ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY
REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTION 3(c)(iii) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY,
THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii)
OF THIS NOTE.


 


THWAPR,
INC.


 


SECURED
CONVERTIBLE NOTE


 


	Execution Date:  March 20, 2012	Original Principal Amount: U.S.$1,347,383.21


 


FOR VALUE RECEIVED,
Thwapr, Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order of Kevir Kang
(“Kang”) or his registered assigns (together with Kang, the “Holder”) (a) the amount set
out above as the Original Principal Amount, as such Original Principal Amount is reduced pursuant to the terms hereof pursuant
to redemption, conversion or otherwise (the “Principal”), whether upon the Maturity Date (as defined below),
or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof), and (b) interest (“Interest”)
on any outstanding Principal, at the applicable Interest Rate (as defined below) from the Execution Date until the same becomes
due and payable, whether upon the Maturity Date or acceleration, conversion, redemption or otherwise (in each case in accordance
with the terms hereof). Certain capitalized terms used herein are defined below and in Section 21 of this Note.


 


The $1,347,383.21 Original
Principal Amount of this Note represents the sum of (i) an aggregate of $1,282,320.44 of cash advances heretofore made by Kang
to the Company and (ii) an aggregate of $65,062.77 of Interest on such cash advances, at the Interest Rate, which has accrued from
the date of each such cash advance through and including March 7, 2012; the date of the execution of this Note (the “Execution
Date”). This Note represents and replaces and supersedes all other notes or other evidences of indebtedness that have
heretofore been issued to the Holder by the Company. This Note represents the mutual agreement and intent of the Holder and the
Company, as to the manner by which the indebtedness owed by the Company to the Holder shall be evidenced.


 


1.          MATURITY
DATE. On the Maturity Date (as defined below), the Company shall pay to the Holder an amount in cash equal to all outstanding
Principal, accrued and unpaid Interest and accrued and unpaid Late Charges on such Principal and Interest. As used in this Note,
the term “Maturity Date” shall mean June 30, 2013, as such date may be extended at the sole option
of the Holder in the event that, and for so long as, an Event of Default (as defined below) shall have occurred and be continuing
on the Maturity Date (as may be extended pursuant to this Section 1) or any event shall have occurred and be continuing on the
Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would result
in an Event of Default.


 



    	 



    	 



    

 


2.          INTEREST
AND NO PREPAYMENT.


 


(a)          Interest
on this Note shall commence accruing on the Execution Date, shall accrue daily at the Interest Rate on the outstanding Principal
amount from time to time, shall be computed on the basis of a 360-day year comprised of twelve (12) thirty (30) day months and
shall be payable in arrears on each Conversion Date by conversion into Common Stock in accordance Section 3 below. From and after
the occurrence and during the continuance of any Event of Default, the Interest Rate shall automatically be increased to twelve
percent (12%). In the event that such Event of Default is subsequently cured, the increase referred to in the preceding sentence
shall cease to be effective as of the date of such cure, provided that the Interest as calculated and unpaid at such increased
rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence
of such Event of Default through and including the date of such cure of such Event of Default.


 


(b)          Other
than as expressly agreed in writing by the Holder or as specifically permitted by this Note, the Company may not prepay any portion
of the outstanding Principal or accrued and unpaid Interest or accrued and unpaid Late Charges on Principal, if any.         


 


3.          CONVERSION
OF NOTE. This Note may, at the option of the Holder, be convertible into shares of Common Stock on the terms and conditions
set forth in this Section 3. “Common Stock” means (i) the Company’s shares of common stock, $0.003
par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting
from a reclassification of such common stock.


 


(a)          Conversion
Right. The Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below)
into fully paid and non-assessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below)
then in effect. The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would
result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock
up to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect
to the issuance and delivery of Common Stock upon conversion of any Conversion Amount.


 


(b)          Conversion
Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall
be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).


 


(i)          “Conversion
Amount” means the sum of (A) the portion of the Principal to be converted, amortized, redeemed or otherwise with respect
to which this determination is being made, and (B) any accrued and unpaid Interest and Late Charges with respect to such Principal.


 



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(ii)         “Conversion
Price” means, as of any Conversion Date (as defined below) or other applicable date of determination, the Fixed Conversion
Price, as such Fixed Conversion Price may hereafter be adjusted pursuant to the provisions of Section 8 of this Note.


 


(c)          Mechanics
of Conversion.


 


(i)          Optional
Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall deliver (whether via facsimile or e-mail to Barry Hall, Chief Financial Officer of the Company at bh@thwapr.com
or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion in
the form attached hereto as Exhibit I (the “Conversion Notice”) to the Company. Following conversion
as aforesaid, the Holder shall provide a copy of such Conversion Notice to legal counsel to the Company on or prior to the first
(1st) Business Day following such Conversion Date. If required by Section 3(c)(iii), within three (3) Trading Days following
a conversion of this Note as aforesaid, the Holder shall surrender this Note to a nationally recognized overnight delivery service
for delivery to the Company (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction
as contemplated by Section 15(b)). On or before the second (2nd) Trading Day following the date of receipt of a Conversion
Notice, the Company shall transmit by facsimile an acknowledgment of confirmation, in the form attached hereto as Exhibit
II, of receipt of such Conversion Notice to the Holder and the Company’s transfer agent (the “Transfer Agent”).
On or before the third (3rd) Trading Day following the date of receipt of a Conversion Notice, the Company shall (1)
provided that the Transfer Agent is participating in The Depository Trust Company’s (“DTC”) Fast Automated
Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled to the
Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (2) if the
Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight
courier) to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder shall be entitled. If this Note is physically surrendered for conversion
pursuant to Section 3(c)(iii) and the outstanding Principal of this Note is greater than the Principal portion of the Conversion
Amount being converted, then the Company shall as soon as practicable and in no event later than three (3) Business Days after
receipt of this Note and at its own expense, issue and deliver to the Holder (or its designee) a new Note (in accordance with Section
15(d)) representing the outstanding Principal not converted. The Person or Persons entitled to receive the shares of Common Stock
issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common
Stock on the Conversion Date.


 



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(ii)         Company’s
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, to issue to the Holder within three
(3) Trading Days after the Company’s receipt of a Conversion Notice (whether via facsimile or otherwise), a certificate for
the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s
share register or to credit the Holder’s or its designee’s balance account with DTC for such number of shares of Common
Stock to which the Holder is entitled upon the Holder’s conversion of any Conversion Amount (as the case may be) (a “Conversion
Failure”), then, in addition to all other remedies available to the Holder, (1) the Company shall pay in cash to the
Holder on each Trading Day after such third (3rd) Trading Day that the issuance of such shares of Common Stock is not
timely effected an amount equal to 1% of the product of (A) 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 (B) the Closing Sale Price of the Common Stock on the Trading
Day immediately preceding the last possible date which the Company could have issued such shares of Common Stock to the Holder
without violating Section 3(c)(i) and (2) the Holder, upon written notice to the Company, may void its Conversion Notice with respect
to, and retain or have returned (as the case may be) any portion of this Note that has not been converted pursuant to such Conversion
Notice, provided that the voiding of a Conversion Notice shall not affect the Company’s obligations to make any payments
which have accrued prior to the date of such notice pursuant to this Section 3(c)(ii) or otherwise. In addition to the foregoing,
if within three (3) Trading Days after the Company’s receipt of a Conversion Notice (whether via facsimile or otherwise),
the Company shall fail to issue and deliver a certificate to the Holder and register such shares of Common Stock on the Company’s
share register or credit the Holder’s or its designee’s balance account with DTC for the number of shares of Common
Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be), and if on or after such
third (3rd) Trading Day the Holder (or any other Person in respect, or on behalf, of the Holder) purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion
of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number
of shares of Common Stock, issuable upon such conversion that the Holder so anticipated receiving from the Company, then, in addition
to all other remedies available to the Holder, the Company shall, within three (3) Business Days after the Holder’s request
and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase
price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including,
without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which
point the Company’s obligation to so issue and deliver such certificate or credit the Holder’s balance account with
DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the
case may be) (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to so issue and
deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit the Holder’s balance
account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder
(as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product
of (A) such number of shares of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading
Day during the period commencing on the date of the applicable Conversion Notice and ending on the date of such issuance and payment
under this clause (ii).


 



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(iii)        Registration;
Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the names and
addresses of the holders of each Note and the principal amount of the Note held by such holders (the “Registered Note”).
The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and the holders
of the Note shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes, including,
without limitation, the right to receive payments of Principal and Interest, if any, hereunder, notwithstanding notice to the contrary.
A Registered Note may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register.
Upon its receipt of a request to assign or sell all or part of any Registered Note by a Holder, the Company shall record the information
contained therein in the Register and issue one or more new Registered Note in the same aggregate principal amount as the principal
amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 15, provided that if the
Company does not so record an assignment, transfer or sale (as the case may be) of all or part of any Registered Note within two
(2) Business Days of such a request, then the Register shall be automatically updated to reflect such assignment, transfer or sale
(as the case may be). Notwithstanding anything to the contrary in this Section 3(c)(iii), a Holder may assign any Note or any portion
thereof to an Affiliate of such Holder or a Related Fund of such Holder without delivering a request to assign or sell such Note
to the Company and the recordation of such assignment or sale in the Register (a “Related Party Assignment”);
provided, that (x) the Company may continue to deal solely with such assigning or selling Holder unless and until such Holder
has delivered a request to assign or sell such Note or portion thereof to the Company for recordation in the Register; (y) the
failure of such assigning or selling Holder to deliver a request to assign or sell such Note or portion thereof to the Company
shall not affect the legality, validity, or binding effect of such assignment or sale and (z) such assigning or selling Holder
shall, acting solely for this purpose as a non-fiduciary agent of the Company, maintain a register (the “Related Party
Register”) comparable to the Register on behalf of the Company, and any such assignment or sale shall be effective upon
recordation of such assignment or sale in the Related Party Register. Notwithstanding anything to the contrary set forth herein,
upon conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically
surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is being converted or (B) the
Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting physical
surrender and reissue of this Note. The Holder and the Company shall maintain records showing the Principal, Interest and Late
Charges, if any, converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder
and the Company, so as not to require physical surrender of this Note upon conversion.


 



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4.          VOTING
RIGHTS. At any regular or special meeting of stockholders of the Company (each a “Meeting”), or in connection
with any consents of holders of Common Stock to be obtained in connection with matters requiring stockholder consents without a
Meeting ( “Stockholder Consents”), the Holder of this Note shall have the right to cast that number of votes
with other holders of Common Stock as through the Holder had converted the entire Principal amount of this Note into Common Stock
immediately prior to the record date fixed for determining those holders of Common Stock of the Company entitled to vote at such
Meeting, or immediately prior to obtaining such Stockholder Consents.


 


5.          SECURITY
INTEREST. As collateral for payment of all Indebtedness evidenced by this Note, the Company hereby grants to the Holder of
this Note a priority senior first Lien and security interest (the “Security Interest”) on all of the assets
and properties of the Company, including, without limitation, all Technology of the Company (the “Collateral”).
The Company represents to the Holder that the Security Interest in the Collateral granted to the Holder hereunder (a) constitutes
and shall continue to constitute a legal, valid and, upon the filing of a UCC financing statement, fully perfected, security interest
in the Collateral and (b) is and shall remain prior and superior to all Liens, rights or claims of all other Persons.


 


Holder hereby
irrevocably constitutes and appoints Ron Singh as the designee of Holder (“Designee”) to take the actions specified
in this Note on behalf of Holder. The Company agrees that it will take all action and execute all documents that may be necessary
or desirable and that Designee may reasonably request to maintain the validity, perfection, enforceability and priority of the
security interest granted hereby in conformance herewith, and Company grants Holder the right to do the same on its, or on its
own, behalf. The Company agrees that it will do nothing to impair the rights and interests of Holder in the Collateral, will protect
and preserve the Collateral and the right of Holder to exercise and enforce its rights therein under this Note, and will not, except
in the ordinary course of business, sell, convey or otherwise transfer all or any part of the Collateral or any rights therein.
If this Note shall not be paid in full on the Maturity Date and thereafter for so long as a default in payment of this Note shall
occur and be continuing (a “Default Event”), Holder shall have all the rights of a Holder under the UCC, shall
have all rights now or hereafter existing under all other applicable laws, and shall have all the rights set forth in this Note
or any other agreement between the parties hereto. The Company agrees that Holder, by itself or its agent, may, without notice
to any person and without judicial process of any kind, enter onto any premises or land owned, leased or otherwise under the real
or apparent control of Company or any agent of Company where Collateral may be or where Holder believes Collateral may be, and
repossess all or any item of the Collateral, removing, disconnecting or separating all Collateral from any other property. The
Company expressly waives all further rights to possession of the Collateral after and during the continuance of a Default Event
and all claims for injuries suffered as a result of or loss caused by such entering and/or repossession and/or such removal, disconnecting
or separation. Company shall, upon demand by Holder, assemble the Collateral and deliver it to Holder, at Company’s expense,
at such place or places to be designated by Holder.


 



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The Company
shall reimburse Holder for all of its expenses in connection with the exercise or protection by Holder of any of its rights and
remedies under this Security Agreement, including without limitation all attorneys’ fees and expenses.


 


THE COMPANY HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH HOLDER’S TAKING POSSESSION OR DISPOSITION OF
ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES
AND ANY SUCH RIGHT WHICH COMPANY WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE.


