EXHIBIT 4.6
THIS DEBENTURE IS A SECURITY THAT HAS NOT BEEN REGISTERED FOR SALE UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, AND
MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
REGISTRATION OR AN EXEMPTION THEREFROM UNDER SAID ACT AND SUCH LAWS AND THE
RESPECTIVE RULES AND REGULATIONS THEREUNDER.
PAYSTAR COMMUNICATIONS CORPORATION
14% CONVERTIBLE DEBENTURE
$25,000 MINIMUM
$ Date: ____________, 2001
Maturity Date: _______________2003_____________________
1. Obligation. For Value received PayStar Communications Corporation, a
Nevada Corporation (herein called the "Company"), promises to pay to
___________________________________________ (the "Holder") or order the sum of
_______________________________________________ together with interest at the
rate of 14% per annum from the date hereof until paid. Interest is payable
quarterly commencing on _______________, 2001 and continuing quarterly
thereafter until the whole of the Debenture is paid in full. Principal and
all accrued and unpaid interest shall be payable at maturity on
________________, 2003. There shall be no prepayment penalty.
1.1. Repayment and Registration. Both principal and interest are payable to
the holder in lawful money of the United States of America at
_____________________________________________________________________.
The obligations of Company under this Debenture shall be registered as to both
principal and interest and any transfer of any obligation hereunder may be
accomplished only through the surrender of this instrument and the reissuance
by the Company hereunder to the new holder (i.e. Xxxxx) of a new Debenture;
the right of the principal and stated interest of this Debenture may be
transferred only through a book-entry system plus a complete reissuance of a
new Debenture under the procedures outlined above. The Holder has no right to
make the Company file a registration statement in connection with either this
Debenture or the shares, if the Debenture is converted.
1.2. Payment. Principal and interest on the Debenture will be payable from,
and the Debenture may be presented for transfer and exchange, at the
accounting office of the Company in Lodi, California. No service charge will
be made for any registration or transfer of this Debenture including payment
of a sum sufficient to cover any transfer tax or similar governmental charge
payable in connection therewith.
1.3. Transfer. Notwithstanding the foregoing, the Company may refuse to
register the transfer, exchange or encumbrance of any Debenture presented for
such purpose without receiving either (i) evidence satisfactory to the Company
that such transfer, exchange or encumbrance has been registered under the
Securities Act of 1933, as amended, as well as any applicable state, blue sky
or securities laws, or (ii) an opinion of counsel satisfactory to the Company
to the effect that there exists an available exemption for such transfer,
exchange or encumbrance under such Act and such blue sky laws.
2. Conversion and Purchase Rights. The Holder of this Debenture shall have
the right from and after one year from the date hereof, and within the twelve
(12) months thereafter, to convert any portion of this Debenture up to the
maximum allowed as in Paragraph 2.1 into fully paid and nonassessable shares
of Common Stock of Company. Upon the surrender hereof, accompanied by such
Xxxxxx's written request for conversion, Company shall pay within 30 days all
interest accrued hereon to the date of conversion and issue and deliver to
such Holder certificates evidencing such shares of stock as hereinafter set
forth. If a portion is converted, Company shall deliver to the Holder a
certificate for the proper number of shares of stock for the portion converted
and a new Debenture in the form hereof for the balance of the principal amount
hereof. Upon transfer of this Debenture, the then unexercised conversion or
purchase rights set forth in this Paragraph 2 shall inure to the transferees
in proportion to their respective interests in remaining principal, or as
Holder shall allocate said conversion or purchase rights.
2.1. Conversion Price. The principal amount of this Debenture is convertible
into Common Stock at $2.00 per share.
2.2. Adjustment of Conversion Terms. If the Company shall at any time
subdivide its outstanding shares of Common Stock by recapitalization,
reclassification or split-up thereof, or if the Company shall declare a stock
dividend or distribute shares of its Common Stock to its stockholders, the
number of Shares convertible pursuant to this Debenture immediately prior to
such subdivision shall be proportionately increased in each instance, and if
the Company shall at any time combine the outstanding shares of Common Stock
by recapitalization, reclassification or combination thereof, the number of
Shares convertible pursuant to this Note immediately prior to such combination
shall be proportionately decreased in each instance.
Whenever the number of shares of Common Stock convertible pursuant
to this Debenture is required to be adjusted as provided in the above
paragraph, the exercise price shall be adjusted (to the nearest cent) in each
instance by multiplying such conversion price per share immediately prior to
such adjustment by a fraction (x) the numerator of which shall be the number
of shares of Common Stock purchasable immediately prior to such adjustment,
and (y) the denominator of which shall be the number of shares of Common Stock
so convertible immediately thereafter.
In case the Company shall, at any time prior to the expiration date
of the Debenture and prior to the conversion thereof, offer to the holders of
it Common Stock any right to subscribe for additional shares of any class of
the Company, then the Company shall give written notice thereof to the
registered holders of the Debenture not less than thirty (30) days prior to
the date on which the books of the Company are closed or a record date fixed
for the determination of stockholders entitled to such subscription rights.
