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THISNOTEANDTHECOMMONSTOCKISSUABLEUPONCONVERSIONOFTHISNOTEHAVENOTBEENANDWILLNOTBEREGISTEREDWITHTHEUNITEDSTATESSECURITIESANDEXCHANGECOMMISSIONORTHESECURITIESCOMMISSIONOFANYSTATEPURSUANTTOANEXEMPTIONFROMREGISTRATIONPROVIDEDUNDERTHESECURITIESACTOF1933,ASAMENDED,ANDTHE
RULES ANDREGULATIONSPROMULGATEDTHEREUNDER(THE "1933ACT”)

 

 

 

US $250,000.00

 

MAXSOUND CORPORATION

8%CONVERTIBLEREDEEMABLENOTEMay 22, 2018

 

FORVALUERECEIVED,MaxSoundCorporation.(the“Company”)promisestopaytotheorderofTheVecheryFamilyTrustanditsauthorizedsuccessorsandpermittedassigns("Holder"),
the aggregate principal face amount of two hundred and fifty thousand dollars
exactly (U.S. $250,000.00) onMay
22,2019("MaturityDate")andtopayinterestontheprincipalamountoutstandinghereunderattherateof8%
perannumcommencingonMay 22, 2018.
TheinterestwillbepaidtotheHolderinwhosenamethisNoteisregisteredontherecordsoftheCompanyregardingregistrationandtransfersofthisNote.Theprincipalof,andintereston,thisNotearepayabletotheHolder,initially,andifchanged,lastappearingontherecordsoftheCompanyasdesignatedin
writing bythe Holder hereoffromtimetotime.TheCompany will pay
eachinterestpaymentandtheoutstandingprincipaldueuponthisNotebeforeorontheMaturityDate,lessanyamountsrequiredbylawtobedeductedorwithheld,totheHolder
ofthisNotebycheckorwiretransferaddressedtosuchHolderatthelastaddressappearingontherecordsoftheCompany.Theforwardingofsuch
checkor wiretransfer shall
constituteapaymentofoutstandingprincipalhereunderandshallsatisfyanddischargetheliabilityforprincipalonthisNotetotheextentofthesumrepresentedbysuchcheckorwiretransfer.InterestshallbepayableinCommonStock(asdefinedbelow)pursuanttoparagraph4(b)herein.

 

ThisNoteissubjecttothefollowingadditionalprovisions:

 

 

 

1.                 
ThisNoteisexchangeableforanequalaggregateprincipalamountofNotesofdifferentauthorizeddenominations,asrequestedbytheHoldersurrenderingthesame.Noservicechargewillbemadeforsuchregistrationortransferorexchange,exceptthatHoldershallpayanytaxorothergovernmentalchargespayableinconnectiontherewith.

 

2.                 
TheCompanyshallbeentitledtowithholdfromallpaymentsanyamountsrequiredtobewithheldunderapplicablelaws.

 

3.                 
ThisNotemaybetransferredorexchangedonlyincompliancewiththeSecuritiesActof1933,asamended("Act")andapplicablestatesecuritieslaws.Anyattemptedtransfertoanon-qualifyingpartyshallbetreatedbytheCompanyasvoid.PriortoduepresentmentfortransferofthisNote,theCompanyandanyagentoftheCompanymaytreatthepersoninwhosenamethisNoteisdulyregisteredontheCompany'srecordsastheownerhereofforallotherpurposes,whetherornotthisNotebeoverdue,andneithertheCompanynoranysuchagentshallbeaffectedorboundbynoticetothecontrary.AnyHolderofthisNoteelectingtoexercisetherightofconversionsetforthinSection4(a)hereof,inadditiontotherequirementssetforthinSection4(a),andanyprospectivetransfereeofthisNote,alsoisrequiredtogivetheCompanywrittenconfirmationthatthisNoteisbeingconverted("NoticeofConversion")intheformannexedheretoasExhibitA.Thedateofreceipt(includingreceiptbytelecopy)ofsuchNoticeofConversionshallbetheConversionDate.

