Exhibit 4.8
▇▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
10% CONVERTIBLE SUBORDINATED DEBENTURE
DUE SEPTEMBER 29, 2000
▇▇▇▇▇▇▇▇▇ Communications, Inc., a corporation organized and existing
under the laws of the State of Nevada (the "Company"), for value received,
hereby promises to pay to those parties identified in ATTACHMENT "A" exhibited
hereto (the "Payee") at the address set forth in the books and records of the
Company or at such other address as the Payee or any registered assign
(collectively, the "Holder") may designate in writing, the principal sum of Five
Hundred and Fifty Thousand Dollars ($550,000.00) in lawful money of the United
States, together with interest thereon from the date hereof at the interest rate
hereinafter set forth until payment in full of the outstanding principal
balance.
This Debenture is one of a duly authorized issue of Debentures of the
Company designated as its 10% Convertible Subordinated Debentures, limited in
the aggregate principal amount to $1,070,000.00 and issued and sold pursuant to
that certain Debenture Purchase Agreement (the "Purchase Agreement") dated as of
September 29, 1999, by and between the Company and the Payee. The Holder is
subject to certain restrictions and is entitled to certain rights and privileges
as set forth in the Purchase Agreement. This Debenture is unsecured, and is
subject to the subordination provisions set forth in Paragraph 4 of this
Debenture.
1. MATURITY. This Debenture shall mature and the outstanding principal
balance and all accrued and unpaid interest shall be due and payable on the
first anniversary of the date hereof.
2. INTEREST.
(a) The outstanding principal balance of this Debenture shall bear
interest at the rate of ten percent (10%) per annum. Interest shall accrue on
the actual number of days elapsed based upon a 365-day year. Interest through
the last day of each calendar quarter shall be due and payable in arrears on the
first business day of the month immediately following the end of such calendar
quarter.
(b) Notwithstanding anything else to the contrary, the interest rate
provided for herein shall not exceed the maximum rate of interest allowed under
applicable usury law. Any payment paid in excess of this maximum rate of
interest shall be deemed to be a prepayment of principal.
3. PREPAYMENT PREMIUM. If the Company prepays all or any portion of the
outstanding principal balance of this Debenture at any time, the Company will
also pay an amount equal to one hundred and twenty percent (120%) of the value
of the outstanding principal balance and accrued interest of the Debenture not
previously converted into Company stock. All principal amounts prepaid shall
cease to bear interest on the date of payment. If the Debentures are held by
more than one person and the Company elects to prepay less than all of the
outstanding principal balance, then the Company shall prepay the same percentage
of the outstanding principal balance of the Debentures held by each such person
subject to the prepayment penalty. Prior to the date of payment, the Holder
shall retain full conversion rights with respect to any amount of this Debenture
called for prepayment.
4. TRANSFER. The Holder may offer, sell, transfer, assign, pledge,
hypothecate, or otherwise dispose of or encumber this Debenture, in person or by
duly authorized attorney, at the offices of the Company upon surrender of this
Debenture and on presentation of a duly executed written instrument of transfer,
together with a written opinion of the Holder's legal counsel, reasonably
satisfactory to the Company and its legal counsel, to the effect that this
Debenture may be lawfully offered, sold, transferred, assigned, pledged,
hypothecated, or otherwise disposed of or encumbered without registration and/or
qualification under all applicable federal and state securities laws then in
effect or in reliance upon an applicable exemption from such registration and/or
qualification requirements. Thereupon, the Company shall issue a new Debenture
or Debentures of the same aggregate principal amount and in authorized
denominations. The Company may issue stop transfer instructions to its transfer
agent in connection with such securities laws restrictions. Any offer to sell,
sale, transfer, assignment, pledge, hypothecation, or other disposition or
encumbrance of this Debenture, or any interest therein, effected in violation of
the foregoing transfer restrictions, is unlawful and shall not be consummated on
the books and records of the Company or otherwise be recognized as valid by the
Company, and the Company shall not have any liability therefor.
5. SUBORDINATION.
(a) This Debenture shall be considered as "Subordinated Debt." It
shall be subordinated or junior in right of payment of principal and interest to
all present and future indebtedness that the Company owes or has guaranteed to
any bank, savings and loan, investment company, insurance company, other
licensed financial or lending institution, or accounts receivable or factoring
lender ("Senior Debt"), and it shall rank PARI PASSU in right of payment of
principal and interest on all other Debentures.
