7% CONVERTIBLE SUBORDINATED DEBENTURE
THIS SECURITY AND THE SECURITIES ISSUABLE UPON CONVERSION OF THIS SECURITY HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE
STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, PLEDGED, HYPOTHECATED,
ASSIGNED OR OTHERWISE TRANSFERRED EXCEPT (i) PURSUANT TO A REGISTRATION
STATEMENT UNDER THE SECURITIES ACT WHICH HAS BECOME EFFECTIVE AND IS CURRENT
WITH RESPECT TO THESE SECURITIES, OR (ii) PURSUANT TO A SPECIFIC EXEMPTION FROM
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND APPLICABLE STATE
SECURITIES LAWS, BUT ONLY UPON A HOLDER HEREOF FIRST HAVING OBTAINED THE WRITTEN
OPINION OF COUNSEL TO THE COMPANY THAT SUCH DISPOSITION IS CONSISTENT WITH ALL
APPLICABLE PROVISIONS OF THE SECURITIES ACT AS WELL AS ANY APPLICABLE "BLUE SKY"
OR OTHER STATE SECURITIES LAWS.
$1,000,000
INFOCAST CORPORATION
November 7, 2000
InfoCast Corporation, a Nevada corporation (together with its
successors and assigns, "Issuer"), for value received hereby promises to pay to
CALP II LP ("Holder") and its successors, transferees and assigns, by wire
transfer of immediately available funds to an account designated by Holder by
notice to Issuer the principal sum of one million U.S. dollars ($1,000,000)
("Debenture Amount") on November 7, 2003 (the "Maturity Date"), unless this
Debenture shall have been repaid or converted prior thereto as provided herein,
plus accrued and unpaid interest on such date and as specified below. The
transferability of this 7% Convertible Subordinated Debenture is restricted as
provided in Section 6 below.
The Debenture Amount shall bear interest accruing from the
date hereof to the date this Debenture shall have been converted or repaid in
full at seven percent (7.0%) per annum both before and after maturity, default
and judgment, with interest at the same rate on overdue interest and any other
overdue amounts payable at any time hereunder. All computations of interest
payable hereunder shall be on the basis of a year of 365 days, or 366 days in
the case of a leap year, and actual days elapsed in the period for which such
interest is payable. The Issuer shall pay interest semi-annually in arrears on
March 31 and September 30 of each year, commencing March 31, 2001 to holders of
record on March 15 and September 15, respectively.
Notwithstanding the foregoing, on the occurrence of an Event
of Default (as hereinafter defined) except an Event of Default pursuant to
Section 3.1(c) hereof as a result of a
breach by the Issuer of its obligations under Section 4.2(c) hereof (such
exception to apply only until the Issuer has incurred 10 full 30-day periods of
Damages (as hereinafter defined)), interest payable hereunder shall accrue at a
rate of twelve percent (12.0%) per annum (the "Increased Rate), which Increased
Rate shall accrue daily and be compounded on the last day of each month from and
after the date upon which such Event of Default occurs until the earliest to
occur of the curing of such Event of Default, the Redemption Date and the
Maturity Date (or on such earlier date as the principal hereof may become due in
accordance with the provisions hereof).
Issuer shall keep at its principal office a register (the
"Register") in which shall be entered the name and address of the registered
holder of this Debenture and of all transferees of this Debenture. The ownership
of this Debenture shall be proven by the Register. For the purpose of paying
principal and any interest on this Debenture, Issuer shall be entitled to rely
on the name and address in the Register and notwithstanding anything to the
contrary contained in this Debenture, no Event of Default shall occur under
Section 3.1(a) or (b) if payment of principal and any interest is made in
accordance with the name and address contained in the Register.
Section 1. Definitions. Capitalized terms used but not defined
in this Debenture shall have the meanings given to them in the Securities
Purchase Agreement. In addition, the following terms (except as otherwise
expressly provided) for all purposes of this Debenture shall have the respective
meanings specified below. All accounting terms used herein and not expressly
defined shall have the meanings given to them in accordance with U.S. generally
accepted accounting principles ("GAAP") as in effect from time to time.
"Business Day" shall mean any day on which banks in the State
of New York are not required or permitted by law to close.
"Default" shall mean any condition or event which constitutes
an Event of Default or which, with the giving of notice or lapse of time or both
would, unless cured or waived, become an Event of Default.
"Debt" shall have the meaning set forth in Section 4.4.
"Debenture" shall mean this 7% Convertible Subordinated
Debenture.
"Event of Default" shall have the meaning set forth in Section
3.1.
"Obligations" shall mean all indebtedness and liabilities of
the Issuer to the Holder from time to time, whether present or future, absolute
or contingent, liquidated or unliquidated, of whatsoever nature or kind, under
or in respect of this Debenture.
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"recognized stock exchange" shall mean any national securities
exchange, Nasdaq or the OTC Bulletin Board.
"Redemption Date" shall mean such date as shall have been
selected by the Issuer on which the Issuer shall redeem this Debenture pursuant
to Section 5.3 hereof, which date shall not be earlier than 30 days after notice
by the Issuer to the Holder of such proposed redemption as provided for in
Section 5.3 hereof and shall not be later than the Maturity Date.
"Securities Purchase Agreement" shall mean that certain
Securities Purchase Agreement by and between the Issuer and the Holder with
respect to the purchase by the Holder of this Debenture.
"Senior Debt" shall have the meaning set forth in Section 4.4.
"Trading Day" shall mean any day on which the Nasdaq Stock
Market is open for trading.
Section 2. Payment Obligation. No provision of this Debenture
shall alter or impair the obligations of Issuer, which are absolute and
unconditional, to pay the principal of and interest on this Debenture in lawful
money of the United States of America in immediately available funds not later
than 5:00 p.m., Eastern Standard Time on the date each such payment is due in
accordance with this Debenture, subject to the conversion provisions of this
Debenture as provided herein. Whenever any payment of this Debenture shall be
stated to be due on a day which is not a Business Day, such payment shall be
made on the next succeeding Business Day and such extension of time shall not be
included in the computation of the payment of interest on this Debenture.
Section 3. Events of Default and Remedies.
Section 3.1. Event of Default Defined; Acceleration of
Maturity; Waiver of Default. In case one or more of the following events (each
an "Event of Default") (whatever the reason for such Event of Default and
whether it shall be voluntary or involuntary or be effected by operation of law
or pursuant to any judgment, decree or order of any court or any order, rule or
regulation of any administrative or governmental body) shall have occurred and
be continuing:
(a) default in the payment of interest on this Debenture when
the same becomes due and payable and the default continues for a period of 10
days; or
(b) default in the payment of all or any part of the principal
of this Debenture when the same becomes due and payable at maturity, upon
redemption, or otherwise; or
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(c) failure on the part of Issuer duly to observe or perform
any other of the agreements or covenants on the part of Issuer contained in this
Debenture (other than those covered by clauses (a) and (b) above) for a period
of 10 days after the date on which written notice specifying such failure,
stating that such notice is a "Notice of Default" hereunder and demanding that
Issuer remedy the same, shall have been given by facsimile, registered or
certified mail, return receipt requested, to Issuer; or
(d) Issuer pursuant to or within the meaning of any U.S.
Bankruptcy Law (as hereinafter defined):
(i) commences a voluntary case or proceeding,
(ii) consents to the entry of an order for relief
against it in an involuntary case or proceeding,
(iii) consents to the appointment of a Custodian of
it or for all or substantially all of its property,
(iv) makes a general assignment for the benefit of
its creditors, or
(v) admits in writing its inability to pay its debts
as the same become due; or
(e) a court of competent jurisdiction enters an order or
decree under any U.S. Bankruptcy Law that:
(i) is for relief against Issuer in an involuntary
case,
(ii) appoints a Custodian of Issuer or for all or
substantially all of the property of Issuer, or
(iii) orders the liquidation of Issuer,
and such order or decree remains unstayed and in
effect for 60 days; or
(f) if, at any time after the date hereof, this Debenture
ceases to be in full force and effect or if this Debenture is declared by a
court to be null and void or the enforceability or validity thereof is contested
by the Issuer or the Issuer denies in writing that it has any or further
liability under this Debenture; or
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(g) if any event of default occurs under any other Debt (as
hereinafter defined); or
(h) if any proceeding is commenced against or affecting the
Issuer:
(A) seeking to adjudicate it a bankrupt or insolvent, or
(B) seeking liquidation, dissolution, winding up,
reorganization, arrangement, adjustment, protection,
relief or composition of it or any of its property or
debts or making a proposal with respect to it under
any law relating to bankruptcy, insolvency,
reorganization or compromise of debts or other similar
laws (including, without limitation, any application
under the U.S. Bankruptcy Law, or with respect to
reorganization, arrangement or compromise of debt,
under the laws of the jurisdiction of incorporation of
the Issuer, or
(C) seeking appointment of a receiver, trustee, custodian
or other similar official for it or for all or any
part of the undertaking, property and assets of the
Issuer and such proceeding is not being contested in
good faith by appropriate proceedings or, if so
contested remains outstanding, undismissed and
unstayed more than 60 days from the institution of
such first mentioned proceeding; provided however,
that notwithstanding any such 60 day period shall not
have elapsed, an Event of Default shall be deemed to
have occurred if such proceeding remains outstanding
and, after the date of commencement of such
proceeding, the Issuer does not meet its payroll for
any pay period arising during such 60 day period; or
(i) if a receiver or other custodian (interim or permanent) of
the assets of the Issuer or any part thereof is appointed by private instrument
or by court order, if any execution, sequestration, extent or other process of
any court becomes enforceable against the Issuer or the assets of the Issuer or
any part thereof, or if distress or analogous process is made against the assets
of the Issuer or any part thereof; or
(j) if any mortgage, charge, lien, security interest or other
encumbrance affecting any real or personal property of the Issuer becomes
enforceable; or
(k) the Issuer admits its inability to pay its debts generally
as they become due or otherwise acknowledges its insolvency; or
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(l) if (i) upon the election by the Issuer to redeem this
Debenture subsequent to March 7, 2001 and prior to the Maturity Date pursuant to
Section 5.3 hereof and the election by the Holder to convert this Debenture
prior to the Redemption Date applicable to such redemption in accordance with
Section 5.1 hereof or (ii) upon the conversion of this Debenture on the Maturity
Date pursuant to Section 5.6 hereof, the Issuer fails to issue to the Holder
freely tradeable securities as required pursuant to Section 5.1(f) hereof,
then, in each case where an Event of Default occurs, Holder, by notice in
writing to Issuer, may declare the aggregate Debenture Amount plus all accrued
and unpaid interest owing thereon to be due and payable immediately, and upon
any such declaration the same shall become immediately due and payable; provided
that if an Event of Default specified in clause (d), (e), (f), (g), (h), (i),
(j) or (k) of this Section 3.1 occurs, the Debenture Amount plus all accrued and
unpaid interest thereon shall become and be immediately due and payable without
any declaration or other act on the part of Holder. If an Event of Default
specified in clause (f) of this Section 3.1 occurs and is not cured within 20
days after the Issuer receives a notice of such Event of Default from the
Issuer, then the Holder shall be entitled, at any time thereafter, to deliver a
notice to the Issuer notifying the Issuer that the Debenture Amount then
outstanding plus all accrued and unpaid interest is due and payable within 10
Business Days after the receipt by the Issuer of such notice.
The term "U.S. Bankruptcy Law" means title 11, United States
Code or any similar United States federal or state law for the relief of
debtors. The term "Custodian" means any receiver, trustee, assignee, liquidator
or similar official under any U.S. Bankruptcy Law.
Section 3.2. Powers and Remedies Cumulative; Delay or Omission
Not Waiver of Default. No right or remedy herein conferred upon or reserved to
Holder is intended to be exclusive of any other right or remedy, and every right
and remedy shall, to the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or hereafter existing at
law or in equity or otherwise. The assertion or employment of any right or
remedy hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
No delay or omission of Holder to exercise any right or power
accruing upon any Event of Default occurring and continuing as aforesaid shall
impair any such right or power or shall be construed to be a waiver of any such
Event of Default or an acquiescence therein; and every power and remedy given by
this Debenture or by law may be exercised from time to time, and as often as
shall be deemed expedient, by Holder.
Section 3.3. Waiver of Past Defaults. Holder may waive any
past Event of Default hereunder and its consequences. In the case of any such
waiver, Issuer and Holder shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Event of Default or impair any right consequent thereon.
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Upon any such waiver, such Default shall cease to exist and be
deemed to have been cured and not to have occurred, and any Event of Default
arising therefrom shall be deemed to have been cured, and not to have occurred
for every purpose of this Debenture, and the interest rate hereon shall not be
deemed to have increased; but no such waiver shall extend to any subsequent or
other Event of Default or impair any right consequent thereon.
Section 4. Covenants. Issuer and Holder agree that, so long as
any amount payable under this Debenture remains unpaid:
Section 4.1. Payment of Debenture. The Issuer will punctually
pay or cause to be paid to the Holder the Debenture Amount and accrued and
unpaid interest thereon and any other Obligations provided for herein. All
payments of principal and interest by the Issuer under this Debenture shall be
made free and clear of, and without withholding or deduction for Canadian Taxes
(as hereinafter defined) (other than Excluded Taxes) (as hereinafter defined)
except that in the event that such withholding or deduction for Canadian Taxes
(other than Excluded Taxes) is required by law with respect to any payment, such
payment shall be increased as may be necessary so that after all such deductions
or withholdings (including deductions or withholdings required in respect of
additional amounts payable hereunder), the Holder shall receive such amounts as
it would have received had no such Canadian Taxes been required to be withheld
or deducted. For purposes herein, "Canadian Taxes" shall mean all taxes or other
charges imposed by Canada or a political subdivision thereof and "Excluded
Taxes" shall mean any Canadian Taxes payable by reason of the Holder carrying on
business in Canada or being or having in the past been resident in Canada or not
dealing at arm's length with the Issuer.
Section 4.2. Covenants. The Issuer covenants with the Holder
as follows:
(a) the Issuer will duly and punctually pay or cause to be
paid to the Holder the principal amount and any interest accrued thereon owing
under this Debenture when due, on the dates, at the place, in the currency, and
in the manner mentioned herein;
(b) the Issuer will use its reasonable best efforts to
maintain its status as a reporting company under U.S. securities laws;
(c) in accordance with, and not in addition to, the Issuer's
obligations under Section 4.1(a) of the Securities Purchase Agreement, the
Issuer shall use its commercially reasonable best efforts to file with the
United States Securities and Exchange Commission (the "SEC"), on or prior to
January 8, 2001 (the "Filing Date") a registration statement covering the resale
of shares of Common Stock (the "Registrable Securities") issuable upon
conversion of this Debenture (the "Registration Statement") and shall use its
commercially reasonable best efforts to cause such registration statement to be
declared effective by March 7, 2001 (the "Registration Deadline"). If the
Company does not meet the Filing Deadline or the Registration Deadline, it shall
continue to use
7
its commercially reasonable best efforts to complete such filing or cause such
registration statement, as the case may be, to become effective as soon as
possible thereafter. The Issuer shall use its commercially reasonable best
efforts to cause such registration statement to remain effective until the
earliest of (i) the date on which this Debenture has been redeemed, (ii) the
date on which all of the shares issuable upon conversion of this Debenture have
been sold by the Holder or (iii) the date on which all of the shares issuable
upon conversion of this Debenture may be immediately sold to the public without
registration or restrictions pursuant to Rule 144(k) under the Securities Act.
(d) the Issuer will duly and punctually perform and carry out
all of the acts or things to be done by it as provided in this Debenture and the
Securities Purchase Agreement;
(e) the Issuer shall at all times maintain its corporate
existence and the Issuer shall carry on and conduct or shall cause to be carried
on and conducted its business and the business of its subsidiaries in a proper
and efficient manner and shall keep or cause to be kept proper books of account
and make or cause to be made therein true and accurate entries of all its
dealings and transactions in relation to its business and the business of its
subsidiaries, as the case may be, all in accordance with generally accepted
account principles applicable in the jurisdiction in which such business is
carried on, and at all reasonable times it shall furnish or cause to be
furnished to the Holder or its duly authorized agent or attorney such
information relating to its business and that of its subsidiaries as the Holder
may reasonably require and such books of account shall at all reasonable times
be open for inspection by the Holder or such agent or attorney;
(f) the Issuer shall furnish or make available to the Holder a
copy of all publicly available financial statements, whether annual or interim,
of the Issuer and any report of the Issuer's auditors thereon and of all annual
and other periodic reports of the Issuer furnished to its shareholders at the
same time(s) as they are furnished to such shareholders; and
(g) at the reasonable request of, and on reasonable notice
from, the Holder, the Issuer shall furnish to the Holder a certificate executed
by the President of the Issuer or the Chief Financial Officer of the Issuer
stating that the Issuer has complied with all covenants, conditions or other
requirements contained in this Debenture, non-compliance with which would, with
the giving of notice or the lapse of time or both, constitute an Event of
Default hereunder or, if such is not the case, specifying the covenant,
condition or other requirement which has not been complied with and giving
particulars of such non-compliance and the action, if any, the Issuer proposes
to take with respect thereto.
Section 4.3. Liquidated Damages and Covenant to Pay. In
accordance with, and not in addition to, the Issuer's obligations under Section
4.2 of the Securities Purchase Agreement, if the Registration Statement referred
to in Section 4.2(c) above is not filed on or prior to the Filing Date then the
Issuer shall pay to the Holder, as the sole remedy of the Holder in respect of
such late filing and as liquidated damages and not as a penalty, a cash amount
("Damages") equal to the
8
product of (i) the outstanding principal amount of this Debenture multiplied by
(ii) .01 further multiplied by the number of full 30-day periods that passed
since the Filing Date. Such liquidated damages shall continue until the earlier
to occur of (i) the filing of such Registration Statement or (ii) the incurrence
by the Issuer of ten 30-day periods of Damages. In accordance with, and not in
addition to, the Issuer's obligations under Section 4.2 of the Securities
Purchase Agreement, if the Registration Statement required to be filed by the
Issuer pursuant to Section 4.2(c) above is filed by the Issuer prior to the
incurrence by the Issuer of ten full 30-day periods of Damages pursuant to the
first sentence of this Section 4.3 but is not declared effective by the SEC on
or prior to the Registration Deadline, then the Issuer shall pay to the Holder,
as the sole remedy of the Holder in respect of such late effective date and as
liquidated damages and not as a penalty, Damages equal to the product of (i) the
outstanding principal amount of this Debenture multiplied by (ii) .01 further
multiplied by the number of full 30-day periods that passed since the
Registration Deadline. Such liquidated damages shall continue until the earlier
to occur of (i) the declaration of effectiveness of such Registration Statement
or (ii) the incurrence by the Issuer of ten full 30-day periods of Damages
inclusive of Damages pursuant to the first sentence of this Section 4.3. For
further clarity, the maximum amount of liquidated damages payable by the Issuer
pursuant to this Section 4.3 shall be ten 30-day periods of Damages.
Section 4.4. Subordination. The Issuer agrees, and the Holder
by accepting this ▇▇▇▇▇▇▇▇▇ agrees, that the indebtedness evidenced by this
▇▇▇▇▇▇▇▇▇ and the payment of principal thereof and interest thereon are
subordinated in right of payment to the prior payment in full of all Senior Debt
and that the subordination is for the benefit of the holders of Senior Debt. By
its acceptance of this Debenture, the Holder agrees to execute and deliver such
documents with respect to subordination as may be reasonably requested from time
to time by Issuer or a lender of Senior Debt.
"Debt" means the principal of and interest on (a) all
indebtedness for borrowed money (including all indebtedness evidenced by notes,
bonds, debentures or other securities sold for money), (b) all indebtedness
incurred in the acquisition (whether by way of purchase, merger, consolidation
or otherwise) of any business, real property or other assets (c) guarantees of
indebtedness described in clauses (a), (b) and (d) of any other person, (d)
capitalized lease obligations and (e) renewals, extensions, refundings,
deferrals, restructurings, amendments and modifications of any such
indebtedness, obligations or guarantees.
"Senior Debt" means Debt of the Issuer outstanding at any time
other than Debt which, pursuant to its terms, is expressly subordinate to this
Debenture.
Section 5. Conversion; Redemption.
Section 5.1. ▇▇▇▇▇▇'s Right to Convert. (a) Subject to Section
5.2 below, Holder shall have the right, exercisable at any time or times before
the Maturity Date, or in the case this
9
Debenture has been called for redemption on or prior to such date, then up to
but not after the close of business on the last Business Day immediately prior
to the Redemption Date, by written notice to Issuer, to convert this Debenture
(in whole or in part) into such whole number of shares of Common Stock as is
equal to the quotient obtained by dividing the principal amount to be converted
plus all accrued and unpaid interest thereon (the "Conversion Amount") by the
conversion price in effect on the conversion date. The conversion price for
purposes of this Section 5.1 shall be the lower of (i) U.S. $1.50 per share of
Common Stock (the "Fixed Exchange Price") or (ii) 80% of the average of the
three lowest closing bid prices of the Issuer's Common Stock for the 30 days
immediately preceding the conversion date, unless, at the conversion date the
Common Stock is not listed and posted for trading on a recognized stock exchange
or quotation system, in which case the conversion price shall be U.S. $1.50.
(b) The date on which the Holder satisfies all of the
requirements for conversion is the conversion date. As soon as practicable
following the conversion date, the Issuer shall deliver a certificate for the
number of full shares of Common Stock issuable upon the conversion and a check
in lieu of any fractional share in accordance with Section 5.4 hereof. The
person in whose name the certificate is registered shall be treated as a
stockholder of record on and after the conversion date.
(c) Upon surrender of this Debenture that is converted in
part, the Issuer shall authenticate for the Holder a new Debenture equal in
principal amount to the unconverted portion of this Debenture surrendered.
(d) If the last day on which this Debenture may be converted
is not a Business Day, this Debenture may be surrendered to the Issuer on the
next succeeding day that is a Business Day.
(e) To convert this Debenture, the Holder must (1) complete
and sign the conversion notice on the back of this Debenture and deliver such
notice to the Issuer, (2) surrender this Debenture to the Issuer, (3) furnish
appropriate endorsements and transfer documents if required by the Issuer and
(4) pay any transfer or similar tax if required. The Holder may convert a
portion of this Debenture if the portion is $100,000 or a whole multiple of
$100,000.
(f) As promptly as practicable, but in any event not later
than five Business Days after the conversion date, the Issuer shall issue or
cause its registrar and transfer agent to issue and deliver or cause to be
delivered to the Holder a certificate or certificates in the name(s) of the
person(s) specified in the conversion notice delivered to the Issuer for the
number of shares of Common Stock deliverable upon the conversion of all or such
portion of this Debenture so converted, and provision shall be made in respect
of any fraction of a share of Common Stock as provided in Section 5.4. Such
conversion shall be deemed to have been effected immediately prior to the close
of business on the conversion date and at such time the rights of the Holder as
the holder
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of all or such portion of this Debenture so converted shall cease and the
person(s) in whose name(s) any certificate or certificates for shares of Common
Stock shall be deliverable upon such conversion shall be deemed to have become
at such time the holder or holders of record of the shares of Common Stock
represented thereby.
Section 5.2. Restrictions. (a) If the closing bid price of the
Common Stock, as reported by the Issuer's then principal trading market, is
equal to or less than U.S. $1.00 for five consecutive Trading Days, Holder shall
not convert any portion of this Debenture (or sell any shares of Common Stock
received upon prior conversions of this Debenture) for a period of 20
consecutive Trading Days beginning immediately after such five-Trading Day
period. If the closing bid price of the Common Stock on the Trading Day
immediately following such 20-Trading Day Period is equal to or less than U.S.
$1.00, then the Issuer shall have the right, for a period of thirty (30) days
thereafter, to redeem all or a portion of this Debenture (plus all accrued and
unpaid interest thereon) at a price equal to 120% of the Conversion Amount and
Holder may not convert any portion of this Debenture during such 30-day period;
provided that if this Debenture has not been redeemed during such 30-day period,
then the restrictions under this Section 5.2 shall no longer be applicable.
(b) If the Issuer elects to redeem any or all of this
Debenture pursuant to this Section 5.2, the Issuer shall mail, in the manner
prescribed in Section 9 hereof, a notice of redemption (an "Issuer Notice") to
the Holder.
The notice shall identify the principal amount to be redeemed
and shall state:
1. the redemption date;
2. the redemption price (including the amount of accrued
interest to be paid); and
3. that interest on the portion of this Debenture to be
redeemed ceases to accrue on and after the redemption
date.
If the Issuer elects to redeem a portion of this Debenture,
the Issuer shall deliver to the Holder a new Debenture equal in principal amount
to the unredeemed portion of this Debenture.
Section 5.3. Redemption. At any time prior to the Maturity
Date, upon 30 days prior written notice, the Issuer may redeem for cash all or a
portion of this Debenture plus accrued and unpaid interest thereon at a
redemption price (the "Redemption Price") of 120% of the Conversion Amount. If
the Issuer elects to redeem any or all of this Debenture pursuant to this
Section 5.3, the Issuer shall mail to the Holder in the manner provided in
Section 9 an Issuer Notice. For greater certainty, the Issuer acknowledges and
agrees that the Holder shall be entitled to convert this Debenture in accordance
with the provisions of Section 5.1 hereof, at any time prior to the
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Redemption Date notwithstanding that the Issuer may have issued an Issuer Notice
under this Section 5.3.
Subject to the provisions of Section 5.1 hereof, upon notice
having been given as provided in this Section 5.3, this Debenture shall
thereupon become due and payable at the Redemption Price and on the Redemption
Date in the same manner and with the same effect as if it were the Maturity Date
specified in this Debenture, notwithstanding anything contained herein to the
contrary, and from and after the Redemption Date, if the monies necessary to
redeem this Debenture shall have been paid to the Holder, such principal amount
of this Debenture being redeemed shall not be considered as outstanding
hereunder and interest upon such principal amount shall cease to accrue after
such Redemption Date.
Section 5.4. Fractional Shares. Upon the conversion of this
Debenture pursuant to this Section 5, no fractional shares or scrip representing
fractional shares shall be issued. With respect to any fraction of a share
called for upon the conversion or redemption of this Debenture or any portion
hereof, a cash amount equal to the then current market price of such fraction
shall be paid to Holder. The current market price of a share of Common Stock is
the closing price of the Common Stock on a recognized stock exchange on the last
Trading Day prior to the conversion date or Redemption Date. In the absence of
such a listing or quotation, the Issuer shall determine the then current market
price as it considers appropriate, acting reasonably.
Section 5.5. Reservation of Shares. The Issuer shall at all
times while this Debenture remains outstanding, reserve and keep available out
of its authorized but unissued shares of Common Stock, for the purpose of
effecting the conversion of this Debenture, such number of shares of Common
Stock as shall be sufficient to effect the conversion of this Debenture.
If, at any time, the Issuer does not have available out of its
authorized but unissued shares of Common Stock, Common Stock necessary to
satisfy the conversion of the principal amount of this Debenture and all accrued
but unpaid interest then outstanding, the Issuer shall call and hold a meeting
within 60 days of such occurrence, for the sole purpose of considering a
resolution to increase the authorized capital of the Issuer to provide for the
shares of Common Stock necessary to satisfy such conversion. The Issuer shall
use its best efforts to cause all directors and officers of the Issuer to vote
any and all shares of the Issuer held by such persons in favor of such
resolution. If such resolution is not approved by the shareholders of the
Issuer, then such failure to approve shall be deemed to be an Event of Default
as contemplated in Section 3.1 hereof.
Section 5.6. Maturity Date Conversion. On the Maturity Date,
the Issuer shall have the option of paying to the Holder the principal amount
then outstanding under the Debenture plus accrued and unpaid interest in cash or
to convert such outstanding principal and accrued and unpaid interest into
freely tradeable shares of Common Stock of the Issuer at the Conversion Amount.
12
Section 6. Restrictions Upon Transferability and Registration
Requirement. This Debenture has not been registered under the Securities Act,
and may not be offered, sold, pledged, hypothecated, assigned or transferred
except (i) pursuant to a Registration Statement under the Securities Act, or
(ii) pursuant to a specific exemption from registration under the Securities Act
but only upon a holder hereof first having obtained the written opinion of U.S.
counsel to the Issuer, that the proposed disposition is consistent with all
applicable provisions of the Securities Act as well as any applicable "blue sky"
or other state securities law in the United States of America. Furthermore, no
transfer of this Debenture shall be effected until, and a transferee shall
succeed to the rights of the Holder only upon, registration of the transfer by
the Issuer in the Register. Prior to the registration of any transfer by a
Holder as provided herein, the Issuer (and any agent of the Issuer) shall treat
the person in whose name this Debenture is registered as the owner thereof for
all purposes.
Section 7. Adjustments. (a) If any reorganization or
reclassification of the capital stock of the Issuer, or consolidation or merger
of the Issuer with another corporation (other than a consolidation or merger in
which the Issuer is the continuing corporation and which does not result in any
reclassification or change of the outstanding Common Stock), or the sale of all
or substantially all of its assets to another corporation in which the holders
of Common Stock are entitled to receive shares, other securities or property
(hereinafter a "Capital Reorganization") shall be effected, and if the Holder
exercises the right to convert this Debenture into shares of Common Stock after
the effective date of such Capital Reorganization, then the Holder shall
receive, in lieu of the number of shares of Common Stock to which it was
previously entitled upon conversion of this Debenture, the aggregate number of
shares, other securities or other property which the Holder would have been
entitled to receive as a result of such Capital Reorganization if, on the
effective date thereof, the Holder had been the registered holder of the number
of shares of Common Stock to which it was previously entitled upon conversion
pursuant to Section 5.1 hereof, and in any such case appropriate provision shall
be made with respect to the rights and interests of Holder to the end that the
provisions hereof shall thereafter be applicable, as nearly as may be, in
relation to any securities or property thereafter deliverable upon the exercise
hereof. The Issuer shall not effect any such reorganization, consolidation,
merger or sale unless, prior to or contemporaneously with the consummation
thereof, the successor corporation (if other than the Issuer) resulting from
such consolidation or merger or the corporation purchasing such assets shall
assume by written instrument executed and delivered to Holder, the obligation to
deliver to Holder such securities or property as, in accordance with the
foregoing provisions, Holder may be entitled to purchase or receive.
(b) If the Issuer subdivides (by any stock split, stock
dividend, recapitalization, reorganization, reclassification or otherwise) its
shares of Common Stock into a greater number of shares or issues shares of
Common Stock (or securities convertible or exchangeable for shares of Common
Stock) to holders of shares of Common Stock as a stock dividend or other
distribution, then, after the date of record for effecting such subdivision or
stock dividend, the Fixed Exchange
13
Price in effect immediately prior to such subdivision will be proportionately
reduced. If the Company combines or consolidates (by reverse stock split,
recapitalization, reorganization, reclassification or otherwise) its shares of
Common Stock into a smaller number of shares, then, after the date of record for
effecting such combination, the Fixed Exchange Price in effect immediately prior
to such combination will be proportionately increased.
(c) If and whenever at any time after the date hereof and
prior to the Maturity Date the Issuer shall fix a record date for the issuance
of rights, options or warrants to all or substantially all of the holders of its
outstanding shares of Common Stock entitling them to subscribe for, acquire or
purchase shares of Common Stock or securities convertible into shares of Common
Stock at a price per share or having a conversion or exchange price per share
less than the Fixed Exchange Price on such record date, the Fixed Exchange Price
shall be adjusted immediately after such record date so that it shall equal the
price determined by multiplying the Fixed Exchange Price then in effect on such
record date by a fraction, the numerator of which will be the total number of
shares of Common Stock outstanding on such record date and the denominator of
which will be the total number of shares of Common Stock outstanding after the
issuance of such rights, options or warrants, treating as outstanding the
maximum number of outstanding shares of Common Stock of the Issuer issuable upon
the exercise of such rights, options or warrants; such adjustment shall be made
successively whenever such a record date is fixed; and to the extent that any
such rights, options or warrants are not so issued or any such rights, options
or warrants are not exercised prior to the expiration thereof, the Fixed
Exchange Price shall be readjusted to the Fixed Exchange Price which would then
be in effect if such record date had not been fixed or to the Fixed Exchange
Price which would then be in effect based upon the number of shares of Common
Stock (or securities convertible into shares of Common Stock) actually issued
upon the exercise of such rights, options or warrants, as the case may be.
(d) If and whenever at any time after the date hereof and
prior to the Maturity Date the Issuer shall fix a record date for the making of
a distribution to all or substantially all of the holders of its outstanding
shares of Common Stock of (i) shares of any class other than Common Stock or
securities convertible into shares of Common Stock and other than Common Stock
or securities convertible into Common Stock distributed to holders of shares of
Common Stock pursuant to their exercise of options to receive dividends in the
form of such shares in lieu of dividends paid in the ordinary course on the
shares of Common Stock; or (ii) rights, options or warrants (excluding those
referred to in subsection (c) above); or (iii) evidence of its indebtedness; or
(iv) assets (excluding dividends paid in the ordinary course); then, in each
such case, the Fixed Exchange Price shall be adjusted immediately after such
record date so that it shall equal the price determined by multiplying the Fixed
Exchange Price in effect on such record date by a fraction, (A) the numerator of
which will be (x) the product of the number of shares of Common Stock
outstanding on such record date and the Current Market Price (as hereinafter
defined) of the shares of Common Stock on such record date, less (y) the fair
market value, as determined by the board of directors of the Issuer, acting in
good faith, which determination shall be conclusive) of such
14
securities, indebtedness or property or other assets so issued or distributed;
and (B) the denominator of which will be the product of the number of shares of
Common Stock outstanding on such record and the Current Market Price of the
shares of Common Stock on such record date. Such adjustment shall be made
successively whenever such a record date is fixed; and to the extent that such
distribution is not so made, the Fixed Exchange Price shall be readjusted to the
Fixed Exchange Price which would then be in effect if such record date had not
been fixed or to the Fixed Exchange Price which would then be in effect based
upon such shares, rights, options or warrants or evidences of indebtedness or
assets actually distributed, as the case may be; in clause (iv) of this
subsection (d) the term "dividends paid in the ordinary course" shall include
the value of any securities or other property or assets distributed in lieu of
cash dividends paid in the ordinary course at the option of shareholders of the
Issuer.
(e) If any event occurs as to which in the reasonable opinion
of the Issuer, in good faith, the other provisions of this Section 7 are not
strictly applicable but the lack of any adjustment would not in the opinion of
the Issuer fairly protect the conversion rights of the Holder in accordance with
the basic intent and principles of such provisions, or if strictly applicable
would not fairly protect the conversion rights of the Holder in accordance with
the basic intent and principles of such provisions, then the Issuer shall
appoint a firm of independent certified public accountants (which may be the
regular auditors of the Issuer) of recognized national standing, which shall
give their opinion upon the adjustment, if any, on a basis consistent with the
basic intent and principles established in the other provisions of this Section
7, necessary to preserve, without dilution, the conversion rights of the Holder.
Upon receipt of such opinion, the Issuer shall forthwith make the adjustments
described therein.
(f) Whenever the Fixed Exchange Price shall be adjusted as
provided in Section 7 hereof, the Issuer shall forthwith file at each office
designated for the exercise of the conversion rights provided for herein, a
statement, signed by the Chairman of the Board, the President, any Vice
President or Treasurer of the Issuer, showing in reasonable detail the facts
requiring such adjustment and the Fixed Exchange Price that will be effective
after such adjustment. The Issuer shall also cause a notice setting forth any
such adjustments to be sent by mail, first class, postage prepaid, to the Holder
at its address appearing on the stock register.
(g) The Issuer shall not, by amendment of its charter or
through reorganization, consolidation, merger, dissolution, sale of assets or
any other voluntary action, avoid or seek to avoid the observance or performance
of any of the terms of this Debenture, but will at all times in good faith
assist in the carrying out of all such terms and in the taking of all such
action as may be necessary or appropriate in order to protect the rights of
Holder against dilution or other impairment. Without limiting the generality of
the foregoing, the Issuer will not increase the par value, if any, of any shares
of stock receivable upon the conversion of this Debenture above the amount
payable therefor upon such conversion, and at all times will take all such
action as may be necessary or
15
appropriate in order that the Issuer may validly and legally issue fully paid
and non-assessable stock upon the conversion of this Debenture.
(h) For the purposes of Section 7 hereof:
(i) The adjustments provided herein are
cumulative and will be computed to the
nearest one-tenth of one cent and will be
made successively whenever an event referred
to in Section 7 occurs, subject to the
following subsections of this section.
(ii) No adjustment in the Fixed Exchange Price
will be required unless such adjustment
would result in a cumulative change of at
least 1% in the prevailing Fixed Exchange
Price; provided, however, that any
adjustments which, except for the provisions
of this subsection would otherwise have been
required to be made, will be carried forward
and taken into account in any subsequent
adjustment.
(iii) No adjustment in the Fixed Exchange Price
will be required upon the exercise from time
to time of options under the Issuer's stock
option plans for directors, officers and
employees of the Issuer adopted by the
Issuer from time to time.
(iv) No adjustment in the Fixed Exchange Price
will be made in respect of any event
described in Section 7 hereof, other than
the events referred to in paragraph (b) of
this Section 7, if the Holder is entitled to
participate in such event on the same terms,
mutatis mutandis, as if it had converted the
Debenture prior to the effective date or
record date of such event.
(v) For the purposes of this Section 7, "Current
Market Price" as at any date means the
average of the closing bid prices of the
Issuer's Common Stock for the 10 Trading
Days immediately preceding such date.
(vi) All subdivisions of this Section 7 are
intended to operate independently of one
another. If a series of transactions or
events occur that requires the application
of more than one subsection, all applicable
subsections shall be given independent
effect.
Upon each adjustment of the Fixed Exchange Price pursuant to
the provisions of Section 7, the number of shares of Common Stock issuable upon
conversion of this Debenture shall
16
be adjusted by multiplying a number equal to the Fixed Exchange Price in effect
immediately prior to such adjustment by the number of shares of Common Stock
issuable upon conversion of this Debenture at such Fixed Exchange Price
immediately prior to such adjustment and dividing the product so obtained by the
adjusted Fixed Exchange Price.
Section 8. Representations and Warranties of the Issuer. The
Issuer hereby represents and warrants to the Holder and acknowledges that the
Holder is relying on such representations and warranties in entering into this
Debenture:
(a) The Issuer and each of its subsidiaries has all requisite
corporate power and authority to own its assets and to carry on its respective
businesses as currently conducted except where a lack of such corporate power
and authority would not have a material adverse effect on the financial
condition or results of operations of the Issuer and its subsidiaries (taken as
a whole).
(b) The shares of Common Stock issuable upon conversion of
this Debenture will be validly issued and outstanding as fully paid and
non-assessable shares of Common Stock in the capital of the Issuer.
(c) No approval, authorization, consent, qualification, or
other order of, and no prior filing, registration, or recording with, any court
or regulatory authority or other governmental authority of Canada or any
Province of Canada or the United States is required of the Issuer in connection
with the execution and delivery of this Debenture or with the performance by the
Issuer of its covenants and obligations under this Debenture except those, if
any, which have obtained and those which may be required to be made subsequent
to the date hereof.
(d) The authorized capital of the Issuer consists of: (i)
100,000,000 shares of Common Stock, of which, as of the date hereof, there are
29,980,624 shares issued and outstanding; and (ii) 100,000,000 shares of
Preferred Stock, none of which, as of the date hereof, are issued and
outstanding.
(e) Except as set forth on Schedule B to the Securities
Purchase Agreement, there is no action, proceeding or investigation pending or,
to the knowledge of the Issuer and its directors and officers, threatened
against or affecting the Issuer or any of the subsidiaries, at law or in equity
(whether in any court, arbitration or similar tribunal) or before or by any
federal, provincial, state, municipal or other governmental department,
commission, board or agency, domestic or foreign which would have a material
adverse effect on the condition (financial or otherwise), properties, assets,
business or results of operations of the Issuer.
(f) The Issuer and each of its subsidiaries are, in all
material respects, conducting their current activities in compliance with all
applicable laws, rules and regulations of each applicable jurisdiction.
17
(g) The Issuer is not in default or in breach in any material
respect of, and the execution and delivery of this Debenture by the Issuer and
the performance and compliance with the terms of this Debenture by the Issuer
will not result in any breach of, or be in conflict with or constitute a default
under, or create a state of facts which, after notice or lapse of time or both,
would constitute a default under any term or provision of the articles, by-laws
or resolutions of the Issuer or any material mortgage, note, indenture,
contract, agreement, instrument, lease or other document to which the Issuer is
a party or by which it is bound.
(h) This Debenture and all other agreements required in
connection with the issue and sale of this Debenture as contemplated herein have
been duly authorized, executed and delivered by the Issuer and constitute valid
and binding obligations of the Issuer enforceable in accordance with their
respective terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium and similar laws affecting creditors' rights generally
and general principles of equity.
(i) Other than InfoCast Canada Corporation in respect of which
the Issuer owns all of the outstanding equity other than outstanding
exchangeable shares, the Issuer owns all of the issued and outstanding shares of
each of its subsidiaries and no person has any option, warrant or other right to
acquire any shares of any such subsidiaries.
(j) Other than 2,250,000 shares of Common Stock reserved for
issuance upon exercise of options that have been or may be granted under the
Issuer's 1998 Stock Option Plan, pursuant to which options to purchase 1,950,000
shares of Common Stock have been granted; (ii) 2,000,000 shares of Common Stock
reserved for issuance upon exercise of options that have been or may be granted
under the Issuer's 1999 Stock Option Plan, pursuant to which options to purchase
1,930,000 shares of Common Stock have been granted; (iii) 780,000 shares of
Common Stock reserved for issuance upon exercise of other outstanding
options;(iv) 6,856,624 shares of Common Stock reserved for issuance upon
exercise of outstanding common stock purchase warrants to purchase such shares
of Common Stock, (v) 1,160,000 shares of Common Stock reserved for issuance upon
conversion of the Issuer's outstanding 7% Convertible Subordinated Debentures,
(vi) 2,495,362 shares of Common Stock to be exchanged on a one-for-one basis for
exchangeable shares of InfoCast Canada Corporation, (vii) 2,000,000 shares of
Common Stock reserved for issuance upon exercise of options that have been or
may be granted under the Issuer's 2000 Stock Option Plan, pursuant to which
options to purchase 350,000 shares of Common Stock have been granted, (viii)
1,500,000 shares of Common Stock reserved for issuance upon exercise of options
that have been or may be granted to employees of the Issuer formerly with i360
inc., of which options to purchase 1,113,602 shares of common stock have been
granted and (ix) shares of Common Stock reserved for issuance upon conversion of
the Debentures and the exercise of the Warrants, no person has any right,
agreement or option (whether contingent or absolute), or any right capable of
becoming a right, agreement or option for the issue or allotment of any unissued
shares of Common Stock or any other security convertible into or exchangeable
for shares of Common Stock or to
18
require the Issuer to purchase, redeem or otherwise acquire any of the issued
and outstanding shares of Common Stock.
(k) There has been no material adverse change in the business,
affairs, operations, assets, liabilities (contingent or otherwise), capital or
ownership of the Issuer, on a consolidated basis, from that on the latest dates
as of which such business, affairs, operations, assets, liabilities (contingent
or otherwise), capital or ownership are set forth in the Issuer's filings under
the U.S. Securities Exchange Act of 1934 (the "Exchange Act"), except as
disclosed in writing to the Holder on or prior to the date hereof.
(l) The consolidated audited financial statements of the
Issuer filed by the Issuer pursuant to the Exchange Act (the "Financial
Statements") have been prepared in accordance with U.S. generally accepted
accounting principles consistently applied, and were true and correct as of the
dates thereof, and since such dates, there have been no material adverse changes
in the consolidated assets, liabilities, revenues, expenses or net profit of the
Issuer from the position thereof as set forth therein, except changes arising in
the ordinary course of business or as otherwise disclosed to the Holder.
(m) Neither the Issuer nor any of its subsidiaries is in
default or breach of any contract or commitment to which it is a party and there
exists no condition, event or act which, with the giving of notice or lapse of
time or both would constitute such a default or breach, except for such defaults
or breaches that would not have a material adverse effect on the condition
(financial or otherwise), properties, assets, business or results of operations
of the Issuer and all such contracts and commitments are in good standing and in
full force and effect without amendment thereto and the Issuer and/or each of
its subsidiaries thereof, as the case may be, is entitled to all benefits
thereunder.
(n) Neither the Issuer nor any of its subsidiaries is a party
to or bound by any guarantee, surety or similar obligation.
(o) Neither the Issuer nor any of its subsidiaries is a party
to any lease or agreement in the nature of a lease for real property, whether as
lessor or lessee, except for leases of the Issuer's offices in Calgary, Toronto,
Halifax, Tucson, Annapolis and Chicago.
(p) There is no agreement, option, understanding or
commitment, or any right or privilege capable of becoming an agreement, for the
purchase from the Issuer or any of its subsidiaries of its business or any of
its assets other than in the usual and ordinary course of business.
(q) No director, former director, officer, 5% or greater
shareholder or employee of the Issuer or any of its subsidiaries or any person
not dealing at arm's length with any such person is indebted to the Issuer (on a
consolidated basis).
19
(r) The Issuer and its subsidiaries (collectively, the
"Corporation") collectively hold title to all intellectual property required to
develop and market its products that it does not otherwise license, and the
Corporation has caused all of its employees in research and development to sign
agreements that assign their rights to intellectual property developed in the
course of their employment to the Corporation (including, without limitation,
any moral rights) and the Corporation has caused any person who has access to
its intellectual property to sign confidentiality or non- disclosure agreements.
The Corporation holds a valid licence or is otherwise authorized to use all
intellectual property required for its business to which it does not hold title.
Each of such licences is in full force and effect, unamended by written or oral
agreement, and the Corporation is entitled to the full benefit and advantage of
such licence in accordance with the terms thereof. Each of such licences is in
good standing and there has not been any default by the Corporation, or to the
knowledge of the Corporation, any other party under such licence. There are
currently no disputes between the Corporation and any party under any such
licence.
(s) None of the Corporation's products or, to the knowledge of
the Corporation, the licences to intellectual property, infringes upon any
copyright, patent, mask work, integrated circuit topography, trademark, trade
name or trade secret of any person and no proceedings have been instituted or
are pending or, to the knowledge of the Corporation, are threatened which
challenge the rights of the Corporation to its intellectual property in and to
its products or the validity thereof.
(t) All of the trade marks, service marks, registered
copyrights and patents, both domestic and foreign, comprising part of the
Corporation's intellectual property are, to the best of the Corporation's
knowledge, in good standing and all maintenance fees which are due have been
paid.
(u) The Issuer has provided the Holder with all of the
information that the Holder has requested in writing in connection with their
decision to purchase this Debenture. To the best of the Issuer's knowledge,
neither this Debenture, any of the ancillary agreements to the offering of this
Debenture, nor any other representations, statements or certificates made or
delivered in connection herewith or therewith, when taken together, contains any
untrue statement of a material fact or omits to state a material fact necessary
to make the statements herein or therein not misleading to a purchaser of
securities of the Issuer seeking full information as to the Issuer and its
respective properties, business and affairs.
Section 9. Modification of Debenture. This Debenture may be
modified, amended or supplemented only by the written consent of the Holder and
the Issuer.
Section 10. Notices. Any notice or other communication
required or permitted hereunder shall be in writing and shall be delivered
personally, by facsimile or sent by certified mail, postage prepaid, and shall
be deemed given when so delivered personally, faxed or, if mailed, five (5) days
after the date of deposit in the United States or Canada mail as follows:
20
(i) if to the Issuer, to:
InfoCast Corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: Secretary
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ Frome ▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
(ii) if to the Holder, to the address of such holder as
shown in the Register of the Issuer.
Section 11. Other Rights of Holder. If at any time the Issuer
grants, issues or sells any options, exchangeable securities or rights to
purchase stock, warrants, securities or other property pro rata to the record
holders of any class of Common Stock (the "Purchase Rights"), then Holder will
be entitled to acquire, upon the terms applicable to such Purchase Rights, the
aggregate Purchase Rights which Holder could have acquired if Holder had held
the number of shares of Common Stock acquirable upon complete conversion of this
Debenture (without taking into account any limitations or restrictions on the
convertibility of the Debenture) immediately before the date on which a record
is taken for the grant, issuance or sale of such Purchase Rights, or, if no such
record is taken, the date as of which the record holders of Common Stock are to
be determined for the grant, issue or sale of such Purchase Rights.
Section 12. Miscellaneous. This Debenture shall be governed by
and be construed in accordance with the laws of the State of New York in the
United States of America without regard to the conflicts of law rules of such
state. Issuer hereby waives presentment, demand, notice, protest and all other
demands and notices in connection with the delivery, acceptance, performance and
enforcement of this Debenture, except as specifically provided herein, and
assents to extensions of the time of payment, or forbearance or other indulgence
without notice. Holder by acceptance of this ▇▇▇▇▇▇▇▇▇ agrees to be bound by the
provisions of this Debenture. The Section headings herein are for convenience
only and shall not affect the construction hereof.
Section 13. Severability. If any term or other provision of
this Debenture is invalid, illegal or incapable of being enforced by virtue of
any rule of law or public policy, all other conditions and provisions of this
Debenture shall nevertheless remain in full force and effect so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner adverse to any party. Upon such determination that any
term or other provision is invalid,
21
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Debenture so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that the
transaction contemplated hereby is fulfilled to the maximum extent possible.
[SIGNATURE PAGE FOLLOWS]
22
IN WITNESS WHEREOF, Issuer has caused this instrument to be
duly executed as of this 7th day of November, 2000.
INFOCAST CORPORATION
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
---------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: President
23
CONVERSION NOTICE
To convert this Debenture into Common Stock of the Issuer, check the box: |_|
To convert only part of this Debenture, state the amount to be
converted: $_________________
If you want the stock certificate made out in another person's name, fill in the
form below:
(Insert other person's social security or tax I.D. no.)_________________________
(Print or type other person's name, address and zip code):
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Date: _______________________ Your Signature: ______________________________
(Sign exactly as your name
appears on the face of this
Debenture)