$500,000CONVERTIBLENOTE
FORVALUE RECEIVED,MaxSoundCorporation,aDelawarecorporation(the"Issuer"ofthisSecurity)withat least 363,904,570common sharesissuedand outstanding, issues this Securityand promises to paytoJMJ Financial,aNevadasoleproprietorship, oritsAssignees (the "Investor") thePrincipalSumalongwiththeInterestRate andany other fees accordingto the termsherein. This Note willbecome effectiveonly uponexecutionbybothparties and deliveryofthefustpaymentof Consideration by theInvestor (the"EffectiveDate").
ThePrincipalSumis$500,000(fivehundredthousand)plus accruedandunpaidinterestandanyotherfees.TheConsiderationis
$450,000(fourhundredfiftythousand)payab.lebywire(thereexistsa$50,000originalissuediscount(the"OID")).TheInvestor shallpay$150,000of Considerationuponclosing ofthisNote.TheInvestormaypayadditionalConsideration to the Issuer insuch amounts and at such dates as mutually agreed.THE PRINCIPAL SUM DUE TO THE INVESTOR SHALLBE PRORATED BASEDON THE CONSIDERATION ACTUALLYPAIDBY INVESTOR (PLUS ANAPPROXIMATE 10% ORIGINAL ISSUE DISCOUNT THAT IS PRORATEDBASED ON THE CONSIDERATIONACTUALLYPAID BY THE INVESTOR AS WELL AS ANY OTHERINTERESTOR FEES)SUCH THAT THEISSUER IS ONLYREQU IRED TOREPAYTHEAMOUNT FUNDED AND THE ISSUER IS NOT REQUCREDTOREPAYANY UNFUNDEDPORTIONOFTIDSNOTE.
TheMaturityDateistwoyearsfromtheEffectiveDateofeachpayment(the"MaturityDate")andisthedateuponwhichthePrincipalSumofthisNote, aswellas anyunpaidinterest and other fee·,shallbedue andpayable.The ConversionPrice is70%oftheaverage of the3lowest lTade pricesi n the15tradingdaysprevious tothe conversion (In the casethatconversionsharesarenotdeliverableby DWACan additional 10% d iscou ntwillapply;andifthesharesare ineligible fordeposit intotheDTCsystem and onlyeligibleforXclearing depositan additional5%discountsha ll apply; in thecase of bothan additionalcumulative15%discount shallapply). Unless otherwiseagreed inwritingby both parl'ies,atnolimewilltheInvestor convertany amountoftheNote into commonstockthatwouldresultinthe rnvestorowning morethan 4.99% ofthe commonstockoutstanding.
1.ZEROPercentInterestfortheFirstThreeMonths.TheIssuermayrepaythis Noteatanytimeon or before180daysfrom theEffectiveDate,afterwhichtheIssuermay notmakefarU1er payments on thisNote prior to theMaturityDate withoutwrittenapprovalfrom thelnvestor. Ifthe Issuerrepays apayment of Consideration on or before 90 days from theEffectiveDate ofthatpayment, theInterest Rate011thatpaymen tofConsideration shall be ZEROPERCENT (0%).IftheIssuerdoesnotrepaya paymentof Consideration onor before90duysfromitsEffective Date,aone-timeInterest chargeof5%shall be appliedtothePri ncipalSum. Anyinterest payable isi naddi tionto theOID,andthat OID (orproratedOID,ifapplicable) remainspayableregardlessof time andma1111er of paymentbythe rssuer.
2. Conversion.TheInvestorhastheright,atanytimeaftertheEffectiveDate,atitselection,toconvertall orpartoftheoutstandingandu npaid PrincipalSum and accruedinterest(and anyotherfoes)into sharesof fullypaid and non-assessablesharesofcommonstockoftheIssuerasperthis conversion formul11:Number ofsharesreceivable uponconversionequalsthedollarconversion amountdividedby U1e ConversionPrice.Conversionsmaybedelivered lotheIssuerbymethodofthe Investor'schoice (includingbut notl imited loemail,facsimile,mail,overnightcourier, orpersonaldelivery),and allconversionsshallbecashless and notrequirefurther paymentfrom the Investor.IfnoobjectionisdeliveredfromtheIssuerto the Investor regardinganyvariable or calculationoftheconversionnoticewithin24 hoursofdelivery oftheconversionnotice, theIssuershallhavebeenthereafterdeemed tohaveirrevoe11bly confirmed andirrevocably ratifiedsuchnoticeofconversionandwaived any objection thereto. TheIssuershalldelivertheshares from any conversion totheInvestor (in anynamedirected by theInvestor)within3(three)businessdaysofconversionnotice delivery.