 


6.          RIGHTS
UPON EVENT OF DEFAULT.


 


(a)          Event
of Default. The occurrence of any the following events shall constitute an “Event of Default”:


 


(i)          the
Company’s failure to pay to the Holder any amount of Principal (including, without limitation, any redemption payments),
Interest, Late Charges or other amounts when and as due under this Note or any of the Other Notes, except, in the case of a failure
to pay Interest, Late Charges or any other such amounts specified above, other than the Principal, when and as due, in which case
only if such failure continues for a period of at least five (5) Business Days;


 


(ii)         any
default or Event of Default under, redemption of or acceleration prior to maturity of any of the Other Notes which is not cured
or waived in writing by the holder(s) of the Other Notes;


 


(iii)        any
default under, redemption of or acceleration prior to maturity of any Indebtedness of the Company in excess of $100,000;


 


(iv)        the
Company, pursuant to or within the meaning of Title 11, U.S. Code, or any similar Federal, foreign or state law for the relief
of debtors (collectively, “Bankruptcy Law”), (A) commences a voluntary case, (B) consents to the entry of an
order for relief against it in an involuntary case, (C) consents to the appointment of a receiver, trustee, assignee, liquidator
or similar official (a “Custodian”), (D) makes a general assignment for the benefit of its creditors or (E)
admits in writing that it is generally unable to pay its debts as they become due;


 


(v)         a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company in
an involuntary case, (B) appoints a Custodian of the Company or (C) orders the liquidation of the Company;


 



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(vi)        a
final judgment or judgments for the payment of money aggregating in excess of $100,000 are rendered against the Company and which
judgments are not, within sixty (60) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged
within sixty (60) days after the expiration of such stay; provided, however, that any judgment which is covered by
insurance or an indemnity from a credit worthy party shall not be included in calculating the $100,000 amount set forth above so
long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall
be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company
will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment;


 


(vii)       any
breach or failure in any respect to comply with Section 10 of this Note, except, in the case of a breach of or failure to comply
with Section 10 which is curable, only if such breach or failure continues for a period of at least ten (10) consecutive Business
Days;


 


(viii)      the
Company’s failure to continue to be in compliance with all of its reporting requirements under the Securities and Exchange
Act of 1934, as amended, and to maintain the listing of its Common Stock on the OTC Markets QX Exchange or OTC Markets QB Exchange;
or


 


(ix)         The
Company’s (A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within three
(3) Business Days after the applicable Conversion Date or (B) notice, written or oral, to any holder of the Note, including by
way of public announcement or through any of its agents, at any time, of its intention not to comply with a request for conversion
of the Note into shares of Common Stock that is tendered in accordance with the provisions of the Note;


 


(b)          Redemption
Right. Upon the occurrence and during the continuation of an Event of Default, the Holder may require the Company to redeem
all or any portion of this Note by delivering written notice thereof (the “Event of Default Redemption Notice”)
to the Company, which Event of Default Redemption Notice shall indicate the portion of this Note the Holder is electing to redeem.
Each portion of this Note subject to redemption by the Company pursuant to this Section 6(b) shall be redeemed by the Company in
cash at a price equal to 125% of the greater of (x) the Conversion Amount to be redeemed and (y) the product of (A) the Conversion
Rate in effect at such time as the Holder delivers an Event of Default Redemption Notice with respect to such Conversion Amount
being redeemed and (B) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the
date immediately preceding such Event of Default and ending on the date the Holder delivers the Event of Default Redemption Notice
(the “Event of Default Redemption Price”). Redemptions required by this Section 6(b) shall be made in
accordance with the provisions of Section 10. To the extent redemptions required by this Section 6(b) are deemed or determined
by a court of competent jurisdiction to be prepayments of the Note by the Company, such redemptions shall be deemed to be voluntary
prepayments. Notwithstanding anything to the contrary in this Section 6(b), but subject to Section 3(d), until the Event of Default
Redemption Price (together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under
this Section 6(b) (together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock
pursuant to the terms of this Note. The parties hereto agree that in the event of the Company’s redemption of any portion
of the Note under this Section 6(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’
inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity
for the Holder. Accordingly, any redemption premium due under this Section 6(b) is 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 as a penalty.


 



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7.          DISTRIBUTION
OF ASSETS; RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.


 


(a)          Distribution
of Assets. If the Company shall declare or make any dividend or other distributions of its assets (or rights to acquire its
assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation,
any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”), then the Holder will
be entitled to such Distributions as if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately prior
to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for such Distributions (provided, however, to the extent that the Holder’s right to
participate in any such Distributions would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be
entitled to participate in such Distribution to such extent (or the beneficial ownership of any such shares of Common Stock as
a result of such Distribution to such extent) and such Distribution to such extent shall be held in abeyance for the benefit of
the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).


 


(b)          Purchase
Rights. If at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which
the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately prior
to 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in
the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such
extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase
Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in
the Holder exceeding the Maximum Percentage).


 



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(c)          Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, if holders of shares of Common Stock
are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive
upon a conversion of this Note, (i) in addition to the shares of Common Stock receivable upon such conversion, such securities
or other assets to which the Holder would have been entitled with respect to such shares of Common Stock had such shares of Common
Stock been held by the Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions
on the convertibility of this Note) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such
securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate
Event in such amounts as the Holder would have been entitled to receive had this Note initially been issued with conversion rights
for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate
with the Conversion Rate. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the
Required Holders. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall be
applied without regard to any limitations on the conversion or redemption of this Note.


 


8.          RIGHTS
UPON ISSUANCE OF OTHER SECURITIES.


 


(a)          Adjustment
of Fixed Conversion Price upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company issues
or sells, or in accordance with this Section 8(a) is deemed to have issued or sold, any shares of Common
Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account
of the Company, but excluding any Excluded Securities issued or sold or deemed to have been issued or sold) for a consideration
per share (the “Dilutive Issuance Price”) that is less than a price equal to the Fixed Conversion
Price in effect immediately prior to such issue or sale or deemed issuance or sale (the “Applicable Conversion Price”)
(the foregoing, a “Dilutive Issuance”), then immediately following such Dilutive Issuance, the Applicable Fixed
Conversion Price then in effect shall be reduced to an amount equal to the Dilutive Issuance Price. For all purposes of the foregoing
(including, without limitation, determining the reduced Fixed Conversion Price and consideration per share under this Section 8(a)),
the following shall be applicable:



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(i)          Issuance
of Options. If the Company in any manner grants any Options and the lowest price per share for which one share of Common Stock
is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option is less than the Applicable Fixed Conversion Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 8(a)(i), the “lowest price per share for which one share of Common Stock is issuable
upon exercise of such Options or upon conversion, exercise or exchange of such Convertible Securities issuable upon exercise of
any such Option” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the
Company with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and
upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option less any consideration
paid or payable by the Company with respect to such one share of Common Stock upon the granting or sale of such Option, upon exercise
of such Option and upon conversion exercise or exchange of any Convertible Security issuable upon exercise of such Option. No further
adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such shares of Common Stock or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise
or exchange of such Convertible Securities.


 


(ii)         Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Fixed Conversion Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section
8(a)(ii), the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange
thereof” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security less any consideration paid or payable by the Company with respect to such one share of Common
Stock upon the issuance or sale of such Convertible Security and upon conversion, exercise or exchange of such Convertible Security.
No further adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such shares of Common Stock upon
conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is
made upon exercise of any Options for which adjustment of the Fixed Conversion Price has been or is to be made pursuant to other
provisions of this Section 8(a), no further adjustment of the Fixed Conversion Price shall be made by reason of such issue or sale.


 



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(iii)        Change
in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the
Fixed Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Fixed Conversion Price which
would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase
price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued
or sold. For purposes of this Section 8(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of
the Subscription Date are increased or decreased in the manner described in the immediately preceding sentence, then such Option
or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed
to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 8(a) shall be made if such
adjustment would result in an increase of the Fixed Conversion Price then in effect.


 


(iv)        Calculation
of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction, (x) the Options will be deemed to have been issued for the Option Value and (y)
the other securities issued or sold in such integrated transaction shall be deemed to have been issued for the difference of (I)
the aggregate consideration received by the Company less any consideration paid or payable by the Company pursuant to the terms
of such other securities of the Company, less (II) the Option Value. If any shares of Common Stock, Options or Convertible Securities
are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the
net amount received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold
for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration,
except where such consideration consists of securities, in which case the amount of consideration received by the Company will
be the Closing Sale Price of such security on the date of receipt. If any shares of Common Stock, Options or Convertible Securities
are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity,
the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the
non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be.
The fair value of any consideration other than cash or securities will be determined jointly by the Company and the Required Holders.
If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation
Event”), the fair value of such consideration will be determined within five (5) Trading Days after the tenth (10th)
day following the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holders.
The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses
of such appraiser shall be borne by the Company.


 



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(v)         Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may
be.


 


(b)          Adjustment
of Fixed Conversion Price upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription
Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares
of Common Stock into a greater number of shares, the Fixed Conversion Price in effect immediately prior to such subdivision will
be proportionately reduced. If the Company at any time on or after the Subscription Date combines (by combination, reverse stock
split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Fixed Conversion
Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section
8(b) shall become effective immediately after the effective date of such subdivision or combination.


 


(c)          Other
Events. If any event occurs of the type contemplated by the provisions of this Section 6 but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features, but excluding Excluded Securities), then the Company’s Board of Directors will make an appropriate
adjustment in the Fixed Conversion Price so as to protect the rights of the Holder under this Note; provided that no such
adjustment pursuant to this Section 8(c) will increase the Fixed Conversion Price as otherwise determined pursuant to this Section
8.


 


9.          INTENTIONALLY
DELETED.


 


10.         ADDITIONAL
COVENANTS OF THE COMPANY. Until the entire Principal and all accrued Interest on this Note shall have been paid in full, the
Company hereby covenants and agrees as follows:


 


(a)          Board
of Directors. The Board of Directors of the Company shall consist of not less than five (5) Persons, namely Ron Singh, who
shall serve as Chairman of the Board, Barry Hall, Leonard Dryer, and two (2) other individuals designated by Ron Singh. In the
event of the death, removal or resignation of any of the designees of Ron Singh, their replacements shall be individuals designated
by Ron Singh. In the event of the death, removal or resignation of Ron Singh, his replacement and those Ron Singh designees shall
be determined by any other Investors in the Company. The members of the Board of Directors shall serve until the next annual meeting
of stockholders of the Company, or until their successors are elected and qualified.


 



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(b)          Executive
Committee. There shall be established an executive committee consisting of Ron Singh, the Chief Financial Officer of the Company
and such other person or persons selected from time to time by the Board of Directors (the “Executive Committee”)
who shall be delegated by the Board of Directors with the authority to manage the business and affairs of the Company, to make
payments, and enter into agreements with third parties; provided that all Major Decisions (as defined below) shall
be submitted to and approved by a majority of all of the members of the Board of Directors of the Company prior to their implementation.


 


(c)          Major
Decisions. All of the following shall be deemed to be Major Decisions that must be submitted to and approved by a majority
of all of the members of the Board of Directors of the Company as at the Execution Date of this Note prior to their implementation
by the Executive Committee or any executive officer of the Company:


 


(i)          increasing
or decreasing the size of the Board of Directors;


 


(ii)         approving
a merger or sale of all or a majority of the assets, properties or capital stock of the Company;


 


(iii)        approving
any sale of capital stock or notes or debentures of the Company, other than the Line of Credit contemplated by this Agreement;


 


(iv)        effecting
any major joint venture or “going private” transaction;


 


(v)         appointing
a new President, Chief Executive Officer or Chief Financial Officer of the Company;


 


(vi)        removing
any member of the Board of Directors, with or without cause;


 


(vii)       mortgaging,
hypothecating or selling all or substantially all of the assets of the Company;


 


(viii)      amending
the certificate of incorporation or by-laws of the Company; and


 


(ix)         fixing
or increasing the compensation of the President, Chief Executive Officer or Chief Financial Officer of the Company.


 



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11.         TRANSFER.


 


(a)          Transfer
and Reissuance of Note. This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold,
assigned or transferred by the Holder without the consent of the Company. If this Note is to be transferred, the Holder shall surrender
this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note, registered
as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire
outstanding Principal is being transferred, a new Note to the Holder representing the outstanding Principal not being transferred.
The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii)
following conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less
than the Principal stated on the face of this Note.


 


(b)          Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company
shall execute and deliver to the Holder a new Note representing the outstanding Principal.


 


12.         REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity
(including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. Amounts
set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts
to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being
required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the
Holder to confirm the Company’s compliance with the terms and conditions of this Note.


 


13.         PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this
Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company
or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay
the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, but not limited to, attorneys’ fees and disbursements.


 


14.         CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note.


 



    	15



    	 



    

 


15.         PAYMENTS..
Except as otherwise provided in this Note, whenever any payment of cash is to be made by the Company to any Person pursuant to
this Note, such payment shall be made in lawful money of the United States of America by a check drawn on the account of the Company
and sent via overnight courier service to such Person at such address as previously provided to the Company in writing (which address,
in the case of each of the Claimants (as defined in the Initial Exchange Agreement), shall initially be as set forth on the Schedule
of Claimants attached to the Initial Exchange Agreement); provided that the Holder may elect to receive a payment of cash
via wire transfer of immediately available funds by providing the Company with prior written notice setting out such request and
the Holder’s wire transfer instructions. Whenever any amount expressed to be due by the terms of this Note is due on any
day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day. Any amount of
Principal or other amounts due under the Transaction Documents which is not paid when due shall result in a late charge being incurred
and payable by the Company in an amount equal to interest on such amount at the rate of twenty four percent (24%) per annum from
the date such amount was due until the same is paid in full (“Late Charge”).


 


16.         CANCELLATION.
After all Principal and other amounts at any time owed on this Note have been paid in full, this Note shall automatically be deemed
canceled, shall be surrendered to the Company for cancellation and shall not be reissued.


 


17.         WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices
in connection with the delivery, acceptance, performance, default or enforcement of this Note.


 


18.         GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Note shall be construed and enforced in accordance with,
and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the
internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than
the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably
waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address it set forth on the signature page hereto and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing
suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to
the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling
in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL
FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED
HEREBY.


 



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19.         CURRENCY.
All principal, interest and other amounts owing under this Note or any Transaction Document that, in accordance with their terms,
are paid in cash shall be paid in US dollars. All amounts denominated in other currencies shall be converted in the US dollar equivalent
amount in accordance with the Exchange Rate on the date of calculation.


 


20.         Severability.
If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).


 


21.         CERTAIN
DEFINITIONS. For purposes of this Note, and in addition to the other terms defined herein, the following terms shall have the
following meanings:


 


(a)          “Accounts
Payable Notes” means the various non-convertible 6% non-convertible promissory notes of the Company due March 31, 2013
to be issued by the Company to various consultants, vendor, employees in partial payment of unpaid accrued expenses and accounts
payable owed by the Company to such Persons.


 


(b)          “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person (it being understood and agreed (x) for purposes of this definition that “control” of a Person
means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or
otherwise, (y) neither the Holder nor any of its Affiliates is an Affiliate of any other holder of any of the Other Notes or any
of their respective Affiliates and (z) neither any holder of any Other Notes nor any of their respective Affiliates is an Affiliate
of the Holder or any of its Affiliates).


 


(c)          
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed.


 



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(d)          “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any
shares of Common Stock.


 


(e)          “Eligible
Market” means any one or more of the Principal Market, The New York Stock Exchange, Inc., The NASDAQ Capital Market,
The Nasdaq Global Market, The Nasdaq
Global Select Market or the NYSE Amex.


 


(f)          “Fixed
Conversion Price” means One and One-Half Cents ($0.015), subject to adjustment as provided herein.


