$__________ No.__________
Debenture Agreement
CUSA Technologies, Inc.
Convertible Debenture
(Due June 30, 1998)
THE SECURITIES ISSUED PURSUANT HERETO HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
( THE ACT ) OR UNDER THE SECURITIES LAWS OF CERTAIN
STATES. THESE SECURITIES HAVE BEEN ACQUIRED FOR
INVESTMENT AND MAY NOT BE TRANSFERRED OR SOLD IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION OR OTHER
COMPLIANCE UNDER THE ACT OR THE LAWS OF THE
APPLICABLE STATES OR A NO ACTION OR INTERPRETIVE
LETTER FROM THE SECURITIES AND EXCHANGE COMMISSION
OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE ISSUER AND ITS COUNSEL TO THE EFFECT THAT THE SALE
OR TRANSFER IS EXEMPT FROM REGISTRATION UNDER THE ACT
AND SUCH STATE STATUTES.
THIS DEBENTURE AGREEMENT ( this Agreement ) is one of the
duly authorized issue of convertible debentures of CUSA Technologies, Inc.
( the Company ) designated as Convertible Debenture due June 30, 1998
( the Debentures ) limited in an aggregate principal amount to $3,000,000 to
be issued from and after June 15, 1995. Payment of this Debenture and the
compliance with the terms herein shall in all respects be treated on a rateable
basis with all other holders of the Debentures ( the Holders ) so that no
Holder enjoys any preference, priority or distinction. The Company hereby
promises to pay to the registered Holder of this Debenture or to his or her
assigns ( the Holder ) the principal sum of ____________________
Thousand Dollars ($__________) on or before June 30, 1998, and interest as
provided herein, subject to the terms and conditions set forth below.
1. Payment of Principal and Interest. The Company shall pay to
the Holder of this Debenture the principal sum stated thereon, on June 30,
1998 at the offices of the Company at 000 Xxxx Xxxxxxxx Xxxxx, Xxxx Xxxx
Xxxx, Xxxx 00000, in such lawful money of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debt, and to pay in like lawful tender interest thereon, from and after the date
hereof, on September 30, December 31, March 31 and June 30 of each year
the Debenture is outstanding, at the rate of eight percent (8%) per annum.
2. Conversion by Holder. The Holder of this Debenture is entitled
at any time prior to maturity or in case a Debenture or some portion hereof
shall have been called for prepayment prior to such date, then until thirty (30)
days after the date of notice of prepayment, to convert a Debenture (or any
portion of the principal amount and interest thereof), into fully paid and
nonassessable shares of the Company s common stock, $0.001 per share par
value, ( the Shares ) at a rate equal to $3.00 per share through June 30, 1996,
$3.50 per share through June 30, 1997 and $4.00 per share through June 30,
1998. The conversion right shall be exercised with conversion occurring by
proper surrender of the Debenture to the Company, accompanied by written
notice that the Holder hereof elects to convert this Debenture.
3. Adjustment of Conversion Rate. The conversion rate and the
number of Shares issuable upon conversion of the Debenture shall be
appropriately adjusted in the case of stock dividend, split, reclassification,
distribution or similar event.
4. Prepayment. The Debenture is subject to prepayment, in whole
or in part, at the election of the Company upon not less than thirty (30) days
written notice; provided, however, the Company may exercise its right to
prepay the Debendture only once each year during the thirty (30) day period
ending on June 30 of such year. During the thirty (30) days following the date
of any notice of prepayment, the Holder will have the right to convert the
Debenture into shares of Common Stock on the terms and conditions
provided above. On the fixed date for prepayment, the Debenture shall cease
to bear interest with respect to the amount of principal actually paid. Upon
proper surrender of any Debenture for prepayment, the amount of principal
and interest due shall be paid. Any Debenture which is prepaid only in part
shall be presented to the Company for notation thereon of such partial
prepayment.
5. Call by Holder. Notwithstanding any other provision of this
Debenture, the Holder hereof may call the Debenture for payment upon one
hundred twenty (120) days written notice to the Company upon the
occurrence of either of the following events:
(a) The after-tax profits of the Company do not exceed the
lesser of $250,000 or three percent (3%) of gross revenues during any
calendar quarter; or
(b) There is a change in control of the Board of Directors of
the Company. For purposes of this provision, change in control
shall mean the acquisition of sufficient shares of common stock by an
individual or group of individuals (including companies) acting
together to enable such individual or group of individuals to control
the outcome of any election for a position on the Board of Directors.
6. Events of Default. The following events constitute Events of
Default under this Agreement:
(a) Default in the payment of any interest on any Debenture in
this Series when it becomes due and payable, and continuance of such
default or payment of interest for a period of thirty (30) days; or
(b) Default in the payment of principal of any Debenture in this
Series when due, whether at maturity, upon prepayment or otherwise;
or
(c) Default in the performance of or breach of any covenant or
warranty of the Company in any Debenture (other than a covenant or
warranty, the breach or default in performance of which is elsewhere
in this section specifically dealt with), and continuation of such default
or breach for a period of sixty (60) days after there has been given to
the Company by registered or certified mail by the Holders of a
majority in principal amount of the outstanding Debentures in this
Series, a written notice specifying such default or breach and requiring
it to be remedied and stating that such notice is a notice of default
hereunder; or
(d) The entry of a decree or order by a court having
jurisdiction in the premises adjudging the Company as bankrupt or
insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment, or composition of or in
respect of the Company under federal bankruptcy laws or any other
applicable federal or state law, or appointing a receiver, liquidator,
assignee, trustee, sequestrator (or other similar official) of the
Company or any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any
such decree or order unstayed and in full effect for a period of sixty
(60) consecutive days; or
(e) The institution by the Company of proceedings to be
adjudicated as bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency proceedings against it, or a
filing by it of a petition or answer or consent seeking reorganization
or relief under federal bankruptcy laws or any other applicable federal
or state law, or appointing a receiver, liquidator, assignee, trustee,
sequestrator (or other similar official) of the Company or of any
substantial part of its property, or the making by the Company of an
assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due,
or the taking of corporate action by the Company in furtherance of
any such action.
7. Rights Upon Default. Upon the occurrence of an Event of
Default, and at any time thereafter, the Holders may exercise any one or all of
the following remedies:
(a) Declare all obligations immediately due and payable and
proceed to enforce payment of the same and exercise from time to
time any rights and remedies available to them under this Debenture
and applicable law; or
(b) Exercise such other right or remedy available to the
Holders, at law or in equity.
8. Notices to Holders; Waiver. Where the Debenture provides for
notice to Holders of any event, such notice shall be sufficiently given if in
writing sent by courier providing for delivery within 72 hours or mailed,
registered, postage prepaid, to each Holder affected by such event, at his
address as it appears in the Debenture register maintained by the Company,
not later than the latest date, prescribed for the giving of such notice.
In any case the Notice to Holders is given by mail, neither the failure to mail
such notice, nor any defect in any notice so mailed, to any particular Holder
shall affect the sufficiency of such notice with respect to the Holders of other
Debentures issued in this Series. Where the Debenture provides for notice to
the Company, such notice shall be sufficiently given if in writing and mailed,
registered, postage prepaid, to the Company at its address set forth above, not
later than the latest date, and no earlier than the earliest date prescribed for
the giving of such notice. Where the Debenture provides for notice in any
manner, such notice may be waived in writing by the person entitled to receive
such notice, whether before or after the event, any such waiver shall be
equivalent of such notice.
9. Withholding. The Company shall be entitled to withhold from all
payments of principal and interest on the Debenture any amounts required to
be withheld under the applicable provisions of federal income tax laws or
other applicable laws at the time of such payments.
10. Governing Law. This Debenture shall be governed by and
construed and interpreted in accordance with the laws of the State of Utah.
11. Miscellaneous. The Debenture is subject to the following
additional terms and conditions:
(a) If the Debenture is placed with an attorney for collection,
or if suit be instituted for collection, or if any other remedy provided
by law is pursued by the registered Holder thereof, because of any
default in the terms and conditions herein, then in either event, the
undersigned agrees to pay reasonable attorney s fees, costs and other
expenses incurred by the Holders hereof in so doing.
(b) The Debenture is transferable, subject to compliance with
the provisions hereof.
CUSA Technologies, Inc.
By_______________________________________
Its: __________
ATTEST:
______________________________
Secretary