3. ConversionDelays.IftheIssuerfailstodeliversharesinaccordancewiththetimeframe statediuection2, theInvestor,atanytimepriortosellingallof those shares, mayrescinda 1yportio11,inwholeorin part,ofthatparticularconversionattributable totheunsoldsharesandhavetherescindedconversionamoimtretu rnedtothePrincipalSum withthe resci ndedconversionsharesreturned10U1eIssuer(underthe[nvestor'sandtheIssuer'sexpectationstJiatanyreturnedconversionamountswilltack backtotheoriginaldate oftheNore).Inaddition, for eachconversion,in tJ1eeventthatsharesarenotdeliverndbythe folll'tllbusinessday(inclusi veof thedayofconversion), apenaltyof $2,000perdaywillbeassessed for eachdayafterthethi rdbusiness day(inclusiveofthedayofthe conversion)unti lsharedeliveryimade;and suchpenaltywillbeaddedtothePrincipalSum oftheNote (underthe Investor'sandtheIssuer'sexpectationsthat any penaltyamounts willlackback totheoriginaldate of theote).
| 4. | ReservationofShares.AtalltimesduringwhichthisNoteisconvertible,theIssuerwillreservefromitsauthorizedandunissuedCommonStock to providefortheissuance of CommonStock uponthefull conversion ofthisNote.The Issuer will atall |
timesreserveatleastl0,000,000sharesofCommonStockforconversion.
5. PiggybackRegistrationRights.TheIssuershallincludeonthenextregistrationstatementtheIssuerfileswithSEC(oronthe subsequent registration statementifsuch registrationstatementis withdrawn)all shares issuableupon conversionof thisNote.Failuretodo so will resultin liquidated damages of 25%oftheoutstanding principalbalanceof thisNote, butnotless than$25,000,being immediatelydue and payable tothe Investor at itselection in the form of cashpayment oraddition tothebalance of this Note.
| 6. | ThisSection6intentionallyleftblank |
7. Default.ThefollowingareeventsofdefaultunderthisNote:(i)theIssuershallfailtopay anyprincipalunder the Notewhendue andpayable(orpayable by conversion) thereunder;or(ii)the Issuer shallfail topayany interest orany otheramount under theNote
whendueandpayable(orpayablebyconversion)thereunder;or(iii)areceiver, trusteeorothersimilarofficialshallbeappointedover the Issuer oramaterialpaii of itsassetsand suchappointmenthallremainuncontestedfortwenty(20)days orshallnotbedismissed ordischarged within sixty(60)days;or(iv) theIssuershall becomeinsolventorgenerally failstopayoradmitsinwritingitsinability topay,itsdebts astbeybecome due, subject toapplicable graceperiods if any;or(v) theIs uershallmakea general assignmentfor thebenefit ofcreditors;or (vi)the Issuer shallfile a petition for relief under anybankruptcy, insolvency or similar law (domestic or foreign);or (vii)aninvoluntary proceedingshallbe commenced or filed against the Issuer; or (viii)the Issuer shall lose itsstatus as"DTC Eligible" ortheIssuer's shareholders shall lose theability to deposit(eitherelectronically orby physicalcertificates,or otherwise) sharesinto the DTC System;or(ix) the Issuer shallbecome delinquent in its filingrequirementsasafully-reporting issuer registered withtheSEC;or (x)theIssuersha llfailtomeet allrequirementstosatisfy the availability ofRule 144 to the Investor or itsassignsincluding but not limited totimelyfulfillment of its filingrequirementsasa fully-reportingissuer registeredwiththe SEC, requirements forXBRL filings, andrequ irementsfordisclosure of financial statements onitswebsite.
