DEBENTURE
THIS DEBENTURE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS PROMULGATED THEREUNDER, (THE
"1933 ACT"), AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO OR
FOR THE ACCOUNT OF BENEFIT OF U.S. PERSONS (AS SUCH TERMS ARE DEFINED IN
REGULATION S UNDER THE 1933 ACT), FOR A PERIOD OF FORTY (40) DAYS AFTER
COMPLETION OF THE OFFERING PURSUANT TO WHICH THIS DEBENTURE WAS ISSUED, AND
THEREAFTER MAY ONLY BE OFFERED OR SOLD PURSUANT TO REGISTRATION UNDER OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT.
6.0% CUMULATIVE CONVERTIBLE DEBENTURE DUE September 16, 1997
$300,000 September 17, 1996
Number A101
FOR VALUE RECEIVED, CYBERAMERICA CORPORATION, a Nevada corporation,
(the "Company"), hereby promises to pay to Legong Investments N.V. or registered
assigns (the "Holder"), on September 16, 1997 (the "Maturity Date"), the
principal amount pf Three Hundred Thousand Dollars ($300,000) USD, and to pay
interest on the principal amount hereof, in such amounts, at such times and on
such terms and conditions as are specified herein.
Article 1. Interest
The Company shall pay interest on the unpaid principal amount of the
Debenture (the "Debenture") at the rate of Six Percent (6.0%) per year, payable
at the time of each conversion until the principal amount hereof is paid in full
or has been converted. Interest on this Debenture shall accrue from the most
recent date to which interest has been paid or, if no interest has been paid,
from September 17, 1996. Interest shall be computed on the basis of a 360 day
year of 12, 30 day months. If the Holder shall convert this Debenture during any
quarter, the Company shall pay to the Holder, upon conversion, the pro-rata
portion of accrued interest payable through the conversion date.
Article 2. Method of Payment
This Debenture must be surrendered to the Company in order for the
Holder to receive payment of the principal amount hereof. The Company shall have
the option of paying the interest on this Debenture in United States dollars or
in Common Stock upon conversion pursuant to Article 3 hereof. The Company may
draw a check for the payment of interest to the order of the Holder of this
Debenture and mail it to the Holder's address as shown on the Register (as
defined in Section 7.2 below). Interest and principal payments shall be subject
to withholding under applicable United States Federal Internal Revenue Service
Regulation.
Article 3. Conversion
Section 3.1. Conversion Privilege
(a) The Holder of this Debenture shall have the right , at its option,
to convert it into shares of common stock, par value $0.001 per share, of the
Company ("Common Stock") at any time which is before the close of business on
the Maturity Date, except as set forth in Section 3.1(c) below. The number of
shares of Common Stock issuable upon conversion of this Debenture id determined
by dividing the principal amount hereof to be converted plus all accrued an
unpaid interest thereof minus any required withholding by the conversion price
in effect on the conversion date (as defined in paragraph (b) of this Section
3.1 below) and rounding the result to the nearest whole share. On conversion, no
payment of or adjustment (other than as provided in the previous sentence) for
accrued and unpaid interest shall be made whether or not such conversion occurs
before, on or after an interest payment date.
(b) The conversion price and procedures are set forth in Section 3.2.
(c) Less than all of the principal amount of this Debenture may be
converted into Common Stock if the portion converted is $5,000 or a whole
multiple pf $5,000 and the provisions of this Article 3 that apply to the
conversion of all of the Debenture shall also apply to the conversion of a
portion of it. All accrued and unpaid interest on this Debenture shall be added
to the amount converted if less than all of the principal amount of this
Debenture is converted and shall be deemed to be paid and discharged thereby.
This Debenture may not be converted, whether in whole or in part, except in
accordance with Section 3.2.
(d) In the event all or any portion of this Debenture remains
outstanding on the first anniversary of the date hereof, the unconverted portion
of such Debenture will automatically be converted into shares of Common Stock on
such date in the manner set forth in this Section 3.2.
Section 3.2. Conversion Procedure
(a) Debentures. Upon the conversion of this Debenture, the holder
thereof shall submit such Debenture to Seller, and Seller shall, within three
(3) business days of receipt of such Debenture, instruct Seller's transfer agent
to issue on or more Certificates representing that number of shares of Common
Stock into which the Debenture is convertible in accordance with the provisions
regarding conversion set forth in Exhibit A hereto. The Seller's transfer agent
or attorney shall act as Debenture Registrar and shall maintain an appropriate
ledger containing the necessary information with respect to each Debenture.
(b) Common Stock to be Issued Without Restrictive Legend. Upon the
conversion of this Debenture and upon receipt by the company of a facsimile or
original of Purchaser's signed Notice of Conversion and Purchaser Representation
Letter (See Exhibits a and B attached hereto) Seller shall instruct Seller's
transfer agent to issued Stock Certificates without restrictive legend or stop
transfer instruction in the name of Purchaser (or its nomine (being a non-U.S.
Person) or such nun-U.S. Persons as may be designated by Purchaser prior to the
closing) and in such denominations to be specified at conversion representing
the number of shares of Common Stock issuable upon such conversion, as
applicable. Seller warrants that no instruction other that these instructions
have been given or will be given to the transfer agent and that the Common Stock
shall otherwise be freely transferable on the books and records of Seller.
Nothing in this Section 3.2, however, shall affect in any way Purchaser's or
such nominee's obligations and agreements to comply with all applicable
securities laws upon resale of the Securities.
(c) The holder of the Debenture ("Holder") is entitled, at its option,
at any time commencing 45 days after issue hereof to convert the original
principal amount of the Debenture into shares of Common Stock, $0.001 par value
per share, of the Company (the "Common Stock"), at a conversion price for each
share of Common Stock equal to seventy percent (70%) of the average closing bid
price of The Company's Common Stock for the five (5) trading days immediately
preceding and ending on the day preceding the date of conversion. The closing
shall be deemed to have occurred on the dated the funds are received by the
Company. Such conversion shall be effectuated by surrendering to the Company, or
its attorney, the original Debenture to be converted together with a facsimile
or original of the signed Notice of Conversion and facsimile or original of the
signed Purchaser Representation Letter, see Exhibits A and B aattached hereto,
wich evidences such Holder's intention to convert the Debenture or a specified
portion thereof, and accompanied by proper assignment, if applicable. No
fractional shares or scrip representing fractions of shares will be issued on
conversion, but the number of shares issuable shall be rounded up or down, as
the case may be, to the nearest whole share. The date on which notice of
conversion is effective ("Conversion Date") shall be deemed to be the date on
which the Holder has delivered to the Company the original Debenture, a
facsimile or original of the signed Notice of Conversion and a facisimile or
original of the signed Purchaser Representation Letter. The Debentures are
subject to a mandatory, 12 month conversion feature at the end of the which all
Debentures outstanding will be automatically converted, upon the terms set forth
in this paragraph.
