Exhibit 4.1
CONUS HOLDINGS, INC.
5% SENIOR SUBORDINATED CONVERTIBLE DEBENTURE
DUE DECEMBER 31, 2002
Number:________________________________________________________
Principal: $___________________________________________________
Original Issue Date:___________________________________________
Registered Holder:_____________________________________________
(name)
Conus Holdings, Inc., a Nevada corporation (the "Company") with
principal offices at ▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇, ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, for
value received, hereby promises to pay the registered holder hereof (the
"Holder") the principal sum set forth above on December 31, 2002 (the "Maturity
Date"), in such coin or currency of the United States of America as at the time
of payment shall be the legal tender for the payment of public and private
debts, and to pay interest, less any amounts required by law to be deducted or
withheld, computed on the basis of a 365-day year, on the unpaid principal
balance hereof from the date hereof (the "Original Issue Date"), at the rate of
5% per year, until such principal sum shall have become due and payable, or has
been converted by the Holder pursuant to Section 6, below. Interest payments
will be made at the option of the Holder in either cash or in such number of
shares of the Company's common stock, $.001 par value ("Common Stock"), computed
in accordance with Section 5.2 below and shall be paid, on December 31, 2001 and
quarterly thereafter until Maturity, or if the principal of the Debenture is
earlier converted, upon conversion pursuant to Section 6, below. All references
herein to dollar amounts refers to U.S. dollars.
By acceptance and purchase of this Debenture, the registered holder
hereof agrees with the Company that the Debenture shall be subject to the
following terms and conditions:
1. Authorization of Debentures. The Company has authorized the issue
and sale of its 5% Senior Subordinated Convertible Debentures due December 31,
2002 (the "Debenture," such term includes any debentures which may be issued in
exchange or in replacement thereof) in the aggregate principal amount of not
more than U.S. $11,500.
2. Transfer or Exchange. Prior to due presentation to the Company for
transfer 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 Company's
Debenture Register as the owner hereof for the purpose of receiving payment as
herein provided and for all other purposes.
3. Current Market Price. For purposes of this Debenture, "Current
Market Price" of the Common stock means:
(a) If traded on a securities exchange, the average
closing bid price of the Common Stock on such
exchange for the fifteen (15) trading days
immediately prior to conversion;
(b) If traded over the counter, the average closing bid
price reported by Bloomberg from the NASDAQ OTC
Bulletin Board for the fifteen (15) trading days
immediately prior to conversion; or
(c) In all other events, the market price determined by
the Board of Directors of the Company in good faith.
4. Prepayment; Payment of Interest in Shares.
4.1 Optional Prepayment of Debenture. The Company may prepay
the Debenture.
4.2 Payment of Interest in Shares. Prior to the conversion of
the principal amount of the Debenture, the Company will issue to the Holder, at
the Holder's option, in lieu of cash interest, shares of Common Stock calculated
in accordance with the following formula (the "Conversion Rate"):
Interest Shares = (.5 x *Principal) / Conversion Price, where
*Principal = the Principal Amount of the Debenture, and
*Conversion Price = .001
5. Conversion of Debentures.
5.1 Conversion of the Debenture.
(a) Right to Convert. The record holder of this Debenture
shall be entitled, on or after the Date of Original
Issuance, at the option of the Holder, to convert
this Debenture, in whole but not in part, into fully
paid and non-assessable shares of the Company's
Common Stock at the rate of $.001 per share.
5.2 Exercise of Conversion Privilege. In order to exercise the
conversion privilege, the Holder shall surrender such Debenture, together with
the Notice of Conversion annexed hereto as Exhibit 1 appropriately endorsed to
the Company at its principal office, accompanied by written notice to the
Company (a) stating that the Holder elects to convert the Debenture or a portion
thereof, and if a portion, the amount of such portion in multiples of $500 in
principal amount, and (b) setting forth the name or names (with address) in
which the certificate or certificates for shares of Common Stock issuable upon
such conversion shall be issued. Provided the Debenture is received properly
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endorsed promptly by the Company, the date of conversion of such Debenture shall
be deemed to be the date of receipt of Notice of Conversion, even if the
Company's stock transfer books are at that time closed, and the converting
Holder shall be deemed to have become, on the date of conversion, the record
holder of the shares of Common Stock deliverable upon such conversion. If the
Debenture is not received, properly endorsed by the fifth business day following
the date the Company receives Notice of Conversion, the date of conversion shall
be deemed to be the date the Debenture is received, provided that such later
receipt will not lower the Conversion Price stated in the Notice of Conversion.
As soon as reasonably possible after the date of conversion,
the Company shall issue and deliver to such converting Holder a certificate or
certificates for the number of shares of Common Stock due on such conversion. No
adjustments in respect of interest or cash dividends shall be made upon the
conversion of any Debenture or Debentures.
Upon conversion of the Debenture in part, the Company shall
execute and deliver to the Holder thereof, at the expense of the Company, a new
Debenture, in aggregate principal amount equal to the unconverted portion of
such Debenture. such new Debenture shall have the same terms and provisions
other than the principal amount as the Debenture or Debentures surrendered for
conversion.
5.3 Duration of Conversion Privilege. The right to subscribe
for and purchase shares of Common Stock pursuant to the conversion privilege
granted herein shall commence on the Original Issue Date and shall expire at
5:00 p.m., New York time on December 31, 2002.
5.4 Stock Fully Paid; Restricted. The Company covenants and
agrees that:
(a) all shares which may be issued upon the exercise of
the conversion privilege granted herein will, upon
issuance in accordance with the terms hereof, be
fully paid, nonassessable, and free from all taxes,
liens and charges (except for taxes, if any, upon the
income of the Holder) with respect to the issue
thereof, and that the issuance thereof shall not give
rise to any preemptive rights on the part of the
stockholders;
(b) the failure of the Company to issue shares upon the
conversion of the Debenture will cause the holder
immediate irreparable harm.
5.5 Antidilution Provisions. The following provisions apply to
the Debenture:
(a) In case the Company shall (i) pay a dividend or make
a distribution in shares of Common Stock, (ii)
subdivide its outstanding shares of Common Stock into
a greater number of shares of Common Stock, (iii)
combine its outstanding shares of Common Stock into a
smaller number of shares of Common Stock, (iv) make a
distribution on its Common Stock in shares of its
capital stock other than Common Stock, or (v) issue
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by reclassification of its Common Stock other
securities of the Company, the conversion privilege
of the Debenture and the Conversion Price then in
effect immediately prior thereto shall be adjusted so
that the Holder shall be entitled to receive the kind
and number of shares of Common Stock and other
securities of the Company which it would have owned
or would have been entitled to receive after the
happening of any of the events described above, had
the Debenture been converted immediately prior to the
happening of such event or any record date with
respect thereto. Any adjustment made pursuant to this
paragraph (a) shall become effective immediately
after the effective date of such event retroactive to
the record date, if any, for such event.
(b) When the number of shares of Common Stock or the
Conversion Price is adjusted as herein provided, the
Company shall cause to be promptly mailed to the
Holder by first class mail, postage prepaid, notice
of such adjustment or adjustments and a certificate
of a firm of independent public accountants selected
by the Board of Directors of the Company (who may be
the regular accountants employed by the Company)
setting forth the number of shares of Common Stock
and the Conversion Price after such adjustment, a
brief statement of the facts requiring such
adjustment and the computation by which such
adjustment was made.
(c) For the purpose of this Section 5.5, the following
shall apply:
(i) The term "Common Stock" shall mean (A) the
class of stock designated as the Common
Stock of the Company at the date of this
Debenture or (B) any other class of stock
resulting from successive changes or
reclassification of such Common Stock
consisting solely of changes in par value,
or from par value to no par value, or from
no par value to par value. In the event that
at any time, as a result of an adjustment
made pursuant to this Section 5.5, the
Holder shall become entitled to receive any
securities upon conversion of the Company
other than shares of Common Stock thereafter
the number of such other securities and the
Conversion Price of such securities shall be
subject to adjustment from time to time in a
manner and on terms as nearly equivalent as
practicable to the provisions with respect
to the Common Stock contained in this
Section 5.5.
(ii) If the Common Stock is traded on a
securities exchange or over the counter, the
"Current Market Price" for purposes of this
Section 5.5 shall mean the average of the
Current Market Prices for the five
consecutive trading days immediate1y prior
to the date of the event which necessitates
an adjustment to the Conversion Price.
5.6 No Adjustment for Dividends. Except as provided in Section
5.5, no adjustment in respect to any dividends paid shall be made during the
term of the Debenture or upon the exercise of the Debenture.
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5.7 Preservation of Purchase Rights Upon Reclassification
Consolidation. etc. In the case of any consolidation of the Company with or
merger of the Company into another corporation or in the case of any sale or
conveyance to another corporation of all or substantially all of the property,
assets or business of the Company, the Company or such successor or purchasing
corporation, as the case may be, shall provide that the Holder shall have the
right thereafter upon payment of the Conversion Price in effect immediately
prior to such action to purchase upon conversion of the Debenture the kind and
amount of shares and other securities and property which the Holder would have
owned or have been entitled to receive after the happening of such
consolidation, merger, sale or conveyance had the Debenture been converted
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 for in this Section 5. The provisions of this Section 5.7 shall
similarly apply to successive consolidations, mergers, sales or conveyances.
5.8 Par Value of Common Stock. Before taking any action which
would cause an adjustment reducing the Conversion Price below the then par value
of the shares of Common Stock issuable upon conversion of the Debenture, the
Company will take any corporate action which may, in the opinion of its counsel,
be necessary in order that the Company may validly and legally issue fully paid
and nonassessable shares of Common Stock at such adjusted Conversion Price.
5.9 Statement on Debenture Certificates. Irrespective of any
adjustments in the Conversion Price or the number of securities convertible,
this Debenture certificate or any certificates hereafter issued may continue to
express the same price and number of securities as are stated in this Debenture
certificate. However, the Company may at any time in its sole discretion (which
shall be conclusive) make any change in the form of the Debenture certificate
that it may deem appropriate and that does not affect the substance thereof; and
any Debenture certificate thereafter issued, whether upon registration or
transfer of, or in exchange or substitution for, an outstanding Debenture
certificate, may be in the form so changed.
6. Restrictions on Transferability. The Debenture and the Common Stock
issuable upon conversion of the Debenture shall not be transferred, hypothecated
or assigned before satisfaction of the conditions specified in this Section 6,
which conditions are intended to ensure compliance with the provisions of the
Securities Act with respect to the Transfer of any Debenture or any Common Stock
issuable upon conversion of the Debenture. Holder, by acceptance of this
▇▇▇▇▇▇▇▇▇, agrees to be bound by the provisions of this Section 6.
6.1 Restrictive Legend. The Holder by accepting this Debenture
and any Common Stock issuable upon conversion of the Debenture agrees that this
Debenture and the Common Stock issuable upon conversion hereof may not be
assigned or otherwise transferred unless and until (i) the Company has received
an opinion of counsel for the Holder that such securities may be sold pursuant
to an exemption from registration under the Securities Act or (ii) a
registration statement relating to such securities has been filed by the Company
and declared effective by the Commission.
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(a) Each certificate for Common Stock issuable hereunder
shall bear a legend substantially worded as follows
unless such securities have been sold pursuant to an
effective registration statement under the Securities
Act:
"The securities represented by this certificate have
not been registered under the Securities Act of 1933,
as amended (the "Act") or any state securities laws.
The securities may not be offered for sale, sold,
assigned, offered, transferred or otherwise
distributed for value except (i) pursuant to an
effective registration statement under the Act or any
state securities laws or (ii) pursuant to an
exemption from registration or prospectus delivery
requirements under the Act or any state securities
laws in respect of which the Company has received an
opinion of counsel satisfactory to the Company to
such effect."
(b) Except as otherwise provided in this Section 6, the
Debenture shall be stamped or otherwise imprinted
with a legend in substantially the following form:
"This Debenture and the securities represented hereby
have not been registered under the Securities Act of
1933, as amended, or any state securities laws and
may not be transferred in violation of such Act, the
rules and regulations thereunder or any state
securities laws or the provisions of this Debenture."
6.2 Notice of Proposed Transfers. Prior to any Transfer or
attempted Transfer of any Debenture or any shares of Restricted Common Stock,
the Holder shall give five (5) days' prior written notice (a "Transfer Notice")
to the Company of ▇▇▇▇▇▇'s intention to effect such Transfer, describing the
manner and circumstances of the proposed Transfer, and obtain from counsel to
Holder an opinion that the proposed Transfer of such Debenture or such
Restricted Common Stock may be effected without registration under the
Securities Act or state securities laws. After the Company's receipt of the
Transfer Notice and opinion, such Holder shall thereupon be entitled to Transfer
such Debenture or such Restricted Common Stock, in accordance with the terms of
the Transfer Notice. Each certificate, if any, evidencing such shares of
Restricted Common Stock issued upon such Transfer and the Debenture issued upon
such Transfer shall bear the restrictive legends set forth in Section 6.1,
unless in the opinion of such counsel such legend is not required in order to
ensure compliance with the Securities Act.
6.3 Termination of Restrictions. Notwithstanding the foregoing
provisions of Section 6, the restrictions imposed by this Section upon the
transferability of the Debentures, the Common Stock issuable upon conversion and
the Restricted Common Stock (or Common Stock issuable upon the conversion of the
Debenture) and the legend requirements of Section 6.1 shall terminate as to any
particular Debenture or Restricted Common Stock (or Common Stock issuable upon
the conversion of the Debenture) (i) when and so long as such security shall
have been effectively registered under the Securities Act and applicable state
securities laws and disposed of pursuant thereto or (ii) when the Company shall
have received an opinion of counsel that such shares may be transferred without
registration thereof under the Securities Act and applicable state securities
laws. Whenever the restrictions imposed by Section 6 shall terminate as to this
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Debenture, as hereinabove provided, the Holder hereof shall be entitled to
receive from the Company upon written request of the Holder, at the expense of
the Company, a new Debenture bearing the following legend in place of the
restrictive legend set forth hereon:
"THE RESTRICTIONS ON TRANSFERABILITY OF THE WITHIN DEBENTURE
CONTAINED IN SECTION 6 HEREOF TERMINATED ON ___________, 20__,
AND ARE OF NO FURTHER FORCE AND EFFECT."
All Debentures issued upon registration of transfer, division or
combination of, or in substitution for, any Debenture or entitled to bear such
legend shall have a similar legend endorsed thereon. Whenever the restrictions
imposed by this Section shall terminate as to any share of Restricted Common
Stock, as hereinabove provided, the holder thereof shall be entitled to receive
from the Company, at the Company's expense, a new certificate representing such
Common Stock not bearing the restrictive legends set forth in Section 6.1.
6.4 Listing on Securities Exchange. If the Company shall list
any shares of Common Stock on any securities exchange, it will, at its expense,
list thereon, maintain and, when necessary, increase such listing of, all shares
of Common Stock issued or, to the extent permissible under the applicable
securities exchange rules, issuable upon the conversion of this Debenture so
long as any shares of Common Stock shall be so listed during the Exercise
Period.
7. Piggyback Registrations. If, at any time, the Company proposes or is
required to register any of its equity securities or securities convertible or
exchangeable for equity securities under the Securities Act (other than pursuant
to registrations on such form or similar form(s) solely for registration of
securities in connection with an employee benefit plan or dividend reinvestment
plan or a merger, consolidation or acquisition) on a registration statement on
Form S-1, Form SB-2 or Form S-3 (or an equivalent general registration form then
in effect), whether or not for its own account, the Company shall give prompt
written notice of its intention to do so to each of the Holders of record of the
Debentures. Upon the written request of any Holder, made within 15 days
following the receipt of any such written notice (which request shall specify
the maximum number of Common Stock issuable upon conversion of the Debenture
intended to be disposed of by such Holder and the intended method of
distribution thereof), the Company shall use its best efforts to cause all such
Common Stock, the Holders of which have so requested the registration thereof,
to be registered under the Securities Act (with the securities which the Company
at the time proposes to register) to permit the sale or other disposition by the
Holders (in accordance with the intended method of distribution thereof) of the
Common Stock to be so registered. There is no limitation on the number of such
piggyback registrations pursuant to the preceding sentence which the Company is
obligated to effect.
7.1 Abandonment or Delay. If, at any time after giving written
notice of its intention to register any equity securities and prior to the
effective date of the registration statement filed in connection with such
registration, the Company shall determine for any reason not to register or to
delay registration of such equity securities, the Company may, at its election,
give written notice of such determination to all Holders and (i) in the case of
a determination not to register, shall be relieved of its obligation to register
any Common Stock issuable upon conversion of the Debenture in connection with
such abandoned registration, and (ii) in the case of a determination to delay
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such registration of its equity securities, shall be permitted to delay the
registration of such Common Stock for the same period as the delay in
registering such other equity securities.
7.2 Holder's Right to Withdraw. Any Holder shall have the
right to withdraw its request for inclusion of its Common Stock in any
registration statement pursuant to this Section 7 by giving written notice to
the Company of its request to withdraw; provided, however, that (i) such request
must be made in writing prior to the earlier of the execution of the
underwriting agreement or the execution of the custody agreement with respect to
such registration, and (ii) such withdrawal shall be irrevocable and, after
making such withdrawal, a Holder shall no longer have any right to include such
Common Stock in the registration as to which such withdrawal was made.
7.3 Cutbacks. If the managing underwriter of any underwritten
offering shall inform the Company by letter of its belief that the number of
shares of Common Stock requested to be included in a registration under this
Section 7 would materially adversely affect such offering, then the Company will
include in such registration, first the securities proposed by the Company to be
sold for its own account and, second the Common Stock issuable upon conversion
and all other securities of the Company to be included in such registration to
the extent of the number and type, if any, which the Company is so advised can
be sold in (or during the time of) such offering, pro rata among the Holders
participating in such offering in accordance with the number of shares of Common
Stock held by each such Holder.
8. Fractional Shares. No fractional shares of Common Stock will be
issued in connection with any subscription hereunder but in lieu of such
fractional shares, the Company shall make a cash payment therefor equal in
amount to the product of the applicable fraction multiplied by the Conversion
Price then in effect.
9. Subordination. Any right of the Holder to payment of principal or
interest from the Company shall be subordinated to the claims and rights of the
holders of the Senior Debt ("Senior Debt Holders"). "Senior Debt" means all
Indebtedness of the Company other than the Debentures, whether outstanding on
the date of execution of this Debenture or thereafter created, incurred or
assumed, except (x) any such Indebtedness that by the terms of the instrument or
instruments by which such Indebtedness was created, assumed or incurred
expressly provides that it (i) is junior in right of payment to the Debentures
or (ii) ranks pari passu in right of payment with the Debentures and (y) any
amendments, modifications or supplements to, or any renewals, extensions,
deferrals, refinancing and refunding of, any of the foregoing. Any cash payment
of principal or interest to the Holder shall be collected, enforced or received
by the Holder as trustee for the Senior Debt Holders and paid over to the Senior
Debt Holders. The Holder agrees that in the event of any payment of principal or
interest by the Company to the Holder by reason of any receivership, insolvency
or bankruptcy proceeding, or proceeding for reorganization or readjustment of
the Company or its properties, or otherwise, then, in any such event, the Senior
Debt Holders shall be preferred in the payment of their claims over the claim of
the Holder to payment of principal or interest against the Company or its
properties, and the claims of the Senior Debt Holders shall be first paid and
satisfied in full before any payment or distribution of any kind or character,
whether in cash or property, shall be made to the Holder. Provided, however,
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that this Section 9 shall not apply to any payment of principal or interest made
to the Holder while the Company is solvent and not in default with respect to
its Senior Debt.
10. Replacement of Debenture Certificate. Upon receipt of evidence
satisfactory to the Company of the certificate loss, theft, destruction or
mutilation of the Debenture certificate and, in the case of any such loss, theft
or destruction, upon delivery of a bond of indemnity satisfactory to the
Company, or, in the case of any such mutilation, upon surrender and cancellation
of the Debenture certificate, the Company will issue a new Debenture
certificate, of like tenor, in lieu of such lost, stolen, destroyed or mutilated
Debenture certificate.
11. Covenants of the Company. So long as any of the Debentures remain
outstanding, the Company shall:
(a) At all times keep reserved the total number of shares
of Common Stock necessary for the conversion of all
of the then outstanding Debentures at the then
current Conversion Rate;
(b) Not pay any dividends in cash and/or property or
other assets of the Company in respect of its Common
Stock or otherwise.
(c) Not issue any debentures of the Company other than
the Debentures unless the rights of the holders of
such debentures are subordinated to the Debentures,
in which event the terms of the subordination
provision shall be similar to the terms set forth in
Section 9 of this Debenture;
(d) Not enter into a loan secured by the property and/or
assets of the Company or any of its subsidiaries with
(i) any director, officer or 5% stockholder of the
Company, (ii) any entity in which a director, officer
or 5% stockholder has an interest as an officer,
director, partner, beneficiary of a trust or is a 5%
or more equity holder of such entity, or (iii) any
parent, spouse, child or grandchild of an officer,
director or 5% stockholder of the Company upon terms
no less favorable to the Company than those which
could be obtained from an "arms-length" lender; and
(e) Not redeem, repurchase or otherwise acquire any
shares of the common or preferred stock of the
Company.
12. Default. If any of the following events (herein called "Events of
Default") shall occur:
(a) if the Company shall default in the payment or
prepayment of any part of the principal of any of the
Debentures after the same shall become due and
payable, whether at maturity or at a date fixed for
prepayment or by acceleration or otherwise, and such
default shall continue for more than 30 days; or
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(b) if the Company shall default in the payment of any
installment of interest on any of the Debentures for
more than 30 days after the same shall become due and
payable; or
(c) if the Company shall make an assignment for the
benefit of creditors or shall be unable to pay its
debts as they become due; or
(d) if the Company shall dissolve; terminate its
existence; become insolvent on a balance sheet basis;
commence a voluntary case under the federal
bankruptcy laws or under any other federal or state
law relating to insolvency or debtor's relief; permit
the entry of a decree or order for relief against the
Company in an involuntary case under the federal
bankruptcy laws or under any other applicable federal
or state law relating to insolvency or debtor's
relief; permit the appointment or consent to the
appointment of a receiver, trustee, or custodian of
the Company or of any of the Company's property; make
an assignment for the benefit of creditors; or admit
in writing to be failing generally to pay its debts
as such debts become due;
(e) if the Company shall default in the performance of or
compliance with any agreement, condition or term
contained in this Debenture or any of the other
Debentures and such default shall not have been cured
within 30 days after such default,
(f) Any of the representations or warranties made by the
Company herein, in the Subscription Agreement, or in
any certificate or financial or other statements
heretofore or hereafter furnished by or on behalf of
the Company in connection with the execution and
delivery of this Debenture or the Subscription
Agreement shall be false or misleading in any
material respect at the time made; or
(g) Any money judgment, writ or warrant of attachment, or
similar process not covered by insurance in excess of
One Hundred Thousand Dollars ($100,000) in the
aggregate shall be entered or filed against the
Company or any of its properties or other assets and
shall remain unpaid, unvacated, unbonded or unstayed
for a period of thirty (30) days or in any event
later than ten (10) days prior to the date of any
proposed sale thereunder; or
then and in any such event the Holder of this Debenture shall have the option
(unless the default shall have theretofore been cured) by written notice to the
Company to declare the Debenture to be due and payable, whereupon the Debenture
shall forthwith mature and become due and payable, at the applicable prepayment
price on the date of such notice, without presentment, demand, protest or
further notice of any kind, all of which are hereby expressly waived, anything
contained in this Debenture to the contrary notwithstanding. Upon the occurrence
of an Event of Default, the Company shall promptly notify the Holder of this
Debenture in writing setting out the nature of the default in reasonable detail.
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13. Remedies on Default; Notice to Other Holders. In case any one or
more of the Events of Default shall occur, the Holder may proceed to protect and
enforce his or her rights by a suit in equity, action at law or other
appropriate proceeding, whether, to the extent permitted by law, for the
specific performance of any agreement of the Company contained herein or in aid
of the exercise of any power granted hereby. If any Holder of one or more of the
Debentures shall declare the same due and payable or take any other action
against the Company in respect of an Event of Default, the Company will
forthwith give written notice to the Holder of this Debenture, specifying such
action and the nature of the default alleged.
14. Amendments. With the consent of the Holders of more than 50% in
aggregate principal amount of the Debentures at the time outstanding, the
Company, when authorized by a resolution of its Board of Directors, may enter
into a supplementary agreement for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of this Debenture or
of any supplemental agreement or modifying in any manner the rights and
obligations of the holders of Debentures or Common Stock issued upon conversion
of the Debentures, and of the Company, provided, however, that no such
supplemental agreement shall (a) extend the fixed maturity of any Debenture, or
reduce the principal amount thereof, or reduce the rate or extend the time of
payment of interest thereon, or alter or impair the right to convert the same
into Common Stock at the rates and upon the terms provided in this Debenture,
without the consent of the Holder of each of the Debentures so affected, or (b)
reduce the aforesaid percentage of Debentures, the Holders of which are required
to consent to any supplemental agreement, without the consent of the Holders of
all Debentures then outstanding.
15. Changes, Waivers. etc. Neither this Debenture nor any provisions
hereof may be changed, waived, discharged or terminated orally, but only by a
statement in writing signed by the party against which enforcement of the
change, waiver, discharge or termination is sought, except to the extent
provided in Section 15 of this Debenture.
16. Entire Agreement. This Debenture embodies the entire agreement and
understanding between the Holder and the Company and supersedes all prior
agreements and understandings relating to the subject matter hereof.
17. Governing Law, Jurisdiction, etc.
(a) It is the intention of the parties that the laws of
the State of Florida shall govern the validity of
this Debenture, the construction of its terms and the
interpretation of the rights and duties of the
parties.
(b) In the case of any dispute, question, controversy or
claim arising among the parties hereto which shall
arise out of or in connection with this Debenture,
the same shall be submitted to arbitration before a
panel of three arbitrators in Tampa, Florida, in
accordance with the rules of the American Arbitration
Association. One arbitrator shall be appointed by the
party or parties bringing the claims ("Claimant") and
one arbitrator shall be appointed by the party or
parties defending the claim ("Respondent"). The
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arbitrators selected by such parties shall be
selected within thirty (30) days after notification
by the Claimant to the Respondent that it has
determined to submit such dispute, question,
controversy or claim to arbitration. The two
arbitrators so selected shall select a third
arbitrator within thirty (30) days after the
selection of the arbitrator selected by such parties.
Should a party fail to select an arbitrator within
the specified time period, or should the arbitrators
selected by the parties fail to select a third
arbitrator, the missing arbitrator or arbitrators
shall be appointed by the Tampa, Florida office of
the American Arbitration Association. The decision of
the panel shall be final and binding on the parties
and enforceable in any court of competent
jurisdiction. The costs of the arbitration will be
imposed upon the Claimant and Respondent as
determined by the arbitration panel or, failing such
determination, will be borne equally by the Claimant
and the Respondent. The successful or prevailing
party or parties shall be entitled to recover
reasonable attorneys fees in addition to any other
relief to which it may be entitled.
(c) In the event of any dispute, question, controversy or
claim arising among the parties hereto which shall
arise out of or in connection with this Debenture,
the parties shall keep the proceeding related to such
controversy in strict confidence and shall not
disclose the nature of said dispute, the status of
the proceeding or any testimony, documents or
information obtained or exchanged in the course of
said proceeding without the express written consent
of all parties to such dispute.
CONUS HOLDINGS, INC.
[Corporate Seal]
By___________________________
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, President
Number:_______________________________________________
Name of Holder: ______________________________________
Principal: $__________________________________________
Original Issue Date:__________________________________
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EXHIBIT 1
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert $______________ of
the above Debenture No. _____ into _________ shares of Common Stock of Conus
Holdings, Inc. (the "Company") according to the conditions set forth in such
Debenture, as of the date written below.
The undersigned confirms the representations and warranties set forth
in the Subscription Agreement.
___________________________________________
Date of Conversion*
___________________________________________
Applicable Conversion Price
___________________________________________
Signature
___________________________________________
Name
___________________________________________
Address
___________________________________________
*The original Debenture and this Notice of Conversion must be received by the
Company within five business days following the date of Conversion.
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