 


(g)          “Interest
Rate” means six percent (6%) per annum, as may be adjusted from time to time in accordance with Section 2.


 


(h)          “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.


 


(i)          “Option
Value” means the value of an Option based on the Black and Scholes Option Pricing model obtained from the “OV”
function on Bloomberg determined as of the day prior to the public announcement of the applicable Option for pricing purposes and
reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of the
applicable Option as of the applicable date of determination, (ii) an expected volatility equal to the greater of 100% and the
100 day volatility obtained from the HVT function on Bloomberg as of the day immediately following the public announcement of the
applicable Option, (iii) the underlying price per share used in such calculation shall be the highest Weighted Average Price during
the period beginning on the day prior to the execution of definitive documentation relating to the issuance of the applicable Option
and the public announcement of such issuance and (iv) a 360 day annualization factor.


 


(j)          “Other
Notes” shall mean the collective reference to (A) the maximum $100,000 convertible promissory notes that may hereafter
be issued to Summit Holdings Ltd., (B) the $117,463.39 principal amount convertible promissory note due June 30, 2013 issued to
Barry Hall, (C) the $200,000 maximum principal amount convertible promissory note due June 30, 2013 issued to Ron Singh; and (D)
the Accounts Payable Notes.


 


(k)          Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.


 


(l)          “Principal
Market” means the OTC Markets Exchange.


 


(m)         “Redemption
Notice” means an Event of Default Redemption Notice.


 



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(n)          “Redemption
Prices” means the Event of Default Redemption Price.


 


(o)          
“SEC” means the United States Securities and Exchange Commission.


 


(p)      
    “Technology”  shall mean all of the Company’s intellectual
property, including but not limited to (i) any and all inventions (whether patentable or unpatentable and whether or not
reduced to practice), ideas, research and techniques, technical designs, discoveries and specifications, improvements,
modifications, adaptations and derivations thereto, and patents, Patent Applications, models, industrial
designs, inventor’s certificates, and patent disclosures, together with reissuances, continuations, continuations in
part, revisions, extensions and reexaminations thereof (the “Patents”), (ii) trademarks (any
applications for registration therefor, including any modifications, extensions or renewals thereof), all service marks,
logos, trade dress, brand names and trade names, assumed names, corporate names and other indications of origin (whether
registered or unregistered) (the “Trademarks”), (iii) copyrights (whether registered or
unregistered and any applications for registration therefor, including any modifications, extensions or renewals thereof)
(the “Copyrights”), (iv) trade secrets, know-how and confidential business information and any
other information, however documented, that is a trade secret within the meaning of the applicable trade secret protection
Laws, including without limitation the Uniform Trade Secrets Act (the “Trade
Secrets”); (v)  all computer programs, software design documents, packaged and unpackaged, including
any and all software implementations of algorithms, models and methodologies, any and all data and collection of data,
whether machine readable or otherwise, descriptions, schematics, flow charts, the raw form and executable form of the source
codes, object codes, bytecode, micro-op codes, databases and compilations or other work product used to design, plan,
organize and develop any of the foregoing, and all documentation, including user manuals and training materials, relating to
any of the foregoing (the “Software”); (vi) any and all rights under any and all transcoder
licenses and license agreements that the Company is currently a party to, including but not limited to the agreement between
the Company and RGB; and (vii) any similar or equivalent intangible assets, properties and rights to any of the
foregoing.


 


(q)          Trading
Day” means, as applicable, (x) with respect to all price determinations relating to the Common Stock, any day on which
the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common
Stock, then 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) unless such day is otherwise designated as a Trading Day in writing by the Holder or
(y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York
Stock Exchange (or any successor thereto) is open for trading of securities.


 



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22.         Counterparts.
This Note may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become
effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is
delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature
page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such signature page were an original thereof.


 


[Signature Page Follows]


 



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IN WITNESS WHEREOF, the
Company has caused this Note to be duly executed as of the Execution Date set out above.


 


	 	THWAPR, INC.
	 	 
	 	By:	 
	 	 	Name: Barry Hall
	 	 	Title:  Chief Financial Officer


 



    	 



    	 



    

 


EXHIBIT I



THWAPR, INC.





CONVERSION NOTICE


 


Reference is made to the Convertible Note
(the “Note”) issued to the undersigned by Thwapr, Inc., a Nevada corporation (the “Company”).
In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the
Note) of the Note indicated below into shares of common stock, par value $0.003 per share, of the Company (the “Common
Stock”), as of the date specified below.


 


	Conversion Date:	 


 


	Aggregate Conversion Amount to be converted:	 


 


	Conversion Price:	 


 


	Number of shares of Common Stock to be issued:	 


 


	Please issue the Common Stock into which the Note is being converted in the following name and to the following address:


 


	Issue to:	 
	 	 
	 	 
	 	 
	 	 


 


	Facsimile Number:	 


 


	Holder:	 


 


	By:	 


 


	Title:	 


 


	Dated:	 


 


	Account Number:	 
	  (if electronic book entry transfer)	 
	 	 	 





	Transaction Code Number:	 
	  (if electronic book entry transfer)	 
	 	 	 


 



    	 



    	 



    

 


EXHIBIT II


 


ACKNOWLEDGMENT


 


The Company hereby acknowledges
this Conversion Notice and hereby irrevocably directs Island Stock Transfer, Inc. to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated ___________, 2012 from the Company and acknowledged and
agreed to by Island Stock Transfer, Inc.


 


	 	THWAPR, INC.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 



    	 



    	 



    











 


ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY
REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTION 3(c)(iii) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY,
THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii)
OF THIS NOTE.


 


THWAPR,
INC.


 


SECURED
CONVERTIBLE NOTE


 


	Execution Date:  March 20, 2012	Original Principal Amount: U.S.$200,000.00


 





FOR VALUE RECEIVED,
Thwapr, Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order of Ron Singh
(“Singh”) or his registered assigns (together with Singh, the “Holder”) (a) the amount
set out above as the Original Principal Amount, as such Original Principal Amount is reduced pursuant to the terms hereof pursuant
to redemption, conversion or otherwise (the “Principal”), whether upon the Maturity Date (as defined below),
or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof), and (b) interest (“Interest”)
on any outstanding Principal, at the applicable Interest Rate (as defined below) from the Execution Date until the same becomes
due and payable, whether upon the Maturity Date or acceleration, conversion, redemption or otherwise (in each case in accordance
with the terms hereof). Certain capitalized terms used herein are defined in the Agreement referred to below and in this Note,
including Section 21 of this Note.


 


The $200,000.00 Original
Principal Amount of this Note represents the maximum amount of the Advances made and to be made by the Holder pursuant to the Line
of Credit and Restructuring Agreement, dated as of February 23, 2012, between Singh, as lender, and the Company, as borrower (the
“Agreement”). This Note represents and replaces and supersedes all other notes or other evidences of indebtedness
that have heretofore been issued to the Holder by the Company, including the convertible line of credit promissory note referred
to in the Agreement. This Note represents the mutual agreement and intent of the Holder and the Company, as to the manner by which
the indebtedness owed by the Company to the Holder shall be evidenced.







 


1.          MATURITY
DATE. On the Maturity Date (as defined below), the Company shall pay to the Holder an amount in cash equal to all outstanding
Principal, accrued and unpaid Interest and accrued and unpaid Late Charges on such Principal and Interest. As used in this Note,
the term “Maturity Date” shall mean June 30, 2013, as such date may be extended at the sole option
of the Holder in the event that, and for so long as, an Event of Default (as defined below) shall have occurred and be continuing
on the Maturity Date (as may be extended pursuant to this Section 1) or any event shall have occurred and be continuing on the
Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would result
in an Event of Default.


 



    	 



    	 



    

 


2.          INTEREST
AND NO PREPAYMENT.


 


(a)          Interest
on this Note shall commence accruing on the Execution Date, shall accrue daily at the Interest Rate on the outstanding Principal
amount from time to time, shall be computed on the basis of a 360-day year comprised of twelve (12) thirty (30) day months and
shall be payable in arrears on each Conversion Date by conversion into Common Stock in accordance Section 3 below. From and after
the occurrence and during the continuance of any Event of Default, the Interest Rate shall automatically be increased to twelve
percent (12%). In the event that such Event of Default is subsequently cured, the increase referred to in the preceding sentence
shall cease to be effective as of the date of such cure, provided that the Interest as calculated and unpaid at such increased
rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence
of such Event of Default through and including the date of such cure of such Event of Default.


 


(b)          Other
than as expressly agreed in writing by the Holder or as specifically permitted by this Note, the Company may not prepay any portion
of the outstanding Principal or accrued and unpaid Interest or accrued and unpaid Late Charges on Principal, if any.         


 


3.          CONVERSION
OF NOTE. This Note may, at the option of the Holder, be convertible into shares of Common Stock on the terms and conditions
set forth in this Section 3. “Common Stock” means (i) the Company’s shares of common stock, $0.003
par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting
from a reclassification of such common stock.


 


(a)          Conversion
Right. The Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below)
into fully paid and non-assessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below)
then in effect. The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would
result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock
up to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect
to the issuance and delivery of Common Stock upon conversion of any Conversion Amount.


 


(b)          Conversion
Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall
be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).


 


(i)          “Conversion
Amount” means the sum of (A) the portion of the Principal to be converted, amortized, redeemed or otherwise with respect
to which this determination is being made, and (B) any accrued and unpaid Interest and Late Charges with respect to such Principal.


 



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(ii)         “Conversion
Price” means, as of any Conversion Date (as defined below) or other applicable date of determination, the Fixed Conversion
Price, as such Fixed Conversion Price may hereafter be adjusted pursuant to the provisions of Section 8 of this Note.


 


(c)          Mechanics
of Conversion.


 


(i)          Optional
Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall deliver (whether via facsimile or e-mail to Barry Hall, Chief Financial Officer of the Company at bh@thwapr.com
or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion in
the form attached hereto as Exhibit I (the “Conversion Notice”) to the Company. Following conversion
as aforesaid, the Holder shall provide a copy of such Conversion Notice to legal counsel to the Company on or prior to the first
(1st) Business Day following such Conversion Date. If required by Section 3(c)(iii), within three (3) Trading Days following
a conversion of this Note as aforesaid, the Holder shall surrender this Note to a nationally recognized overnight delivery service
for delivery to the Company (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction
as contemplated by Section 15(b)). On or before the second (2nd) Trading Day following the date of receipt of a Conversion
Notice, the Company shall transmit by facsimile an acknowledgment of confirmation, in the form attached hereto as Exhibit
II, of receipt of such Conversion Notice to the Holder and the Company’s transfer agent (the “Transfer Agent”).
On or before the third (3rd) Trading Day following the date of receipt of a Conversion Notice, the Company shall (1)
provided that the Transfer Agent is participating in The Depository Trust Company’s (“DTC”) Fast Automated
Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled to the
Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (2) if the
Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight
courier) to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder shall be entitled. If this Note is physically surrendered for conversion
pursuant to Section 3(c)(iii) and the outstanding Principal of this Note is greater than the Principal portion of the Conversion
Amount being converted, then the Company shall as soon as practicable and in no event later than three (3) Business Days after
receipt of this Note and at its own expense, issue and deliver to the Holder (or its designee) a new Note (in accordance with Section
15(d)) representing the outstanding Principal not converted. The Person or Persons entitled to receive the shares of Common Stock
issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common
Stock on the Conversion Date.


 



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(ii)         Company’s
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, to issue to the Holder within three
(3) Trading Days after the Company’s receipt of a Conversion Notice (whether via facsimile or otherwise), a certificate for
the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s
share register or to credit the Holder’s or its designee’s balance account with DTC for such number of shares of Common
Stock to which the Holder is entitled upon the Holder’s conversion of any Conversion Amount (as the case may be) (a “Conversion
Failure”), then, in addition to all other remedies available to the Holder, (1) the Company shall pay in cash to the
Holder on each Trading Day after such third (3rd) Trading Day that the issuance of such shares of Common Stock is not
timely effected an amount equal to 1% of the product of (A) 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 (B) the Closing Sale Price of the Common Stock on the Trading
Day immediately preceding the last possible date which the Company could have issued such shares of Common Stock to the Holder
without violating Section 3(c)(i) and (2) the Holder, upon written notice to the Company, may void its Conversion Notice with respect
to, and retain or have returned (as the case may be) any portion of this Note that has not been converted pursuant to such Conversion
Notice, provided that the voiding of a Conversion Notice shall not affect the Company’s obligations to make any payments
which have accrued prior to the date of such notice pursuant to this Section 3(c)(ii) or otherwise. In addition to the foregoing,
if within three (3) Trading Days after the Company’s receipt of a Conversion Notice (whether via facsimile or otherwise),
the Company shall fail to issue and deliver a certificate to the Holder and register such shares of Common Stock on the Company’s
share register or credit the Holder’s or its designee’s balance account with DTC for the number of shares of Common
Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be), and if on or after such
third (3rd) Trading Day the Holder (or any other Person in respect, or on behalf, of the Holder) purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion
of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number
of shares of Common Stock, issuable upon such conversion that the Holder so anticipated receiving from the Company, then, in addition
to all other remedies available to the Holder, the Company shall, within three (3) Business Days after the Holder’s request
and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase
price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including,
without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which
point the Company’s obligation to so issue and deliver such certificate or credit the Holder’s balance account with
DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the
case may be) (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to so issue and
deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit the Holder’s balance
account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder
(as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product
of (A) such number of shares of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading
Day during the period commencing on the date of the applicable Conversion Notice and ending on the date of such issuance and payment
under this clause (ii).


 



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(iii)        Registration;
Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the names and
addresses of the holders of each Note and the principal amount of the Note held by such holders (the “Registered Note”).
The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and the holders
of the Note shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes, including,
without limitation, the right to receive payments of Principal and Interest, if any, hereunder, notwithstanding notice to the contrary.
A Registered Note may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register.
Upon its receipt of a request to assign or sell all or part of any Registered Note by a Holder, the Company shall record the information
contained therein in the Register and issue one or more new Registered Note in the same aggregate principal amount as the principal
amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 15, provided that if the
Company does not so record an assignment, transfer or sale (as the case may be) of all or part of any Registered Note within two
(2) Business Days of such a request, then the Register shall be automatically updated to reflect such assignment, transfer or sale
(as the case may be). Notwithstanding anything to the contrary in this Section 3(c)(iii), a Holder may assign any Note or any portion
thereof to an Affiliate of such Holder or a Related Fund of such Holder without delivering a request to assign or sell such Note
to the Company and the recordation of such assignment or sale in the Register (a “Related Party Assignment”);
provided, that (x) the Company may continue to deal solely with such assigning or selling Holder unless and until such Holder
has delivered a request to assign or sell such Note or portion thereof to the Company for recordation in the Register; (y) the
failure of such assigning or selling Holder to deliver a request to assign or sell such Note or portion thereof to the Company
shall not affect the legality, validity, or binding effect of such assignment or sale and (z) such assigning or selling Holder
shall, acting solely for this purpose as a non-fiduciary agent of the Company, maintain a register (the “Related Party
Register”) comparable to the Register on behalf of the Company, and any such assignment or sale shall be effective upon
recordation of such assignment or sale in the Related Party Register. Notwithstanding anything to the contrary set forth herein,
upon conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically
surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is being converted or (B) the
Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting physical
surrender and reissue of this Note. The Holder and the Company shall maintain records showing the Principal, Interest and Late
Charges, if any, converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder
and the Company, so as not to require physical surrender of this Note upon conversion.


 



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4.          VOTING
RIGHTS. At any regular or special meeting of stockholders of the Company (each a “Meeting”), or in connection
with any consents of holders of Common Stock to be obtained in connection with matters requiring stockholder consents without a
Meeting ( “Stockholder Consents”), the Holder of this Note shall have the right to cast that number of votes
with other holders of Common Stock as through the Holder had converted the entire Principal amount of this Note into Common Stock
immediately prior to the record date fixed for determining those holders of Common Stock of the Company entitled to vote at such
Meeting, or immediately prior to obtaining such Stockholder Consents.


 


5.          SECURITY
INTEREST. As collateral for payment of all Indebtedness evidenced by this Note, the Company hereby grants to the Holder of
this Note a priority senior first Lien and security interest (the “Security Interest”) on all of the assets
and properties of the Company, including, without limitation, all Technology of the Company (the “Collateral”).
The Company represents to the Holder that the Security Interest in the Collateral granted to the Holder hereunder (a) constitutes
and shall continue to constitute a legal, valid and, upon the filing of a UCC financing statement, fully perfected, security interest
in the Collateral and (b) is and shall remain prior and superior to all Liens, rights or claims of all other Persons.


 


Holder hereby
irrevocably constitutes and appoints Ron Singh as the designee of Holder (“Designee”) to take the actions specified
in this Note on behalf of Holder. The Company agrees that it will take all action and execute all documents that may be necessary
or desirable and that Designee may reasonably request to maintain the validity, perfection, enforceability and priority of the
security interest granted hereby in conformance herewith, and Company grants Holder the right to do the same on its, or on its
own, behalf. The Company agrees that it will do nothing to impair the rights and interests of Holder in the Collateral, will protect
and preserve the Collateral and the right of Holder to exercise and enforce its rights therein under this Note, and will not, except
in the ordinary course of business, sell, convey or otherwise transfer all or any part of the Collateral or any rights therein.
If this Note shall not be paid in full on the Maturity Date and thereafter for so long as a default in payment of this Note shall
occur and be continuing (a “Default Event”), Holder shall have all the rights of a Holder under the UCC, shall
have all rights now or hereafter existing under all other applicable laws, and shall have all the rights set forth in this Note
or any other agreement between the parties hereto. The Company agrees that Holder, by itself or its agent, may, without notice
to any person and without judicial process of any kind, enter onto any premises or land owned, leased or otherwise under the real
or apparent control of Company or any agent of Company where Collateral may be or where Holder believes Collateral may be, and
repossess all or any item of the Collateral, removing, disconnecting or separating all Collateral from any other property. The
Company expressly waives all further rights to possession of the Collateral after and during the continuance of a Default Event
and all claims for injuries suffered as a result of or loss caused by such entering and/or repossession and/or such removal, disconnecting
or separation. Company shall, upon demand by Holder, assemble the Collateral and deliver it to Holder, at Company’s expense,
at such place or places to be designated by Holder.


 



    	6



    	 



    

 


The Company
shall reimburse Holder for all of its expenses in connection with the exercise or protection by Holder of any of its rights and
remedies under this Security Agreement, including without limitation all attorneys’ fees and expenses.


 


THE COMPANY HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH HOLDER’S TAKING POSSESSION OR DISPOSITION OF
ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES
AND ANY SUCH RIGHT WHICH COMPANY WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE.


 


6.          RIGHTS
UPON EVENT OF DEFAULT.


 


(a)          Event
of Default. The occurrence of any the following events shall constitute an “Event of Default”:


 


(i)          the
Company’s failure to pay to the Holder any amount of Principal (including, without limitation, any redemption payments),
Interest, Late Charges or other amounts when and as due under this Note or any of the Other Notes, except, in the case of a failure
to pay Interest, Late Charges or any other such amounts specified above, other than the Principal, when and as due, in which case
only if such failure continues for a period of at least five (5) Business Days;


 


(ii)         any
default or Event of Default under, redemption of or acceleration prior to maturity of any of the Other Notes which is not cured
or waived in writing by the holder(s) of the Other Notes;


 


(iii)        any
default under, redemption of or acceleration prior to maturity of any Indebtedness of the Company in excess of $100,000;


 


(iv)        the
Company, pursuant to or within the meaning of Title 11, U.S. Code, or any similar Federal, foreign or state law for the relief
of debtors (collectively, “Bankruptcy Law”), (A) commences a voluntary case, (B) consents to the entry of an
order for relief against it in an involuntary case, (C) consents to the appointment of a receiver, trustee, assignee, liquidator
or similar official (a “Custodian”), (D) makes a general assignment for the benefit of its creditors or (E)
admits in writing that it is generally unable to pay its debts as they become due;


 


(v)         a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company in
an involuntary case, (B) appoints a Custodian of the Company or (C) orders the liquidation of the Company;


 



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(vi)        a
final judgment or judgments for the payment of money aggregating in excess of $100,000 are rendered against the Company and which
judgments are not, within sixty (60) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged
within sixty (60) days after the expiration of such stay; provided, however, that any judgment which is covered by
insurance or an indemnity from a credit worthy party shall not be included in calculating the $100,000 amount set forth above so
long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall
be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company
will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment;


 


(vii)       any
breach or failure in any respect to comply with Section 10 of this Note, except, in the case of a breach of or failure to comply
with Section 10 which is curable, only if such breach or failure continues for a period of at least ten (10) consecutive Business
Days;


 


(viii)      the
Company’s failure to continue to be in compliance with all of its reporting requirements under the Securities and Exchange
Act of 1934, as amended, and to maintain the listing of its Common Stock on the OTC Markets QX Exchange or OTC Markets QB Exchange;
or


 


(ix)         The
Company’s (A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within three
(3) Business Days after the applicable Conversion Date or (B) notice, written or oral, to any holder of the Note, including by
way of public announcement or through any of its agents, at any time, of its intention not to comply with a request for conversion
of the Note into shares of Common Stock that is tendered in accordance with the provisions of the Note;


 


(b)          Redemption
Right. Upon the occurrence and during the continuation of an Event of Default, the Holder may require the Company to redeem
all or any portion of this Note by delivering written notice thereof (the “Event of Default Redemption Notice”)
to the Company, which Event of Default Redemption Notice shall indicate the portion of this Note the Holder is electing to redeem.
Each portion of this Note subject to redemption by the Company pursuant to this Section 6(b) shall be redeemed by the Company in
cash at a price equal to 125% of the greater of (x) the Conversion Amount to be redeemed and (y) the product of (A) the Conversion
Rate in effect at such time as the Holder delivers an Event of Default Redemption Notice with respect to such Conversion Amount
being redeemed and (B) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the
date immediately preceding such Event of Default and ending on the date the Holder delivers the Event of Default Redemption Notice
(the “Event of Default Redemption Price”). Redemptions required by this Section 6(b) shall be made in
accordance with the provisions of Section 10. To the extent redemptions required by this Section 6(b) are deemed or determined
by a court of competent jurisdiction to be prepayments of the Note by the Company, such redemptions shall be deemed to be voluntary
prepayments. Notwithstanding anything to the contrary in this Section 6(b), but subject to Section 3(d), until the Event of Default
Redemption Price (together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under
this Section 6(b) (together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock
pursuant to the terms of this Note. The parties hereto agree that in the event of the Company’s redemption of any portion
of the Note under this Section 6(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’
inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity
for the Holder. Accordingly, any redemption premium due under this Section 6(b) is 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 as a penalty.


 



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7.          DISTRIBUTION
OF ASSETS; RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.


 


(a)          Distribution
of Assets. If the Company shall declare or make any dividend or other distributions of its assets (or rights to acquire its
assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation,
any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”), then the Holder will
be entitled to such Distributions as if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately prior
to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for such Distributions (provided, however, to the extent that the Holder’s right to
participate in any such Distributions would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be
entitled to participate in such Distribution to such extent (or the beneficial ownership of any such shares of Common Stock as
a result of such Distribution to such extent) and such Distribution to such extent shall be held in abeyance for the benefit of
the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).


 


(b)          Purchase
Rights. If at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which
the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately prior
to 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in
the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such
extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase
Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in
the Holder exceeding the Maximum Percentage).


 



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(c)          Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, if holders of shares of Common Stock
are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive
upon a conversion of this Note, (i) in addition to the shares of Common Stock receivable upon such conversion, such securities
or other assets to which the Holder would have been entitled with respect to such shares of Common Stock had such shares of Common
Stock been held by the Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions
on the convertibility of this Note) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such
securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate
Event in such amounts as the Holder would have been entitled to receive had this Note initially been issued with conversion rights
for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate
with the Conversion Rate. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the
Required Holders. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall be
applied without regard to any limitations on the conversion or redemption of this Note.


 


8.          RIGHTS
UPON ISSUANCE OF OTHER SECURITIES.


 


(a)          Adjustment
of Fixed Conversion Price upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company issues
or sells, or in accordance with this Section 8(a) is deemed to have issued or sold, any shares of Common
Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account
of the Company, but excluding any Excluded Securities issued or sold or deemed to have been issued or sold) for a consideration
per share (the “Dilutive Issuance Price”) that is less than a price equal to the Fixed Conversion
Price in effect immediately prior to such issue or sale or deemed issuance or sale (the “Applicable Conversion Price”)
(the foregoing, a “Dilutive Issuance”), then immediately following such Dilutive Issuance, the Applicable Fixed
Conversion Price then in effect shall be reduced to an amount equal to the Dilutive Issuance Price. For all purposes of the foregoing
(including, without limitation, determining the reduced Fixed Conversion Price and consideration per share under this Section 8(a)),
the following shall be applicable:



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(i)          Issuance
of Options. If the Company in any manner grants any Options and the lowest price per share for which one share of Common Stock
is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option is less than the Applicable Fixed Conversion Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 8(a)(i), the “lowest price per share for which one share of Common Stock is issuable
upon exercise of such Options or upon conversion, exercise or exchange of such Convertible Securities issuable upon exercise of
any such Option” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the
Company with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and
upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option less any consideration
paid or payable by the Company with respect to such one share of Common Stock upon the granting or sale of such Option, upon exercise
of such Option and upon conversion exercise or exchange of any Convertible Security issuable upon exercise of such Option. No further
adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such shares of Common Stock or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise
or exchange of such Convertible Securities.


 


(ii)         Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Fixed Conversion Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section
8(a)(ii), the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange
thereof” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security less any consideration paid or payable by the Company with respect to such one share of Common
Stock upon the issuance or sale of such Convertible Security and upon conversion, exercise or exchange of such Convertible Security.
No further adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such shares of Common Stock upon
conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is
made upon exercise of any Options for which adjustment of the Fixed Conversion Price has been or is to be made pursuant to other
provisions of this Section 8(a), no further adjustment of the Fixed Conversion Price shall be made by reason of such issue or sale.


 



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(iii)        Change
in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the
Fixed Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Fixed Conversion Price which
would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase
price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued
or sold. For purposes of this Section 8(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of
the Subscription Date are increased or decreased in the manner described in the immediately preceding sentence, then such Option
or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed
to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 8(a) shall be made if such
adjustment would result in an increase of the Fixed Conversion Price then in effect.


 


(iv)        Calculation
of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction, (x) the Options will be deemed to have been issued for the Option Value and (y)
the other securities issued or sold in such integrated transaction shall be deemed to have been issued for the difference of (I)
the aggregate consideration received by the Company less any consideration paid or payable by the Company pursuant to the terms
of such other securities of the Company, less (II) the Option Value. If any shares of Common Stock, Options or Convertible Securities
are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the
net amount received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold
for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration,
except where such consideration consists of securities, in which case the amount of consideration received by the Company will
be the Closing Sale Price of such security on the date of receipt. If any shares of Common Stock, Options or Convertible Securities
are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity,
the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the
non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be.
The fair value of any consideration other than cash or securities will be determined jointly by the Company and the Required Holders.
If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation
Event”), the fair value of such consideration will be determined within five (5) Trading Days after the tenth (10th)
day following the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holders.
The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses
of such appraiser shall be borne by the Company.


 



    	12



    	 



    

 


(v)         Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may
be.


 


(b)          Adjustment
of Fixed Conversion Price upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription
Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares
of Common Stock into a greater number of shares, the Fixed Conversion Price in effect immediately prior to such subdivision will
be proportionately reduced. If the Company at any time on or after the Subscription Date combines (by combination, reverse stock
split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Fixed Conversion
Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section
8(b) shall become effective immediately after the effective date of such subdivision or combination.


 


(c)          Other
Events. If any event occurs of the type contemplated by the provisions of this Section 6 but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features, but excluding Excluded Securities), then the Company’s Board of Directors will make an appropriate
adjustment in the Fixed Conversion Price so as to protect the rights of the Holder under this Note; provided that no such
adjustment pursuant to this Section 8(c) will increase the Fixed Conversion Price as otherwise determined pursuant to this Section
8.


 


9.          INTENTIONALLY
DELETED.


 


10.         ADDITIONAL
COVENANTS OF THE COMPANY. Until the entire Principal and all accrued Interest on this Note shall have been paid in full, the
Company hereby covenants and agrees as follows:


 





(a)          Board
of Directors. The Board of Directors of the Company shall consist of not less than five (5) Persons, namely Singh, who shall
serve as Chairman of the Board, Barry Hall, Leonard Dryer, and two (2) other individuals designated by Singh. In the event of the
death, removal or resignation of any of the designees of Singh, their replacements shall be individuals designated by Singh. In
the event of the death, removal or resignation of Singh, his replacement and those Singh designees shall be determined by any other
Investors in the Company. The members of the Board of Directors shall serve until the next annual meeting of stockholders of the
Company, or until their successors are elected and qualified.







 



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(b)          Executive
Committee. There shall be established an executive committee consisting of Ron Singh, the Chief Financial Officer of the Company
and such other person or persons selected from time to time by the Board of Directors (the “Executive Committee”)
who shall be delegated by the Board of Directors with the authority to manage the business and affairs of the Company, to make
payments, and enter into agreements with third parties; provided that all Major Decisions (as defined below) shall
be submitted to and approved by a majority of all of the members of the Board of Directors of the Company prior to their implementation.


 


(c)          Major
Decisions. All of the following shall be deemed to be Major Decisions that must be submitted to and approved by a majority
of all of the members of the Board of Directors of the Company as at the Execution Date of this Note prior to their implementation
by the Executive Committee or any executive officer of the Company:


 


(i)          increasing
or decreasing the size of the Board of Directors;


 


(ii)         approving
a merger or sale of all or a majority of the assets, properties or capital stock of the Company;


 


(iii)        approving
any sale of capital stock or notes or debentures of the Company, other than the Line of Credit contemplated by this Agreement;


 


(iv)        effecting
any major joint venture or “going private” transaction;


 


(v)         appointing
a new President, Chief Executive Officer or Chief Financial Officer of the Company;


 


(vi)        removing
any member of the Board of Directors, with or without cause;


 


(vii)       mortgaging,
hypothecating or selling all or substantially all of the assets of the Company;


 


(viii)      amending
the certificate of incorporation or by-laws of the Company; and


 


(ix)         fixing
or increasing the compensation of the President, Chief Executive Officer or Chief Financial Officer of the Company.


 



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11.         TRANSFER.


 


(a)          Transfer
and Reissuance of Note. This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold,
assigned or transferred by the Holder without the consent of the Company. If this Note is to be transferred, the Holder shall surrender
this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note, registered
as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire
outstanding Principal is being transferred, a new Note to the Holder representing the outstanding Principal not being transferred.
The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii)
following conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less
than the Principal stated on the face of this Note.


 


(b)          Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company
shall execute and deliver to the Holder a new Note representing the outstanding Principal.


 


12.         REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity
(including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. Amounts
set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts
to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being
required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the
Holder to confirm the Company’s compliance with the terms and conditions of this Note.


 


13.         PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this
Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company
or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay
the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, but not limited to, attorneys’ fees and disbursements.


 


14.         CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note.


 



    	15



    	 



    

 


15.         PAYMENTS..
Except as otherwise provided in this Note, whenever any payment of cash is to be made by the Company to any Person pursuant to
this Note, such payment shall be made in lawful money of the United States of America by a check drawn on the account of the Company
and sent via overnight courier service to such Person at such address as previously provided to the Company in writing (which address,
in the case of each of the Claimants (as defined in the Initial Exchange Agreement), shall initially be as set forth on the Schedule
of Claimants attached to the Initial Exchange Agreement); provided that the Holder may elect to receive a payment of cash
via wire transfer of immediately available funds by providing the Company with prior written notice setting out such request and
the Holder’s wire transfer instructions. Whenever any amount expressed to be due by the terms of this Note is due on any
day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day. Any amount of
Principal or other amounts due under the Transaction Documents which is not paid when due shall result in a late charge being incurred
and payable by the Company in an amount equal to interest on such amount at the rate of twenty four percent (24%) per annum from
the date such amount was due until the same is paid in full (“Late Charge”).


 


16.         CANCELLATION.
After all Principal and other amounts at any time owed on this Note have been paid in full, this Note shall automatically be deemed
canceled, shall be surrendered to the Company for cancellation and shall not be reissued.


 


17.         WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices
in connection with the delivery, acceptance, performance, default or enforcement of this Note.


 


18.         GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Note shall be construed and enforced in accordance with,
and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the
internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than
the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably
waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address it set forth on the signature page hereto and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing
suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to
the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling
in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL
FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED
HEREBY.


 



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19.         CURRENCY.
All principal, interest and other amounts owing under this Note or any Transaction Document that, in accordance with their terms,
are paid in cash shall be paid in US dollars. All amounts denominated in other currencies shall be converted in the US dollar equivalent
amount in accordance with the Exchange Rate on the date of calculation.


 


20.         Severability.
If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).


 


21.         CERTAIN
DEFINITIONS. For purposes of this Note, and in addition to the other terms defined herein, the following terms shall have the
following meanings:


 


(a)          “Accounts
Payable Notes” means the various non-convertible 6% non-convertible promissory notes of the Company due March 31, 2013
to be issued by the Company to various consultants, vendor, employees in partial payment of unpaid accrued expenses and accounts
payable owed by the Company to such Persons.


 


(b)          “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person (it being understood and agreed (x) for purposes of this definition that “control” of a Person
means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or
otherwise, (y) neither the Holder nor any of its Affiliates is an Affiliate of any other holder of any of the Other Notes or any
of their respective Affiliates and (z) neither any holder of any Other Notes nor any of their respective Affiliates is an Affiliate
of the Holder or any of its Affiliates).


 


(c)          
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed.


 



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(d)          “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any
shares of Common Stock.


 


(e)          “Eligible
Market” means any one or more of the Principal Market, The New York Stock Exchange, Inc., The NASDAQ Capital Market,
The Nasdaq Global Market, The Nasdaq
Global Select Market or the NYSE Amex.


 


(f)          “Fixed
Conversion Price” means One and One-Half Cents ($0.015), subject to adjustment as provided herein.


 


(g)          “Interest
Rate” means six percent (6%) per annum, as may be adjusted from time to time in accordance with Section 2.


 


(h)          “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.


 


(i)          “Option
Value” means the value of an Option based on the Black and Scholes Option Pricing model obtained from the “OV”
function on Bloomberg determined as of the day prior to the public announcement of the applicable Option for pricing purposes and
reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of the
applicable Option as of the applicable date of determination, (ii) an expected volatility equal to the greater of 100% and the
100 day volatility obtained from the HVT function on Bloomberg as of the day immediately following the public announcement of the
applicable Option, (iii) the underlying price per share used in such calculation shall be the highest Weighted Average Price during
the period beginning on the day prior to the execution of definitive documentation relating to the issuance of the applicable Option
and the public announcement of such issuance and (iv) a 360 day annualization factor.


 





(j)          “Other
Notes” shall mean the collective reference to (A) the maximum $65,000 convertible promissory notes that may hereafter
be issued to Summit Holdings Ltd., (B) the $1,347,383.21 principal amount convertible promissory note due June 30, 2013 issued
to Kevir Kang, (C) the $117,463.39 principal amount convertible promissory note due June 30, 2013 issued to Barry Hall; and (D)
the Accounts Payable Notes.







 


(k)          Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.


 


(l)          “Principal
Market” means the OTC Markets Exchange.


 


(m)         “Redemption
Notice” means an Event of Default Redemption Notice.


 



    	18



    	 



    

 


(n)          “Redemption
Prices” means the Event of Default Redemption Price.


 


(o)          
“SEC” means the United States Securities and Exchange Commission.


 


(p)      
    “Technology”  shall mean all of the Company’s intellectual
property, including but not limited to (i) any and all inventions (whether patentable or unpatentable and whether or not
reduced to practice), ideas, research and techniques, technical designs, discoveries and specifications, improvements,
modifications, adaptations and derivations thereto, and patents, Patent Applications, models, industrial
designs, inventor’s certificates, and patent disclosures, together with reissuances, continuations, continuations in
part, revisions, extensions and reexaminations thereof (the “Patents”), (ii) trademarks (any
applications for registration therefor, including any modifications, extensions or renewals thereof), all service marks,
logos, trade dress, brand names and trade names, assumed names, corporate names and other indications of origin (whether
registered or unregistered) (the “Trademarks”), (iii) copyrights (whether registered or
unregistered and any applications for registration therefor, including any modifications, extensions or renewals thereof)
(the “Copyrights”), (iv) trade secrets, know-how and confidential business information and any
other information, however documented, that is a trade secret within the meaning of the applicable trade secret protection
Laws, including without limitation the Uniform Trade Secrets Act (the “Trade
Secrets”); (v)  all computer programs, software design documents, packaged and unpackaged, including
any and all software implementations of algorithms, models and methodologies, any and all data and collection of data,
whether machine readable or otherwise, descriptions, schematics, flow charts, the raw form and executable form of the source
codes, object codes, bytecode, micro-op codes, databases and compilations or other work product used to design, plan,
organize and develop any of the foregoing, and all documentation, including user manuals and training materials, relating to
any of the foregoing (the “Software”); (vi) any and all rights under any and all transcoder
licenses and license agreements that the Company is currently a party to, including but not limited to the agreement between
the Company and RGB; and (vii) any similar or equivalent intangible assets, properties and rights to any of the
foregoing.


 


(q)          Trading
Day” means, as applicable, (x) with respect to all price determinations relating to the Common Stock, any day on which
the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common
Stock, then 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) unless such day is otherwise designated as a Trading Day in writing by the Holder or
(y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York
Stock Exchange (or any successor thereto) is open for trading of securities.


 



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22.         Counterparts.
This Note may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become
effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is
delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature
page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such signature page were an original thereof.


 


[Signature Page Follows]


 



    	20



    	 



    

 


IN WITNESS WHEREOF, the
Company has caused this Note to be duly executed as of the Execution Date set out above.


 


	 	THWAPR, INC.
	 	 
	 	By:	 
	 	 	Name: Barry Hall
	 	 	Title:  Chief Financial Officer


 



    	 



    	 



    

 


EXHIBIT I



THWAPR, INC.





CONVERSION NOTICE


 


Reference is made to the Convertible Note
(the “Note”) issued to the undersigned by Thwapr, Inc., a Nevada corporation (the “Company”).
In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the
Note) of the Note indicated below into shares of common stock, par value $0.003 per share, of the Company (the “Common
Stock”), as of the date specified below.


 


	Conversion Date:	 


 


	Aggregate Conversion Amount to be converted:	 


 


	Conversion Price:	 


 


	Number of shares of Common Stock to be issued:	 


 


	Please issue the Common Stock into which the Note is being converted in the following name and to the following address:


 


	Issue to:	 
	 	 
	 	 
	 	 
	 	 


 


	Facsimile Number:	 


 


	Holder:	 


 


	By:	 


 


	Title:	 


 


	Dated:	 


 


	Account Number:	 
	  (if electronic book entry transfer)	 
	 	 	 





	Transaction Code Number:	 
	  (if electronic book entry transfer)	 
	 	 	 


 



    	 



    	 



    

 


EXHIBIT II


 


ACKNOWLEDGMENT


 


The Company hereby acknowledges
this Conversion Notice and hereby irrevocably directs Island Stock Transfer, Inc. to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated ___________, 2012 from the Company and acknowledged and
agreed to by Island Stock Transfer, Inc.


 


	 	THWAPR, INC.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:


 



    	 



    	 



    











 


ANY TRANSFEREE OF THIS NOTE SHOULD CAREFULLY
REVIEW THE TERMS OF THIS NOTE, INCLUDING SECTION 3(c)(iii) HEREOF. THE PRINCIPAL AMOUNT REPRESENTED BY THIS NOTE AND, ACCORDINGLY,
THE SECURITIES ISSUABLE UPON CONVERSION HEREOF MAY BE LESS THAN THE AMOUNTS SET FORTH ON THE FACE HEREOF PURSUANT TO SECTION 3(c)(iii)
OF THIS NOTE.


 


THWAPR,
INC.


 


SECURED
CONVERTIBLE NOTE


 


	Execution Date:  March 20, 2012	Original Principal Amount: U.S.$117,463.39


  


FOR VALUE RECEIVED,
Thwapr, Inc., a Nevada corporation (the “Company”), hereby promises to pay to the order of Barry Hall
(“Hall”) or his registered assigns (together with Hall, the “Holder”) (a) the amount
set out above as the Original Principal Amount, as such Original Principal Amount is reduced pursuant to the terms hereof pursuant
to redemption, conversion or otherwise (the “Principal”), whether upon the Maturity Date (as defined below),
or upon acceleration, redemption or otherwise (in each case in accordance with the terms hereof), and (b) interest (“Interest”)
on any outstanding Principal, at the applicable Interest Rate (as defined below) from the Execution Date until the same becomes
due and payable, whether upon the Maturity Date or acceleration, conversion, redemption or otherwise (in each case in accordance
with the terms hereof). Certain capitalized terms used herein are defined below and in Section 21 of this Note.


 


The $117,963.39
Original Principal Amount of this Note represents the sum of (i) an aggregate of $104,965.39 of cash advances heretofore made by
Hall to the Company; and (ii) an aggregate of $12,498.00 of accrued and unpaid compensation owed by the Company to Hall. This Note
represents and replaces and supersedes all other notes or other evidences of indebtedness that have heretofore been issued to the
Holder by the Company. This Note represents the mutual agreement and intent of the Holder and the Company, as to the manner by
which the indebtedness owed by the Company to the Holder shall be evidenced.










 


1.          MATURITY
DATE. On the Maturity Date (as defined below), the Company shall pay to the Holder an amount in cash equal to all outstanding
Principal, accrued and unpaid Interest and accrued and unpaid Late Charges on such Principal and Interest. As used in this Note,
the term “Maturity Date” shall mean June 30, 2013, as such date may be extended at the sole option
of the Holder in the event that, and for so long as, an Event of Default (as defined below) shall have occurred and be continuing
on the Maturity Date (as may be extended pursuant to this Section 1) or any event shall have occurred and be continuing on the
Maturity Date (as may be extended pursuant to this Section 1) that with the passage of time and the failure to cure would result
in an Event of Default.


 



    	 



    	 



    

  


2.          INTEREST
AND NO PREPAYMENT.


 


(a)          Interest
on this Note shall commence accruing on the Execution Date, shall accrue daily at the Interest Rate on the outstanding Principal
amount from time to time, shall be computed on the basis of a 360-day year comprised of twelve (12) thirty (30) day months and
shall be payable in arrears on each Conversion Date by conversion into Common Stock in accordance Section 3 below. From and after
the occurrence and during the continuance of any Event of Default, the Interest Rate shall automatically be increased to twelve
percent (12%). In the event that such Event of Default is subsequently cured, the increase referred to in the preceding sentence
shall cease to be effective as of the date of such cure, provided that the Interest as calculated and unpaid at such increased
rate during the continuance of such Event of Default shall continue to apply to the extent relating to the days after the occurrence
of such Event of Default through and including the date of such cure of such Event of Default.


 


(b)          Other
than as expressly agreed in writing by the Holder or as specifically permitted by this Note, the Company may not prepay any portion
of the outstanding Principal or accrued and unpaid Interest or accrued and unpaid Late Charges on Principal, if any.         