(d) Nothing contained in this Debentrue or pragraph 3.2(f) hereof,
shall be deemed to establish or reeqire the payment of interest to the Purchaser
at a rate in excess of the maximum rate permitted by governing l aw. In the
event that the rate on interest required to be paid inder the Debenture exceeds
the maximum rate permitted by governing law, the rate of interest required ot be
paid thereunder shall be automatically reduced to the maximum rate permitted
under the governing and any any mounts collected inexcess of the permissible
amount shall be deemed a payment of principal. To the extent that such excess
amount exceeds the aggregate principal amount of this Debenture, such excess
shall be returned with reasonable promptness by the Holder to the Company.
(e) Within five (5) business days after receipt of the documentation
regerred to above in Setion 3.2(c), the Company shall deliver a certificate,
without stop transger instructions, for the number of shares of Common Stock
issiable upon the conversion. It shall be the Company's responsibility to take
all necessary actions and to bear all such costs to issue the Common Stock as
provided herein, including the responsibility and cost for delivery of an
opinion letter to the transfer agent, if so required. Ther pperson in whose name
the certificate of Common Stock is to be registered shall be treated as a
shareholder of record on and after the conversion date. No payment of adjustment
shall be made for accrued and unpaid interest until the earlier of the
COnversion Date or the madatory conversion date. Upon surrender of any
Debentures that are to be converted in part, the Company shall issue to the
Purchase a new Debenture qual to the unconverted amount, if so requested by
Purchaser.
(f) In the event the Company does not make delivery of the Common
Stock, as instructed by Purchaser, within 6 business days after the Conversion
Date, then in such event the Company shall pay to Purchaser an amount, in cash
in accordance with the following schedule, wherein "No. Business Days Late" is
defined as the number of business days beyond the 6 business days delivery
period
Late Payment for Each
$10,000 of Debenture
Principal Amount Being
No. of Business Days Late Converted
1 $100
2 $200
3 $300
4 $400
5 $500
6 $600
7 $700
8 $800
9 $900
10 $1,000
>10 $1,000 $200 for each
Business Days Late Beyond 10 Days
In no event shall the damages for late delivery exceed $14,545.
To the extent that the failure of the Company to issue the Common Stock
pursuant to this Section 3.2(f) is due to the unavailability of authorized but
unissued shares of Common Stock, the provisions of this Section 3.2(f) shall not
apply but instead the provisions of Section 3.2(g) shall apply.
The Company shall pay any payments incurred under this Section 3.2(f)
in immediately available funds within three (3) business days from the date of
issuance of the applicable Common Stock to the Holder within 6 business days
after the Conversion Date.
The Company recognizes the right of Purchaser to assign any portion of
the Debentures to another non-U.S. Person during the 40 day restricted period
and to assign any portion of the Debentures to another non-U.S. Person or U.S.
person or entity after the 40 dat restricted period/
(g) If, at any time Purchaser submits a Notice of Conversion and the
Company does not have sufficient authorized but unissued shares of Common Stock
available to effect, in full, a conversion of the Debentures (a "Conversion
Default"), the date of such default being referred to herein as the "Conversion
Default Date"), the Company shall issue to the Purchase all of the shares of
Common Stock which are available, and the Notice of Conversion as to any
Debentures requested to be converted but not converted (the "Unconverted
Debentures") shall become null and void. The Company shall provide notice of
such Conversion Default ("Notice of conversion Default") to all existing
Purchasers of outstanding Debentures, by facsimile, within one (1) business day
of such default (with the original delivered by overnight or two day courier).
No Holder may submit a Notice on Conversion after receipt of a Notice of
Conversion Default until the date additional shares of Common Stock are
authorized by the Company. The Company agrees to pay to all Purchasers of
outstanding Debentures payments for a Conversion Default ("Conversion Default
Payments") in the amount of (N/365) x (.24) x the initial issuance price of the
outstanding Debentures held by each Purchaser where N = the number of days from
the Conversion Default Date to the date (the "Authorization Date") that the
Company authorizes a sufficient number of shares of Common Stock to effect
conversion of all remaining Debentures. The Company shall send notice Debentures
that additional shares of Common Stock have been accrued Conversion Default
Payments. The accrued Conversion Default shall be paid in cash or shall be
convertible into Common Stock at the Conversion Rate, at the Purchaser's option,
payable as follows: (I) in the event Purchaser elects to take such payment in
cash, cash payments shall be made to such Purchaser of outstanding Debentures by
the fifth day of the following calendar month, or (ii) in the event Purchaser
elects to take such payment in stock, the Purchaser may convert such payment
amount into common stock at the Conversion Rate at anytime after the 5th day of
the calendar month following the month in which the Authorization Notice was
received, until the expiration of the mandatory 12 month conversion period.
Nothing herein shall limit the Purchaser's right to pursue actual
damages for the Company's failure to maintain a sufficient number of authorized
shares of common stock.
Section 3.3 Fractional Shares. The Company shall not issue a fractional
share of Common Stock upon the conversion of this Debenture. Instead, the
Company shall round up or down, as the case may be, to the nearest whole share.
Section 3.4 Taxes on Conversion. The Company shall pay any documentary,
stamp or similar issue or transfer tax due on the issue of shares of Common
Stock upon the conversion of this Debenture. However, the Holder shall pay any
such tax which is due because the shares are issued in a name other than its
name.
Section 3.5 Company to Reserve Stock. The Company shall reserve out of
its authorized but unissued Common Stock or Common Stock held in treasury a
sufficient number of shares of Common Stock to permit the conversion of this
Debenture. All shares of Common Stock which may be issued upon the conversion
hereof shall upon issuance be validly issued, fully paid and nonassessable and
free from all taxes, liens and charges with respect to the issuance thereof.