8. Remedies.Intheeventofanydefault,theoutstandingprincipalamountofthis Note, plusaccrued butunpaid interest,liquidated damages, feesandother amountsowing inrespectthereofthroughthe dateof acceleration, shallbecome,attheInvestor'selection,immediately dueand payable incash atthe MandatoryDefault Amount. TheMandatory DefaultAmount meansthegreater of(i) theoutstanding principalamountof thisNotepl usallaccruedandunpaidinterest, liquidateddamages,fees andotheramountshereon,dividedbytheConversionPriceont11edatetheMandatoryDefaultAmountis either demandedor paid in full, whicheverhasa lower Conversion Price,multipliedby theV WAPonthedatetheMandatory Default Amount iseitherdemandedor paidin full,whicheverhasahigherVWAP, or (ii) 150% ofthe outstandingprincipalamountof this Note,plus 100% ofaccruedandunpaidinterest,liquidateddamages, fees and otheramountshereon.Commencingfive (5) days after the occurrence ofany event ofdefaultthat resultsintheeventualacceleration of thisNote, the interest rateonthisNoteshall accrueataninterest rateequal tothelesserof 18%perannumor themaximumratepennitted underapplicablelaw. Inconnection with suchaccelerationdescribedherein, the Investor need notprovide,andthe Issuerherebywaives,anypresentment, demand, protestorothernotice ofanykind,andtheInvestormayimmediately andwithout expiration of anygrace periodenforceany andallofitsrightsandremedieshereunder and allotherremedies available toit underapplicablelaw. Suchacceleration may berescinded andannulledby the Investorat anytime priortopaymenthereunder and the Investor shallhave all rights asaholderofthenoteu ntilsuchti me,ifany, asthe[nvcstorreceives fullpaymentpursuant to this Section8.Nosuchrescissionor annulmentshalla ffect any subsequent event ofdefaultor impairany rightconsequent thereon.Nothing herein shall limitthe Investor'srighttopursue any otherremed iesavailabletoitatlaworinequityincluding, without limitation,adecree ofspecificperformanceand/ori njunctivereliefwi threspecttotheIssuer's failuretotimel ydelivercertificatesrepresenting shares of CommonStockuponconversion oftheNoteasreq u ired pu rsuanttothe termshereof.
9. NoShorting.TheInvestoragreesthatsolongasthisNotefromtheIssuertotheInvestorremainsoutstanding,theInvestor will notenterintooreffect "shortsales" ofthe Common Stockor hedging transaction whichestablishesa net short positionwithrespecttotheCommon Stockof theIssuer.TheIssueracknowledgesand agreesthat upondeliveryof aconversionnoticeby theInvestor,the Investor immediatelyownsthesharesof CommonStock describedin tho conversion noticeandanysaleofthose sharesissuable undersuch conversionnoticewouldnotbe considered short sales.
10.Assignability.TheIssuermaynotassignthisNote.ThisNotewillbebindingupontheIssueranditssuccessorsandwillinureto thebenefitoftheInvestor anditssuccessors andassignsandmaybeassignedbytheInvestor toanyonewithoutthe Issuer'sapproval.
lI.GoverningLaw.Thisotewillbegovernedby,andconstruedandenforcedin accordancewith,the laws of the StateofNevada,withoutregard totheconflictoflawsprinciples thereof. Anyaction brought byeitherparty againstthe other concerningthetra1sactionscontemplatedby this Agreementshallbebroughtonly inthe state courtsofFlorida or inthefederalcourtslocatedinM iami-DadeCounty,in the Stateo[Florida.Both parties andthe individuals signingthisAgreementagree tosubmittothejurisdictionofsuchcourts.
12. DeliveryofProcessbytheInvestortotheIssuer.IntheeventofanyactionorproceedingbytheInvestoragainsttheIssuer,andonlybytheInvestor againsttheIssuer,serviceof copiesofsummonsand/orcomplaintand/or anyotherprocesswhichmay be served inanysuchactionorproceeding maybemadeby theInvestorviaU.S.Mail,overnightdeliveryservicesuchas FedEx orUPS,email,fax,orprocess server,orbymailingorotherwisedeliveringacopy ofsuchprocess totheIssueratits lastknownattorney assetforthinits most recentSECfiling.
13. AttorneyFees.Ifanyattorneyisemployedbyeitherpartywithregardtoanylegalorequitableaction,arbitrationorother proceeding brought bysuchpartyfor enforcementof this Note orbecauseofan allegeddispute, breach, defaultor misrepresentation in connection withanyof the provisionsof this Note, the prevailing party will beentitledtorecoverfrom theotherpartyreasonable attorneys' feesandothercostsandexpensesincurred, inadditionto anyotherrelieftowhichtheprevailing party maybeentitled.
14. OpinionofCounsel.IntheeventthatanopinionofcounselisneededforanymatterrelatedtothisNote, the Investorhastheright tohaveanysuchopinionprovided by its counsel. Investor also hasthe rightto haveanysuchopinionprovidedbyIssuer'scounsel.
15. Notices.Anynoticerequiredorpermittedhereunder(includingConversionNotices)mustbeinwritingandeither personallyserved, sentby facsimi leor email transmission,or sent byovernightcourier.Notices willbedeemedeffectivelydeliveredatthetimeoftransmissionifbyfacsimileoremail,and ifby overnightcourierthe businessdayafter suchnotice is deposited withthecourierservicefordel ivery.
Issuer:
[SignaturePagetoFollow]
Investor:
Gc;ld2
MaxSoundCorporation
ChiefFinancialOfficer
Date:03/10/15
[SignaturePageto$500,000ConvertibleNote]
Marchl0. 2015 GlobexTrnnsl'cr,LLC
780DeltonaBoulevard,Suite202Deltona,FL32725
LadiesandGentlemen:
.X·D(··,®!
TECHNOLOGYREDEFINED...
MaxSoundCorporntiun,a Delawarecorporation(the"Company")and.IMJFinancial(the"Investor")enteredinto u $500,000Convertible Note(the'"Nole") dated March9.201 5. Acopyof' thcNote is aLtac hcd hereto.You
shoultlfamiliarizeyourselfwithyourissuanceanddeliveryobligat ions.m; Transfer Agen t, cunta i ned therei n.
Youan.:herebyirrevocablyauthorizetlcllldinstructedtoreserveasufficientnumberu f'sharesor commonstock(" ommonSt·ock") ofthe Company a tleast10,000 000 {ten mi ll i on) sha resor Commonstock for thl! Note whichslloul<lbeheldinreserve fort heInvestor as or thisdutc)forissuanceuponfullcon versi on of'the Note i naccordance withthete1111sthereof.I n the cvenr!'hattheprice pershare oftheCommonStockfallsbelow50'i'oortheclosingprice011the d oteoflh islettertheInvestormayi'rom ti111eto time provideyou wit hwri tten notice to
increasethenumberorshoresofCommonStockso1·c·ervcd,wi tho ut a n y furtheraction or con li rmat i onoft he
Company,tos11chnumberofsharesasequalsfivet i mes t heoutstand i ngNot eba l ancea t t he l imeof t he noti ce d i vided by t heaverage ofthecl osingpricesol' t hcCommonStockfor t hethreet rad ingdayspriorlot hedateofthenot ice. I nvestor hasagreed that int heeventt he stock pricei ncreases.the1·cservecanbedecreased
proportionally.Intheeventofareversestocksplit'thereserveshoul d rema i nunehangcd un l ess i nstruc ted by the Investorand theCom pa ny.
TheabilitytoprocessanoticeofeonvcrsionundertheNote(a "ConversionNot ice")in at imely ma nner isa malcrialobligation oftheCompany pursuant t ot heNote.Yo urfi rm islwn;by i rrevoca blym1t hori zed and instructed toissueshares("Shares") of Common Stock oC thc Compa n y tot heI n vestor wit hou tany furtheraction or co n lirnrntionbyt heCom pany ( fromt hereserve,bu t i n theeventt herearcinsu f ficientreserve shares ofCom monStock toaccommodat eaConve rsion No tice (clcfined bel ow) yourf irma ndt heCom pu nyagreet hat
theConversionNoticeshouldbecompletedusingauthorizedbutun issuedsharesorCommonStockthatthe
Companyhasinit'streasury)uponyourreceiptfromtheInvestorofaConve rsionN oticeexecutedbythe
Investor.TheSharesshouldbeissuedwithoutanyrestrictive h:ge nd if: (A) t heI nvestorprovi desyouwit hanopinionofcounselorthc Investor, i n form,su bst ance and scope c ustomary foropin ionsofcounsel incompa rabletransactions (andsatisfactorytot hetransf"eragent),totheeffect Llin1 theShares issued10theln veslor p urs uan t to theConversionNoticeare no\ "restrictedsecurities" as delined in Rule144 andshouldbe issued lo theInvestor withoutany restrictive legend,provided that t heCompany iscurrent onitsSEC filingsandtheopinion isdatedwitl1 in90daysfrom thedateoftheissuanceortrnnsferrequest;a nd(8)the numberofShares!obeissuedis less
than4.99'%ofthetotalissuedcommonstockoftheCompany.
TheCompanyherebyrequeststhatyouri·lrmnetimmediately,withoutdelay andw i thout the needfor anyactionor confirmationbythe Com pany wi th respectlothe i ssua nceol' Corn rnonStockp u rsuant lo anyConversi onNotices received fromtheI nvestor.
TheSharesshallnotbesubjecttoanystop-transferrestrictionsatanytime.TheCompan yherebyconl'irrnsto
yonandtotheInvestorthatnoinstructionotherthanascontemplatedhereinwill begiven toyouby tileCom pan y withrespecttothemattersreferenced herein.TheCompanyherebyauthorizesyou, andyousha l lbeobiiga tcd, to d isrega rd anycontra ry i nst ruction received byor onbchalfoftheCompa nyornny other p<.:rsonpurportingtorepresent the Com pany.
YouareherebyauthorizedanddirectedtopromptlydiscloselotheInvestor,afterlnvestor's requesl rromtimeto time, the total n um ber ofsharesof CommonStockisucdand ouls!andi ngandthe tota l numberofsharesofCommon Stock llrn l areau thori zed bu tunissucclandu nreserved.
TheCompanyshallindemnifyyouandyourofficers,directors,principals,partners,agentsandrepresentatives, andholdeachofthemharmlessfromand againstanyand allloss,liability, damage,c.laimorexpense (including the reasonable feesanddiS;buraementsofilsattomeys) incurre.d by oi·assertedagainstyouor any o-fthem arising
outoforinconnectiontheinstructionssetforthherein,theperfonnanceofyourdutishereunderandotherwfaeinrespectbereof,.inoludingthecostsandexpensesof defendingyourselforthemselvesagains'anychumorliability hereunder.,except that the Companyshallnot heliablehereunderas tomatters inrespectof whichit Is determined thatyou haveJtct.edwithgtoss negligei1ceorin bad faith (which gross negligence orbad faith musthe determined byafinul,non-appcal n bleorder,j\ldgment,decree or rulingof aeourt of c0mpetent jurisdiction). You shall have
liabilitytotheCompanyinresp.ecttoanyactiontakenoranyfailuretoactinrespectofthisifsuchaction was taken or omittedto.fue takeningoo,d faith,andyou shall beentitledto rely in thisregardonthe advice of counsel.
TheBoru:dofDirectorsoftheCompanyhasapprovedtheforegoing(irrevocableinstructions)anddoeshereby extendthe Company's irrevocable agreement to indemnifyyourfirmfor a\llo.ss, liabilityor expense incarryingout theauthority anddirection herein contained on the tt?nns herein set forth.
IftheCompany'saccountisinarrearswiththeTransferAgent,theT1:ansferAgentshallnothavartyobligationt©actup.ontheseinstructions;however the Investor shall have the option toCU1'ethe outstandingb,alancewith the TransferAgent.
TheCompanyagreesthatintheeventthatthl.llTransferAge11tresignsastheCompany'strnnsferageat,oriftheCompanydecides.to switchor terniinatethe current TransferAgent, the Companyshallengageasuitable replacement transfer agentthatwil1agreeto serve astransfer agentfurthe Company andbe boundbythe terms and conditions of these Irrevecable Instructionswithin flve (5) businesi; days.
Th.eInvestorisintendei;ltobeandisthirdpmtybeneficiaryhereof,andnoamendment01·modificationtothe instru.ction.ssetfor.thberelum:ay bemaoewithout theconsent oftheInvestor.
VerytruJy:yours,
By:--::::=-----1-'---------
C1regHalpern
ChiefFinancialOfficer
GlobexTransfer,LLC
By:_·....._-------
Name:
Title:
