AUGUST
5, 2014


 


112359
FACTOR FUND, LLC


411
Hackensack Avenue

Hackensack, NY 07601


 


RE:     Convertible
Debentures numbered BTZO – 59FF 101 through 108


 


To
whom it may concern:


 


112359
FACTOR FUND, LLC (“Investor”) holds those certain convertible debentures numbered BTZO – 59FF
101, BTZO – 59FF 102, BTZO – 59FF 103, BTZO – 59FF 104, BTZO – 59FF 105, BTZO – 59FF
106, BTZO – 59FF 107, and BTZO – 59FF 108 (the “Debentures”) issued by BITZIO, INC.
(“Company”), and any Company securities issuable thereunder (the “Securities”). This
letter agreement (“Agreement”), effective as of the date hereof (the “Effective Date”),
shall confirm that, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Investor and
Company, intending to be legally bound, hereby agree as follows:


 


		1. 	Section
    1(b) of the Debentures shall be amended in their entirety as follows:



 


		“(b) 	Certain
    Conversion Restrictions.  A Holder may not convert this Debenture to the extent such conversion would result
    in the Holder, together with any affiliate thereof, beneficially owning (as determined in accordance with Section 13(d) of
    the Exchange Act and the rules promulgated thereunder) in excess of 9.99% of the then issued and outstanding shares of Common
    Stock, including shares issuable upon conversion of this Debenture held by such Holder after application of this Section.  Since
    the Holder will not be obligated to report to the Obligor the number of shares of Common Stock it may hold at the time of
    a conversion hereunder, unless the conversion at issue would result in the issuance of shares of Common Stock in excess of
    9.99% of the then outstanding shares of Common Stock without regard to any other shares which may be beneficially owned by
    the Holder or an affiliate thereof, the Holder shall have the authority and obligation to determine whether the restriction
    contained in this Section will limit any particular conversion hereunder and to the extent that the Holder determines that
    the limitation contained in this Section applies, the determination of which portion of the principal amount of this Debenture
    is convertible shall be the responsibility and obligation of the Holder.  If the Holder has delivered a Conversion
    Notice for a principal amount of this Debenture that, without regard to any other shares that the Holder or its affiliates
    may beneficially own, would result in the issuance in excess of the permitted amount hereunder, the Obligor shall notify the
    Holder of this fact and shall honor the conversion for the maximum principal amount permitted to be converted on such Conversion
    Date in accordance with the periods described in Section 1(a)(i) and, at the option of the Holder, either retain any principal
    amount tendered for conversion in excess of the permitted amount hereunder for future conversions or return such excess principal
    amount to the Holder. The provisions of this Section may be waived by a Holder (but only as to itself and not to any other
    Holder) upon not less than 65 days prior notice to the Obligor. Other Holders shall be unaffected by any such waiver.”



 


		2. 	Section
    1(c)(i) of the Debentures shall be amended in its entirety as follows:



 


		“(i) 	The
    “Conversion Price” in effect on any Conversion Date shall be equal to 100% of the average of the five (5)
    lowest closing market prices for the Common Stock for the sixty (60) Trading Days preceding conversion. All market and trading
    prices shall be the prices as posted on the OTCQB or on the principal US National Stock Exchange or other electronic stock
    trading platform upon which the Company may at that time be listed.”



 


		3. 	Section 1(d)(ii)
    of the Debentures shall be amended in its entirety as follows:



 


		“(ii)	[Intentionally Omitted].”



 


		4. 	Section
    1(f) of the Debentures shall be amended to include a new Section 1(f)(viii) as follows:



 


		“(viii) 	The
    Interest Rate shall automatically increase to TWENTY PERCENT (20%) (“Default Interest Rate”) in the event
    that any Default Event occurs hereunder, including, without limitation, any failure by the Company to pay the full principal
    balance due hereunder on or before the Maturity Date; provided, however, that the Default Interest Rate shall only be applicable
    from and after the date upon which and such Default Event hereunder occurs and shall only apply from that date with respect
    to the unpaid portion of the principal balance hereunder.”


 






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Please
confirm your agreement with the foregoing by executing this Agreement where indicated below and returning it to the Company.


 


	 	Sincerely,
	 	BITZIO, INC.
	 	 	 
	 	By:	/s/ Hubert Blanchette
	 	Print:	Hubert Blanchette
	 	Title:	Chief Executive Officer



 


	ACKNOWLEDGED AND ACCEPTED BY	 
	 	 
	112359 FACTOR FUND, LLC	 
	 	 
	By:	/s/
    Mary Carroll	 
	Print:	Mary Carroll	 
	Title:	Manager	 


 






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