MAXSOUNDCORPORATION
CONVERTIBLEDEBENTURE
$126,000.00 May19,2015
THISDEBENTUREHASNOTBEENREGISTEREDPURSUANTTOTHE SECURITIESACTOF1933(THE"ACT")ORANYSTATESECURITIESLAWAND MAYNOTBESOLD,TRANSFERRED,PLEDGEDOROTHERWISEDISPOSEDOF INTHEABSENCEOFANEFFECTIVEREGISTRATIONSTATEMENTUNDERTHE ACTASTOTHISDEBENTUREORANOPINIONOFCOUNSELSATISFACTORY TOTHECOMPANYTHATSUCHREGISTRATIONISNOTREQUIRED.
FORVALUERECEIVED,theundersigned,MaxSoundCorporation,aDelawarecorporation(the"Company"orthe“Borrower”),herebypromisestopaytoMacallanPartners, LLC(the"Lender"),oritsregisteredassigns,theprincipalsumofONEHUNDREDTWENTY SIXTHOUSANDdollars($126,000.00),togetherwithinterest(computedonthebasisofathree hundredsixty(360)dayyearoftwelve(12)thirty(30)daymonths)ontheunpaidprincipal balanceofthisDebenturefromthedateofthisDebentureuntilpaid,attherateofEightpercent (8%)perannum..
1. PAYMENT.
(a) PaymentsoftheprincipalofandinterestonthisDebentureshallbemade inlawfulmoneyoftheUnitedStatesofAmericaatthecurrentaddressoftheregisteredholderof thisDebentureasrecordedintheCompany’sbooks.Paymentsshallbemadebymandatory conversion,unlessthisDebentureisprepaidattheCompany’soptioninaccordancewithSection 1(c)orunlessthereisadefaultinaccordancewithSection5(b).
(b) InterestaccruingontheoutstandingprincipalbalanceofthisDebenture duringthetermofthisDebentureshallbepaidattheMaturityDate,whichshallbeNovember 27,2015.UpontheoccurrenceofanyEventofDefault(assuchtermisdefinedhereinafter)and accelerationoftheindebtednesshereunder,oraftertheMaturityDate(includingwithout limitation anytimefromand aftertheentryofa judgmentforsumsdue),any unpaidprincipalof thisDebentureshallbearinterestattherateofeighteenpercent(18%)perannumuntilpaid. Thereshallbea10daygraceperiodforpaymentstobemadehereunder(butinterestshallbe computedtotheactualdateofpayment).
(c) TheoutstandingprincipalbalanceofthisDebenture,togetherwithall accruedbutunpaidinterestthereon,maybeprepaid,attheCompany'soptionatanytimeprior totheMaturityDate,providedthattheCompanyshallgivewrittennoticeofanysuch prepaymenttotheregisteredholderofthisDebenturenolaterthanten(10)businessdaysprior tothedatetheCompanyintendstomakeaprepayment(the“PrepaymentDate”).Suchamount mustbepaidincashonorbeforethenextbusinessdayfollowingtheexpirationofthe10 businessdaynoticeperiod.NotwithstandingtheCompany’snotificationofprepayment,the
LendermaystillconvertanyremainingbalanceofthisDebenturepursuanttoitstermsuntilfull prepaymenthasoccurred.UponthePrepaymentDatetheCompanyshallpayapremiumonthe outstandingprincipalbalanceplusallaccruedandunpaidinterestthereonandanyapplicable fees and expenses (the“Prepayment Premium”). Upon thePrepayment Date the Companyshall payaPrepaymentPremiumbaseduponthefollowingschedule:Ifprepaymentismadewithin 60daysfromthedateofthisDebenturethen130%oftheoutstandingprincipalbalanceplusall accruedandunpaidinterestthereonwillbedue, ifprepaymentismadebetween61-120days fromthedateofthisDebenturethen140%oftheoutstandingprincipalbalanceplusallaccrued andunpaidinterestthereonwillbedue,ifprepaymentismadebetween121daysfromthedate ofthisDebentureandthematuritydatethen150%oftheoutstandingprincipalbalanceplusall accruedandunpaidinterestthereonwillbedue(the“Prepayment”).
| 2. | REGISTRATIONANDTRANSFER. |
(a) TheCompanyshallmaintainatitsprincipalexecutiveofficesaregisterfor thisDebenture,inwhichtheCompanyshallrecordthenameandaddressofthepersoninwhose namethisDebenturehasbeenissuedandthenameandaddressofeachtransfereeandprior ownerthereof.TheCompanymaydeemandtreatthepersoninwhosenamethisDebentureisso registeredastheholderandownerthereofforallpurposesandallnoticeshereundertothe registeredholdermaybetotheaddressindicatedonsuchregister.
