Exhibit
10.67


 


Exhibit
A.


 


THIS
FOURTEEN PERCENT (14%) CONVERTIBLE PROMISSORY NOTE IS ISSUED IN EXCHANGE FOR THAT CERTAIN PROMISSORY NOTE ISSUED TO DAVID RATZKER ON
JULY 20, 2006. FOR PURPOSES OF RULE 144, THIS NOTE SHALL BE DEEMED TO HAVE BEEN ISSUED ON JULY 20, 2006.


 


THIS
NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THE NOTE IN THE EVENT OF A PARTIAL REDEMPTION OR CONVERSION.


 


COROWARE,
INC.


 


$131,377.39


 


FOURTEEN
PERCENT (14%) CONVERTIBLE PROMISSORY NOTE DATED FEBRUARY 25, 2013


 


FOR
VALUE RECEIVED of $131,377.39 less a $81,377.39 discount COROWARE, INC., a Delaware corporation (hereinafter called
“Borrower” or the “Company”), hereby promises to pay to AGS CAPITAL GROUP, LLC
or its assigns or successors-in-interest (the “Holder”) or order, without demand, the aggregate principal
amount of ONE HUNDRED THIRTY ONE THOUSAND THREE HUNDRED AND SEVENTY SEVEN DOLLARS AND THIRTY NINE CENTS ($131,377.39) (the
“Principal Amount”), together with interest thereon from the Issue Date, payable on February 25, 2014 (the
“Maturity Date”). Interest shall accrue at a rate of fourteen percent (14%) per annum, compounded monthly.
“Outstanding Balance” means the Original Principal Amount, as reduced or increased, as the case may be, pursuant
to the terms hereof for conversion, breach hereof or otherwise, plus any accrued but unpaid interest (including with limitation
Default Interest), collection and enforcements costs, and any other fees or charges incurred under this Note or under the Purchase
Agreement.


 


ARTICLE
I


GENERAL PROVISIONS


 


1.1 Conversion
Privileges. The conversion privileges set forth in Article II shall remain in full force and effect immediately from the date hereof
and until Note is paid in full regardless of the occurrence of an Event of Default but subject to Article II. The Principal Amount of
Note together with all unpaid interest accrued thereon and any other amounts payable hereunder, or such portion thereof, that has not
previously been converted into common stock, of the Company (the “Common Stock”) in accordance with Article
II hereof, if any, shall be payable in full on the Maturity Date.


 


1.2
Payment of Interest. There shall be no periodic payments of interest on this Note.


 


ARTICLE
II


CONVERSION RIGHTS


 


The
Holder shall have the right to convert the Principal Amount together with all unpaid interest accrued thereon of this Note into shares
of the Borrower’s Common Stock as set forth below.


 




    	 



    	 



    

 


2.1 Conversion
into the Borrower’s Common Stock.


 


(a) Conversion
Price. The conversion price (the “Conversion Price”) shall 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 “Variable Conversion Price” shall mean thirty five percent (35%) multiplied by the
Market Price (as defined herein); provided, however, that if, after the Issue Date, the Borrower issues a convertible promissory
note to any Person other than the Holder or its Affiliates which contains a conversion price (the “Third-Party Conversion
Price”) which the Borrower and the Holder agree in writing, after good faith negotiations, is less than the effective Variable
Conversion Price (after giving effect to any shares of Common Stock issued, or issuable, to the Holder or its Affiliates in connection
with this Note or any other agreement between the Borrower and the Holder), then the Variable Conversion Price shall be reduced to the
Third-Party Conversion Price. Should the Variable Conversion Price be less than the Par Value ($.0001) of the company’s Common
Stock, the principal reduction resulting from this conversion will be less than the dollar amount of the conversion and shall be added
back to the principal amount of the Note. “Market Price” means the lowest closing bid price in the twenty Trading
Days prior to the applicable Conversion Date) “Trading Day” shall mean any day on which the Common Stock is
traded on the principal securities exchange or securities market on which the Common Stock is then traded, provided that “Trading
Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours
or any day that the Common Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange
or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00
p.m., New York time). The Conversion Price set forth herein shall be reduced an additional ten percent of the lowest closing bid price
in the twenty Trading Days prior to the applicable Conversion Date for each Public Information Failure. If the Company is late in any
of their filings with the SEC, such lateness shall constitute a Public Information Failure. For purposes of clarity, it is understood
that if there shall be a Public Information Failure which is cured and then repeated once, the Conversion Price shall be reduced an additional
twenty percent of the lowest closing bid price in the twenty Trading Days prior to the applicable Conversion Date. The Conversion Price
may be adjusted pursuant to the other terms of this Note.


 


(b) Conversion.
The Holder shall have the option, but shall not be required, to convert all or a portion of the Note into a number of fully paid
and non-assessable shares of Common Stock (the “Conversion Shares”). The number of Conversion Shares issuable
upon a conversion hereunder shall be determined by the quotient obtained by dividing (x) the outstanding Principal Amount together with
all unpaid interest accrued thereon of this Note to be converted by (y) the Conversion Price. The Company may deliver an objection to
any Notice of Conversion within one Business Day of delivery of such Notice of Conversion. To effect conversions hereunder, the Holder
shall not be required to physically surrender this Debenture to the Company.


