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EXHIBIT 4.9
THESE SECURITIES (INCLUDING ANY UNDERLYING SECURITIES) HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THEY MAY NOT BE
SOLD, OFFERED FOR SALE, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER
SAID ACT OR AN OPINION OF COUNSEL OR OTHER EVIDENCE SATISFACTORY TO THE
COMPANY THAT SUCH REGISTRATION SHALL NO LONGER BE REQUIRED.
AIRTECH INTERNATIONAL GROUP, INC.
12% CONVERTIBLE DEBENTURE
DUE 2005
$_________________ Issuance Date: ________________, 2000
Dallas, Texas
1. CONSIDERATION. FOR VALUE RECEIVED, AIRTECH INTERNATIONAL
GROUP, INC. a Wyoming corporation (the "Company"), hereby promises to pay to
the order of _________________, at its offices located at
______________________ or at such other place as the holder hereof (the
"Registered Holder") shall designate to the Company in writing, in lawful
money of the United States of America, the principal amount of
_____________________________ Dollars ($__________) on January ___, 2005 (the
"Maturity Date"). The Company promises to pay the said principal sum and all
accrued interest thereon in accordance with the terms of this Debenture.
2. PAYMENTS OF PRINCIPAL AND INTEREST. The Company shall pay
interest on the principal sum of this Debenture at the rate of 12% per annum
from the Issuance Date set forth above (the "Issuance Date"). Interest shall
be due and payable semiannually on the first days of September and March
commencing September 1, 2000. The principal sum of this Debenture together
with all unpaid accrued interest thereon shall be fully and finally due and
payable on the Maturity Date. Notwithstanding the foregoing, the Company may,
at its sole option and in accordance with Section 7 hereof, force conversion
of the outstanding principal sum of this Debenture, including all unpaid
accrued interest thereon, into shares of the Company's common stock, $0.05
par value per share (the "Common Stock"), in full and final payment of this
Debenture on the Maturity Date. Principal and interest shall be payable at
the last address of the Registered Holder as it appears on the registration
books of the Company.
3. PAST DUE PAYMENTS. Interest on the indebtedness evidenced by
this Debenture after default or maturity accelerated or otherwise shall be
due and payable at the rate of twelve (12%) percent per annum, subject to the
limitations of applicable usury laws.
4. HOLIDAYS. If any payment of principal or interest on this
Debenture becomes due and payable on a Saturday, Sunday or public holiday
under the laws of the State of Texas, the due date for such payment shall be
extended to the next succeeding business day and interest shall be
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payable at the rate of twelve (12%) percent per annum during such extension.
All payments received by the Registered Holder shall be applied first to the
payment of all accrued interest payable hereunder.
5. ISSUANCE OF DEBENTURES. This Debenture has been issued by the
Company pursuant to the authorization of the Board of Directors of the
Company (the "Board") and pursuant to a Private Placement Memorandum, dated
as of January 1, 2000 (the "Placement Memorandum"). Pursuant to the Placement
Memorandum, the Company also issued to the Registered Holder warrants to
purchase ____ shares of the Company's Common Stock at an exercise price equal
to $2.00 per share. The rights of the Registered Holder relating to the
Warrants are set forth in a separate Warrant of even date herewith executed
by the Company in from of the Registered Holder. By acceptance of this
Debenture, the Registered Holder of this Debenture represents and warrants to
the Company as follows:
(a) the Registered Holder has carefully reviewed the Placement
Memorandum and all other relevant information furnished to the Registered
Holder such that the Registered Holder understands the risk of, and other
considerations relating to, an investment in the Company;
(b) the Registered Holder has been furnished all materials
requested by the Registered Holder relating to the Company and has been
afforded the opportunity to obtain any additional information deemed
necessary by the Registered Holder about the Company and the Company's
proposed business activities; and
(c) the Company has satisfactorily answered all inquiries made
by the Registered Holder concerning the Company and the Company's proposed
business activities.
6. CONVERSION.
(a) Subject to and in compliance with the provisions of this
Section 6, the Registered Holder shall have the right at any time to convert all
or a portion of the outstanding principal sum of this Debenture, including any
unpaid accrued interest thereon, into such number of shares of the Company's
Common Stock equal to the quotient obtained by dividing (x) the principal sum,
plus any unpaid accrued interest thereon, of this Debenture to be converted by
(y) One Dollar ($1.00) (the "Conversion Price") and by surrender of this
Debenture to the Company, such surrender to be made in the manner provided in
this Section 6.
(b) In order to exercise the conversion right described in
Section 6(a), the Registered Holder shall surrender this Debenture to the
Company, at the address of the Company set forth in Section 23 hereof,
accompanied by a duly executed Notice of Conversion in the form attached to
this Debenture. Unless the shares issuable on conversion are to be issued in
the same name as the name in which this Debenture is registered, this
Debenture shall be accompanied by instruments of transfer, in form reasonably
satisfactory to the Company, duly executed by the Registered Holder or the
Registered Holder's duly authorized agent.
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(c) As promptly as practicable after the surrender of this
Debenture, the Company shall issue and shall deliver (or shall cause the
issuance and delivery) to the Registered Holder, or on written order of the
Registered Holder, a certificate or certificates for the number of shares of
Common Stock issuable upon the conversion of this Debenture in accordance
with the provisions of this Section 6. Any fractional interest in respect of
a share of Common Stock arising upon conversion shall be settled as provided
in Section 8(b) hereof. Each conversion shall be deemed to have been effected
immediately prior to the close of business on the date on which this
Debenture shall have been surrendered and the Notice of Conversion received
by the Company, and the person or persons in whose name or names any
certificate or certificates for shares of Common Stock shall be issuable upon
such conversion shall be deemed to have become the holder or holders of
record of the shares represented thereby at such time and on such date.
(d) If the entire outstanding principal amount of this
Debenture is not converted, the Company shall also issue and deliver to the
Registered Holder a new Debenture of like tenor in the principal sum equal to
the principal which was not converted and dated the Issuance Date.
7. MANDATORY CONVERSION BY THE COMPANY.
(a) On the Maturity Date, the Company shall have the right, at
its sole option, to convert all or any portion of the principal sum of this
Debenture, including any unpaid accrued interest thereon, into shares of the
Company's Common Stock. The number of shares of Common Stock issuable to the
Registered Holder upon conversion shall be equal to the quotient obtained by
dividing (x) the principal sum, plus any unpaid accrued interest thereon, of
this Debenture to be converted by (y) the Conversion Price. If the Company
elects to convert less than the principal sum plus accrued interest due on
this Debenture on the Maturity Date, the Company shall pay any remaining
amounts due to the Registered Holder in cash or other immediately available
funds.
(b) In order to exercise the conversion right described in
Section 7(a), the Company shall deliver to the Registered Holder at least ten
(10) days prior to the Maturity Date a notice of the Company's intent to
convert the Debentures (the "Mandatory Conversion Notice"). The Mandatory
Conversion Notice shall set forth the amount of this Debenture to be
converted into Common Stock, the number of shares of Common Stock to be
issued to the Registered Holder upon conversion and the amount of any
additional cash payments owed to the Registered Holder, if any. The Mandatory
Conversion Notice shall also set forth the name and address of an
unaffiliated escrow agent selected by the Company (the "Escrow Agent") who
shall be responsible for delivering any shares of Common Stock or cash
payments to the Registered Holder against delivery of this Debenture by the
Registered Holder.
(c) On or before the Maturity Date, the Company shall issue
and deliver (or shall cause the issuance and delivery) to the Escrow Agent a
certificate in the name of the Registered Holder for the number of shares of
Common Stock issuable upon the conversion of this Debenture in accordance
with the provisions of this Section 7. The certificate shall be accompanied
by a cashiers check payable to the Registered Holder in the amount of any
additional cash payments owed to the Registered Holder, if any. Any
fractional interest in respect of a share of Common Stock arising upon
conversion shall be settled as provided in Section 8(b) below. The Company
will
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instruct the Escrow Agent to deliver any share certificates or cash payments
to the Registered Holder only upon receipt by the Escrow Agent of their
Debenture at the address of the Escrow Agent set forth in the Mandatory
Conversion Notice. A conversion pursuant to this Section 7 shall be deemed
effective as of the Maturity Date and the Registered Holder shall be deemed
the holder of record of the shares of Common Stock issued in the conversion
on the Maturity Date.
(d) Upon the timely delivery by the Company of the appropriate
stock certificates and cash payments required by the provisions of this
Section 7, this Debenture shall cease to bear interest as of the Maturity
Date.
8. ISSUANCE OF COMMON STOCK ON CONVERSION.
(a) All shares of Common Stock delivered upon conversion of
this Debenture will, upon delivery, be duly authorized, validly issued and
fully paid and nonassessable.
(b) No fractional shares of Common Stock shall be issued upon
conversion of this Debenture. Instead of any fractional share of Common Stock
which would otherwise be deliverable upon the conversion of this Debenture,
the Company shall pay to the holder an amount in cash (computed to the
nearest cent) equal to the Conversion Price multiplied by the fraction of a
share of Common Stock represented by such fractional interest.
(c) The issuance of certificates for shares of Common Stock
upon any conversion of this Debenture shall be made without charge to the
payee hereof for any tax, unless required by law, or other expense in respect
to the issuance of such certificates, all of which taxes and expenses shall
be paid by the Company, and such certificates shall be issued only in the
name of the Registered Holder of this Debenture.
9. REDEMPTION BY THE COMPANY.
(a) The Company shall have the right, only with the consent of
the Registered Holder, to redeem some or all of the principal amount of this
Debenture prior to the Maturity Date, upon payment of the following
redemption prices together with accrued interest to the date of redemption:
<TABLE>
<CAPTION>
IF REDEEMED DURING THE
12-MONTH PERIOD BEGINNING % OF PRINCIPAL AMOUNT
------------------------- ---------------------
<S> <C>
January 1, 2000 110%
January 1, 2001 108%
January 1, 2002 106%
January 1, 2003 104%
January 1, 2004 102%
</TABLE>
(b) Prior to redemption, the Company will notify the
Registered Holder of this Debenture of its intent to redeem and of the
redemption date (the "Redemption Date") at least thirty
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(30) days prior to the Redemption Date. Notice shall be sent by registered
mail to the last address of the Registered Holder as it appears on the
registration books of the Company.
(c) If the Registered Holder fails or neglects to present this
Debenture for payment within twenty (20) days after the Redemption Date, this
Debenture shall cease to bear interest and the redemption price of this
Debenture shall be deemed to be 100% of face value.
10. COVENANTS.
(a) The Company will at no time close its stock transfer books
against the transfer of any shares of Common Stock issued or issuable upon
the conversion of this Debenture, in any manner which interferes with the
timely conversion of this Debenture.
(b) The Company will not, by amendment of its Articles of
Incorporation or Bylaws or through any reorganization, recapitalization,
transfer of assets, consolidation, merger, dissolution, issue or sale of
securities or any other voluntary action, avoid or seek to avoid the
observance or performance of any of the terms to be observed or performed
under this Debenture by the Company, and will at all times assist in good
faith in the carrying out of all the provisions of this Debenture and in the
taking of all such action as may be necessary or appropriate in order to
protect the conversion rights of the Registered Holder of this Debenture
against impairment.
11. LIMITATION ON CERTAIN CORPORATE ACTS. The Company hereby
covenants and agrees that upon any consolidation or merger or upon the
transfer of all or substantially all of the property or assets of the
Company, the due and punctual payment of the principal and interest on this
Debenture according to its tenor and the due and punctual performance and
observance of all the terms, covenants and conditions of this Debenture to be
kept and performed by the Company shall be expressly assumed by the
corporation formed by such consolidation, or into which the Company shall
have merged or by the purchaser of such property or assets; and such
assumption shall be an express condition of such merger or consolidation
agreement or agreement for the transfer of property or assets.
12. EVENTS OF DEFAULT. The term "Event of Default", as used in
this Debenture, means the occurrence of any one or more of the following
events:
(a) default in the due and punctual payment of interest upon
or principal of this Debenture as and when the same becomes due and payable
either at maturity or otherwise; or
(b) failure to deliver to the Registered Holder shares of
Common Stock required to be delivered upon conversion of this Debenture in
the manner required by Section 6 hereof; or
(c) failure of the Company to have authorized the number of
shares of Common Stock issuable upon conversion of this Debenture; or
(d) failure on the part of the Company to duly observe or
perform any of its other covenants or agreements contained in, or to cure any
material breach in a material representation or
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covenant contained in this Debenture for a period of ten (10) days after the
date on which written notice of such failure or breach requiring the same to
be remedied has been given by the Registered Holder to the Company; or
(e) a decree or order by a court having jurisdiction has been
entered adjudging the Company bankrupt or insolvent, or approving a petition
seeking reorganization of the Company under any applicable bankruptcy law and
such decree or order has continued undischarged or unstayed for a period of
thirty (30) days; or a decree or order of a court having jurisdiction for the
appointment of a receiver or liquidator or trustee or assignee in bankruptcy
or insolvency of the Company or of all or substantially all of its property,
or for the winding-up or liquidation of its affairs, has been entered, and
has remained in force undischarged or unstayed for a period of thirty (30)
days; or
(f) the Company institutes proceedings to be adjudicated a
voluntary bankrupt, or consents to the filing of a bankruptcy proceeding
against it, or files a petition or answer or consent seeking reorganization
under applicable law, or consents to the filing of any such petition or to
the appointment of a receiver or liquidator or trustee or assignee in
bankruptcy or insolvency of it or of all or substantially all of its
property, or makes an assignment for the benefit of creditors, or admits in
writing its inability to pay its debts generally as they become due; or if
the Company shall suffer any writ of attachment or execution or any similar
process to be issued or levied against it or any significant part of its
property which is not released, stayed, bonded or vacated within thirty (30)
days after its issue or levy; or if the Company takes corporate action in
furtherance of any of the aforesaid purposes or conditions.
If any Event of Default shall have occurred and remained uncured beyond the
applicable grace period, other than an Event of Default specified in clauses
(e) and (f) above, the Registered Holder of this Debenture, by notice in
writing to the Company, may declare the principal of this Debenture and the
interest accrued thereon, if not already due and payable, to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable, anything herein contained to the
contrary notwithstanding. Upon the occurrence of an Event of Default
specified in clauses (e) and (f) above, such principal and interest shall
automatically become due and payable immediately without any action on the
part of the Registered Holder, anything herein contained to the contrary
notwithstanding.
13. TRANSFERABILITY. This Debenture is transferable, in whole or
in part, only in accordance with the terms of this Debenture. The Registered
Holder may submit a written request, in person or by the Registered Holder's
duly authorized attorney, for a transfer of this Debenture on the register of
the Company maintained at its principal offices. The Company may deem and
treat the person in whose name this Debenture is registered as the absolute
owner hereof, for the purpose of receiving payment of the principal thereof
and interest hereon, whether or not the same shall be overdue, and for all
other purposes whatsoever, including but without limitation, the giving of
any written notices required hereunder, and the Company shall not be affected
by any notice to the contrary.
14. ADJUSTMENTS TO CONVERSION PRICE.
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(a) If the Company, at any time after the Issuance Date shall
(i) subdivide the outstanding shares of Common Stock into a larger number of
shares, or (ii) combine outstanding shares of Common Stock into a smaller
number of shares, or (iii) declare a stock dividend, the Conversion Price
prior to the date of any such occurrence shall be multiplied by a fraction of
which the numerator shall be the number of shares of Common Stock outstanding
before such event and of which the denominator shall be the number of shares
of Common Stock outstanding after such event. Any adjustment made pursuant to
this Section 14(a) shall become effective immediately after the effective
date of the subdivision or a combination.
(b) If the Company, at any time after the Issuance Date, shall
declare a dividend or any other distribution upon any of its capital stock
which is payable in Common Stock, then the Conversion Price in effect
immediately prior to such declaration shall be reduced to an amount
determined by multiplying the Conversion Price then in effect by a fraction,
(x) the numerator of which shall be the number of shares of Common Stock and
Common Stock equivalents of the Company outstanding immediately prior to such
declaration, and (y) the denominator of which shall be the number of shares
of Common Stock and Common Stock equivalents of the Company outstanding
immediately after such declaration.
For the purposes of the foregoing adjustment, in the case of
the issuance of any convertible or exchangeable securities, warrants, options
or other rights to subscribe for or to purchase or exchange for, shares of
Common Stock ("Exchangeable Securities"), the maximum number of shares of
Common Stock issuable upon exercise, conversion or exchange of such
Exchangeable Securities shall be deemed to be outstanding, provided that no
further adjustment shall be made upon the actual issuance of Common Stock
upon exercise, exchange or conversion of such Exchangeable Securities.
(c) (i) In the event that at any time or from time to time
after the Issuance Date, the Common Stock issuable upon the conversion of
this Debenture is changed into the same or a different number of shares of
any class or classes of stock, whether by merger, consolidation,
recapitalization, reclassification or otherwise (other than a subdivision or
combination of shares or stock dividend or reorganization provided for
elsewhere in this Section 14), then and as a condition to each such event
provision shall be made so that the Registered Holder shall have the right
thereafter to convert this Debenture into the kind of stock receivable upon
such recapitalization, reclassification or other change by holders of shares
of Common Stock, all subject to further adjustment as provided herein. In
such event, the formula set forth herein for conversion and redemption shall
be adjusted to reflect such change in number of shares or, if shares of a new
class of stock are issued, to reflect the market price of the class or
classes of stock issued in connection with the above described transaction.
(ii) If at any time or from time to time after the
Issuance Date there is a capital reorganization of the Common Stock,
including by way of a sale of all or substantially all of the assets of the
Company (other than a recapitalization, subdivision, combination,
reclassification or exchange of shares provided for elsewhere in this Section
14), then, as a part of and a condition to such reorganization, provision
shall be made so that the Registered Holder shall thereafter be entitled to
receive upon conversion of this Debenture the number of shares of stock or
other
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securities or property to which a holder of the number of shares of Common
Stock deliverable upon conversion of the Debentures would have been entitled
on such capital reorganization. In any such case, appropriate adjustment
shall be made in the application of the provisions of this Section 14 with
respect to the rights of the Registered Holder after the reorganization to
the end that the provisions of this Section 14 shall be applicable after that
event and be as nearly equivalent as may be practicable.
(d) Whenever any element of the Conversion Price is adjusted
pursuant to Sections 12(a), (b) or (c), the Company shall promptly mail to
the Registered Holder, a notice setting forth the Conversion Price after such
adjustment and setting forth a brief statement of the facts requiring such
adjustment.
15. REMEDIES CUMULATIVE. The rights, powers and remedies given to
the Registered Holder and the Company under this Debenture shall be in
addition to all rights, powers and remedies given to it by virtue of any
statute or rule of law.
16. NON-WAIVER. Any forbearance, failure or delay by the
Registered Holder or the Company in exercising any right, power or remedy
under this Debenture shall not be deemed to be a waiver of such right, power
or remedy, nor shall any single or partial exercise of any right, power or
remedy preclude the further exercise thereof.
17. MODIFICATIONS AND WAIVERS. No modifications or waiver of any
provision of this Debenture shall be effective unless it shall be in writing
and signed by the Registered Holder and the Company, and any such
modifications or waiver shall apply only in the specific instance for which
given.
18. ATTORNEY'S FEES. If this Debenture shall not be paid when due
and shall be placed by the Registered Holder hereof in the hands of an
attorney for collection, through legal proceedings or otherwise, or if this
Debenture shall not be converted into shares of Common Stock pursuant to the
provisions of Section 6 hereof, and an action is brought by the Registered
Holder with respect thereto, the Company shall pay reasonable attorney's fees
to the Registered Holder or if more than one Registered Holder then the
reasonable fees of one lead attorney hereof, together with reasonable costs
and expenses of collection or enforcement incurred in connection with any
such action.
19. GOVERNING LAW. This Debenture and the rights and obligations
of the parties hereto, shall be governed, construed and interpreted according
to the laws of the State of Texas.
20. REGISTERED HOLDER DEFINED. The term "Registered Holder" as
used herein shall be deemed to include the Registered Holder and its
successors, endorsees and assigns.
21. WAIVER OF PRESENTMENT, ETC. The undersigned hereby waives
presentment, demand for payment, protest, notice of protest and notice of
non-payment hereof.
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22. HEADINGS. The headings contained in this Debenture are for
reference purposes only and shall not affect the meaning of interpretation of
this Debenture.
23. NOTICES. Any notice to any party required or permitted
hereunder shall be given in writing and shall be effective upon personal
delivery, via facsimile (upon receipt of confirmation of error-free
transmission) or two business days following deposit of such notice with an
internationally recognized courier service, with postage prepaid and
addressed to such party at the address set forth below, or at such other
address as a party may designate by five days advance written notice to each
of the other parties hereto.
COMPANY: Airtech International Group, Inc.
15400 Knoll Trail, Suite #200
Dallas, Texas 77063
Attn: James Halter, General Counsel
Tel: (972) 960-9400 x111
Fax: (972) 960-9395
REGISTERED HOLDER: ____________________________________
____________________________________
____________________________________
Attn:_______________________________
Tel:________________________________
Fax:________________________________
24. AMENDMENTS AND MODIFICATION. Changes in or additions to this
Debenture may be made, and compliance with any covenant or condition herein
set forth may be omitted only if the Company shall obtain the written consent
from the Registered Holder of this Debenture.
[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK,
SIGNATURE PAGE TO FOLLOW]
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IN WITNESS WHEREOF, the Company has caused this Debenture to be
executed as of ________________, 2000.
AIRTECH INTERNATIONAL GROUP, INC.
By:________________________________
Name:______________________________
Title:_____________________________
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NOTICE OF CONVERSION
The conversion from appearing below should only be executed by the
Registered Holder desiring to convert all or part of the principal amount of
the Debenture attached hereto.
CONVERSION FORM
Date:________________________
To: AIRTECH INTERNATIONAL GROUP, INC.
The undersigned hereby exercises the conversion privileges
upon the terms and conditions set forth in the attached Debenture, to the
extent of the maximum number of shares of Common Stock issuable pursuant to
the terms of Section 6 of the Debenture, and accordingly, authorizes the
Company to apply $___________ principal amount of the attached Debenture to
payment in full for such shares of Common Stock. Please register such shares
and make delivery thereof as follows:
Registered in the Name of (Giving First or Middle Name in Full)
Name ___________________________________
(Please Print)
Address ________________________________
Signature ______________________________
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