CONVERSION
      AGREEMENT

     

    This
      CONVERSION
      AGREEMENT
      (the
      "Agreement")
      is
      dated as of August 27, 2007 by and between uKarma Corporation, a Nevada
      corporation, with headquarters located at 520 Broadway, Suite 350, Santa Monica,
      California 90401 (the "Company"),
      and
      Alicia Blas McDonald (the "Holder").
      Capitalized terms used herein and not otherwise defined herein shall have the
      respective meanings set forth in the Notes (as defined below). 

     

    WHEREAS:

     

    A. On
      or
      about April 10, 2007, the Company issued to Holder a Promissory Note for the
      principal amount of Thirty Thousand Dollars ($30,000) bearing an interest rate
      of seven percent (7%) per annum and due on the one (1) year anniversary of
      the
      issue date (“Note”), which Note has a balance of $30,799.73, including interest
      (“Balance”), as of the date hereof.

     

    B. Holder
      wishes to convert all of the Notes into shares of the Company’s common stock,
      par value $0.001 (“Common Stock”) pursuant to the terms hereof. 

     

    NOW,
      THEREFORE,
      the
      Company and the Holder hereby agree as follows:

    


    
      	
              (1)

            	
              TERMINATION.
                Upon receipt of the securities set forth in Section 2 below, the
                Company
                and Holder hereby agree that each of the Notes shall be terminated.
                

            


    

     

    
      	
              (2)

            	
              CONVERSION;
                ISSUANCE OF SHARES.
                

            


    

     

    (a) Conversion
      Price.
      The
      Notes shall convert into shares of Common Stock at $0.25 per share.

     

    (b) Number
      of Shares.
      In
      consideration of the termination set forth in Section 1 above, the Company
      shall
      convert the Balance of each Note and shall issue to the Holder that number
      of
      shares (123,199 shares) of Common Stock as set forth in Schedule
      1
      attached
      hereto (“Conversion Shares”). 

     

    (c) Legend.
      The
      Holder understands that until such time as the resale of the Conversion Shares
      have been registered under the Securities Act of 1933, as amended, the stock
      certificates representing the Conversion Shares, except as set forth below,
      shall bear any legend as required by the "blue sky" laws of any state and a
      restrictive legend in substantially the following form (and a stop-transfer
      order may be placed against transfer of such stock certificates):

     

    THE
      SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
      SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE
      SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN
      THE
      ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER
      THE
      SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL, IN A GENERALLY
      ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS
      SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE
      FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN
      ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE
      SECURITIES.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    The
      legend set forth above shall be removed and the Company shall issue a
      certificate without such legend to the holder of the securities upon which
      it is
      stamped, if, unless otherwise required by state securities laws, (i) such
      securities are registered for resale under the 1933 Act, (ii) in connection
      with
      a sale, assignment or other transfer, such holder provides the Company with
      an
      opinion of counsel, in a generally acceptable form, to the effect that such
      sale, assignment or transfer of the Securities may be made without registration
      under the applicable requirements of the 1933 Act, or (iii) such holder provides
      the Company with reasonable assurance that the Securities can be sold, assigned
      or transferred pursuant to Rule 144 or Rule 144A.

     

    
      	
              (3)

            	
              COMPANY
                REPRESENTATIONS, WARRANTIES AND COVENANTS.

            


    

     

    (a)Authorization;
      Enforcement; Validity.
      The
      Company has the requisite power and authority to enter into and perform its
      obligations under this Agreement and to issue the Conversion Shares in
      accordance with the terms hereof. When duly executed and delivered by the
      Company, this Agreement shall constitute the legal, valid, and binding
      obligations of the Company, enforceable against the Company in accordance with
      their respective terms, except as such enforceability may be limited by general
      principles of equity or applicable bankruptcy, insolvency, reorganization,
      moratorium, liquidation, or similar laws relating to, or affecting generally,
      the enforcement of applicable creditors' rights and remedies.

     

    (b)Issuance
      of Securities.
      The
      issuance of the Conversion Shares are duly authorized and are free from all
      taxes, liens, and charges with respect to the issue hereof. 

     

    
      	
              (4)

            	
              MISCELLANEOUS.

            


    

     

    (a) Governing
      Law.
      All
      questions concerning the construction, validity, enforcement, and interpretation
      of this Agreement shall be governed by the internal laws of the State of
      California, without giving effect to any choice of law or conflict of law
      provision or rule (whether of the State of California or any other
      jurisdictions) that would cause the application of the laws of any jurisdictions
      other than the State of California. 