 






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(c) Mechanics
of Conversion. As a condition to effecting the conversion set forth in Section 2.1(b) above, the Holder shall properly complete
and deliver to the Company a Notice of Conversion, a form of which is annexed hereto as Exhibit B. The Notice of Conversion
shall set forth the Principal Amount together with all unpaid interest accrued thereon of this Note to be converted and the date on
which such conversion shall be effected (such date, the “Conversion Date”). If no Conversion Date is
specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion is deemed delivered
hereunder. Upon timely delivery to the Borrower of the Notice of Conversion, certificates evidencing that number of shares of Common
Stock for the portion of the Note converted in accordance herewith shall be transmitted by the Company’s transfer agent to the
Holder by crediting the account of the Holder’s broker with The Depository Trust Company through its Deposit / Withdrawal at
Custodian system if the Company is then a participant in such system and either (A) there is an effective registration statement
permitting the issuance of the Conversion Shares to, or resale of the Conversion Shares by, the Holder or (B) the shares are
eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by physical
delivery to the address specified by the Holder in the Notice of Conversion by the date that is three (3) Trading Days after the
Conversion Date (such third day being the “Share Delivery Date”). The Borrower will not issue fraction
shares or scrip representing fractions of shares upon conversion, but the Borrower will round the number of the she shares up to the
nearest whole share.


 


 (d) Obligation to Deliver Conversion Shares Absolute; Certain Remedies.




 


(i) Obligation
Absolute. The Company’s obligations to issue and deliver the Conversion Shares upon conversion of this Note in accordance with
the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver
or consent with respect to any provision hereof, the recovery of any judgment against any Person or any action to enforce the same, or
any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other Person of
any obligation to the Company or any violation or alleged violation of law by the Holder or any other Person, and irrespective of any
other circumstance which might otherwise limit such obligation of the Company to the Holder in connection with the issuance of such Conversion
Shares. The Company shall issue Conversion Shares or, if applicable, cash, upon a properly noticed conversion. All payments under this
Note (whether made by the Borrower or any other person) to or for the account of the Holder hereunder shall be made free and clear of
and without reduction by reason of any present and future income, stamp, registration and other taxes, levies, duties, costs and charges
whatsoever imposed, assessed, levied or collected by the United States or any political subdivision or taxing authority thereof or therein,
together with interest thereon and penalties with respect thereto, if any on or in respect of this Note (such taxes, levies, duties,
costs and charges being herein collectively called “Taxes”).


 


(ii) Failure
to Deliver Common Stock Prior to Delivery Date. 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 as required by Section 2.1(c) by the Share Delivery Date (a “Conversion Default”), the
Borrower shall pay in cash to the Holder for each calendar day beyond the Delivery Date that the Borrower fails to deliver such
Common Stock an amount equal to the greater of (i) $2,000.00 and (ii) 2% of the product of (1) the sum of the number of shares of
Common Stock not issued to the Holder on a timely basis and to which the Holder is entitled multiplied by (2) the Closing Trading
Price of the Common Stock on the Trading Day immediately preceding the last possible date on which the Borrower could have issued
such shares of Common Stock to the Holder without violating Section 2.1(c) (the “Conversion Default Payment”).
Such cash amount shall be paid to the Holder by the fifth day of the month following the month in which it has accrued (the
“Conversion Default Payment Due Date”). In the event such cash amount is not received by the Holder by the
Conversion Default Payment Due Date, at the option of the Holder (without notice to the Borrower), the Conversion Default Payment
shall be added to the Outstanding Balance of this Note, in which event interest shall accrue thereon in accordance with the terms of
this Note.


 






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(iii) Rescission.
If, in the case of any Notice of Conversion, such certificate or certificates are not delivered to or as directed by the applicable Holder
by the Share Delivery Date, the Holder shall be entitled to elect by written notice to the Company at any time on or before its receipt
of such certificate or certificates, to rescind such Conversion, in which event the Company shall promptly return to the Holder any original
Note delivered to the Company and the Holder shall promptly return to the Company the Common Stock certificates issued to such Holder
pursuant to the rescinded Conversion Notice.


 


(e) Adjustment.
The number and kind of shares or other securities to be issued upon conversion determined pursuant to Section 2.1(b), shall be subject
to adjustment, from time to time, upon the happening of certain events while this conversion right remains outstanding, as follows:


 


(f) Reservation
of Shares. The Borrower represents at all times to have authorized and reserved four times the number of shares that is actually
issuable upon full conversion of this Note (based on the Conversion Price in effect from time to time) (the “Reserved Amount”).
The Reserved Amount shall be increased from time to time as required to insure compliance with this provision. 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 this Note
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
this Note. The Borrower (i) acknowledges that it has irrevocably instructed its transfer agent to issue shares of 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 issuing the necessary 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.


 






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 2.2 Effect of Certain Events.




