ANNEX I
TO
SECURITIES PURCHASE AGREEMENT
(PROTOTYPE FOR EACH ISSUANCE)
FORM OF DEBENTURE
THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF
1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
SOLD OR OFFERED FOR SALE IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT FOR THE SECURITIES OR AN OPINION OF COUNSEL OR OTHER EVIDENCE
ACCEPTABLE TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
No.____________ US $ ___________
6% SECURED CONVERTIBLE DEBENTURE DUE FEBRUARY 28, 2005
THIS DEBENTURE is one of a duly authorized issue of up to $2,000,000 in
Debentures of URANIUM POWER CORPORATION a corporation organized and existing
under the laws of the State of Colorado (the "Company") designated as its 6%
Secured Convertible Debentures- Series 2004 B
FOR VALUE RECEIVED, the Company promises to pay to ______________ , the
registered holder hereof (the "Holder"), the principal sum of __________________
and 00/100 Dollars (US $__________________ ) on February 28, 2005 (the "Maturity
Date") and to pay interest on the principal sum outstanding from time to time in
arrears at the rate of 6% per annum, accruing from September 14, 2004, the date
of initial issuance of this Debenture (the "Issue Date"), on the date (each, an
"Interest Payment Date") which is the earlier of (i) a Conversion Date (as
defined below) or (ii) the Maturity Date, as the case may be. Accrual of
interest shall commence on the first such business day to occur after the Issue
Date and shall continue to accrue on a daily basis until payment in full of the
principal sum has been made or duly provided for. Additional provisions
regarding the payment of interest are provided in Section 4(D) below.
This Debenture is being issued pursuant to the terms of the Securities
Purchase Agreement, dated September 14, 2004 (the "Securities Purchase
Agreement"), to which the Company and the Holder (or the Holder's predecessor in
interest) are parties. Capitalized terms not otherwise defined herein shall have
the meanings ascribed to them in the Securities Purchase Agreement.
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This Debenture is subject to the following additional provisions:
1. The Debentures will initially be issued in denominations
determined by the Company, but are exchangeable for an equal aggregate principal
amount of Debentures of different denominations, as requested by the Holder
surrendering the same. No service charge will be made for such registration or
transfer or exchange.
2. The Company shall be entitled to withhold from all payments of
principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States and Canadian
income tax laws or other applicable laws at the time of such payments, and
Holder shall execute and deliver all required documentation in connection
therewith.
3. This Debenture has been issued subject to investment
representations of the original purchaser hereof and may be transferred or
exchanged only in compliance with the Securities Act of 1933, as amended (the
"Act"), and other applicable state and foreign securities laws and the terms of
the Securities Purchase Agreement . In the event of any proposed transfer of
this Debenture, the Company may require, prior to issuance of a new Debenture in
the name of such other person, that it receive reasonable transfer documentation
that is sufficient to evidence that such proposed transfer complies with the Act
and other applicable state and foreign securities laws and the terms of the
Securities Purchase Agreement. Prior to due presentment for transfer of this
Debenture, the Company and any agent of the Company may treat the person in
whose name this Debenture is duly registered on the Company's Debenture Register
as the owner hereof for the purpose of receiving payment as herein provided and
for all other purposes, whether or not this Debenture be overdue, and neither
the Company nor any such agent shall be affected by notice to the contrary.
4. A. (i) At any time on or after the Issue Date and prior to
the time this Debenture is paid in full in accordance with its terms (including
without limitation after the Maturity Date and after the occurrence of an Event
of Default, as defined below), the Holder of this Debenture is entitled, at its
option, subject to the following provisions of this Section 4, to convert this
Debenture at any time into shares of Common Stock of the Company at a conversion
price for each share of Common Stock ("Conversion Price") equal to the lower of
(i) 70% of the average Closing Bid Price as reported, by Bloomberg, LP for the
five (5) trading days ending on the day prior to the Conversion Date or (ii)
$.45 per share. Notwithstanding the foregoing, until the Maturity Date or the
occurrence of an Event of Default hereunder, the Conversion Price shall not be
below $.15 per share.
(ii) Notwithstanding any other provision of this Debenture
to the contrary, if, on the Maturity Date or the occurrence of an Event of
Default hereunder, there is an Unconverted Debenture (as defined below), the
Holder shall have the option to require payment of the principal and accrued
interest (through the actual date of payment) of Unconverted Debenture (the
"Maturity Amount") either (i) in cash (and such cash shall be applied first to
interest and then to principal or (ii) to the extent not paid in cash as
provided in clause (i), by delivering to the Holder such number of Conversion
Shares equal to such unpaid Maturity Amount divided by the Conversion Price then
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in effect (such Conversion Shares, the "Maturity Date Shares"). The option to
pay any or all of the Maturity Amount by the issuance of Maturity Date Shares
shall be subject to the following conditions: (x) the Registration Statement
covering such shares must be effective at the time the Maturity Date Shares are
issued and (y) the issuance of the Maturity Date Shares shall not exceed the
amount contemplated by Section 4(C) hereof. In addition the Holder shall be
entitled to benefits of the Security Interest as more particularly described in
paragraph 12 hereof.
B. Conversion shall be effectuated by faxing a Notice of
Conversion (as defined below) to the Company as provided in this paragraph. The
Notice of Conversion shall be executed by the Holder of this Debenture and shall
evidence such Holder's intention to convert this Debenture or a specified
portion hereof in the form annexed hereto as Exhibit A. If paid in Common Stock
as contemplated hereby, interest accrued or accruing from the Issue Date to the
relevant Interest Payment Date shall be paid in Common Stock at the Conversion
Price applicable as of such Interest Payment Date. No fractional shares of
Common Stock 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. The date on which notice of conversion is given (the "Conversion
Date") shall be deemed to be the date on which the Holder faxes or otherwise
delivers the conversion notice ("Notice of Conversion") to the Company so that
it is received by the Company on or before such specified date, provided that,
if such conversion would convert the entire remaining principal of this
Debenture, the Holder shall deliver to the Company the original Debentures being
converted no later than five (5) business days thereafter. Facsimile delivery of
the Notice of Conversion shall be accepted by the Company at facsimile number
(000) 000-0000; Attn: Xxxxxxxx Xxxxxxxxx and to (000) 000-0000 Attn: Xxxxxx Xxx.
Certificates representing Common Stock upon conversion ("Conversion
Certificates") will be delivered to the Holder at the address specified in the
Notice of Conversion (which may be the Holder's address for notices as
contemplated by the Securities Purchase Agreement or a different address), via
express courier, by electronic transfer or otherwise, within three (3) business
days (such third business day, the "Delivery Date") after the date on which the
Notice of Conversion is delivered to the Company as contemplated in this
paragraph B, and, if interest is paid by Common Stock, the Interest Payment
Date. The Holder shall be deemed to be the holder of the shares issuable to it
in accordance with the provisions of this Section 4(B) on the Conversion Date.
C. Notwithstanding any other provision hereof or of any of the
other Transaction Agreements, in no event (except (i) as specifically provided
herein as an exception to this provision, or (ii) while there is outstanding a
tender offer for any or all of the shares of the Company's Common Stock) shall
the Holder be entitled to convert any portion of this Debenture, or shall the
Company have the obligation to convert such Debenture (and the Company shall not
have the right to pay interest hereon in shares of Common Stock) to the extent
that, after such conversion or issuance of stock in payment of interest, the sum
of (1) the number of shares of Common Stock beneficially owned by the Holder and
its affiliates (other than shares of Common Stock which may be deemed
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beneficially owned through the ownership of the unconverted portion of the
Debentures or other convertible securities or of the unexercised portion of
warrants or other rights to purchase Common Stock), and (2) the number of shares
of Common Stock issuable upon the conversion of the Debentures with respect to
which the determination of this proviso is being made, would result in
beneficial ownership by the Holder and its affiliates of more than 4.99% of the
outstanding shares of Common Stock (after taking into account the shares to be
issued to the Holder upon such conversion). For purposes of the proviso to the
immediately preceding sentence, beneficial ownership shall be determined in
accordance with Section 13(d) of the Securities Exchange Act of 1934, as
amended, except as otherwise provided in clause (1) of such sentence. The
Holder, by its acceptance of this Debenture, further agrees that if the Holder
transfers or assigns any of the Debentures to a party who or which would not be
considered such an affiliate, such assignment shall be made subject to the
transferee's or assignee's specific agreement to be bound by the provisions of
this Section 4(C) as if such transferee or assignee were the original Holder
hereof. Nothing herein shall preclude the Holder from disposing of a sufficient
number of other shares of Common Stock beneficially owned by the Holder so as to
thereafter permit the continued conversion of this Debenture.
D. (i) Subject to the terms of Section 4(C) and to the other
terms of this Section 4(D), interest on the principal amount of this Debenture
converted pursuant to a Notice of Conversion shall be due and payable, at the
option of the Company, in cash or Common Stock on the Interest Payment Date.
(ii) If the interest is to be paid in cash, the Company
shall make such payment within three (3) business days of the Interest Payment
Date. If the interest is not paid by such third business day, the interest must
be paid in Common Stock in accordance with the provisions of Section 4(D)(i)
hereof, unless the Holder consents otherwise in each specific instance.
(iii) Notwithstanding the foregoing, the Company's right to
issue shares in payment of such interest is applicable if, and only if, there is
then in effect a current Registration Statement covering the shares to be issued
to the Holder in payment of such interest.
(iv) The number of shares of Common Stock to be issued in
payment of such interest shall be determined by dividing the dollar amount of
the interest to be so paid by the average of the Closing Bid Prices for the five
(5) trading days, as reported by Bloomberg, LP ending on the day prior to the
Interest Payment Such Common Stock shall be delivered to the Holder, or per
Holder's instructions, on the Delivery Date for the related Conversion
Certificates pursuant to Section 4(B) hereof.
(iv) If the Company elects to have the interest paid in
cash, the Company shall make such payment within three (3) business days of the
Interest Payment Date. If such payment is not made in cash by such date, it
shall be deemed that, subject to the provisions of Section 4(C) hereof, the
Company has elected to pay the interest in stock, if, but only if, the
Registration Statement covering the shares being issued is effective on the date
such shares are issued.
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E. (i) The Company shall have the right to redeem all, but
not less than all of the Debentures for which a Notice of Conversion has not
theretofore been submitted by delivering a Notice of Redemption to the Holder of
the Debenture.
(ii) The redemption price shall be calculated at 125% of
the principal amount of the Debenture, plus accrued and unpaid interest, and
shall be paid to the Holder within ten (10) business days from the date of the
receipt of the Notice of Redemption by wire transfer , except with respect to
any Debentures for which a Notice of Conversion is submitted to the Company,
within seven (7) business days of the Holder's receipt of the Company's Notice
of Redemption. .
5. Subject to the terms of the Securities Purchase Agreement, no
provision of this Debenture shall alter or impair the obligation of the Company,
which is absolute and unconditional, to pay the principal of, and interest on,
this Debenture at the time, place, and rate, and in the coin or currency, herein
prescribed. This Debenture and all other Debentures now or hereafter issued of
similar terms are direct obligations of the Company.
6. No recourse shall be had for the payment of the principal of,
or the interest on, this Debenture, or for any claim based hereon, or otherwise
in respect hereof, against any incorporator, shareholder, officer or director,
as such, past, present or future, of the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
7. All payments contemplated hereby to be made "in cash" shall be
made in immediately available good funds of United States of America currency by
wire transfer to an account designated in writing by the Holder to the Company
(which account may be changed by notice similarly given). All payments of cash
and each delivery of shares of Common Stock issuable to the Holder as
contemplated hereby shall be made to the Holder at the address last appearing on
the Debenture Register of the Company as designated in writing by the Holder
from time to time; except that the Holder can designate, by notice to the
Company, a different delivery address for any one or more specific payments or
deliveries.