 

4.                  (a)
TheHolderofthisNoteisentitled,atitsoption,toconvertallorany amount
oftheprincipalfaceamount ofthis Notethen outstandinginto sharesof
theCompany'scommonstock(the"CommonStock")withoutrestrictivelegendofanynature,ataprice("ConversionPrice")foreachshareofCommonStockequalto65%oftheaverageofthethreelowestdailyVWAP'switha10daylookbackoftheCommonStockasreportedontheNationalQuotationsBureauOTCQBexchangewhichtheCompany’ssharesaretradedoranyexchangeuponwhichtheCommonStockmaybetradedinthefuture("Exchange"),includingthedayuponwhichaNoticeofConversionisreceivedbytheCompany(providedsuchNoticeofConversionisdeliveredbyfax,emailorotherelectronicmethodofcommunicationtotheCompanyafter
4P.M.Eastern
StandardorDaylightSavingsTimeiftheHolderwishestoincludethesamedayclosingprice).Iftheshareshavenotbeendeliveredwithin3businessdays,theNoticeofConversionmayberescinded.SuchconversionshallbeeffectuatedbytheCompanydeliveringthe
shares ofCommon Stock tothe Holderwithin 3businessdaysofreceipt
bytheCompanyoftheNoticeofConversion.OncetheHolderhasreceivedsuchsharesofCommonStock,theHoldershallsurrenderthisNotetotheCompany,executedbytheHolderevidencingsuchHolder'sintentiontoconvertthisNoteoraspecifiedportionhereof,andaccompaniedbyproperassignment
hereof in blank.Accrued,but unpaidinterest shall be subjectto conversion.No
fractionalsharesorscriprepresentingfractionsofshareswillbeissuedonconversion,butthenumberofsharesissuableshallberoundedtothenearestwholeshare.

 

(b)              
InterestonanyunpaidprincipalbalanceofthisNoteshallbepaidattherateof8%perannum.InterestshallbepaidbytheCompanyinCommonStock("InterestShares").Holdermay,atanytime,sendinaNoticeofConversiontotheCompanyforInterestSharesbasedontheformulaprovidedinSection4(a)above.
Thedollaramountconvertedinto

 

 

InterestSharesshallbealloraportionoftheaccruedinterestcalculatedontheunpaidprincipalbalanceofthisNotetothedateofsuchnotice.

 

(c)               
DuringthefirstsixmonthsthisNoteisineffect,theCompanyatitsoptionmayredeemthisNotebypayingtotheHolderanamountasfollows:(i)iftheredemptioniswithinthefirst90daysthisNoteisineffect,thenforanamountequalto130%oftheunpaid

principalamountofthisNotealongwithanyinterestthathasaccruedduringthatperiod,(ii)iftheredemptionisafterthe90thdaythisNoteisineffect,butlessthanthe181stdaythisNoteisineffect,thenforanamountequalto2,0%oftheunpaidprincipalamountofthisNotealongwithanyaccruedinterest.
ThisNotemaynotberedeemedbytheCompanyafter180days.The

redemptionmustbeclosedandpaidforwithin3businessdaysoftheCompanysendingtheredemptiondemandortheredemptionwillbeinvalidandtheCompanymaynotredeemthisNote.

 

(d)              
Upon(i)atransferofallorsubstantiallyalloftheassetsoftheCompanytoanypersoninasingletransactionorseriesofrelatedtransactions,(ii)areclassification,capitalreorganizationorotherchangeorexchangeofoutstandingsharesoftheCommonStock,otherthanaforward
orreverse stocksplit orstockdividend,or (iii)anyconsolidation or merger of
theCompanywithorintoanotherpersonorentityinwhichtheCompanyisnotthesurvivingentity(otherthanamergerwhichiseffectedsolelytochangethejurisdictionofincorporationoftheCompanyandresultsinareclassification,conversionorexchangeofoutstandingsharesofCommonStocksolelyintosharesofCommonStock)(eachofitems(i),(ii)and(iii)beingreferredtoasa"SaleEvent"),then,ineachcase,theCompanyshall,uponrequestoftheHolder,redeemthisNoteincashfor150%oftheprincipalamount,plusaccruedbutunpaidinterestthroughthedateofredemption,
orattheelectionoftheHolder,suchHolder mayconverttheunpaidprincipalamount of this
Note(togetherwiththe amount of accrued butunpaidinterest)
intosharesofCommonStockimmediatelypriortosuchSaleEventattheConversionPrice.

 

(e)                In case of any Sale Event (not to include a sale of all or
substantiallyall
oftheCompany’sassets)inconnectionwithwhichthisNoteisnotredeemedorconverted,theCompanyshallcauseeffectiveprovisiontobemadesothattheHolderofthisNoteshallhavetherightthereafter,byconvertingthisNote,topurchaseorconvertthisNoteintothekindandnumberofsharesofstockorothersecuritiesorproperty(includingcash)receivableuponsuchreclassification,capitalreorganizationorotherchange,consolidationormergerbyaholderof
thenumberofsharesofCommonStockthatcouldhavebeenpurchaseduponexerciseoftheNoteandatthesameConversionPrice,asdefinedinthisNote,immediatelypriortosuchSaleEvent.TheforegoingprovisionsshallsimilarlyapplytosuccessiveSaleEvents.IftheconsiderationreceivedbytheholdersofCommonStockisotherthancash,thevalueshallbeasdeterminedbytheBoardofDirectorsoftheCompanyorsuccessorpersonorentityactingingoodfaith.

 

5.                 
NoprovisionofthisNoteshallalterorimpairtheobligationoftheCompany,whichisabsoluteandunconditional,topaytheprincipalof,andintereston,thisNoteatthetime,place,andrate,andintheform,hereinprescribed.

 

TheCompanyherebyexpresslywaivesdemandandpresentmentforpayment,noticeofnon-payment,protest,noticeofprotest,noticeofdishonor,noticeofacceleration
orintenttoaccelerate,

 

 

.

 

6.                 
TheCompanyagreestopayallcostsandexpenses,includingreasonableattorneys'feesandexpenses,whichmaybeincurredbytheHolderincollectinganyamountdueunderthisNote.

 

7.Ifoneormoreofthefollowingdescribed"EventsofDefault"shalloccur:

 

(a)                 
TheCompanyshalldefaultinthepaymentofprincipalorinterestonthisNoteoranyothernoteissuedtotheHolderbytheCompany;or

 

(b)                
AnyoftherepresentationsorwarrantiesmadebytheCompanyhereinorinanycertificateorfinancialorotherwrittenstatementsheretoforeorhereafterfurnishedbyoronbehalfoftheCompanyinconnectionwiththeexecutionanddeliveryofthisNote,ortheSecuritiesPurchaseAgreementunderwhichthisnotewasissuedshallbefalseormisleadinginanyrespect;or

 

(c)                 
TheCompanyshallfailtoperformorobserve,inanyrespect,anycovenant,term,provision,condition,agreementorobligationoftheCompanyunderthisNoteoranyothernoteissuedtotheHolder;or

 

(d)                
TheCompanyshall(1)becomeinsolvent;(2)admitinwritingitsinabilitytopayitsdebtsgenerallyastheymature;(3)makeanassignmentforthebenefitofcreditorsor
commenceproceedingsforitsdissolution;(4)applyfororconsenttotheappointmentofatrustee,liquidatororreceiverforitsorforasubstantialpartofitspropertyorbusiness;(5)fileapetitionforbankruptcyrelief,consenttothefilingofsuchpetitionorhavefiledagainstitaninvoluntarypetitionforbankruptcyrelief,allunderfederalorstatelawsasapplicable;or

 

(e)                 
Atrustee,liquidatororreceivershallbeappointedfortheCompanyorfora substantialpart
of its property or business without its consentand shall not bedischarged
withinsixty(60)daysaftersuchappointment;or

 

(f)                  Any governmental agencyor anycourt ofcompetent jurisdiction
at
theinstanceofanygovernmentalagencyshallassumecustodyorcontrolofthewholeoranysubstantialportionofthepropertiesorassetsoftheCompany;or

 

(g)                 One or more money judgments, writs or
warrantsofattachment,or
similarprocess,inexcessoffiftythousanddollars($50,000)intheaggregate,shallbeenteredorfiledagainsttheCompanyoranyofitspropertiesorotherassetsandshallremainunpaid,unvacated,unbondedorunstayedforaperiodoffifteen(15)daysorinanyeventlaterthanfive(5)days
priortothedateofanyproposedsalethereunder;or

 

(h)                
TheCompanyshallhavedefaultedonorbreachedanytermofanyothernoteofsimilardebtinstrumentintowhichtheCompanyhasenteredandfailedtocuresuchde

 

 

faultwithintheappropriategraceperiod;or

 

(i)                  
TheCompanyshallhaveitsCommonStockdelistedfromanexchange(includingtheOTCBBexchange)or,iftheCommonStocktradesonanexchange,thentradingintheCommonStockshallbesuspendedformorethan10consecutivedays;

 

(j)                   If amajorityof themembersof theBoard ofDirectorsof
theCompanyonthedatehereofarenolongerservingasmembersoftheBoard;

 

(k)                
TheCompanyshallnotdelivertotheHoldertheCommonStockpursuanttoparagraph4hereinwithoutrestrictivelegendwithin3businessdaysofitsreceiptofaNoticeofConversion;or

 