 


(a) Fundamental
Transaction Consent Right. The Borrower shall not enter into or be party to a Fundamental Transaction (as defined below), unless
the Borrower obtains the prior written consent of the Holder to enter into such Fundamental Transaction. For purposes of this Note,
“Fundamental Transaction” means that (i) (1) the Borrower or any of its subsidiaries shall, directly or
indirectly, in one or more related transactions, consolidate or merge with or into (whether or not the Borrower or any of its
subsidiaries is the surviving corporation) any other individual, corporation, limited liability company, partnership, association,
trust or other entity or organization (collectively, “Person”), or (2) the Borrower or any of its subsidiaries
shall, directly or indirectly, in one or more related transactions, sell, lease, license, assign, transfer, convey or otherwise
dispose of all or substantially all of its respective properties or assets to any other Person, or (3) the Borrower or any of its
subsidiaries shall, directly or indirectly, in one or more related transactions, allow any other Person to make a purchase, tender
or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of voting stock of the Borrower (not
including any shares of voting stock of the Borrower held by the Person or Persons making or party to, or associated or affiliated
with the Persons making or party to, such purchase, tender or exchange offer), or (4) the Borrower or any of its subsidiaries shall,
directly or indirectly, in one or more related transactions, consummate a stock or share purchase agreement or other business
combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other
Person whereby such other Person acquires more than 50% of the outstanding shares of voting stock of the Borrower (not including any
shares of voting stock of the Borrower held by the other Person or other Persons making or party to, or associated or affiliated
with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (5) the
Borrower or any of its subsidiaries shall, directly or indirectly, in one or more related transactions, reorganize, recapitalize or
reclassify the Common Stock, other than an increase in the number of authorized shares of the Borrower’s Common Stock, or (ii)
any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the 1934 Act
and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule
13d-3 under the 1934 Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and
outstanding voting stock of the Borrower. The provisions of this Section 2.2(a) shall apply similarly and equally to successive
Fundamental Transactions and shall be applied without regard to any limitations on the conversion of this Note. As a condition to
pre-approving any Fundamental Transaction in writing, which approval may be withheld in the Holder’s sole discretion, Holder
may require the resulting successor or acquiring entity (if not the Borrower) to assume by written instrument all of the obligations
of the Borrower under this Note and all the other Transaction Documents with the same effect as if such successor or acquirer had
been named as the Borrower hereto and thereto.


 


(b) Adjustment
Due to Fundamental Transactions. If, at any time when this Note is issued and outstanding and prior to conversion of all of this
Note, there shall be any Fundamental Transaction that is pre-approved in writing by the Holder pursuant to Section 2.2(a) above, 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 this 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 above provisions shall similarly apply to successive Fundamental
Transactions.


 






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(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 stockholders 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 stockholders 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 stockholders entitled to such Distribution.


 


(d) Adjustment
Due to Dilutive Issuance. If, at any time when this Note is issued and outstanding, the Borrower issues or sells, or in accordance
with this section 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 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 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.


 






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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, 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 (1) 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 (2) 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) Purchase
Rights. If, at any time when this Note is issued and outstanding, the Borrower issues any convertible securities or rights to purchase
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 Purchase Rights, the aggregate
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 Purchase 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 Purchase Rights.


 


(f) Adjustment
Due to Non-DWAC Eligibility. If, at any time when this Note is issued and outstanding thereafter, the Holder delivers a Notice of
Conversion and at such time all DWAC Eligible Conditions are not then satisfied, the Borrower shall deliver certificated Conversion Shares
to the Holder pursuant to Section 2.1(c) and the Non-DWAC Eligible Adjustment Amount shall be added to the Outstanding Balance of this
Note, without limiting any other rights of the Holder under this Note or the other Transaction Documents. The “Non-DWAC Eligible
Adjustment Amount” is the amount equal to the number of applicable Conversion Shares multiplied by the excess, if any, of (i)
the Trading Price of the Common Stock on the Conversion Date, over (ii) the Trading Price of the Common Stock on the date the certificated
Conversion Shares are freely tradable, clear of any restrictive legend and deposited in the Holder’s brokerage account. In any
such case, Holder will use reasonable efforts to timely deposit such certificates in its brokerage account after it receives them and
cause such restrictive legends to be removed, and, without limiting any other provision hereof, Borrower agrees to fully cooperate with
Holder in accomplishing the same. Any fees charged to Holder for the stock being Non-DWAC Eligible shall be paid by the Borrower.


 


(g) Notice
of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price or the addition of the Non-DWAC
Eligible Adjustment Amount to the Outstanding Balance as a result of the events described in this Note, the Borrower, the Non-DWAC
Eligible Adjustment Amount shall be added to the Outstanding Balance of this Note, without limiting any other rights of the Holder
under this Note or the other Transaction Documents. The “Non-DWAC Eligible Adjustment Amount” is the amount equal
to the number of applicable Conversion Shares multiplied by the excess, if any, of (i) the Trading Price of the Common Stock on the
Conversion Date, over (ii) the Trading Price of the Common Stock on the date the certificated Conversion Shares are freely tradable,
clear of any restrictive legend and deposited in the Holder’s brokerage account. 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 this Note.


 






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2.3 Method
of Conversion. Note may be converted by the Holder, in whole or in part, as described in Section 2.1(a) hereof and the Purchase Agreement.
Upon partial conversion of Note, a new Note containing the same date and provisions of Note shall, at the request of the Holder, be issued
by the Borrower to the Holder for the principal balance of Note and interest which shall not have been converted or paid.


