THISNOTEANDTHECOMMONSTOCK ISSUABLEUPONCONVERSIONOFTHISNOTE HAVENOTBEENANDWILLNOTBE REGISTEREDWITHTHEUNITEDSTATES SECURITIESANDEXCHANGECOMMISSIONOR THESECURITIESCOMMISSIONOFANYSTATE PURSUANTTOANEXEMPTIONFROM REGISTRATIONPROVIDEDUNDERTHE SECURITIESACTOF1933,ASAMENDED,AND THE	RULES	AND	REGULATIONSPROMULGATEDTHEREUNDER(THE "1933 ACT”)

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**US $110,000.00**

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MAXSOUND CORPORATION.

8%CONVERTIBLEREDEEMABLENOTE DUENOVEMBER4,2015

 

 

FORVALUERECEIVED,MaxSoundCorporation.(the“Company”)promisestopaytotheorderofLGCAPITALFUNDING,LLCanditsauthorizedsuccessorsandpermittedas-signs("Holder"),theaggregateprincipalfaceamountofOneHundredTenThousandDollarsex- actly (U.S.$110,000.00)onNovember4, 2015("MaturityDate")andto payinterestontheprin- cipalamountoutstandinghereunderattherateof8%perannumcommencingonNovember4, 2014.TheinterestwillbepaidtotheHolderinwhosenamethisNoteis registeredontherecords oftheCompanyregardingregistrationandtransfersofthisNote.Theprincipalof,andinterest on,thisNotearepayableat1218UnionStreet,Suite#2,Brooklyn,NY11225,initially,andif changed,lastappearingontherecordsoftheCompanyasdesignatedinwritingbytheHolder hereoffromtimetotime.TheCompanywillpayeach interestpaymentandtheoutstanding principal dueupon this Note before or on the Maturity Date, less any amounts required by law to bedeductedorwithheld, totheHolderof thisNotebycheck orwiretransfer addressedtosuch Holderat the last address appearing on the records of the Company. The forwarding ofsuchcheck or wire transfer shall constitute a payment of outstanding principal hereunder and shall sat- isfy and discharge the liabilityfor principal on this Note to the extent of the sum represented by such check or wire transfer.Interest shall be payable in Common Stock (as defined below) pur- suant to paragraph 4(b) herein.

 

ThisNoteissubjecttothefollowingadditionalprovisions:

 

1.                 ThisNoteisexchangeableforanequalaggregate principalamountof

 

GH

Initials

Notesofdifferentauthorizeddenominations,asrequestedbytheHoldersurrenderingthesame. Noservicechargewillbemadeforsuchregistrationortransferorexchange,exceptthatHolder shallpayanytaxorothergovernmentalchargespayableinconnectiontherewith.

 

2.                 TheCompanyshallbeentitledtowithholdfromallpaymentsanyamounts requiredtobewithheldunderapplicablelaws.

 

3.                 ThisNotemaybetransferredorexchangedonlyincompliancewiththe SecuritiesActof1933,asamended("Act")andapplicablestatesecuritieslaws.Anyattempted transfertoanon-qualifyingpartyshallbetreatedbytheCompanyasvoid.Priortoduepresent- mentfortransferofthisNote,theCompanyandanyagentoftheCompanymaytreattheperson inwhosenamethisNoteisdulyregisteredontheCompany'srecordsastheownerhereofforall otherpurposes,whetherornotthis Notebeoverdue,andneithertheCompanynoranysuch agentshallbeaffectedorboundbynoticetothecontrary.AnyHolderofthisNoteelectingto exercisetherightofconversionsetforthinSection4(a)hereof,inadditiontotherequirements setforthinSection4(a),andanyprospectivetransfereeofthisNote,alsoisrequiredtogivethe CompanywrittenconfirmationthatthisNoteisbeingconverted("NoticeofConversion")inthe formannexedheretoasExhibitA.Thedateofreceipt(includingreceipt bytelecopy)ofsuch Notice of Conversionshall be the Conversion Date.

 

4.                 (a) TheHolderofthisNoteisentitled,atitsoption, toconvertallor anyamountoftheprincipalfaceamountofthisNotethenoutstandingintosharesoftheCompa- ny'scommonstock(the"CommonStock")withoutrestrictivelegendofanynature,ataprice ("ConversionPrice")foreachshareofCommonStockequalto65%ofthe**lowestdailyVWAP**oftheCommonStockasreportedontheNationalQuotationsBureauOTCQBexchangewhich theCompany’ssharesaretradedoranyexchangeuponwhichtheCommonStockmaybetraded inthefuture("Exchange"),forthe**ten**priortradingdaysincludingthedayuponwhichaNotice ofConversionisreceivedbytheCompany(providedsuchNoticeofConversionisdeliveredby faxorotherelectronicmethodofcommunicationtotheCompanyafter4P.M.EasternStandard orDaylight Savings Time if the Holder wishesto include the same day closing price).If the shares have not been delivered within 3 business days, the Notice of Conversion may be rescind- ed. Such conversionshall be effectuated by the Company delivering the shares of Common Stock to the Holder within 3 business days of receipt by theCompany of the Notice of Conver- sion. Once the Holder has received such shares of Common Stock, the Holder shall surrender thisNotetotheCompany,executedbytheHolderevidencingsuchHolder'sintentiontoconvert this Note or a specified portion hereof, and accompanied by properassignment hereof in blank. Accrued, but unpaid interest shall be subject to conversion. No fractional shares or scrip repre- sentingfractions of shares will be issued on conversion, but the number of shares issuable shall beroundedtothenearestwholeshare*.IntheeventtheCompanyexperiencesaDTC“Chill”on its shares, the conversion price shall be decreased to 55% instead of 65% while that “Chill” is ineffect.*Innoeventshall theHolderbeallowedtoeffect aconversionifsuchconversion,along with all othershares of Company Common Stock beneficially owned by the Holder and its affili- ates would exceed 9.9% of the outstanding sharesof the Common Stock of the Company

(b)              InterestonanyunpaidprincipalbalanceofthisNoteshallbepaidatthe rateof8%perannum.InterestshallbepaidbytheCompanyinCommonStock("Interest Shares").Holdermay,atanytime,sendinaNoticeofConversiontotheCompanyforInterest SharesbasedontheformulaprovidedinSection4(a)above.Thedollaramountconvertedinto InterestSharesshallbealloraportionoftheaccruedinterestcalculatedontheunpaidprincipal balanceofthisNotetothedateofsuchnotice.

 

(c)               DuringthefirstsixmonthsthisNoteisineffect,theCompanymayre- deemthisNotebypayingtotheHolderanamountasfollows:(i)iftheredemptioniswithinthe first90daysthisNoteisineffect,thenforanamountequalto125%oftheunpaidprincipal

amountofthisNotealongwithanyinterestthathasaccruedduringthatperiod,(ii)ifthere- demptionisafterthe90thdaythisNoteisineffect,butlessthanthe150thdaythisNoteisin effect,thenforanamountequalto135%oftheunpaidprincipalamountofthisNotealongwith anyaccruedinterestduringthatperiod,(iii)iftheredemptionisafterthe150thdaythisNoteis ineffect,butlessthanthe180thdaythisNoteisineffect,thenforanamountequalto145%of theunpaidprincipalamountofthisNotealongwithanyaccruedinterest.ThisNotemaynotbe redeemedafter180days. Theredemptionmust beclosedandpaid forwithin3 businessdaysof theCompanysendingtheredemptiondemandortheredemptionwillbeinvalidandtheCompa-

nymaynotredeemthisNote.

 

(d)              Upon(i)atransferofallorsubstantiallyalloftheassetsoftheCompany toanypersoninasingletransactionorseriesofrelatedtransactions,(ii)areclassification,capital reorganizationorotherchangeorexchangeofoutstandingsharesoftheCommonStock,other thanaforwardorreversestocksplitorstockdividend,or(iii)anyconsolidationormergerofthe CompanywithorintoanotherpersonorentityinwhichtheCompanyisnotthesurvivingentity (otherthanamergerwhich iseffectedsolelytochangethejurisdictionofincorporationofthe Companyandresultsinareclassification,conversionorexchangeofoutstandingsharesof CommonStocksolelyintosharesofCommonStock)(eachofitems(i),(ii)and(iii)beingre- ferredtoasa"SaleEvent"),then,ineachcase,theCompanyshall,uponrequestoftheHolder, redeem this Note incash for 150% of the principal amount, plus accrued but unpaid interest through the date of redemption, or at the election of theHolder, such Holder may convert the un- paid principalamountofthisNote(togetherwiththe amountofaccruedbutunpaidinterest)into shares ofCommonStockimmediatelypriortosuchSale EventattheConversionPrice.

 

(e)               In caseofany SaleEvent(not toincludea saleofall orsubstantiallyall of theCompany’sassets)inconnectionwithwhichthisNoteisnotredeemedorconverted,the CompanyshallcauseeffectiveprovisiontobemadesothattheHolderofthisNoteshallhave therightthereafter,byconvertingthisNote,topurchaseorconvertthisNoteintothekindand numberofsharesofstockorothersecuritiesorproperty(includingcash)receivableuponsuch reclassification,capitalreorganizationorotherchange,consolidationormerger byaholderof thenumberofsharesofCommonStockthatcouldhavebeenpurchaseduponexerciseofthe NoteandatthesameConversionPrice,asdefinedinthisNote,immediatelypriortosuchSale Event.TheforegoingprovisionsshallsimilarlyapplytosuccessiveSaleEvents.Iftheconsidera- tionreceivedbytheholdersofCommonStockisotherthancash,thevalueshallbeasdeter- mined by theBoard ofDirectors ofthe Companyor successorpersonor entityacting ingood

faith.

 

5.                 NoprovisionofthisNoteshallalterorimpairtheobligationoftheCom- pany,whichisabsoluteandunconditional,topaytheprincipalof,andintereston,thisNoteat thetime,place,andrate,andintheform,hereinprescribed.

 

6.                 TheCompanyherebyexpresslywaivesdemandandpresentmentforpay- ment,noticeofnon-payment,protest,noticeofprotest,noticeofdishonor,noticeofacceleration orintenttoaccelerate,anddiligenceintakinganyactiontocollectamountscalledforhereunder andshallbedirectlyandprimarilyliableforthepaymentofallsumsowingandtobeowing hereto.

 

7.                 TheCompanyagreestopayallcostsandexpenses,includingreasonable attorneys'feesandexpenses,whichmaybeincurredbytheHolderincollectinganyamountdue underthisNote.

 

 

(a)                 TheCompanyshalldefaultinthepaymentofprincipalorinterestonthis NoteoranyothernoteissuedtotheHolderbytheCompany;or

 

(b)                AnyoftherepresentationsorwarrantiesmadebytheCompanyhereinor inanycertificateorfinancialorotherwrittenstatementsheretoforeorhereafterfurnishedbyor onbehalfoftheCompanyinconnectionwiththeexecutionanddeliveryofthisNote,ortheSe- curitiesPurchaseAgreementunderwhichthisnotewasissuedshallbefalseormisleadinginany respect;or

 

(c)                 TheCompanyshallfailtoperformorobserve,inanyrespect,anycove- nant,term,provision,condition,agreementorobligationoftheCompanyunderthisNoteorany othernoteissuedtotheHolder;or

 

(d)                TheCompanyshall(1)becomeinsolvent;(2)admitinwritingitsinability topayitsdebtsgenerallyastheymature;(3)makeanassignmentforthebenefitofcreditorsor commenceproceedingsforitsdissolution;(4)applyfororconsenttotheappointmentofatrus- tee,liquidatororreceiverforitsorforasubstantialpartofitspropertyorbusiness;(5)fileapeti- tionforbankruptcyrelief,consenttothefilingofsuchpetitionorhavefiledagainstitaninvol- untary petitionforbankruptcyrelief,allunderfederalorstatelawsasapplicable;or

 

(e)                 Atrustee,liquidatororreceivershallbeappointedfortheCompanyorfor a substantialpartofitspropertyorbusinesswithoutits consentandshallnotbedischargedwith- insixty(60)daysaftersuchappointment;or

 

(f)                 Any governmentalagencyoranycourtofcompetentjurisdictionatthein- stanceofanygovernmentalagencyshallassumecustodyorcontrolofthewholeoranysubstan- tialportionofthepropertiesorassetsoftheCompany;or

 

(g)                One or more money judgments, writsor warrants of attachment, orsimilar process,inexcessoffiftythousanddollars($50,000)intheaggregate,shallbeenteredorfiledagainsttheCompanyoranyofitspropertiesorotherassetsandshallremainunpaid,unvacated, unbondedorunstayedforaperiodoffifteen(15)daysorinanyeventlaterthanfive(5)days priortothedateofanyproposedsalethereunder;or

 

(h)                TheCompanyshallhavedefaultedonorbreachedanytermofanyother noteofsimilardebtinstrumentintowhichtheCompanyhasenteredandfailedtocuresuchde- faultwithintheappropriategraceperiod;or

 

(i)                  TheCompanyshallhaveitsCommonStockdelistedfromanexchange (includingtheOTCBBexchange)or,iftheCommonStocktradesonanexchange,thentrading intheCommonStockshallbesuspendedformorethan10consecutivedays;

 

(j)                  IfamajorityofthemembersoftheBoardofDirectorsoftheCompanyon thedatehereofarenolongerservingasmembersoftheBoard;

 

(k)                TheCompanyshallnotdelivertotheHoldertheCommonStockpursuant toparagraph4hereinwithoutrestrictivelegendwithin3businessdaysofitsreceiptofaNotice ofConversion;or

 

(l)                  TheCompanyshallnotreplenishthereservesetforthinSection12,with- in3businessdaysoftherequestoftheHolder.

 

(m)               TheCompanyshallnotbe“current”initsfilingswiththeSecuritiesand ExchangeCommission;or

 

(n)                TheCompanyshalllosethe“bid”priceforitsstockandamarket(includ- ingtheOTCBBmarketplaceorotherexchange)

 

Then,oratanytimethereafter,unlesscuredwithin5days,andineachandeverysuchcase,un- lesssuchEventofDefaultshallhavebeenwaivedinwritingbytheHolder(whichwaivershall notbedeemedtobeawaiverofanysubsequentdefault)attheoptionoftheHolderandinthe Holder'ssolediscretion,theHoldermayconsiderthisNoteimmediatelydueandpayable,with- outpresentment,demand,protestor(further)noticeofanykind(otherthannoticeofaccelera- tion),allofwhichareherebyexpresslywaived,anythinghereinorinanynoteorotherinstru- mentscontainedtothecontrarynotwithstanding,andtheHoldermayimmediately,andwithout expirationofanyperiodofgrace,enforceanyandallof theHolder'srightsandremediesprovid- edhereinoranyotherrightsorremediesaffordedbylaw.UponanEventofDefault,interest shall accrue at a default interest rate of24% per annum or, if suchrateis usurious or not permit- tedbycurrentlaw,thenatthehighestrateofinterestpermittedbylaw. Intheeventofabreach

ofSection8(k)thepenaltyshallbe$250perdaythesharesarenotissuedbeginningonthe4thdayaftertheconversionnoticewasdeliveredtotheCompany. Thispenaltyshallincreaseto

$500perdaybeginningonthe10thday. ThepenaltyforabreachofSection8(n)shallbeanin-

creaseoftheoutstandingprincipalamountsby20%.IncaseofabreachofSection8(i),theout- standingprincipaldueunderthisNoteshallincreaseby50%.IfthisNoteisnotpaidatmaturity, theoutstandingprincipaldueunderthisNoteshallincreaseby10%.

 

IftheHoldershallcommenceanactionorproceedingtoenforceanyprovisionsofthisNote,in- cluding,withoutlimitation,engaginganattorney,theniftheHolderprevailsinsuchaction,the HoldershallbereimbursedbytheCompanyforitsattorneys’feesandothercostsandexpenses incurredintheinvestigation,preparationandprosecutionofsuchactionorproceeding.

 

9.                 IncaseanyprovisionofthisNoteisheldbyacourtofcompetentjurisdic- tiontobeexcessiveinscopeorotherwiseinvalidorunenforceable,suchprovisionshallbead- justedratherthanvoided,ifpossible,sothatitisenforceabletothemaximumextentpossible, andthevalidityandenforceabilityoftheremainingprovisionsofthisNotewillnotinanyway beaffectedorimpairedthereby.

 

10.             NeitherthisNotenoranytermhereofmaybeamended,waived,dis- chargedorterminatedotherthanbyawritteninstrumentsignedbytheCompanyandtheHolder.

 

11.             TheCompanyrepresentsthatitisnota“shell”issuerandhasneverbeena “shell”issuerorthatifitpreviouslyhasbeena“shell”issuerthatatleast12monthshavepassed sincetheCompanyhasreportedform10typeinformationindicatingitisnolongera“shellissu- er.Further.The Company willinstruct its counselto either(i)write a144- 3(a)(9) opinionto al- lowforsalabilityoftheconversionsharesor(ii)acceptsuchopinionfromHolder’scounsel.

 

12.             TheCompanyshallissueirrevocabletransferagentinstructionsreserving 3,150,000sharesofitsCommonStockforconversionsunderthisNote(the“ShareReserve”). ThereserveshallbereplenishedasneededtoallowforconversionsofthisNoteandanother NotedatedMay1,2014intheamountof$105,000.UponfullconversionofthisNote,any sharesremainingintheShareReserveshallbecancelled.TheCompanyshallpayallcostsasso- ciatedwithissuinganddeliveringtheshares.Thecompanyshouldatalltimesmaintainamini- mumof4,500,000sharesforbothNotes.TheHoldermayreasonablyrequestincreasesfrom timetotimetoreservesuchamounts.

 

13.             TheCompanywillgivetheHolderdirectnoticeofanycorporateactions, includingbutnotlimitedtonamechanges,stocksplits,recapitalizationsetc.Thisnoticeshallbe giventotheHolderassoonaspossibleunderlaw.

 

14.             ThisNoteshallbegovernedbyandconstruedinaccordancewiththelaws ofNewYorkapplicabletocontractsmadeandwhollytobeperformedwithintheStateofNewYorkandshallbebindinguponthesuccessorsandassignsofeachpartyhereto.TheHolderand theCompanyherebymutuallywaivetrialbyjuryandconsenttoexclusivejurisdictionandvenue inthecourtsoftheStateofNewYork.ThisAgreementmaybeexecutedincounterparts,and thefacsimiletransmissionofanexecutedcounterparttothisAgreementshallbeeffectiveasan original.

 

 

INWITNESSWHEREOF,theCompanyhascausedthisNotetobedulyexecut- edbyanofficerthereuntodulyauthorized.

 

 

Dated:November4,2014