Exhibit 10.12 


 


CONVERTIBLE PROMISSORY NOTE


 


NEITHER THE ISSUANCE AND SALE OF THE SECURITIES
REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE CONVERTIBLE HAVE 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 (WHICH COUNSEL SHALL BE SELECTED BY TILE HOLDER), 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.


 


Issue Date: May 22, 2014


Principal Amount: $15,000.00


 


CONVERTIBLE PROMISSORY NOTE


 


FOR VALUE RECEIVED, Max Sound Corporation,
a Delaware corporation (hereinafter called the "Borrower"), hereby promises to pay to the order of ICG USA, LLC,
a British Virgin Islands Corporation, or registered assigns (the "Holder") the sum of $15,000 together with any interest
as set forth herein, on May 22, 2016 (the "Maturity Date"], and to pay interest on the unpaid principal balance hereof
at the rate of two and a half percent (2.5%) (the "Interest Rate") per annum from the date hereof (the "Issue Date")
until the same becomes due and payable, whether at maturity or upon acceleration or by prepayment or otherwise. This Note may not
be prepaid in whole or in part except as otherwise explicitly set forth herein. Any amount of principal or interest on this Note,
which is not paid when due, shall bear interest at the rate of fourteen percent (14%) per annum from the due date thereof until
the same is paid ("Default Interest"). Interest shall cease accruing on the date that the Note is fully paid and shall
be computed on the basis of a 365-day year and the actual number of days elapsed. All payments due hereunder (to the extent not
converted into common stock, $0.0001 par value per share (the "Common Stock") in accordance with the terms hereof shall
be made in lawful money of the United States of America. All payments shall be made at such address, as the Holder shall hereafter
give to the Borrower by written notice made in accordance with the provisions of this Note. 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 he due on the next succeeding
day which is a business day and in the case of any interest payment date which is not the date on which this Note is paid in full,
the extension of the due date thereof shall not be taken into account for purposes of determining the amount of interest due on
such date. As used in this Note, the term "business day" shall mean any day other than a Saturday, Sunday or a day on
which commercial banks in the city of New York, New York are authorized or required by law or executive order to remain closed.
Each capitalized term used herein, and not otherwise defined, shall have the meaning ascribed thereto in that certain Securities
Purchase Agreement dated the date hereof, pursuant to which this Note was originally issued (the "Purchase Agreement").


 


This Note is free from all taxes, liens, claims
and encumbrances with respect to the issue thereof and shall not be subject to preemptive rights or other similar rights of shareholders
of the Borrower and will not impose personal liability upon the holder thereof.


 






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The following terms shall apply to this Note:


 


ARTICLE 1. CONVERSION RIGHTS


 


1.1  Conversion Right. The Holder shall
have the right from time to time, and at any time following the date of this Note and ending on the later of: (i) the Maturity
Date or (ii) the date of payment of the Default Amount (as defined in Article III pursuant to Section 1.6(a) or Article III., each
in respect of the remaining outstanding principal amount of this Note, to convert all or any part of the outstanding and unpaid
principal amount of this Note into fully paid and non-assessable shares of Common Stock, as such Common Stock exists on the Issue
Date, or any shares of capital stock or other securities of the Borrower into which such Common Stock shall hereafter be changed
or reclassified, at the conversion price (the "Conversion Price") determined as provided herein (a "Conversion");
provided, however, that in no event shall the Holder be entitled to convert any portion of this Note in excess of that portion
of this Note upon conversion of which the sum of (1) the number of shares of Common Stock beneficially owned by the Holder and
its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted
portion of the Notes or the un-exercised or unconverted portion or any other security of the Borrower subject to a limitation on
conversion or exercise analogous to the /imitations contained herein) and (2) the number of shares of Common Stock issuable
upon the conversion of the portion of this Note with respect to which the determination of this proviso is being made, would result
in beneficial ownership by the Holder and its affiliates of more than 9.99% of the outstanding shares of Common Stock. For purposes
of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and Regulations 13D-thereunder, except as otherwise
provided in clause (1) of such proviso, provided, further, however that the limitations on conversion may be waived by the Holder,
at the election of the Holder, not less than 61 days' after giving prior notice to the Borrower, and the provisions of the conversion
limitation shall continue to apply until such 61st day (or such later date, as determined by the Holder, as may be specified in
such notice of waiver.) The number of shares of Common Stock to be issued upon each conversion of this Note shall be determined
by dividing the Conversion Amount (as defined below) by the applicable Conversion Price then in effect on the date specified in
the notice of conversion, in the form attached hereto as Exhibit A (the "Notice of Conversion"), delivered to the Borrower
by the Holder in accordance with Section 1.4 below; provided that the Notice of Conversion is submitted by facsimile or e-mail
(or by other means resulting in, or reasonably expected to result in, notice) to the Borrower before 6:00 pm New York, New York
time on such conversion date (the "Conversion Date"). The term "Conversion Amount" means, with respect to any
conversion of this Note, the sum of (1) the principal amount of this Note to be converted in such conversion plus (2) accrued
and unpaid interest, if any, on such principal amount at the interest rates provided in this Note to the Conversion Date, plus
(3) Default Interest, if any, on the amounts referred to in the immediately preceding clauses (1) and/or (2) plus (3) at
the Holder's option, any amounts owed to the Holder pursuant to Sections 1.3 and 1.4(g) hereof.


 



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1.2  Conversion Price 


 


(a) Calculation of Conversion Price:
The principal and interest amount owed on this note may be converted at any time by the Holder into shares of the Borrower's Common
Stock at $0.07 per share, subject to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower
relating to the Borrower's securities or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications,
extraordinary distributions and similar events. (the "Conversion Price") However, after six (6) months from the date
of this note the Conversion Price shall equal the lower of $0.07, or the Variable Conversion Price (as defined herein) (subject
to equitable adjustments for stock splits, stock dividends or rights offerings by the Borrower relating to the Borrower's securities
or the securities of any subsidiary of the Borrower, combinations, recapitalization, reclassifications, extraordinary distributions
and similar events). The "Variable Conversion Price" shall mean 75% multiplied by the Market Price [as defined herein)
(representing a discount rate of 25%). "Market Price" means the average three (3) lowest closing bid prices for the
Common Stock during the ten [10) Trading Day period ending on the latest complete Trading Day prior to the Conversion Date. "Trading
Price" means, for any security as of any date, the closing bid price on the Over-the-Counter Bulletin Board, or applicable
trading market (the "OTCBB") as reported by a reliable reporting service ('Reporting Service") designated by the
Holder (i.e. Bloomberg) or, if the OTCBB is not the principal trading market for such security, the closing bid price of such
security on the principal securities exchange or trading market where such security is listed or traded or, if no closing bid
price of such security is available in any of the foregoing manners, the average of the closing bid prices of any market makers
for such security that are listed in the "pink sheets- by the National Quotation Bureau, Inc. If the Trading Price cannot
be calculated for such security on such date in the manner provided above, the Trading Price shall be the fair market value as
mutually determined by the Borrower and the holders of a majority in interest of the Notes being converted for which the calculation
of the Trading Price is required in order to determine the Conversion Price of such Notes. "Trading Day" shall mean
any day on which the Common Stock is tradable for any period on the OTCBB, OTCQB or PinkSheets, or on the principal securities
exchange or other securities market on which the Common Stock is then being traded.


 


1.3 Authorized Shares. The Borrower
covenants that during the period the conversion right exists, the Borrower will reserve from its authorized and unissued Common
Stock a sufficient number of shares, free from preemptive rights, to provide for the issuance of Common Stock upon the full conversion
of this Note issued pursuant to the Purchase Agreement (the "Reserved Amount"). The Borrower represents that upon issuance,
such shares will be duly and validly issued, fully paid and non-assessable. In addition, if the Borrower shall issue any securities
or make any change to its capital structure which would change the number of shares of Common Stock into which the Notes shall
be convertible at the then current Conversion Price, the Borrower shall at the same time make proper provision so that thereafter
there shall be a sufficient number of shares of Common Stock authorized and reserved, free from preemptive rights, for conversion
of the outstanding Notes. The Borrower (I) acknowledges that it has irrevocably instructed its transfer agent to issue certificates
for the Common Stock issuable upon conversion of this Note, and (ii) agrees that its issuance of this Note shall constitute full
authority to its officers and agents who are charged with the duty of executing stock certificates to execute and issue the necessary
certificates for shares of Common Stock in accordance with the terms and conditions of this Note.


 


If, at any time the Borrower does not maintain
the Reserved Amount it will be considered an Event of Default under Section 3.2 of the Note.


 


1.4 Method of Conversion.


 


(a) Mechanics
of Conversion. Subject to Section 1.1, this Note may be converted by the Holder in whole or in part after the Issue Date, by
(a) submitting to the Borrower a Notice of Conversion (by facsimile (with receipt confirmation from recipient), e-mail or other
reasonable means of communication dispatched on the Conversion Date prior to 6:00 p.m., Eastern Standard Time) and (b) subject
to Section 1.4(b), surrendering this Note at the principal office of the Borrower.


 



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(b) 
Surrender of Note Upon Conversion. Notwithstanding anything to the contrary set forth herein, upon
conversion of this Note in accordance with the terms hereof, the Holder shall not be required to physically surrender this
Note to the Borrower unless the entire unpaid principal amount of this Note is so converted. The Holder and the Borrower
shall maintain records showing the principal amount so converted and the dates of such conversions or shall use such other
method, reasonably satisfactory to the Holder and the Borrower, so as not to require physical surrender of this Note upon
each such conversion. in the event of any dispute or discrepancy, such records of the Borrower shall, prima-fade, be
controlling and determinative in the absence of manifest error. Notwithstanding the foregoing, if any portion of this Note is
converted as aforesaid, the Holder may not transfer this Note unless the Holder first physically surrenders this Note to the
Borrower, whereupon the Borrower will forthwith issue and deliver upon the order of the Holder a new Note of like tenor,
registered to the Holder (upon payment by the Holder of any applicable transfer taxes) may request, representing in the
aggregate the remaining unpaid principal amount of this Note. The Holder and any assignee who is an Accredited Investor and
related party as defined under Rule 501(a) of Regulation D of the 1933 Act by acceptance of this Note, acknowledge and agree
that, by reason of the provisions of this paragraph, following conversion of a portion of this Note, the unpaid and
unconverted principal amount of this Note represented by this Note may be less than the amount stated on the face hereof.


 


(c) Payment
of Taxes, The Borrower shall not be required to pay any tax which may be payable in respect of any transfer involved in the
issue and delivery of shares of Common Stock or other securities or property on conversion of this Note in a name other than that
of the Holder for in street name), and the Borrower shall not be required to issue or deliver any such shares or other securities
or property unless and until the person or persons (other than the Holder or the custodian in whose street name such shares are
to be held for the Holder's account) requesting the issuance thereof shall have paid to the Borrower the amount of any such tax
or shall have established to the satisfaction of the Borrower that such tax has been paid.


 


(d) Delivery
of Common Stock Upon Conversion. Upon receipt by the Borrower from the Holder of a facsimile transmission (with receipt confirmation
from recipient) or e-mail (or other reasonable means of communication) of a Notice of Conversion meeting the requirements for conversion
as provided in this Section 1.4, the Borrower shall issue and deliver or cause to be issued and delivered to or upon the order
of the Holder certificates for the Common Stock issuable upon such conversion within three (3) business days after such receipt
(but in any event the fifth (5th) business day being hereinafter referred to as the "Deadline") (and, solely in
the case of conversion of the entire unpaid principal amount hereof, surrender of this Note) in accordance with the terms hereof
and the Purchase Agreement. The Borrower will bear all costs related to the issuance of the Conversion Shares, including all costs
of obtaining an attorney's opinion letter regarding the Conversion, and the overnight delivery of the Conversion Shares.


 


(e) Obligation
of Borrower to Deliver Common Stock. Upon receipt by the Borrower of a Notice of Conversion, the Holder shall be deemed to
be the holder of record of the Common Stock issuable upon such conversion, the outstanding principal amount and the amount of accrued
and unpaid interest on this Note shall be reduced to reflect such conversion, and, unless the Borrower defaults on its obligations
under this Article 1, all rights with respect to the portion of this Note being so converted shall forthwith terminate except
the right to receive the Common Stock or other securities, cash or other assets, as herein provided, on such conversion.
If the Holder shall have given a Notice of Conversion as provided herein, the Borrower's obligation to issue and deliver the certificates
for Common Stock shall be absolute and unconditional, irrespective of the absence of any action by the Holder to enforce the same,
any waiver or consent with respect to any provision thereof, the recovery of any judgment against any person or any action to enforce
the same, any failure or delay in the enforcement of any other obligation of the Borrower to the holder of record, or any setoff
counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder of any obligation to the Borrower,
and irrespective of any other circumstance which might otherwise hint such obligation of the Borrower to the Holder in connection
with such conversion. The Conversion Date specified in the Notice of Conversion shall be the Conversion Date so long as
the Notice of Conversion is received by the Borrower before 6:00 p.m., Eastern Standard Time, on such date.


 



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(f) Delivery
of Common Stock by Electronic Transfer. In lieu of delivering physical certificates representing the Common Stock issuable
upon conversion, provided the Borrower is participating in the Depository Trust Company ("DTC") Fast Automated Securities
Transfer ("FAST") program, upon request of the Holder and its compliance with the provisions contained in Section 1.1
and in this Section 1.4, the Borrower shall use its best efforts to cause its transfer agent to electronically transmit the Common
Stock issuable upon conversion to the Holder by crediting the account of Holder's Prime Broker with DTC through its Deposit Withdrawal
Agent Commission ("DWAC") system, provided the stock underlying the Note is eligible for an exemption from registration
under the Securities Act of 1933.


 


(g) Failure
to Deliver Common Stock Prior to Deadline. Without in any way limiting the Holder's right to pursue other remedies, including
actual damages and/or equitable relief, the parties agree that if delivery of the Common Stock issuable upon conversion of this
Note is not delivered by the Deadline (other than a failure due to the circumstances described in Section 1.3 above, which failure
shall be governed by such Section) the Borrower shall pay to the Holder $500 per day in cash, for each day beyond the Deadline
that the Borrower fails to deliver such Common Stock. Such cash amount shall be paid to Holder by the fifth day of the month
following the month in which it has accrued or, at the option of the Holder (by written notice to the Borrower by the first day
of the month following the month in which it has accrued), shall be added to the principal amount of this Note, in which event
interest shall accrue thereon in accordance with the terms of this Note and such additional principal amount shall he convertible
into Common Stock in accordance with the terms of this Note. The Borrower agrees that the right to convert is a valuable right
to the Holder. The damages resulting from a failure, attempt to frustrate, interference with such conversion right are difficult
if not impossible to quantify. Accordingly the parties acknowledge that the liquidated damages provision contained in this Section
1.4(g) are justified.


 


1.5  Concerning the Sharks. The shares of Common Stock issuable
upon conversion of this Note may not be sold or transferred unless (i) such shares are sold pursuant to an effective registration
statement under Act 1933 or (ii] the Borrower or its transfer agent shall have been furnished with an opinion of counsel (which
opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that
the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration or (iii) such shares
are sold or transferred pursuant to Rule 144 under the Act [or a successor rule) ("Rule 144"] or [iv) such shares are
transferred to an "affiliate" [as defined in Rule 144] of the Borrower who agrees to sell or otherwise transfer the shares
only in accordance with this Section 1.5 and who is an Accredited Investor (as defined in the Purchase Agreement). Except as otherwise
provided in the Purchase Agreement (and subject to the removal provisions set forth below), until such time as the shares of Common
Stock issuable upon conversion of this Note have been registered under the Act or otherwise may be sold pursuant to Rule 144 without
any restriction as to the number of securities as of a particular date that can then be immediately sold, each certificate
for shares of Common Stock issuable upon conversion of this Note that has not been so included in an effective registration statement
or that has not been sold pursuant to an effective registration statement or an exemption that permits removal of the legend, shall
bear a legend substantially in the following form, as appropriate:


 


"NEITHER THE ISSUANCE AND
SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE 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 (WHICH COUNSEL SHALL BE SELECTED BY THE HOLDER), 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."


 



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The legend set forth above shall be removed
and the Borrower shall issue to the Holder a new certificate therefore free of any transfer legend if (i) the Borrower or its transfer
agent shall have received an opinion of counsel, in form of the Form of Opinion attached as Exhibit B to the Note, to the
effect that a public sale or transfer of such Common Stock may be made without registration under the Act, which opinion shall
be accepted by the Company so that the sale or transfer is effected or [ii) in the case of the Common Stock issuable upon conversion
of this Note, such security is registered for sale by the Holder under an effective registration statement filed under the Act
or otherwise may be sold pursuant to Rule 144 without any restriction as to the number of securities as of a particular date that
can then be immediately sold. In the event that the Company does not accept the opinion of counsel provided by the Buyer with respect
to the transfer of Securities pursuant to an exemption from registration, such as Rule 144 or Regulation 5, at the Deadline, it
will be considered an Event of Default pursuant to Section 3.2 of the Note, providing that the Company counsel does not reasonably
object to the legal opinion conclusion that an exemption is available.