Section 3.6. Restrictions on Transfer. This Debenture and the Common
Stock issuable upon the conversion hereof have not been registered under the
Securities Act of 1933, as amended, (the "Act") and have been been sold pursuant
to Regulation S under the Act ("Regulation S"). The Debenture may not be
transferred or resold in the United States, or to a U.S. Person, or to or for
the account or benefit of a U.S. Person (as defined in Regulation S) for a
period of forty (40) days from the date hereof and thereafter this Debentrue and
the Common Stock issuable upon the conversion thereof may only be offeredor sold
pursuant to registration under or an exemption from the Act.
Section 3.7. Mergers, Etc. If the Company merges or consoldiates with
another corporation or sells or transgers all or sobstantially all of its assets
to another person and the holders of the Common Stock are entitled to receive
stock, securities or property in respect of or in exchange for Common Stock,
then as a condition of such merger, consolidation, sale or transger, the Company
and any such successor, ppurchaser 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 Debentrue might
have been converted immediately before such merger, consolidation, sale or
transfer, subject to adjustments which shall be as nearly equivalent as may be
practicable to adjustments provided for in this Article 3.
Article 4. Mergers
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 his Debenture and immediately after such
transaction no Event of Default exits. Any reference herein to the Company shall
refer to such surviving or tranferee corporaiton and the obligations of the
Company shall terminate upon such assumption.
Article 5. Reports
The Company will mail to the Holder hereof at iits address as shhown on
the Register a copy of any annual, quarterly or current report that it files
withthe Securities and Exchange Commission promptly after the filing thereof and
a copy of any annual, quarterly or other report or proxy statement that it gives
to its shareholders generally at the time such report or statement is sent to
shareholders.
Article 6. Defaults and Remedies
Section 6.1 Events of Default. an "Event of Default" occurs if (a) the
Company does not make the payment of the principal of this Debenture when the
same becomes due and payable at maturity, upon redemption or otherwise, (b) the
Company does not make a payment, other that a payment of principal, for a period
of 5 days thereafter, (c) the Company fails to comply with any of its other
agreements in this Debenture and such failure continues for the period and after
the notice specified below, (d) the Company pursuant to or within the meanin g
of any Bankruptcy Law (as hereinafter defined): (i) commences a coluntary case;
(ii) consents to the entry of an order for relief against it in an involuntary
case; (iii) consents to the appointment of a Custodian (as hereinafter defined)
of it or for all or substantially all of its property of (iv) makes a general
assignment for the benefit of its creditors or (v) a court of competent
jurisdiction enters an order or decree under any Bankruptcy Law that : (A) is
for relief against the Company in an involuntary case; (B) appoints a Custodian
of the Company or for all or substantially all of its property or (C) orders the
liquidation of the Company, and the order or decree remains unstayed and in
effect for 60 days, (e) the Company shall have its Common Stock delisted from an
exchange or over-the-counter market. As used in this Section 6.1, the term
"Bankruptcy Law" means Title 11 of the United States Code or any similar federal
or state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law. A
default under clause (C)above is not an Event of Default until the holders of at
least 25% of the aggregate principal amount of the Debentures outstanding notify
the Company of such default and the Company does not cure it within five (5)
days after the receipt of such notice, which must specify the default, demand
that it be remedies and state that it is a "Notice of Default."
Section 6.2. Acceleration. If an Event of Default occurs and is
continuing, the Holder hereof by notice to the Company, may declare the
principal of and accrued interest on this Debenture to be due and payable. Upon
such declaration, the principal and interest hereof shall be due and payable
immediately.
Article 7. Registered Debentures
Section 7.1. Series. This Debenture is one of a numbered series of
Debentures having an aggregate principal amount of $1,300,000 which are
identical except as to the principal amount and date of issuance thereof and as
to any restriction on the transfer thereof in order to comply with the
Securities Act of 1933 and the regulations of the Securities and Exchange
Commission promulgated thereunder. Such Debentures are referred to herein
collectively as the "Debentures." The Debentures shall be issued in whole
multiples of $10,000.
Section 7.2. Record Ownership. The Company, or its attorney, shall
maintain a register of the holders of the Debentures (the "Register") showing
their names and addresses and the serial numbers and principal amounts of
Debentures issued to or transferred of record by them from time to time. The
Register may be maintained in electronic, magnetic or other computerized form.
The Company may treat the person named as the Holder of this Debenture in the
Register as the sole owner of this Debenture. The Holder of this Debenture is
the person exclusively entitled to receive payments of interest on this
Debenture, receive notifications wit respect to this Debenture, convert it into
Common Stock and otherwise exercise all rights and powers as the absolute owner
hereof.
Section 7.3. Registration of Transfer. Transfers of this Debenture may
be registered on the books of the Company maintained for such purpose pursuant
to Section 7.2 above (i.e., the Register). Transfers shall be registered when
this Debenture is presented to the Company with a request to register the
transfer hereof and the Debenture is duly endorsed by the appropriate person,
reasonable assurances are ? that the endorsements are genuine and effective, and
the Company has received evidence satisfactory to it that such transfer is
rightful and in compliance with all applicable laws, including tax laws and
state and federal securities laws. When this Debenture is presented for transfer
and duly transferred hereunder, it shall be canceled and a new Debenture showing
the name of the transferee as the record holder thereof shall be issued in lieu
hereof. When this Debenture is presented to the Company with a reasonable
request to exchange it for an equal principal amount of Debentures of other
denominations, the Company shall make such exchange and shall cancel this
Debenture and issue in lieu thereof Debentures having a total principal amount
equal to this Debenture in the denominations requested by the Holder. The
Company may charge a reasonable fee for any registration of transfer or exchange
other than one occasioned by a notice of redemption or the conversion hereof. No
transfer of this Debenture shall be made to any U.S. Person as that term is
defined in Regulation s.
Section 7.4. Worn or Lost Debentures. If this Debenture becomes worn,
defaced or mutilated but is still substantially intact and recognizable, the
Company or its agent may issue a new Debenture in lieu hereof upon its
surrender. Where the Holder of this Debenture claims that the Debenture has been
lost, destroyed or wrongfully taken, the Company shall issue a new Debenture in
place of the original Debenture if the Holder so requests by written notice to
the Company actually received by the Company before it is notified that the
Debenture has been acquired by a bona fide purchaser and the Holder has
delivered to the Company an indemnity bond in such amount and issued by such
surety as the Company deems satisfactory together with an affidavit of the
Holder setting forth the facts concerning such loss, destruction or wrongful
taking and such other information in such form with such proof or verification
as the Company may request.
