NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS
CONVERTIBLE (COLLECTIVELY, THE "SECURITIES") HAVE BEEN REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.
9% CONVERTIBLE DEBENTURE
XXX XXXXX CORP.
DUE MAY 5, 2009
Original Issue Date: May 5, 2006 US$500,000
This Debenture is one of a series of duly authorized and issued
convertible debentures of Xxx Xxxxx Corp., a Nevada corporation (the "Company")
designated its 9% Convertible Debentures due May 5, 2009 (the "Debenture")
issued to Xxxxx Xxxxxxx (together with its permitted successors and assigns, the
"Holder") pursuant to exemptions from registration under the Securities Act of
1933, as amended, pursuant to a Securities Purchase Agreement, of even date
herewith (the "Securities Purchase Agreement") among the Company and the Holder.
ARTICLE I.
SECTION 1.01 PRINCIPAL AND INTEREST. For value received, the Company
hereby promises to pay to the order of the Holder, in lawful money of the United
States of America and in immediately available funds the principal sum of
$500,000.
(a) Interest shall accrue on the unpaid principal balance of the
Debenture at the rate of nine percent (9%) per year (compounded monthly)
commencing 150 days from the Original Issue Date until May 5, 2009 (the
"Maturity Date"). Interest shall be calculated on the basis of a 360-day year.
(b) Commencing 150 days from the Original Issue Date, the Company
shall pay the Holder equal monthly installments of principal, together with
accrued interest as aforesaid. Thereafter, on the first business day of each
month through and including the month in which the Maturity Date occurs, the
Company shall pay such monthly installments of principal and interest. On the
Maturity Date, the entire unpaid principal amount and all accrued and unpaid
interest shall be paid to the Holder on the Maturity Date, unless this Debenture
is converted in accordance with Section 1.02 herein.
(c) Except as otherwise set forth in this Debenture, the Company may
not prepay any portion of the principal amount of this Debenture without the
prior written consent of the Holder.
SECTION 1.02 CONVERSION
(a) OPTIONAL CONVERSION. From and after October 1, 2006, the Holder
shall be entitled, at its option, to convert, at any time and from time to time,
until payment in full of this Debenture, all or any part of the principal amount
of the Debenture, plus accrued and unpaid interest thereon, into units ("Units")
of the Company's securities, at a price (the "Conversion Price") of $1.00 per
Unit. Each Unit shall consist of one share (the "Conversion Shares") of the
Company's common stock, par value $.001 per share (the "Common Stock"), and one
common stock purchase warrant (the "Warrants"). Each Warrant shall entitle the
holder to purchase one share of Common Stock (the "Warrant Shares") at an
exercise price (the "Exercise Price") of $3.00 per share, and shall be
exercisable for a period of two years commencing October 1, 2006. No fraction of
shares or scrip representing fractions of shares will be issued on conversion,
but the number of shares issuable shall be rounded to the nearest whole share.
The number of Units issuable upon a conversion hereunder shall be determined by
the quotient obtained by dividing (x) the outstanding principal amount of this
Debenture, plus accrued and unpaid interest thereon, to be converted as set
forth in the applicable Conversion Notice by (y) the Conversion Price. To
convert this Debenture, the Holder hereof shall deliver written notice thereof,
substantially in the form of Exhibit A to this Debenture, with appropriate
insertions (the "Conversion Notice"), to the Escrow Agent (as defined in the
Securities Purchase Agreement) and the Company at its address as set forth
herein. The date upon which the conversion shall be effective (the "Conversion
Date") shall be deemed to be the date set forth in the Conversion Notice. Except
as otherwise provided herein, the Company shall not have the right to object to
the conversion or the calculation of the applicable conversion price, absent
manifest error. Any conversion of any portion of the Debenture to Units shall be
deemed to be a pre-payment of principal plus accrued and unpaid interest,
without any penalty, and shall be credited against any future payments of
principal and interest in the order that such payments become due and payable.