 


2.4 Limitations
on Conversion. Notwithstanding anything to the contrary contained in this Note, this Note shall not be convertible by the Holder
hereof, and the Company shall not effect any conversion of this Note or otherwise issue any shares of Common Stock pursuant hereto,
to the extent (but only to the extent) that the Holder or any of its affiliates would beneficially own in excess of 4.99% (the
“Maximum Percentage”) of the Common Stock. The Holder, upon not less than 61 days’ prior notice to
the Company, may increase or decrease the Beneficial Ownership Limitation provision of this section, provided that the Beneficial
Ownership Limitation in no event exceeds 9.99% of the number of shares of the Common Stock outstanding immediately after giving
effect to the issuance of shares of common Stock upon conversion of this Note held by the Holder and the Beneficial Ownership
Limitation provision of this section shall continue to apply. To the extent the above limitation applies, the determination of
whether this Note shall be convertible (vis-à-vis other convertible, exercisable or exchangeable securities owned by the
Holder) shall, subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for
conversion, exercise or exchange (as the case may be). No prior inability to convert this Note, or to issue shares of Common Stock,
pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any
subsequent determination of convertibility. For purposes of this paragraph, beneficial ownership and all determinations and
calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance
with Section 13(d) of the Securities Act of 1934, as amended, and the rules and regulations promulgated thereunder. The provisions
of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct
this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial
ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such
Maximum Percentage limitation. The limitations contained in this paragraph shall apply to a successor Holder of this Note. The
holders of Common Stock shall be third party beneficiaries of this paragraph and the Company may not waive this paragraph without
the consent of holders of a majority of its Common Stock. For any reason at any time, upon the written or oral request of the
Holder, the Company shall within two (2) Trading Days confirm orally to the Holder and, if requested, in writing to the Holder the
number of shares of Common Stock then outstanding, including by virtue of any prior conversion or exercise of convertible or
exercisable securities into Common Stock, including, without limitation, pursuant to this Note or securities issued pursuant to the
Purchase Agreement.


 






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ARTICLE
III


EVENT OF DEFAULT


 


The
occurrence of any of the following events of default (“Event of Default”) shall be an event of default hereunder
(whatever the reason for such event and whether such event shall be voluntary or involuntary or effected by operation of law or pursuant
to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):


 


3.1 Failure
to Pay. The Borrower fails to pay the Principal Amount, interest, damages or other sum due under this Note or any other note when
due;


 


3.2 Breach
of Covenant. The Borrower breaches any material covenant of the Purchase Agreement or Note in any material respect and such breach,
if subject to cure, continues for a period of FIFTEEN (15) Trading Days after written notice to the Borrower from the Holder;


 


3.3 Breach
of Representations and Warranties. Any representation or warranty of the Borrower made, in the Purchase Agreement, this Note or in
any certificate delivered pursuant to the Purchase Agreement, said statement or certificate given in writing pursuant hereto or in connection
therewith or any other report, financial statement or certificate shall be false or misleading in any material respect as of the date
made and the Closing Date;


 


3.4 Receiver
or Trustee. 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;


 


3.5 Judgments.
Any money judgment, writ or similar final process shall be entered or filed against Borrower or any of its property or other assets for
more than ONE MILLION DOLLARS ($1,000,000.00) and shall remain unvacated, unbonded or unstayed for a period of THIRTY (30) days;


 


3.6 Bankruptcy.
Bankruptcy, reorganization, insolvency proceeding, liquidation proceedings or other proceedings or relief under any bankruptcy law or
any law, or the issuance of any notice in relation to such event, for the relief of debtors shall be instituted by or against the Borrower
and if instituted against them are not dismissed within THIRTY (30) days of initiation. The Borrower suffers any appointment of any custodian
or the like for it or any substantial art of its property that is not discharged or stayed within 30 days; the Borrower makes a general
assignment of the benefit of creditors; the Borrower fails to pay or states that it is unable to pay, or is unable to pay its debts generally
as they become due;


 


3.7 Non-Payment.
A default by the Borrower under any one or more obligations in, unless the Borrower is contesting the validity of such obligation in
good faith and has segregated cash funds equal to not less than one-half of the contested amount;


 




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3.8 Public
Information Failure. A Public Information Failure occurs and continues for a period of FIFTEEN (15) Days after written notice to
the Borrower from the Holder of such Public Information Failure;


 


3.9
Beginning 30 days after the Issue Date, the failure of any of the DWAC Eligible Conditions to be satisfied at any time thereafter
during which the Borrower has obligations under this Note;


 


3.10 Reservation
Default. Failure by the Borrower to have reserved for issuance upon conversion of this Note the amount of Common stock as set forth
in this Note for more than FORTY FIVE (45) days after notice to the Borrower from the Holder;


 


3.11
Withdrawal from registration of the Issuer under the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
either voluntary or involuntary;


 


3.12
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;


 


3.13
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;


 


3.14
The Borrower shall fail to maintain the listing and/or quotation, as applicable, of the Common Stock on the Principal
Market;


 


3.15
The Borrower shall fail to comply with the reporting requirements of the 1934 Act; and/or the Borrower shall cease to be subject to
the reporting requirements of the 1934 Act;


 


3.16 Any cessation of operations by the Borrower or the Borrower admits it is
otherwise generally unable to pay its debts and such debts become due;


 


3.17
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
any other Transaction Documents;


 


3.18
The Borrower effectuates a reverse split of its Common Stock without twenty (20) calendar days prior written notice to the Holder;


 


3.19
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 (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 the
Borrower and the Borrower;


 




    	10



     


    

 


3.20
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, fully executed Irrevocable Transfer Agent Instructions in a form as initially delivered pursuant to the Purchase Agreement
(including but not limited to the provision to irrevocable reserve shares of Common Stock in the Reserved Amount) signed by the successor
transfer agent to Holder and the Borrower;


 


3.21
The Company shall fail for any reason to deliver certificates to a Holder prior to the fifth Trading Day after a Conversion Date or
the company shall provide at any time notice to the Holder, including by way of public announcement, of the Company’s
intention to not honor requests for conversion of any Notes in accordance with the terms hereof;


 


3.22 The
Company shall fail to increase their authorized shares by an additional one hundred billion shares by March 20, 2013 or the Company shall
fail to have their transfer agent reserve seventy billion shares for the Holder by March 20, 2013.