Such notice shall specify the date as to which the books shall be closed or
record date be fixed with respect to such offer or subscription, and the right
of the holders to participate in such off or subscription shall terminate if
the Debenture shall not be converted before the date of such closing of the
books or such record date.
If the Company shall take any action affecting the shares of its
Common Stock, other than that action described in this Debenture, which, in
the opinion of the Company would materially affect the rights of the holders
of the Debenture or the conversion price per shares of Common Stock
convertible shall be adjusted in each instance and at such time as the Company
, in good faith, may determine to be equitable under the circumstances. The
adjustments determined by the Company shall be final, binding and conclusive.
Any changes or adjustments in the number of shares of Common Stock
convertible or in the conversion price of the Debenture, as required or
authorized by this section, shall be made with respect to all authorized
Debentures whether or not they have yet been issued or outstanding at the time
of the occurrence of the circumstances leading to such change or adjustment.
2.3. Fractional Shares. No fractional shares of Common Stock will be issued
in connection with any conversion or purchase hereunder but in lieu of such
fractional shares Company shall make a cash payment therefore upon the basis
of the Conversion Price then in effect.
2.4. Authorized Shares. Company covenants that during the period the
conversion or purchase rights exist, Company will reserve from its authorized
and unissued Common Stock a sufficient number of shares to provide for the
issuance of Common Stock upon the conversion of this Debenture. Company
agrees that its issuance of this Debenture shall constitute full authority to
its officers who are charged with the duty of executing stock certificates to
execute and issue the necessary certificates for shares of Common Stock upon
the conversion of this Debenture or purchase of shares pursuant hereto.
2.5. Method of Conversion. This Debenture may be converted by the Holder in
whole or in part by the surrender of this Debenture at the principal office of
the Company. Upon partial exercise hereof, a new Debenture containing the same
date and provisions of this Debenture shall be issued by the Company to said
Holder for the remaining principal balance and the number of shares of Common
Stock with respect to which this Debenture shall not have been converted.
3. Default. The occurrence of any one or more of the following events shall
constitute an event of default ("Event of Default") by the Company hereunder:
3.1. The Company defaults in the payment of interest on this Debenture when
the same becomes due and payable, and the default continues for a period of
ten (10) days after notice is given by the Holder to the Company of the
failure to make such payment;
3.2. The Company defaults in the payment of principal on this Debenture when
the same becomes due and payable, and the default continues for a period of
ten (10) days after notice is given by the Holder to the Company of the
failure to make such payment;
3.3. The Company fails to comply with any of its other material agreements
contained in this Debenture, and the default continues for a period of thirty
(30) days after notice is given by the Holder to the Company of the default;
3.4. The Company shall make an assignment for the benefit of its creditors,
or admit in writing its inability to pay its debts generally as they become
due, or commences a voluntary case or proceeding, or consents to the
institution of bankruptcy or insolvency proceedings against it, or a court of
competent jurisdiction shall enter a judgment, decree or order for relief
against the Company in any involuntary case or proceeding or under any
bankruptcy law which judgment, decree or order shall remain unstayed and in
effect for a period of ninety (90) consecutive days.
4. Remedies. If the Company shall be in default under this Debenture the
Holder shall have all rights at law or in equity to remedy the default.
5. No Recourse Against Others. A director, officer, employee or stockholder,
as such, of the Company shall not have any liability for any obligations of
the Company under the Debenture or for any claim based on, in respect of, or
by reason of, such obligations or their creation. Each Holder by accepting a
Debenture waives and releases all such liability. The waiver and release are
part of the consideration for the issue of the Debenture.
6. Acceleration. If an Event of Default described above occurs and is
continuing, the Holder may, by written notice to the Company, declare to be
due and payable immediately all principal and outstanding interest on this
Debenture.
7. Notices. All notices referred to in this Debenture shall be in writing,
and shall be sent by certified or registered mail, return receipt requested,
and if to the Company at its then corporate accounting offices in Lodi,
California and if to the Holder to his, her or its address as set forth in the
books and records of the Company.
8. Reports. Provided that the Debentures are outstanding, the Company shall
provide each Holder with any and all reports, including financial reports,
which it provides to shareholders, in the same manner and at the same time.
9. Waiver. The failure of any party to enforce any of the terms and
provisions hereof, or the failure to declare a default hereunder shall apply
only in the particular instance, and shall not operate as a continuing waiver.
10. Benefit. This Debenture shall be binding upon and inure to the benefit
of the parties hereto and their successors and assigns; provided, however,
that this Debenture, and all rights hereunder, shall not be assigned by the
Holder without compliance with all federal and state securities laws and the
provisions of any legend on this Debenture.
11. Construction. The laws of the State of California shall govern the
construction of this Debenture and the rights and duties of the parties
hereto.
IN WITNESS WHEREOF, this Xxxxxxxxx has been duly executed the day and year
first set forth above.
PAYSTAR COMMUNICATIONS CORPORATION
a Nevada, Corporation
By _______________________________
_______________, Its _____________