8. If, for as long as this Debenture remains outstanding, the
Company enters into a merger (other than where the Company is the surviving
entity) or consolidation with another corporation or other entity or a sale or
transfer of all or substantially all of the assets of the Company to another
person (collectively, a "Sale"), the Company will require, in the agreements
reflecting such transaction, that the surviving entity expressly assume the
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obligations of the Company hereunder. Notwithstanding the foregoing, if the
Company enters into a Sale and the holders of the Common Stock are entitled to
receive stock, securities or property in respect of or in exchange for Common
Stock, then as a condition of such Sale, the Company and any such successor,
purchaser or transferee will agree that the Debenture may thereafter be
converted on the terms and subject to the conditions set forth above into the
kind and amount of stock, securities or property receivable upon such merger,
consolidation, sale or transfer by a holder of the number of shares of Common
Stock into which this Debenture might have been converted immediately before
such merger, consolidation, sale or transfer, subject to adjustments which shall
be as nearly equivalent as may be practicable. In the event of any such proposed
Sale, (i) the Holder hereof shall have the right to convert by delivering a
Notice of Conversion to the Company within fifteen (15) days of receipt of
notice of such Sale from the Company, except that Section 4(C) shall not apply
to such conversion.
9. If, at any time while any portion of this Debenture remains
outstanding, the Company spins off or otherwise divests itself of a part of its
business or operations or disposes of all or of a part of its assets in a
transaction (the "Spin Off") in which the Company, in addition to or in lieu of
any other compensation received and retained by the Company for such business,
operations or assets, causes securities of another entity (the "Spin Off
Securities") to be issued to security holders of the Company, the Company shall
cause (i) to be reserved Spin Off Securities equal to the number thereof which
would have been issued to the Holder had all of the Holder's Debentures
outstanding on the record date (the "Record Date") for determining the amount
and number of Spin Off Securities to be issued to security holders of the
Company (the "Outstanding Debentures") been converted as of the close of
business on the trading day immediately before the Record Date (the "Reserved
Spin Off Shares"), and (ii) to be issued to the Holder on the conversion of all
or any of the Outstanding Debentures, such amount of the Reserved Spin Off
Shares equal to (x) the Reserved Spin Off Shares multiplied by (y) a fraction,
of which (I) the numerator is the principal amount of the Outstanding Debentures
then being converted, and (II) the denominator is the principal amount of the
Outstanding Debentures
10. If, at any time while any portion of this Debenture remains
outstanding, the Company effectuates a stock split or reverse stock split of its
Common Stock or issues a dividend on its Common Stock consisting of shares of
Common Stock, the Conversion Price and any other amounts calculated as
contemplated hereby or by any of the other Transaction Agreements shall be
equitably adjusted to reflect such action. By way of illustration, and not in
limitation, of the foregoing, (i) if the Company effectuates a 2:1 split of its
Common Stock, thereafter, with respect to any conversion for which the Company
issues shares after the record date of such split, the Conversion Price shall be
deemed to be one-half of what it had been immediately prior to such split; (ii)
if the Company effectuates a 1:10 reverse split of its Common Stock, thereafter,
with respect to any conversion for which the Company issues shares after the
record date of such reverse split, the Conversion Price shall be deemed to be
ten times what it had been calculated to be immediately prior to such split; and
(iii) if the Company declares a stock dividend of one share of Common Stock for
every 10 shares outstanding, thereafter, with respect to any conversion for
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which the Company issues shares after the record date of such dividend, the
Conversion Price shall be deemed to be such amount multiplied by a fraction, of
which the numerator is the number of shares (10 in the example) for which a
dividend share will be issued and the denominator is such number of shares plus
the dividend share(s) issuable or issued thereon (11 in the example).
11. The Holder of the Debenture, by acceptance hereof, agrees that
this Debenture is being acquired for investment and that such
Holder will not offer, sell or otherwise dispose of this Debenture or the shares
of Common Stock issuable upon conversion thereof except under circumstances
which will not result in a violation of the Act or any applicable state Blue Sky
or foreign laws or similar laws relating to the sale of securities.
12. 12.1 As continuing security for the payment and performance of
all debts, liabilities and obligations hereunder of the Company to the Holder,
howsoever arising (present and future, absolute and contingent) (the
"Indebtedness"), the Company grants, assigns, mortgages, pledges and charges, as
and by way of a specific mortgage, pledge and charge, and grants a Subordinate
Security Interest (the "Security Interest") to and in favour of the Holder in
the undertaking of the Company and in all present and after acquired personal
property of the Company and in all proceeds and renewals thereof, accessions
thereto and substitutions therefor (the "Collateral"). The Company warrants and
acknowledges to and in favour of the Holder that:
(a) the parties intend the Security Interest hereby
constituted in its existing property to attach upon execution and delivery
hereof;
(b) the parties intend the Security Interest created in
after-acquired property of the Company to attach at the same time as it acquires
rights in the said after-acquired property; and
(c) value has been given.
The Holder acknowledges that the Security Interest granted hereunder
shall rank subordinate to the Security Interests granted to the holders of other
debentures issued in January 2004 and March 2004.
12.2 Until Default, or until the Holder provides written notice to
the contrary to the Company, the Company may deal with the Collateral in the
ordinary course of the Company's business in any manner not inconsistent with
the provisions of this Agreement, provided that the Company may not, and agrees
that it will not, without the prior written consent of the Holder:
(a) Sell or dispose of any of the Collateral otherwise than for
fair market value in the ordinary course of the Company's business as it is
presently conducted and for the purpose of carrying on that business, or
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(b) Create or incur any Security Interest, lien, assessment, or
encumbrance upon any of the Collateral which ranks or purports to rank, or is
capable of being enforced in priority to or equally with the Security Interest
granted under this Agreement, except for other debentures issued concurrently
herewith and Purchase Money Security Interests and Leases incurred in the
ordinary course of the Company's business.
12.3 On Default:
(a) The Holder may seize or otherwise take possession of
the Collateral or any part thereof and sell the same by public or private sale
at such price and upon such terms as the Holder in its sole discretion may
determine and the proceeds of such sale less all costs and expenses of the
Holder (including costs as between a solicitor and its own client on a full
indemnity basis) shall be applied on the Indebtedness and the surplus, if any,
shall be disposed of according to law;
(b) The Holder has the right to enforce this Agreement by
any method provided for in this Agreement and as permitted by law, and to
dispose of the Collateral by any method permitted by law, including disposal by
lease or deferred payment;
(c) The Holder may appoint any person or persons to be a
Receiver of any Collateral, and may remove any person so appointed and appoint
another in his stead. The term "Receiver" as used in this Agreement includes a
Receiver-Manager;
(d) Any Receiver will have the power:
(i) To take possession of any Collateral and for
that purpose to take any proceedings, in the name of
the Company or otherwise;
(ii) To carry on or concur in carrying on the
business of the Company;
(iii) To sell or lease any Collateral;
(iv) To make any arrangement or compromise which
it may think expedient in the interest of the Holder;
(v) To pay all liabilities and expenses
connected with the Collateral, including the cost of
insurance and payment of taxes or other charges
incurred in obtaining, maintaining possession of and
preserving the Collateral, and the same shall be
added to the Indebtedness and secured by the
Collateral;
(vi) To hold as additional security any increase
or profits resulting from the Collateral;
(vii) To exercise all rights that the Holder has
under this Agreement or otherwise at law;
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(viii) With the consent of the Holder in writing,
to borrow money for the purpose of carrying on the
business of the Company or for the maintenance of the
Collateral or any part thereof or for other purposes
approved by the Holder, and any amount so borrowed
together with interest thereon shall form a charge
upon the Collateral in priority to the Security
Interest created by this Agreement;
(ix) To enter into and to occupy any premises in
which the Company has any interest;
(e) The Company hereby appoints each Receiver appointed
by the Holder to be its attorney to effect the sale or lease of any Collateral
and any deed, lease, agreement or other document signed by a Receiver under his
seal pursuant hereto will have the same effect as if it were under the seal of
the Company;
(f) Any Receiver will be deemed to be the agent of the
Company, and the Company will be solely responsible for his acts or defaults and
for his remuneration and expenses, and the Holder will not be in any way
responsible for any misconduct or negligence on the part of any Receiver;
(g) Neither the Holder nor the Sheriff will be required
to take any steps to preserve any rights against other parties pursuant to any
Chattel Paper, Security, or Instrument constituting the Collateral or any part
of it;
(h) Neither the Holder nor the Sheriff is required to
keep Collateral identifiable;
(i) The Holder may use the Collateral in any manner as it
in its sole discretion deems advisable.
13. This Debenture shall be governed by and construed in
accordance with the laws of the State of New York. Each of the parties consents
to the exclusive jurisdiction of the federal courts whose districts encompass
any part of the City of New York or the state courts of the State of New York
sitting in the City of New York in connection with any dispute arising under
this Agreement and hereby waives, to the maximum extent permitted by law, any
objection, including any objection based on forum non coveniens, to the bringing
of any such proceeding in such jurisdictions. To the extent determined by such
court, the Company shall reimburse the Holder for any reasonable legal fees and
disbursements incurred by the Holder in enforcement of or protection of any of
its rights under any of this Debenture.
14. The Company and the Holder hereby waive a trial by jury in any
action, proceeding or counterclaim brought by either of the Parties hereto
against the other in respect of any matter arising out of or in connection with
this Debenture.
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15. The following shall constitute an "Event of Default":
a. The Company shall default in the payment of principal
or interest on this Debenture, any Redemption Amount due hereunder, any penalty
amount due under the Registration Rights Agreement or any other amount due, and,
in any such instance, the same shall continue for a period of five (5) business
days; or
b. Any of the representations or warranties made by the
Company herein, in the Securities Purchase Agreement or any of the other
Transaction Agreements or in any certificate or financial or other written
statements heretofore or hereafter furnished by the Company in connection with
the execution and delivery of this Debenture or the Securities Purchase
Agreement shall be false or misleading in any material respect at the time made;
or
c. Subject to the terms of the Securities Purchase
Agreement, the Company fails to authorize or to cause its Transfer Agent to
issue shares of Common Stock upon exercise by the Holder of the conversion
rights of the Holder in accordance with the terms of this Debenture, fails to
transfer or to cause its Transfer Agent to transfer any certificate for shares
of Common Stock issued to the Holder upon conversion of this Debenture and when
required by this Debenture or the Registration Rights Agreement, and such
transfer is otherwise lawful, or fails to remove any restrictive legend on any
certificate or fails to cause its Transfer Agent to remove such restricted
legend, in each case where such removal is lawful, as and when required by this
Debenture, the Agreement or the Registration Rights Agreement, and any such
failure shall continue uncured for ten (10) business days; or
d. The Company shall fail to perform or observe, in any
material respect, any other covenant, term, provision, condition, agreement or
obligation of any Debenture in this series, and such failure shall continue
uncured for a period of thirty (30) days after written notice from the Holder of
such failure; or
e. The Company shall fail to perform or observe, in any
material respect, any covenant, term, provision, condition, agreement or
obligation of the Company under any of the Transaction Agreements (including the
Pledge Agreement) and such failure shall continue uncured for a period of ten
(10) days after written notice from the Holder of such failure; or
f. The Company shall (1) admit in writing its inability
to pay its debts generally as they mature; (2) make an assignment for the
benefit of creditors or commence proceedings for its dissolution; or (3) apply
for or consent to the appointment of a trustee, liquidator or receiver for its
or for a substantial part of its property or business; or
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g. A trustee, liquidator or receiver shall be appointed
for the Company or for a substantial part of its property or business without
its consent and shall not be discharged within sixty (60) days after such
appointment; or
h. Any governmental agency or any court of competent
jurisdiction at the instance of any governmental agency shall assume custody or
control of the whole or any substantial portion of the properties or assets of
the Company and shall not be dismissed within sixty (60) days thereafter; or
i. Any money judgment, writ or warrant of attachment, or
similar process in excess of Two Hundred Thousand ($200,000) Dollars in the
aggregate shall be entered or filed against the Company or any of its properties
or other assets and shall remain unpaid, unvacated, unbonded or unstayed for a
period of sixty (60) days or in any event later than five (5) days prior to the
date of any proposed sale thereunder; or
j. Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any bankruptcy law or any law
for the relief of debtors shall be instituted by or against the Company and, if
instituted against the Company, shall not be dismissed within sixty (60) days
after such institution or the Company shall by any action or answer approve of,
consent to, or acquiesce in any such proceedings or admit the material
allegations of, or default in answering a petition filed in any such proceeding;
or
k. The Company shall have its Common Stock suspended
from trading on, or delisted from, the Principal Trading Market for in excess of
ten (10) trading days; or
l. Any event defined in another provision of this
Debenture as an Event of Default shall have occurred.
If an Event of Default shall have occurred and the Holder has provided written
notice that the Holder has declared the Company in default, then, or at any time
thereafter, and in each and every such case, unless such Event of Default shall
have been waived in writing by the Holder (which waiver shall not be deemed to
be a waiver of any subsequent default) at the option of the Holder and in the
Holder's sole discretion, the Holder may consider this Debenture immediately due
and payable (and the Maturity Date shall be accelerated accordingly), without
presentment, demand, protest or notice of any kinds, all of which are hereby
expressly waived, anything herein or in any note or other instruments contained
to the contrary notwithstanding, and the Holder may immediately enforce any and
all of the Holder's rights and remedies provided herein or any other rights or
remedies afforded by law.
16. Nothing contained in this Debenture shall be construed as
conferring upon the Holder the right to vote or to receive dividends or to
consent or receive notice as a shareholder in respect of any meeting of
shareholders or any rights whatsoever as a shareholder of the Company, unless
and to the extent converted in accordance with the terms hereof.
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17. In the event for any reason, any payment by or act of the
Company or the Holder shall result in payment of interest which would exceed the
limit authorized by or be in violation of the law of the jurisdiction applicable
to this Debenture, then ipso facto the obligation of the Company to pay interest
or perform such act or requirement shall be reduced to the limit authorized
under such law, so that in no event shall the Company be obligated to pay any
such interest, perform any such act or be bound by any requirement which would
result in the payment of interest in excess of the limit so authorized. In the
event any payment by or act of the Company shall result in the extraction of a
rate of interest in excess of a sum which is lawfully collectible as interest,
then such amount (to the extent of such excess not returned to the Company)
shall, without further agreement or notice between or by the Company or the
Holder, be deemed applied to the payment of principal, if any, hereunder
immediately upon receipt of such excess funds by the Holder, with the same force
and effect as though the Company had specifically designated such sums to be so
applied to principal and the Holder had agreed to accept such sums as an
interest-free prepayment of this Debenture. If any part of such excess remains
after the principal has been paid in full, whether by the provisions of the
preceding sentences of this Section or otherwise, such excess shall be deemed to
be an interest-free loan from the Company to the Holder, which loan shall be
payable immediately upon demand by the Company. The provisions of this Section
shall control every other provision of this Debenture.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated: ___________________, 2004
URANIUM POWER CORPORATION
By:_____________________________
Name:
Title:
13
EXHIBIT A
NOTICE OF CONVERSION
OF
6% SECURED CONVERTIBLE DEBENTURE DUE FEBRUARY 28, 2005
(To be Executed by the Registered Holder in Order to Convert the Debenture)
FROM:_________________________________________________________________("Holder")
DATE:____________________________________________________(the "Conversion Date")
RE: Conversion of $___________ principal amount (the "Converted Debenture") of
the 6% Secured Convertible Debenture Due February, 2005 (the "Debenture") of
URANIUM POWER CORPORATION (the "Company") into _______________ shares (the
"Conversion Shares") of Common Stock (defined below)
CONVERSION DATE: __________________________________
The captioned Holder hereby gives notice to the Company, pursuant to
the Debenture of URANIUM POWER CORPORATION that the Holder elects to convert the
Converted Debenture into fully paid and non-assessable shares of Common Stock,
$0.001 par value (the "Common Stock"), of the Company as of the Conversion Date
specified above. Said conversion shall be based on the following Conversion
Price
_ $__________, representing the original Conversion Price (as
defined in the Debenture)
_ $__________, representing the original Conversion Price (as
defined in the Debenture), adjusted in accordance with the provisions of the
Debenture.
Based on this Conversion Price, the number of Conversion Shares indicated above
should be issued in the following name(s):
Name and Record Address Conversion Shares
_________________________________________ _________________
_________________________________________ _________________
_________________________________________ _________________
It is the intention of the Holder to comply with the provisions of
Section 4(C) of the Debenture regarding certain limits on the Holder's right to
convert thereunder. Based on the analysis on the attached Worksheet Schedule,
the Holder believe this conversion complies with the provisions of said Section
4(C). Nonetheless, to the extent that, pursuant to the conversion effected
hereby, the Holder would have more shares than permitted under said Section,
this notice should be amended and revised, ab initio, to refer to the conversion
which would result in the issuance of shares consistent with such provision. Any
conversion above such amount is hereby deemed void and revoked.
As contemplated by the Debenture and the Securities Purchase Agreement,
this Notice of Conversion is being sent by facsimile to the telecopier number
and officer indicated above.
If this Notice of Conversion represents the full conversion of the
outstanding balance of the Converted Debenture, the Holder either (1) has
previously surrendered the Converted Debenture, duly endorsed, to the Company or
(2) will surrender (or cause to be surrendered) the Converted Debenture, duly
endorsed, to the Company at the address indicated above by express courier
within five (5) business days after delivery or facsimile transmission of this
Notice of Conversion.
The certificates representing the Conversion Shares should be
transmitted by the Company to the Holder via express courier or by electronic
transfer within the time contemplated by the Debenture and Securities Purchase
Agreement after receipt of this Notice of Conversion (by facsimile transmission
or otherwise) to:
As contemplated by the Debenture, the Company should also pay all
accrued but unpaid interest on the Converted Debenture to the Holder.
-- If the Company elects to pay such interest in
Common Stock, as contemplated by and subject to the provisions
of the Debenture, such shares should be issued in the name of
the Holder and delivered in the same manner as, and together
with, the Conversion Shares.
-- If the Company elects or is required to pay the
interest paid in cash, such payment should be made by wire
transfer as follows:
___________________________________
(Print name of Holder)
By:________________________________
(Signature of Authorized Person)
___________________________________
(Printed Name and Title)
NOTICE OF CONVERSION
WORKSHEET SCHEDULE
1. Current Common Stock holdings of Holder and Affiliates ____________
2. Shares to be issued on current conversion(s) and other
exercise(s) ____________
3. Other shares to be issued on other current
conversion(s) and other current exercise(s) ____________
4. Other shares eligible to be acquired within next 60
days without restriction ____________
5. Total [sum of Lines 1 through 4] ____________
6. Outstanding shares of Common Stock* ____________
7. Adjustments to Outstanding
a. Shares known to Holder as previously
issued to Holder or others but not included in Line 6 ____________
b. Shares to be issued per Line(s) 2 and 3 ____________
c. Total Adjustments [Lines 7a and 7b] ____________
8. Total Adjusted Outstanding [Lines 6 plus 76c] ____________
9. Holder's Percentage [Line 5 divided by Line 8]
____________%
[Note: Line 9 not to be above 4.99%]
* Based on latest SEC filing by Company or information provided by executive
officer of Company, counsel to Company or transfer agent