 


Upon
the occurrence of any Event of Default, (a) the Outstanding Balance shall immediately increase to 150% of the Outstanding Balance immediately
prior to the occurrence of the Event of Default and (b) this Note shall then accrue interest at the Default Interest rate (collectively,
the “Default Effects”); provided, however, that (x) in no event shall the Default Effects be applied more than
two times, and a particular Event of Default that triggers the Default Effects will not cause the Default Effects to be triggered again
unless such Event of Default is cured after triggering the Default Effects and then occurs again thereafter, and (y) notwithstanding
any provision to the contrary herein, in no event shall the applicable interest rate at any time exceed the maximum interest rate allowed
under applicable law. The Default Effects shall automatically apply upon the occurrence of an Event of Default without the need for any
party to give any notice or take any other action. Further, upon the occurrence and during the continuation of any Event of Default,
the Holder may by written notice to the Borrower declare the entire Outstanding Balance immediately due and payable without presentment,
demand, protest or any other notice of any kind, all of which are hereby expressly waived, anything contained herein or in the other
Transaction Documents to the contrary notwithstanding; provided, however, that upon the occurrence or existence of any
Event of Default, immediately and without notice, all outstanding obligations payable by the Borrower 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, anything contained herein or in the Transaction Documents to the contrary (“Automatic Acceleration”). The
Holder shall retain all rights under this Note and the Transaction Documents, including the ability to convert the then Outstanding Balance
of this Note at all times following the occurrence of an Automatic Acceleration until the entire then Outstanding Balance has been paid
in full. If one or more of the “Events of Default” as described in the Agreement shall occur, the Borrower agrees to pay
all costs and expenses, including reasonable attorney’s fees, which the Holder may incur in collecting any amount due under, or
enforcing any terms of, this Note. The Borrower covenants that until all amounts due under this Note are paid in full, by conversion
or otherwise, the Borrower shall notify Holder in writing within one day of any of the above Events of Default.


 




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ARTICLE
IV


NEGATIVE
COVENANTS


 


4.1. Negative
Covenants. As long as any portion of this Note remains outstanding, unless the Holder shall have otherwise given prior written consent,
the Company shall not, and shall not permit any of the Subsidiaries to, directly or indirectly:


 


(a) other
than Permitted Indebtedness (as defined below), enter into, create, incur, assume, guarantee or suffer to exist any secured indebtedness
for borrowed money of any kind, including, but not limited to, a guarantee, on or with respect to any of its property or assets now owned
or hereafter acquired or any interest therein or any income or profits therefrom;


 


(b) other
than Permitted Liens (as defined below), enter into, create, incur, assume or suffer to exist any Liens of any kind, on or with respect
to any of its property or assets now owned or hereafter acquired or any interest therein or any income or profits therefrom;


 


(c) repay,
repurchase or offer to repay, repurchase or otherwise acquire for cash more than a de minimis number of shares of its Common Stock other
than repurchases of Common Stock of departing officers and directors of the Company, provided that such repurchases shall not exceed
an aggregate of $100,000 during the term of this Note; or


 


(d)
pay cash dividends or distributions on any equity securities of the Company.


 


(e)
amend its charter documents, including, without limitation, its certificate of incorporation and bylaws, in any manner that
materially and adversely affects any rights of the Holder;


 


(f) repay,
repurchase or offer to repay, repurchase or otherwise acquire any indebtedness, other than the Debentures if on a pro-rata basis, other
than regularly scheduled principal and interest payments as such terms are in effect as of the Original Issue Date, provided that such
payments shall not be permitted if, at such time, or after giving effect to such payment, any Event of Default exist or occur;


 


(g) enter
into any transaction with any affiliate of the Company which would be required to be disclosed in any public filing with the SEC, unless
such transaction is made on an arm’s-length basis and expressly approved by a majority of the disinterested directors of the Company
(even if less than a quorum otherwise required for board approval;


 


 (h) enter into any agreement with respect to any of the foregoing.




 


 4.2. Definitions. For the purpose of this Note, the following definitions shall apply:




 


(i)
“Permitted Indebtedness” means (i) the Indebtedness evidenced by the Note, (ii) the Indebtedness existing
on the Issue Date and set forth on Schedule 5.19 attached to the Purchase Agreement, (iii) unsecured Indebtedness incurred by
the Company, which Indebtedness is not senior in rank to the Note and does not mature prior to six months from the issue date of
such Indebtedness, (iv) Indebtedness secured by Permitted Liens, and (v) extensions, refinancings and renewals of any items in
clauses (i) through (iv) above, provided that the principal amount is not increased (other than with respect to the addition of
existing or future interest due and payable thereunder to the principal thereunder) or the terms modified to impose materially more
burdensome terms upon the Company or its Subsidiaries, as the case may be.


