Convertible Debenture Clause Samples

Convertible Debenture. (a) Upon the execution of this Agreement, the Original Common Stock certificates received by each Purchaser pursuant to Securities Purchase Agreement are hereby deemed surrendered and automatically cancelled and each Purchaser shall receive from the Company a Debenture, substantially in the form attached hereto as EXHIBIT A. Purchasers shall pay no additional consideration for the Debentures. The form of the Debenture will include: (i) the Debenture shall bear ten percent (10%) interest per ANNUM ("INTEREST") payable semi-annually; (ii) Purchasers may convert all or any portion of the outstanding principal balance (and all of any portion of accrued but unpaid Interest) of the Debenture into Debenture Shares voluntarily at the Per Share Conversion Price any time following the Conversion Date; (iii) on August 4, 2004 (the "MATURITY DATE"), or such date that is earlier pursuant to the Debentures, Purchasers may demand all of the outstanding principal balance and any accrued and unpaid Interest that is due and payable; and (iv) the Company may not redeem the Debenture except with the written consent of Purchasers. (b) In the event that the Company does not have an adequate number of authorized Common Stock to issue all of the Debenture Shares, Original Warrant Shares and New Warrants Shares within thirty (30) days of any Purchaser's Conversion Notice, then (i) first, the Company's Chief Executive Officer, (ii) and if more Common Stock is required, then second, the President, (iii) and if more Common Stock is required, then third and on a PRO RATA basis, any other executive officers of the Company, shall surrender to the Company, for immediate cancellation, that number of such executive officer's shares of Common Stock necessary, when added to the available authorized but not issued shares of Common Stock, to enable the Company to issue the Debenture Shares, Original Warrant Shares and New Warrants Shares so converted and/or exercised by Purchasers. Upon cancellation of such surrendered Common Stock, the Company shall promptly issue the corresponding certificates to each Purchaser for the Debenture Shares, Original Warrant Shares and New Warrants Shares as converted/exercised by such Purchaser. It shall be the sole obligation of the Company and its Chief Executive Officer, President and other executive officers to enter into any separate contractual arrangements so as to remunerate the Chief Executive Officer, President and other executive officers for the Comm...

Convertible Debenture. Debentures and interest due thereunder on the Automatic Conversion Date into shares of Common Stock pursuant to the terms hereof. Failure to timely provide such written notice shall be deemed a relinquishment of the Company's rights pursuant to this Section.

Convertible Debenture same shall become due and payable (whether on a Conversion Date or the Maturity Date or by acceleration or otherwise);

Convertible Debenture the Company shall be a party to any Change of Control Transaction (as defined in Section 6), shall agree to sell or dispose all or in excess of 33% of its assets in one or more transactions (whether or not such sale would constitute a Change of Control Transaction), or shall redeem or repurchase more than a de minimis number of shares of Common Stock or other equity securities of the Company (other than redemptions of Underlying Shares (as defined in Section 6));

Convertible Debenture. This Debenture shall be governed by and construed in accordance with the laws of the State of New York, without giving effect to conflicts of laws thereof. The Company and the Holder hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, or that such suit, action or proceeding is improper. Each of the Company and the Holder hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by receiving a copy thereof sent to the Company at the address in effect for notices to it under this instrument and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law.

Convertible Debenture be the lesser of the Conversion Price on the Conversion Date and the Conversion Price on the date of such Holder demand. Any such shares will be subject to the provision of this Section.

Convertible Debenture. EXHIBIT A

Convertible Debenture receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.

Convertible Debenture converting Holder in an amount equal to the Mandatory Prepayment Amount for the Excess Principal as liquidated damages and not as penalty. If the converting Holder shall have elected the first option pursuant to the immediately preceding sentence and the Company shall have failed to obtain the Shareholder Approval on or prior to the 60th day after such request, then within three days of such 60th day, the Company shall pay cash to the converting Holder an amount equal to the Mandatory Prepayment Amount for the Excess Principal as liquidated damages and not as penalty. If the Company fails to pay the Excess Principal in full pursuant to this Section within seven days after the date payable, the Company will pay interest thereon at a rate of 18% per annum or such lesser maximum amount that is permitted to be paid by applicable law, to the converting Holder, accruing daily from the Conversion Date until such amount, plus all such interest thereon, is paid in full. The Company and the Holder understand and agree that shares of Common Stock issued to and then held by the Holder as a result of conversions of Debentures shall not be entitled to cast votes on any resolution to obtain Shareholder Approval pursuant hereto.