 


3.          CONVERSION
OF NOTE. This Note may, at the option of the Holder, be convertible into shares of Common Stock on the terms and conditions
set forth in this Section 3. “Common Stock” means (i) the Company’s shares of common stock, $0.003
par value per share, and (ii) any capital stock into which such common stock shall have been changed or any share capital resulting
from a reclassification of such common stock.


 


(a)          Conversion
Right. The Holder shall be entitled to convert any portion of the outstanding and unpaid Conversion Amount (as defined below)
into fully paid and non-assessable shares of Common Stock in accordance with Section 3(c), at the Conversion Rate (as defined below)
then in effect. The Company shall not issue any fraction of a share of Common Stock upon any conversion. If the issuance would
result in the issuance of a fraction of a share of Common Stock, the Company shall round such fraction of a share of Common Stock
up to the nearest whole share. The Company shall pay any and all transfer, stamp and similar taxes that may be payable with respect
to the issuance and delivery of Common Stock upon conversion of any Conversion Amount.


 


(b)          Conversion
Rate. The number of shares of Common Stock issuable upon conversion of any Conversion Amount pursuant to Section 3(a) shall
be determined by dividing (x) such Conversion Amount by (y) the Conversion Price (the “Conversion Rate”).


 


(i)          “Conversion
Amount” means the sum of (A) the portion of the Principal to be converted, amortized, redeemed or otherwise with respect
to which this determination is being made, and (B) any accrued and unpaid Interest and Late Charges with respect to such Principal.


 



    	2



    	 



    

 


(ii)         “Conversion
Price” means, as of any Conversion Date (as defined below) or other applicable date of determination, the Fixed Conversion
Price, as such Fixed Conversion Price may hereafter be adjusted pursuant to the provisions of Section 8 of this Note..


 


(c)          Mechanics
of Conversion.


 


(i)          Optional
Conversion. To convert any Conversion Amount into shares of Common Stock on any date (a “Conversion Date”),
the Holder shall deliver (whether via facsimile or e-mail to Barry Hall, Chief Financial Officer of the Company at bh@thwapr.com
or otherwise), for receipt on or prior to 11:59 p.m., New York time, on such date, a copy of an executed notice of conversion in
the form attached hereto as Exhibit I (the “Conversion Notice”) to the Company. Following conversion
as aforesaid, the Holder shall provide a copy of such Conversion Notice to legal counsel to the Company on or prior to the first
(1st) Business Day following such Conversion Date. If required by Section 3(c)(iii), within three (3) Trading Days following
a conversion of this Note as aforesaid, the Holder shall surrender this Note to a nationally recognized overnight delivery service
for delivery to the Company (or an indemnification undertaking with respect to this Note in the case of its loss, theft or destruction
as contemplated by Section 15(b)). On or before the second (2nd) Trading Day following the date of receipt of a Conversion
Notice, the Company shall transmit by facsimile an acknowledgment of confirmation, in the form attached hereto as Exhibit
II, of receipt of such Conversion Notice to the Holder and the Company’s transfer agent (the “Transfer Agent”).
On or before the third (3rd) Trading Day following the date of receipt of a Conversion Notice, the Company shall (1)
provided that the Transfer Agent is participating in The Depository Trust Company’s (“DTC”) Fast Automated
Securities Transfer Program, credit such aggregate number of shares of Common Stock to which the Holder shall be entitled to the
Holder’s or its designee’s balance account with DTC through its Deposit/Withdrawal at Custodian system or (2) if the
Transfer Agent is not participating in the DTC Fast Automated Securities Transfer Program, issue and deliver (via reputable overnight
courier) to the address as specified in the Conversion Notice, a certificate, registered in the name of the Holder or its designee,
for the number of shares of Common Stock to which the Holder shall be entitled. If this Note is physically surrendered for conversion
pursuant to Section 3(c)(iii) and the outstanding Principal of this Note is greater than the Principal portion of the Conversion
Amount being converted, then the Company shall as soon as practicable and in no event later than three (3) Business Days after
receipt of this Note and at its own expense, issue and deliver to the Holder (or its designee) a new Note (in accordance with Section
15(d)) representing the outstanding Principal not converted. The Person or Persons entitled to receive the shares of Common Stock
issuable upon a conversion of this Note shall be treated for all purposes as the record holder or holders of such shares of Common
Stock on the Conversion Date.


 



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(ii)         Company’s
Failure to Timely Convert. If the Company shall fail, for any reason or for no reason, to issue to the Holder within three
(3) Trading Days after the Company’s receipt of a Conversion Notice (whether via facsimile or otherwise), a certificate for
the number of shares of Common Stock to which the Holder is entitled and register such shares of Common Stock on the Company’s
share register or to credit the Holder’s or its designee’s balance account with DTC for such number of shares of Common
Stock to which the Holder is entitled upon the Holder’s conversion of any Conversion Amount (as the case may be) (a “Conversion
Failure”), then, in addition to all other remedies available to the Holder, (1) the Company shall pay in cash to the
Holder on each Trading Day after such third (3rd) Trading Day that the issuance of such shares of Common Stock is not
timely effected an amount equal to 1% of the product of (A) 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 (B) the Closing Sale Price of the Common Stock on the Trading
Day immediately preceding the last possible date which the Company could have issued such shares of Common Stock to the Holder
without violating Section 3(c)(i) and (2) the Holder, upon written notice to the Company, may void its Conversion Notice with respect
to, and retain or have returned (as the case may be) any portion of this Note that has not been converted pursuant to such Conversion
Notice, provided that the voiding of a Conversion Notice shall not affect the Company’s obligations to make any payments
which have accrued prior to the date of such notice pursuant to this Section 3(c)(ii) or otherwise. In addition to the foregoing,
if within three (3) Trading Days after the Company’s receipt of a Conversion Notice (whether via facsimile or otherwise),
the Company shall fail to issue and deliver a certificate to the Holder and register such shares of Common Stock on the Company’s
share register or credit the Holder’s or its designee’s balance account with DTC for the number of shares of Common
Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the case may be), and if on or after such
third (3rd) Trading Day the Holder (or any other Person in respect, or on behalf, of the Holder) purchases (in an open
market transaction or otherwise) shares of Common Stock to deliver in satisfaction of a sale by the Holder of all or any portion
of the number of shares of Common Stock, or a sale of a number of shares of Common Stock equal to all or any portion of the number
of shares of Common Stock, issuable upon such conversion that the Holder so anticipated receiving from the Company, then, in addition
to all other remedies available to the Holder, the Company shall, within three (3) Business Days after the Holder’s request
and in the Holder’s discretion, either (i) pay cash to the Holder in an amount equal to the Holder’s total purchase
price (including brokerage commissions and other out-of-pocket expenses, if any) for the shares of Common Stock so purchased (including,
without limitation, by any other Person in respect, or on behalf, of the Holder) (the “Buy-In Price”), at which
point the Company’s obligation to so issue and deliver such certificate or credit the Holder’s balance account with
DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder (as the
case may be) (and to issue such shares of Common Stock) shall terminate, or (ii) promptly honor its obligation to so issue and
deliver to the Holder a certificate or certificates representing such shares of Common Stock or credit the Holder’s balance
account with DTC for the number of shares of Common Stock to which the Holder is entitled upon the Holder’s conversion hereunder
(as the case may be) and pay cash to the Holder in an amount equal to the excess (if any) of the Buy-In Price over the product
of (A) such number of shares of Common Stock multiplied by (B) the lowest Closing Sale Price of the Common Stock on any Trading
Day during the period commencing on the date of the applicable Conversion Notice and ending on the date of such issuance and payment
under this clause (ii).


 



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(iii)        Registration;
Book-Entry. The Company shall maintain a register (the “Register”) for the recordation of the names and
addresses of the holders of each Note and the principal amount of the Note held by such holders (the “Registered Note”).
The entries in the Register shall be conclusive and binding for all purposes absent manifest error. The Company and the holders
of the Note shall treat each Person whose name is recorded in the Register as the owner of a Note for all purposes, including,
without limitation, the right to receive payments of Principal and Interest, if any, hereunder, notwithstanding notice to the contrary.
A Registered Note may be assigned or sold in whole or in part only by registration of such assignment or sale on the Register.
Upon its receipt of a request to assign or sell all or part of any Registered Note by a Holder, the Company shall record the information
contained therein in the Register and issue one or more new Registered Note in the same aggregate principal amount as the principal
amount of the surrendered Registered Note to the designated assignee or transferee pursuant to Section 15, provided that if the
Company does not so record an assignment, transfer or sale (as the case may be) of all or part of any Registered Note within two
(2) Business Days of such a request, then the Register shall be automatically updated to reflect such assignment, transfer or sale
(as the case may be). Notwithstanding anything to the contrary in this Section 3(c)(iii), a Holder may assign any Note or any portion
thereof to an Affiliate of such Holder or a Related Fund of such Holder without delivering a request to assign or sell such Note
to the Company and the recordation of such assignment or sale in the Register (a “Related Party Assignment”);
provided, that (x) the Company may continue to deal solely with such assigning or selling Holder unless and until such Holder
has delivered a request to assign or sell such Note or portion thereof to the Company for recordation in the Register; (y) the
failure of such assigning or selling Holder to deliver a request to assign or sell such Note or portion thereof to the Company
shall not affect the legality, validity, or binding effect of such assignment or sale and (z) such assigning or selling Holder
shall, acting solely for this purpose as a non-fiduciary agent of the Company, maintain a register (the “Related Party
Register”) comparable to the Register on behalf of the Company, and any such assignment or sale shall be effective upon
recordation of such assignment or sale in the Related Party Register. Notwithstanding anything to the contrary set forth herein,
upon conversion of any portion of this Note in accordance with the terms hereof, the Holder shall not be required to physically
surrender this Note to the Company unless (A) the full Conversion Amount represented by this Note is being converted or (B) the
Holder has provided the Company with prior written notice (which notice may be included in a Conversion Notice) requesting physical
surrender and reissue of this Note. The Holder and the Company shall maintain records showing the Principal, Interest and Late
Charges, if any, converted and the dates of such conversions or shall use such other method, reasonably satisfactory to the Holder
and the Company, so as not to require physical surrender of this Note upon conversion.


 



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4.          VOTING
RIGHTS. At any regular or special meeting of stockholders of the Company (each a “Meeting”), or in connection
with any consents of holders of Common Stock to be obtained in connection with matters requiring stockholder consents without a
Meeting ( “Stockholder Consents”), the Holder of this Note shall have the right to cast that number of votes
with other holders of Common Stock as through the Holder had converted the entire Principal amount of this Note into Common Stock
immediately prior to the record date fixed for determining those holders of Common Stock of the Company entitled to vote at such
Meeting, or immediately prior to obtaining such Stockholder Consents.


 


5.          SECURITY
INTEREST. As collateral for payment of all Indebtedness evidenced by this Note, the Company hereby grants to the Holder of
this Note a priority senior first Lien and security interest (the “Security Interest”) on all of the assets
and properties of the Company, including, without limitation, all Technology of the Company (the “Collateral”).
The Company represents to the Holder that the Security Interest in the Collateral granted to the Holder hereunder (a) constitutes
and shall continue to constitute a legal, valid and, upon the filing of a UCC financing statement, fully perfected, security interest
in the Collateral and (b) is and shall remain prior and superior to all Liens, rights or claims of all other Persons.


 


Holder hereby
irrevocably constitutes and appoints Ron Singh as the designee of Holder (“Designee”) to take the actions specified
in this Note on behalf of Holder. The Company agrees that it will take all action and execute all documents that may be necessary
or desirable and that Designee may reasonably request to maintain the validity, perfection, enforceability and priority of the
security interest granted hereby in conformance herewith, and Company grants Holder the right to do the same on its, or on its
own, behalf. The Company agrees that it will do nothing to impair the rights and interests of Holder in the Collateral, will protect
and preserve the Collateral and the right of Holder to exercise and enforce its rights therein under this Note, and will not, except
in the ordinary course of business, sell, convey or otherwise transfer all or any part of the Collateral or any rights therein.
If this Note shall not be paid in full on the Maturity Date and thereafter for so long as a default in payment of this Note shall
occur and be continuing (a “Default Event”), Holder shall have all the rights of a Holder under the UCC, shall
have all rights now or hereafter existing under all other applicable laws, and shall have all the rights set forth in this Note
or any other agreement between the parties hereto. The Company agrees that Holder, by itself or its agent, may, without notice
to any person and without judicial process of any kind, enter onto any premises or land owned, leased or otherwise under the real
or apparent control of Company or any agent of Company where Collateral may be or where Holder believes Collateral may be, and
repossess all or any item of the Collateral, removing, disconnecting or separating all Collateral from any other property. The
Company expressly waives all further rights to possession of the Collateral after and during the continuance of a Default Event
and all claims for injuries suffered as a result of or loss caused by such entering and/or repossession and/or such removal, disconnecting
or separation. Company shall, upon demand by Holder, assemble the Collateral and deliver it to Holder, at Company’s expense,
at such place or places to be designated by Holder.


 



    	6



    	 



    

 


The Company
shall reimburse Holder for all of its expenses in connection with the exercise or protection by Holder of any of its rights and
remedies under this Security Agreement, including without limitation all attorneys’ fees and expenses.


 


THE COMPANY HEREBY WAIVES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH HOLDER’S TAKING POSSESSION OR DISPOSITION OF
ANY OF THE COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING FOR ANY PREJUDGMENT REMEDY OR REMEDIES
AND ANY SUCH RIGHT WHICH COMPANY WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE.


