THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR THE SECURITIES LAWS OF ANY STATE, AND IS
BEING OFFERED AND SOLD PURSUANT TO AN EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND SUCH LAWS. THIS SECURITY MAY NOT BE SOLD
OR TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT OR SUCH OTHER LAWS.
8% AMENDED AND RESTATED CONVERTIBLE DEBENTURE
DUE JANUARY 16, 2006
$___________ JANUARY 16, 2001
No. __
The Xxxxx Group, Inc., a Delaware corporation with principal executive
offices located at 00 Xxxxxxx Xxxxx, Xxxx Xxxxxxxx, Xxx Xxxxxx 00000 (the
"COMPANY"), for value received, hereby promises to pay to the Holder (as such
term is hereinafter defined) or such other Person (as such term is hereinafter
defined) upon order of the Holder, on January 16, 2006 (the "MATURITY DATE"),
the principal sum of _________________ ($_________), as such sum may be adjusted
pursuant to Article 3, and to pay interest thereon from the date of original
issuance (or the most recent date on which an interest payment was made in full)
at the rate of eight percent (8%) per annum (the "DEBENTURE INTEREST RATE"),
until the Principal Amount (as such term is hereinafter defined) of this
Debenture has been paid in full or duly and irrevocably provided for. Interest
on the Principal Amount of this Debenture shall be paid in connection with each
conversion and redemption of this Debenture in the manner provided for herein.
All interest payable on the Principal Amount of this Debenture with respect to
any portion of a calendar year shall be calculated on the basis of a 360-day
year for the actual number of days elapsed. At the option of the Company,
interest payable from time to time may be paid through the delivery of duly and
validly authorized and issued, fully paid and non-assessable, freely tradeable
shares of Common Stock (as such term is hereinafter defined) valued at the
Conversion Price (as such term is hereinafter defined). The Common Stock to be
delivered in lieu of cash interest payments shall be registered for resale in
the Registration Statement (as such term is defined in the Registration Rights
Agreement (as such term is hereinafter defined)) to be filed by the Company to
register the Common Stock deliverable upon conversion of this Debenture as set
forth in the Registration Rights Agreement. Notwithstanding the foregoing, until
such Registration Statement has been declared effective under the Securities Act
by the SEC (as such term is hereinafter defined), payment of interest on this
Debenture shall be in cash.
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1
ARTICLE 1
DEFINITIONS
SECTION 1.1 DEFINITIONS. The terms defined in this Article whenever
used in this Debenture have the following respective meanings:
(i) "ADDITIONAL CAPITAL SHARES" has the meaning set forth in Section
3.1(b).
(ii) "AFFILIATE" has the meaning ascribed to such term in Rule 12b-2
under the Securities Exchange Act of 1934, as amended.
(iii) "BANKRUPTCY CODE" means the United States Bankruptcy Code of
1986, as amended (11 U.S.C.ss.ss.101 et. seq.).
(iv) "BUSINESS DAY" means a day other than Saturday, Sunday or any day
on which banks located in the State of New York are authorized or
obligated to close.
(v) "CAPITAL SHARES" means the Common Stock and any other shares of
any other class or series of capital stock, whether now or hereafter
authorized and however designated, which have the right to participate
in the distribution of earnings and assets (upon dissolution,
liquidation or winding-up) of the Company.
(vi) "CLOSING DATE" means January 16, 2001.
(vii) "COMMON SHARES" or "COMMON STOCK" means shares of the Company's
common stock, par value $0.001 per share.
(viii) "COMMON STOCK ISSUED AT CONVERSION", when used with reference
to the securities deliverable upon conversion of this Debenture, means
all Common Shares now or hereafter Outstanding and securities of any
other class or series into which this Debenture hereafter shall have
been changed or substituted, whether now or hereafter created and
however designated.
(ix) "COMPANY" means The Xxxxx Group, Inc., a Delaware corporation,
and any successor or resulting corporation by way of merger,
consolidation, sale or exchange of all or substantially all of the
Company's assets or otherwise.
(x) "CONVERSION" or "CONVERSION" means the repayment by the Company of
the Principal Amount of this Debenture (and, to the extent the Company
elects as permitted hereunder, accrued and unpaid interest thereon) by
the delivery of Common Stock on the terms provided in Section 3.2, and
"CONVERT," "CONVERTED," "CONVERTIBLE" and like words shall have a
corresponding meaning.
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(xi) "CONVERSION DATE" means any day on which all or any portion of
the Principal Amount of this Debenture is converted in accordance with
the provisions hereof.
(xii) "CONVERSION NOTICE" means a written notice of conversion
substantially in the form annexed hereto as Exhibit A.
(xiii) "CONVERSION PRICE" on any date of determination means the
applicable price for the conversion of this Debenture into Common
Shares on such day as set forth in Section 3.1(a).
(xiv) "CURRENT MARKET PRICE" on any date of determination means the
closing bid price of a Common Share on such day as reported on OTCBB;
PROVIDED that, if such security is not listed or admitted to trading
on OTCBB, as reported on the principal national security exchange or
quotation system on which such security is quoted or listed or
admitted to trading, or, if not quoted or listed or admitted to
trading on any national securities exchange or quotation system, the
closing bid price of such security on the over-the-counter market on
the day in question as reported by Bloomberg LP or a similar generally
accepted reporting service, as the case may be.
(xv) "DEBENTURE"or "DEBENTURES" means this 8% Amended and Restated
Convertible Debenture due January 16, 2006 of the Company or such
other convertible debenture(s) exchanged therefor as provided in
Section 2.1.
(xvi) "DEFAULT INTEREST RATE" shall be equal to the Debenture Interest
Rate plus an additional four percent (4%) per annum.
(xvii) "DISCOUNT MULTIPLIER" has the meaning set forth in Section
3.1(a).
(xviii) "DUE DATE" has the meaning set forth in Section 3.1(a).
(xix) "EVENT OF DEFAULT" has the meaning set forth in Section 6.1.
(xx) "HOLDER" means _____________, any successor thereto, or any
Person to whom this Debenture is subsequently transferred in
accordance with the provisions hereof.
(xxi) "MARKET DISRUPTION EVENT" means any event that results in a
material suspension or limitation of trading of the Common Shares.
(xxii) "MARKET PRICE" per Common Share means the average of the
closing bid prices of the Common Shares as reported on OTCBB for the
three (3) Trading Days on which the three (3) lowest closing bid
prices are reported during the applicable Valuation Period, it being
understood that such three (3) Trading Days need not be consecutive;
PROVIDED that, if such security is not listed or admitted to trading
on OTCBB, as reported on the principal national security
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3
exchange or quotation system on which such security is quoted or
listed or admitted to trading, or, if not quoted or listed or admitted
to trading on any national securities exchange or quotation system,
the average of the closing bid prices of the Common Shares on the
over-the-counter market as reported by Bloomberg LP or a similar
generally accepted reporting service, as the case may be, for the
three (3) Trading Days on which the three (3) lowest closing bid
prices are reported during the applicable Valuation Period, it being
understood that such three (3) Trading Days need not be consecutive.
(xxiii) "MAXIMUM RATE" has the meaning set forth in Section 6.3.
(xxiv) "OPTIONAL REDEMPTION DATE" has the meaning set forth in Section
3.6.
(xxv) "OPTIONAL REDEMPTION NOTICE" has the meaning set forth in
Section 3.6.
(xxvi) "OPTIONAL REDEMPTION PRICE" has the meaning set forth in
Section 3.6.
(xxvii) "OTCBB" means the OTC Bulletin Board service of the National
Association of Securities Dealers, Inc.
(xxviii) "OTHER DEBENTURES" means the other 8% Amended and Restated
Convertible Debentures of like tenor and of even date with the Closing
Date issued by the Company or such other convertible debenture(s)
exchanged therefor.
(xxix) "OUTSTANDING" when used with reference to Common Shares or
Capital Shares (collectively, "Shares") means, on any date of
determination, all issued and outstanding Shares, and includes all
such Shares issuable in respect of outstanding scrip or any
certificates representing fractional interests in such Shares;
PROVIDED, HOWEVER, that any such Shares directly or indirectly owned
or held by or for the account of the Company or any Subsidiary of the
Company shall not be deemed "Outstanding" for purposes hereof.
(xxx) "OUTSTANDING AMOUNT" has the meaning set forth in Section 2.4.
(xxxi) "PERSON" means an individual, a corporation, a partnership, an
association, a limited liability company, an unincorporated business
organization, a trust or other entity or organization, and any
government or political subdivision or any agency or instrumentality
thereof.
(xxxii) "PRINCIPAL AMOUNT" means, for any date of calculation, the
principal sum set forth in the first paragraph of this Debenture (but
only such principal amount as to which the Holder has not theretofore
furnished a Conversion Notice in compliance with Section 3.2).
(xxxiii) "REGISTRATION RIGHTS AGREEMENT" means that certain
Registration Rights Agreement dated the Closing Date among the
Company, the initial Holder of this Debenture and
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4
the other parties thereto, as the same may be amended from time to
time.
(xxxiv) "SEC" means the United States Securities and Exchange
Commission.
(xxxv) "SECURITIES ACT" means the Securities Act of 1933, as amended,
and the rules and regulations of the SEC thereunder, all as in effect
at the time.
(xxxvi) "SECURITIES PURCHASE AGREEMENT" means that certain Securities
Purchase Agreement dated the Closing Date among the Company, the
initial holder of this Debenture and the other parties thereto, as the
same may be amended from time to time.
(xxxvii) "SUBSIDIARY" means any entity of which securities or other
ownership interests having ordinary voting power to elect a majority
of the board of directors or other persons performing similar
functions are owned directly or indirectly by the Company.
(xxxviii) "TRADING DAY" means any day on which (i) purchases and sales
of securities on the principal national security exchange or quotation
system on which the Common Shares are traded are reported thereon, or,
if not quoted or listed or admitted to trading on any national
securities exchange or quotation system, as reported by Bloomberg LP
or a similar generally accepted reporting service, as the case may be,
(ii) at least one bid for the trading of Common Shares is reported and
(iii) no Market Disruption Event occurs.
(xxxix) "VALUATION EVENT" has the meaning set forth in Section 3.1(b).
(xl) "VALUATION PERIOD" means the ten (10) Trading Day period
immediately preceding the applicable Conversion Date.
All references to "cash" or "$" herein means currency of the United States of
America.
ARTICLE 2
EXCHANGES AND TRANSFER
SECTION 2.1 EXCHANGE AND REGISTRATION OF TRANSFER OF DEBENTURES. The
Holder may, at its option, surrender this Debenture at the principal executive
offices of the Company and receive in exchange therefor a Debenture or
Debentures, each in the denomination of $10,000 or an integral multiple of
$1,000 in excess thereof, dated as of the date of this Debenture (which shall
accrue interest from the Closing Date or, if applicable, the most recent date on
which an interest payment was made in full), and payable to such Person or order
as may be designated by such Holder. The aggregate Principal Amount of the
Debenture or Debentures exchanged in accordance with this Section 2.1 shall
equal the aggregate unpaid Principal Amount of this Debenture as of the date of
such surrender; PROVIDED, HOWEVER, that upon any exchange pursuant to this
Section 2.1 there shall be filed with the Company the name and address for all
purposes hereof of the Holder or Holders of
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5
the Debenture or Debentures delivered in such exchange. This Debenture, when
presented for registration of transfer or for exchange or conversion, shall (if
so required by the Company) be duly endorsed, or be accompanied by a written
instrument of transfer in form reasonably satisfactory to the Company duly
executed, by the Holder duly authorized in writing.
SECTION 2.2 LOSS, THEFT, DESTRUCTION OF DEBENTURE. Upon receipt of
evidence satisfactory to the Company of the loss, theft, destruction or
mutilation of this Debenture and, in the case of any such loss, theft or
destruction, upon receipt of indemnity or security reasonably satisfactory to
the Company, or, in the case of any such mutilation, upon surrender and
cancellation of this Debenture, the Company shall make, issue and deliver, in
lieu of such lost, stolen, destroyed or mutilated Debenture, a new Debenture of
like tenor and unpaid Principal Xxxxxx dated as of the date hereof (which shall
accrue interest from the Closing Date or, if applicable, the most recent date on
which an interest payment was made in full). This Debenture shall be held and
owned upon the express condition that the provisions of this Section 2.2 are
exclusive with respect to the replacement of a mutilated, destroyed, lost or
stolen Debenture and shall preclude any and all other rights and remedies
notwithstanding any law or statute existing or hereafter enacted to the contrary
with respect to the replacement of negotiable instruments or other securities
without the surrender thereof.
SECTION 2.3 WHO DEEMED ABSOLUTE OWNER. The Company may deem the Person
in whose name this Debenture shall be registered upon the registry books of the
Company to be, and may treat it as, the absolute owner of this Debenture
(whether or not this Debenture shall be overdue) for the purpose of receiving
payment of or on account of the Principal Amount of this Debenture, for the
conversion of this Debenture and for all other purposes, and the Company shall
not be affected by any notice to the contrary. All such payments and such
conversions shall be valid and effectual to satisfy and discharge the liability
upon this Debenture to the extent of the sum or sums so paid or the conversion
or conversions so made.
SECTION 2.4 CONVERSION AT MATURITY. In the event that all or any
portion of the Principal Amount of this Debenture remains outstanding (the
"OUTSTANDING AMOUNT") on the Maturity Date, the Outstanding Amount together with
all accrued and unpaid interest thereon to the Maturity Date shall automatically
be converted as if the Holder had exercised its conversion rights on the
Maturity Date.
ARTICLE 3
CONVERSION OF DEBENTURE
SECTION 3.1 CONVERSION; CONVERSION PRICE; VALUATION EVENT. (a) At the
option of the Holder, this Debenture may be converted, either in whole or in
part, up to the full Principal Amount hereof into Common Shares (calculated as
to each such conversion to the nearest 1/100th of a share), at any time and from
time to time on any Business Day, subject to compliance with Section 3.2. The
number of Common Shares into which this Debenture may be converted is equal to
(i) the Principal Amount of the Debenture being converted at the Conversion Date
(plus any accrued and unpaid
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interest on the Debenture being converted through the Conversion Date) divided
by (ii) the Conversion Price. The "CONVERSION PRICE" shall be equal to
sixty-five percent (65%) (the "DISCOUNT MULTIPLIER") of the Market Price,
PROVIDED that in the event that the Registration Statement has not been declared
effective by the SEC within one hundred and twenty (120) days after the Closing
Date (the "DUE DATE"), then the Discount Multiplier shall decrease by two and
one-half percent (2.5%) effective as of the Due Date to sixty-two and one-half
percent (62.5%) and shall further decrease by two and one-half percent (2.5%)
for each thirty-day period occurring after the Due Date that the Registration
Statement has not been declared effective by the SEC and PROVIDED, FURTHER that,
in addition to any Discount Multiplier decrease(s) effected pursuant to the
foregoing proviso on account of the Registration Statement, the Discount
Multiplier then in effect shall automatically decrease by two and one-half
percent (2.5%) on the one hundred and eightieth (180th) day after the Closing
Date; PROVIDED, HOWEVER, under no circumstances shall the Discount Multiplier be
less than fifty percent (50%).
(b) Within two (2) Business Days of the occurrence of a
Valuation Event, the Company shall send notice of such occurrence to the Holder.
Notwithstanding anything to the contrary contained herein, if a Valuation Event
occurs during any Valuation Period, the Holder may convert some or all of this
Debenture, at its sole option, at a Conversion Price equal to the Current Market
Price on any Trading Day during the Valuation Period. For purposes of this
Section 3.1(b), a "VALUATION EVENT" shall mean an event in which the Company at
any time takes any of the following actions:
(i) subdivides or combines its Capital Shares;
(ii) makes any distribution on its Capital Shares;
(iii) issues any additional Capital Shares (the "ADDITIONAL
CAPITAL SHARES"), otherwise than as provided in clauses (i) and (ii) above, at a
price per share less, or for other consideration lower, than the Current Market
Price in effect immediately prior to such issuances, or without consideration,
except for issuances under (A) employee benefit plans consistent with those
presently in effect and (B) presently outstanding warrants, options or
convertible securities;
(iv) issues any warrants, options or other rights to subscribe
for or purchase any Additional Capital Shares if the price per share for which
Additional Capital Shares may at any time thereafter be issuable pursuant to
such warrants, options or other rights shall be less than the Current Market
Price in effect immediately prior to such issuance;
(v) issues any securities convertible into or exchangeable or
exercisable for Additional Capital Shares if the consideration per share for
which Additional Capital Shares may at any time thereafter be issuable pursuant
to the terms of such convertible, exchangeable or exercisable securities shall
be less than the Current Market Price in effect immediately prior to such
issuance;
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6
(vi) announces or effects a Fundamental Corporate Change (as such term is
hereinafter defined);
(vii) makes a distribution of its assets or evidences of indebtedness to
the holders of its Capital Shares as a dividend in liquidation or by way of
return of capital or other than as a dividend payable out of earnings or surplus
legally available for the payment of dividends under applicable law or any
distribution to such holders made in respect of the sale of all or substantially
all of the Company's assets (other than under the circumstances provided for in
clauses (i) through (v) above) or
(viii) takes any action affecting the number of Outstanding Capital Shares,
other than an action described in any of the above clauses (i) through (vii),
inclusive, which in the opinion of the Company's Board of Directors, determined
in good faith, would have a material adverse effect upon the rights of the
Holder at the time of a conversion of this Debenture or is reasonably likely to
result in a decrease in the Market Price.
SECTION 3.2 EXERCISE OF CONVERSION PRIVILEGE. (a) Conversion of this
Debenture may be exercised, in whole or in part, on any Business Day by the
Holder by telecopying an executed and completed Conversion Notice to the
Company. Each date on which a Conversion Notice is telecopied to the Company in
accordance with the provisions of this Section 3.2 shall constitute a Conversion
Date. The Company shall convert this Debenture and issue the Common Stock Issued
at Conversion in the manner provided below in this Section 3.2, and all voting
and other rights associated with the beneficial ownership of the Common Stock
Issued at Conversion shall vest with the Holder, effective as of the Conversion
Date at the time specified in the Conversion Notice. The Conversion Notice also
shall state the name or names (with addresses) of the persons who are to become
the holders of the Common Stock Issued at Conversion in connection with such
conversion. The Holder shall deliver this Debenture by express courier within
thirty (30) days following the date on which the telecopied Conversion Notice
has been transmitted to the Company. Upon surrender for conversion, this
Xxxxxxxxx shall be accompanied by a proper assignment hereof to the Company or
be endorsed in blank. As promptly as practicable after the receipt of the
Conversion Notice as aforesaid, but in any event not more than three (3)
Business Days after the Company's receipt of such Conversion Notice, the Company
shall (i) issue the Common Stock Issued at Conversion in accordance with the
provisions of this Article 3 and (ii) cause to be mailed for delivery by
overnight courier to the Holder (x) a certificate or certificate(s) representing
the number of Common Shares to which the Holder is entitled by virtue of such
conversion, (y) cash, as provided in Section 3.3, in respect of any fraction of
a Common Share deliverable upon such conversion and (z) cash or, to the extent
permitted hereunder, shares of Common Stock representing the amount of accrued
and unpaid interest on this Debenture as of the Conversion Date. Such conversion
shall be deemed to have been effected at the time at which the Conversion Notice
indicates, and at such time the rights of the Holder of this Debenture, as such
(except if and to the extent that any Principal Amount thereof remains
unconverted), shall cease and the Person or Persons in whose name or names the
Common
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7
Stock Issued at Conversion shall be issuable shall be deemed to have become the
holder or holders of record of the Common Shares represented thereby, and all
voting and other rights associated with the beneficial ownership of such Common
Shares shall at such time vest with such Person or Persons. The Conversion
Notice shall constitute a contract between the Holder and the Company, whereby
the Holder shall be deemed to subscribe for the number of Common Shares which it
will be entitled to receive upon such conversion and, in payment and
satisfaction of such subscription (and for any cash adjustment to which it is
entitled pursuant to Section 3.4), to surrender this Debenture and to release
the Company from all liability thereon (except if and to the extent that any
Principal Amount thereof remains unconverted). No cash payment aggregating less
than $1.00 shall be required to be given unless specifically requested by the
Holder.
(b) If, at any time after the date of this Debenture, (i) the
Company challenges, disputes or denies the right of the Holder hereof to effect
the conversion of this Debenture into Common Shares or otherwise dishonors or
rejects any Conversion Notice delivered in accordance with this Section 3.2 or
(ii) any third party who is not and has never been an Affiliate of the Holder
commences any lawsuit or legal proceeding or otherwise asserts any claim before
any court or public or governmental authority which seeks to challenge, deny,
enjoin, limit, modify, delay or dispute the right of the Holder hereof to effect
the conversion of this Debenture into Common Shares, then the Holder shall have
the right, by written notice to the Company, to require the Company to promptly
redeem this Debenture for cash at one hundred and thirty-five percent (135%) of
the Principal Amount thereof, together with all accrued and unpaid interest
thereon to the date of redemption. Under any of the circumstances set forth
above, the Company shall be responsible for the payment of all costs and
expenses of the Holder, including reasonable legal fees and expenses, as and
when incurred in defending itself in any such action or pursuing its rights
hereunder (in addition to any other rights of the Holder).
(c) The Holder shall be entitled to exercise its conversion
privilege notwithstanding the commencement of any case under the Bankruptcy
Code. In the event the Company is a debtor under the Bankruptcy Code, the
Company hereby waives to the fullest extent permitted any rights to relief it
may have under 11 U.S.C. ss. 362 in respect of the Holder's conversion
privilege. The Company hereby waives to the fullest extent permitted any rights
to relief it may have under 11 U.S.C. ss. 362 in respect of the conversion of
this Debenture. The Company agrees, without cost or expense to the Holder, to
take or consent to any and all action necessary to effectuate relief under 11
U.S.C. ss. 362.
SECTION 3.3 FRACTIONAL SHARES. No fractional Common Shares or scrip
representing fractional Common Shares shall be delivered upon conversion of this
Debenture. Instead of any fractional Common Shares which otherwise would be
delivered upon conversion of this Debenture, the Company shall pay a cash
adjustment in respect of such fraction in an amount equal to the same fraction
multiplied by the Current Market Price on the Conversion Date. No cash payment
of less than $1.00 shall be required to be given unless specifically requested
by the Holder.
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SECTION 3.4 ADJUSTMENTS. The Conversion Price and the number of shares
deliverable upon conversion of this Debenture are subject to adjustment from
time to time as follows:
(i) ISSUANCE OF SECURITIES. If at any time while this
Debenture, or any portion thereof, is outstanding the Company issues and sells
pursuant to an exemption from registration under the Securities Act (A) Common
Shares at a purchase price that is lower than the Conversion Price on the date
of issuance of such Common Shares, (B) warrants or options with an exercise
price on the date of issuance thereof that is lower than the Conversion Price
for the Holder on such date, except for warrants or options issued pursuant to
employee stock option agreements or stock incentive agreements of the Company or
(C) convertible, exchangeable or exercisable securities with a right to exchange
at lower than the Current Market Price on the date of issuance or conversion, as
applicable, of such convertible, exchangeable or exercisable securities, except
for stock option agreements or stock incentive agreements, then the Conversion
Price shall be reduced to equal the lowest of any such purchase price, exercise
price or exchange price, and the number of shares of Common Stock into which
this Debenture is convertible pursuant to Section 3.1(a) shall be
correspondingly adjusted. After such reduction, the Conversion Price shall never
exceed the Conversion Price as so reduced, in spite of any subsequent increase
in the Market Price.
(ii) RECLASSIFICATION, ETC. In case the Company shall
reorganize its capital, reclassify its capital stock, consolidate or merge with
or into another Person (where the Company is not the survivor or where there is
a change in or distribution with respect to the Common Stock of the Company),
sell, convey, transfer or otherwise dispose of all or substantially all its
property, assets or business to another Person or otherwise effectuate a
Spin-off Dividend (as such term is hereinafter defined), or effectuate a
transaction or series of related transactions in which more than fifty percent
(50%) of the voting power of the Company is disposed of (each, a "FUNDAMENTAL
CORPORATE CHANGE") and, pursuant to the terms of such Fundamental Corporate
Change, shares of common stock of the successor or acquiring corporation, or any
cash, shares of stock or other securities or property of any nature whatsoever
(including warrants or other subscription or purchase rights) in addition to or
in lieu of common stock of the successor or acquiring corporation ("OTHER
PROPERTY") are to be received by or distributed to the holders of Common Stock
of the Company, then the Holder of this Debenture shall have the right
thereafter, at its sole option, to (x) require the Company to prepay this
Debenture for cash at one hundred and thirty percent (130%) of the Principal
Amount thereof, together with all accrued and unpaid interest thereon to the
date of prepayment, (y) receive the number of shares of common stock of the
successor or acquiring corporation or of the Company, if it is the surviving
corporation, and Other Property as is receivable upon or as a result of such
Fundamental Corporate Change by a holder of the number of shares of Common Stock
into which such the outstanding portion of this Debenture may be converted at
the Conversion Price applicable immediately prior to such Fundamental Corporate
Change or (z) require the Company, or such successor, resulting or purchasing
corporation, as the case may be, to, without benefit of any additional
consideration therefor, execute and deliver to the Holder a debenture with
substantially identical rights, privileges, powers, restrictions and other terms
as this Debenture in an amount equal to the amount outstanding under this
Debenture immediately prior to such Fundamental Corporate
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Change. For purposes hereof, "COMMON STOCK OF THE SUCCESSOR OR ACQUIRING
CORPORATION" shall include stock of such corporation of any class which is not
preferred as to dividends or assets over any other class of stock of such
corporation and which is not subject to prepayment and shall also include any
evidences of indebtedness, shares of stock or other securities which are
convertible into or exchangeable for any such stock, either immediately or upon
the arrival of a specified date or the happening of a specified event and any
warrants or other rights to subscribe for or purchase any such stock. The
foregoing provisions shall similarly apply to successive Fundamental Corporate
Changes.
(iii) SPIN-OFFS. Notwithstanding anything to the contrary
herein, if at any time the Company shall "spin-off" certain of its assets or
businesses by transferring, directly or indirectly, such assets or businesses to
a Subsidiary ("SPINCO") and making a dividend ("SPIN-OFF DIVIDEND") to the
Company's stockholders of the shares of capital stock of Spinco, then prior to
making such Spin-off Dividend, the Company shall cause Spinco to issue to each
Holder a debenture, with substantially identical terms as this Debenture, in an
amount equal to the amount outstanding under this Debenture immediately prior to
such Spin-off Dividend.
SECTION 3.5 CERTAIN CONVERSION LIMITS.
-------------------------
(i) Notwithstanding anything herein to the contrary, the
Holder shall not have the right, and the Company shall not have the obligation,
to convert all or any portion of this Debenture (and the Company shall not have
the right to pay interest on this Debenture in shares of Common Stock) if and to
the extent that the issuance to the Holder of shares of Common Stock upon such
conversion (or payment of interest) would result in the Holder being deemed the
"BENEFICIAL OWNER" of more than five percent (5%) of the then Outstanding shares
of Common Stock within the meaning of Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules promulgated thereunder. If any court of
competent jurisdiction shall determine that the foregoing limitation is
ineffective to prevent a Holder from being deemed the beneficial owner of more
than five percent (5%) of the then Outstanding shares of Common Stock, then the
Company shall prepay this Debenture in part, in such Principal Amount as is
necessary to cause such Holder to be deemed the beneficial owner of not more
than five percent (5%) of the then Outstanding shares of Common Stock. Such
prepayment shall be for cash at a prepayment price of one hundred and thirty
percent (130%) of the Principal Amount thereof, together with all accrued and
unpaid interest thereon to the date of prepayment.
(ii) Notwithstanding anything herein to the contrary, if and
to the extent that, on any date (the "SECTION 16 DETERMINATION DATE"), the
holding by the Holder of this Debenture would result in the Holder's becoming
subject to the provisions of Section 16(b) of the Securities Exchange Act of
1934, as amended, by virtue of being deemed the "BENEFICIAL OWNER" of more than
ten percent (10%) of the then Outstanding shares of Common Stock, then the
Holder shall not have the right, and the Company shall not have the obligation,
to convert any portion of this Debenture (the "SECTION 16 PREPAYMENT PORTION")
as shall cause such Holder to be deemed the beneficial owner of more than ten
percent (10%) of the then Outstanding shares of Common Stock during the period
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ending sixty (60) days after the Section 16 Determination Date. If any court of
competent jurisdiction shall determine that the foregoing limitation is
ineffective to prevent a Holder from being deemed the beneficial owner of more
than ten percent (10%) of the then Outstanding shares of Common Stock for the
purposes of such Section 16(b), then the Company shall prepay the Section 16
Prepayment Portion. Upon such determination by a court of competent
jurisdiction, the Holder shall have no interest in or rights under such Section
16 Prepayment Portion. Any and all interest paid on or prior to the date of such
determination shall be deemed interest paid on the remaining portion of this
Debenture held by the Holder. Such prepayment shall be for cash at a prepayment
price of one hundred and thirty (130%) of the Principal Amount thereof, together
with all accrued and unpaid interest thereon to the date of prepayment.
(iii) Unless the Company shall have obtained the approval of
its voting stockholders to such issuance in accordance with the rules of any
stock market with which the Company shall be required to comply, but only to the
extent required thereby, the Company shall not issue shares of Common Stock (i)
upon conversion of this Debenture or (ii) as a payment of interest on this
Debenture, if such issuance of Common Stock, when added to the number of shares
of Common Stock previously issued by the Company (y) upon conversion of a
portion of this Debenture and (z) in payment of interest on this Debenture would
equal or exceed twenty percent (20%) of the number of Common Shares which were
issued and outstanding on the Closing Date (the "MAXIMUM ISSUANCE AMOUNT"). In
the event that a properly executed Conversion Notice is received by the Company
which would require the Company to issue shares of Common Stock equal to or in
excess of the Maximum Issuance Amount, the Company shall honor such conversion
request by (a) converting the portion of the Debenture stated in the Conversion
Notice which is not in excess of the Maximum Issuance Amount and (b) prepaying
the remaining portion of the Debenture stated in the Conversion Notice in cash
at a prepayment price of one hundred and thirty percent (130%) of the Principal
Amount of the remaining portion of this Debenture, together with all accrued and
unpaid dividends on the total portion of this Debenture stated in the Conversion
Notice to the date of prepayment. In the event the Company shall elect to pay
interest in shares of Common Stock which would require the Company to issue
shares of Common Stock equal to or in excess of the Maximum Issuance Amount, the
Company shall pay such interest by (y) issuing a number of shares of Common
Stock equal to one share less than the Maximum Issuance Amount and (z) paying
the balance due on such interest payment in cash.
SECTION 3.6 OPTIONAL REDEMPTION. Subject to Section 3.7 and Section
3.9, the Company may redeem this Debenture in whole or in part at a cash
redemption price ("OPTIONAL REDEMPTION PRICE") equal to one hundred and thirty
percent (130%) of the Principal Amount of this Debenture subject to such
redemption, together with all accrued and unpaid interest thereon to the date of
redemption ("OPTIONAL REDEMPTION DATE") by delivery of the notice ("OPTIONAL
REDEMPTION NOTICE") provided for in Section 3.7.
SECTION 3.7 NOTICE OF REDEMPTION. Each Optional Redemption Notice shall
be provided by the Company to the Holder in writing at the Holder's last address
appearing in the Company's
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security registry, not less than thirty (30) Business Days prior to the Optional
Redemption Date to which such notice relates and not more than forty-five (45)
Business Days prior to such Optional Redemption Date, which notice shall be in
substantially the form of Exhibit B hereto, specify the Optional Redemption
Date, the Principal Amount of this Debenture being redeemed, and refer to
Section 3.6 (including a statement of the Optional Redemption Price) and this
Section 3.7.
SECTION 3.8 SURRENDER OF DEBENTURES. Upon any redemption of this
Debenture pursuant to Sections 3.2, 3.5, 3.6 or 6.2, the Holder shall either
deliver this Debenture by hand to the Company at its principal executive offices
or surrender the same to the Company at such address by nationally recognized
overnight courier. Payment of the redemption price shall be made by the Company
to the Holder against receipt of this Debenture (as provided in this Section
3.8) by wire transfer of immediately available funds to such account(s) as the
Holder shall specify by written notice to the Company. If payment of such
redemption price is not made in full by the redemption date, the Holder shall
again have the right to convert this Debenture as provided in Article 3 hereof
or to declare an Event of Default.
SECTION 3.9 REDEMPTION OF OTHER DEBENTURES. On each occasion, if any,
that the Company shall elect to deliver an Optional Redemption Notice in
accordance with Section 3.6 and Section 3.7, the Company shall contemporaneously
therewith deliver a like notice to each holder of the Other Debentures providing
for the redemption of the principal amount of such holder's Other Debenture in
an amount equal to the product obtained by multiplying (i) the principal amount
of such Other Debenture outstanding on the date of such Optional Redemption
Notice by (ii) a fraction, the (y) numerator of which is the Principal Amount of
this Debenture subject to such Optional Redemption Notice and (z) denominator of
which is the Principal Amount of this Debenture outstanding on the date of such
Optional Redemption Notice.
ARTICLE 4
STATUS; RESTRICTIONS ON TRANSFER
SECTION 4.1 STATUS OF DEBENTURE. This Debenture is an unsecured
obligation of the Company, and constitutes a legal, valid and binding obligation
of the Company, enforceable in accordance with its terms subject, as to
enforceability, to general principles of equity and to principles of bankruptcy,
insolvency, reorganization and other similar laws of general applicability
relating to or affecting creditors' rights and remedies generally.
SECTION 4.2 RESTRICTIONS ON TRANSFER. Subject to the terms and
conditions of the Registration Rights Agreement, this Debenture, and any Common
Shares deliverable upon the conversion hereof, have not been registered under
the Securities Act. The Holder by accepting this Xxxxxxxxx agrees that this
Debenture and the shares of Common Stock to be acquired as interest on and upon
conversion of this Debenture may not be assigned or otherwise transferred unless
and until (i) the Company has received the opinion of counsel for the Holder
that this Debenture or such shares may be sold pursuant to an exemption from
registration under the Securities Act or (ii) a
HFNY2: #533962 v1/05466-0001 / 03/12/2001
12
registration statement relating to this Debenture or such shares has been filed
by the Company and declared effective by the SEC.
Each certificate for shares of Common Stock deliverable hereunder shall
bear a legend as follows unless and until such securities have been sold
pursuant to an effective registration statement under the Securities Act:
"The securities represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Securities Act").
The securities may not be offered for sale, sold or otherwise transferred except
(i) pursuant to an effective registration statement under the Securities Act or
(ii) pursuant to an exemption from registration under the Securities Act in
respect of which the issuer of this certificate has received an opinion of
counsel satisfactory to the issuer of this certificate to such effect. Copies of
the agreement covering both the purchase of the securities and restrictions on
their transfer may be obtained at no cost by written request made by the holder
of record of this certificate to the Secretary of the issuer of this certificate
at the principal executive offices of the issuer of this certificate."
ARTICLE 5
COVENANTS
SECTION 5.1 CONVERSION. The Company shall, not later than three (3)
Business Days after the Company's receipt of a Conversion Notice, issue and
deliver to the Holder the requisite shares of Common Stock Issued at Conversion.
SECTION 5.2 NOTICE OF DEFAULT. If any one or more events occur which
constitute or which, with notice, lapse of time, or both, would constitute an
Event of Default, the Company shall forthwith give notice to the Holder,
specifying the nature and status of the Event of Default or such other event(s),
as the case may be.
SECTION 5.3 PAYMENT OF OBLIGATIONS. So long as this Debenture shall be
outstanding, the Company shall pay, extend, or discharge at or before maturity,
all its respective material obligations and liabilities, including, without
limitation, tax liabilities, except where the same may be contested in good
faith by appropriate proceedings.
SECTION 5.4 COMPLIANCE WITH LAWS. So long as this Debenture shall be
outstanding, the Company shall comply with all applicable laws, ordinances,
rules, regulations and requirements of governmental authorities, except for such
noncompliance which would not have a material adverse effect on the business,
properties, prospects, condition (financial or otherwise) or results of
operations of the Company and the Subsidiaries.
SECTION 5.5 INSPECTION OF PROPERTY, BOOKS AND RECORDS. So long as this
Debenture shall be outstanding, the Company shall keep proper books of record
and account in which full, true and
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correct entries shall be made of all material dealings and transactions in
relation to its business and activities and shall permit representatives of the
Holder at the Holder's expense to visit and inspect any of its respective
properties, to examine and make abstracts from any of its respective books and
records, not reasonably deemed confidential by the Company, and to discuss its
respective affairs, finances and accounts with its respective officers and
independent public accountants, all at such reasonable times and as often as may
reasonably be desired.
ARTICLE 6
REMEDIES
SECTION 6.1 EVENTS OF DEFAULT. "EVENT OF DEFAULT" wherever used herein
means any one of the following events:
(i) the Company shall default in the payment of principal of
or interest on this Debenture as and when the same shall be due and payable or
the Company shall fail to perform or observe any other covenant, agreement,
term, provision, undertaking or commitment under this Debenture or any other
Document (as such term is defined in the Securities Purchase Agreement) and such
default shall continue for a period of three (3) Business Days after the
delivery to the Company of written notice that the Company is in default
hereunder or thereunder;
(ii) any of the representations or warranties made by the
Company herein, in any other Document or in any certificate or financial or
other written statements heretofore or hereafter furnished by or on behalf of
the Company in connection with the execution and delivery of this Debenture or
any other Document shall be false or misleading on the Closing Date;
(iii) under the laws of any jurisdiction not otherwise covered
by clauses (iv) and (v) below, the Company or any Subsidiary (A) becomes
insolvent or generally not able to pay its debts as they become due, (B) admits
in writing its inability to pay its debts generally or makes a general
assignment for the benefit of creditors, (C) institutes or has instituted
against it any proceeding seeking (x) to adjudicate it a bankrupt or insolvent,
(y) liquidation, winding-up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency, reorganization or relief of debtors including any plan
of compromise or arrangement or other corporate proceeding involving or
affecting its creditors or (z) the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or for any
substantial part of its properties and assets, and in the case of any such
official proceeding instituted against it (but not instituted by it), either the
proceeding remains undismissed or unstayed for a period of sixty (60) calendar
days, or any of the actions sought in such proceeding (including the entry of an
order for relief against it or the appointment of a receiver, trustee, custodian
or other similar official for it or for any substantial part of its properties
and assets) occurs or (D) takes any corporate action to authorize any of the
above actions;
(iv) the entry of a decree or order by a court having jurisdiction in the
premises
HFNY2: #533962 v1/05466-0001 / 03/12/2001
14
adjudging the Company or any Subsidiary a bankrupt or insolvent, or approving as
properly filed a petition seeking reorganization, arrangement, adjustment or
composition of or in respect of the Company or such Subsidiary under the
Bankruptcy Code or any other applicable Federal or state law, or appointing a
receiver, liquidator, assignee, trustee or sequestrator (or other similar
official) of the Company or such Subsidiary, or of any substantial part of its
property, or ordering the winding-up or liquidation of its affairs, and any such
decree or order continues and is unstayed and in effect for a period of sixty
(60) calendar days;
(v) the institution by the Company or any Subsidiary of
proceedings to be adjudicated a bankrupt or insolvent, or the consent by it to
the institution of bankruptcy or insolvency proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or relief
under the Bankruptcy Code or any other applicable federal or state law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee or sequestrator (or other similar
official) of the Company or such Subsidiary, or of any substantial part of its
property, or the making by it of an assignment for the benefit of creditors, or
the admission by it in writing of its inability to pay its debts generally as
and when they become due, or the taking of corporate action by the Company or
such Subsidiary in furtherance of any such action;
(vi) a final judgment or final judgments for the payment of
money shall have been entered by any court or courts of competent jurisdiction
against the Company or any Subsidiary and remains undischarged for a period
(during which execution shall be effectively stayed) of thirty (30) days,
PROVIDED that the aggregate amount of all such judgments at any time outstanding
(to the extent not paid or to be paid, as evidenced by a written communication
to that effect from the applicable insurer, by insurance) exceeds Fifteen
Thousand Dollars ($15,000);
(vii) it becomes unlawful for the Company to perform or comply
with its obligations under this Debenture or any other Document in any respect;
(viii) the Common Shares shall be delisted from the OTCBB (the
"TRADING MARKET" or, to the extent the Company becomes eligible to list its
Common Stock on any national security exchange or other quotation system, upon
official notice of listing on any such exchange or system, as the case may be,
it shall be the "TRADING MARKET") or suspended from trading on the Trading
Market, and shall not be reinstated, relisted or such suspension lifted, as the
case may be, within five (5) days or
(ix) the Company or any Subsidiary shall default (giving
effect to any applicable grace period) in the payment of principal or interest
as and when the same shall become due and payable, under any indebtedness,
individually or in the aggregate, of more than Fifteen Thousand Dollars
($15,000).
SECTION 6.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default occurs and is continuing, then and in every such case the
Holder may, by a notice in writing to the
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15
Company, rescind any outstanding Conversion Notice and declare that all amounts
owing or otherwise outstanding under this Debenture are immediately due and
payable and upon any such declaration this Debenture shall become immediately
due and payable in cash at a price of one hundred and thirty-five percent (135%)
of the Principal Amount thereof, together with all accrued and unpaid interest
thereon to the date of payment; PROVIDED, HOWEVER, in the case of any Event of
Default described in clauses (iii), (iv), (v) or (vii) of Section 6.1, such
amount automatically shall become immediately due and payable without the
necessity of any notice or declaration as aforesaid.
SECTION 6.3 DEFAULT INTEREST RATE. (a) If any portion of the principal
of or interest on this Debenture shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise) such principal of and interest on
the Debenture which is due and owing but not paid shall, without limiting the
Holder's rights under this Debenture, bear interest at the Default Interest Rate
until paid in full.
(b) Notwithstanding anything herein to the contrary, if at any
time the applicable interest rate as provided for herein shall exceed the
maximum lawful rate which may be contracted for, charged, taken or received by
the Holder in accordance with applicable laws of the State of New York (the
"MAXIMUM RATE"), the rate of interest applicable to this Debenture shall be
limited to the Maximum Rate.
SECTION 6.4 REMEDIES NOT WAIVED. No course of dealing between the
Company and the Holder or any delay in exercising any rights hereunder shall
operate as a waiver by the Holder.
ARTICLE 7
MISCELLANEOUS
SECTION 7.1 NOTICE OF CERTAIN EVENTS. In the case of the occurrence of
any event described in Section 3.1(b) or 3.4 of this Debenture, the Company
shall cause to be mailed to the Holder of this Debenture at its last address as
it appears in the Company's security registry, at least twenty (20) days prior
to the applicable record, effective or expiration date hereinafter specified
(or, if such twenty (20) days' notice is not possible, at the earliest possible
date prior to any such record, effective or expiration date), a notice thereof,
including, if applicable, a statement of (y) the date on which a record is to be
taken for the purpose of such dividend, distribution, issuance or granting of
rights, options or warrants, or if a record is not to be taken, the date as of
which the holders of record of Common Stock to be entitled to such dividend,
distribution, issuance or granting of rights, options or warrants are to be
determined or (z) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective, and the date as of which it is expected that holders of record
of Common Stock will be entitled to exchange their shares for securities, cash
or other property deliverable upon such reclassification, consolidation, merger,
sale transfer, dissolution, liquidation or winding-up.
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SECTION 7.2 REGISTER. The Company shall keep at its principal office a
register in which the Company shall provide for the registration of this
Debenture. Upon any transfer of this Debenture in accordance with Articles 2 and
4 hereof, the Company shall register such transfer on the Debenture register.
SECTION 7.3 WITHHOLDING. To the extent required by applicable law, the
Company may withhold amounts for or on account of any taxes imposed or levied by
or on behalf of any taxing authority in the United States having jurisdiction
over the Company from any payments made pursuant to this Debenture.
SECTION 7.4 TRANSMITTAL OF NOTICES. Except as may be otherwise provided
herein, any notice or other communication or delivery required or permitted
hereunder shall be in writing and shall be delivered personally, or sent by
telecopier machine or by a nationally recognized overnight courier service, and
shall be deemed given when so delivered personally, or by telecopier machine or
overnight courier service as follows:
(1) if to the Company, to:
The Xxxxx Group, Inc.
00 Xxxxxxx Xxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Telecopier: 908.890.9877
Telephone: 000.000.0000
with a copy to:
Xxxxxx & Xxxxxx, LLP
0000 Xxxxx 0 Xxxxx
Xxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier: 732.577.1188
Telephone: 000.000.0000
(2) if to the Holder, to the address of such Holder as shown on
the books of the Company.
Each of the Holder or the Company may change the foregoing address by notice
given pursuant to this Section 7.4.
SECTION 7.5 GOVERNING LAW. THIS DEBENTURE SHALL BE GOVERNED BY, AND
-------------
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK
HFNY2: #533962 v1/05466-0001 / 03/12/2001
17
(WITHOUT GIVING EFFECT TO CONFLICTS OF LAWS PRINCIPLES). WITH RESPECT TO ANY
SUIT, ACTION OR PROCEEDINGS RELATING TO THIS DEBENTURE, THE COMPANY IRREVOCABLY
SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND
THE UNITED STATES DISTRICT COURT LOCATED IN THE BOROUGH OF MANHATTAN IN THE CITY
OF NEW YORK AND HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM. SUBJECT TO APPLICABLE LAW, THE COMPANY AGREES THAT FINAL
JUDGMENT AGAINST IT IN ANY LEGAL ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO THIS DEBENTURE SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN ANY OTHER
JURISDICTION WITHIN OR OUTSIDE THE UNITED STATES BY SUIT ON THE JUDGMENT, A
CERTIFIED COPY OF WHICH JUDGMENT SHALL BE CONCLUSIVE EVIDENCE THEREOF AND THE
AMOUNT OF ITS INDEBTEDNESS, OR BY SUCH OTHER MEANS PROVIDED BY LAW.
SECTION 7.6 HEADINGS. The headings of the Articles and Sections of this
Debenture are inserted for convenience only and do not constitute a part of this
Debenture.
SECTION 7.7 PAYMENT DATES. Whenever any payment hereunder shall be due
on a day other than a Business Day, such payment shall be made on the next
succeeding Business Day.
SECTION 7.8 BINDING EFFECT. Each Holder by accepting this Xxxxxxxxx
agrees to be bound by and comply with the terms and provisions of this
Debenture.
SECTION 7.9 NO STOCKHOLDER RIGHTS. Except as otherwise provided herein,
this Debenture shall not entitle the Holder to any of the rights of a
stockholder of the Company, including, without limitation, the right to vote, to
receive dividends and other distributions, or to receive any notice of, or to
attend, meetings of stockholders or any other proceedings of the Company, unless
and to the extent converted into shares of Common Stock in accordance with the
terms hereof.
SECTION 7.10 AMENDMENTS AND WAIVER. No supplement, modification or
waiver of this Debenture shall be binding unless executed in writing by Xxxxxx
and the Company. No waiver of any of the provisions of this Debenture shall be
deemed or shall constitute a waiver of any other provision hereof (whether or
not similar), nor shall such waiver constitute a continuing waiver unless
otherwise expressly provided.
SECTION 7.11 NEW DEBENTURE. This Debenture has been issued in
substitution for and replacement of the 8% Convertible Debenture Due January 16,
2006 of the Company issued to the initial Holder of this Debenture.
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NEXT PAGE IS SIGNATURE PAGE.]
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IN WITNESS WHEREOF, the Company has caused this Debenture to be
executed and delivered by its duly authorized officer on the date of this
Debenture.
THE XXXXX GROUP, INC.
By: ________________________________
Name:
Title:
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19
EXHIBIT A
[FORM OF CONVERSION NOTICE]
TO: The Xxxxx Group, Inc.
00 Xxxxxxx Xxxxx
Xxxx Xxxxxxxx, Xxx Xxxxxx 00000
Attn: Corporate Secretary
The undersigned owner of this 8% Amended and Restated
Convertible Debenture due January 16, 2006 (the "DEBENTURE") issued by The Xxxxx
Group, Inc. (the "COMPANY") hereby irrevocably exercises its option to convert
$__________ Principal Amount of the Debenture into shares of Common Stock in
accordance with the terms of the Debenture. The undersigned hereby instructs the
Company to convert the portion of the Debenture specified above into shares of
Common Stock Issued at Conversion in accordance with the provisions of Article 3
of the Debenture. The undersigned directs that the Common Stock and certificates
therefor deliverable upon conversion, the Debenture reissued in the Principal
Amount not being surrendered for conversion hereby, the check or shares of
Common Stock in payment of the accrued and unpaid interest thereon to the date
of this Notice, together with any check in payment for fractional Common Stock,
be registered in the name of and/or delivered to the undersigned unless a
different name has been indicated below. All capitalized terms used and not
defined herein have the respective meanings assigned to them in the Debenture.
The conversion pursuant hereto shall be deemed to have been effected at the date
and time specified below, and at such time the rights of the undersigned as a
Holder of the Principal Amount of the Debenture set forth above shall cease and
the Person or Persons in whose name or names the Common Stock Issued at
Conversion shall be registered shall be deemed to have become the holder or
holders of record of the Common Shares represented thereby and all voting and
other rights associated with the beneficial ownership of such Common Shares
shall at such time vest with such Person or Persons.
Date and time:
---------------------------------
Signature
Fill in for registration of Debenture:
Please print name and address (including ZIP code number):
========================
------------------------
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A-1
EXHIBIT B
[FORM OF COMPANY REDEMPTION NOTICE]
Dated:
TO: [Holder]
[Address]
The Xxxxx Group, Inc. (the "COMPANY") hereby irrevocably
exercises its option to redeem $__________ Principal Amount of the 8% Amended
and Restated Convertible Debenture due January 16, 2006 issued by the Company
(the "DEBENTURE"), at a redemption price of $__________ and of accrued and
unpaid interest thereon, in accordance with the terms of the Debenture. The
undersigned hereby instructs the Holder to surrender the portion of the
Debenture specified above in accordance with the provisions of Section 3.8 of
the Debenture. Upon receipt of such surrendered Debenture, the Company shall
deliver the Debenture reissued in the Principal Amount, if any, not being called
for redemption hereby, together with the check in payment of the redemption
price and for fractional Common Stock, such reissued Debenture to be issued in
your name and delivered to you or issued in the name of such other Person as you
may designate and delivered to such other Person. All capitalized terms used and
not defined herein have the respective meanings assigned to them in the
Debenture.
Very truly yours,
The Xxxxx Group, Inc.
By: ____________________
Name:
Title:
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B-1