 


1.6  Effect of Certain Events.


 


(a) Effect
of Merger, Consolidation. Etc. At the option of the Holder, the sale, conveyance or disposition of all or substantially all
of the assets of the Borrower, the effectuation by the Borrower of a transaction or series of related transactions in which more
than 50% of the voting power of the Borrower is disposed of, or the consolidation, merger or other business combination of the
Borrower with or into any other Person (as defined below) or Persons when the Borrower is not the survivor shall either: (i) be
deemed to be an Event of Default (as defined in Article III) pursuant to which the Borrower shall be required to pay to
the Holder upon the consummation of and as a condition to such transaction an amount equal to the Default Amount (as defined in
Article III) or (ii) be treated pursuant to Section 1.6(b) hereof. "Person" shall mean any individual, corporation, limited
liability company, partnership, association, trust or other entity or organization.


 


(b) Adjustment
Due to Merger. Consolidation, Etc. lf, at any time when this Note is issued and outstanding and prior to conversion of all
of the Notes, there shall be any merger, consolidation, exchange of shares, recapitalization, reorganization, or other similar
event, as a result of which shares of Common Stock of the Borrower shall be changed into the same or a different number of shares
of another class or classes of stock or securities of the Borrower or another entity, or in case of any sale or conveyance of all
or substantially all of the assets of the Borrower other than in connection with a plan of complete liquidation of the Borrower,
then the Holder of this Note shall thereafter have the right to receive upon conversion of this Note, upon the basis and upon the
terms and conditions specified herein and in lieu of the shares of Common Stock immediately theretofore issuable upon conversion,
such stock, securities or assets which the Holder would have been entitled to receive in such transaction had this Note been converted
in full immediately prior to such transaction (without regard to any limitations on conversion set forth herein), and in any such
case appropriate provisions shall be made with respect to the rights and interests of the Holder of this Note to the end that the
provisions hereof (including, without limitation, provisions for adjustment of the Conversion Price and of the number of shares
issuable upon conversion of the Note) shall thereafter be applicable, as nearly as may be practicable in relation to any securities
or assets thereafter deliverable upon the conversion hereof. The Borrower shall not affect any transaction described in this Section
1.6(b) unless (a] it first gives, to the extent practicable, thirty (30) days prior written notice (but in any event at least fifteen
(15) days prior written notice) of the record date of the special meeting of shareholders to approve, or if there is no
such record date, the consummation of, such merger, consolidation, exchange of shares, recapitalization, reorganization or other
similar event or sale of assets (during which time the Holder shall be entitled to convert this Note) and (b) the resulting successor
or acquiring entity (if not the Borrower) assumes by written instrument the obligations of this Section 1.6(b). The above provisions
shall similarly apply to successive consolidations, mergers, sales. transfers or share exchanges.


 



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(c) Adjustment
Due to Distribution. If the Borrower shall declare or make any distribution of its assets (or rights to acquire its assets)
to holders of Common Stock as a dividend, stock repurchase, by way of return of capital or otherwise (including any dividend or
distribution to the Borrower's shareholders in cash or shares (or rights to acquire shares] of capital stock of a subsidiary (i.e.,
a spin-off)] (a "Distribution"], then the Holder of this Note shall be entitled, upon any conversion of this Note after
the date of record for determining shareholders entitled to such Distribution, to receive the amount of such assets which would
have been payable to the Holder with respect to the shares of Common Stock issuable upon such conversion had such Holder been the
holder of such shares of Common Stock on the record date for the determination of shareholders entitled to such Distribution.


 


(d) Adjustment
Due to Dilutive Issuance. if, at any time when any Notes are issued and outstanding, the Borrower issues or sells more than
5% of its then outstanding common shares, or in accordance with this Section 1.6(d) hereof is deemed to have issued or sold, any
shares of Common Stock for no consideration or for a consideration per share [before deduction of reasonable expenses or commissions
or underwriting discounts or allowances in connection therewith) less than the Conversion Price in effect on the date of such issuance
(or deemed issuance] of such shares of Common Stock (a "Dilutive Issuance"), then immediately, upon the Dilutive
Issuance, the Conversion Price will be reduced to the amount of the consideration per share received by the Borrower in such Dilutive
Issuance. The Borrower shall be deemed to have issued or sold shares of Common Stock if the Borrower in any manner issues or grants
any warrants, rights or options (not including employee stock option plans], whether or not immediately exercisable, to subscribe
for or to purchase Common Stock or other securities convertible into or exchangeable for Common Stock ("Convertible Securities")
(such warrants, rights and options to purchase Common Stock or Convertible Securities are hereinafter referred to as "Options")
and the price per share for which Common Stock is issuable upon the exercise of such Options is less than the Conversion Price
then in effect, then the Conversion Price shall be equal to such price per share. For purposes of the preceding sentence, the "price
per share for which Common Stock is issuable upon the exercise of such Options" is determined by dividing (i) the total
amount, if any, received or receivable by the Borrower as consideration for the issuance or granting of all such Options, plus
the minimum aggregate amount of additional consideration, if any, payable to the Borrower upon the exercise of all such Options,
plus, in the case of Convertible Securities issuable upon the exercise of such Options, the minimum aggregate amount of additional
consideration payable upon the conversion or exchange thereof at the time such Convertible Securities first become convertible
or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the exercise of all such Options (assuming
full conversion of Convertible Securities, if applicable]. No further adjustment to the Conversion Price will be made upon the
actual issuance of such Common Stock upon the exercise of such Options or upon the conversion or exchange of Convertible Securities
issuable upon exercise of such Options. For the purposes of this Section 1.6(d) as it pertains to the issuance or sale of shares
by the Borrower, as defined herein, the determination of an Adjustment to the Conversion Price based upon the computation described
in this Section shall not include any shares (including Options as defined above) issued or to be issued by the Borrower to any
officers, directors, or consultants in connection with an acquisition, merger, consolidation, joint venture or other business combination
of the Borrower.


 



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Additionally, the Borrower shall be deemed
to have issued or sold shares of Common Stock if the Borrower in any manner issues or sells any Convertible Securities, whether
or not immediately convertible (other than where the same are issuable upon the exercise of Options), and the price per share for
which Common Stock is issuable upon such conversion or exchange is less than the Conversion Price then in effect, then the Conversion.


 


Price shall be equal to such price per share.
For the purposes of the preceding sentence, the "price per share for which Common Stock is issuable upon such conversion or
exchange" is determined by dividing (i) the total amount, if any, received or receivable by the Borrower as consideration
for the issuance or sale of all such Convertible Securities, plus the minimum aggregate amount of additional consideration, if
any, payable to the Borrower upon the conversion or exchange thereof at the time such Convertible Securities first become convertible
or exchangeable, by (ii) the maximum total number of shares of Common Stock issuable upon the conversion or exchange of all such
Convertible Securities. No further adjustment to the Conversion Price will be made upon the actual issuance of such Common Stock
upon conversion or exchange of such Convertible Securities.


 


(e) Notice
of Adjustments. Upon the occurrence of each adjustment or readjustment of the Conversion Price as a result of the events described
in this Section 1.6, the Borrower, at its expense, shall promptly compute such adjustment or readjustment and prepare and furnish
to the Holder a certificate setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment
or readjustment is based. The Borrower shall, upon the written request at any time of the Holder, furnish to such Holder a like
certificate setting forth (i) such adjustment or readjustment, (ii) the Conversion Price at the time in effect and (iii) the number
of shares of Common Stock and the amount, if any, of other securities or property which at the time would be received upon conversion
of the Note.


 


1.7  Status as Shareholder. Upon submission
of a Notice of Conversion by a Holder, (i) the shares covered thereby (other than the shares, if any, which cannot be issued because
their issuance would exceed such Holder's allocated portion or the Reserved Amount or Maximum Share Amount) shall be deemed converted
into shares of Common Stock and (ii) the Holder's rights as a Holder of such converted portion of this Note shall cease and terminate,
excepting only the right to receive certificates for such shares of Common Stock and to any remedies provided herein or otherwise
available at law or in equity to such holder because of a failure by the Borrower to comply with the terms of this Note. Notwithstanding
the foregoing, if a Holder has not received certificates for all shares of Common Stock prior to the tenth (10th) business day
after the expiration of the Deadline with respect to a conversion of any portion of this Note for any reason, then (unless the
Holder otherwise elects to retain its status as a holder of Common Stock by so notifying the Borrower) the Holder shall regain
the rights of a Holder of this Note with respect to such unconverted portions of this Note and the Borrower shall, as soon as practicable,
return such unconverted Note to the Holder or, if the Note has not been surrendered, adjust its records to reflect that such portion
of this Note has not been converted. In all cases, the Holder shall retain all of its rights and remedies (including, without limitation,
(i) the right to receive Conversion Default Payments pursuant to Section 1.3 to the extent required thereby for such Conversion
Default and any subsequent Conversion Default and (ii) the right to have the Conversion Price with respect to subsequent conversions
determined in accordance with Section 1.3) for the Borrower's failure to convert this Note. Further, the Holder shall not have
shareholder rights until the Note is converted into common stock shares.


 


1.8  Prepayment No prepayment
shall be permitted unless otherwise mutually agreed upon by both the Holder and the Borrower.


 



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ARTICLE H. CERTAIN COVENANTS


 


2.1  Distributions on Capital Stock.
So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder's written consent
(a) pay, declare or set apart for such payment, any dividend or other distribution (whether in cash, property or other securities)
on shares of capital stock other than dividends on shares of Common Stock solely in the form of additional shares of Common Stock
or (b) directly or indirectly or through any subsidiary make any other payment or distribution in respect of its capital stock.


 


2.2  Restriction on Stock Repurchases.
So long as the Borrower shall have any obligation under this Note, the Borrower shall not without the Holder's written consent
redeem, repurchase or otherwise acquire (whether for cash or in exchange for property or other securities or otherwise) in any
one transaction or series of related transactions any shares of capital stock of the Borrower or any warrants, rights or options
to purchase or acquire any such shares.


 


2.3  Borrowings. So long as the Borrower
shall have any obligation under this Note, the Borrower shall not, without giving the Holder notice of his Right of First Refusal,
with the exception of any Offerings (as defined herein] in progress prior to execution of this Agreement, in accordance with Section
4(d) of the Purchase Agreement written consent create, incur, assume, guarantee, endorse, contingently agree to purchase or otherwise
become liable upon the obligation of any person, firm, partnership, joint venture or corporation, except by the endorsement of
negotiable instruments for deposit or collection, or suffer to exist any liability for borrowed money, except (a) borrowings in
existence or committed on the date hereof and of which the Borrower has informed Holder in writing prior to the date hereof, or
such debt as disclosed in the SEC filings to date, (b] indebtedness to trade creditors or financial institutions incurred in the
ordinary course of business, (c) borrowings, the proceeds of which shall be used to repay this Note or (d) debt financing not senior
to this Note.


 


2.4  Sale of Assets. So long as the Borrower
shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, sell, lease or otherwise
dispose of any significant portion of its assets outside the ordinary course of business. Any consent to the disposition of any
assets may be conditioned on a specified use of the proceeds of disposition.


 


2.5  Advances and Loans  So long as the
Borrower shall have any obligation under this Note, the Borrower shall not, without the Holder's written consent, lend money, give
credit or make advances to any person, firm, joint venture or corporation, including, without limitation, officers, directors,
employees, subsidiaries and affiliates of the Borrower, except loans, credits or advances (a) in existence or committed on the
date hereof and which the Borrower has informed Holder in writing prior to the date hereof, (b] made in the ordinary course of
business or (c) not in excess of 5500,000.


 


ARTICLE III. EVENTS OF DEFAULT


 


If any of the following events of default (each,
an "Event of Default"] shall occur prior to the date of either the final payment of all outstanding principal and unpaid
and accrued interest or, if elected by the Holder, the Conversion of the Note and subsequent disposition of all of the converted
shares of the Borrower:


 


3.1  Failure to Pay Principal or Interest.
The Borrower fails to pay the principal hereof or interest thereon when due on this Note, whether at maturity, upon acceleration
or otherwise.


 


3.2  Conversion and the Shares The Borrower
fails to issue shares of Common Stock to the Holder (or announces or threatens in writing that it will not honor its obligation
to do so) upon exercise by the Holder of the conversion rights of the Holder in accordance with the terms of this Note, fails to
transfer or cause its transfer agent to transfer or issue (electronically or certificated form) any certificate for shares of Common
Stock issued to the Holder upon conversion of or otherwise pursuant to this Note as and when required by this Note, the Borrower
directs its transfer agent not to transfer or delays, impairs, and/or hinders its transfer agent in transferring (or issuing) (electronically
or in certificated form] any certificate for shares of Common Stock to be issued to the Holder upon conversion of or otherwise
pursuant to this Note as and when required by this Note, or fails to remove (or directs its transfer agent not to remove or impairs,
delays, and/or hinders its transfer agent from removing) any restrictive legend (or to withdraw any stop transfer instructions
in respect thereof) on any certificate for any shares of Common Stock issued to the Holder upon conversion of or otherwise pursuant
to this Note as and when required by this Note (or makes any written announcement, statement or threat that it does not intend
to honor the obligations described in this paragraph) and any such failure shall continue uncured (or any written announcement,
statement or threat not to honor its obligations shall not be rescinded in writing) for three (3) business days after the Holder
shall have delivered a Notice of Conversion.


 



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3.3  Breach of Covenants. The Borrower
breaches any material covenant or other material term or condition contained in this Note and any collateral documents including
but not limited to the Purchase Agreement and such breach continues for a period of ten (I0) days after written notice thereof
to the Borrower from the Holder.


 


3.4  Breach of Representations
and Warranties. Any representation or warranty of the Borrower made herein or in any agreement, statement or certificate
given in pursuant hereto or in connection herewith (including, without limitation, the Purchase Agreement), shall be false or
misleading in any material respect when made and the breach of which has (or with the passage of time will have) a material
adverse effect on the rights of the Holder with respect to this Note or the Purchase Agreement


 


3.5  Receiver or Trustee. The Borrower
or any subsidiary of the Borrower shall make an assignment for the benefit of creditors, or apply for or consent to the appointment
of a receiver or trustee for it or for a substantial part of its property or business, or such a receiver or trustee shall otherwise
be appointed.


 


3.6  Judgments. Any money judgment, writ
or similar process shall be entered or filed against the Borrower or any subsidiary of the Borrower or any of its property or other
assets for more than $50,000, and shall remain unvacated, unbonded or imstayed for a period of twenty (20) days unless otherwise
consented to by the Holder, which consent will not be unreasonably withheld.


 


3.7  Bankruptcy. Bankruptcy, insolvency,
reorganization or liquidation proceedings or other proceedings, voluntary or involuntary, for relief under any bankruptcy law or
any law for the relief of debtors shall he instituted by or against the Borrower or any subsidiary of the Borrower.


 


3.8  Delisting of Common Stock. The Borrower
shall fail to maintain the listing of the Common Stock on at least one of the OTCBB (inclusive of the Pink Sheets or the Q13) or
an equivalent replacement exchange, the NASDAQ National Market, the NASDAQ SmallCap Market, the New York Stock Exchange, or the
American Stock Exchange.


 


3.9 Failure to Comply with the Exchange
Act. The Borrower shall fail to comply with the reporting requirements of the Exchange Act; and/or the Borrower shall cease
to be subject to the reporting requirements of the Exchange Act


 


3.10 Liquidation. Any dissolution, liquidation,
or winding up of Borrower or any substantial portion of its business.


 


3.11  Cessation of Operations.  Any cessation
of operations by Borrower or Borrower admits it is otherwise generally unable to pay its debts as such debts become due, provided,
however, that any disclosure of the Borrower's ability to continue as a "going concern" shall not be an admission that
the Borrower cannot pay its debt as they become due.


 






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3.12  Maintenance of Assets. The failure
by Borrower to maintain any material intellectual property rights, personal, real property or other assets which are necessary
to conduct its business (whether now or in the future).


 


3.13  Financial Statement Restatement.
The restatement of any financial statements filed by the Borrower with the SEC for any date or period from two years prior to the
Issue Date of this Note and until this Note is no longer outstanding, if the result of such restatement would, by comparison to
the unrestated financial statement, have constituted a material adverse effect on the rights of the Holder with respect to this
Note or the Purchase Agreement.


 


3.14  Reverse Splits. The Borrower effectuates
a reverse split of its Common Stock without twenty (20) days prior written notice to the Holder.


 


3.15  Replacement of Transfer Agent.
In the event that the Borrower proposes to replace its transfer agent, the Borrower fails to provide, prior to the effective date
of such replacement, a fully executed Irrevocable Transfer Agent Instructions in a Form as initially delivered pursuant to the
Purchase Agreement (including but not limited to the provision to irrevocably reserve shares of Common Stack in the Reserved Amount)
signed by the successor transfer agent to Borrower and the Borrower.


 


3.16  Cross-Default. Notwithstanding
anything to the contrary contained in this Note or the other related or companion documents, a breach or default by the Borrower
of any covenant or other term or condition contained in any of the Other Agreements, after the passage of all applicable notice
and cure or grace periods, shall, at the option of the Borrower, be considered a default under this Note and the Other Agreements,
in which event the Holder shall he entitled (but in no event required) to apply all rights and remedies of the Holder under the
terms of this Note and the Other Agreements by reason of a default under said Other Agreement or hereunder. "Other Agreements"
means, collectively, all agreements and instruments between, among or by: (i) the Borrower, and, or for the benefit of, (ii] the
Holder and any affiliate of the Holder, including, without limitation, promissory notes; provided, however, the term "Other
Agreements" shall not include the related or companion documents to this Note. Each of the loan transactions will be cross-defaulted
with each other loan transaction and with all other existing and future debt of Borrower to the Holder.


 


3.17  Remedies for Default:  Upon the
occurrence and during the continuation of any Event of Default specified in Section 3.1 (solely at the discretion of the Holder
with respect to failure to pay the principal hereof or interest thereon when due at the Maturity Date], the Note shall become immediately
due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to
the Default Sum (as defined herein). Upon the occurrence and during the continuation of any Event of Default specified in Sections
3.1 (solely at the discretion of the Holder with respect to failure to pay the principal hereof or interest thereon when due on
this Note upon a Trading Market Prepayment Event pursuant to Section 1.7 or upon acceleration), 3.3, 3.4, 3.6, 3.8, 3.9, 3.11,
3.12, 3.13, 3.14, and/or 3.15 exercisable through the delivery of written notice to the Borrower by such Holders (the "Default
Notice"), and upon the occurrence of an Event of Default specified in the remaining sections of Article III (other than failure
to pay the principal hereof or interest thereon at the Maturity Date specified in Section 3.1 hereof], the Note shall become immediately
due and payable and the Borrower shall pay to the Holder, in full satisfaction of its obligations hereunder, an amount equal to
the greater of (i) 110% times the sum of (w) the then outstanding principal amount of this Note plus (x) accrued
and unpaid interest on the unpaid principal amount of this Note to the date of payment (the "Mandatory Prepayment Date"]
plus (y) Default Interest, if any, on the amounts referred to in clauses (w) and/or (x) plus (z) any amounts owed
to the Holder pursuant to Sections 1.3 and 1.4 (hereof (the then outstanding principal amount of this Note to the date of payment
plus the amounts referred to in clauses (x], (y] and (z) shall collectively be known as the "Default Sum'] or (ii] the "parity
value" of the Default Sum to be prepaid, where parity value means (a) the highest number of shares of Common Stock issuable
upon conversion of or otherwise pursuant to such Default Sum in accordance with Article 1, treating the Trading Day immediately
preceding the Mandatory Prepayment Date as the "Conversion Date" for purposes of determining the lowest applicable Conversion
Price, unless the Default Event arises as a result of a breach in respect of a specific Conversion Date in which case such Conversion
Date shall he the Conversion Date), multiplied by (b) the ten-day volume weighted average price (VWAP) per share, according
to Bloomberg, for the Common Stock during the period beginning on the date of first occurrence of the Event of Default (the "Default
Amount") and all other amounts payable hereunder shall immediately become due and payable, all without demand, presentment
or notice, all of which hereby are expressly waived, together with all costs, including, without limitation, legal fees and expenses,
of collection, and the Holder shall be entitled to exercise all other rights and remedies available at law or in equity.


 



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If the Borrower fails to pay the Default Amount
within five (5) business days of written notice that such amount is due and payable, then the Holder shall have the right at any
time, so long as the Borrower remains in default (and so long and to the extent that there are sufficient authorized shares), to
require the Borrower, upon written notice, to immediately issue, in lieu of the Default Amount, the number of shares of Common
Stock of the Borrower equal to the Default Amount divided by the Conversion Price then in effect


 


ARTICLE IV. MISCELLANEOUS


 


4.1  Failure or Indulgence Not Waiver.
No failure or delay on the part of the Holder in the exercise of any power, right or privilege hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise of any such power, right or privilege preclude other or further exercise thereof
or of any other right, power or privileges. All rights and remedies existing hereunder are cumulative to, and not exclusive of,
any rights or remedies otherwise available.


 


4.2  Notices. All notices, demands, requests,
consents, approvals, and other communications required or permitted hereunder shall be in writing and, unless otherwise specified
herein, shall be (i) personally served, (ii) deposited in the mail, registered or certified, return receipt requested, postage
prepaid, (iii) delivered by reputable air courier service with charges prepaid, or (iv) transmitted by hand delivery, telegram,
or facsimile, addressed as set forth below or to such other address as such party shall have specified most recently by written
notice. Any notice or other communication required or permitted to be given hereunder shall be deemed effective (a) upon
hand delivery or delivery by facsimile, with accurate confirmation generated by the transmitting facsimile machine, at the address
or number designated below (if delivered on a business day during normal business hours where such notice is to be received), or
the first business day following such delivery (if delivered other than on a business day during normal business hours where such
notice is to he received) or (b) on the second business day following the date of mailing by express courier service, fully prepaid,
addressed to such address, or upon actual receipt of such mailing, whichever shall first occur.


 


The addresses for such communications shall be:


If to the Borrower, to:


 


Max Sound Corporation 2902A


Colorado Avenue Santa Monica,


CA 90404 Telephone: 888-777-1987


Email: info@maxsound.com


 


If to the Holder:


 


ICG USA, LLC


425 North Martingale Road, Suite 1540


Schaumburg, IL 60124


Attn: Brian Nord, CEO


Telephone: 847.278.0333


Email: brian.nord@icgholdings.com


 



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4.3  Amendments. This Note and any provision
hereof may only be amended by an instrument in writing signed by the Borrower and the Holder. The term "Note" and all
reference thereto, as used throughout this instrument, shall mean this instrument (and the other Notes issued pursuant to the Purchase
Agreement) as originally executed, or if later amended or supplemented, then as so amended or supplemented.


 


4.4  Assignability. This Note shall be
binding upon the Borrower and its successors and assigns, and shall insure to be the benefit of the Holder and its successors and
assigns. Each transferee of this Note must be an "accredited investor" (as defined in Rule 501(a) of the 1933 Act). Notwithstanding
anything in this Note to the contrary, this Note may he pledged as collateral in connection with a bona fide margin account
or other lending arrangement in compliance with applicable securities rules and regulations.


 


4.5  Cost of Collection. If default is
made in the payment of this Note, the Borrower shall pay the Holder hereof costs of collection, including reasonable attorneys'
fees.


 


4.6  Governing Law. This Note shall be
governed by and construed in accordance with the laws of the State of Illinois without regard to principles of conflicts of laws.
Any action brought by either party against the other concerning the transactions contemplated by this Note shall be brought only
in the state courts of Illinois or in the federal courts located in Cook County. The parties to this Note hereby irrevocably waive
any objection to jurisdiction and venue of any action instituted hereunder and shall not assert any defense based on lack of jurisdiction
or venue or based upon forum non conveniens_ The Borrower and Holder waive trial by jury. The prevailing party shall be
entitled to recover from the other party its reasonable attorney's fees and costs. In the event that any provision of this Note
or any other agreement delivered in connection herewith is invalid or unenforceable under any applicable statute or rule of law,
then such provisions shall be deemed inoperative to the extent that it may conflict therewith and shall be deemed modified to conform
with such statute or rule of law. Any such provision, which may prove invalid or unenforceable under any law, shall not affect
the validity or enforceability of any other provision of any agreement. Each party hereby irrevocably waives personal service of
process and consents to process being served in any suit, action or proceeding in connection with this Agreement or any other Transaction
Document by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party
at the address in effect for notices to it under this Agreement 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 other manner permitted by law


 


4.7  Certain Amounts.
Whenever pursuant to this Note the Borrower is required to pay an amount in excess of the outstanding principal amount (or
the portion thereof required to be paid at that time) plus accrued and unpaid interest plus Default Interest on such
interest, the Borrower and the Holder agree that the actual damages to the Holder from the receipt of cash payment on this
Note may be difficult to determine and the amount to be so paid by the Borrower represents stipulated damages and not a
penalty and is intended to compensate the Holder in part for loss of the opportunity to convert this Note and to earn a
return from the sale of shares of Common Stock acquired upon conversion of this Note at a price in excess of the price paid
for such shares pursuant to this Note, The Borrower and the Holder hereby agree that such amount of stipulated damages is not
plainly disproportionate to the possible loss to the Holder from the receipt of a cash payment without the opportunity to
convert this Note into shares of Common Stock


 



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4.8  Purchase Agreement. By its acceptance
of this Note, each party agrees to be bound by the applicable terms of the Purchase Agreement.


 


4.9  Notice of Corporate Events. The
Holder of this Note shall have no rights as a Holder of Common Stock unless and only to the extent that it converts this Note into
Common Stock.


 


4.10  Remedies. The Borrower acknowledges
that a breach by it of its obligations hereunder will cause irreparable harm to the Holder, by vitiating the intent and purpose
of the transaction contemplated hereby. Accordingly, the Borrower acknowledges that the remedy at law for a breach of its obligations
under this Note will be inadequate and agrees, in the event of a breach or threatened breach by the Borrower of the provisions
of this Note, that the Holder shall be entitled, in addition to all other available remedies at law or in equity, and in addition
to the penalties assessable herein, to an injunction or injunctions restraining, preventing or curing any breach of this Note and
to enforce specifically the terms and provisions thereof, without the necessity of showing economic loss and without any bond or
other security being required.


 



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IN WITNESS WHEREOF, Borrower has caused this Note to be signed
in its name by its duly authorized officer this May 22, 2014.


 





	BORROWER:	 	HOLDER:
	 	 	 
	Max Sound Corporation	 	ICG USA, LLC
	 	 	 
	By:	/s/ Greg Halpern  	 	By: 	/s/ Brian R. Nord
	Name: 	Greg Halpern	 	Name: 	Brian R. Nord
	Title:	 CFO  	 	Title: 	Chairman  & CEO
	Date:	 05/22/14	 	Date:	 05/22/14







  




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EXHIBIT A: NOTICE OF CONVERSION


 


The undersigned hereby elects to convert
$___________of the Note (defined below) into that number of shares of Common Stock to be issued pursuant to the conversion of
the Note ("Common Stock") as set forth below, Max Sound Corporation (the "Borrower") according to the
conditions of the convertible note of the Borrower dated as of (the "Note"), as of the date written below. No
fee will be charged to the Holder for any conversion, except for transfer taxes, if any.


 


Box Checked as to applicable instructions:


 


The Borrower shall electronically transmit
the Common Stock issuable pursuant to this Notice of Conversion to the account of the undersigned or its nominee with DTC through
its Deposit Withdrawal Agent Commission system ("DWAC Transfer"). This election shall only be effective if the Company's
transfer agent is a participating member of DTC's DWAC program and the Borrower is DWAC eligible.


 


Name of DTC Prime Broker:


Account
Number:


 


The undersigned hereby requests that the Borrower
issue a certificate or certificates for the number of shares of Common Stock set forth below (which numbers are based on
the Holder's calculation attached hereto) in the name[s] specified immediately below or, if additional space is necessary, on an
attachment


hereto:


 


ICG USA, LLC


4.25 North Martingale Road


Suite 1450


Schaumburg, IL 60173


847.278.0333


 


Date of Conversion:


 


Applicable Conversion Price:


 


Number of Shares of Common Stock to be issued:


 


Pursuant to Conversion of the Notes: Amount
of Principal Balance Due remaining Under the Note after this conversion:


 


ICG USA, LLC


  


	By:	____________________________________   
	Name:	____________________________________   
	Title:	____________________________________   
	Date:	____________________________________   



   





	Borrower:______________                   Holder: ________________










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