Article 8. Notices
Any notice which is required or convenient under the terms of this
Debenture shall be duly given if it is in writing and delivered in person or
mailed by first class mail, postage prepaid and directed to the Holder of the
Debenture at its address as it appears on the Register or if to the Company to
its principal executive offices. The time when such notice is sent shall be the
time of the giving of the notice.
Article 9. Time
Where this Debenture authorizes or requires the payment of money or the
performance of a condition or obligation on a Saturday or Sunday or a public
holiday, or authorizes o requires the payment of money or the performance of a
condition or obligation within, before or after a period of time computed from a
certain date, and such period of time ends on a Saturday or Sunday or a public
holiday, such payment may be made or condition or obligation performed on the
next succeeding business day, and if the period ends at a specified hour, such
payment may be made or condition performed, at or before the same hour of such
next succeeding business day, with the same force and effect as if made or
performed in accordance with the terms of this Debenture. Where time is extended
by virtue of the provisions of this Article 9, such extended time shall not be
included in the computation of interest. A "business day" shall mean a day on
which the banks in Nevada are not required or allowed to be closed.
Article 10. Waivers
The holders of a majority in principal amount of the Debentures may
waive a default or rescind the declaration of an Event of Default and its
consequences except for a default in the payment of principal of or interest on
any Debenture.
Article 11. Rules of Construction
In this Debenture, unless the context otherwise requires, words in the
singular number include the plural, and in the plural include the singular, and
words of the masculine gender include the feminine and the neuter, and when the
sense so indicates, words of the neuter gender may refer to any gender. The
numbers and titles of sections contained in the Debenture are inserted for
convenience of reference only, and they neither form a part of this Debenture
nor are they to be used in the construction or interpretation hereof. Wherever,
in this Debenture, a determination of the Company is required or allowed, such
determination shall be made by a majority of the Board of Directors of the
Company and if it is made in good faith, it shall be conclusive and binding upon
the Company and the Holder of this Debenture.
Article 12. Governing Law
The validity, terms, performance and enforcement of this Debenture
shall be governed and construed by the provisions hereof and in accordance with
the laws of the State of Nevada applicable to agreements that are negotiated,
executed, delivered and performed solely in the State of Nevada.
IN WITNESS WHEREOF, the Company has duly executed this Debenture as of
the date first written above.
CYBERAMERCA CORPORATION
By
/s/ Richard Surber
----------------------
Name: Richard Surber
Title: President
Exhibit A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debentures.)
The undersigned hereby irrevocably elects, as of _______________, 199_ to
convert $______________ of the Debentures into Shares of Common Stock (the
"Shares") of CYBERAMERICA CORPORATION (the "Company") according to the
conditions set forth in the Subscription Agreement dated September 16, 1996.
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 Debentures on behalf of any U.S. Person.
Date of Conversion_____________________________________________________________
Applicable Conversion Price____________________________________________________
Number of Shares Issuable upon this conversion_________________________________
Signature______________________________________________________________________
[Name]
Address________________________________________________________________________
_______________________________________________________________________________
Phone______________________________Fax________________________
EXHIBIT B
PURCHASER REPRESENTATION LETTER
Dear Sirs:
The undersigned______________________, has purchased on September 17, 1996,
One (1) convertible Debenture(s) of CYBERAMERICA CORPORATION (the "Company") in
the amount of $ _________________, (the "Debenture(s)"). In connection with such
purchase, the undersigned has executed and delivered a subscription agreement
("Subscription Agreement") of your design. As the forty (40) day transaction
restriction period has expired, the undersigned hereby requests that the
Debentures be transferred into "Street Name" of
__________________________________.
The undersigned represents and warrants as follows:
(1) The offer to purchase the Debentures was made to it outside of the United
States and the undersigned was, at the time the Subscription Agreement was
executed and delivered, and is now, outside the United States;
(2) It is not a U.S. Person (as such term is defined in Section 902(a) of
Regulation S promulgated under the United States Securities of 1933 (the
"Securities Act"); and it has purchased the Debentures for its own account and
not for the account or benefit of any U.S. person;
(3) All offers and sales by the undersigned of the Debentures shall be made
pursuant to an effective registration statement under the Securities Act or
pursuant to and exemption from, or in a transaction not subject to the
registration requirements of, the Securities Act;
(4) It is familiar with and understands the terms, conditions and requirements
contained in Regulation S and definitions of U.S. persons contained in
Regulation S;
(5) The undersigned has not engaged in any "directed selling efforts" (as such
term is defined in Regulation S) with respect to the Debentures or the Common
Stock that is issuable upon conversion; and
(6) The undersigned purchased its Debentures with investment intent and at the
time of the purchase of said Debentures had no interest to sell, dispose of or
otherwise transfer the Debentures or the Common Stock that is issuable upon
conversion. The purpose for this request is to facilitate the management of the
undersigned's investment accounts.
(7) The undersigned agrees to the provisions of Paragraph 2(a)(xiv) of the
Offshore Securities Subscription Agreement which is incorporated herein and made
a part hereof as if written.
Dated this ______day of the month of ___________________, 1996.
By:
_____________________________ ______________________________
Official Signature of Purchase Title
Assignment of Debenture
The undersigned hereby sell(s) and assign(s) and transfer(s)
unto
(Name, address, and SSN or EIN of assignee)
Dollars ($ )
(principal amount of Debenture, $10,000 or integral multiples of $10,000)
of principal amount of this Debenture together with all accrued and unpaid
interest hereon.
Date: Signed:
(Signature must conform in all respects to
shown name of Holder of face of Debenture)
Signature Guaranteed:
OFFSHORE SECURITIES SUBSCRIPTION AGREEMENT
THE SECURITIES OFFERED HEREBY HAVE NOT BEEN AND WILL
NOT BE REGISTERED UNDER THE UNITED STATES SECURITIES
ACT OF 1933, AS AMENDED, AND THE RULES AND REGULATIONS
PROMULGATED THEREUNDER (THE "1933 ACT"), AND MAY NOT BE
OFFERED OR SOLD WITHIN THE UNITED STATES (AS DEFINED IN
REGULATION S OF THE 1933 ACT) OR TO, OR FOR THE ACCOUNT
OR BENEFIT OF, U.S. PERSONS (AS DEFINED IN REGULATION S
OF THE 1933 ACT) EXCEPT PURSUANT TO REGISTRATION UNDER
OR AN EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE 1933 ACT.
THIS OFFHSORE SECURITIES SUBSCRIPTION AGREEMENT dated as of September,
1996 (the "Agreement"), is executed in reliance upon the exemption from
registration afforded by Regulation S ("Regulation S") as promulgated
by the Securities and Exchange Commission ("Securities"), under the
Securities Act of 1933, as amended. Capitalized terms used herein and
not defined shall have the meanings given to them in Regulation S.
This Agreement has been executed by the undersigned Legong
Investments as "Purchaser" in connection with the offshore offering of
6.0% Cumulative Convertible Debentures of CYBERAMERICA CORPORATION
("CYBERAMERICA"), a corporation organized under the laws of the State
of Nevada, with its principal executive offices located at 268 West
400 South, Suite 300, Salt Lake City, Utah 84101 (herein-after
referred to as "Seller" or "Company"). Purchaser hereby represents and
warrants to, and agrees with Seller:
1. Agreement to Subscribe: Purchase Price.
a) Subscription. The undersigned Purchaser
hereby subscribes for and agrees to
purchase the Sellers 6.0% Cumulative
Convertible Debentures in the principal
amount of U.S. $ (Singly, a "Debenture",
and collectively, the "Debentures").
b) Form of Payment. Purchaser shall pay the
total consideration by delivering good
funds by wire transfer in United States
Dollars to the Escrow Agent, Joseph B.
LaRocco, Esq. on or before September, 1996
into the escrow account as follows:
First Union Bank of Connecticut
Executive Office
300 Main Street, P.O. Box 700
Stamford, CT 06904-0700
ABA #: 021102208 First Union Bank
Swift #: UTCIUS33
Account #: 20000-2072298-4
Acct.Name: Joseph B. LaRocco,Esq.Trustee Acct
c) Closing. Subject to the satisfaction of the
conditions set forth in Section 8 and 9
hereof, the closing of the transactions
contemplated by this Agreement shall occur
from time to time on or before September,
1996.
2. Purchaser Representations Access to Information.
a) Offshore Transaction. In connection with the purchase and
sale of the Debentures, Purchaser represents and warrants to, and
covenants and agree with Seller as follows:
(I). Purchaser is not a natural person and
is not organized under the laws of any jurisdiction
within the United States, was not formed by a U.S.
Person (as defined in Section 902(o) of Regulation
S) securities and is not otherwise a U.S. Person.
Purchaser is not, and on the closing date will not
be, an affiliate of Seller;
(ii.) At the time the buy order was
originated, Purchaser was outside the United States
and is outside of the United States as of the date
of the execution and delivery of this Agreement;
(iii.) No offer to purchase the Debentures
or the common stock of Seller issuable upon
conversion of the Debentures (collectively, the
"Securities"), was made by Purchaser in the United
States;
(iv.) Purchaser is purchasing the
Securities for its own account and Purchaser is
qualified to purchase the Securities under the laws
of its jurisdiction of residence, and the offer and
sale of the Securities will not violate the
securities or other laws of such jurisdiction;
(v.) All offers and sales of any of the
Securities by Purchaser prior to the end of the
Restricted Period (as hereinafter defined) shall be
made in compliance with any applicable securities
laws of any applicable jurisdiction and in accordance
with Rule 903 and 904, as applicable, or Regulation S
or pursuant to registration of securities under the
1933 Act or pursuant to an exemption from
registration. In any case, none of the securities
have been or will be offered or sold by Purchaser to,
or for the account or benefit of, a U.S. Person or
within the United States until after the end of the
forty (40) day period commencing on the date of
closing of the offering of the Securities or (the
"Restricted Period"), which in no event shall be
later than , 1996, when this offering shall be closed
to all Purchasers;
(vi.) The transactions contemplated by this
Agreement (a) have not been and will not be
pre-arranged by Purchaser with a purchaser located
in the United States or a purchaser which is a U.S.
Person, and (b) are not and will not be part of a
plan or scheme by Purchaser, to evade the
registration provisions of the 1933 Act;
(vii.) Purchaser understands that the
Securities are not registered under the 1933 Act and
are being offered and sold to it in reliance on
specific exclusions from the registration
requirements of Deferral and State securities laws,
and that Seller is relying upon the truth and
accuracy of the representations, warranties,
agreements, acknowledgments and understandings of
Purchaser set forth herein in order to determine the
applicability of such exclusions and the suitability
of Purchaser to acquire these Securities;
(viii.) Purchaser shall take all reasonable
steps to ensure its compliance with Regulation S and
shall promptly send to each purchaser who acts as a
distributor, dealer or a person receiving a selling
concession, fee or other remuneration in respect of
any of the Securities, who purchases prior to the
expiration of the Restricted Period referred to in
subparagraph (v) above, a confirmation or other
notice to the purchaser stating that the purchaser is
subject to the same restrictions on offers and sales
as Purchaser pursuant to Section 109(c)(2)(iv) of
Regulation S;
(ix.) Purchaser has not conducted and shall
not conduct any "directed selling efforts" as that
term is defined in Rule 902(b) of Regulation S; nor
has Purchaser conducted any genera solicitation
relating to the offer and sale of any of the
Securities in the United States or elsewhere;
(x.) This Agreement has been duly
authorized, validly executed and delivered on behalf
of Purchaser and is a valid and binding agreement in
accordance with this terms, subject to general
principals of equity and to bankruptcy or other laws
affecting the enforcement of creditors' right
generally;
(xi.) The execution and delivery of this
Agreement and the consummation of the purchase of the
Securities, and the transactions contemplated by the
Agreement do not and will not conflict with or result
in a breach by the Purchaser of any of the terms or
provisions of, or constitute a default under, the
articles of incorporation or by-laws (or similar
constitutive documents) of the Purchaser, or any
indenture, mortgage, deed of trust, or other material
agreement or instrument to which Purchaser is a party
or by which it or any of its properties or asses are
bound, or any existing applicable law, rule, or
regulation of the United States or any State thereof
or any applicable decrees, judgement, or order of any
Federal or State court, Federal or State regulatory
body, administrative agency or other governmental
body having jurisdiction over the Purchaser or any of
its properties or assets;
(xii.) All invitations, offers and sales of
or in respect of any of the Securities, by Purchaser
and any distribution by Purchaser of any documents
relating to any offer by it of any of the Securities
will be in compliance with applicable laws and
regulations and will be made in such a manner that no
prospectus need be filed and no other filing need be
made by Seller with any regulatory authority or stock
exchange in any country or any political subdivision
of any country;
(xiii.) Purchaser will not make any offer or
sale of the Securities by any means which would not
comply with the laws and regulation of the territory
in which such offer of sale takes place or to which
such offer or sale is subject or which would on
connection with any such offer or sale impose upon
Seller any obligation to satisfy any public filing or
registration requirement or provide or publish any
information of any kind whatsoever or otherwise
undertake or become obligated to do any act; and
(xiv.) Neither the Purchaser nor any of this
affiliates agents or any other person or entities at
the direction of the Purchaser has entered, has the
intention of entering, or will during the Restricted
Period or 30 days prior ro the restricted period
enter into any put option, short position or other
similar instrument or position with respect to any of
the Securities or securities of the same class as the
Securities or common shares of the Company.
b) No Government Recommendation or Approval.
Purchaser understands that no Federal or State or foreign government
agency has passed on or made any recommendation or endorsement of the
Securities.
c) Current Public Information. Purchaser acknowledges
that it and its advisors, if any, have had access to or have been
furnished with all materials relating to the business, finances and
operations of Seller and all materials relating to the offer and sale
of the Securities which have been requested by Purchaser. Purchaser
further acknowledges that it and its advisors, if any, have received
complete and satisfactory answers to such inquiries.
d) Purchaser's Sophistication. Purchaser acknowledges
that the purchase of the Securities involves a high degree of risk,
including the total loss of Purchaser's investment. Purchaser has such
knowledge and experience in financial and business matters that it is
capable of evaluating the merits and risks of purchasing the
Securities.
e) Tax Status. Purchaser is not a "10-percent
Shareholder" (as defined in Section 871(h)(3)(B) of the U.S. Internal
Revenue Code) of Seller.
3. Seller Representations.
a) Reporting Company Status. Seller is a "Reporting
Issuer" as defined by Rule 902 of Regulation S. Seller has registered
its Common Stock, $0.001 par value per share (the "Common Stock"),
pursuant to Section 12 of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the Common Stock is listed and trades
on the Nasdaq Electronic Bulletin Board ("NASDAQ"). Seller has filed
all material required to be filed pursuant to all reporting obligations
under either Section 13(a) or 15(d) of the Exchange Act for a period of
at least twelve (12) months immediately preceding the offer or sale of
the Securities (or for such other period that Seller has been required
to file such material).
b) Current Public Information. Seller has either
furnished Purchaser with copies of its most recent reports filed under
the Exchange Act referred to in Section 2(C) above, and other publicly
available documents or Purchaser has had access thereto.
c) Offshore Transaction. Seller has not offered any
of the Securities to any person in the United States, any identifiable
groups of U.S. Citizens abroad, or to any U.S. Person, as such terms
are used in Regulation S.
(I) At the time the buy order was
originated, Seller and/or its agents reasonable
believe the Purchase was outside of the United
States and was not a U.S. Person, based on the
representations of Purchaser.
(ii) Seller and/or its agent reasonable
believe that the transaction has not been
pre-arranged with a buyer in the United States, based
on the representation of Purchaser.
(iii) No offer to buy or sell the
Securities was or will be made by Seller to any
person in the United States.
(iv) The sale of the Securities by Seller
pursuant to this Agreement will be made in
accordance with the provisions and requirements of
Regulation S provided that the representations and
warranties of Purchaser in Section 2(a) hereof are
true and correct.
(v) The transactions contemplated by this
Agreement (a) have not been and will not be
pre-arranged by Seller with a purchaser located in
the United States or a purchaser which is a U.S.
Person, and (b) are not and will not be part of a
plan or scheme by Seller to evade the registration
provisions of the 1933 Act.
d) No Directed Selling Efforts. In regard to this
transaction, Seller has not conducted any "directed selling efforts" as
that term is defined in Rule 902 of Regulation S nor has Seller
conducted any general solicitation relating to the offer and sale of
any of the Securities in the United States or elsewhere.
e) Concerning the Securities. The issuance, sale and delivery
of the Debentures have been duly authorized by all required corporate
action on the part of Seller, and when issued, sold and delivered in
accordance with the terms hereof and thereof for the consideration
expressed herein and therein, will be duly and validly issued and
enforceable in accordance with their terms, subject to the laws of
bankruptcy and creditors' rights generally. A sufficient number of
shares of Common Stock issuable upon conversion of the Debentures has
been duly and validly reserved for issuance and, upon issuance in
accordance with the terms of the Debentures, shall be duly and validly
issued, fully paid, and non-assessable and will not subject the holders
thereof, if such persons are non-U.S. persons, to personal liability by
reason of being such holders. There are no pre-emptive rights of any
shareholder of Seller, other than has been disclosed in the Company's
annual report(s).
f) Authority to Enter Agreement. This Agreement has
been duly authorized, validly executed and delivered on behalf of
Seller and is a valid and binding agreement in accordance with this
terms, subject to general principals of equity and to bankruptcy or
other laws affecting the enforcement of creditors' rights generally.
g) Non-contravention. The execution and delivery of
this Agreement and the consummation of the issuance of the Securities,
and the transactions contemplated by this Agreement do not and will
not conflict with or result in a breach by Seller of any of the terms
or provisions of, or constitute a default under, the articles of
incorporation or by-laws of Seller, or any indenture, mortgage, deed
of trust, or other material agreement or instrument to which Seller is
a party or by which it or any of its properties or assets are bound,
or any existing applicable law, rule or regulation of the United
States or any State thereof or any applicable decree, judgment, or
order of any Federal or State court, Federal or State regulatory body,
administrative agency or other United States governmental body having
jurisdiction over Seller or any of its properties or assets.
h) Approvals. Seller is not aware of any
authorization, approval or consent of any governmental body which is
legally required for the issuance and sale of the Debentures and the
Common Stock issuable upon conversion thereof to persons who are
non-U.S. Person, as contemplated by this Agreement.
I) Prior Shares Issued Under Regulation S. Seller
has not issued any shares of stock under Regulation S subsequent to
the filing of its most recent Securities report.
j) Use of Proceeds. Seller represents that the
intended use of the proceeds form this offering is expansion and
development of its internet division, real estate acquisitions and
working capital.
4. Exemption: Reliance on Representations. Purchaser
understands that the offer and sale of the Securities are not being
registered under the 1933 Act. Seller and Purchaser are relying on the
rules governing offers and sales made outside the United States
pursuant to Regulation S.
5. Transfer Agent Instructions.
a) Debentures. Upon the conversion of the Debentures,
the holder thereof shall submit such Debentures to seller, and Seller
shall, within three (3) business day of receipt of such Debentures,
instruct Seller's transfer agent to issue one or more Certificates
representing that number of shares of Common Stock into which the
Debenture or Debentures are convertible n accordance with the
provisions regarding conversion set forth in Exhibit A hereto. The
Seller's transfer agent or attorney shall act as Debenture Registrar
and shall maintain an appropriate ledger containing the necessary
information with respect to each Debenture.
b) Common Stock to be Issued Without Restrictive
Legend. Upon the conversion of an Debentures and upon receipt by the
Company or its attorney of a facsimile or original of Purchaser's
signed Notice of Conversion and Purchaser Representation Letter (See
Exhibits A and B attached hereto) Seller shall instruct Seller's
transfer agent to issue Stock Certificates without restrictive agent or
stop transfer instructions in the name of Purchaser (or it nominee
(being a non-U.S. Person) or such non-U.S. Persons as may be designated
by Purchaser prior to the closing) and in such denominations to be
specified at conversion representing the number of shares of Common
Stock issuable upon such conversion, as applicable. Seller warrants
that no instructions other than these instructions have been given or
will be given to the transfer agent and that the common Stock shall
otherwise be freely transferable on the books and records of Seller.
Nothing in this Section 5, however, shall affect in any way Purchaser's
or such nominee's obligations and agreements to comply with all
applicable securities laws upon resale of the Securities.
c) The holder of the Debenture ("Holder") is
entitled, at its option, at any time commencing 45 days after issue
hereof to convert the original principal amount of the Debenture into
shares of Common Stock, $0.001 par value per share, of the Company (the
"Common Stock"), at a conversion price for each share of Common Stock
equal to seventy percent (70%) of the average closing bid price of
CYBERAMERICA's Common Stock for the five (5) trading days immediately
preceding and ending on the day preceding the date of conversion. The
closing shall be deemed to have occurred on the date the funds are
received by the Company. Such conversion shall be effectuated b
surrendering to the Company, or its attorney, the original Debenture to
be converted together with a facsimile or original of the signed Notice
of Conversion and a facsimile or original of the signed Purchaser
Representation Letter, see Exhibits A and B attached hereto, which
evidence such Holder's intention to convert the Debenture or a
specified portion thereof, and accompanied by proper assignment, if
applicable. No fractional shares or scrip representing fractions of
shares will be issued on conversion, but the number of shares issuable
shall be rounded up or down, as the case may be, to the nearest whole
share. The date on which notice of conversion is effective ("Conversion
Date") shall be deemed to be the date on which the Holder has delivered
to the Company the original Debenture, a facsimile or original of the
signed Notice of Conversion and a facsimile or original of the signed
Purchaser Representation Letter. The Debentures are subject to a
mandatory, 12 month conversion feature at the end of which all
Debentures outstanding will be automatically converted upon the terms
set forth in this paragraph.
d) Nothing contained in the Debenture or paragraph
(f) hereof, shall be deemed to establish or require the payment of
interest to the Purchaser at a rate in excess of the maximum rate
permitted by governing law. In the event that the rate of interest
required to be paid under the Debenture exceeds the maximum rate
permitted by governing law, the rate of interest required to be paid
thereunder shall be automatically reduced to the maximum rate permitted
under the governing and any amounts collected in excess of the
permissible amount shall be deemed a payment of principal. To the
extent that such excess amount exceeds the aggregate principal amount
of the Debenture, such excess shall be returned with reasonable
promptness by the holder to the Company.
e) Within five (5) business days after receipt of the
documentation referred to above in Section 5(c), the Company shall
deliver a certificate, without stop transfer instructions, for the
number of shares of Common Stock issuable upon the conversion. It shall
be the Company's responsibility to take all necessary actions and to
bear all such costs to issue the Common Stock as provided herein,
including the responsibility and cost for delivery of an opinion letter
to the transfer agent, if so required. The person with whose name the
certificate of Common Stock is to be registered shall be treated as a
shareholder of record on and after the conversion date. No payment or
adjustment shall be made for accrued and unpaid interest until the
earlier of the conversion date or the mandatory conversion date. Upon
surrender of any Debentures that are to be converted in part, the
Company shall issue to the Purchaser a new Debenture equal to the
unconverted amount, if so requested by Purchaser.
f) In the event the Company does not make delivery of
the Common Stock, as instructed by Purchaser, within 6 business days
after the Conversion Date, then in such event the Company shall pay to
Purchaser an amount, in cash in accordance with the following schedule
wherein "No. Business Days Late" is defined as the number of business
days beyond the 6 business days delivery period.
Late Payment for Each
$10,000 of Debenture
Principal Amount Being
No. Business Days Late Converted
1 $100
2 $200
3 $300
4 $400
5 $500
6 $600
7 $700
8 $800
9 $900
10 $1,000
>10 $1,000 + $200 for each
Business days Late Beyond 10 days
In no event shall the damages for late delivery exceed
$80,000.
To the extent that the failure of the company to issue the
Common Stock pursuant to this Section 5(f) is due to the unavailability
of authorized but unissued shares of Common Stock, the provisions of
this Sections 5(f) shall not apply but instead the provisions of
Section 5(g) shall apply.
The Company shall pay any payments incurred under this Section
5(f) in immediately available funds within three 93) business days from
the date of issuance of the applicable Common Stock. Nothing herein
shall limit a Purchaser's right to pursue actual damages for the
Company's failure to issue and deliver Common Stock to the Holder
within 6 business days after the Conversion date.
