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EXHIBIT 4.2
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XXXXXXX FINANCE COMPANY, INC.
FORM OF SUBORDINATED DEBENTURE
(FORM USED ON OR BEFORE 4/1/98)
_______________, Georgia _____________, 19___
From __________ XXXXXXX FINANCE COMPANY (the "Company") promises to pay
________________________________________________ $_____________
____________________________________________________ DOLLARS at
the main office of the Company, 000 Xxxxxx Xxxxxx, Xxxxx Xxxxx, Xxxxxxx, and to
pay interest thereon at the rate of _____% per annum, calculated on a simple
interest basis, for a period of _______________ from date hereof and for each
such successive period (the interest adjustment period) thereafter at an annual
rate, calculated on a simple interest basis, which shall be determined at the
beginning of each interest adjustment period. Interest will be earned daily and
payable at any time at the holder's request delivered by mail or in person at
the Company's main office.
1. REDEMPTION. This debenture may be redeemed by the Company prior
to maturity for a redemption price equal to the principal amount plus any
unpaid interest thereon to date of redemption. Notice of redemption shall be
given by mail to the holder not less than 30 nor more than 60 days prior to the
date fixed for redemption.
2. OPTIONAL REDEMPTION. At the request of the holder, the Company
will redeem this Debenture at the end of any interest adjustment period for a
redemption price equal to the principal amount plus any unpaid interest thereon
to date of redemption. At the request of the holder, the Company may, at its
option, redeem this Debenture during any interest adjustment period for a
redemption price equal to the principal amount plus interest thereon at the
rate of one-half the stated rate on this Debenture. If the holder dies before
maturity, the Company may, at its option, redeem this Debenture for a
redemption price equal to the principal amount plus any unpaid interest thereon
to date of redemption.
3. EXTENSION OF MATURITY. The maturity of this Debenture will be
automatically extended from the original maturity date for a period equal to
the original term of the Debenture unless the holder submits this Debenture for
redemption within 15 days after its maturity or the Company tenders the amount
due the holder within 15 days after maturity. In the event of such an
extension, all provisions of the Debenture shall remain unchanged with the
exception of the interest rate which will be changed in accordance with the
interest adjustment provision. If the Company does not plan to tender payment,
it will send the holder a notice of this extension provision at least 30 days
prior to the maturity date.
4. SUBORDINATION. The Debentures are subordinated to Senior Debt,
which is any Debt of the Company except Debt that by its terms is not senior in
right to the payment of the Debentures. Debt is any indebtedness for borrowed
money or any guarantee of such indebtedness. Senior Debt must be paid before
the Debentures may be paid. The Company agrees, and each Debentureholder by
accepting a Debenture, agrees to the subordination.
5. AMENDMENTS AND WAIVERS. Subject to certain exceptions, the
Debentures may be amended with the consent of the holders of at least 66-2/3%
in principal amount of the Debentures, and any existing
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default may be waived with the consent of the holders of a majority in
principal amount of the Debentures. Without the consent of any Debentureholder,
the Debentures may be amended to cure any ambiguity, defect or inconsistency,
to provide for assumption of Company obligations to Debentureholders or to make
any change that does not adversely affect the rights of any Debentureholder.
6. DEFAULTS AND REMEDIES. An Event of Default is: default for 30
days in payment of interest on the Debentures; default in payment of principal
on them; failure by the Company for 60 days after notice of it from holders of
25% in principal amount of the debentures to comply with any of its other
agreements in the Debentures; and the filing by or against the Company of A
bankruptcy or insolvency proceeding which remains unstayed and in effect for 60
days. If an Event of Default occurs and is continuing, the holders of at least
25% in principal amount of the Debentures may declare all the Debentures to be
due and payable immediately.
7. TRANSFER. This Debenture, having been registered at the office of
the Company in Union Point, Georgia, at the time of issue, is transferrable at
such office only by the registered holder hereof in person or by an attorney
duly authorized in writing upon surrender of this Debenture; and upon such
transfer a new registered Debenture for a like principal amount will be issued
to the transferee in exchange herefor. The new Debenture will be dated as of
the date of the old Debenture, and will bear the same maturity date. An
indemnity bond may be required by the Company in an amount sufficient in the
judgment of the Company to protect the Company from any loss it might suffer
upon the issuance of a replacement Debenture.
8. OWNERS. The registered holder of a Debenture may be treated as
its owner for all purposes.
9. NO RECOURSE. A director, officer, employee or stockholder, as
such, of the Company shall not have any liability for any obligations of the
Company under the Debentures or for any claim based on, in respect of, or by
reason of such obligations or their creation. Each Debentureholder by accepting
a Debenture waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Debentures.
THIS DEBENTURE IS NOT A BANK OBLIGATION AND IS NOT INSURED BY THE FDIC.