     

    (b) Counterparts.
      This
      Agreement may be executed in two or more identical counterparts, all of which
      shall be considered one and the same agreement and shall become effective when
      counterparts have been signed by each party and delivered to the other party;
      provided that a facsimile signature shall be considered due execution and shall
      be binding upon the signatory thereto with the same force and effect as if
      the
      signature were an original, not a facsimile signature.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (c) Headings.
      The
      headings of this Agreement are for convenience of reference and shall not form
      part of, or affect the interpretation of, this Agreement.

     

    (d) Severability.
      If any
      provision of this Agreement shall be invalid or unenforceable in any
      jurisdiction, such invalidity or unenforceability shall not affect the validity
      or enforceability of the remainder of this Agreement in that jurisdiction or
      the
      validity or enforceability of any provision of this Agreement in any other
      jurisdiction.

     

    (e) Entire
      Agreement; Amendments.
      This
      Agreement shall supersede all other prior oral or written agreements among
      Holder, the Company, their affiliates, and persons acting on their behalf with
      respect to the matters discussed herein and therein, and this Agreement, and
      the
      instruments referenced herein contain the entire understanding of the parties
      with respect to the matters covered herein and therein. No provision of this
      Agreement may be amended other than by an instrument in writing signed by the
      Company and Holder, and any amendment to this Agreement made in conformity
      with
      the provisions of this Section 4(e) shall be binding on Holder and the Company.
      No provision hereof may be waived other than by an instrument in writing signed
      by the party against whom enforcement is sought. 

     

    (f) Notices.
      Any
      notices, consents, waivers, or other communications required or permitted to
      be
      given under the terms of this Agreement must be in writing and will be deemed
      to
      have been delivered: (i) upon receipt, when delivered personally; (ii) upon
      receipt, when sent by facsimile (provided confirmation of transmission is
      mechanically or electronically generated and kept on file by the sending party);
      or (iii) one business day after deposit with an overnight courier service,
      in
      each case properly addressed to the party to receive the same. The addresses
      and
      facsimile numbers for such communications shall be:

     

    If
      to the
      Company:

     

    uKarma
      Corporation

    520
      Broadway, Suite 350

    Santa
      Monica, California 90401

    Attention:
       Bill
      Glaser

    Telephone: (310)
      998-8909

    


    If
      to
      Holder, to its address and facsimile number set forth below the Holder’s
      signature on the signature page to this Agreement, or to such other address
      and/or facsimile number as the recipient party has specified by written notice
      given to each other party five (5) days prior to the effectiveness of such
      change. Written confirmation of receipt (A) given by the recipient of such
      notice, consent, waiver or other communication, (B) mechanically or
      electronically generated by the sender's facsimile machine containing the time,
      date, recipient facsimile number, and an image of the first page of such
      transmission, or (C) provided by an overnight courier service shall be
      rebuttable evidence of personal service, receipt by facsimile, or receipt from
      an overnight courier service in accordance with clause (i), (ii) or (iii) above,
      respectively.

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    (g) Successors
      and Assigns.
      This
      Agreement shall be binding upon and inure to the benefit of the parties and
      their respective successors and assigns, including any purchasers of the Notes.
      

     

    (h) No
      Third Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns, and is not for the benefit of, nor may any
      provision hereof be enforced by, any other person.

     

    (i) Further
      Assurances.
      Each
      party shall do and perform, or cause to be done and performed, all such further
      acts and things, and shall execute and deliver all such other agreements,
      certificates, instruments, and documents, as any other party may reasonably
      request in order to carry out the intent and accomplish the purposes of this
      Agreement.

     

    (j) No
      Strict Construction.
      The
      language used in this Agreement will be deemed to be the language chosen by
      the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

     

    [Signature
      Page Follows]

     

    


    
      
         

      

      
         

        
          

        

      

      
         

      

    


    


    IN
      WITNESS WHEREOF,
      the
      Holder and the Company have caused their respective signature to this Agreement
      to be duly executed as of the date first written above.

    
      	 	 	 
	 	 
	 	
              COMPANY:

            
	 	 
	 	UKARMA
              CORPORATION
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Bill
              Glaser
	 	
              CEO

            


    

    


     

     

      	 	 	 
	 	
              HOLDER:

            
	 
 	 
 	 
 
	 	By:  	 
	 	
              
Alicia
              Blas McDonald
	 	
              Address:
                ___________________________________

               

              
                

              

              
                

              

            


    

    


    


     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    SCHEDULE
      1

     

    


     

    
      	
              Note
                Date

            	
              Note
                Balance

            	
              Conversion
                Shares

            
	 	 	 
	
              April
                10, 2007

            	
              $30,799.73

            	
              123,199