EXHIBIT 4.3
THIS NOTE, AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE (COLLECTIVELY, THE
"SECURITIES"), HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THE SECURITIES
ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER REGULATION S
AND/OR REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED
(THE "ACT"). THE SECURITIES ARE "RESTRICTED" AND MAY NOT BE OFFERED OR SOLD IN
THE UNITED STATES OR TO U.S. PERSONS (AS SUCH TERM IS DEFINED IN REGULATION S
PROMULGATED UNDER THE ACT) UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT,
PURSUANT TO REGULATION S AND/OR REGULATION D OR PURSUANT TO AVAILABLE EXEMPTIONS
FROM THE REGISTRATION REQUIREMENTS OF THE ACT AND THE COMPANY WILL BE PROVIDED
WITH OPINION OF COUNSEL OR OTHER SUCH INFORMATION AS IT MAY REASONABLY REQUIRE
TO CONFIRM THAT SUCH EXEMPTIONS ARE AVAILABLE. FURTHER HEDGING TRANSACTIONS
INVOLVING THE SECURITIES MAY NOT BE MADE EXCEPT IN COMPLIANCE WITH THE ACT.
DEBENTURE
PICK - UPS PLUS, INC.
5% CONVERTIBLE DEBENTURE
DUE MARCH ___, 2006
No. ___ $__________
This Debenture is issued by PICK - UPS PLUS, INC., a Delaware
corporation (the "COMPANY"), to ____________________________ (together with its
permitted successors and assigns, the "HOLDER") pursuant to exemptions from
registration under the Securities Act of 1933, as amended.
ARTICLE I.
SECTION 1.01 PRINCIPAL AND INTEREST. For value received, on March ___,
2001, the Company hereby promises to pay to the order of the Holder in lawful
money of the United States of America and in immediately available funds the
principal sum of __________________(US $________), together with interest on the
unpaid principal of this Debenture at the rate of five percent (5%) per year
(computed on the basis of a 365-day year and the actual days elapsed) from the
date of this Debenture until paid. At the Company's option, the entire principal
amount and all accrued interest shall be either (a) paid to the Holder on the
five (5) year anniversary from the date hereof or (b) converted in accordance
with Section 4.02 herein.
SECTION 1.02 OPTIONAL CONVERSION. The Holder is entitled, at its
option, to convert at any time and from time to time, until payment in full of
this Debenture, all or any part of the principal amount of the Debenture, plus
accrued interest, into shares (the "CONVERSION SHARES") of the Company's common
stock, $0.001 par value ("COMMON STOCK"), at the price per share (the
"CONVERSION PRICE") equal to either (a) Fifty Cents ($0.50) , or (b) an amount
equal to eighty percent (80%) of the lowest five (5) Closing Bid Price of the
Common Stock for the twenty (20) trading days immediately preceding the
Conversion Date (as defined herein). Subparagraphs (a) and (b) above are
individually referred to as a "CONVERSION PRICE". As used herein, "PRINCIPAL
MARKET" shall mean the Nasdaq Bulletin Board System, Nasdaq SmallCap Market, or
American Stock Exchange. If the Common Stock is not traded on a Principal
Market, the Closing Bid Price shall mean, the reported Closing Bid Price for the
Common Stock, as furnished by the National Association of Securities Dealers,
Inc., for the applicable periods. No fraction of shares or scrip representing
fractions of shares will be issued on conversion, but the number of shares
issuable shall be rounded to the nearest whole share. To convert this Debenture,
the Holder hereof shall deliver written notice thereof, substantially in the
form of EXHIBIT "A" to this Debenture, with appropriate insertions (the
"CONVERSION NOTICE"), to the Company at its address as set forth herein. The
date upon which the conversion shall be effective (the "CONVERSION DATE") shall
be deemed to be the date set forth in the Conversion Notice, provided that the
Company or the transfer agent delivers the Conversion Shares within ten (10)
business days after receipt of a Conversion Notice. If such Conversion Shares
are not delivered within such ten (10) business day period, the Conversion Date
shall be the date such shares are actually delivered to the Holder.
SECTION 1.03 RESERVATION OF COMMON STOCK. The Company shall reserve and
keep available out of its authorized but unissued shares of Common Stock, solely
for the purpose of effecting the conversion of this Debenture, such number of
shares of Common Stock as shall from time to time be sufficient to effect such
conversion, based upon the Conversion Price. If at any time the Company does not
have a sufficient number of Conversion Shares authorized and available, then the
Company shall call and hold a special meeting of its stockholders within thirty
(30) days of that time for the sole purpose of increasing the number of
authorized shares of Common Stock.
SECTION 1.04 REGISTRATION RIGHTS. The Company is obligated to register
the resale of the Conversion Shares under the Securities Act of 1933, as
amended, pursuant to the terms of a Registration Rights Agreement, between the
Company and the Holder of even date herewith (the "REGISTRATION RIGHTS
AGREEMENT").
SECTION 1.05 INTEREST PAYMENTS. The interest so payable will be paid at
the time of maturity or conversion to the person in whose name this Debenture is
registered. At the time such interest is payable, the Company, in its sole
discretion, may elect to pay interest in cash (via wire transfer or certified
funds) or in the form of Common Stock. In the event of default, as described in
Article III Section 3.01 hereunder, the Holder may elect that the interest be
paid in cash (via wire transfer or certified funds) or in the form of Common
Stock. If paid in the form of Common Stock, the amount of stock to be issued
will be calculated as follows: the value of the stock shall be the Closing Bid
Price on: (i) the date the interest payment is due; or (ii) if the interest
payment is not made when due, the date the interest payment is made. A number of
shares of Common Stock with a value equal to the amount of interest due shall be
issued. No cash (via wire transfer or certified funds) or in the form of Common
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Stock. If paid in the form of Common Stock, the amount of stock to be issued
will be calculated as follows: the value of the stock shall be the Closing Bid
Price on: (i) the date the interest payment is due; or (ii) if the interest
payment is not made when due, the date the interest payment is made. A number of
shares of Common Stock with a value equal to the amount of interest due shall be
issued. No fractional shares will be issued; therefore, in the event that the
value of the Common Stock per share does not equal the total interest due, the
Company will pay the balance in cash.
SECTION 1.06 PAYING AGENT AND REGISTRAR. Initially, the Company will
act as paying agent and registrar. The Company may change any paying agent,
registrar, or Company-registrar by giving the Holder not less than ten (10)
business days' written notice of its election to do so, specifying the name,
address, telephone number and facsimile number of the paying agent or registrar.
The Company may act in any such capacity.
SECTION 1.07 SUBORDINATED NATURE OF DEBENTURE. This Debenture and all
payments hereon, including principal or interest, shall be subordinate and
junior in right of payment to all accounts payable of the Company incurred in
the ordinary course of business and/or bank debt of the Company not to exceed
$250,000.
ARTICLE II.
SECTION 2.01 AMENDMENTS AND WAIVER OF DEFAULT. The Debenture may be
amended with the consent of the Holder. Without the consent of the Holder, the
Debenture may be amended to cure any ambiguity, defect or inconsistency, to
provide for assumption of the Company obligations to the Holder or to make any
change that does not adversely affect the rights of the Holder.
ARTICLE III.
SECTION 3.01 EVENTS OF DEFAULT. An Event of Default is defined as
follows: (a) failure by the Company to pay amounts due hereunder within fifteen
(15) business days of the date of maturity of this Debenture; (b) failure by the
Company to advise its transfer agent to issue Common Stock to the Holder within
ten (10) business days of the Company's receipt of the attached Notice of
Conversion from Holder; (c) failure by the Company for thirty (30) business days
after notice to it to comply with any of its other agreements in the Debenture;
(d) events of bankruptcy or insolvency; (e) a breach by the Company of its
obligations under the Registration Rights Agreement which is not cured by the
Company within fifteen (15) business days after receipt of written notice
thereof. The Holder may not enforce the Debenture except as provided herein.
SECTION 3.02 FAILURE TO ISSUE UNRESTRICTED COMMON STOCK. As indicated
in Article III Section 3.01, a breach by the Company of its obligations under
the Registration Rights Agreement shall be deemed an Event of Default, which if
not cured within ten (10) days, shall entitle the Holder accelerated full
repayment of all debentures outstanding. The Company acknowledges that failure
to honor a Notice of Conversion shall cause hardship to the Holder.
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ARTICLE IV.
SECTION 4.01 RIGHTS AND TERMS OF CONVERSION. This Debenture, in whole
or in part, may be converted at any time following the date of closing, into
shares of Common Stock at a price equal to the Conversion Price as described in
Section 1.02 above.
SECTION 4.02 RE-ISSUANCE OF DEBENTURE. When the Holder elects to
convert a part of the Debenture, then the Company shall reissue a new Debenture
in the same form as this Debenture to reflect the new principal amount.
SECTION 4.03 LIMITATION ON RIGHT AND POWER TO EXERCISE. Any provision
in this Debenture or any other document to the contrary not withstanding, the
Holder shall not have the right or power to convert this Debenture into Common
Stock, either in whole or in part, and any attempt to do so shall be void, if,
after having given effect to such conversion, the Holder shall be or shall be
deemed to be the beneficial owner of ten percent (10%) or more of the then
outstanding Common Stock within the meaning or for the purposes of Section 13(d)
or 13(g) of the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), or as the term "BENEFICIAL OWNER" is defined in Rule 13d-3 of the Act.
SECTION 4.04 TERMINATION OF CONVERSION RIGHTS. The Holder's right to
convert the Debenture into the Common Stock in accordance with paragraph 4.01
shall terminate on the date that is the five (5) year anniversary from the date
hereof and this Debenture shall be automatically converted on that date in
accordance with the formula set forth in Section 4.01 hereof, and the
appropriate shares of Common Stock and amount of interest shall be issued to the
Holder.
ARTICLE V.
SECTION 5.01 ANTI-DILUTION. In the event that the Company shall at any
time subdivide the outstanding shares of Common Stock, or shall issue a stock
dividend on the outstanding Common Stock, the Conversion Price in effect
immediately prior to such subdivision or the issuance of such dividend shall be
proportionately decreased, and in the event that the Company shall at any time
combine the outstanding shares of Common Stock, the Conversion Price in effect
immediately prior to such combination shall be proportionately increased,
effective at the close of business on the date of such subdivision, dividend or
combination as the case may be.
SECTION 5.02 CONSENT OF HOLDER TO SELL COMMON STOCK. So long as any of
the principal of or interest on this Note remains unpaid and unconverted, the
Company shall not, without the prior consent of the Holder, issue or sell (i)
any Common Stock without consideration or for a consideration per share less
than its fair market value determined immediately prior to its issuance, or (ii)
issue or sell any warrant, option, right, contract, call, or other security or
instrument granting the holder thereof the right to acquire Common Stock without
consideration or for a consideration per share less than such Common Stock's
fair market value determined immediately prior to its issuance. Nontheless,
nothing contained herein shall exclude the Company from issuing Common Stock to
Cornell Capital Partners, L.P. pursuant to that Certain Equity Line of Credit
Agreement dated March 29, 2001.
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ARTICLE VI.
SECTION 6.01 NOTICE. Notices regarding this Debenture shall be sent to
the parties at the following addresses, unless a party notifies the other
parties, in writing, of a change of address:
If to the Company, to: Pick - Ups Plus, Inc.
0000 Xxxxxx Xxxxxxxxx
Xxxxx, Xxxx 00000
Attention: Xxxx Xxxxxxxxxx
President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to: Xxxx X. Xxxxxxx P.C.
000-00 Xxxxx Xxxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Holder:
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SECTION 6.02 GOVERNING LAW. This Debenture shall be deemed to be made
under and shall be construed in accordance with the laws of the State of New
York without giving effect to the principals of conflict of laws thereof. Each
of the parties consents to the jurisdiction of the U.S. District Court sitting
in the Southern District of the State of New York or the state courts of the
State of New York sitting in Manhattan in connection with any dispute arising
under this Debenture and hereby waives, to the maximum extent permitted by law,
any objection, including any objection based on FORUM NON CONVENIENS to the
bringing of any such proceeding in such jurisdictions.
SECTION 6.03 SEVERABILITY. The invalidity of any of the provisions of
this Debenture shall not invalidate or otherwise affect any of the other
provisions of this Debenture, which shall remain in full force and effect.
SECTION 6.04 ENTIRE AGREEMENT AND AMENDMENTS. This Debenture represents
the entire agreement between the parties hereto with respect to the subject
matter hereof and there are no representations, warranties or commitments,
except as set forth herein. This Debenture may be amended only by an instrument
in writing executed by the parties hereto.
SECTION 6.05 COUNTERPARTS. This Debenture may be executed in multiple
counterparts, each of which shall be an original, but all of which shall be
deemed to constitute on instrument.
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IN WITNESS WHEREOF, with the intent to be legally bound hereby, the
Company as executed this Debenture as of the date first written above.
PICK - UPS PLUS, INC.
By:
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Name: Xxxx Xxxxxxxxxx
Title: President
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EXHIBIT "A"
NOTICE OF CONVERSION
(TO BE EXECUTED BY THE HOLDER IN ORDER TO CONVERT THE NOTE)
TO:
The undersigned hereby irrevocably elects to convert
$_________________________ of the principal amount of the above Note into Shares
of Common Stock of Pick - Ups Plus, Inc., according to the conditions stated
therein, as of the Conversion Date written below.
CONVERSION DATE:
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APPLICABLE CONVERSION PRICE:
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SIGNATURE:
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NAME:
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ADDRESS:
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A-1