 







(j) “Permitted
Lien” means the individual and collective reference to the following: (i) any Lien for taxes not yet due or delinquent
or being contested in good faith by appropriate proceedings for which adequate reserves have been established in accordance with GAAP,
(ii) any statutory Lien arising in the ordinary course of business by operation of law with respect to a liability that is not yet due
or delinquent, (iii) any Lien created by operation of law, such as materialmen’s liens, mechanics’ liens and other similar
liens, arising in the ordinary course of business with respect to a liability that is not yet due or delinquent or that are being contested
in good faith by appropriate proceedings, (iv) Liens (A) upon or in any equipment acquired or held by the Company or any of its Subsidiaries
to secure the purchase price of such equipment or indebtedness incurred solely for the purpose of financing the acquisition or lease
of such equipment, or (B) existing on such equipment at the time of its acquisition, provided that the Lien is confined solely to the
property so acquired and improvements thereon, and the proceeds of such equipment, (v) Liens incurred in connection with the extension,
renewal or refinancing of the indebtedness secured by Liens of the type described in clause (iv) above, provided that any extension,
renewal or replacement Lien shall be limited to the property encumbered by the existing Lien and the principal amount of the Indebtedness
being extended, renewed or refinanced does not increase, (vi) leases or subleases and licenses and sublicenses granted to others in the
ordinary course of the Company’s business, not interfering in any material respect with the business of the Company and its Subsidiaries
taken as a whole, (vii) Liens in favor of customs and revenue authorities arising as a matter of law to secure payments of custom duties
in connection with the importation of goods, (viii) Liens arising from judgments, decrees or attachments in circumstances not constituting
an Event of Default, (ix) Liens incurred in connection with Permitted Indebtedness under clause (i) and, solely to the extent existing
as of the Issue Date, clause (ii) of the definition thereof (including any extensions, refinancings and renewals of such Indebtedness
that constitute Permitted Indebtedness).


 






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Article
V


REDEMPTION RIGHTS


 


5.1. Optional
Redemption Right. Subject to the provisions of this Article V, at any time (a) within ninety (90) days after the Effective Date,
the Company may deliver a notice to the Holder (an “Optional Redemption Notice” and the date such notice
is deemed delivered hereunder, the “Optional Redemption Notice Date”) of its irrevocable election to
redeem all of the then outstanding principal amount together with all unpaid interest accrued thereon of this Note for cash at a
redemption price equal to 150% multiplied by all of the then outstanding principal amount together with all unpaid interest accrued
thereon of this Note, on the 20th Trading Day following the Optional Redemption Notice Date (such date, the
“Optional Redemption Date”, such 20 Trading Day period, the “Optional Redemption
Period” and such redemption, the “Optional Redemption”), The Optional Redemption Amount is
payable in full on the Optional Redemption Date. The Company may only effect an Optional Redemption if each of the Equity Conditions
(as defined below) shall have been met (unless waived in writing by the Holder) on each Trading Day during the period commencing on
the Optional Redemption Notice Date through to the Optional Redemption Date and through and including the date payment of the
Optional Redemption Amount is actually made in full. If any of the Equity Conditions shall cease to be satisfied at any time during
the Optional Redemption Period, then the Holder may elect to nullify the Optional Redemption Notice by notice to the Company after
the day on which any such Equity Condition has not been met in which case the Optional Redemption Notice shall be null and void, ab
initio. The Company covenants and agrees that it will honor all Notices of Conversion tendered from the time of delivery of the
Optional Redemption Notice through the date all amounts owing thereon are due and paid in full. “Equity
Conditions” means, during the period in question, (a) the Company shall have duly honored all conversions and
redemptions scheduled to occur or occurring by virtue of one or more Notices of Conversion of the Holder, if any, (b) the Company
shall have paid all liquidated damages and other amounts owing to the Holder in respect of this Note, (c)(i) there is an effective
Registration Statement pursuant to which the Holder is permitted to utilize the prospectus thereunder to resell all of the
Conversion Shares issuable upon conversion of such portion of this Note subject to an Optional Redemption (and the Company believes,
in good faith, that such effectiveness will continue uninterrupted for such period) or (ii) all of the Conversion Shares issuable
upon conversion of such portion of this Note subject to an Optional Redemption may be resold pursuant to Rule 144 during such
period, (d) the Common Stock is trading on a Trading Market and all of the shares issuable pursuant to the Transaction Documents are
listed or quoted for trading on such Trading Market (and the Company believes, in good faith, that trading of the Common Stock on a
Trading Market will continue uninterrupted for the foreseeable future), (e) there is a sufficient number of authorized but unissued
and otherwise unreserved shares of Common Stock for the issuance of all of the Conversion Shares issuable upon conversion of such
portion of this Note being redeemed at such time, (f) there is no existing Event of Default and, to the actual knowledge of the
Company, no existing event which, with the passage of time or the giving of notice, would constitute an Event of Default, (g) the
issuance of the shares issuable to the Holder upon conversion of such portion of this Note subject to an Optional Redemption would
not violate the limitations set forth in Section 2.3 under this Note, (h) there has been no public announcement of a pending or
proposed Fundamental Transaction that has not been consummated or abandoned, and (i) the applicable Holder is not in possession of
any information provided by the Company that constitutes, or may constitute, material non-public information. Notwithstanding the
foregoing, the Holder may elect to convert the outstanding principal amount of the Note subject to an Optional Redemption Notice
pursuant to Article II at any time prior to actual payment in cash for any redemption under this Section 5 by the delivery of an
irrevocable Notice of Conversion to the Company.


