SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
________
Date of Report (Date of earliest event reported) March 12, 1997
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QPQ CORPORATION
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(Exact name of registrant as specified in its charter)
Florida 1-12350 65-0423147
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(State or other jurisdiction (Commission File (IRS Employer
or incorporation) Number) Identification No.)
1000 Lincoln Road, Suite 200, Miami Beach, Florida 33139
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(Address of principal executive offices, including zip code)
Registrant's telephone number, including area code (305) 531-5800
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS.
On March 11, 1997, pursuant to Regulation S promulgated under the Securities Act
of 1933, as amended ("Regulation S"), the Company entered into Offshore
Securities Subscription Agreements with non-U.S. residents pursuant to which the
Company issued 8.0% Convertible Debentures to five investors for an aggregate
purchase price of $900,000. The holders of the Debentures are entitled, at their
option, at any time commencing 45 days after issuance thereof, to convert any or
all of the original principal amount of the Debentures into shares of the
Company's Common Stock, $.0001 par value per share, at a conversion price for
each share of Common Stock equal to the lower of (a) 75% of the average closing
bid price of the Common Stock for the five (5) business days immediately
preceding the conversion date, or (b) 75% of the average closing bid price of
the Common Stock for the business day immediately preceding the date of
subscription by the holder as reported by the NASDAQ. The Company will use the
proceeds of the sale of the Debentures for general working capital purposes.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Exhibits
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(a) Form of 8.0% Convertible Debenture
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
QPQ CORPORATION
By: /s/ Mitchell Rubinson
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MITCHELL RUBINSON
President
DATED: March 21, 1997
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FORM OF DEBENTURE
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND
MAY NOT BE OFFERED OR SOLD IN THE UNITED STATES (AS DEFINED IN
REGULATION S UNDER THE ACT) OR TO, OR FOR THE ACCOUNT OR BENEFIT OF
U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE ACT) EXCEPT
PURSUANT TO REGISTRATION UNDER THE ACT OR AN EXEMPTION FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND APPLICABLE STATE SECURITIES
LAWS.
No.___________ US $_________
QPQ CORPORATION
8.0% CONVERTIBLE DEBENTURE DUE MARCH 31, 1998
THIS DEBENTURE is one of a duly authorized issue of Debenture of QPQ
Corporation, a corporation duly organized and existing under the laws of Florida
(the "Company") designated as its 8.0% Convertible Debenture Due February 28,
1998, in an aggregate principal amount not exceeding Six Million Dollars (US
$6,000,000).
FOR VALUE RECEIVED, the Company promises to pay to Asia Equities, the
registered holder hereof and its successors and assigns (the "Holder"), the
principal sum of __________________ Dollars (US $___________) on March 31, 1998
(the "Maturity Date"), and to pay interest on the principal sum outstanding, at
the rate of 8.0% per annum due and payable quarterly in arrears. Accrual of
interest shall commence on the date hereof and shall continue until payment in
full of the outstanding principal sum has been made or duly provided for. The
interest so payable will be paid to the person in whose name this Debenture (or
one or more predecessor Debentures) is registered on the records of the Company
regarding registration and transfers of the Debentures (the "Debenture
Register"); provided, however, that the Company's obligation to a transferee of
this Debenture arises only if such transfer, sale or other disposition is made
in accordance with the terms and conditions of the Offshore Securities
Subscription Agreement dated as of March 11, 1997 between the Company and Asia
Equities (the "Subscription Agreement"). The principal of, and interest on, this
Debenture are payable in such coin or currency of the United States of America
as at the time of payment is legal tender for payment of public and private
debts, at the address last appearing on the Debenture Register of the Company as
designated in writing by the Holder hereof from time to time. The Company will
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pay the outstanding principal of and all accrued and unpaid interest due upon
this Debenture on a Maturity Date, less any amounts required by law to be
deducted or withheld, to the record Holder of this Debenture as of the tenth
(10th) day prior to the Maturity Date and addressed to such record Holder at the
last address appearing on the Debenture Register. The forwarding of such check
shall constitute a payment of outstanding principal and interest hereunder and
shall satisfy and discharge the liability for principal nd interest on this
Debenture to the extent of the sum represented by such check plus any amounts so
deducted.
This Debenture is subject to the following additional provisions:
1. The Debentures are issuable in denominations of One Hundred Thousand
Dollars (US $100,000) and integral multiples thereof. The Debentures are
exchangeable for an equal aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holders surrendering the same but
not less than US $100,000. No service charge will be made for such registration
or transfer or exchange.
2. The Company shall be entitled to withhold form all payments of
principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States income tax or
other applicable laws at the time of such payments.
3. This Debenture has been issued subject to investment representations
of the original purchaser hereof and may be transferred or exchanged in the U.S.
only in compliance with the Securities Act of 1933, as amended (the "Act") and
applicable state securities laws. Prior to due presentment 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, whether or not this Debenture be overdue, and neither
the Company nor any such agent shall be affected or bound by notice to the
contrary. Any holder of this Debenture, electing to exercise the right of
conversion set forth in Section 4(a) hereof, in addition to the requirements set
forth in Section 4(a), is also required to give the Company (i) written
confirmation that it is not a U.S. Person and the Debenture is not being
converted on behalf of a U.S. Person and the representations contained in the
Subscription Agreement are true ("Notice of Conversion") or (ii) an opinion of
U.S. counsel to the effect that the Debenture and shares of common stock
issuable upon conversion thereof have been registered under the 1933 Act or are
exempt from such registration. In the event a Notice of Conversion or opinion of
counsel is not provided the Holder hereof will not be entitled to exercise the
right to convert the Debenture pursuant to Section 4(a) herein.
4. The Holder of this Debenture is entitled, at its option, at any time
commencing 45 days after issue hereof to convert any or all of the original
principal amount of this Debenture into shares of common stock, $0.01 par value
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per share, of the Company (the "Common Stock"), at a conversion price for each
share or Common Stock equal to the lower of (a) 75% of the average closing price
of the Common Stock for the five (5) business days immediately preceding the
conversion date or (b) 75% of the average of the closing price of the Common
Stock for the business day immediately preceding the date of Subscription by the
Holder as reported by the National Association of Securities Dealers Automated
Quotation System ("NASDAQ") (the "Conversion Price"). Such conversion shall be
effectuated by surrendering the Debentures to be converted (by facsimile or
courier, to the Company) with the form of conversion notice attached hereto as
Exhibit I, executed by the Holder of this Debenture evidencing such Holder's
intention to convert this Debenture or a specified portion (as above provided)
hereof, and accompanied by proper assignment hereof in blank. Accrued but unpaid
interest shall be subject to conversion at the option of the Company. No
fractional shares or scrip representing fractions of shares will be issued on
conversion, but the number of shares issuable shall be rounded to the nearest
whole share, with the fraction paid in cash at the discretion of the Company.
The date on which notice of conversion is given shall be deemed to be the date
on which the Holder has delivered this Debenture, with the conversion notice
duly executed, to the Company or, if earlier, the date set forth in such notice
of conversion if the Debenture is received by the Company within five (5)
business days thereafter.
5. No provision of this Debenture shall alter or impair the obligation of
the Company, which is absolute and unconditional, to pay the principal of, and
interest on, this Debenture at the time, place, and rate, and in the coin
currency, herein prescribed.
6. The Company hereby expressly waives demand and presentment for
payment, notice of nonpayment, protest, notice of protest, notice of dishonor,
notice of acceleration or intent to accelerate, bringing of suit and diligence
in taking any action to collect amounts called for hereunder and shall be
directly and primarily liable for the payment of all sums owing and to be owing
hereon, regardless of and without any notice, diligence, act or omission as or
with respect to the collection of any amount called for hereunder.
7. The Company agrees to pay all costs and expenses, including reasonable
attorneys' fees, which may be incurred by the Holder in collecting any amount
due under this Debenture.
8. If one or more of the following described "events of Default" shall
occur:
(a) The Company shall default in the payment of principal or
interest on this Debenture; or
(b) Any of the representations or warranties made by the Company
herein, in the Subscription Agreement, or in any certificate
or financial or other written statements heretofore or
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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
(c) The Company shall fail to perform or observe, in any material
respect, any other covenant, term, provision, condition,
agreement or obligation of the Company under this Debenture
and such failure shall continue uncured for a period of seven
(7) days after notice from the Holder of such failure
including, but not limited to, failure to issue the Common
Stock upon conversion of this Debenture pursuant to paragraph
4(a) hereof; or
(d) The Company shall (1) become insolvent; (2) admit in writing
its liability to pay its debts generally as they mature; (3)
make an assignment for the benefit of creditors or commence
proceedings for its dissolution; or (4) apply for or consent
to the appointment of a trustee, liquidator or receiver for
its or for a substantial part of its property or business; or
(e) A trustee, liquidator or receiver shall be appointed for the
Company or for a substantial part of its property or business
without its consent and shall not be discharged within sixty
(60) days after such appointment; or
(f) Any governmental agency or any court of competent jurisdiction
at the instance of any governmental agency shall assume
custody or control of the whole or any substantial portion of
the properties or assets of the Company and shall not be
dismissed within sixty (60) days thereafter, or
(g) Any money judgment, writ or warrant of attachment, or similar
process in excess of Three Hundred Thousand Dollars ($300,000)
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 five (5) days prior to
the date of any proposed sale thereunder; or
(h) Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any
bankruptcy law or for the relief of debtors shall be
instituted by or against the Company and, if instituted
against the Company, shall not be dismissed within sixty (60)
days after such instruction of the Company shall by any action
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or answer approve of, consent to, or acquiesce in any such
proceedings or admit the material allegations of, or default
in answering a petition filed in any such proceeding; or
(i) The Company shall have its Common Stock delisted from an
exchange or the over-the-counter market.
Then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of
the Holder and in the Holder's sole discretion, the Holder may consider this
Debenture immediately due and payable, without presentment, demand, protest or
notice of any kinds, all of which are hereby expressly waived, anything herein
or in any note or other instruments contained to the contrary notwithstanding,
and the Holder may immediately, and without expiration of any period of grace,
enforce any and all of the Holder's rights and remedies provided herein or any
other rights or remedies afforded by law.
9. This Debenture represents a general unsecured obligation of the
Company. No recourse shall be had for the payment of the principal of, or the
interest on, this Debenture, or for any claim based hereon, or otherwise in
respect hereof, against any incorporator, shareholder, officer or director, as
such, past, present or future, of the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
10. The Holder of this Debenture, by acceptance hereof, agrees that this
Debenture is being acquired for investment and that such Holder will not offer,
sell or otherwise dispose of this Debenture or the Shares of Common Stock
issuable upon exercise thereof except under circumstances which will not result
in a violation of the Act or any applicable state Blue Sky law or similar laws
relating to the sale of securities.
11. In case any provision of this Debenture is held by a court of
competent jurisdiction to be excessive in scope or otherwise invalid or
unenforceable, such provision shall be adjusted rather than voided, if possible,
so that it is enforceable to the maximum extent possible, and the validity and
enforceability of the remaining provisions of this Debenture will not in any way
be affected or impaired thereby.
12. This Debenture and the agreements referred to in this Debenture
constitute the full and entire understanding and agreement between the Company
and the Holder with respect to the subject hereof. Neither this Debenture nor
any term hereof may be amended, waived, discharged or terminated other than by a
written instrument signed by the Company and the Holder.
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13. This Debenture shall be governed by and construed in accordance with
the laws of Florida.
14. As set forth herein, the Company shall use all reasonable efforts to
issue and deliver, within three (3) business days after the Holder has fulfilled
all conditions and submitted all necessary documents duly executed and in proper
form required for conversion (the "Deadline"), to the Holder or any party
receiving a Debenture by transfer from the Holder (together, a "Holder"), at the
address of the Holder on the books of the Company, a certificate or certificates
for the number of Shares of Common Stock to which the Holder shall be entitled.
The Company understands that a delay in the issuance of the Shares of Common
Stock beyond the Deadline could result in economic loss to the Holder. As
compensation to the Holder for such loss, the Company agrees to pay liquidated
damages to the Holder for late issuance of Shares upon conversion in accordance
with the following schedule (where "No. Business Days Late" is defined as the
number of business days beyond seven (7) business days from the date of receipt
by the Company of a Notice of Conversion and the transfer agent of all necessary
documentation duly executed and in proper form required for conversion,
including the original Debenture to be converted, all in accordance with the
Debenture, Subscription Agreement and the requirements of the transfer agent):
Liquidated Damages per
No. Business Days Late $100,000 of Debenture
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1 $ 500
2 $1,000
3 $1,500
4 $2,000
5 $2,500
6 $3,000
7 $3,500
8 $4,000
9 $4,500
10 $5,000
10 5,000 + $1,000 each
Business Day Late beyond 10 days
The Company shall pay the Holder any liquidated damages incurred under
this Section by check upon the earlier to occur of (i) issuance of the Shares to
the Holder or (ii) each monthly anniversary of the receipt of the Company of
such Holder's Notice of Conversion. Nothing herein shall limit the Holder's
right to pursue actual damages for the Company's failure to issue and deliver
shares of Common Stock to the Subscriber in accordance with the terms of the
Debenture.
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IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated:___________________ QPQ CORPORATION
By:________________________________
Title:___________________________
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EXHIBIT I
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 QPQ Corporation
(the "Company") according to the conditions set forth in such Debenture, as of
the date written below.
The undersigned represents that it is not a U.S. Person as defined in
Regulation S promulgated under the Securities Act of 1933, as amended, and is
not converting the Debenture on behalf of any U.S. Person and the
representations contained in the Subscription Agreement are true.
Date of Conversion*_____________________________________________________________
Applicable Conversion Price_____________________________________________________
Signature_______________________________________________________________________
[Name]
Address:________________________________________________________________________
________________________________________________________________________________
_____________
*This original Debenture and Notice of Conversion must be received by the
Company by the fifth business date following the Date of Conversion.