 


6.          RIGHTS
UPON EVENT OF DEFAULT.


 


(a)          Event
of Default. The occurrence of any the following events shall constitute an “Event of Default”:


 


(i)          the
Company’s failure to pay to the Holder any amount of Principal (including, without limitation, any redemption payments),
Interest, Late Charges or other amounts when and as due under this Note or any of the Other Notes, except, in the case of a failure
to pay Interest, Late Charges or any other such amounts specified above, other than the Principal, when and as due, in which case
only if such failure continues for a period of at least five (5) Business Days;


 


(ii)         any
default or Event of Default under, redemption of or acceleration prior to maturity of any of the Other Notes which is not cured
or waived in writing by the holder(s) of the Other Notes;


 


(iii)        any
default under, redemption of or acceleration prior to maturity of any Indebtedness of the Company in excess of $100,000;


 


(iv)        the
Company, pursuant to or within the meaning of Title 11, U.S. Code, or any similar Federal, foreign or state law for the relief
of debtors (collectively, “Bankruptcy Law”), (A) commences a voluntary case, (B) consents to the entry of an
order for relief against it in an involuntary case, (C) consents to the appointment of a receiver, trustee, assignee, liquidator
or similar official (a “Custodian”), (D) makes a general assignment for the benefit of its creditors or (E)
admits in writing that it is generally unable to pay its debts as they become due;


 


(v)         a
court of competent jurisdiction enters an order or decree under any Bankruptcy Law that (A) is for relief against the Company in
an involuntary case, (B) appoints a Custodian of the Company or (C) orders the liquidation of the Company;


 



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(vi)        a
final judgment or judgments for the payment of money aggregating in excess of $100,000 are rendered against the Company and which
judgments are not, within sixty (60) days after the entry thereof, bonded, discharged or stayed pending appeal, or are not discharged
within sixty (60) days after the expiration of such stay; provided, however, that any judgment which is covered by
insurance or an indemnity from a credit worthy party shall not be included in calculating the $100,000 amount set forth above so
long as the Company provides the Holder a written statement from such insurer or indemnity provider (which written statement shall
be reasonably satisfactory to the Holder) to the effect that such judgment is covered by insurance or an indemnity and the Company
will receive the proceeds of such insurance or indemnity within thirty (30) days of the issuance of such judgment;


 


(vii)       any
breach or failure in any respect to comply with Section 10 of this Note, except, in the case of a breach of or failure to comply
with Section 10 which is curable, only if such breach or failure continues for a period of at least ten (10) consecutive Business
Days;


 


(viii)      the
Company’s failure to continue to be in compliance with all of its reporting requirements under the Securities and Exchange
Act of 1934, as amended, and to maintain the listing of its Common Stock on the OTC Markets QX Exchange or OTC Markets QB Exchange;
or


 


(ix)         The
Company’s (A) failure to cure a Conversion Failure by delivery of the required number of shares of Common Stock within three
(3) Business Days after the applicable Conversion Date or (B) notice, written or oral, to any holder of the Note, including by
way of public announcement or through any of its agents, at any time, of its intention not to comply with a request for conversion
of the Note into shares of Common Stock that is tendered in accordance with the provisions of the Note;


 


(b)          Redemption
Right. Upon the occurrence and during the continuation of an Event of Default, the Holder may require the Company to redeem
all or any portion of this Note by delivering written notice thereof (the “Event of Default Redemption Notice”)
to the Company, which Event of Default Redemption Notice shall indicate the portion of this Note the Holder is electing to redeem.
Each portion of this Note subject to redemption by the Company pursuant to this Section 6(b) shall be redeemed by the Company in
cash at a price equal to 125% of the greater of (x) the Conversion Amount to be redeemed and (y) the product of (A) the Conversion
Rate in effect at such time as the Holder delivers an Event of Default Redemption Notice with respect to such Conversion Amount
being redeemed and (B) the greatest Closing Sale Price of the Common Stock on any Trading Day during the period commencing on the
date immediately preceding such Event of Default and ending on the date the Holder delivers the Event of Default Redemption Notice
(the “Event of Default Redemption Price”). Redemptions required by this Section 6(b) shall be made in
accordance with the provisions of Section 10. To the extent redemptions required by this Section 6(b) are deemed or determined
by a court of competent jurisdiction to be prepayments of the Note by the Company, such redemptions shall be deemed to be voluntary
prepayments. Notwithstanding anything to the contrary in this Section 6(b), but subject to Section 3(d), until the Event of Default
Redemption Price (together with any Late Charges thereon) is paid in full, the Conversion Amount submitted for redemption under
this Section 6(b) (together with any Late Charges thereon) may be converted, in whole or in part, by the Holder into Common Stock
pursuant to the terms of this Note. The parties hereto agree that in the event of the Company’s redemption of any portion
of the Note under this Section 6(b), the Holder’s damages would be uncertain and difficult to estimate because of the parties’
inability to predict future interest rates and the uncertainty of the availability of a suitable substitute investment opportunity
for the Holder. Accordingly, any redemption premium due under this Section 6(b) is 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 as a penalty.


 



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7.          DISTRIBUTION
OF ASSETS; RIGHTS UPON ISSUANCE OF PURCHASE RIGHTS AND OTHER CORPORATE EVENTS.


 


(a)          Distribution
of Assets. If the Company shall declare or make any dividend or other distributions of its assets (or rights to acquire its
assets) to any or all holders of shares of Common Stock, by way of return of capital or otherwise (including without limitation,
any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate
rearrangement, scheme of arrangement or other similar transaction) (the “Distributions”), then the Holder will
be entitled to such Distributions as if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately prior
to the date on which a record is taken for such Distribution or, if no such record is taken, the date as of which the record holders
of Common Stock are to be determined for such Distributions (provided, however, to the extent that the Holder’s right to
participate in any such Distributions would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be
entitled to participate in such Distribution to such extent (or the beneficial ownership of any such shares of Common Stock as
a result of such Distribution to such extent) and such Distribution to such extent shall be held in abeyance for the benefit of
the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).


 


(b)          Purchase
Rights. If at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock,
warrants, securities or other property pro rata to the record holders of any class of Common Stock (the “Purchase Rights”),
then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which
the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete conversion
of this Note (without taking into account any limitations or restrictions on the convertibility of this Note) immediately prior
to 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 shares of Common Stock are to be determined for the grant, issue or sale of such Purchase
Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in
the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such
extent (or beneficial ownership of such shares of Common Stock as a result of such Purchase Right to such extent) and such Purchase
Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in
the Holder exceeding the Maximum Percentage).


 



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(c)          Other
Corporate Events. In addition to and not in substitution for any other rights hereunder, if holders of shares of Common Stock
are entitled to receive securities or other assets with respect to or in exchange for shares of Common Stock (a “Corporate
Event”), the Company shall make appropriate provision to insure that the Holder will thereafter have the right to receive
upon a conversion of this Note, (i) in addition to the shares of Common Stock receivable upon such conversion, such securities
or other assets to which the Holder would have been entitled with respect to such shares of Common Stock had such shares of Common
Stock been held by the Holder upon the consummation of such Corporate Event (without taking into account any limitations or restrictions
on the convertibility of this Note) or (ii) in lieu of the shares of Common Stock otherwise receivable upon such conversion, such
securities or other assets received by the holders of shares of Common Stock in connection with the consummation of such Corporate
Event in such amounts as the Holder would have been entitled to receive had this Note initially been issued with conversion rights
for the form of such consideration (as opposed to shares of Common Stock) at a conversion rate for such consideration commensurate
with the Conversion Rate. Provision made pursuant to the preceding sentence shall be in a form and substance satisfactory to the
Required Holders. The provisions of this Section shall apply similarly and equally to successive Corporate Events and shall be
applied without regard to any limitations on the conversion or redemption of this Note.


 


8.          RIGHTS
UPON ISSUANCE OF OTHER SECURITIES.


 


(a)          Adjustment
of Fixed Conversion Price upon Issuance of Common Stock. If and whenever on or after the Subscription Date the Company issues
or sells, or in accordance with this Section 8(a) is deemed to have issued or sold, any shares of Common
Stock (including the issuance or sale of shares of Common Stock owned or held by or for the account
of the Company, but excluding any Excluded Securities issued or sold or deemed to have been issued or sold) for a consideration
per share (the “Dilutive Issuance Price”) that is less than a price equal to the Fixed Conversion
Price in effect immediately prior to such issue or sale or deemed issuance or sale (the “Applicable Conversion Price”)
(the foregoing, a “Dilutive Issuance”), then immediately following such Dilutive Issuance, the Applicable Fixed
Conversion Price then in effect shall be reduced to an amount equal to the Dilutive Issuance Price. For all purposes of the foregoing
(including, without limitation, determining the reduced Fixed Conversion Price and consideration per share under this Section 8(a)),
the following shall be applicable:



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(i)          Issuance
of Options. If the Company in any manner grants any Options and the lowest price per share for which one share of Common Stock
is issuable upon the exercise of any such Option or upon conversion, exercise or exchange of any Convertible Securities issuable
upon exercise of any such Option is less than the Applicable Fixed Conversion Price, then such share of Common Stock shall be deemed
to be outstanding and to have been issued and sold by the Company at the time of the granting or sale of such Option for such price
per share. For purposes of this Section 8(a)(i), the “lowest price per share for which one share of Common Stock is issuable
upon exercise of such Options or upon conversion, exercise or exchange of such Convertible Securities issuable upon exercise of
any such Option” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the
Company with respect to any one share of Common Stock upon the granting or sale of the Option, upon exercise of the Option and
upon conversion, exercise or exchange of any Convertible Security issuable upon exercise of such Option less any consideration
paid or payable by the Company with respect to such one share of Common Stock upon the granting or sale of such Option, upon exercise
of such Option and upon conversion exercise or exchange of any Convertible Security issuable upon exercise of such Option. No further
adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such shares of Common Stock or of such Convertible
Securities upon the exercise of such Options or upon the actual issuance of such shares of Common Stock upon conversion, exercise
or exchange of such Convertible Securities.


 


(ii)         Issuance
of Convertible Securities. If the Company in any manner issues or sells any Convertible Securities and the lowest price per
share for which one share of Common Stock is issuable upon the conversion, exercise or exchange thereof is less than the Applicable
Fixed Conversion Price, then such share of Common Stock shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such Convertible Securities for such price per share. For the purposes of this Section
8(a)(ii), the “lowest price per share for which one share of Common Stock is issuable upon the conversion, exercise or exchange
thereof” shall be equal to the sum of the lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the Convertible Security and upon conversion, exercise or
exchange of such Convertible Security less any consideration paid or payable by the Company with respect to such one share of Common
Stock upon the issuance or sale of such Convertible Security and upon conversion, exercise or exchange of such Convertible Security.
No further adjustment of the Fixed Conversion Price shall be made upon the actual issuance of such shares of Common Stock upon
conversion, exercise or exchange of such Convertible Securities, and if any such issue or sale of such Convertible Securities is
made upon exercise of any Options for which adjustment of the Fixed Conversion Price has been or is to be made pursuant to other
provisions of this Section 8(a), no further adjustment of the Fixed Conversion Price shall be made by reason of such issue or sale.


 



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(iii)        Change
in Option Price or Rate of Conversion. If the purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion, exercise or exchange of any Convertible Securities, or the rate at which any Convertible
Securities are convertible into or exercisable or exchangeable for shares of Common Stock increases or decreases at any time, the
Fixed Conversion Price in effect at the time of such increase or decrease shall be adjusted to the Fixed Conversion Price which
would have been in effect at such time had such Options or Convertible Securities provided for such increased or decreased purchase
price, additional consideration or increased or decreased conversion rate, as the case may be, at the time initially granted, issued
or sold. For purposes of this Section 8(a)(iii), if the terms of any Option or Convertible Security that was outstanding as of
the Subscription Date are increased or decreased in the manner described in the immediately preceding sentence, then such Option
or Convertible Security and the shares of Common Stock deemed issuable upon exercise, conversion or exchange thereof shall be deemed
to have been issued as of the date of such increase or decrease. No adjustment pursuant to this Section 8(a) shall be made if such
adjustment would result in an increase of the Fixed Conversion Price then in effect.


 


(iv)        Calculation
of Consideration Received. In case any Option is issued in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction, (x) the Options will be deemed to have been issued for the Option Value and (y)
the other securities issued or sold in such integrated transaction shall be deemed to have been issued for the difference of (I)
the aggregate consideration received by the Company less any consideration paid or payable by the Company pursuant to the terms
of such other securities of the Company, less (II) the Option Value. If any shares of Common Stock, Options or Convertible Securities
are issued or sold or deemed to have been issued or sold for cash, the consideration received therefor will be deemed to be the
net amount received by the Company therefor. If any shares of Common Stock, Options or Convertible Securities are issued or sold
for a consideration other than cash, the amount of such consideration received by the Company will be the fair value of such consideration,
except where such consideration consists of securities, in which case the amount of consideration received by the Company will
be the Closing Sale Price of such security on the date of receipt. If any shares of Common Stock, Options or Convertible Securities
are issued to the owners of the non-surviving entity in connection with any merger in which the Company is the surviving entity,
the amount of consideration therefor will be deemed to be the fair value of such portion of the net assets and business of the
non-surviving entity as is attributable to such shares of Common Stock, Options or Convertible Securities, as the case may be.
The fair value of any consideration other than cash or securities will be determined jointly by the Company and the Required Holders.
If such parties are unable to reach agreement within ten (10) days after the occurrence of an event requiring valuation (the “Valuation
Event”), the fair value of such consideration will be determined within five (5) Trading Days after the tenth (10th)
day following the Valuation Event by an independent, reputable appraiser jointly selected by the Company and the Required Holders.
The determination of such appraiser shall be final and binding upon all parties absent manifest error and the fees and expenses
of such appraiser shall be borne by the Company.


 



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(v)         Record
Date. If the Company takes a record of the holders of shares of Common Stock for the purpose of entitling them (A) to
receive a dividend or other distribution payable in shares of Common Stock, Options or in Convertible Securities or (B) to
subscribe for or purchase shares of Common Stock, Options or Convertible Securities, then such record date will be deemed to be
the date of the issue or sale of the shares of Common Stock deemed to have been issued or sold upon the declaration of such dividend
or the making of such other distribution or the date of the granting of such right of subscription or purchase, as the case may
be.


 


(b)          Adjustment
of Fixed Conversion Price upon Subdivision or Combination of Common Stock. If the Company at any time on or after the Subscription
Date subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its outstanding shares
of Common Stock into a greater number of shares, the Fixed Conversion Price in effect immediately prior to such subdivision will
be proportionately reduced. If the Company at any time on or after the Subscription Date combines (by combination, reverse stock
split or otherwise) one or more classes of its outstanding shares of Common Stock into a smaller number of shares, the Fixed Conversion
Price in effect immediately prior to such combination will be proportionately increased. Any adjustment pursuant to this Section
8(b) shall become effective immediately after the effective date of such subdivision or combination.


 


(c)          Other
Events. If any event occurs of the type contemplated by the provisions of this Section 6 but not expressly provided for by
such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights
with equity features, but excluding Excluded Securities), then the Company’s Board of Directors will make an appropriate
adjustment in the Fixed Conversion Price so as to protect the rights of the Holder under this Note; provided that no such
adjustment pursuant to this Section 8(c) will increase the Fixed Conversion Price as otherwise determined pursuant to this Section
8.