 


ARTICLE
IV


UNSECURED NOTE


 


4.1 Unsecured
Note. Note is an unsecured obligation of the Borrower.


 


ARTICLE
V


MISCELLANEOUS


 


5.1 Failure
or Indulgence Not Waiver. No failure or delay on the part of Holder hereof 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 privilege. All rights and remedies existing hereunder are
cumulative to, and not exclusive of, any rights or remedies otherwise available. Notices. All notices, requests, demands, consents,
instructions or other communications required or permitted hereunder shall be in writing and either faxed, mailed, e- mailed or
delivered to each party at the respective addresses of the parties. All such notices and communications shall be effective (a) when
sent by Federal Express or other overnight service of recognized standing on the Trading Day following the deposit with such
service; (b) when mailed, by registered or certified mail, first class postage prepaid and addressed as aforesaid through the United
States Postal Service, upon receipt; (c) when delivered by hand, upon delivery; (d) when faxed, upon confirmation of receipt; (e)
when e-mailed, upon e-mail being sent.


 






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5.3 Amendment
Provision. No provision of this Note may be modified or amended without the prior written consent of the Holder. The term “Note”
and all reference thereto, as used throughout this instrument, shall mean this instrument as originally executed, or if later amended
or supplemented, then as so amended or supplemented.


 


5.4 Assignability.
Note shall be binding upon the Borrower and its successors and assigns, and shall inure to the benefit of the Holder and its successors
and assigns. The Holder may assign or transfer this Note to any transferee.


 


5.5 Cost
of Collection. If default is made in the payment of Note, Borrower shall pay the Holder hereof reasonable costs of collection, including
reasonable attorneys’ fees.


 


5.6 Governing
Law. Note shall be only be governed by and construed in accordance with the laws of the State of Florida, including, but not limited
to, Florida statutes of limitations. Any action brought by either party against the other concerning the transactions contemplated by
this Agreement shall be brought only in the civil or state courts in Miami, Florida or in the federal courts located in Miami, Florida.
Both parties and the individual signing this Agreement on behalf of the Borrower agree to submit only to the jurisdiction of such courts
in Miami, Florida. 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 Note 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 to such statute or rule
of law. Any such provision, which may prove invalid or unenforceable under any law, shall not affect the validity or unenforceability
of any other provision of Note. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking
other legal action against the Borrower in any other jurisdiction to collect on the Borrower’s obligations to Holder, or to enforce
a judgment or other decision in favor of the Holder. This Note shall be deemed an unconditional obligation of Borrower for the payment
of money and, without limitation to any other remedies of Holder, may be enforced against Borrower by summary proceeding or summary judgment
or any similar rule or statute in the jurisdiction where enforcement is sought. For purposes of such rule or statute, any other document
or agreement to which Holder and Borrower are parties or which Borrower delivered to Holder, which may be convenient or necessary to
determine Holder’s rights hereunder or Borrower’s obligations to Holder are deemed a part of Note, whether or not such other
document or agreement was delivered together herewith or was executed apart from Note.


 


5.7 Shareholder
Status. The Holder shall not have rights as a shareholder of the Borrower with respect to unconverted portions of Note. However,
the Holder will have the rights of a shareholder of the Borrower with respect to the Shares of Common Stock to be received after delivery
by the Holder of a Conversion Notice to the Borrower.


 




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5.8 Non-Business
Days. Whenever any payment or any action to be made shall be due on a Saturday, Sunday or a public holiday under the laws of the
State of Florida, such payment may be due or action shall be required on the next succeeding Trading Day and, for such payment, such
next succeeding day shall be included in the calculation of the amount of accrued interest payable on such date.


 


5.9 Unenforceability.
If any term in this Note is found by a court of competent jurisdiction to be unenforceable, then the entire Note shall be rescinded,
the consideration proffered by the Holder for the remaining Debt acquired by the Holder not converted by the Holder in accordance with
this Note shall be returned in its entirety and any Conversion Shares in the possession or control of the Investor shall be returned
to the Issuer.


 


5.10 Entire
Understanding. The Note and the Purchase Agreement between the Borrower and the Holder (including all Exhibits thereto) constitute
the full and entire understanding and agreement between the Borrower and the Holder with respect to the subject hereof. Neither this
Note nor any term hereof may be amended, waived, discharged or terminated other than by a written instrument signed by the Borrower and
the Holder.


 


5.11 Registration
Rights. The Issuer hereby grants the right to the Investor, at Investor’s expense, to require Issuer to register any and all
issuances, past, present and future, directly connected to this specific Debt. If the Investor shall request the registration, the Issuer
shall begin the registration process within 30 days and the Investor shall have the following rights.


 


5.12 Recoupment
of Registration Fees. If the Investor shall invoke his rights under section 5.11 of this Agreement, the Issuer shall reimburse to
the Investor all fees, costs, and disbursements, inclusive of attorney’s fees, paid for by Investor, in common stock under the
same terms and conditions provided for herein.