Then,oratanytimethereafter,unlesscured,andineachandeverysuchcase,unlesssuchEventofDefault
shall havebeenwaived inwriting bytheHolder (whichwaiver shall
notbedeemedtobeawaiverofanysubsequentdefault)attheoptionoftheHolderandintheHolder'ssolediscretion,theHoldermayconsiderthisNoteimmediatelydueandpayable,withoutpresentment,demand,protestor(further)noticeofanykind(otherthannoticeofacceleration),allofwhichareherebyexpresslywaived,anythinghereinorinanynoteorotherinstrumentscontainedtothecontrarynotwithstanding,andtheHoldermayimmediately,andwithoutexpirationofanyperiodofgrace,enforceanyandalloftheHolder'srightsandremediesprovidedhereinoranyotherrightsorremediesaffordedbylaw.UponanEventofDefault,interestshallaccrueatadefaultinterestrateof16%perannumor,ifsuch
rateisusuriousornotpermittedbycurrentlaw,thenatthehighestrateofinterestpermittedbylaw.
IntheeventofabreachofSection8(k)thepenalty
shallbe$250perdaythesharesarenotissuedbeginningonthe4thdayaftertheconversionnoticewas
delivered to theCompany. Thispenalty shall increaseto $500 perday beginning on
the10thday.

 

IftheHoldershallcommenceanactionorproceedingtoenforceanyprovisionsofthisNote,including,withoutlimitation,engaginganattorney,theniftheHolderprevailsinsuchaction,theHoldershallbereimbursedbytheCompanyforitsattorneys’feesandothercostsandexpensesincurredintheinvestigation,preparationandprosecutionofsuchactionorproceeding.

 

8.                  In case anyprovision ofthis Noteisheld bya courtof competent
jurisdictiontobeexcessiveinscopeorotherwiseinvalidorunenforceable,suchprovisionshallbeadjustedratherthanvoided,ifpossible,sothatitisenforceabletothemaximumextentpossible,andthevalidityandenforceabilityoftheremainingprovisionsofthisNotewillnotinanywaybeaffectedorimpairedthereby.

 

9.                 
NeitherthisNotenoranytermhereofmaybeamended,waived,dischargedorterminatedotherthanbyawritteninstrumentsignedbytheCompanyandtheHolder.

 

TheCompanyrepresentsthatitisnota“shell”issuerandhasneverbeena“shell”issuerorthatifitpreviouslyhasbeena“shell”issuerthatatleast12monthshavepassed
since theCompanyhasreportedform10type information indicating itisnolonger
a“shell issuer.
Further.TheCompanywillinstructitscounseltoeither(i)writea144-3(a(9)opiniontoallowforsalabilityoftheconversionsharesor(ii)acceptsuchopinionfromHolder’scounsel.

 

 

 

1.             
TheCompanywillgivetheHolderdirectnoticeofanycorporateactions,includingbutnotlimitedtonamechanges,stocksplits,recapitalizationsetc.ThisnoticeshallbegiventotheHolderassoonaspossibleunderlaw.

 

2.                 
ThisNoteshallbegovernedbyandconstruedinaccordancewiththeLawsofDelawareapplicabletocontractsmadeandwhollytobeperformedwithintheStateofCaliforniaCountyofSanDiegoandshallbebindinguponthesuccessorsandassignsofeachpartyhereto.TheHolderandtheCompanyherebymutuallywaivetrialbyjuryandconsenttoexclusivejurisdictionandvenueinthecourtsoftheStateofCaliforniaCountyofSanDiego.ThisAgreementmaybeexecutedincounterparts,andthefacsimiletransmissionofanexecutedcounterparttothisAgreementshallbeeffectiveasanoriginal.

 

INWITNESSWHEREOF,theCompanyhascausedthisNotetobedulyexecutedbyanofficerthereuntodulyauthorized.

 

 

Dated:May 22,2018

 

 

 

[image_005.gif]MAXSOUND CORPORATION

 

 

 

 

By:GregHalpern-Chairman&CFO

 

 

EXHIBITA

 

 

NOTICEOF CONVERSION

 

(TobeExecutedbytheRegisteredHolderinordertoConverttheNote)

 

Theundersigned hereby irrevocablyelects toconvert$ oftheaboveNoteinto
SharesofCommonStockofMaxSoundCorporation.(“Shares”)accordingtotheconditionssetforthinsuchNote,asofthedatewrittenbelow.

 

IfSharesaretobeissuedinthenameofapersonotherthantheundersigned,theundersignedwillpayalltransferandothertaxesandchargespayablewithrespectthereto.

 

Dateof Conversion: ApplicableConversion Price: Signature:

[PrintNameofHolderandTitleofSigner]

Address:

 

 

 

SSNorEIN:

Sharesaretoberegisteredinthefollowingname:

 

Name: Address: Tel: Fax: SSN orEIN:

 

Sharesaretobesentordeliveredtothefollowingaccount:

 

AccountName: Address: