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): September 24,
1997
VIDEOLAN TECHNOLOGIES, INC.
(Exact name of registrant as specified in charter)
Delaware 000-26302 611283466
(State or other (Commission File Number) (IRS Employer
jurisdiction or Identification
incorporation) No.)
11403 Bluegrass Parkway, Suite 400
Louisville, Kentucky 40299
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(502) 266-0099
Not Applicable
(Former name or former address
if changed since last report.)
INFORMATION TO BE INCLUDED IN THE REPORT
Item 7. Financial Statements, Pro Forma Financial Information
and Exhibits
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
Exhibit 3.1, 4.1 -- Certificate of Incorporation,
incorporated by reference as an exhibit to the Registration
Statement on Form SB-2, as amended, filed by the Company (File
No. 32-93086).
Exhibit 3.2, 4.2 -- Certificate of Amendment to Certificate
of Incorporation, incorporated by reference as an exhibit to the
1996 Annual Report on Form 10-KSB (File No. 0-26302 ).
Exhibit 3.3, 4.3 -- Bylaws of the Company, incorporated by
reference as an exhibit to the Registration Statement on Form 8-A
dated January 29, 1997 (File No. 0-26302).
Exhibit 4.4 -- Form of 4% Convertible Debenture due
September 1, 1999 (the "Debenture").
Item 9. Sale of Debentures Pursuant to Regulation S.
(a) Securities Sold. On September 24, 1999 the
Registrant issued two $100,000.00 4% Convertible
Debentures due September 1, 1999.
(b) Underwriters and Other Purchasers. The Registrant did
not engage an underwriter in connection the issuance of
the Debentures. The Debentures were purchased by non-U.S.
Persons (as such term is defined in Regulation S
("Regulation S") under the Securities Act of 1933, as
amended ("Securities Act")). The purchasers are
"accredited investors" as defined in Rule 501(a) in
Regulation D under the Securities Act.
(c) Consideration. The Registrant issued the Debentures for
cash consideration. The Registrant is obligated to pay
J.P. Carey, Inc. a consulting fee in the aggregate
amount of $18,000.
(d) Exemption from Registration Claimed. The Debentures
were issued in accordance with the provisions of
Regulation S in an Offshore Transaction to a non-U.S.
Person.
(e) Terms of Conversion or Exercise.
The terms of the Debenture provide for interest on the
Debenture at the rate of Four percent (4.0%) per year
payable until the Debenture has been converted.
Purchaser, at its option, may convert all the principal
amount of the Debenture, plus accrued interest,
provided the principal amount is at least $10,000, into
Common Stock at any time after November 8, 1997, at a
conversion price for each share of Common Stock equal
to the lesser of eighty percent 80% of the Closing Bid
Price (as that term is defined below) for the five
trading days immediately preceding (i) the date of
issuance of the Debenture or (ii) the date of
conversion of the Debenture. The term "Closing Bid
Price" shall mean the closing bid price of the
Company's Common Stock as reported by NASDAQ (or, if
not reported by NASDAQ, as reported by such other
exchange or market where traded).
The discussion at this Item 701(e) is qualified in its
entirety by reference to the Debenture attached to this
Form 8-K as an exhibit.
SIGNATURE
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 thereunto duly authorized.
VIDEOLAN TECHNOLOGIES, INC.
By:/s/ Steven B. Rothenberg
Steven B. Rothenberg
Executive Vice President,
Treasurer And Chief Financial
Officer
Date: October 8, 1997
THESE SECURITIES HAVE NOT BEEN REGISTERED WITH THE UNITED
STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE "ACT"), OR THE SECURITIES COMMISSION
OF ANY STATE UNDER ANY STATE SECURITIES LAW. THEY ARE BEING
OFFERED PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER
REGULATION S ("REGULATION S") PROMULGATED UNDER THE ACT. THE
SECURITIES MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN
THE UNITED STATES OR TO U.S. PERSONS (AS SUCH TERM IS DEFINED IN
REGULATION S) UNLESS THE SECURITIES ARE REGISTERED UNDER THE ACT
AND APPLICABLE STATE SECURITIES LAWS, OR SUCH OFFERS, SALES AND
TRANSFERS ARE MADE PURSUANT TO AVAILABLE EXEMPTIONS FROM THE
REGISTRATION REQUIREMENTS OF THE ACT AND THOSE LAWS.
THESE SECURITIES HAVE NOT BEEN RECOMMENDED BY ANY FEDERAL OR
STATE SECURITIES COMMISSION OR REGULATORY AUTHORITY. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
No. ____ $100,000 U.S.
VIDEOLAN TECHNOLOGIES, INC.
4% CONVERTIBLE DEBENTURE DUE SEPTEMBER 1, 1999
THIS DEBENTURE, issued this 24th day of September, 1997, is
one of a duly authorized issue of Debentures of VIDEOLAN
TECHNOLOGIES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (the "Company"),
designated as its 4% Convertible Debentures Due September 1, 1999
in the aggregate principal amount of $2,000,000 U.S. (the
"Debentures").
FOR VALUE RECEIVED, the Company promises to pay to
_____________, the registered holder hereof (the "Holder"), the
principal sum of One Hundred Thousand Dollars ($100,000 U.S.), on
or prior to September 1, 1999 (the "Maturity Date"). This
instrument shall accrue interest on the principal sum outstanding
at the rate of 4% per annum. Accrual of interest on this
IN WITNESS WHEREOF, the Company has caused this instrument
to be duly executed by an officer thereunto duly authorized.
VIDEOLAN TECHNOLOGIES, INC.
Dated: September 24, 1997 By:_______________________________
Its:______________________________
Debenture shall commence on the date of this Debenture and shall
continue to accrue until payment in full of the principal sum has
been made or duly provided for. 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 of
the Holder last appearing on the Debenture Register of the
Company as designated in writing by the Holder from time to time.
The Debenture Register shall represent the record of ownership
and right to receive principal and interest on this Debenture.
Interest and principal shall be payable only to the registered
Holder as reflected in the Debenture Register. The right to
receive principal and interest under this Debenture shall be
transferable only through an appropriate entry in the Debenture
Register as provided herein. The forwarding of such payment
shall constitute a payment of interest hereunder and shall
satisfy and discharge the liability for principal and interest on
this Debenture to the extent of the sum represented by such
payment.
This Debenture is subject to the following additional
provisions:
1. Debentures. The Debentures are issuable in denominations of
at least Ten Thousand Dollars ($10,000, U.S.). The Debentures
are exchangeable for an equal aggregate principal amount of
Debentures of direct authorized denominations, as requested by
the Holders surrendering the same, but shall not be issuable in
denominations less than integral multiples of Ten Thousand
Dollars $10,000, U.S.). No service charge will be made for such
registration of transfer or exchange.
2. Withholding. The Company shall be entitled to withhold from
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 laws or other applicable laws at
the time of such payments. The Holder shall pay any other taxes,
charges, or levies in connection with the issuance or transfer
thereof.
3. Transfer. This Debenture has been issued subject to
investment representations of the original purchaser hereof and
may be transferred or exchanged only in compliance with the
Securities Act of 1933, as amended (the "Act"), including
Regulation S promulgated under the Act. Any Holder of this
Debenture, by acceptance hereof, agrees to the representations,
warranties and covenants herein. Prior to due presentment to the
Company for transfer of this Debenture, the Company and any agent
of the Company may treat the person in whose name this Debenture
is duly registered on the Company's Debenture Register as the
owner hereof for the purpose of receiving payment as herein
provided and for all other purposes, whether or not this
Debenture be overdue, and neither the Company nor any such agent
shall be affected by notice to the contrary.
4. Conversion. The record Holders of this Debenture shall have
conversion rights as follows (the "Conversion Rights"):
(a) Right to Convert. The record Holder of this Debenture
shall be entitled, at the option of the Holder, to convert any or
all of the aggregate principal amount and accrued interest of
Debentures held by such Holder, at any time beginning forty-five
(45) days after the date of issuance of this Debenture, at the
office of the Company or any transfer agent for the Debentures,
into that number of fully-paid and non-assessable shares of
Common Stock of the Company calculated in accordance with the
following formula:
* Principal = The principal amount of the Debenture(s) to
be converted,
* Interest = Principal x (N/365) x .04, where N = the
number of days between (i) the date of issuance of this
Debenture, and (ii) the date of conversion of this
Debenture, and
* Conversion Price = the lesser of (i) .80 multiplied by
the average Closing Bid Price, as that term is defined
below, of the Company's Common Stock for the five (5)
trading days immediately preceding the date of issuance
of this Debenture (the "Fixed Conversion Price"), or
(ii) .80 multiplied by the average Closing Bid Price,
as that term is defined below, of the Company's Common
Stock for the five (5) trading days immediately
preceding the Date of Conversion, as defined below (the
"Floating Conversion Price"). For purposes hereof, the
term "Closing Bid Price" shall mean the closing bid
price of the Company's Common Stock as reported by
NASDAQ (or, if not reported by NASDAQ, as reported by
such other exchange or market where traded).
(b) Mechanics of Conversion. No fractional shares of
Common Stock shall be issued upon conversion of this Debenture.
In lieu of any fractional share to which the Holder would
otherwise be entitled, the Company shall pay cash to such Holder
in an amount equal to such fraction multiplied by the Conversion
Price then in effect. In the case of a dispute as to the
calculation of the Conversion Rate, the Company's calculation
shall be deemed conclusive absent manifest error. In order to
convert Debentures into full shares of Common Stock, the Holder
shall surrender the certificate or certificates therefor, duly
endorsed, by either overnight courier or 2-day courier, to the
office of the Company or of any transfer agent for the
Debentures, and shall give written notice to the Company, on the
form attached as Exhibit "A" hereto, at such office that he
elects to convert eh same, the number of Debentures so converted
and a calculation of the Conversion Rate (with an advance copy of
the certificate(s) and the notice by facsimile); provided,
however, that the Company shall not be obligated to issue
certificates evidencing the shares of Common Stock issuable upon
such conversion unless either the certificates evidencing the
shares of Common Stock issuable upon such conversion unless
either the certificates evidencing such Debentures are delivered
to the Company or its transfer agent as provided above, or the
Holder notifies the Company or its transfer agent that such
certificates have been lost, stolen or destroyed and executes an
agreement satisfactory to the Company to indemnify the Company
from any loss incurred by it in connection with such
certificates.
The Company shall use reasonable efforts to issue and
deliver within five (5) business days after delivery to the
Company of such certificates, or after such agreement and
indemnification, to such Holder of Debentures 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 as aforesaid. The date on which
notice of conversion is given (the "Date of Conversion") shall be
deemed to be the date set forth in such notice of conversion,
provided that the original Debentures to be converted are
received by the transfer agent or the Company within five
business days thereafter and the person or persons entitled to
receive the shares of Common Stock issuable upon such conversion
shall be treated for all purposes as the record holder or holders
of such shares of Common Stock on such date. If the original
Debentures to be converted are not received by the transfer agent
or the Company with five business days after the Date of
Conversion, the notice of conversion (at the option of the
holder) shall become null and void.
Following conversion of a Debenture, or a portion thereof,
the principal and interest owed on that Debenture or portion of
the Debenture so converted will be deemed paid in full and
satisfied, and such Debenture or portion thereof will no longer
be outstanding.
Failure to timely convert the Debenture shall entitle the
Holder to liquidate damages in accordance with section 6.4 of the
Subscription Agreement pursuant to which this Debenture was
issued.
(c) Reservation of Stock Issuable Upon Conversion. The
Company shall at all times reserve and keep available out of its
authorized but unissued shares of Common Stock, solely for the
purpose of effecting the conversion of the Debentures, such
number of its shares of Common Stock as shall from time to time
be sufficient to effect the conversion of all then outstanding
Debentures; and if at any time the number of authorized but
unissued shares of Common Stock shall not be sufficient to effect
the conversion of all then outstanding Debentures, the Company
will take such corporate action as may be necessary to increase
its authorized but unissued shares of Common Stock to such number
of shares as shall be sufficient for such purpose.
(d) Automatic Conversion on Maturity Date. Each
outstanding Debenture shall automatically be converted into
Common Stock on September 1, 1999 at the Conversion Price for
each share of Common Stock calculated in accordance with the
formula in Section 4(a) above, and September 1, 1999 shall be
deemed the Date of Conversion with respect to such conversion.
(e) Adjustment to Conversion Price.
(i) If, prior to the conversion of all of the
Debentures, the number of outstanding shares of Common Stock is
increased by a stock split, stock dividend, or other similar
event, the Fixed Conversion Price shall be proportionately
reduced, or if the number of outstanding shares of Common Stock
is decreased by a combination or reclassification of shares, or
other similar event, the Fixed Conversion Price shall be
proportionately increased.
(ii) If, prior to the conversion of all of the
Debentures at a time when conversion would be at the Floating
Conversion Price, there is a stock split, sock dividend or other
similar event which occurs during the five-day period utilized to
compute the Conversion Price, then the Closing Bid Price used to
compute the Conversion Price shall be appropriately adjusted to
reflect, as deemed equitable and appropriate by the Company, such
stock split, stock dividend or other similar event.
(iii) If, prior to the conversion of all
Debentures, there shall be any merger, consolidation, exchange of
shares, recapitalization, reorganization, or other similar event,
as a result of which shares of Common Stock of the Company shall
be changed into the same or a different number of shares of the
same or another class of stock or securities of the Company or
another entity, then the Holders of Debentures shall thereafter
have the right to purchase and receive upon conversion of
Debentures, upon the basis and upon the terms and conditions
specified herein and in lieu of the shares of Common Stock
immediately theretofore issuable upon conversion, such shares of
stock and/or securities as may be issued or payable with respect
to or in exchange for the number of shares of Common Stock
immediately theretofore purchasable and receivable upon the
conversion of Debentures held by such Holders had such merger,
consolidation, exchange of shares, recapitalization or
reorganization not taken place, and in any such case appropriate
provisions shall be made with respect to the rights and interests
of the Holders of the Debentures to the end that the provisions
hereof (including, without limitation, provisions for adjustment
of the Fixed Conversion Price and of the number of shares
issuable upon conversion of the Debentures) shall thereafter be
applicable, as nearly as may be practicable in relation to any
shares of stock or securities thereafter deliverable upon the
exercise hereof. The Company shall not effect any transaction
described in this subsection 4(e) unless the resulting successor
or acquiring entity (if not the Company) assumes by written
instrument the obligation to deliver to the Holders of the
Debentures such shares of stock and/or securities as, in
accordance with the foregoing provisions, the Holders of the
Debentures may be entitled to purchase.
(iv) If any adjustment under this Section 4(e) would
create a fractional share of Common Stock or a right to acquire a
fractional share of Common Stock, such fractional share shall be
disregarded and the number of shares of Common Stock issuable
upon conversion shall be the next higher number of shares.
5. Redemption.
(a) Redemption on Asset Sale. In the event the Company
enters into a transaction to sell all or substantially all of its
assets, the Company shall, within seven days after the closing of
such transaction and after giving at least 15 days advance
written notice of such transaction (which notice shall specify
the date such redemption is to be effected, which date is
referred to hereinafter as the "Effective Date of Redemption"),
redeem the Debentures for cash. The redemption price in such
event ("Redemption Price on Asset Sale") shall be calculated in
accordance with the formula set forth in Section 5(b) below.
Upon the close of the transaction causing redemption under
this Section 5(c), the Company shall deposit the Redemption Price
on Asset Sale for all outstanding Debentures with a bank or trust
company having aggregate capital and surplus in excess of
$50,000,000 as a trust fund for the benefit of the respective
holders of the Debentures designated for redemption and not yet
redeemed. Simultaneously, the Company shall deposit irrevocable
instruction and authority to such bank or trust company to
publish the notice of redemption thereof (or to complete such
publication if theretofore commenced) and to pay, on and after
the date fixed for redemption or prior thereto, the Redemption
Price on Asset Sale to the holders of the Debentures upon
surrender of their Debentures.
(b) Redemption Price.
The redemption price per Debenture shall be calculated in
accordance with the following formula:
[Principal + Interest] x 120%
For the purposes of the above formula, "Principal" and
"Interest" shall have the meanings set forth in Section 4(a).
The redemption price shall be paid to the Holder of
Debentures redeemed as set forth in Section 5(a) above; provided,
however, that the Company shall not be obligated to deliver any
portion of such redemption price unless either the certificates
evidencing the Debentures redeemed are delivered to the Company
or its transfer agent as provided in Section 4(b), or the Holder
notifies the Company or its transfer agent that such certificates
have been lost, stolen or destroyed and executes an agreement
satisfactory to the Company to indemnify the Company from any
loss incurred by it in connection with such certificates.
(c) No Other Redemption. The Company shall have no right
to redeem the Debentures except as provided in Section 5 hereof.
6. No Right to Force Conversion Prior to Maturity Date. The
Company shall have no right to force conversion of any
outstanding Debentures prior to the Maturity Date.
7. Direct Obligations. This Debenture and all other Debentures
now or hereafter issued of similar terms are direct obligations
of the Company.
8. Termination. After this Debenture shall have been
surrendered for conversion as herein provided or notice of
conversion shall have been given by the Company pursuant to
Section 4(d) herein, this Debenture shall no longer be deemed to
be outstanding and all rights with respect to this Debenture,
including, without limitation, the right to receive interest
hereon and the principal hereof, shall forthwith terminate as of
the Date of Conversion, except only the right of the Holder
hereof to receive shares of Common Stock in exchange here for.
