice
of Conversion”) in the form annexed hereto as Exhibit A. The date of receipt (including receipt by telecopy) of such
Notice of Conversion shall be the Conversion Date.


 


4.
(a) The Holder of this Note is entitled, at its option, at any time after 180 days, and after full cash payment for the shares convertible
hereunder, to convert all or any amount of the principal face amount of this Note then outstanding into shares of the Company’s
common stock (the “Common Stock”) without restrictive legend of any nature, at a price (“Conversion Price”)
for each share of Common Stock equal to 50% of the lowest closing bid price of the Common Stock as reported on the
National Quotations Bureau OTCQB exchange which the Company’s shares are traded or any exchange upon which the Common Stock may
be traded in the future (“Exchange”), for the ten prior trading days including the day upon which
a Notice of Conversion is received by the Company (provided such Notice of Conversion is delivered by fax or other electronic method
of communication to the Company after 4 P.M. Eastern Standard or Daylight Savings Time if the Holder wishes to included the same day
closing price). If the shares have not been delivered within 3 business days, the Notice of Conversion may be rescinded. Such conversion
shall be effectuated by the Company delivering the shares of Common Stock to the Holder within 3 business days of receipt by the Company
of the Notice of Conversion. Once the Holder has received such shares of Common Stock, the Holder shall surrender this Note to the Company,
executed by the Holder evidencing such Holder’s intention to convert this Note or a specified portion hereof, and accompanied by
proper assignment hereof in blank. Accrued but unpaid interest shall be subject to conversion. No fractional shares or scrip representing
fractions of shares will be issued on conversion, but the number of shares issuable shall be rounded to the nearest whole share.


 


(b)
Interest on any unpaid principal balance of this Note shall be paid at the rate of 12% per annum. Interest shall be paid by the Company
in Common Stock (“Interest Shares”). The Holder may, at any time, send in a Notice of Conversion to the Company for Interest
Shares based on the formula provided in Section 4(a) above. The dollar amount converted into Interest Shares shall be all or a portion
of the accrued interest calculated on the unpaid principal balance of this Note to the date of such notice.


 




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(c)
This Note may not be prepaid.


 


(d)
Upon (i) a transfer of all or substantially all of the assets of the Company to any person in a single transaction or series of related
transactions, (ii) a reclassification, capital reorganization or other change or exchange of outstanding shares of the Common Stock,
or (iii) any consolidation or merger of the Company with or into another person or entity in which the Company is not the surviving entity
(other than a merger which is effected solely to change the jurisdiction of incorporation of the Company and results in a reclassification,
conversion or exchange of outstanding shares of Common Stock solely into shares of Common Stock) (each of items (i), (ii) and (iii)
being referred to as a “Sale Event”), then, in each case, the Company shall, upon request of the Holder, redeem this Note
in cash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the election of the
Holder, such Holder may convert the unpaid principal amount of this Note (together with the amount of accrued but unpaid interest) into
shares of Common Stock immediately prior to such Sale Event at the Conversion Price.


 


(e)
In case of any Sale Event in connection with which this Note is not re- deemed or converted, the Company shall cause effective provision
to be made so that the Holder of this Note shall have the right thereafter, by converting this Note, to purchase or convert this Note
into the kind and number of shares of stock or other securities or property (including cash) receivable upon such reclassification, capital
reorganization or other change, consolidation or merger by a holder of the number of shares of Common Stock that could have been purchased
upon exercise of the Note and at the same Conversion Price, as defined in this Note, immediately prior to such Sale Event. The foregoing
provisions shall similarly apply to successive Sale Events. If the consideration received by the holders of Common Stock is other than
cash, the value shall be as determined by the Board of Directors of the Company or successor person or entity acting in good faith.


 


5.
No provision of this Note shall alter or impair the obligation of the Com- pany, which is absolute and unconditional, to pay the principal
of, and interest on, this Note at the time, place, and rate, and in the form, herein prescribed.


 


6.
The Company hereby expressly waives demand and presentment for pay- ment, notice of non-payment, protest, notice of protest, notice of
dishonor, notice of acceleration or intent to accelerate, and diligence in taking any action to collect amounts called for hereunder
and shall be directly and primarily liable for the payment of all sums owing and to be owing hereto.


 


7.
The Company agrees to pay all costs and expenses, including reasonable attorneys’ fees and expenses, which may be incurred by the
Holder in collecting any amount due under this Note.


 


8.
If one or more of the following described “Events of Default” shall occur:


 


 (a) The Company shall default in the payment of principal or interest on this Note or any other note issued to the Holder by the Company; or




 




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(b)
Any of the representations or warranties made by the Company herein or in any certificate or financial or other written statements heretofore
or hereafter furnished by or on behalf of the Company in connection with the execution and delivery of this Note, or the Securities
Purchase Agreement under which this note was issued shall be false or misleading in any respect; or


 


(c)
The Company shall fail to perform or observe, in any respect, any cove- nant, term, provision, condition, agreement or obligation of
the Company under this Note; or


 


(d)
The Company shall (1) become insolvent; (2) admit in writing its inability to pay its debts generally as they mature; (3) make an assignment
for the benefit of creditors or commence proceedings for its dissolution; (4) apply for or consent to the appointment of a trustee,
liquidator or receiver for its or for a substantial part of its property or business; (5) file a petition for bankruptcy relief, consent
to the filing of such petition or have filed against it an involuntary petition for bankruptcy relief, all under federal or state laws
as applicable; or


 


(e)
A trustee, liquidator or receiver shall be appointed for the Company or for a substantial part of its property or business without its
consent and shall not be discharged within thirty (30) days after such appointment; or


 