(b) The Company shall not pay any payment of the outstanding
principal balance or accrued but unpaid interest on this Debenture if the
Company is in default under any Senior Debt and the holder of such Senior Debt
prohibits the Company from paying any such payment while the Company is in
default under such Senior Debt. Upon any distribution to the creditors of the
Company in a liquidation or dissolution of the Company or in a bankruptcy,
reorganization, receivership, or similar proceeding relating to the Company or
its property, the holders of all Senior Debt shall be entitled to receive
payment in full of the outstanding principal balance and all accrued but unpaid
interest on such Senior Debt before the Holder shall be entitled to receive any
payment of principal or interest on this Debenture.
(c) For the benefit of the holder of any Senior Debt (a "Senior
Lender"), the Holder agrees to execute and deliver an intercreditor or
subordination agreement in favor of the Senior Lender containing the provisions
set forth in subparagraph 5(b) of this Debenture, and any or all of the
following provisions as may be required by the Senior Lender:
(i) In the event that the Holder receives notice from the Senior
Lender that the Company is in default of its obligations under the Senior Debt,
any payment of money or property in satisfaction of the Company's obligations
under this Debenture, including without limitation payments received from the
Company or anyone on behalf of the Company, and distributions from any
bankruptcy or reorganization proceeding or from any liquidator or receiver of
any nature whatsoever, shall be promptly delivered to the Senior Lender in
precisely the form received, and until so delivered to the Senior Lender, the
same shall be held in trust by the Holder as the property of the Senior Lender.
Any evidence of payment shall be endorsed by the Holder to the Senior Lender and
in the event that the Holder fails to do so, the Holder shall make, constitute,
and appoint the Senior Lender as its true and lawful attorney-in-fact to endorse
the Holder's name on any such evidence of payment;
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(ii) A Senior Lender may, at any time and without notice to the
Holder, exercise all rights and remedies as provided for in its security
agreements with the Company or granted to it by law, with respect to enforcing
its security interest in any collateral. In liquidating or disposing of such
collateral, the Senior Lender need only use its reasonable efforts with respect
thereto and shall not be liable to the Holder for any act or omission with
respect to the liquidation, disposition, realization, or collection of such
collateral or that the proceeds realized from such action could, under other
circumstances, have been greater. The Senior Lender shall account to the Holder
for any surplus in excess of the amount of the Senior Debt received from a
liquidation or disposition of such collateral; and
(iii) Such other customary representations, warranties,
agreements, and indemnifications.
(d) The Company shall not pay any distribution or return of capital
to any holder of its equity securities if the Company is in default under this
Debenture. Upon any distribution to the creditors of the Company in a
liquidation or dissolution of the Company or in a bankruptcy, reorganization,
receivership, or similar proceeding relating to the Company or its property, the
Holder shall be entitled to receive payment in full of the outstanding principal
balance and all accrued but unpaid interest on this Debenture before any holder
of any equity securities of the Company receives any distribution or return of
capital.
6. CONVERSION.
(a) The "Market Price" of a share of the Company's common stock (the
"Common Stock") shall mean the average of the closing bid prices of the Common
Stock as reported on Nasdaq or, if such security bid is not listed or admitted
to trading on the Nasdaq System, 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 the
National Quotation Bureau Incorporated, or a similar generally accepted
reporting service, or if not so available, in such manner as furnished by any
Nasdaq member firm of the National Association of Securities Dealers, Inc.
selected from time to time by the Board of Directors of the Company for that
purpose, as the case may be, for the twenty (20) trading days immediately
preceding the date in question.
(b) At the option of the Holder at any time after the date of
issuance, or automatically on the earlier of (i) the effective date of the
registration statement for a public offering of the Company's Common Stock, if
such offering results in an offering of at least Five Million Dollars
($5,000,000) of Common Stock, (ii) the date on which the Common Stock is listed
for sale on a national stock exchange or has its sales or bid price quoted on
NASDAQ with a sales/bid price of at least Five Dollars and No Cents ($5.00) per
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share, as adjusted for stock splits, subdivisions, and combinations of the
outstanding shares of Common Stock after the date hereof, (iii) the securities
into which this Debenture would be convertible as a result of a merger,
consolidation, or sale of assets as set forth in subparagraph 6b (i) of this
Debenture, at the time of such merger, consolidation, or sale or subsequently,
meet the criteria set forth in either clause (i) or (ii) of this subparagraph
6(b), this Debenture shall be convertible into that number of fully paid and
nonassessable shares of Common Stock (or other securities in the event of clause
(iii) of this subparagraph 6(b)), rounded to the nearest whole share, computed
by dividing the outstanding principal amount of this Debenture, plus all accrued
but unpaid interest, by the Conversion Price (as defined in subparagraph 6(f) of
this Debenture) or (iv) March 1, 2000, if any registration statement filed or
amended subsequent to this Agreement has not become effective and to which any
portion of this Debenture is converted to shares and registered for resale.
(c) Before the Holder shall be entitled to exercise the option to
convert this Debenture into shares of Common Stock, the Holder shall surrender
this certificate, duly endorsed, at the office of the Company, shall give
written notice to the Company at its principal corporate office of the election
to convert, and shall provide the Company with an investor representation letter
containing such representations as are customary in a private placement of
securities and as may be reasonably requested by the Company. The Company shall
issue and deliver to the Holder a certificate or certificates for the number of
shares of Common Stock to which the Holder shall be entitled. The conversion
shall be deemed to have been made immediately prior to the close of business on
the date that the Company receives the surrender of this Debenture to be
converted, the written notice of election to convert, and the investor
representation letter, and the Holder shall be treated for all purposes as the
record holder of such shares of Common Stock as of that date.
(d) On the conversion date, the Company shall cancel this Debenture
and so annotate its books and records, and shall issue a certificate for the
shares of Common Stock and deliver such certificate to the Holder; provided that
the Company shall have no obligation to deliver the certificate for the shares
of Common Stock until the Holder shall have surrendered this Debenture or shall
have notified the Company that this Debenture has been lost, stolen, or
destroyed and shall have complied with the provisions of Paragraph 14 of this
Debenture. On the conversion date, the Holder shall have no more rights under
this Debenture and shall be treated for all purposes as the record holder of
shares of Common Stock as of that date.
(e) No fractional shares of Common Stock shall be issued on the
conversion of this Debenture. If any fractional interest in a share of Common
Stock would, except for the provisions of this subparagraph 6(e), be deliverable
on the conversion of this Debenture, the Company shall, in lieu of delivering
the fractional share for that fractional interest, adjust the fractional
interest by payment to the Holder an amount in cash (computed to the nearest
cent) equal to the Market Price of the fractional interest.
(f) The Conversion Price shall initially be $0.60. The Conversion
Price will be subject to adjustment pursuant to this Section 6.
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(g) In the event of a stock split, subdivision, or combination of
shares of Common Stock, the Conversion Price shall be adjusted, rounded to the
nearest cent, such that this Debenture will be convertible into the same number
of shares of Common Stock after such event as the Holder would have if this
Debenture had been converted into shares of Common Stock immediately prior to
such event.
(h) In the event of a capital reorganization, reclassification,
exchange, or substitution of the Common Stock (other than a subdivision or
combination of shares or a merger, consolidation, or sale of assets), this
Debenture shall thereafter be convertible into the kind of securities or
property that a holder of Common Stock would have been entitled to receive on
such reorganization, reclassification, exchange, or substitution. The Conversion
Price shall be adjusted, rounded to the nearest cent, such that this Debenture
will be convertible into the same amount of securities or property after such
event as the Holder would have if this Debenture had been converted into shares
of Common Stock immediately prior to such event.
(i) In the event the Company shall merge or consolidate into another
company where the Company is not the surviving entity, or sell all or
substantially all of its assets to another person, this Debenture shall
thereafter be convertible into the kind of securities or property that a holder
of Common Stock would have been entitled to receive on such merger,
consolidation, or sale. The Conversion Price shall be adjusted, rounded to the
nearest cent, such that this Debenture will be convertible into the same amount
of securities or property after such event as the Holder would have if this
Debenture had been converted into shares of Common Stock immediately prior to
such event. In any such case, an appropriate adjustment (as determined by the
Board of Directors) shall be made in the application of the provisions of this
Debenture with respect to the rights and interests thereafter of the Holder such
that the provisions of this Debenture (including provisions with respect to
changes in and other adjustments of the Conversion Price) shall thereafter be
applicable, as nearly as reasonably may be, in relation to any shares or other
property thereafter deliverable on conversion of this Debenture.
(j) In the event that the Company shall issue shares of Common
Stock, whether directly or on the exercise of an option, warrant, or other right
to purchase shares of Common Stock or on the conversion of any convertible
security, for a sales price that is less than both the then Conversion Price and
the Market Price (1) pursuant to any stock split, stock dividend, or
subdivision, (2) on the exercise or conversion of any option, warrant, or
convertible security outstanding on the date hereof, or (3) pursuant to any
employee stock or stock option plan approved by the Company's shareholders), the
Conversion Price shall be adjusted, rounded to the nearest cent, to be an amount
equal to the Market Price multiplied by a fraction, the numerator of which is
the sum of the number of shares of Common Stock on a fully diluted basis
outstanding immediately prior to the issuance plus the number of shares of
Common Stock that the total consideration received by the Company (as set forth
in subparagraph 6(k) of this Debenture) would purchase at the then Conversion
Price, and the denominator of which is the number of shares of Common Stock on a
fully diluted basis outstanding immediately after the issuance.
(k) For the purposes of subparagraph 6(j) of this Debenture, the
total consideration received by the Company for any issuance of shares of Common
Stock shall be the sum of all cash and the fair market value of all property
other than cash, as determined by the Company's Board of Directors in good
faith, received or applied to the benefit of the Company, including for options,
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warrants, rights, and convertible securities the amount, if any, received on the
issuance of such option, warrant, right, or convertible security. When equity
securities are issued in connection with debt securities, the allocation of the
purchase price shall be as determined by the parties thereto, or if not so
determined, then as determined by the Company's Board of Directors in good
faith.
(l) Upon any adjustment of the Conversion Price, the Company shall
maintain at its principal executive office a statement, signed by its President,
any Vice President, or Chief Financial Officer, showing in reasonable detail the
facts requiring the adjustment and the Conversion Price after the adjustment.
(m) In the event that the Company shall set a record date for the
purpose of entitling the holders of the Common Stock to receive a dividend or
other distribution payable in 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, or in the event the Company shall
reorganize or reclassify its capital stock (other than a subdivision or
combination of its outstanding shares), merge or consolidate into another
company, or sell of all or substantially all of its assets to another company,
or in the event of the voluntary or involuntary dissolution, liquidation, or
winding up of the Company, then the Company shall send a written notice, in the
form described below, to the Holder. The notice shall state the date that has
been set as the record date for the purpose of such dividend or distribution, or
on which the reclassification, reorganization, merger, consolidation, sale,
dissolution, liquidation, or winding up is to take place and the record date as
of which holders of record of shares of Common Stock shall be entitled to
exchange such shares for securities or other property deliverable on
reclassification, reorganization, merger, consolidation, sale, dissolution,
liquidation, or winding up. The notice shall be mailed at least ten (10) days
prior to the date specified in the notice, as determined pursuant to the
provisions of the preceding sentence.
(n) The Company shall place the conversion shares in Escrow
according to the terms and conditions of the "Stock Escrow and Security
Agreement" in Attachment "B." The total number of Conversion Shares shall equal
916,667 shares subject to adjustment for stock split, stock dividends and
similar events. The Shares held in Escrow shall be reserved solely for the
Holder. The Escrow shall terminate and the Shares held in Escrow shall be
returned to the Company upon the earlier of (a) the receipt by the Holder of the
Conversion Shares upon conversion of the entire outstanding principal balance of
the Debenture or (b) the Company's payment of the entire outstanding principal
balance of the Debenture. The Company shall, from time to time, in accordance
with Nevada law, increase the authorized number of shares of Common Stock if at
any time the authorized number of shares of Common Stock remaining unissued
shall not be sufficient to permit the conversion of this Debenture.
(o) The Company shall pay any and all issue and other taxes that may
be payable in respect of any issue or delivery of shares of Common Stock on
conversion of this Debenture. The Company shall not, however, be required to pay
any tax that may be payable in respect of any transfer involved in the issue and
delivery of shares of Common Stock in a name other than that of the Holder, and
no such issue or delivery shall be made unless and until the Holder has paid to
the Company the amount of any such tax or has established to the satisfaction of
the Company that such tax has been paid.
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7. ISSUANCE OF SHARES
(a) An amount of the Company Shares issuable to the Holder shall be
determined from time to time as described herein (the "Share Issuance") and if
necessary, Shares of Common Stock (the "Shares") will be issued and delivered to
the Holder as provided herein. In reference to this Section 7, the Conversion
Price will be used, in connection with determining any Shares, if any, to be
issued to investors upon certain conditions.
(b) The Issuance of Shares shall be determined on the first market
trading day of each calendar month commencing October 1, 1999 ("Issuance Date")
and shall be applied only to 25% of the total Purchase Price ("Designated
Portion"), at the Holder's written election ("Election Date") at any time during
each quarter per Issuance Date.
(c) If, on the Issuance Date or any of them, the Company's Common
Stock Market Price, as defined in Section 6, hereof, is less than 150% of the
Conversion Price (subject to adjustment for stock split, stock dividends and
similar events), then Shares shall be issued to the Holder according to this
Section 7. The Shares issued, if any, will be calculated for the Designated
Portion only and shall be based on a total Holder Market Value for the
Designated Portion equal to an Expected Share Value of 150% of the Designated
Conversion Price Shares. Should Shares be issuable hereunder to the Holder, then
such Share amount shall be calculated by dividing the Expected Share Value by
the Common Stock Market Price and then subtracting 25% of the Conversion Price
Shares from the result thereof.
(d) Share Issuance rights described herein shall end on the sooner
to occur of one year after the Effective Date of the registration statement or
upon the Holder having realized proceeds from sales of the Company Shares equal
to 150% of the Purchase Price actually paid by the Holder, of which occurrence
the Holder shall notify the Company in writing.
(e) In no event will the Holder be required to return any Shares to
the Company. Each Share Issuance calculation shall be made independent of all
other Share Issuance calculations.
(f) The Company agrees to deliver the Shares to the Holder in hand
no later than ten (10) business days from the Election Date.
(g) Nothing contained herein or in any document referred to herein
or delivered in connection herewith shall be deemed to establish or require the
payment of a rate of interest or other charges in excess of the maximum
permitted by applicable law. In the event that the rate of interest required to
be paid or other charges hereunder exceed the maximum permitted by such law, any
payments in excess of such maximum shall be credited against amounts owed by the
Company to the Holder and thus refunded to the Company.
8. DEFAULT. Upon the occurrence of any of the following (a "Default"),
the Holder may declare the entire unpaid principal balance of this Debenture and
all accrued but unpaid interest thereon immediately due and payable, by giving
written notice to the Company:
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(a) the Company fails to make any payment of the principal or
interest on this Debenture within thirty (30) days of the date such payment was
due and payable;
(b) the Company breaches any provision of this Debenture other than
a Default as described in subparagraph 8(a) of this Debenture and such breach
remains uncured for thirty (30) days after written notice thereof from the
Holder, unless such breach is of such a nature that it cannot be cured within
thirty (30) days and the Company commences a cure within thirty (30) days after
receipt of written notice of the breach and diligently proceeds to complete the
cure as soon as possible but in no event greater than one hundred eighty (180)
days after receipt of such notice;
(c) the Company is in default under any Senior Debt that gives the
Senior Lender the right to accelerate such Senior Debt, and the Senior Lender in
fact accelerates the maturity of such Senior Debt, but only if such default and
acceleration would have a material adverse effect on the Company;
(d) the Company is in Default under any other Debenture, and the
holder thereof accelerates the maturity of such Debenture; or
(e) the Company elects to dissolve, dissolves, or is the subject of
any order, judgment, or decree of any court or governmental authority dissolving
or ending the existence of the Company.
9. AUTOMATIC DEFAULT. Upon the occurrence of any of the following (an
"Automatic Default"), the entire unpaid principal balance of this Debenture and
all accrued but unpaid interest thereon shall immediately become due and
payable, without the requirement for any notice from the Holder:
(a) the Company files or consents to any voluntary or involuntary
petition for bankruptcy, insolvency, reorganization, liquidation, or other
similar form of debtor relief, or petitions for or consents to the appointment
of a receiver, trustee, or liquidate on its behalf for all or a substantial
portion of its assets, or makes a general assignment for the benefit of
creditors; or
(b) the Company is the subject of any involuntary petition for
bankruptcy, insolvency, reorganization, liquidation, or other similar form of
debtor relief, or has a receiver, trustee, or liquidate appointed on its behalf
for all or a substantial portion of its assets, unless such petition or
appointment is set aside, withdrawn, or ceases to be in effect within ninety
(90) days from the date of any such petition or appointment.
10. COLLECTION. In the event of a Default or an Automatic Default, the
Holder may place this Debenture in the hands of an attorney for collection and
the Company shall pay all costs of collection, including but not limited to
court costs and attorneys' fees.
11. WAIVER. The Company hereby waives diligence, presentment, protest,
notice of protest, notice of dishonor, and notice of nonpayment of this
Debenture, and specifically consents to and waives notice of any renewal or
extension of this Debenture. The Company hereby waives the benefits of the
statute of limitations to the maximum extent allowed by law. No delay by the
Holder in exercising any power or privilege hereunder, nor the single or partial
exercise of any power or privilege hereunder, shall preclude any other or
further exercise thereof, or the exercise of any other power or privilege
hereunder.
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12. AMENDMENT. This Debenture may be waived, changed, modified, or
amended only with the written consent of the Company and those persons holding a
majority of the outstanding principal balance of all of the Debentures. Any such
waiver, change, modification, or amendment approved by those persons holding a
majority of the outstanding principal balance of all of the Debentures shall be
binding on the Holder and this Debenture, even if the Holder did not consent
thereto.
13. NOTICES. All notices or other communications required or permitted
to be given pursuant to this Debenture shall be in writing and shall be
delivered personally or sent by overnight courier, by telecopier with
confirmation by firstclass mail, or by certified mail, return receipt requested.
Notices delivered personally or sent by overnight courier or telecopier with
confirmation by firstclass mail shall be effective on the date first received,
while notices sent by certified mail, return receipt requested, shall be deemed
to have been received and to be effective three (3) business days after deposit
into the mails. Notices shall be given to the Company at the following address,
to the Holder at the address set forth in the books and records of the Company,
or to such other addresses as either party shall designate in writing:
If to the Company: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
President
▇▇▇▇▇▇▇▇▇ Communications, Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇-▇
▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
With Copy To: ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ Coffee Nojima, LLP
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
14. ASSIGNMENT. Subject to the restrictions on transfer described in
Paragraph 3 of this Debenture, the rights and obligations of the Company and the
Holder shall be binding upon and inure to the benefit their successors, assigns,
heirs, executors, administrators, and transferees.
15. REPLACEMENT OF THIS DEBENTURE. On receipt of evidence reasonably
satisfactory to the Company of the loss, theft, destruction, or mutilation of
this Debenture, and, in the case of loss, theft, or destruction, on delivery of
an indemnity agreement reasonably satisfactory in form and substance to the
Company or, in the case of mutilation, on surrender and cancellation of this
Debenture, the Company at its expense shall execute and deliver, in lieu of this
Debenture, a new Debenture of like tenor and amount.
16. LAW GOVERNING. This Debenture is deemed to be negotiated, executed,
and delivered and to be performed in the State of California, and shall be
governed by and construed and enforced in accordance with the laws of the State
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of California, except for its conflict of laws rules. The parties hereby
irrevocably submit to the exclusive jurisdiction of the courts of the State of
California and any United States District Court situated in the State of
California, for any suit or proceeding arising out of or based upon this
Debenture.
17. CONSTRUCTION. The headings in the Paragraphs of this Debenture are
for convenience only and shall not constitute a part hereof. Whenever the
context so requires, the masculine shall include the feminine and the neuter,
the singular shall include the plural, and conversely. The terms and all parts
of this Debenture shall in all cases be interpreted simply and according to
their plain meaning and neither for nor against any party hereto.
18. TIME OF THE ESSENCE. Time is hereby expressly declared to be of the
essence of this Debenture and of every provision hereof.
IN WITNESS WHEREOF, the Company has caused this Debenture to be issued
on the date first written above.
▇▇▇▇▇▇▇▇▇ COMMUNICATIONS, INC.
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
-----------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
President
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Attachment "A"
10% CONVERTIBLE SUBORDINATED DEBENTURE DUE SEPTEMBER 29, 2000
Debenture
Payee Amount
----- ------
AJW PARTNERS, LLC $250,000
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
NEW MILLENIUM CAPITAL
PARTNERS II, LLC $150,000
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BANK ▇▇▇▇▇▇▇▇ DE BEAUFORT $150,000
Herengtecht 551
1017 BW Amsterdam
Netherlands