(b) ThisDebenturemaybetransferredonlybythesurrenderingthereoffor registrationoftransferdulyendorsed,oraccompaniedbyawritteninstrumentoftransferduly executed,bytheregisteredholder.TheCompanymayconditionitsregistrationofsuchtransfer upon(a)theopinionofcounselreasonablyacceptabletotheCompanythatthetransferofthis DebenturedoesnotviolatetheActoranystatesecuritiesorblueskylaws,and(b)thepayment toitofasumsufficienttocoveranystamptaxorothergovernmentalchargeimposedinrespect ofsuchtransfer.
3. COMMONSTOCKCONVERSIONRIGHTSANDSHARERESERVATION RIGHTS.
(a) TheLenderhastheright,atanytimeafterthedateofthisdebenture,at itselection,toconvertallorpartoftheoutstandingandunpaidprincipalsumandaccrued interest(andanyotherfees)onthisDebenture,intofullypaidandnon-assessablesharesof commonstockoftheCompanyasperthefollowingconversionformula:Numberofshares receivableuponconversionequalsthedollarconversionamountdividedbytheConversion Price.TheConversionPriceisequalto:65%oftheaverageofthe3lowesttradedprices duringthe10tradingdayspriortotheelectiontoconvert.Ifconversionsharesarenot deliverablebyDWACthenanadditional5%discountwillapplytotheconversionprice.Ifthe sharesareineligiblefordepositintotheDTCsystemfor anyreasonandonlyeligiblefor“X clearing” or if the Company’s common stock price closes below 0.005 at any time while this Debentureis outstanding then anadditional 15% discount willapply to the conversionprice. However,if the Company’scommon stock price atany time loses “thebid” (ex: .0001 on“the
ask”withzeromarketmakersonthebidasperlevel2quotations),thentheconversionprice may,intheLender’ssoleandabsolutediscretion,bereducedtoafixedpriceof.00001.Notice ofLender’sconversionmaybedeliveredtoBorrowerbymethodofLender’schoice(including butnotlimitedtoemail,facsimile,mail,overnightcourier,orpersonaldelivery),andall conversionsshallbecashlessandnotrequirefurtherpaymentfromtheLender.Ifnoobjection isdeliveredfromBorrowertoLenderregardingcalculationsintheconversionnoticewithin24 hoursofdeliveryoftheconversionnotice,theCompanyshallhavebeenthereafterdeemedto haveirrevocablyconfirmedandirrevocablyratifiedsuchconversionnoticeandwaivedany objectionthereto.TheCompanyshalldeliverthesharesfromanyconversiontoLender(inany name directed by Lender) within 2 (two) business days of conversion notice delivery. At no time will the lender convert any amount of the Debenture into common stock that would result in the lender owning more than 4.99% of the company’s common stock outstanding.
(b) TheobligationsoftheBorrowerunderthisDebentureshallbesecuredby sharesofthecommonstockoftheCompany,assignedtoareservetobeadministeredbythe Company’sTransferAgent,forthebenefitoftheLender.TheBorrowershallinitiallyand irrevocablyplace10,000,000sharesoftheCompany’scommonstockonreservewiththe Company’sTransferAgenttoensurethattherearesufficientsharesavailablefortheconversion ofthis Debenture. So longas any portion ofthe Debenture(s) is outstanding,the Company shall takeallactionnecessarytoreserveandkeepavailableoutofitsauthorizedandunissued CommonStock,solelyforthepurposeofeffectingtheconversionoftheDebenture(s),a numberof shares of Common Stock equalto, at minimum, 4 times (4x)the value of the outstanding principal and interest of the Debenture(s) as shall from time to time be necessary to effect the conversion of all of the Debenture(s) then outstanding (without regard to any limitations on conversions)(the “RequiredReserve Amount”).
(c) InsufficientAuthorizedShares.If,notwithstandingSection3(b),andnot inlimitationthereof,atanytimewhileanyoftheDebenture(s)remainoutstandingthe CompanydoesnothaveasufficientnumberofauthorizedandunreservedsharesofCommon StocktosatisfyitsobligationtoreserveforissuanceuponconversionoftheDebenture(s)at leastanumberofsharesofCommonStockequaltotheRequiredReserveAmount(an “AuthorizedShareFailure”),thentheCompanyshallimmediatelytakeallactionnecessarytoincreasetheCompany’sauthorizedsharesofCommonStocktoanamountsufficienttoallow theCompanytoreservetheRequiredReserveAmountfortheDebenture(s)thenoutstanding. Withoutlimitingthegeneralityoftheforegoingsentence,assoonas practicableafterthedate ofthe occurrence of anAuthorized Share Failure, but inno event later than thirty(30) days after the occurrence of such Authorized Share Failure, the Company shall hold a meeting of its stockholders for the approval of an increase in the number of authorized shares of Common Stock. In connection with such meeting, the Company shall provide each stockholder with a proxystatementandshalluse itsreasonablebesteffortsto solicititsstockholders’approval of such increase in authorized shares of Common Stock and to cause its board of directors to recommend to the stockholders that they approve such proposal.
| (d) | Intheeventthattheoutstandingsharesofthecommonstocksubjecttothe |
conversionarechangedintoorexchangedforadifferentnumberorkindofsharesofthe CompanyorothersecuritiesoftheCompanybyreasonofmerger,consolidation,re- capitalization,re-classification,stocksplit,stockdividendorcombinationofshares,the Companyshallmakeanappropriateandequitableadjustmentinthenumberandkindofshares astowhichtheconversionshallbeapplicable,totheendthataftersucheventtheLender’s proportionateinterestispreservedaftertheoccurrenceofsuchevent.
(e)IfBorrowerfailstodeliversharesinaccordancewiththetimeframe statedthisSection;theLender,atanytimepriortosellingallofthoseshares,mayrescindany portion,inwholeorinpart,ofthatparticularconversionattributabletotheunsoldsharesand havetherescindedconversionamountreturnedtothePrincipalSumwiththerescinded conversionsharesreturnedtotheCompany(underLender’sandBorrower’sexpectationsthat anyreturnedconversionamountswilltackbacktotheoriginaldateofthisDebenture).In addition,foreachconversion,intheeventthatsharesarenotdeliveredbythefourthbusiness day(inclusiveofthedayofconversion),apenaltyof$2,000perdaywillbeassessedforeach day afterthethirdbusinessday(inclusiveof thedayoftheconversion)untilsharedelivery is made;andsuchpenaltywillbeaddedtothePrincipalSumofthisDebenture(underLender’s and Borrower’s expectations that any penalty amounts will tack back to the original date of this Debenture).
4. ADJUSTMENT FOR CAPITAL CHANGES; MERGER OR CONSOLIDATION;NON-DILUTIONPROVISIONS.
(a) IftheCompanydeclaresorpaysadividendonitscommonstockpayable incommonstock,orothersecurities,subdividestheoutstandingcommonstockintoagreater amountofcommonstock,orengagesinanyreclassification,exchangeorsubstitutiontransaction (an“Event”),thentheconversionpriceshallbeautomaticallyadjustedtoprovidetheLender withthesamepercentageownershipintheStockoftheCompanythatitwouldhavehadifthe conversionhadbeenaccomplishedimmediatelypriortotheEvent.
(b) IfanymergerorconsolidationoftheCompanyorthesaleofallor substantiallyallofitsassetsshalloccur,then,asaconditiontosuchmerger,consolidationor sale,lawfulandadequateprovisionshallbemadewherebytheregisteredholderofthis Debentureshallthereafterhavetherighttoreceiveuponthebasisanduponthetermsand conditionsspecifiedherein(including,withoutlimitation,paymentoftheapplicableConversion Price)andinlieuofthesharesofCommonStockoftheCompanyimmediatelytheretofore receivableuponconversionofthisDebenture,suchsharesofstock,securitiesorassetsasmaybe issuedorpayablewithrespecttoorinexchangeforsuchsharesofCommonStockimmediately theretoforereceivable by such holder had such merger or consolidation not taken place. The Company shall not affectany such consolidationor merger, unlessprior to orsimultaneously with the consummation thereof, the successor (if other than the Company) resulting from such consolidation or merger shall assume, by written instrument executed and delivered to the holder, the obligation to deliver to the holder such shares of stock, securities or assets as, in accordance with the foregoing provisions, the holder may be entitled to receive.
(c) TheCompanywillatalltimesreserveandkeepavailableoutofits authorizedCommonStock,forthepurposeofissuanceuponconversionofthisDebentureas hereinprovided,themaximumnumberofsharesofCommonStockasshallthenbeissuable upontheexerciseoftheconversionprivilegessetforthherein.TheCompanycovenantsthatall shareswhichshallbesoissuableshall,upontheconversionofthisDebentureashereinprovided, bedulyandvalidlyissuedandfullypaidandnonassessablebytheCompany.
Default”):
(a) Thefollowingshallconstituteaneventofdefault(an“Eventof
(i) theCompanyshallfailtopayanyprincipalunderthis Debenturewhendueandpayable(orpayablebyconversion)thereunder;or
(ii) theCompanyshallfailtopayanyinterestoranyotheramount underthisDebenturewhendueandpayable(orpayablebyconversion)thereunder;or
(iii) areceiver,trusteeorothersimilarofficialshallbeappointed overtheCompanyoramaterialpartofitsassetsandsuchappointmentshallremain uncontestedfortwenty(20)daysorshallnotbedismissedordischargedwithinsixty
(60)days;or
(iv) theCompanyshallbecomeinsolventorgenerallyfailstopay, oradmitsinwritingitsinabilitytopay,itsdebtsastheybecomedue,subjectto applicablegraceperiods,ifany;or
ofcreditors;or
| (v) | theCompanyshallmakeageneralassignmentforthebenefit |
(vi) theCompanyshallfileapetitionforreliefunderany bankruptcy,insolvencyorsimilarlaw(domesticorforeign);or
(vii) aninvoluntaryinsolvencyproceedingshallbecommenced orfiledagainsttheCompany;or
(viii) theCompanyshallloseitsstatusas“DTCEligible”orthe Company’sshareholdersshalllosetheabilitytodeposit(eitherelectronicallyorby physicalcertificates,orotherwise)sharesintotheDTCSystem;orthesharesofthe CompanynolongerallowforDWACtransferfortheshares;or
(ix) theCompanyshallbecomedelinquentinitsfiling requirementsasafully-reportingissuerregisteredwiththeSECorotherwisecausinga classoftheCompany’sequitysecuritiestobecomeeligibleforterminationof registrationpursuanttoSection12(g)(4)oftheSecuritiesExchangeActof1934,as amended;or
(x) theCompanyshallfailtomaintaintheRequiredReserve AmountassetforthinSection3(b)orshallotherwisefailtomaintainsufficient commonsharesauthorizedandavailabletosatisfythelender’sconversionsforaslong asthisDebentureremainsunpaidinwholeorinpart.
(xi) theCompanyshallfailtomaintaincommunicationwith LenderorshallfailtoupdateitscontactinformationwithLenderorshallotherwise ignoretheLender’sattemptsatcommunication.
(xii) theCompanyshallfailtomaintainalistingontheOTC Marketsexchangeoranyhighertierexchangeorshallotherwisefailtomaintaina minimumbidquotationof.0001(“nobid”).
(b) UpontheoccurrenceofanEventofDefault,theLendermaydeclareby writtennoticeallthethenunpaidprincipalandinterestoutstanding,aswellasanyapplicable penalties,feesandapenaltyof150%oftheunpaidprincipalbalancetobedueandpayable, withoutpresentation,demand,protestornoticeofdishonor,allofwhichtheCompanyhereby waives.InterestaccruingafteranEventofDefaultshallaccrueataninterestrateequaltothe lesserof18%perannumorthemaximumratepermittedunderapplicablelaw.Nothingherein shalllimitLender’srighttopursueanyotherremediesavailabletoitatlaworinequity including,without limitation, adecree of specificperformance and/or injunctiverelief with respecttotheCompany’sfailuretotimelydelivercertificatesrepresentingsharesofCommon Stock upon conversion of this Debenture as required pursuant to the terms hereof.
(c) AtanytimethattheCompanyisindefaultofitsobligationsunderthis Debenture,theCompanyshallnottakethefollowingactionswithoutwrittenconsentofthe Lender:
(i) Engageinanymerger,saleorothertransactionnotintheordinary courseofbusiness;or
(ii) IncurIndebtednessexceedingtwotimes(2x)theoutstandingprincipal, interest,andallotherapplicablefeesandpenaltiesowedonthisDebenture;or
(iii) Makeanypayment,includingsalaries,toanystockholderoraffiliate oftheCompany;or
(iv) Makeanychangestothebylawsorcertificateofincorporationofthe Company;or
| (v) | Declareorpayanydividendincash,stockorotherproperty;or |
| (vi) | MakeanypaymentonanyotherdebtobligationoftheCompany;or |
| (vii) | IssueanyadditionalstockofanykindoftheCompany |
(d) ShouldtheindebtednessrepresentedbythisDebentureoranypartthereof becollectedinanyproceedingorplacedinthehandsofattorneysforcollection,theCompany agreestopay,inadditiontotheprincipalandinterestdueandpayablehereon,allcostsof collectingthisDebenture,includingreasonableattorneys'feesandexpenses.
(a) Forsolongasthe LenderoranyofitsaffiliatesholdanyunpaidportionofthisDebenture,theCompanyanditsaffiliatesareprohibitedfrom,amongotherthings,voting anysecuritiesofCompany’sCorporation,infavorof:
(i) Anextraordinarycorporatetransaction,suchasamerger,reorganization orliquidation,involvingCompanyoranyofitssubsidiaries,
(ii) AsaleortransferofamaterialamountofCompany’sassetsorits subsidiaries’assets,
policy,
| (iii) | AnymaterialchangeinCompany’spresentcapitalizationordivided |
| (iv) | AnyothermaterialchangeinCompany’sbusinessorcorporatestructure, |
thereto
| (v) | AchangeinCompany’scharter,bylaws,orinstrumentscorresponding |
(vi) CausingaclassofCompany’ssecuritiestobedelistedfromanational securitiesassociation,
(vii) CausingaclassofCompany’sequitysecuritiestobecomeeligiblefor terminationofregistrationpursuanttoSection12(g)(4)oftheSecuritiesExchangeActof1934, asamended,
| (viii) | TerminatingCompany’stransferagent, |
Debentureor
| (ix) | Takinganyactionwhichwouldimpededthepurposesandobjectsofthis |
(x) Takinganyaction,intention,planorarrangementsimilartoanyofthose enumeratedabove.
(a) IfthedateofanypaymentrequiredbythisDebenturebeSaturday,Sunday orabankholiday,suchpaymentshallbepayableonthefirstbusinessdayfollowingsuchdate.
(b) TheCompanyherebyexpresslywaivespresentment,demand,protestor anyothernoticewhatsoever.
(c) TheCompanyshallhavetherighttoenterintosecuredorunsecured borrowingsfromcommercialbanksandcomparablecommercialcreditinstitutionsforthe purposeoffinancinginventoryandfixedassets,uponapprovaloftheBoardofDirectorsofthe Company(“PermittedBorrowings”).PermittedBorrowingsshallnotrequirethepriorapproval oftheLender.AllotherborrowingsbytheCompanyshallbesubjecttothepriorwritten approvaloftheLender.
(d) ThisDebentureshallbebindinguponandshallinuretothebenefitofthe partieshereto,theirsuccessors,heirsandassigns.
(e) TheinvalidityorpartialinvalidityofanyprovisionofthisDebentureshall affectonlysuchprovisionorpartthereofandthebalanceofthisDebentureshallremainin effect.
(f) TheCompanyshallfileaForm8-KwiththeSECdisclosingthis DebentureandallofitstermswithinthetimeframemandatedbytheCommission.
(g) Itisunderstoodandagreedthatnofailureordelayinexercisinganyright, powerorprivilegehereundershalloperateasawaiverthereof,norshallanysingleorpartial exercise thereof precludeany other orfurther exercise thereofor theexercise of anyright, power orprivilegehereunder.
| 8. | TERMSOFFUTUREFINANCINGS. |
(a) SolongastheDebentureisoutstanding,uponanyissuancebytheCompany oranyofitssubsidiariesofanysecuritywithanytermmorefavorabletotheholderofsuch securityorwithaterminfavoroftheholderofsuchsecuritythatwasnotsimilarlyprovidedto theLenderintheDebenture,thentheCompanyshallnotifytheLenderofsuchadditionalor more favorable term(s) andsuch term(s), atthe Lender’s option,shall become apart of theterms containedhereinthisDebenture.Thetypesoftermscontainedinanothersecuritythatmaybe morefavorabletotheholderofsuchsecurityincludebutarenotlimitedto:termsaddressing conversiondiscounts andterms addressingtransfer agentreserve shares.
(a) TheLenderanditsadvisors,ifany,havebeen,andforsolongasthe Debentureremainsoutstandingwillcontinuetobe,furnishedwithallmaterialsrelatingtothe business,financesandoperationsoftheCompanyandmaterialsrelatingtotheofferandsaleof theSecuritieswhichhavebeenrequestedbytheLenderoritsadvisors.TheLenderandits advisors,ifany,havebeen,andforsolongastheDebentureremainsoutstandingwillcontinue tobe,affordedtheopportunitytoaskquestions oftheCompany.Notwithstandingtheforegoing, theCompanyhasnotdisclosedtotheLenderanymaterialnonpublicinformationandwillnot disclosesuchinformationunlesssuchinformationisdisclosedtothepublicpriortoorpromptly following such disclosure to the Lender. The Lender is not aware of any facts that may constitute a breach of any of the Company's representations and warranties made herein.
(b) TheLenderunderstandsthattheDebentureandtheConversionSharesmay beararestrictivelegendinsubstantiallythefollowingform(andastop-transferordermaybe placedagainsttransferofthecertificatesforsuchSecurities):
“NEITHERTHEISSUANCEANDSALEOFTHESECURITIES REPRESENTEDBYTHISCERTIFICATENORTHESECURITIES INTOWHICHTHESESECURITIESAREEXERCISABLEHAVE BEENREGISTEREDUNDERTHESECURITIESACTOF1933,AS AMENDED,ORAPPLICABLESTATESECURITIESLAWS.THE SECURITIESMAYNOTBEOFFEREDFORSALE,SOLD, TRANSFERREDORASSIGNED(I)INTHEABSENCEOF(A)AN EFFECTIVEREGISTRATIONSTATEMENTFORTHE SECURITIESUNDERTHE SECURITIESACTOF1933,AS AMENDED, OR (B) AN OPINION OF COUNSEL (WHICH COUNSEL SHALLBE SELECTED BYTHE HOLDER), INA GENERALLY ACCEPTABLEFORM,THATREGISTRATIONISNOTREQUIRED UNDERSAIDACT OR(II)UNLESS SOLDPURSUANTTO RULE 144ORRULE144AUNDERSAIDACT.NOTWITHSTANDINGTHE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHERLOANORFINANCINGARRANGEMENTSECUREDBY THE SECURITIES.”
ThelegendsetforthaboveshallberemovedandtheCompanyshallissueacertificatewithout suchlegendtotheholderofanySecurityuponwhichitisstamped,if,unlessotherwiserequired byapplicablestatesecuritieslaws,(a)suchSecurityisregisteredforsaleunderaneffective registrationstatementfiledunderthe1933ActorotherwisemaybesoldpursuanttoRule144or RegulationS without anyrestriction as tothe number of securitiesas of aparticular date thatcan thenbeimmediatelysold,or(b)suchholderprovidestheCompanywithanopinionof counsel, inform,substanceandscopecustomaryforopinionsofcounselincomparabletransactions,to theeffectthatapublicsaleortransferofsuchSecuritymaybemadewithoutregistrationunder the1933Act,whichopinionshallbeacceptedbytheCompanysothatthesaleortransferis effected.TheLenderagreestosellallSecurities,includingthoserepresentedbyacertificate(s)
fromwhichthelegendhasbeenremoved,incompliancewithapplicableprospectusdelivery requirements,ifany.IntheeventthattheCompanydoesnotacceptsuchopinionofcounsel providedbytheLenderwithrespecttothetransferofSecuritiespursuanttoanexemptionfrom registration,suchasRule144orRegulationSitwillbeconsideredanEventofDefaultpursuant toSection5oftheDebenture.
(a) All questions concerningthe construction, validity,enforcement and interpretationofthisDebentureshallbegovernedbyandconstruedandenforcedin accordancewiththeinternallawsoftheStateofDelaware,withoutregardtotheprinciplesof conflictsoflawthereof.Anyclaimorcontroversyarisingoutoforrelatingtothe interpretation, application orenforcement of anyprovision of thisAgreement, shallbe submittedforresolutiontoacourtofcompetentjurisdictioninNewYork.Thepartieshereby consenttopersonaljurisdictionandvenueinNewYork.
(a) EachPartytothisAgreementagreesthatanysuit,action,orproceeding, whetherclaimorcounterclaim,broughtorinstitutedbyanypartyheretooranysuccessoror assignof anypartyonorwithrespecttothisAgreementshallbetriedonlybyacourtandnot byajury.Eachandeverypartyherebyknowingly,expressly,voluntarilyandintentionally waivesanyrighttoatrialbyjuryinanysuchsuit,actionorproceeding.
INWITNESSWHEREOF,theCompanyhascausedthisDebenturetobeexecuted, sealedanddeliveredonthedatefirstabovewritten.
MaxSoundCorporation
By:
Name:GregHalpern Title:CFO
MacallanPartnersLLC.
By:_
Name:AdamDidia Title:Member