(b) MANDATORY CONVERSION. Immediately following the last to occur of
(i) the filing by the Company with the Secretary of State of the State of Nevada
of an amendment (the "Amendment") to its Articles of Incorporation which, among
other things, increases its authorized capitalization to 300,000,000 shares of
common stock, $0.001 par value per share ("Common Stock"), (ii) the declaration
and distribution by the Company of a 30 for 1 stock split in the form of a stock
dividend (the "Stock Split"), and (ii) the closing of the PPO, as defined below,
this Debenture will automatically convert as to all unpaid principal, plus
accrued interest, if any, into Units at the Conversion Price. The Company shall
afford the Holder the opportunity to become a party to all agreements and
instruments executed by the investors in the Company's contemplated private
placement offering ("PPO") of Units, including, but not limited to, a
registration rights agreement (the "Registration Rights Agreement"). The
Registration Rights Agreement shall, among other things, register the Conversion
Shares and the Warrant Shares under the Securities Act.
2
SECTION 1.03 RESERVATION OF COMMON STOCK. The Company shall reserve and
keep available out of its authorized but unissued shares of Common Stock, solely
for the purpose of effecting the conversion of this Debenture and the exercise
of the Warrants, that number of shares of Common Stock equal to the sum of (i)
the number of shares of Common Stock into which the Debenture is convertible
from time to time based upon the Conversion Price, plus (ii) the number of
shares of Common Stock for which the Warrants are exercisable from time to time
based upon the Exercise Price.
SECTION 1.04 ABSOLUTE OBLIGATION/RANKING. Except as expressly provided
herein, no provision of this Debenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of,
interest and liquidated damages (if any) on, this Debenture at the time, place,
and rate, and in the coin or currency, herein prescribed. This Debenture is a
direct debt obligation of the Company. This Debenture ranks pari passu with all
other Debentures now or hereinafter issued pursuant to the Securities Purchase
Agreement.
SECTION 1.05 PAYING AGENT AND REGISTRAR. Initially, the Company will act
as paying agent and registrar. The Company may change any paying agent,
registrar, or Company-registrar by giving the Holder not less than ten (10)
business days' written notice of its election to do so, specifying the name,
address, telephone number and facsimile number of the paying agent or registrar.
The Company may act in any such capacity.
SECTION 1.06 DIFFERENT DENOMINATIONS. This Debenture is exchangeable for
an equal aggregate principal amount of Debentures of different authorized
denominations, as requested by the Holder surrendering the same. No service
charge will be made for such registration of transfer or exchange.
SECTION 1.07 INVESTMENT REPRESENTATIONS. This Debenture has been issued
subject to certain investment representations of the original Holder set forth
in the Securities Purchase Agreement and may be transferred or exchanged only in
compliance with the Securities Purchase Agreement and applicable federal and
state securities laws and regulations.
SECTION 1.08 RELIANCE ON DEBENTURE REGISTER. Prior to due presentment to
the Company for transfer or conversion 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 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 is overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.
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ARTICLE II.
SECTION 2.01 AMENDMENTS AND WAIVER OF DEFAULT. The Debenture may not be
amended without the consent of the Holder. Notwithstanding the above, without
the consent of the Holder, the Debenture may be amended to cure any ambiguity,
defect or inconsistency or to make any change that does not adversely affect the
rights of the Holder.
ARTICLE III.
SECTION 3.01 EVENTS OF DEFAULT. Each of the following events shall
constitute a default under this Agreement (each an "Event of Default"):
(a) failure by the Company to pay principal amount or interest due
hereunder within ten (10) days of the date such payment is due;
(b) failure by the Company's transfer agent to issue Common Stock to
the Holder within five (5) days of the Company's receipt of the attached
Conversion Notice from Holder in accordance with the Securities Purchase
Agreement;
(c) failure by the Company for ten (10) days after notice to it to
comply with any of its other agreements in the Debenture;
(d) the Company shall: (1) make a general assignment for the benefit
of its creditors; (2) apply for or consent to the appointment of a receiver,
trustee, assignee, custodian, sequestrator, liquidator or similar official for
itself or any of its assets and properties; (3) commence a voluntary case for
relief as a debtor under the United States Bankruptcy Code; (4) file with or
otherwise submit to any governmental authority any petition, answer or other
document seeking: (A) reorganization, (B) an arrangement with creditors or (C)
to take advantage of any other present or future applicable law respecting
bankruptcy, reorganization, insolvency, readjustment of debts, relief of
debtors, dissolution or liquidation; (5) file or otherwise submit any answer or
other document admitting or failing to contest the material allegations of a
petition or other document filed or otherwise submitted against it in any
proceeding under any such applicable law, or (6) be adjudicated a bankrupt or
insolvent by a court of competent jurisdiction;
(e) any case, proceeding or other action shall be commenced against
the Company for the purpose of effecting, or an order, judgment or decree shall
be entered by any court of competent jurisdiction approving (in whole or in
part) anything specified in Section 3.01(d) hereof, or any receiver, trustee,
assignee, custodian, sequestrator, liquidator or other official shall be
appointed with respect to the Company, or shall be appointed to take or shall
otherwise acquire possession or control of all or a substantial part of the
assets and properties of the Company, and any of the foregoing shall continue
unstayed and in effect for any period of sixty (60) days;
(f) any material obligation of the Company for the payment of
borrowed money is not paid when due or within any applicable grace period, or
such obligation becomes or is declared to be due and payable before the
expressed maturity of the obligation, or there shall have occurred an event
that, with the giving of notice or lapse of time, or both, would cause any such
obligation to become, or allow any such obligation to be declared to be, due and
payable before the expressed maturity date of the obligation;
4
(g) a breach by the Company of any material contract that would have
a Material Adverse Effect (as defined in the Securities Purchase Agreement);
(h) the Common Stock shall not be eligible for quotation on or
quoted for trading on the OTC Bulletin Board and shall not again be eligible for
and quoted for trading thereon within five (5) trading days; or
(i) any default, whether in whole or in part, shall occur in the due
observance or performance of any obligations or other covenants, terms or
provisions to be performed under the Securities Purchase Agreement which is not
cured by the Company within ten (10) days after receipt of written notice
thereof.
If any Event of Default occurs, the full principal amount of this
Debenture, together with interest and other amounts owing in respect thereof, to
the date of acceleration shall become, at the Holder's election, immediately due
and payable in cash. Commencing five (5) days after the occurrence of any Event
of Default that results in the eventual acceleration of this Debenture, the
interest rate on this Debenture shall accrue at the rate of 18% per annum, or
such lower maximum amount of interest permitted to be charged under applicable
law. All Debentures for which the full amount hereunder shall have been paid in
accordance herewith shall promptly be surrendered to or as directed by the
Company. The Holder need not provide and the Company hereby waives any
presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law. Such declaration may be rescinded and annulled by Xxxxxx at any
time prior to payment hereunder and the Holder shall have all rights as a
Debenture holder until such time, if any, as the full payment under this Section
shall have been received by it. No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent thereon.
ARTICLE IV.
SECTION 4.01 RE-ISSUANCE OF DEBENTURE. When the Holder elects to convert a
part of the Debenture, then the Company shall reissue a new Debenture in the
same form as this Debenture to reflect the new principal amount and the Holder
shall return the Debenture to the Company for cancellation.
ARTICLE V.
SECTION 5.01 ANTI-DILUTION. Adjustment of Conversion Price. The Conversion
Price shall be adjusted from time to time as follows:
(a) Adjustment of Conversion Price and Number of Shares upon
Issuance of Common Stock. If at any time after the Original Issue Date, the
Company issues or sells, or is deemed to have issued or sold, any shares of
Common Stock (other than (i) Excluded Securities (as defined herein) and (ii)
shares of Common Stock which are issued or deemed to have been issued by the
Company in connection with an Approved Stock Plan (as defined herein) or upon
issuance, exercise or conversion of the Other Securities (as defined herein))
for a consideration per share less than a price (the "Applicable Price") equal
to the Conversion Price in effect immediately prior to such issuance or sale,
then immediately after such issue or sale the Conversion Price then in effect
shall be reduced to an amount equal to such consideration per share, provided
that in no event shall the Conversion Price be reduced below $.001.
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(b) Effect on Conversion Price of Certain Events. For purposes of
determining the adjusted Conversion Price under Section 5.01(a) above, the
following shall be applicable:
(i) Issuance of Options. If after the date hereof, the Company
in any manner grants any rights, warrants or options to subscribe for or
purchase Common Stock or convertible securities ("Options"), other than Excluded
Securities or Other Securities issued or deemed to have been issued in
connection with any Approved Stock Plan, and the lowest price per share for
which one share of Common Stock is issuable upon the exercise of any such Option
or upon conversion or exchange of any convertible securities issuable upon
exercise of any such Option is less than the Conversion Price then in effect,
then such share of Common Stock shall be deemed to be outstanding and to have
been issued and sold by the Company at the time of the granting or sale of such
Option for such price per share. For purposes of this Section 5.01(b)(i), the
lowest price per share for which one share of Common Stock is issuable upon
exercise of such Options or upon conversion or exchange of such convertible
securities shall be equal to the sum of the lowest amounts of consideration (if
any) received or receivable by the Company with respect to any one share of
Common Stock upon the granting or sale of the Option, upon exercise of the
Option or upon conversion or exchange of any other convertible security other
than this Debenture issuable upon exercise of such Option. No further adjustment
of the Conversion Price shall be made upon the actual issuance of such Common
Stock or of such convertible securities upon the exercise of such Options or
upon the actual issuance of such Common Stock upon conversion or exchange of
such convertible securities.
(ii) Issuance of Convertible Securities. If the Company in any
manner issues or sells any convertible securities after the Original Issue Date,
other than Excluded Securities or Other Securities issued or deemed to have been
issued in connection with an Approved Stock Plan, and the lowest price per share
for which one share of Common Stock is issuable upon the conversion or exchange
thereof is less than the Conversion Price then in effect, then such share of
Common Stock shall be deemed to be outstanding and to have been issued and sold
by the Company at the time of the issuance or sale of such convertible
securities for such price per share. For the purposes of this Section
5.01(b)(ii), the lowest price per share for which one share of Common Stock is
issuable upon such conversion or exchange shall be equal to the sum of the
lowest amounts of consideration (if any) received or receivable by the Company
with respect to one share of Common Stock upon the issuance or sale of the
convertible security and upon conversion or exchange of such convertible
security. No further adjustment of the Conversion Price shall be made upon the
actual issuance of such Common Stock upon conversion or exchange of such
convertible securities, and if any such issue or sale of such convertible
securities is made upon exercise of any Options for which adjustment of the
Conversion Price had been or are to be made pursuant to other provisions of this
Section 5.01(b), no further adjustment of the Conversion Price shall be made by
reason of such issue or sale.
6
(iii) Change in Option Price or Rate of Conversion. If the
purchase price provided for in any Options, the additional consideration, if
any, payable upon the issue, conversion or exchange of any convertible
securities, or the rate at which any convertible securities are convertible into
or exchangeable for Common Stock changes at any time, the Conversion Price in
effect at the time of such change shall be adjusted to the Conversion Price
which would have been in effect at such time had such Options or convertible
securities provided for such changed purchase price, additional consideration or
changed conversion rate, as the case may be, at the time initially granted,
issued or sold and the number of shares of Common Stock issuable upon conversion
of this Debenture shall be correspondingly readjusted. For purposes of this
Section 5.01(b)(iii), if the terms of any Option or convertible security that
was outstanding as of the Original Issue Date are changed in the manner
described in the immediately preceding sentence, then such Option or convertible
security and the Common Stock deemed issuable upon exercise, conversion or
exchange thereof shall be deemed to have been issued as of the date of such
change. No adjustment pursuant to this Section 5.01(b) shall be made if such
adjustment would result in an increase of the Conversion Price then in effect.
(c) Effect on Conversion Price of Certain Events. For purposes of
determining the adjusted Conversion Price under Sections 5.01(a) and 5.01(b),
the following shall be applicable:
(i) Calculation of Consideration Received. If any Common
Stock, Options or convertible securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefore will be
deemed to be the net amount received by the Company therefore. If any Common
Stock, Options or convertible securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will
be the fair value of such consideration, except where such consideration
consists of marketable securities, in which case the amount of consideration
received by the Company will be the market price of such securities on the date
of receipt of such securities (measured by the closing sale price of such
securities on the Over-the-Counter Bulletin Board or its principal trading
market). If any Common Stock, Options or convertible securities are issued to
the owners of the non-surviving entity in connection with any merger in which
the Company is the surviving entity, the amount of consideration therefore will
be deemed to be the fair value of such portion of the net assets and business of
the non-surviving entity as is attributable to such Common Stock, Options or
convertible securities, as the case may be. The fair value of any consideration
other than cash or securities will be determined jointly by the Company and the
holders of the principal amount of the Debentures then outstanding. If such
parties are unable to reach agreement within ten (10) days after the occurrence
of an event requiring valuation (the "Valuation Event"), the fair value of such
consideration will be determined within five (5) Business Days after the tenth
(10th) day following the Valuation Event by an independent, reputable appraiser
jointly selected by the Company and the holders of the principal amount of the
Debentures then outstanding. The determination of such appraiser shall be final
and binding upon all parties and the fees and expenses of such appraiser shall
be borne by the Company.
(ii) Integrated Transactions. In case any Option is issued in
connection with the issue or sale of other securities of the Company, together
comprising one integrated transaction in which no specific consideration is
allocated to such Options by the parties thereto, the Options will be deemed to
have been issued for a consideration of $.001.
7
(iii) Treasury Shares. The number of shares of Common Stock
outstanding at any given time does not include shares owned or held by or for
the account of the Company, and the disposition of any shares so owned or held
will be considered an issue or sale of Common Stock.
(iv) Record Date. If the Company takes a record of the holders
of Common Stock for the purpose of entitling them (1) to receive a dividend or
other distribution payable in Common Stock, Options or in convertible securities
or (2) to subscribe for or purchase Common Stock, Options or convertible
securities, then such record date will be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or the making of such other distribution or the
date of the granting of such right of subscription or purchase, as the case may
be.
(d) Adjustment of Conversion Price upon Subdivision or Combination
of Common Stock. If at any time after the date of issuance of this Debenture
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of Common Stock into a greater
number of shares, the Conversion Price or Future Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time after the date of issuance of this Debenture combines (by combination,
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Conversion Price or Future
Price in effect immediately prior to such combination will be proportionately
increased. Any adjustment under this Section 5.01(d) shall become effective at
the close of business on the date the subdivision or combination becomes
effective.
(e) Distribution of Assets. If the Company shall declare or make any
dividend or other distribution of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise (including,
without limitation, any distribution of cash, stock or other securities,
property or options by way of a dividend, spin off, reclassification, corporate
rearrangement or other similar transaction) (a "Distribution"), at any time
after the issuance of this Debenture, then, in each such case the Conversion
Price in effect immediately prior to the close of business on the record date
fixed for the determination of holders of Common Stock entitled to receive the
Distribution shall be reduced, effective as of the close of business on such
record date, to a price determined by multiplying such Conversion Price by a
fraction of which (A) the numerator shall be the closing bid price of the Common
Stock on the trading day immediately preceding such record date minus the value
of the Distribution (as determined in good faith by the Company's Board of
Directors) applicable to one share of Common Stock, and (B) the denominator
shall be the closing bid price of the Common Stock on the trading day
immediately preceding such record date. Notwithstanding the foregoing, the
Distribution in the form of a stock dividend (the "Forward Split") to be
effected prior to, and in connection with, the Merger shall in no event cause an
adjustment to the Conversion Price, nor shall any similar adjustment to the
capital structure of the Company effected in connection with the Merger.
(f) Certain Events. If any event occurs of the type contemplated by
the provisions of this Section 5.01 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
Company's Board of Directors will make an appropriate adjustment in the
Conversion Price so as to protect the rights of the holders of the Debenture;
provided, except as set forth in Section 5.01(d), that no such adjustment
pursuant to this Section 5.01(f) will increase the Conversion Price as otherwise
determined pursuant to this Section 5.01.
8
(g) Notices.
(i) Immediately upon any adjustment of the Conversion Price,
the Company will give written notice thereof to the holder of this Debenture,
setting forth in reasonable detail, and certifying, the calculation of such
adjustment.
(ii) The Company will give written notice to the holder of
this Debenture at least ten (10) days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to holders of Common Stock or (C) for determining rights to
vote with respect to any dissolution or liquidation, provided that such
information shall be made known to the public prior to or in conjunction with
such notice being provided to such holder.
(h) Definitions.
(i) "Approved Stock Plan" means any employee benefit plan
which has been approved by the Board of Directors of the Company, or any
successor thereto, pursuant to which the Company's securities may be issued to
any employee, officer or director for services provided to the Company.
(ii) "Excluded Securities" means any of the following: (a) any
issuance by the Company of securities in connection with a strategic partnership
or a joint venture (the primary purpose of which is not to raise equity
capital), (b) any issuance by the Company of securities as consideration for a
merger or consolidation or the acquisition of a business, product, license, or
other assets of another person or entity and (c) options to purchase shares of
Common Stock, or other stock based awards or grants under an Approved Stock
Plan.
(iii) "Other Securities" means (i) those options and warrants
of the Company issued prior to, and outstanding on, the Original Issue Date,
including but not limited to those options issued in connection with the
employment of the Company's Chief Executive Officer, (ii) the Units, including
the Common Stock and Warrants included in the Units, issued in the PPO, (ii) the
shares of Common Stock issuable on exercise of such options and warrants,
provided such options and warrants are not amended after the Original Issue
Date, (iii) the shares of Common Stock issued in connection with the Stock Split
and (iv) the shares of Common Stock issuable upon exercise of the Warrants or
conversion of this Debenture.
(i) Nothing in this Section 5.01 shall be deemed to authorize the
issuance of any securities by the Company in violation of Section 5.02.
9
ARTICLE VI.
SECTION 6.01 NOTICE. Notices regarding this Debenture shall be sent to the
parties at the following addresses, unless a party notifies the other parties,
in writing, of a change of address:
If to the Company, to: Xxx Xxxxx Corp.
: c/o Xxxxxx X. Xxxxxxxxx
Suite 328, 000 Xxxxx Xxxxx Xxxx Xxxxx
Xxxxxxx, X.X. T3G 5K7
Telephone: (000) 000-0000
If to the Holder: Xxxxx Xxxxxxx
00000 0xx Xxxxxx
Xxxxxxxxx, XX Xxxxxx X0X 0X0
Telephone: 000- 000-0000
SECTION 6.02 GOVERNING LAW. All questions concerning the construction,
validity, enforcement and interpretation of this Debenture shall be governed by
and construed and enforced in accordance with the internal laws of the State of
New York, without regard to the principles of conflicts of law thereof. Each
party agrees that all legal proceedings concerning the interpretations,
enforcement and defense of the transactions contemplated by any of the
Transaction Documents (whether brought against a party hereto or its respective
affiliates, directors, officers, shareholders, employees or agents) shall be
commenced in the state and federal courts sitting in the City of New York,
Borough of Manhattan (the "New York Courts"). Each party hereto hereby
irrevocably submits to the exclusive jurisdiction of the New York Courts for the
adjudication of any dispute hereunder or in connection herewith or with any
transaction contemplated hereby or discussed herein (including with respect to
the enforcement of any of the Transaction Documents), and hereby irrevocably
waives, and agrees not to assert in any suit, action or proceeding, any claim
that it is not personally subject to the jurisdiction of any such court, or such
New York Courts are improper or inconvenient venue for such proceeding. Each
party hereby irrevocably waives personal service of process and consents to
process being served in any such suit, action or proceeding by mailing a copy
thereof via registered or certified mail or overnight delivery (with evidence of
delivery) to such party at the address in effect for notices to it under this
Debenture and agrees that such service shall constitute good and sufficient
service of process and notice thereof. Nothing contained herein shall be deemed
to limit in any way any right to serve process in any manner permitted by law.
Each party hereto hereby irrevocably waives, to the fullest extent permitted by
applicable law, any and all right to trial by jury in any legal proceeding
arising out of or relating to this Debenture or the transactions contemplated
hereby. If either party shall commence an action or proceeding to enforce any
provisions of this Debenture, then the prevailing party in such action or
proceeding shall be reimbursed by the other party for its attorneys fees and
other costs and expenses incurred with the investigation, preparation and
prosecution of such action or proceeding.
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SECTION 6.03 SEVERABILITY. The invalidity of any of the provisions of this
Debenture shall not invalidate or otherwise affect any of the other provisions
of this Debenture, which shall remain in full force and effect.
SECTION 6.04 ENTIRE AGREEMENT AND AMENDMENTS. This Debenture represents
the entire agreement between the parties hereto with respect to the subject
matter hereof and there are no representations, warranties or commitments,
except as set forth herein. This Debenture may be amended only by an instrument
in writing executed by the parties hereto.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, with the intent to be legally bound hereby, the
Company as executed this Debenture as of the date first written above.
XXX XXXXX CORP.
By: /s/ Xxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxx Xxxxxxxxx
Title: Chief Executive Officer
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EXHIBIT A
NOTICE OF CONVERSION
(TO BE EXECUTED BY THE HOLDER IN ORDER TO CONVERT THE DEBENTURE)
TO:
The undersigned hereby irrevocably elects to convert $___ of the principal
amount of the above Debenture into Units of securities of Xxx Xxxxx Corp.,
according to the conditions stated therein, as of the Conversion Date written
below.
CONVERSION DATE: ______________________________________
APPLICABLE CONVERSION PRICE: ______________________________________
SIGNATURE: ______________________________________
NAME: ______________________________________
ADDRESS: ______________________________________
AMOUNT TO BE CONVERTED: $_____________________________________
AMOUNT OF DEBENTURE UNCONVERTED: $_____________________________________
CONVERSION PRICE PER UNIT: $_____________________________________
INTEREST ON THE PRINCIPAL BEING
CONVERTED SHALL BE PAID IS
NUMBER OF SHARES OF COMMON STOCK AND
WARRANTS TO BE ISSUED INCLUDING AS
PAYMENT OF INTEREST, IF APPLICABLE: ______________________________________
PLEASE ISSUE THE SHARES OF COMMON STOCK
AND WARRANTS IN THE FOLLOWING NAME AND
TO THE FOLLOWING ADDRESS: ______________________________________
ISSUE TO THE FOLLOWING ACCOUNT OF THE
HOLDER: ______________________________________
AUTHORIZED SIGNATURE: ______________________________________
NAME: ______________________________________
TITLE: ______________________________________
PHONE NUMBER: ______________________________________
BROKER DTC PARTICIPANT CODE: ______________________________________
ACCOUNT NUMBER: ______________________________________
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