NEITHERTHEISSUANCEANDSALEOFTHESECURITIESREPRESENTEDBYTHISCERTIFICATENORTHESECURITIESINTOWHICHTHESESECURITIESARECONVERTIBLEHAVEBEENREGISTEREDUNDERTHESECURITIESACTOF1933,AS
AMENDED,OR APPLICABLE
STATE SECURITIES LAWS.
THESECURITIES
MAY NOT BE OFFERED
FOR SALE, SOLD,
TRANSFERRED ORASSIGNED
(I) IN THE ABSENCE OF (A)
AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES
UNDER THE SECURITIES ACT OF1933, AS AMENDED, OR (B)
AN OPINION OF COUNSEL
(WHICH COUNSEL SHALL
BE SELECTEDBYTHEHOLDER),INAGENERALLYACCEPTABLEFORM,THAT REGISTRATION IS NOT
REQUIRED UNDER SAID
ACT OR (II) UNLESS
SOLD PURSUANTTORULE144ORRULE144AUNDERSAIDACT.
NOTWITHSTANDING THE FOREGOING, THE SECURITIES
MAY BE PLEDGED IN CONNECTIONWITHABONAFIDEMARGINACCOUNTOROTHERLOANORFINANCINGARRANGEMENT SECUREDBYTHE SECURITIES.





PrincipalAmount:$254,000.00	IssueDate: November6, 2014PurchasePrice:$254,000.00





CONVERTIBLEPROMISSORY NOTE



FORVALUERECEIVED,MAXSOUNDCORPORATION,aDelawarecorporation(hereinaftercalledthe“Borrower”),herebypromisestopaytotheorderofKBMWORLDWIDE,INC.,aNewYorkcorporation,orregisteredassigns(the“Holder”)thesumof

$254,000.00togetherwithanyinterestassetforthherein,onAugust10,2015(the“MaturityDate”),andtopayinterestontheunpaidprincipalbalancehereofattherateofeightpercent(8%)(the“InterestRate”)perannumfromthedatehereof(the“IssueDate”)untilthesamebecomes 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 setforth
herein. Any amount
of principal or interest on this Note
which is not paid when
due shall bear interest
at the rate of
twenty two percent (22%) per
annum from the due date
thereof until the same is paid
(“Default Interest”). Interest
shall commence 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 duehereunder(to theextent not converted
into common stock, $0.001 par value
pershare (the
“CommonStock”)inaccordance withthe 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 inaccordance with
the provisions of this Note. Whenever
any amount expressed to be due by
the terms of this Note is dueon any day which
is not abusiness day,
thesameshall
instead be dueon thenext succeeding day which is abusiness
day and, in thecaseofany interest payment
datewhich is not thedateon











whichthisNoteispaidinfull,theextensionoftheduedatethereofshallnotbetakenintoaccountforpurposesofdeterminingtheamountofinterestdueonsuchdate.AsusedinthisNote,theterm“business day”shallmean anydayotherthan
aSaturday, Sundayor adayon which
commercial banks in the city of New York,
New York are authorized or required by
law orexecutive ordertoremainclosed. Eachcapitalizedterm usedherein,andnot otherwise defined,shallhave themeaningascribedtheretointhatcertainSecuritiesPurchaseAgreement dated the date
hereof, pursuant to which this Note
was originally issued (the “Purchase
Agreement”).



ThisNoteisfreefromalltaxes,liens,claimsandencumbranceswithrespecttotheissuethereofandshallnotbesubjecttopreemptiverightsorothersimilarrightsofshareholdersoftheBorrowerand will not imposepersonal liabilityupon theholder thereof.



The
followingterms shall applyto
this Note:



ARTICLEI.CONVERSION
RIGHTS



1.1ConversionRight.TheHoldershallhavetherightfromtimetotime,andatanytimeduringtheperiodbeginningonthedatewhichisonehundredeighty(180)daysfollowingthedateofthisNoteandendingonthelaterof:(i)theMaturity Dateand(ii)thedate of payment
of the Default Amount (as defined
in Article III) pursuant to Section
1.6(a)or Article III, each
in respect of theremainingoutstanding principal amount of
this Noteto convert
all or any part of the outstandingand unpaid principal amount
of this Note into fully paid
and non- assessable shares
of Common Stock, as such
Common Stock exists
onthe Issue Date,
or any sharesofcapitalstockorothersecuritiesoftheBorrowerintowhichsuchCommonStockshall
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 convertany 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 andits 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 unexercised or unconverted portion
of anyother securityof the Borrower subject to alimitation
on conversion orexerciseanalogous to thelimitationscontained herein)and (2)thenumberofshares 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 4.99% of the outstanding sharesof Common Stock. For purposes
of the proviso to the immediately preceding sentence, beneficial
ownership shall be determinedinaccordance withSection13(d)
of the SecuritiesExchange
Act of 1934,as amended
(the “Exchange Act”),and Regulations13D-G thereunder, exceptasotherwise
provided in clause (1) of such
proviso, provided, further,
however, that the limitations
on conversionmay be waivedby the Holder upon, atthe electionof the Holder,notlessthan61 days’
prior notice to the Borrower,
and the provisions of the conversion
limitation shall continue











toapply untilsuch61stday(orsuchlaterdate,asdeterminedby
theHolder,asmay
bespecifiedinsuchnoticeofwaiver).ThenumberofsharesofCommonStocktobeissueduponeachconversionofthisNoteshallbe determinedbydividingthe ConversionAmount(asdefined
below) by the applicable
Conversion Price then
in effect on the date
specified in the notice of conversion,inthe form attachedheretoas
Exhibit A(the “Notice
ofConversion”),deliveredto the Borrower
bythe 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 p.m., New York, New
York time on such conversion
date(the “Conversion
Date”).The
term“ConversionAmount” means,with respect to any
conversion of this Note, the sum of (1)
the principal amount of this Note to
be convertedinsuch conversionplus(2) atthe Holder’soption,accrued and unpaidinterest,if any,
on such principal amount at
the interest rates provided in this Note
to the Conversion Date, plus

(3)attheHolder’soption,DefaultInterest,ifany,ontheamountsreferredtointheimmediatelyprecedingclauses(1)and/or(2)plus(4)attheHolder’soption,anyamountsowedtotheHolderpursuant to Sections 1.3 and
1.4(g) hereof.



| | 1.2 | ConversionPrice.
| | --- | ----------------



(a)CalculationofConversionPrice.Theconversionprice(the“ConversionPrice”)shallequaltheVariableConversionPrice(asdefinedherein)(subjecttoequitableadjustmentsforstocksplits,stockdividendsorrightsofferingsbythe Borrowerrelatingto the Borrower’s
securities or the securities of any
subsidiary of the Borrower, combinations,
recapitalization, reclassifications,
extraordinary distributions and
similar events). The"VariableConversionPrice" shallmean65%multipliedby theMarketPrice(asdefined herein)(representing adiscountrateof35%). “MarketPrice”meanstheaverageofthelowest
three(3)Trading Prices (asdefinedbelow)fortheCommonStockduringtheten
(10)Trading
Dayperiodending onthelatestcompleteTrading
Day priortotheConversionDate.“Trading Price”means,for any security asofany
date,theclosingbidpriceon theOver-the-Counter BulletinBoard,PinkSheetselectronic
quotationsystemor applicable trading market(the“OTC”) as
reported by a reliable
reporting service (“Reporting Service”)
designated by the Holder
(i.e. Bloomberg) or,
if the OTC is not the principal tradingmarket for such
security, the closingbid priceofsuch security on the principal
securities exchange or tradingmarket where such
security is listed or traded or,
if no closingbid price
of such securityis available in any of the foregoing
manners, the average of the closing bid
prices of anymarket makers for
such security that arelisted in the“pink
sheets”. IftheTradingPrice cannot
becalculated
forsuch security on such
date in themanner
provided above, theTradingPrice shall bethe fairmarket 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 TradingPrice is
required in order to determine the Conversion
Price of such
Notes. “Trading Day” shall
mean anydayon which
the Common Stock is tradable for
anyperiod on the OTC,
or on the principal securities exchange
or other securities market
on which theCommon Stock is then being
traded.