 


9.          INTENTIONALLY
DELETED.


 


10.         ADDITIONAL
COVENANTS OF THE COMPANY. Until the entire Principal and all accrued Interest on this Note shall have been paid in full, the
Company hereby covenants and agrees as follows:


 


(a)          Board
of Directors. The Board of Directors of the Company shall consist of not less than five (5) Persons, namely Ron Singh, who
shall serve as Chairman of the Board, Barry Hall, Leonard Dryer, and two (2) other individuals designated by Ron Singh. In the
event of the death, removal or resignation of any of the designees of Ron. Singh, their replacements shall be individuals designated
by Ron Singh. In the event of the death, removal or resignation of Ron Singh, his replacement and those Ron Singh designees shall
be determined by any other Investors in the Company. The members of the Board of Directors shall serve until the next annual meeting
of stockholders of the Company, or until their successors are elected and qualified.


 



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(b)          Executive
Committee. There shall be established an executive committee consisting of Ron Singh, the Chief Financial Officer of the Company
and such other person or persons selected from time to time by the Board of Directors (the “Executive Committee”)
who shall be delegated by the Board of Directors with the authority to manage the business and affairs of the Company, to make
payments, and enter into agreements with third parties; provided that all Major Decisions (as defined below) shall
be submitted to and approved by a majority of all of the members of the Board of Directors of the Company prior to their implementation.


 


(c)          Major
Decisions. All of the following shall be deemed to be Major Decisions that must be submitted to and approved by a majority
of all of the members of the Board of Directors of the Company as at the Execution Date of this Note prior to their implementation
by the Executive Committee or any executive officer of the Company:


 


(i)          increasing
or decreasing the size of the Board of Directors;


 


(ii)         approving
a merger or sale of all or a majority of the assets, properties or capital stock of the Company;


 


(iii)        approving
any sale of capital stock or notes or debentures of the Company, other than the Line of Credit contemplated by this Agreement;


 


(iv)        effecting
any major joint venture or “going private” transaction;


 


(v)         appointing
a new President, Chief Executive Officer or Chief Financial Officer of the Company;


 


(vi)        removing
any member of the Board of Directors, with or without cause;


 


(vii)       mortgaging,
hypothecating or selling all or substantially all of the assets of the Company;


 


(viii)      amending
the certificate of incorporation or by-laws of the Company; and


 


(ix)         fixing
or increasing the compensation of the President, Chief Executive Officer or Chief Financial Officer of the Company.


 



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11.         TRANSFER.


 


(a)          Transfer
and Reissuance of Note. This Note and any shares of Common Stock issued upon conversion of this Note may be offered, sold,
assigned or transferred by the Holder without the consent of the Company. If this Note is to be transferred, the Holder shall surrender
this Note to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Note, registered
as the Holder may request, representing the outstanding Principal being transferred by the Holder and, if less than the entire
outstanding Principal is being transferred, a new Note to the Holder representing the outstanding Principal not being transferred.
The Holder and any assignee, by acceptance of this Note, acknowledge and agree that, by reason of the provisions of Section 3(c)(iii)
following conversion or redemption of any portion of this Note, the outstanding Principal represented by this Note may be less
than the Principal stated on the face of this Note.


 


(b)          Lost,
Stolen or Mutilated Note. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft,
destruction or mutilation of this Note, and, in the case of loss, theft or destruction, of any indemnification undertaking by the
Holder to the Company in customary form and, in the case of mutilation, upon surrender and cancellation of this Note, the Company
shall execute and deliver to the Holder a new Note representing the outstanding Principal.


 


12.         REMEDIES,
CHARACTERIZATIONS, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Note shall be cumulative
and in addition to all other remedies available under this Note and any of the other Transaction Documents at law or in equity
(including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the Holder’s
right to pursue actual and consequential damages for any failure by the Company to comply with the terms of this Note. Amounts
set forth or provided for herein with respect to payments, conversion and the like (and the computation thereof) shall be the amounts
to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company
(or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable
harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the
event of any such breach or threatened breach, the Holder shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being
required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the
Holder to confirm the Company’s compliance with the terms and conditions of this Note.


 


13.         PAYMENT
OF COLLECTION, ENFORCEMENT AND OTHER COSTS. If (a) this Note is placed in the hands of an attorney for collection or enforcement
or is collected or enforced through any legal proceeding or the Holder otherwise takes action to collect amounts due under this
Note or to enforce the provisions of this Note or (b) there occurs any bankruptcy, reorganization, receivership of the Company
or other proceedings affecting Company creditors’ rights and involving a claim under this Note, then the Company shall pay
the costs incurred by the Holder for such collection, enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, but not limited to, attorneys’ fees and disbursements.


 


14.         CONSTRUCTION;
HEADINGS. This Note shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against
any Person as the drafter hereof. The headings of this Note are for convenience of reference and shall not form part of, or affect
the interpretation of, this Note.


 



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15.         PAYMENTS..
Except as otherwise provided in this Note, whenever any payment of cash is to be made by the Company to any Person pursuant to
this Note, such payment shall be made in lawful money of the United States of America by a check drawn on the account of the Company
and sent via overnight courier service to such Person at such address as previously provided to the Company in writing (which address,
in the case of each of the Claimants (as defined in the Initial Exchange Agreement), shall initially be as set forth on the Schedule
of Claimants attached to the Initial Exchange Agreement); provided that the Holder may elect to receive a payment of cash
via wire transfer of immediately available funds by providing the Company with prior written notice setting out such request and
the Holder’s wire transfer instructions. Whenever any amount expressed to be due by the terms of this Note is due on any
day which is not a Business Day, the same shall instead be due on the next succeeding day which is a Business Day. Any amount of
Principal or other amounts due under the Transaction Documents which is not paid when due shall result in a late charge being incurred
and payable by the Company in an amount equal to interest on such amount at the rate of twenty four percent (24%) per annum from
the date such amount was due until the same is paid in full (“Late Charge”).


 


16.         CANCELLATION.
After all Principal and other amounts at any time owed on this Note have been paid in full, this Note shall automatically be deemed
canceled, shall be surrendered to the Company for cancellation and shall not be reissued.


 


17.         WAIVER
OF NOTICE. To the extent permitted by law, the Company hereby waives demand, notice, protest and all other demands and notices
in connection with the delivery, acceptance, performance, default or enforcement of this Note.


 


18.         GOVERNING
LAW; JURISDICTION; JURY TRIAL. This Note shall be construed and enforced in accordance with,
and all questions concerning the construction, validity, interpretation and performance of this Note shall be governed by, the
internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether
of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than
the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting
in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with
any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action
or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding
is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. The Company hereby irrevocably
waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy
thereof to such party at the address it set forth on the signature page hereto and agrees that such service shall constitute good
and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to
serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing
suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to
the Holder, to realize on any collateral or any other security for such obligations, or to enforce a judgment or other court ruling
in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL
FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS NOTE OR ANY TRANSACTION CONTEMPLATED
HEREBY.


 



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19.         CURRENCY.
All principal, interest and other amounts owing under this Note or any Transaction Document that, in accordance with their terms,
are paid in cash shall be paid in US dollars. All amounts denominated in other currencies shall be converted in the US dollar equivalent
amount in accordance with the Exchange Rate on the date of calculation.


 


20.         Severability.
If any provision of this Note is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent
jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the
broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect
the validity of the remaining provisions of this Note so long as this Note as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability
of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties
or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good
faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which
comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).


 


21.         CERTAIN
DEFINITIONS. For purposes of this Note, and in addition to the other terms defined herein, the following terms shall have the
following meanings:


 


(a)          “Accounts
Payable Notes” means the various non-convertible 6% non-convertible promissory notes of the Company due March 31, 2013
to be issued by the Company to various consultants, vendor, employees in partial payment of unpaid accrued expenses and accounts
payable owed by the Company to such Persons.


 


(b)          “Affiliate”
means, with respect to any Person, any other Person that directly or indirectly controls, is controlled by, or is under common
control with, such Person (it being understood and agreed (x) for purposes of this definition that “control” of a Person
means the power directly or indirectly either to vote 10% or more of the stock having ordinary voting power for the election of
directors of such Person or direct or cause the direction of the management and policies of such Person whether by contract or
otherwise, (y) neither the Holder nor any of its Affiliates is an Affiliate of any other holder of any of the Other Notes or any
of their respective Affiliates and (z) neither any holder of any Other Notes nor any of their respective Affiliates is an Affiliate
of the Holder or any of its Affiliates).


 


(c)          
“Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in The City
of New York are authorized or required by law to remain closed.


 



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(d)          “Convertible
Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly
or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any
shares of Common Stock.


 


(e)          “Eligible
Market” means any one or more of the Principal Market, The New York Stock Exchange, Inc., The NASDAQ Capital Market,
The Nasdaq Global Market, The Nasdaq
Global Select Market or the NYSE Amex.


 


(f)          “Fixed
Conversion Price” means One and One-Half Cents ($0.015), subject to adjustment as provided herein.


 


(g)          “Interest
Rate” means six percent (6%) per annum, as may be adjusted from time to time in accordance with Section 2.


 


(h)          “Options”
means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.


 


(i)          “Option
Value” means the value of an Option based on the Black and Scholes Option Pricing model obtained from the “OV”
function on Bloomberg determined as of the day prior to the public announcement of the applicable Option for pricing purposes and
reflecting (i) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the remaining term of the
applicable Option as of the applicable date of determination, (ii) an expected volatility equal to the greater of 100% and the
100 day volatility obtained from the HVT function on Bloomberg as of the day immediately following the public announcement of the
applicable Option, (iii) the underlying price per share used in such calculation shall be the highest Weighted Average Price during
the period beginning on the day prior to the execution of definitive documentation relating to the issuance of the applicable Option
and the public announcement of such issuance and (iv) a 360 day annualization factor.


 





(j)          “Other
Notes” shall mean the collective reference to (A) the $65,000 of convertible promissory notes that may hereafter be issued
to Summit Holdings Ltd., (B) the $1,347,383.21 principal amount convertible promissory note due June 30, 2013 issued to Kevir Kang
Hall, (C) the $200,000 maximum principal amount convertible promissory note due June 30, 2013 issued to Ron Singh; and (D) the
Accounts Payable Notes.







 


(k)          Person”
means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization,
any other entity and a government or any department or agency thereof.


 


(l)          “Principal
Market” means the OTC Markets Exchange.


 


(m)         “Redemption
Notice” means an Event of Default Redemption Notice.


 



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(n)          “Redemption
Prices” means the Event of Default Redemption Price.


 


(o)          
“SEC” means the United States Securities and Exchange Commission.


 


(p)      
    “Technology”  shall mean all of the Company’s intellectual
property, including but not limited to (i) any and all inventions (whether patentable or unpatentable and whether or not
reduced to practice), ideas, research and techniques, technical designs, discoveries and specifications, improvements,
modifications, adaptations and derivations thereto, and patents, Patent Applications, models, industrial
designs, inventor’s certificates, and patent disclosures, together with reissuances, continuations, continuations in
part, revisions, extensions and reexaminations thereof (the “Patents”), (ii) trademarks (any
applications for registration therefor, including any modifications, extensions or renewals thereof), all service marks,
logos, trade dress, brand names and trade names, assumed names, corporate names and other indications of origin (whether
registered or unregistered) (the “Trademarks”), (iii) copyrights (whether registered or
unregistered and any applications for registration therefor, including any modifications, extensions or renewals thereof)
(the “Copyrights”), (iv) trade secrets, know-how and confidential business information and any
other information, however documented, that is a trade secret within the meaning of the applicable trade secret protection
Laws, including without limitation the Uniform Trade Secrets Act (the “Trade
Secrets”); (v)  all computer programs, software design documents, packaged and unpackaged, including
any and all software implementations of algorithms, models and methodologies, any and all data and collection of data,
whether machine readable or otherwise, descriptions, schematics, flow charts, the raw form and executable form of the source
codes, object codes, bytecode, micro-op codes, databases and compilations or other work product used to design, plan,
organize and develop any of the foregoing, and all documentation, including user manuals and training materials, relating to
any of the foregoing (the “Software”); (vi) any and all rights under any and all transcoder
licenses and license agreements that the Company is currently a party to, including but not limited to the agreement between
the Company and RGB; and (vii) any similar or equivalent intangible assets, properties and rights to any of the
foregoing.


 


(q)          Trading
Day” means, as applicable, (x) with respect to all price determinations relating to the Common Stock, any day on which
the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common
Stock, then 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) unless such day is otherwise designated as a Trading Day in writing by the Holder or
(y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York
Stock Exchange (or any successor thereto) is open for trading of securities.


 



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22.         Counterparts.
This Note may be executed in two or more counterparts, all of which shall be considered one and the same instrument and shall become
effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is
delivered by facsimile transmission or by an e-mail which contains a portable document format (.pdf) file of an executed signature
page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature
is executed) with the same force and effect as if such signature page were an original thereof.


 


[Signature Page Follows]


 



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IN WITNESS WHEREOF, the
Company has caused this Note to be duly executed as of the Execution Date set out above.


 


	 	THWAPR, INC.
	 	 
	 	By:	 
	 	 	Name: Ron Singh
	 	 	Title:  Chief Executive Officer


 



    	 



    	 



    

 


EXHIBIT I



THWAPR, INC.





CONVERSION NOTICE


 


Reference is made to the Convertible Note
(the “Note”) issued to the undersigned by Thwapr, Inc., a Nevada corporation (the “Company”).
In accordance with and pursuant to the Note, the undersigned hereby elects to convert the Conversion Amount (as defined in the
Note) of the Note indicated below into shares of common stock, par value $0.003 per share, of the Company (the “Common
Stock”), as of the date specified below.


 


	Conversion Date:	 


 


	Aggregate Conversion Amount to be converted:	 


 


	Conversion Price:	 


 


	Number of shares of Common Stock to be issued:	 


 


	Please issue the Common Stock into which the Note is being converted in the following name and to the following address:


 


	Issue to:	 
	 	 
	 	 
	 	 
	 	 


 


	Facsimile Number:	 


 


	Holder:	 


 


	By:	 


 


	Title:	 


 


	Dated:	 


 


	Account Number:	 
	  (if electronic book entry transfer)	 
	 	 	 





	Transaction Code Number:	 
	  (if electronic book entry transfer)	 
	 	 	 


 



    	 



    	 



    

 


EXHIBIT II


 


ACKNOWLEDGMENT


 


The Company hereby acknowledges
this Conversion Notice and hereby irrevocably directs Island Stock Transfer, Inc. to issue the above indicated number of shares
of Common Stock in accordance with the Transfer Agent Instructions dated ___________, 2012 from the Company and acknowledged and
agreed to by Island Stock Transfer, Inc.


 


	 	THWAPR, INC.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title: