0 % CONVERTIBLE DEBENTURE
(This Convertible Debenture is one of a series of
Convertible Debentures of like tenor and terms)
August _____, 1999 $________________
FOR VALUE RECEIVED, the undersigned, INTERNATIONAL COSMETICS MARKETING
CO., a Florida corporation (f/k/a CindyCo, Inc.), ("Maker"), hereby promises to
pay to the order of _______________ ("Payee"), the principal sum of
____________________________________ Dollars ($___________) with the principal
balance being due and payable three (3) years from the date of this Debenture,
all as hereinafter provided (the "Debenture").
1. Payments of Principal. Upon the expiration of three (3) years from
the date of this Debenture ("Maturity Date"), all outstanding principal shall be
due and payable, and shall be paid to Payee.
2. Place of Payment. So long as Payee shall hold this Debenture, all
payments of principal shall be made to the Payee at the address of Maker as
specified herein upon presentment of this Debenture.
3. Conversion.
(a) Conversion. All, but not less than all, of this Debenture
is subject to conversion (the "Conversion") into shares of the Maker's common
stock ("Common Stock") at any time, at the option of the Payee, at a conversion
price of $5.00 per share of Common Stock ("Conversion Price") of the Maker in
accordance with the provisions of Paragraph 3(b) hereof; provided, however, that
such Conversion must be effected by the holder on or prior to 36 months from the
date hereof (the "Conversion Period"). In the event such Conversion does not
occur within the Conversion Period or payment does not occur on the Maturity
Date, this Debenture shall be automatically converted.
(b) Conversion Procedure. Before the Payee shall be entitled
to convert all or any portion of this Debenture into shares of Common Stock, it
shall surrender this Debenture at the office of the Maker and shall give written
notice by mail, postage prepaid, to the Maker at its principal corporate office
of the election to convert the same and shall state therein the name or names
and the amounts in which the certificate or certificates for shares of Common
Stock are to be issued, provided however, that such issuance is in compliance
with federal and applicable state securities laws. Such conversion shall be
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deemed to have been made immediately prior to the close of business on the date
of such surrender of this Debenture. The person entitled to receive the shares
of Common Stock issuable upon such conversion shall be treated for all purposes
as the record holder or holder of such shares of Common Stock as of such date.
(c) All shares of Common Stock acquired by conversion of the
Debenture ("Conversion Shares"), upon issuance, will be duly authorized, validly
issued, fully paid and non-assessable and free from all taxes, liens and charges
with respect to the issue thereof, provided that the Maker shall not be required
to pay any tax which may be payable in respect of any transfer involved in the
issuance and delivery of any certificate in a name other than that of the holder
of the Debenture which is being converted.
(d) Delivery of Stock Certificates. As promptly as practical
after the conversion of this Debenture, the Maker at its expense will issue and
deliver to the Payee of this Debenture a certificate or certificates for the
number of full shares of Common Stock issuable upon such conversion.
(e) Mechanics and Effect of Conversion. No fractional shares
of Common Stock shall be issued upon conversion of this Debenture. In lieu of
the Maker issuing any fractional shares to the Payee upon the conversion of this
Debenture, the Maker shall round such number of shares to be issued to the Payee
to the next highest number of shares.
4. Adjustments for Stock Splits and Subdivisions. In the event the
Company should at any time or from time to time after the date of issuance
hereof fix a record date for the effectuation of a split or subdivision of the
outstanding shares if Common Stock or the determination of holders of Common
Stock entitled to receive a dividend or other distribution payable in additional
shares of Common Stock or other securities or rights convertible into, or
entitling the holder thereof to receive directly or indirectly, additional
shares of Common Stock (hereinafter referred to as the "Common Stock
Equivalents") without payment of any consideration by such holder for the
additional shares of Common Stock or the Common Stock Equivalents then, as of
such record date, (or the date of such dividend distribution, split or
subdivision if no record date is fixed), the Conversion Price of this Debenture
shall be appropriately decreased so that the number of shares of Common Stock
issuable upon conversion of this Debenture shall be increased in proportion to
such increase of outstanding shares.
If the number of shares of Common Stock outstanding any time
after the date hereof is decreased by a combination of the outstanding shares of
Common Stock, then, following the record date of such combination, the
Conversion Price of this Debenture shall be appropriately increased so that the
number of shares of Common Stock issuable on conversion hereof shall be
decreased in proportion to such decrease in outstanding shares.
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5. Sale, Exchange, Tender Offer, Redemption or Buyout. In case of any
sale, exchange, tender offer, redemption or buyout of the Company's shares, or
any consolidation of the Company with or merger of the Company into another
corporation, or in case of any sale, transfer or lease to another corporation of
all or substantially all the property of the Company, the Company or such
successor or purchasing corporation, as the case may be, shall execute with the
Lender an agreement that the Lender shall have the right thereafter, upon
payment of the per share Conversion Price in effect immediately prior to such
action, to convert on the same basis which it would have or have been entitled
to receive after the happening of such consolidation, merger, sale, transfer or
lease had such conversion been accomplished immediately prior to such action.
Such agreement shall provide for adjustments, which shall be as nearly
equivalent as may be practicable to the adjustments provided herein. These
provisions shall similarly apply to successive consolidations, mergers, sales,
transfers or leases.
6. No Prepayment. This Debenture may not be prepaid prior to the
Maturity Date.
7. Restriction on Transfer. The shares of Common Stock issuable upon
conversion of the Debenture will be subject to any restrictions on transfer or
disposition imposed by (i) an underwriter for any public offering of the
Company's securities; (i) the National Association of Securities Dealers (NASD);
or (ii) any national exchange including the National Association of Securities
Dealers Automated Quotation System ("NASDAQ").
8. Reservation of Stock Issuable upon Conversion. The Maker shall
reserve and keep available out of its authorized but unissued shares of Common
Stock solely for the purposes of effecting the conversion of this Debenture such
number of its shares of Common Stock as shall from time to time be sufficient to
effect the conversion of this Debenture.
9. Investment Intent. Payee represents and warrants that Payee is
acquiring this Debenture for investment purposes and not with a view to, for
resale in connection with, or with an intent of participating directly or
indirectly in any distribution within the meaning of the Securities Act of 1933,
as amended (the "Act"). Payee shall not divide its participation with others or
resell, assign or otherwise dispose of all or any part of this Debenture.
Notwithstanding the foregoing provisions of this paragraph 7, The Payee may not
sell, transfer, pledge or hypothecate the Debenture or the shares issuable upon
the conversion of the Debenture unless: (i) said Debenture and the shares
issuable upon conversion of the Debenture shall have first been registered under
the Act and all applicable state securities laws; or (ii) the Payee shall have
first delivered to the Maker a written opinion of counsel (in form and substance
reasonably satisfactory to the Company), to the effect that the proposed sale or
transfer of the Debenture or the shares issuable upon conversion of the
Debenture are exempt from the registration provisions of the Act, and the rules
promulgated thereunder, and all applicable state securities laws.
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10. Certain Restrictions. The Maker shall not, without the prior
written consent of the holders of a majority of Debentures:
(i) declare, order or pay any dividend (other than dividends
payable solely in shares of stock);
(ii) redeem any securities;
(iii) adjust the salary and benefits (increase or decrease)
for employees that are officers of the Corporation;
(iv) sell all or substantially all of the assets of the Maker;
(v) restructure the Maker, including a merger, consolidation,
liquidation, recapitalization, or other such actions;
(vi) increase or decrease the number of directors of the
Maker;
(vii) commence any new business venture, new office, or invest
or acquire any new entity which would require an investment of Twenty Five
Thousand ($25,000) Dollars or more in a one year period;
(viii) authorize and/or issue new shares of stock of the
Maker;
(ix) enter into and approve any agreement or contract for the
purchase of goods, services or other items between the Maker, a Stockholder, or
a member of a Stockholder's immediate family; or
(x) enter into a contract for employment or for a consultant.
11. Miscellaneous.
(a) Waivers. No waiver of any term or condition of this
Debenture shall be construed to be a waiver of any succeeding breach of the same
term or condition. No failure or delay of Payee to exercise any power hereunder,
or to insist upon strict compliance by Maker of any obligations hereunder, and
no custom or other practice at variance with the terms hereof shall constitute a
waiver of the right of Payee to demand exact compliance with such terms.
(b) Invalid Terms. In the event any provision contained in
this Debenture shall, for any reason, be held invalid, illegal or unenforceable
in any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Debenture,
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and this Debenture shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein.
(c) Successors. This Debenture shall be binding upon Maker,
its legal representatives, successors and assigns, and inure to the benefit of
Payee, its legal representatives, successors and assigns.
(d) Controlling Law. This Debenture shall be read, construed
and governed in all respects in accordance with the laws of the State of
Florida.
(e) Amendments. Any provision in this Debenture to the
contrary notwithstanding, changes in or additions to this Debenture may be made
by the Maker, and compliance with any covenant or condition herein set forth may
be omitted, if the Maker shall obtain from the holder of this Debenture their
consent thereto in writing.
(f) Notices. All notices, requests, demands and other
communications required or permitted to be given hereunder shall be sufficiently
given if addressed to the Maker at its executive offices, and to Payee at
_________________________________, posted in the U.S. mail by certified or
registered mail, return receipt requested. Any party may change said address by
giving the other party hereto notice of such change of address. Notice given as
hereinabove prescribed shall be deemed given on the date of its deposit in the
United States mail and, unless sooner received, shall be deemed received by the
party to whom it is addressed on the fifth calendar day following the date on
which said notice is deposited in the mail.
(g) Construction of Terms. Whenever the context so requires,
any gender is deemed to include any other, and the singular is deemed to include
the plural, and conversely.
(h) Headings. All section and subsection headings herein,
wherever they appear, are for convenience only and shall not affect the
construction of any terms herein.
(i) No Shareholder Rights. Nothing contained in this Debenture
shall be construed as conferring upon the Payee or any other person the right to
vote or to consent or to receive notice as a shareholder in respect of meetings
of shareholders for the election of directors of the Maker or any other matters
or any other rights whatsoever as a shareholder of the Maker; and no dividends
or interest shall be payable or accrued in respect to this Debenture or the
interest represented thereby or the Conversion Shares obtainable hereunder
until, and only to the extent that, this Debenture shall have been converted.
IN WITNESS WHEREOF, the undersigned has caused this Debenture to be
executed by its duly authorized officer and its seal affixed hereto, as of the
day and year first above written.
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INTERNATIONAL COSMETICS MARKETING CO.
By:_________________________________
Xxxxxxxxx XxXxxx, President
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