(b)ConversionPriceDuringMajorAnnouncements.NotwithstandinganythingcontainedinSection1.2(a)tothecontrary,intheeventtheBorrower(i)makesapublicannouncementthatitintendstoconsolidateormergewithanyothercorporation(otherthana merger
in which the Borrower is the surviving
or continuing corporation and its capital
stock is unchanged) or sell
or transfer all or substantially
all of the assets of the Borrower
or (ii) any person,group or entity (including the Borrower)
publicly announcesa tender offer to
purchase 50% or more of the Borrower’s
Common Stock (or anyother takeover scheme) (the
date of theannouncementreferred to in clause(i)or(ii)ishereinafterreferredto asthe “Announcement
Date”), then the Conversion Price
shall, effective upon the Announcement
Date and continuing
through the Adjusted Conversion Price
Termination Date (as defined
below), be equal to the lowerof (x)theConversion Pricewhichwould
havebeen applicable for
a Conversion occurring ontheAnnouncementDateand(y)theConversionPricethatwouldotherwisebeineffect.From
andafter
the Adjusted ConversionPrice TerminationDate,the ConversionPrice shall be determinedasset
forthinthisSection1.2(a). For purposeshereof, “AdjustedConversionPrice
Termination Date” shall mean,
with respect to any proposed transaction
or tender offer (or takeover
scheme) for which a public announcement as
contemplated by this Section
1.2(b) has beenmade,thedateuponwhichtheBorrower(inthecaseofclause(i) above)ortheperson,
grouporentity (inthecaseofclause(ii)above)consummatesorpublicly announcesthetermination or abandonment of
the proposed transaction or tender offer
(or takeover scheme) which
caused this Section 1.2(b)to becomeoperative.



1.3AuthorizedShares.TheBorrowercovenantsthatduringtheperiodtheconversionrightexists,theBorrowerwillreservefromitsauthorizedandunissuedCommonStockasufficientnumberofshares,freefrompreemptiverights,toprovidefortheissuanceofCommon Stock upon thefull conversion
ofthis Noteissued pursuant
to thePurchaseAgreement. TheBorrowerisrequiredat all
times tohaveauthorizedandreservedfive times the numberof
shares that is actually issuable
upon full conversion of the Note (based
onthe Conversion Price
of the Notes in effect from time to time)(the
“Reserved Amount”). The Reserved
Amount shall be increased
from time to time in accordance
with the Borrower’s obligations hereunder.
TheBorrower
represents that upon issuance,
such shares will be dulyand validlyissued,
fullypaid and non-assessable.Inaddition, iftheBorrowershall issueany securities ormakeany changeto its capital structure
which would change
the number of shares of Common Stock
into which the Notesshallbe convertibleatthethencurrentConversionPrice,theBorrowershall
atthesametimemakeproperprovisionsothatthereafterthereshallbea sufficientnumberofsharesofCommon 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 agenttoissuecertificatesfortheCommonStockissuableuponconversionofthisNote,and

(ii)agreesthatitsissuanceofthisNoteshallconstitutefullauthoritytoitsofficersandagentswhoarechargedwiththedutyofexecutingstockcertificatestoexecuteandissuethenecessarycertificatesforsharesof CommonStockinaccordance withthetermsandconditionsofthis Note.











If,atanytimetheBorrowerdoesnotmaintaintheReservedAmountitwillbeconsideredan Event ofDefault underSection 3.2 oftheNote.



| | 1.4 | MethodofConversion.
| | --- | -------------------



(a)MechanicsofConversion.SubjecttoSection1.1,thisNotemaybeconvertedbytheHolderinwholeorinpartatany
timefromtimetotimeaftertheIssueDate,by

(A)submittingtotheBorroweraNoticeofConversion(byfacsimile,e-mailorotherreasonablemeansofcommunicationdispatchedontheConversionDatepriorto6:00p.m.,NewYork,NewYorktime)and(B)subjecttoSection1.4(b),surrenderingthisNoteattheprincipalofficeoftheBorrower.



(b)SurrenderofNoteUponConversion.Notwithstandinganythingtothecontrarysetforthherein,uponconversionofthisNoteinaccordancewiththetermshereof,theHolder shallnotbe requiredtophysicallysurrender thisNote tothe Borrower
unlessthe entire
unpaid principal amount
of this Note is so converted. The
Holder and the Borrower shall maintain
records showing theprincipal amount
so converted and thedates ofsuch conversions
or shall use suchothermethod,reasonably satisfactory totheHolderandtheBorrower,soas not to requirephysical surrenderofthis Noteupon each such
conversion.In the event
ofany disputeor discrepancy,suchrecords oftheBorrowershall,primafacie,becontrollinganddeterminative in the absence of
manifest error. Notwithstanding
the foregoing, if any portion of this
Note is converted asaforesaid,the Holder
maynottransfer thisNote
unlessthe Holder
firstphysically surrenders
this Note tothe
Borrower, whereupon the Borrower
will forthwith issue and
deliver upon theorderoftheHolderanewNoteofliketenor, registered
as theHolder(upon payment by
the Holder of any
applicable transfer taxes) may request,
representing in the aggregate the remainingunpaidprincipal
amount ofthis Note.The Holderandany assignee,by acceptanceof thisNote,acknowledge
andagreethat,byreasonoftheprovisionsofthisparagraph,following conversionofa portionofthisNote,theunpaidandunconvertedprincipalamountof thisNote represented by this Notemay beless than
theamount stated on theface hereof.



(c)PaymentofTaxes.TheBorrowershallnotberequiredtopayanytaxwhichmaybepayableinrespectofanytransferinvolvedintheissueanddeliveryofsharesof
Common Stock orother
securities or property onconversionofthis Note in anameotherthan thatofthe Holder(orin streetname),
andtheBorrowershallnot be requiredtoissue or deliver anysuch
sharesorother securitiesorpropertyunlessanduntilthepersonorpersons(otherthan the Holder or the custodian
in whose street name
such shares are to be held
for the Holder’s account)requestingtheissuancethereofshallhavepaidtotheBorrowertheamountofany such tax orshall have established to thesatisfaction
oftheBorrowerthat such
tax has been paid.



(d)DeliveryofCommonStockUponConversion.UponreceiptbytheBorrowerfromtheHolderofafacsimiletransmissionore-mail(orotherreasonablemeansofcommunication)ofaNoticeofConversionmeeting therequirementsforconversionasprovided











inthisSection1.4,theBorrowershallissueanddeliverorcausetobeissuedanddeliveredtoorupontheorderoftheHoldercertificatesfortheCommonStockissuableuponsuchconversionwithinthree(3)businessdaysaftersuchreceipt(the“Deadline”)(and,solely inthe case of conversion
of the entire unpaid principal
amount hereof, surrender of this Note)
in accordance with theterms hereof
and thePurchase Agreement.



(e)ObligationofBorrowertoDeliverCommonStock.UponreceiptbytheBorrowerofaNoticeofConversion,theHoldershallbedeemedtobetheholderofrecordoftheCommonStockissuableuponsuchconversion,theoutstandingprincipalamount andthe 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 I, 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.Ifthe Holdershall
have given a NoticeofConversion 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 orconsent with respect
to any provision thereof, the recovery
ofany judgment
against any person or
any action to enforce the same, any failure
or delay in the enforcement of any otherobligationoftheBorrowertotheholderofrecord,orany setoff,counterclaim,
recoupment,limitationortermination,oranybreachorallegedbreach bythe Holderof any
obligationtothe Borrower,and
irrespective of any other circumstance
whichmight otherwise
limit suchobligationof the Borrowertothe Holderinconnectionwithsuchconversion. 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., New York,
New York time, on such
date.



(f)DeliveryofCommonStockbyElectronicTransfer.InlieuofdeliveringphysicalcertificatesrepresentingtheCommonStockissuableuponconversion,providedthe Borrower isparticipatinginthe Depository Trust Company(“DTC”)
Fast AutomatedSecurities Transfer (“FAST”)
program,uponrequestof the Holder
andits compliance
with the provisions contained in Section
1.1 and in this Section 1.4, the Borrower
shall use its best efforts
tocause its transferagent toelectronically transmit
the Common Stock issuable
uponconversiontothe Holderby
crediting the account ofHolder’s Prime Brokerwith DTC through
its Deposit Withdrawal Agent
Commission (“DWAC”) system.



(g)FailuretoDeliverCommonStockPriortoDeadline.WithoutinanywaylimitingtheHolder’s right to pursueotherremedies, includingactual damages and/orequitablerelief,thepartiesagreethatifdeliveryoftheCommonStockissuableuponconversionof this Note
is not delivered by the Deadline (other
than a failure due to the circumstances
describedin Section
1.3above, which failure
shall begoverned by suchSection) theBorrower
shall payto the Holder $2,000 per
dayin cash, for each
daybeyondthe Deadline
that the BorrowerfailstodeliversuchCommonStock. SuchcashamountshallbepaidtoHolderby the











fifthdayofthemonthfollowing
themonthinwhichithasaccruedor,attheoptionoftheHolder(bywrittennoticetotheBorrowerbythefirstdayofthemonthfollowingthemonthinwhichithasaccrued),shallbeaddedtotheprincipal amountof thisNote, inwhicheventinterestshall accruethereon in accordancewith theterms
ofthis Noteand such additional
principal amount shallbeconvertibleintoCommon Stockin accordancewiththetermsofthis Note.
The Borroweragrees that theright to convert is avaluableright to theHolder.The damages resulting from
a failure, attempt to frustrate,
interference with such
conversion right are
difficult if not impossible to qualify.
Accordingly the parties acknowledge that
the liquidated damages provision
contained in this Section 1.4(g)arejustified.



1.5ConcerningtheShares.ThesharesofCommonStockissuableuponconversionofthisNotemaynotbesoldortransferredunless(i)suchsharesaresoldpursuanttoaneffectiveregistrationstatementundertheAct or(ii)theBorroweroritstransferagentshall have
been furnished with an
opinion ofcounsel (which
opinion shall be in form, substance
and scope customaryfor opinions of counsel in comparable
transactions) to the effect that
the shares tobesoldortransferredmay besoldortransferredpursuanttoanexemptionfromsuchregistration
or (iii) such shares are
sold or transferred pursuant
to Rule 144 under the Act (or
a successorrule)(“Rule 144”)or(iv)suchsharesare
transferredtoan“affiliate”
(as definedin Rule 144) of the Borrower whoagreestosellor otherwise
transfer the sharesonly inaccordance with
thisSection 1.5 andwho is an Accredited
Investor (as defined in the Purchase
Agreement). Except as
otherwise provided in the Purchase
Agreement (and subject
to the removal provisions setforthbelow),untilsuchtimeasthesharesofCommonStockissuableuponconversionofthis Note have been
registered under the Act
or otherwise maybe sold pursuant to Rule 144 without anyrestriction as to the number
of securities as of a particular
date that can then
be immediately sold,eachcertificate for sharesofCommonStockissuableuponconversionofthisNotethathasnot been
so included in an effective
registration statement or that
has not been sold pursuant
to aneffective
registrationstatementor anexemptionthatpermitsremovalof thelegend,shallbear alegend substantially in thefollowing
form, as appropriate:



“NEITHERTHEISSUANCEANDSALEOFTHESECURITIESREPRESENTEDBYTHISCERTIFICATENORTHESECURITIESINTOWHICHTHESESECURITIESAREEXERCISABLEHAVEBEENREGISTEREDUNDERTHESECURITIESACTOF1933,ASAMENDED,ORAPPLICABLESTATESECURITIESLAWS.THESECURITIESMAY NOTBE 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 OFCOUNSEL (WHICH COUNSEL
SHALL BE SELECTED BY
THE HOLDER), IN A GENERALLY ACCEPTABLE
FORM, THATREGISTRATION 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 BEPLEDGED IN CONNECTION WITH
A BONA FIDE MARGIN ACCOUNT
OR











OTHER LOAN OR FINANCING ARRANGEMENT
SECURED BY THESECURITIES.”



ThelegendsetforthaboveshallberemovedandtheBorrowershallissuetotheHolderanewcertificatethereforefreeofanytransferlegendif(i)theBorroweroritstransferagentshallhavereceivedanopinionofcounsel,inform,substanceandscopecustomaryfor opinions of counsel
in comparable transactions, to the effect
that a public sale or transfer of
such Common Stock may be made
without registration undertheAct, which opinion shall beaccepted by theCompany sothatthe sale
ortransferiseffectedor(ii)inthecaseofthe CommonStock
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 Rule144 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
Holderwith respect
to the transfer of Securities pursuant
to an exemption from registration,
such as Rule 144 or Regulation
S, at the Deadline, it will
be considered an Event
of Defaultpursuant to Section
3.2 oftheNote.



| | 1.6 | EffectofCertain Events.
| | --- | -----------------------



(a)EffectofMerger,Consolidation,Etc.AttheoptionoftheHolder,thesale,conveyanceordispositionofallorsubstantiallyalloftheassetsoftheBorrower,theeffectuationby the Borrowerof a transactionorseries ofrelatedtransactions inwhichmore than 50% of the votingpower of the Borrower is disposed of,
or the consolidation, merger or other
business combination of the Borrower
with or into anyother
Person (as defined below) or Persons
when the Borrower is not the survivor
shall either: (i)
be deemed to be anEvent of Default(asdefinedinArticle III)pursuanttowhichtheBorrowershallberequiredtopaytothe Holderuponthe consummationofandasa conditiontosuchtransactionanamountequaltothe Default Amount (as
defined in Article III) or (ii)
be treated pursuant to Section
1.6(b) hereof. “Person”
shallmean
any individual,corporation,limitedliability company,partnership, association, trust
orotherentity ororganization.