(f)
Any governmental agency or any court of competent jurisdiction at the in- stance of any governmental agency shall assume custody or control
of the whole or any substantial portion of the properties or assets of the Company; or


 


(g)
One or more money judgments, writs or warrants of attachment, or similar process, in excess of fifty thousand dollars ($50,000) in the
aggregate, shall be entered or filed against the Company or any of its properties or other assets and shall remain unpaid, unvacated,
unbonded or unstayed for a period of fifteen (15) days or in any event later than five (5) days prior to the date of any proposed sale
thereunder; or


 


(h)
defaulted on or breached any term of any other note of similar debt in- strument into which the Company has entered and failed to cure
such default within the appropriate grace period; or


 


(i)
The Company shall have its Common Stock delisted from an exchange (including the OTCBB exchange) or, if the Common Stock trades on an
exchange, then trading in the Common Stock shall be suspended for more than 10 consecutive days;


 


(i)
If a majority of the members of the Board of Directors of the Company on the date hereof are no longer serving as members of the Board;


 


(k)
The Company shall not deliver to the Holder the Common Stock pursuant to paragraph 4 herein without restrictive legend within 3 business
days of its receipt of a Notice of Conversion; or


 




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(l)
The Company shall not replenish the reserve set forth in Section 12, with- in 3 business days of the request of the Holder.


 


Then,
or at any time thereafter, unless cured, and in each and every such case, unless such Event of Default shall have been waived in writing
by the Holder (which waiver shall not be deemed to be a waiver of any subsequent default) at the option of the Holder and in the Holder’s
sole discretion, the Holder may consider this Note immediately due and payable, without presentment, demand, protest or (further) notice
of any kind (other than notice of acceleration), all of which are hereby expressly waived, anything herein or in any note or other instruments
contained to the contrary notwithstanding, and the Holder may immediately, and without expiration of any period of grace, enforce any
and all of the Holder’s rights and remedies provided herein or any other rights or remedies afforded by law. Upon an Event of Default,
interest shall be accrue at a default interest rate of 24% per annum or, if such rate is usurious or not permitted by current law, then
at the highest rate of interest permitted by law. In the event of a breach of 8(k) the penalty shall be $250 per day the shares are not
issued beginning on the 4th day after the conversion notice was delivered to the Company. This penalty shall increase to
$500 per day beginning on the 10th day.


 


If
the Holder shall commence an action or proceeding to enforce any provisions of this Note, including without limitation engaging an attorney,
then the Holder shall be reimbursed by the Company for its attorneys’ fees and other costs and expenses incurred in the investigation,
preparation and prosecution of such action or proceeding.


 


9.
In case any provision of this Note is held by a court of competent jurisdic- tion to be excessive in scope or otherwise invalid or unenforceable,
such provision shall be adjusted rather than voided, if possible, so that it is enforceable to the maximum extent possible, and the
validity and enforceability of the remaining provisions of this Note will not in any way be affected or impaired thereby.


 


10.
Neither this Note nor any term hereof may be amended, waived, dis- charged or terminated other than by a written instrument signed by
the Company and the Holder.


 


11.
The Company represents that it is not a “shell” issuer and has never been a “shell” issuer or that if it previously
has been a “shell” issuer that at least 12 months have passed since the Company has reported form 10 type information indicating
it is no longer a “shell issuer. Further. The Company will instruct its counsel to either (i) write a 144- 3(a)(9) opinion to
allow for salability of the conversion shares or (ii) accept such opinion from Holder’s counsel.


 


12.
The Company will issue irrevocable transfer agent instructions reserving 322,000,000 shares of Common Stock for conversion under this
Note. The reserve shall be replenished as needed to allow for conversions of this Note. Upon full conversion of this Note, the reserve
representing this Note shall be cancelled.


 


13.
The Company will give the Holder direct notice of any corporate actions including but not limited to name changes, stock splits, recapitalizations
etc. This notice shall be given
to the Holder as soon as possible under law.


  


14.
This Note shall be governed by and construed in accordance with the laws of New York applicable to contracts made and wholly to be performed
within the State of New York and shall be binding upon the successors and assigns of each party hereto. The Holder and the Company hereby
mutually waive trial by jury and consent to exclusive jurisdiction and venue in the courts of the State of New York. This Agreement may
be executed in counterparts, and the facsimile transmission of an executed counterpart:to this Agreement shall be effective as an original.


 



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IN
WITNESS WHEREOF, the Company has caused this Note to be duly executed by an officer thereunto duly authorized.


 


	Dated:	 	 	 


 


	 	 	COROWARE, INC.
	 	 	 
	 	 	By:	             
	 	 	Title:	 


 




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EXHIBIT
A


 


NOTICE
OF CONVERSION


 


(To
be Executed by the Registered Holder in order to Convert the Note)


 


The
undersigned hereby irrevocably elects to convert $ ________of the above Note into ________ Shares of Common Stock of
Coroware, Inc. (“Shares”) according to the conditions
set forth in such Note, as of the date written below.


 


If
Shares are to be issued in the name of a person other than the undersigned, the w1dersigned will pay all transfer and other taxes and
charges payable with respect thereto.


 






Date
of Conversion: ________________________________________________________


Applicable
Conversion Price: ________________________________________________


Signature:
______________________________________________________________


[Print
Name of Holder and Title of Signer]


	Address:	______________________________________________________________
	 	______________________________________________________________




 


SSN
or EIN: ____________________________


Shares
are to be registered in the following name: _____________________________________________


 


Name: ______________________________________________________


Address: ____________________________________________________


Tel: _____________________________________________


Fax:
 _____________________________________________


SSN
or EIN:  _______________________________________


 


Shares
are to be sent or delivered to the following account:


 


Account
Name: ___________________________________________________________


Address:
 ________________________________________________________________


 



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