 


5.13 Legal
Opinion. The Issuer’s counsel has provided an opinion regarding the applicable exemption from registration under the Securities
Act for the issuance of the Conversion Shares pursuant to the terms and conditions of this Agreement and the Note, which provides that
upon conversion at any time following the date hereof, the shares received as a result of the conversion shall be issued unrestricted
in accordance with the appropriate exemption.


 


5.14 Post-Closing
Expenses. The Borrower will bear any and all miscellaneous expenses of the Borrower and Holder that may arise as a result of this
Agreement post-closing. These expenses include, but are not limited to, the cost of legal opinion production, transfer agent fees, equity
issuance fees, fees charged for vetting and accepting physical certificates, etc. The failure to pay any and all Post-Closing Expenses
will be deemed an Event of Default.


 


5.15 Savings
Clause. In case any provision of this Note is held by a court of competent jurisdiction 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 provision of this Note will not in any way be affected or
impaired thereby. In no event shall the amount of interest paid hereunder exceed the maximum rate of interest on the unpaid
principal balance hereof allowable by applicable law. If any sum is collected in excess of the applicable maximum rate, the excess
collected shall be applied to reduce the principal debt. If the interest actually collected hereunder is still in excess of the
applicable maximum rate, the interest rate shall be reduced so as not to exceed the maximum allowable under law.


 






    	15



     


    

 


5.16 Attorneys’
Fees and Cost of Collection. In the event of any action at law or in equity to enforce or interpret the terms of this Note or any
of the other documents related to this financing, the parties agree that the party who is awarded the most money shall be deemed the
prevailing party for all purposes and shall therefore be entitled to an additional award of the full amount of the attorneys’ fees
and expenses paid by such prevailing party in connection with the litigation and/or dispute without reduction or apportionment based
upon the individual claims or defenses giving rise to the fees and expenses. Nothing herein shall restrict or impair a court’s
power to award fees and expenses for frivolous or bad faith pleading.


 


5.17 Fees
and Charges. The parties acknowledge and agree that upon the Borrower’s failure to comply with the provisions of this Note,
the Holder’s damages would be uncertain and difficult (if not impossible) to accurately estimate because of the parties’
inability to predict future interest rates, the Holder’s increased risk, and the uncertainty of the availability of a suitable
substitute investment opportunity for the Holder, among other reasons. Accordingly, any fees, charges, and interest due under this Note
are intended by the parties to be, and shall be deemed, a reasonable estimate of the Holder’s actual loss of its investment opportunity
and not a penalty, and shall not be deemed in any way to limit any other right or remedy Holder may have hereunder, at law or in equity.


 


5.18 Notice
of Corporate Events. Except as otherwise provided herein, 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 stockholders (and copies of proxy materials and other information sent to stockholders). In the
event of any taking by the Borrower of a record of its stockholders for the purpose of determining stockholders 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 stockholders 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) calendar days prior to the record date specified therein (or thirty
(30) calendar 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.


 


5.19 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 charges 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.


 


[SIGNATURES
ON THE FOLLOWING PAGE]


 




    	16



     


    

 


IN
WITNESS WHEREOF, Borrower has caused Note to be signed in its name by an authorized officer as of the I’1... day of
Fehfttftf)’ 2013.


 


	 	MARl-H
	 	 
		COROWARE, INC.
	 	 
	 	By:	/s/ Lloyd T.
  Spencer
	 	Name:	Lloyd T. Spencer
	 	Title:	Chief Executive Officer




 





	NOTARY PUBLIC WITNESS:
	 	Notary
                                            Public

 State of Washington

                                                                                   LINDA R RUBEL


MY
COMMISSION EXPIRES

June 12, 2015








 




    	 



    	 



    

 


Exhibit
B


 


NOTICE
OF CONVERSION


 


(To
be executed by the Registered Holder in order to convert the Note)


 


The
undersigned hereby elects to convert $_____ of the principal amount and $______ of the interest due on the Note
issued by COROWARE, INC. on February 18, 2013 into shares of common stock of COROWARE, INC. (the “Borrower”) according to
the conditions set forth in such Note, as of the date written below. Should the Conversion Price in effect for this conversion be less
than the Par Value ($0.0001) of the Company’s common Stock, the principal reduction resulting from this conversion will be less
than the dollar amount of the conversion as set forth below.


 


Date
of Conversion:


 


Amount
to be converted:


 


Conversion
Price per share:


 


Price
Per Share for Stock Issuable pursuant to this Conversion Notice*:


 


Number of shares of Common Stock to be issued:


 


Amount
of Principal Reduced**:


 


*Pursuant
to State Securities Rules and Regulations, the Company may be prohibited from issuing shares of stock at a price per share that is less
than its Par Value ($0.0001).


 


**Principal
shall be reduced based upon value received for the shares issued (as determined by multiplying the number of shares to be issued by the
Conversion Price per share).


 


Notwithstanding
anything to the contrary contained herein, this Conversion Notice shall constitute a representation by the Holder of the Note submitting
this Conversion Notice that, after giving effect to the conversion provided for in this Conversion Notice, such Holder (together with
its affiliates) will not have beneficial ownership (together with the beneficial ownership of such person’s affiliates) of a number
of shares Common Stock which exceeds the Maximum Percentage (as defined in the Note) of the total outstanding shares Common Stock of
the Company as determined pursuant to the provisions of Section 2.3 of the Note.


 


	Signature:		 
		Allen
                                            Silberstein, CEO of AGS Capital Group, LLC