9. Protective Provisions. This Debenture may not be amended
without the prior written consent of the Holder hereof.
10. Events of Default; Remedies. 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 these Debentures; or
(b) Any of the representations or warranties made by the
Company herein, in the Regulation S Securities Subscription
Agreement, dated as of the date hereof relating to these
Debentures (the "Subscription Agreement") or in any certificate
or financial or other written statements heretofore or hereafter
furnished by or on behalf of the Company in connection with the
execution and delivery of this Debenture or the Subscription
Agreement shall be false or misleading in any material respect at
the time made; or
(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 five (5) days
after notice from Holder of such failure; or
(d) The Company shall (1) become insolvent; (2) admit in
writing its inability 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
thirty (3) 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 thirty (30) days thereafter; or
(g) Any money judgment, writ or warrant of attachment, or
similar process in excess of Two Hundred Thousand Dollars
($200,000) 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 any law for the relief of debtors shall be instituted by
or against the Company and, if instituted against the Company
shall not be dismissed within thirty (30) days after such
institution or if the Company shall by any action 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 Common Stock shall no longer be traded on any U.S.
securities exchanges or on any U.S. over-the-counter securities
market, including the electronic bulletin board;
Then, or at any time thereafter, and in each ave 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 kind, 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
with 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.
11. Mergers, Consolidations, etc. The Company shall not
consolidate or merge into, or transfer all or substantially all
of its assets to, any person, unless such person assumes the
obligations of the Company under this Debenture and immediately
after such transaction no Event of Default exists. Any reference
of the Company shall refer to such surviving or transferee
corporation and the obligations of the Company shall terminate
upon such assumption. If the Company merges or consolidates with
another corporation or sells or transfers all or substantially
all of its assets to another person and the holders of the Common
Shares are entitled to receive stock, securities or property in
respect of or in exchange for Common Shares, then as a condition
of such merger, consolidation, sale or transfer, either (i) the
Company and any such successor, purchaser or transferee shall
amend this Debenture to provide that it may thereafter be
converted on the terms and subject to the conditions set forth
above into the kind and amount of stock, securities or property
receivable upon such merger, consolidation, sale or transfer by a
holder of the number of shares of Common Stock into which this
Debenture might have been converted immediately before such
merger, consolidation, sale or transfer, or (ii) if the Company
is not the surviving entity in such merger, consolidation, sale
or transfer, the Company shall give the Holder at least 30 days
prior written notice of the expected closing date of such
transaction, and if any portion of this Debenture has not been
converted into Common Stock at the election of the Holder prior
to such closing, then the remaining principal amount of this
Debenture may, at the option of the Holder, be converted into
shares of Common Stock at the closing of such transaction. The
Conversion Price shall be the same as the applicable Conversion
Price defined in Section 4 above.
12. No Voting Rights. This Debenture shall not entitle the
Holder hereof to any of the rights of a stockholder of the
Company, including without limitation, the right to vote, to
receive dividends and other distributions, or to receive any
notice of, or to attend, meetings of stockholders or any other
proceedings of the Company.
13. No Dividends. For so long as the Debentures remain
outstanding, the Company will not, without the prior consent of a
majority of the Holders, make any distribution, either in stock
or cash, to its holders of Common Stock.
14. Lost or Destroyed Debenture. If this Debenture shall be
mutilated, lost, stolen or destroyed, the Company shall execute
and deliver, in exchange and substitution for and upon
cancellation of a mutilated Debenture, or in lieu of or in
substitution for a lost, stolen or destroyed Debenture, a new
Debenture for the principal amount of this Debenture so
mutilated, lost, stolen or destroyed but only upon receipt of
evidence of such loss, theft or destruction of such Debenture,
and of the ownership thereof, and indemnity, if requested, all
reasonably satisfactory to the Company.
15. Sales in Compliance with Applicable Law. Any Holder of this
Debenture, by acceptance hereof, agrees 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, including Regulation S promulgated under the Act, or any
applicable state Blue Sky law or similar laws relating to the
sale of securities and the Holder agrees to provide the Company
with documentation executed by the original Holder hereof to
demonstrate that such offer, sale or disposition complies with
applicable securities laws.
16. Governing Law. This Debenture shall be governed by and
construed in accordance with the laws of the State of Delaware,
without giving effect to the principles of conflicts of laws.
17. Business Day Definition. For purposes hereof, the term
"business day" shall mean any day on which banks are generally
open for business in the State of New York, USA and excluding any
Saturday and Sunday.
18. Notices. Any notice, demand or request or permitted to be
given by either the Company or the Subscriber pursuant to the
terms of this Agreement shall be in writing and shall be deemed
given when delivered personally, or by facsimile (with a hard
copy to follow by two day courier), addressed to the Company at
11403 Bluegrass Parkway, Ste. 400, Louisville, KY 40299, Telecopy
No. (502) 266-7608, or to the Subscriber at ____________________;
or such other addresses as a party may request by notifying the
other in writing.
19. Waiver. Any waiver by the Company or the Holder hereof of a
breach of any provision of this Debenture shall not operate as or
be construed to be a waiver of any other breach of such provision
or of any breach of any other provision of this Debenture. The
failure of the Company or the Holder hereof to insist upon strict
adherence to any term of this Debenture on one or more occasions
shall not be considered a waiver or deprive that party of the
right thereafter to insist upon strict adherence to that term or
any other term of this Debenture. Any waiver must be in writing.
20. Unenforceable Provisions. If any provision of this
Debenture is invalid, illegal or unenforceable, the balance of
this Debenture shall remain in effect, and if any provision is
inapplicable to any person or circumstance, it shall nevertheless
remain applicable to all other persons and circumstances.
[remainder of page intentionally left blank]
EXHIBIT "A"
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Convertible Debentures)
The undersigned hereby irrevocably elects to convert $_______
U.S. in principal (face) amount of Convertible Debentures
("Convertible Debentures"), represented by Debenture No(s). _____
(the "Convertible Debentures Certificate(s)") into shares of
common stock ("Common Stock") of VIDEOLAN TECHNOLOGIES, INC. (the
"Company") according to the conditions of the Convertible
Debentures, as of the date written below. If shares are to be
issued in the name of a person other than undersigned, the
undersigned will pay all transfer taxes payable with respect
thereto and is delivering herewith such certificates. No fee
will be charged to the undersigned for any conversion, except for
transfer taxes, if any.
The undersigned represents that it and each person or entity on
whose behalf it holds Convertible Debentures to be converted into
Common Stock (each an "Investor"): (i) is familiar with and
understands the terms, conditions and requirements contained in
Regulation S ("Regulation S") promulgated under the Securities
Act of 1933, as amended (the "Act"); (ii) is not a "U.S. Person"
or "distributor" as defined in Regulation S; (iii) purchased the
Convertible Debentures for which conversion is being elected, and
is purchasing the Common Stock reference herein, for its own
account and for the account of each Investor an not for the
account or benefit of any U.S. Person; (iv) will comply with the
transfer restrictions contained in Section 4(1) of the Act to the
extent applicable; (v) has no prior understanding with respect to
the sale of the Common Stock to any third party; (vi) has not
engaged in any "directed selling efforts" (as such term is
defined in Regulation S) with respect to the Convertible
Debentures or the Common Stock issuable upon conversion of the
Convertible Debentures; (vii) purchased the Convertible
Debentures with investment intent and will dispose of the Common
Stock only in compliance with regulation S and all other
applicable provisions of the federal securities laws; (viii) will
make any sale, transfer or other disposition of the Common Stock
in full compliance with the Act, the Exchange Act, as amended,
and the rules and regulations of the Securities and Exchange
Commission promulgated thereunder; and (ix) received the offer to
purchase the Convertible Debentures outside the United States
and, at the time the Subscription Agreement pursuant to which the
Convertible Debentures was executed was, and upon execution of
this Notice of Conversion is, outside the United States. The
undersigned has obtained representations from each Investor with
respect to compliance with paragraphs (i) - (ix) of this Notice.
Conversion Formula: ___________________________
Date of Conversion
____________________________
Applicable Conversion Price
___________________________
Signature
___________________________
Name
Address:
____________________________
____________________________
*No shares of Common Stock will be issued until the original
Convertible Debentures Certificate(s) to be converted and the
Notice of Conversion are received by the Company's Attorney or
Transfer Agent. The original Convertible Debentures
Certificate(s) to be converted and the Notice of Conversion must
be received by the Company's Attorney or Transfer Agent by the
fifth business day following the Date of Conversion, or such
Notice of Conversion shall become null and void in the discretion
of the Company.