(b)AdjustmentDuetoMerger,Consolidation,Etc.If,atanytimewhenthisNoteisissuedandoutstandingandpriortoconversionofalloftheNotes,thereshallbeanymerger,consolidation,exchangeofshares,recapitalization,reorganization,orother similar event, asa result of which shares of Common Stock
of theBorrower shall be changed
into the same or a different number
of shares of another classor classes of stock or securities
of the Borrower or another entity, or
in case of anysale
or conveyance of all or substantiallyall of theassets
of the Borrower other than
in connection with a plan
of complete liquidation of the Borrower,thentheHolderofthisNoteshallthereafterhavetherighttoreceiveuponconversion ofthis Note,uponthe basis anduponthetermsandconditions specifiedhereinandinlieuofthe shares
of Common Stock immediately theretofore
issuable upon conversion, such stock,
securitiesorassetswhichtheHolderwouldhavebeenentitledtoreceiveinsuchtransactionhad











thisNotebeenconvertedinfullimmediatelypriortosuchtransaction(withoutregardtoanylimitationsonconversionsetforthherein),andinanysuchcaseappropriateprovisionsshallbemadewith respect to therights and interests
of theHolderofthis Noteto theend that
the provisions hereof (including,
without limitation, provisions
foradjustment
of theConversion Price
and of the number of shares issuable
upon conversion of theNote)
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
writtennotice
(butinanyeventatleastfifteen(15) daysprior writtennotice)
of the recorddate ofthespecial meeting ofshareholders to approve, orifthereis no such record
date, the consummation of, such merger,
consolidation, exchangeofshares, recapitalization, reorganizationorothersimilareventorsaleof assets(during whichtimetheHoldershallbe 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 orshare exchanges.



(c)AdjustmentDuetoDistribution.IftheBorrowershalldeclareormakeanydistributionofitsassets(orrightstoacquireitsassets)toholdersofCommonStockasadividend,stockrepurchase,bywayofreturnofcapitalorotherwise(including any dividendor distribution to the Borrower’s
shareholders in cash or shares
(or rights to acquire shares) of capital
stock of asubsidiary(i.e.,aspin-off))
(a “Distribution”), then
theHolder ofthis Note shall be entitled,
upon any conversion of this Note after
the date of record for determining shareholdersentitled to such Distribution,
to receivetheamount ofsuchassets 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
forthedetermination ofshareholders entitled to such
Distribution.



(d)AdjustmentDuetoDilutiveIssuance.If,atanytimewhenanyNotesareissuedandoutstanding,theBorrowerissuesorsells,orinaccordancewiththis Section1.6(d)hereofisdeemedtohaveissuedorsold,anysharesofCommonStockfornoconsiderationorfora consideration
per share (before deduction of reasonable
expenses or commissions or underwritingdiscountsorallowancesinconnectiontherewith)lessthantheConversionPricein effect
on the date of such issuance
(or deemed issuance)
of such shares of Common Stock
(a “DilutiveIssuance”),thenimmediatelyupontheDilutiveIssuance,the ConversionPricewill
be reduced to theamount
oftheconsideration pershare received
bytheBorrowerin such Dilutive
Issuance.



TheBorrowershallbedeemedtohaveissuedorsoldsharesofCommonStockiftheBorrowerinanymannerissuesorgrantsanywarrants,rightsoroptions(notincludingemployeestockoptionplans),whetherornotimmediately exercisable,tosubscribefororto purchase Common Stock
orother securities
convertibleinto orexchangeable forCommon











Stock(“ConvertibleSecurities”)(suchwarrants,rightsandoptionstopurchaseCommonStockorConvertibleSecuritiesarehereinafterreferredtoas“Options”)andthepricepershareforwhichCommonStockisissuableupontheexerciseofsuchOptionsislessthantheConversionPricethenineffect,thentheConversionPriceshallbeequaltosuch pricepershare. 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
bytheBorroweras consideration for
the issuanceor grantingof all such Options,plustheminimumaggregate amountof additionalconsideration,ifany,payabletothe Borrowerupon theexerciseofall
such Options, plus, in thecaseofConvertibleSecurities
issuable upon the exercise of such Options,
the minimum aggregate amount of additional
consideration payable upon the conversionor 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 (assumingfull conversion ofConvertible Securities, if applicable).
No further adjustment
to the Conversion Price will
be madeupon theactual issuanceofsuch Common Stock upon theexercise ofsuch Options orupon theconversion or exchangeofConvertible Securities issuableupon exerciseofsuch Options.



Additionally,theBorrowershallbedeemedtohaveissuedorsoldsharesofCommonStockiftheBorrowerinanymannerissuesorsellsanyConvertibleSecurities,whetherornotimmediately convertible(otherthanwhere thesame areissuableupon the exercise
of Options), and the price per share for
which Common Stock is issuable
upon such conversionor exchangeislessthanthe ConversionPrice then ineffect, thenthe Conversion Price shall be
equal to such price per share.For the purposes of the preceding sentence,
the “price per share forwhich Common Stock is issuable
upon such conversion or exchange”
isdetermined 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 orexchange
thereofat
the time suchConvertible
Securities first become convertible
or exchangeable, by (ii)
the maximum total number of shares
of Common Stock issuable upontheconversionor exchangeofallsuchConvertibleSecurities. Nofurtheradjustmenttothe ConversionPricewillbemadeupontheactualissuanceofsuchCommonStockuponconversion orexchangeofsuch Convertible Securities.



(e)PurchaseRights.If,atanytimewhenanyNotesareissuedandoutstanding,theBorrowerissuesanyconvertiblesecuritiesorrightstopurchasestock,warrants,securitiesorotherproperty(the“PurchaseRights”)proratatotherecordholdersofanyclassofCommonStock,thenthe
Holder of thisNote
willbe entitledtoacquire,uponthe termsapplicabletosuchPurchaseRights,theaggregate PurchaseRightswhichsuchHoldercouldhave
acquired if suchHolder had held
the number of shares of Common Stock
acquirable upon complete conversion
of this Note (without regard
to any limitations on conversion contained
herein) immediatelybefore
the date on which a recordistakenfor the grant,issuance or sale
of











suchPurchaseRightsor,ifnosuchrecordistaken,thedateasofwhichtherecordholdersofCommon Stock areto bedetermined forthegrant,issueorsaleofsuch PurchaseRights.



(f)NoticeofAdjustments.UpontheoccurrenceofeachadjustmentorreadjustmentoftheConversionPriceasaresultoftheeventsdescribedinthisSection1.6,theBorrower,atitsexpense,shallpromptlycomputesuchadjustmentorreadjustmentandprepare 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
settingforth(i)suchadjustmentorreadjustment,(ii)theConversionPriceatthetimeineffect
and(iii)thenumberofsharesofCommonStockandtheamount,ifany, ofothersecuritiesor property which
at thetimewould bereceived upon conversion
oftheNote.



1.7TradingMarketLimitations.UnlesspermittedbytheapplicablerulesandregulationsoftheprincipalsecuritiesmarketonwhichtheCommonStockisthenlistedortraded,inno eventshall the Borrower
issue uponconversion of or
otherwise pursuant tothis Note andthe other Notes issued pursuantto the Purchase Agreement more
thanthe maximum number
of sharesof CommonStockthatthe Borrower canissue pursuanttoany rule
of the principal United States securities
market on which theCommon Stock
is then traded (the “Maximum ShareAmount”), which shall
be4.99%ofthetotal shares
outstanding on theClosing Date
(as defined in the Purchase Agreement),
subject to equitable adjustment from
time to time forstock
splits, stock dividends, combinations,
capital reorganizations and
similarevents
relating to the Common Stock occurring
after the date hereof.Once the Maximum Share Amount
has been issued,
if the Borrower fails to eliminate any
prohibitions under applicable
law or the rules
or regulations of any stock exchange,
interdealer quotation system
or other self-regulatory organization
with jurisdiction overthe Borrower orany ofits securities on theBorrower’s
ability toissue sharesof CommonStockinexcessofthe MaximumShare
Amount,inlieuof anyfurther
right to convert this Note,
this will be considered an
Event of Default under
Section 3.3 oftheNote.



1.8StatusasShareholder.UponsubmissionofaNoticeofConversionbyaHolder,(i)thesharescoveredthereby(otherthantheshares,ifany,whichcannotbeissuedbecause their issuance would exceed
such Holder’s allocated
portion of the Reserved Amount
or Maximum Share Amount) shall
be deemed converted into shares
of Common Stock and
(ii) the Holder’srightsasa Holder of suchconvertedportionof this Note shall cease
andterminate,
exceptingonly the righttoreceivecertificatesforsuchsharesofCommonStockandtoany 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











thisNotewithrespecttosuchunconvertedportionsofthisNoteandtheBorrowershall,assoonaspracticable,returnsuchunconvertedNotetotheHolderor,iftheNotehasnotbeensurrendered,adjustitsrecordstoreflectthatsuchportionofthisNotehasnotbeenconverted.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 therebyfor
suchConversionDefaultandanysubsequentConversionDefaultand(ii)
the rightto havetheConversionPricewithrespecttosubsequentconversionsdeterminedinaccordancewith
Section 1.3)fortheBorrower’s failureto convertthis Note.



1.9Prepayment.Notwithstandinganythingtothecontrary containedinthisNote,atanytimeduringtheperiodssetforthonthetableimmediatelyfollowingthisparagraph(the“PrepaymentPeriods”),the Borrowershall have the right,exercisable onnot less
than three (3) Trading
Days prior written notice
to the Holder of the Note to prepay the
outstanding Note (principal
and accrued interest),
in full, in accordance with
this Section 1.9. Any notice of prepaymenthereunder(an“OptionalPrepayment
Notice”)shallbedeliveredtotheHolderofthe Note at
its registered addresses and
shall state: (1) that
the Borrower is exercising its right
to prepay the Note, and (2)
the date of prepayment which
shall be not more than
three (3) Trading
Daysfromthe date of the OptionalPrepayment Notice. Onthe date fixedfor
prepayment(the“Optional Prepayment Date”),
the Borrower shall make payment
of the Optional Prepayment Amount(asdefinedbelow)toHolder,orupontheorderoftheHolderasspecifiedby theHolder
in writing to the Borrower, at
least one (1) business
dayprior to the Optional
Prepayment Date. IftheBorrowerexercisesitsrighttoprepay theNote,theBorrowershallmake
paymenttothe Holder of an amount
in cash (the “Optional
Prepayment Amount”) equal to the
percentage (“Prepayment Percentage”)
as set forth
in the table immediatelyfollowing this paragraph oppositetheapplicable PrepaymentPeriod,multipliedbythesumof:(w)thethenoutstanding principal amount
of this Note plus(x)accrued
and unpaid intereston the unpaid
principal amount of this Note
to the Optional Prepayment
Date plus(y) Default Interest,
if any, on the amounts referred
to in clauses (w) and(x) plus(z) any amounts
owed to the Holder pursuant
toSections 1.3 and
1.4(g) hereof.Ifthe Borrower delivers an Optional
Prepayment Notice and fails topay the
OptionalPrepaymentAmountdue tothe Holder ofthe Note
withintwo(2)business
days following the Optional Prepayment
Date, the Borrower shall
forever forfeit its right
toprepay theNotepursuantto this Section 1.9.











|PrepaymentPeriod                                                                                       | PrepaymentPercentage
|------------------------------------------------------------------------------------------------------ | --------------------
|1.	The periodbeginningon theIssueDateandendingon thedatewhichis thirty(30) daysfollowingtheIssue Date. | 110%                











|2.	The period beginningon thedate whichis thirty-one (31)days followingtheIssue Date andendingon the datewhichis sixty(60)days followingtheIssue Date                                           | 115%
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ----
|3.	The
        period beginningon thedate which
        is sixty-one
        (61)days
        followingthe Issue
        Date andendingon thedate whichisninety(90)days followingthe Issue Date | 120%
|4.	The
        period beginningon the date thatis ninety-one
        (91)dayfromthe Issue Date
        and endingonehundredtwenty(120)days followingthe Issue Date                              | 125%
|5.The period beginningon thedate thatisone hundredtwenty-one (121)dayfromthe Issue Date andendingone hundredfifty(150)days followingthe Issue Date                                              | 130%
|6.	The period beginningon thedate thatisone hundredfifty-one (151)dayfromthe Issue Date and endingone hundredeighty(180)days followingthe Issue Date                                            | 135%



Aftertheexpirationofonehundredeighty(180)followingthedateoftheNote,theBorrowershall haveno right ofprepayment.





ARTICLEII. CERTAIN
COVENANTS



2.1DistributionsonCapitalStock.Solongas
theBorrowershallhaveanyobligationunderthisNote,theBorrowershallnotwithouttheHolder’swrittenconsent(a)pay,declareorsetapartforsuchpayment,anydividendorotherdistribution(whetherincash,propertyorothersecurities)on shares ofcapital stock otherthan dividends
on shares ofCommon Stock solely in the formof
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 except
for distributions pursuant to anyshareholders’ rights plan
which is approved by amajority oftheBorrower’s
disinterested directors.



2.2RestrictiononStockRepurchases.SolongastheBorrowershallhaveanyobligationunderthisNote,theBorrowershallnotwithouttheHolder’swrittenconsentredeem,repurchaseorotherwiseacquire(whetherforcashorinexchangeforproperty orothersecurities orotherwise)in any
onetransaction orseries ofrelated transactions
any shares ofcapital stock of theBorrowerorany
warrants, rightsoroptions to purchaseoracquireany such shares.



2.3Borrowings.SolongastheBorrowershallhaveanyobligationunderthisNote, the Borrower shall not, without the Holder’s written consent,
create, incur, assume











guarantee,endorse,contingentlyagreetopurchaseorotherwisebecomeliableupontheobligationofanyperson,firm,partnership,jointventureorcorporation,exceptbytheendorsementofnegotiableinstrumentsfordeposit
orcollection,orsuffertoexist anyliability 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, (b)
indebtedness to trade creditors
or financial institutions incurred in
the ordinary course of business or (c)
borrowings,theproceedsofwhich shall beused torepaythis Note.



2.4SaleofAssets.SolongastheBorrowershallhaveanyobligationunderthisNote,theBorrowershallnot,withouttheHolder’swrittenconsent,sell,leaseorotherwisedisposeofanysignificantportionofitsassets
outsidetheordinary courseof business.Any consent
to the disposition of any assets may
be conditioned on a specifieduse of the proceeds of disposition.



2.5AdvancesandLoans.SolongastheBorrowershallhaveanyobligationunderthisNote,theBorrowershallnot,withouttheHolder’swrittenconsent,lendmoney,givecreditormakeadvancestoany person, firm,jointventureor 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 hasinformedHolder inwritingpriortothe date
hereof,(b)made inthe ordinary courseofbusiness or(c)not in excess of$100,000.





ARTICLEIII. EVENTS
OFDEFAULT



Ifanyofthefollowing events ofdefault (each,
an“Event
ofDefault”)shall occur:



3.1FailuretoPayPrincipalorInterest.TheBorrowerfailstopaytheprincipalhereoforinterestthereonwhendueonthisNote,whetheratmaturity,uponaccelerationorotherwise.



3.2ConversionandtheShares.TheBorrowerfailstoissuesharesofCommonStocktotheHolder(orannouncesorthreatensinwritingthatitwillnothonoritsobligationtodoso) uponexercise by the Holder of the
conversionrightsof the Holder inaccordance withthe termsof thisNote,failstotransfer
or cause itstransfer agenttotransfer (issue)
(electronically or in certificated form)
any certificate for sharesof Common Stock issued to the
Holder upon conversion of or otherwise
pursuant to this Note as
andwhen
required by this Note, the Borrower directs
its transfer agent not to transferor delays, impairs, and/or
hinders its transfer agent
in transferring (or issuing)
(electronically or in certificated form) anycertificate 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
orimpairs, delays,
and/or hinders its transferagent from removing)anyrestrictive











legend(ortowithdrawanystoptransferinstructionsinrespectthereof)onany
certificateforanysharesofCommonStockissuedtotheHolderuponconversionoforotherwisepursuanttothisNoteasandwhenrequiredbythisNote(ormakesanywrittenannouncement,statementorthreatthatitdoesnotintendtohonortheobligationsdescribedinthisparagraph)andany suchfailure shallcontinueuncured(orany writtenannouncement,statementorthreatnottohonorits obligations shall not be rescinded
in writing) for three (3)
business days after
the Holder shall have
delivereda Noticeof Conversion. Itisanobligationof theBorrower toremaincurrentin its obligations
to its transfer agent.It shall
be anevent of default
of this Note, if a conversion of this
Note is delayed, hindered
or frustrated due to a balance owed
bythe Borrower to its transferagent. If at the option of the
Holder, the Holder advances
anyfunds
to the Borrower’s transfer agent
inorderto process
aconversion,such advancedfunds shall be paidbythe Borrowerto the Holder within forty eight(48) hours ofademand from theHolder.



3.3BreachofCovenants.TheBorrowerbreachesanymaterialcovenantorothermaterialtermorconditioncontainedinthisNoteandanycollateraldocumentsincludingbutnotlimitedtothePurchaseAgreementandsuchbreachcontinuesforaperiodoften(10)daysafterwritten notice thereofto theBorrower from theHolder.



3.4BreachofRepresentationsandWarranties.AnyrepresentationorwarrantyoftheBorrowermadehereinorinanyagreement,statementorcertificategiveninwritingpursuantheretoorinconnectionherewith(including,withoutlimitation,thePurchaseAgreement),shall
be false or misleadingin any material
respect when made and
the breach of which has
(or with thepassageoftimewill have)amaterialadverseeffect on therights of theHolder with respect to this NoteorthePurchaseAgreement.



3.5ReceiverorTrustee.TheBorroweroranysubsidiaryoftheBorrowershallmakeanassignmentforthebenefitofcreditors,orapplyfororconsenttotheappointmentofareceiverortrusteeforitorforasubstantialpartofits property orbusiness, orsuch
areceiveror trustee shall otherwisebeappointed.



3.6Judgments.Anymoneyjudgment,writorsimilarprocessshallbeenteredorfiledagainsttheBorroweroranysubsidiaryoftheBorroweroranyofitspropertyorotherassetsformorethan$50,000,andshall remainunvacated,unbondedorunstayedforaperiodoftwenty

(20)daysunlessotherwiseconsentedtobytheHolder,whichconsentwillnotbeunreasonablywithheld.



3.7Bankruptcy.Bankruptcy,insolvency,reorganizationor liquidationproceedingsorotherproceedings,voluntaryorinvoluntary,forreliefunderanybankruptcylaworanylawforthereliefofdebtors shall
beinstituted byoragainst theBorrowerorany subsidiary oftheBorrower.











3.8DelistingofCommon
Stock. TheBorrower shallfail
to maintain thelistingoftheCommonStockonatleastoneoftheOTC(whichspecificallyincludesthePinkSheetselectronicquotationsystem)oranequivalentreplacementexchange,theNasdaqNational
Market, the Nasdaq SmallCap Market,
the New York Stock
Exchange, or the American
Stock Exchange.



3.9FailuretoComplywiththeExchangeAct.TheBorrowershallfailtocomplywiththereportingrequirementsoftheExchangeAct;and/ortheBorrowershallceasetobesubject to thereportingrequirements oftheExchangeAct.



3.10Liquidation.Anydissolution,liquidation,orwindingupofBorroweroranysubstantial
portion ofits business.



3.11CessationofOperations.AnycessationofoperationsbyBorrowerorBorroweradmitsitisotherwisegenerallyunabletopayitsdebtsassuchdebtsbecomedue,provided, however, that
anydisclosureoftheBorrower’sabilityto continueas a“going concern” shall
not bean admission that
theBorrowercannotpayits debts as
theybecomedue.



3.12MaintenanceofAssets.	ThefailurebyBorrowertomaintainanymaterial intellectualpropertyrights, personal,
realpropertyorotherassetswhich
arenecessarytoconduct its business (whethernoworin thefuture).



3.13FinancialStatement
Restatement.Therestatementofany financialstatementsfiledby theBorrowerwiththeSECforany dateorperiodfromtwoyearspriortotheIssueDateofthisNoteanduntilthisNoteis nolongeroutstanding, iftheresultofsuch restatementwould,by
comparisontotheunrestatedfinancialstatement,haveconstituteda material adverse effect
on the rights of the Holder with
respect to this Note or the Purchase
Agreement.



3.14ReverseSplits.	TheBorrowereffectuatesareversesplitofitsCommon Stock withouttwenty(20)
days priorwritten noticeto theHolder.





3.15ReplacementofTransferAgent.In theevent
that theBorrower proposes toreplaceitstransferagent,theBorrowerfailstoprovide,priortotheeffectivedateofsuchreplacement,afullyexecutedIrrevocableTransferAgentInstructionsinaformasinitiallydeliveredpursuant tothe Purchase Agreement (including
but not limitedtothe provisionto irrevocably
reserve shares of Common Stock in the
Reserved Amount) signed
by the successor transferagent to Borrower andtheBorrower.











3.16Cross-Default.NotwithstandinganythingtothecontrarycontainedinthisNoteortheotherrelatedorcompaniondocuments,abreachordefaultbytheBorrowerofanycovenantor othertermorconditioncontainedin anyofthe OtherAgreements,after
thepassage ofall applicablenoticeand cureorgraceperiods,shall, at theoption oftheHolder,
beconsidered a default
under this Note and the Other Agreements,
in which event the Holder
shall be entitled(but in no event required) to
applyall rights
andremedies
of the Holder under the terms of this NoteandtheOtherAgreementsbyreasonofadefaultundersaidOtherAgreementor
hereunder.“Other Agreements”
means, collectively, all
agreements and instruments
between, among or by:
(1) the Borrower, and,
or for the benefit of,
(2)the Holderand anyaffiliate 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. Eachof the loan
transactions will be cross-defaulted
with each other
loan transaction and with
all other existing and
future debt ofBorrowerto theHolder.



UpontheoccurrenceandduringthecontinuationofanyEventofDefaultspecifiedinSection3.1(solelywithrespecttofailuretopaytheprincipalhereoforinterestthereonwhendueattheMaturityDate),theNoteshallbecomeimmediatelydueandpayableandtheBorrowershallpay
tothe Holder, infullsatisfactionof its obligationshereunder,an amountequaltothe Default
Sum (as defined herein).
UPON THE OCCURRENCE AND
DURING THE CONTINUATION OF ANY
EVENT OF DEFAULT SPECIFIED
IN SECTION 3.2, THENOTE SHALL BECOMEIMMEDIATELYDUE ANDPAYABLE AND THEBORROWER SHALL PAY TO
THE HOLDER,IN FULL
SATISFACTION OF ITS OBLIGATIONS HEREUNDER,
AN AMOUNT EQUAL TO:
(Y) THE DEFAULT SUM
(AS DEFINED

HEREIN);MULTIPLIEDBY(Z)TWO(2).Upontheoccurrenceandduring thecontinuationofanyEventofDefaultspecifiedinSections3.1(solelywithrespecttofailuretopaytheprincipalhereoforinterestthereonwhendueonthisNoteuponaTradingMarketPrepaymentEvent pursuanttoSection1.7oruponacceleration),3.3,3.4,3.6,3.8,3.9,3.11,3.12,3.13,3.14,and/or

3.15exercisablethroughthedeliveryofwrittennoticetotheBorrowerbysuchHolders(the“DefaultNotice”),andupontheoccurrenceofanEventofDefaultspecifiedtheremainingsectionsofArticlesIII(otherthanfailuretopay theprincipalhereofor interestthereon atthe Maturity Date specifiedin Section 3,1 hereof),the Note shall become
immediately due and payableandtheBorrowershall pay to theHolder,
in full satisfaction ofits obligations hereunder,
an amount equal
to the greater of (i) 150% timesthe sumof (w) the then outstanding
principal amount of this Note
plus(x) accrued and unpaid
interest on the unpaid principal
amount of this Noteto thedateofpayment (the“Mandatory Prepayment Date”)plus(y)Default
Interest, ifany,
ontheamountsreferred toinclauses(w)
and/or (x)plus(z)any amountsowedtotheHolder pursuant
to Sections 1.3 and 1.4(g)
hereof (the then outstanding
principal amount of this Note
to the date of payment
plusthe 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 I, treating
the TradingDay immediately preceding the Mandatory Prepayment
Date as
the “Conversion Date” for











purposesofdeterminingthelowestapplicableConversionPrice,unlesstheDefaultEventarisesasaresultofabreachinrespectofaspecificConversionDateinwhichcasesuchConversionDateshallbetheConversionDate),multipliedby(b)thehighestClosingPricefortheCommonStock
during the period beginning
on the date of first occurrence
of the Event of Default
andendingone dayprior
to the Mandatory Prepayment Date (the
“Default Amount”) and
all other amountspayable hereunder shall immediately
become due andpayable,
all without demand,
presentmentornotice, allofwhichhereby areexpressly waived,togetherwithallcosts,
including, without limitation,
legal fees andexpenses, of collection, and the
Holder shall be entitled
to exercise all other rights and
remedies available at laworin equity.



IftheBorrowerfailstopaytheDefaultAmountwithinfive(5)businessdaysofwrittennoticethatsuchamountisdueandpayable,thentheHoldershallhavetherightatanytime,solongastheBorrowerremainsindefault (andso longandtotheextent that
therearesufficient authorizedshares),to require
the Borrower,uponwrittennotice,toimmediately issue,in lieuof the Default
Amount, the number of shares
of Common Stock of the Borrower
equal to the Default Amount
divided by theConversion Pricethen in effect.



ARTICLEIV.MISCELLANEOUS



4.1FailureorIndulgenceNotWaiver.NofailureordelayonthepartoftheHolderintheexerciseofanypower,rightorprivilegehereundershalloperateasawaiverthereof,norshallanysingleorpartialexerciseof anysuchpower,right or privilege preclude other or further
exercise thereof or of anyother right, power or privileges.All rights and
remediesexistinghereunder arecumulativeto,andnotexclusiveof,anyrightsorremedies otherwise available.



4.2Notices.Allnotices,demands,requests,consents,approvals,andothercommunicationsrequiredorpermittedhereundershallbeinwritingand,unlessotherwisespecifiedherein,shallbe(i)personallyserved,(ii)depositedinthemail,registeredorcertified, 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 belowortosuchotheraddressassuchparty shallhavespecifiedmostrecentlyby writtennotice.Any
notice orother communicationrequiredor permittedtobe givenhereundershallbe deemedeffective (a) uponhanddelivery or delivery by facsimile,withaccurate
confirmation generatedbythe transmittingfacsimile machine,atthe addressor number designatedbelow (if delivered on abusiness day during normal business
hours where such noticeis to bereceived), or
the firstbusinessdayfollowingsuchdelivery(if
deliveredother thanona businessdayduring normal
business hours where
such notice is to be received) or (b)
on the second business day
following the date ofmailing by express
courier service, fully prepaid, addressed
to such address,or upon actual receipt
of suchmailing,
whichever shall first
occur. The addresses
for such communications
shall be:











Ifto theBorrower, to:

MAX
SOUND CORPORATION

2902AColorado AvenueSanta
Monica, CA90404

Attn:
GREG HALPERN,Chief
Financial Officerfacsimile:



With acopybyfaxonlyto (which
copyshall not constitute notice):[enter nameoflawfirm]

Attn:
[attorneyname][enter address line1][enter city, state, zip]

facsimile:
[enter faxnumber]



Ifto theHolder:

KBM
WORLDWIDE,INC.

80 Cuttermill
Road – Suite410Great Neck, NY11021

Attn:
Seth Kramer, President

e-mail:
info@kbmworldwide.com





With acopybyfaxonlyto (which
copyshall not constitute notice):Naidich Wurman Birnbaum &Maday,LLP

Att:Judah A. Eisner, Esq.Attn: Bernard S. Feldman,
Esq.facsimile:
516-466-3555

e-mail:dyork@nwbmlaw.com



4.3Amendments.ThisNoteandanyprovisionhereofmayonlybeamendedbyaninstrumentinwritingsignedbytheBorrower andthe Holder.
Theterm“Note”andall reference thereto,asusedthroughout thisinstrument,shall meanthisinstrument (andthe other Notesissuedpursuanttothe Purchase Agreement)
asoriginally executed,or if later amendedor supplemented, then as
soamendedorsupplemented.



4.4Assignability. ThisNoteshallbebindingupontheBorroweranditssuccessorsandassigns,andshallinuretobethebenefitoftheHolderanditssuccessorsandassigns.Eachtransferee of this Note must be
an“accredited
investor” (as defined in Rule 501(a) of the 1933Act).Notwithstanding
anything in this Note to the contrary,
this Note may be pledged as
collateral in connection with
a bona fidemargin account or
other lending arrangement.











4.5Cost ofCollection.Ifdefault
is madein thepayment ofthis Note,theBorrowershall paytheHolderhereof costs ofcollection, includingreasonableattorneys’ fees.



4.6GoverningLaw.ThisNoteshallbegovernedbyandconstruedinaccordancewiththelawsoftheStateofNewYorkwithoutregardtoprinciplesofconflictsoflaws.Anyactionbrought
byeither
partyagainst the other
concerningthe transactionscontemplatedbythis Noteshallbebroughtonlyinthestate courtsof NewYorkorinthe federalcourtslocatedinthe state and
countyof Nassau. The
parties tothisNote herebyirrevocably waive
anyobjectionto jurisdiction
and venue of any action instituted
hereunder and shall
not assert any defense based onlackofjurisdictionorvenueorbaseduponforumnonconveniens.The BorrowerandHolder
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 anyother
agreementdeliveredinconnectionherewithisinvalidor unenforceable
under any applicable statute
or rule of law, then such provision 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. Anysuchprovisionwhichmay prove invalidorunenforceableunderanylawshall notaffect
the validity or enforceabilityof any other
provision of any agreement. Each partyhereby irrevocablywaives
personal service of process and consents
to process beingserved
in anysuit, 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)
tosuchpartyat the addressineffectfor noticestoitunder
this Agreementand
agrees that such
service shall constitute
good and sufficient
service of process and notice
thereof. Nothingcontained herein shall be deemed
to limit in anyway any right
to serve process in any other
manner permitted by law.



4.7CertainAmounts.WheneverpursuanttothisNotetheBorrowerisrequiredtopayanamountinexcessoftheoutstandingprincipalamount(ortheportionthereofrequiredtobepaidatthattime)plusaccruedandunpaidinterestplusDefaultInterestonsuchinterest,theBorrower 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 inpartfor lossof the opportunity toconvertthisNote andtoearna returnfromthe 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 herebyagree 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 ofCommon Stock.



4.8PurchaseAgreement.ByitsacceptanceofthisNote,eachpartyagreestobebound bytheapplicableterms ofthePurchase Agreement.











4.9NoticeofCorporateEvents.Exceptasotherwiseprovidedbelow,theHolderofthisNoteshallhavenorightsasaHolderofCommonStockunlessandonly totheextentthatitconvertsthisNoteintoCommonStock.The
BorrowershallprovidetheHolderwithprior notification of any meetingof the Borrower’s shareholders
(and copies of proxy materials
and other information
sent to shareholders).In the event of anytakingby the Borrower of a record
of its shareholders for the purpose
of determining shareholders who are entitled
to receive payment of anydividend or other distribution,
any right to subscribe
for, purchase or
otherwise acquire(including by way ofmerger, consolidation,
reclassification orrecapitalization)any share ofany class orany othersecurities orproperty, orto receiveany otherright, orforthepurposeof determiningshareholders who are
entitledtovote inconnection withanyproposedsale,leaseor
conveyance of all or substantiallyall of the assets of the Borrower
or any proposed liquidation,
dissolution or windingup of the Borrower,
the Borrower shall mail
a notice to the Holder, at
least twenty (20) days prior to the record
date specified therein
(or thirty (30) days
prior to the consummation of the transaction
or event, whichever is earlier),
of the date on which any such
record istobe takenfor the purpose
of suchdividend,distribution,right or other event,
anda brief
statement regarding the amount and
character of such dividend,
distribution, right or other eventtotheextentknownatsuchtime.
TheBorrowershallmakeapublicannouncementofany
event requiring notificationto the Holder hereunder substantiallysimultaneouslywith the notification
to theHolderin accordancewith theterms ofthis Section 4.9.



4.10Remedies.TheBorroweracknowledgesthatabreachbyitofitsobligationshereunderwillcauseirreparableharmtotheHolder,byvitiatingtheintentand purpose of the transaction
contemplated hereby. Accordingly,
the Borrower acknowledges that
theremedy atlawforabreachofitsobligationsunderthisNotewill
beinadequateandagrees,in theevent ofabreach orthreatened
breachby theBorroweroftheprovisions ofthis Note,
that the Holdershallbeentitled,inadditiontoallotheravailableremediesatlaworinequity,andin addition
to the penalties assessable herein,
to an injunction or injunctions
restraining, preventing or curingany breach of thisNote and toenforce specifically the terms andprovisionsthereof, withoutthenecessityof showing economiclossandwithoutanybondorothersecuritybeing required.





INWITNESSWHEREOF,BorrowerhascausedthisNotetobesignedinitsnameby itsdulyauthorized officerthis November6, 2014.





|
|



MAX SOUND CORPORATION



By:
_GREG
HALPERN

Chief
Financial Officer











EXHIBITA-- NOTICEOF CONVERSION



Theundersignedherebyelectstoconvert$principalamountoftheNote(definedbelow)intothatnumberofsharesofCommonStocktobeissuedpursuantto theconversionoftheNote (“CommonStock”)as setforth below,ofMAX SOUNDCORPORATION,a Delaware
corporation(the“Borrower”)accordingto theconditions
ofthe convertiblenote of the
Borrower dated as of
November 6, 2014 (the “Note”),
as of the date writtenbelow. No fee will
becharged to the
Holderforany conversion, exceptfortransfertaxes, if any.



Box
Checked asto applicable
instructions:



[]TheBorrowershallelectronicallytransmittheCommonStockissuablepursuanttothisNoticeofConversiontotheaccountoftheundersignedoritsnomineewithDTCthroughits DepositWithdrawalAgentCommission system(“DWAC Transfer”).



Name
ofDTCPrime
Broker:AccountNumber:



[ ] TheundersignedherebyrequeststhattheBorrowerissueacertificateorcertificatesforthenumberofsharesofCommonStocksetforthbelow(whichnumbersarebasedontheHolder’scalculationattachedhereto)inthename(s)specifiedimmediatelybelow
or,if additionalspaceis necessary,
on an attachmenthereto:



KBMWORLDWIDE,INC.

80 CuttermillRoad – Suite410GreatNeck, NY11021Attention:CertificateDelivery

e-mail:info@kbmworldwide.com



Date
ofConversion:

Applicable
Conversion Price:$NumberofShares ofCommon Stockto be Issued

Pursuantto Conversion ofthe Notes:	AmountofPrincipalBalance
Dueremaining

Underthe Noteafterthisconversion:



KBMWORLDWIDE,INC.



By:Name: SethKramer

| | Title: | PresidentDate:
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