The Company recognized the right of Purchaser to assign any
portion of the Debentures to another non-U.S. Person during the 40 day
restricted period and to assign any portion of the Debentures to
another non-U.S. Person or U.S. Person or entity after the 40 day
restricted period.
g) If, at any time Purchaser submits a Notice of Conversion
and the Company does not have sufficient authorized but unissued shares
of Common Stock available to effect, in full, a conversion of the
Debentures (a "Conversion Default", the date of such default being
referred to herein as the "conversion Default Date"), the Company shall
issue to the Purchaser all of the shares of Common Stock which are
available, and the Notice of Conversion as to any Debentures requested
to be converted but not converted (the "Unconverted Debentures") shall
become null and void. The Company shall provide notice of such
Conversion Default ("Notice of Conversion Default") to all existing
Purchasers of outstanding Debentures, by facsimile, within one (1)
business day of such default (with the original delivered by overnight
or two day courier). No Holder may submit a Notice of Conversion after
recept of a Notice of Conversion Default until the date additional
shares of Common Stock are authorized by the Company. The Company
agrees to pay to all Puurchasers of outstanding Debentures payments for
a Conversion Default ("Conversion Default Payments") in the amount of
(N/365) x (.24) x the initial issuance price of the outstanding
Debentures held by each Purchaser where N = the number of days from the
Conversion Default Date to the date (the "Authorization Notice")to each
Purchaser of outstanding Debentures that additional shares of Common
Stock have been authorized, the Authorization Date and the amount of
Holder's accrued Conversion Default Payments. The accrued Conversion
Default ahll be paid in cash or shall be convertible into Common Stock
at the Conversion Rate, at the Purch's ooption, payable as follow: (i)
in the event Purchaser elects to take such payment in cash, cash
payments shall be made to such Pruch of outstanding Debentures by the
fifth day of the following calendar month, or (ii) in the event
Purchaser elects to take such payment in stock, the Purchaser may
convert such payment amount into common stock at the Conversion Rate at
anytime after the 5th day of the calendar month follwoing the month in
which the Authorization Notice was received, until the expiration of
the mandatory 36 month conversion period.
Nothing herein shall limit the Purch's right to
pursue actual damages for the Company's failure to mainatin a
sufficient number of Authorization shares of common stock.
6. Closing Date and Escrow Agent. Closing shall be effected
through delivery of funds and Debentures to the Escrow Agent. Purchaser
shal forthwith deliver the necessary funds as indicated in Paragraph 1
to the Escrow Agent. A Debentures(s) will be delivered at the
instructions of the Company too the Escrow Agent: Joseph B. LaRocco,
Esquire, 1055 Washington Boulevard, Stamford, Connecticut 06901.
Purchaser and the Company agree that the Escrow Agent, in his capacity
as Escrow Agent, has no liabililty as a result of any fraudulent or
unlawful conduct of an party other than the Escrow Agent and agree to
thold the Escrow Agent harmless in such event. In the event the
Debentures are not received by the Escrow Agent from the Company within
Five (5) Business Days of the date of receipt of the Escrowed Funds,
the Escrow Agent shall return the Escrowed funds without interest to
the Purchaser by wire transfer pursuant to written instructions.
7. Delivery Instructions. The Debentures being purchased
hereunder shall be delivered to Joseph B. LaRocco, Esq. as Escrow
Agent, who will hold the Debentures in escrow until funds have been
wired to the Company less, placement fees, at which time the Ecrow
attorney shall thenhave the Debentures dleivered to the Purchaser
outside the United States.
8. Conditions To Seller's Obligation to Sell. Seller's
obligation to sell the Debentures is conditioned upon:
a) The receipt and acceptance by Purchaser of this
Agreement as evidenced by exeuction of this Agreement by Purchaser.
b) Delivery into the closing depository of good
funds by Puch as payment in full of the purchase price of the
Debentures.
9. Conditions To Purch's Obligation to Purchase. Purch's
obligation to purchase the Debentures is conditioned upon:
a) The receipt and acceptance by Seller of this
Agreement as evidenced by exeuction of this Agreement by the duly
authorized officer of Seller.
b) Delivery of the Debentures as described herein.
10. Offering Materials. All offering materials and documents
used in connection with offers and sales of the Securities prior to the
expiration of the Restricted Period referred to in Section 2(a)(v)
hhereof shall include statements ot the effect that the Securities have
not been registered under the 1933 Act or appliable state Securities
laws, and that neither Purchaser, nor any direct or indirect Purchaser
of the Securities from Purchaser, may directly or indirectly offer or
sell the Securities in the United States or to U.S. Persons (other than
distributors) unless the Securities are registereed under the 1933 Act
any appliable state Securities laws, or any exemption from the
registration requirements of the 1933 Act or such state Securities laws
is available. Such statements shall appear (1) on the cover of any
prospectus or offering used in connection with the offer of sale of the
Securities, (2) in the underwriting sectin of any prospectus or
offering circular used in connection with the offer or sale of the
Securities, and (3) in any advertisement made orissued by Seller,
Purchaser, any other distributor, any of their respective affiliates,
or any person acting on behalf of any of the foregoing.
11. No Shareholder Approval. Seller hereby agrees that after
the Closing ate it wil take all appropriate action to authorize the
issuance of Common Stock upon conversion of the Debentures and that no
shareholder approval is required for such action. If an opinion of
counsel Company shall arrange for such an opinion to be provided at
Company's sole cost and expense.
12. Right of First Refusal. During the six (6) month period
following the Closing Date, eacj Purchaser shall have a pro rata right
of firtst refusal to purchase formt he Company any securities of the
COmpany which may be offered pursuant to exemption from registration
under Regulation S of the Securities Act on the same terms and
coditions as my be offered to any third party. In connection
therewith, the Company shall be required to give written notice to the
Purchaser(s) of any such offer prior to the completion of any
transaction contemplated by such offer.
The notice shall specify the terms and conditions of
such offer. Pruch shall have five (5) business days following receipt
of such notice to provide written notice to the Company of its exercise
of riht of first refusal to purchase all of the Securities described in
the notice on the terms and conditions set forth in the ntocie. If
Purchaser shall give notice of its election to exercise such right of
first refusal, Purchaser shall deliver all documents required to
complete such transaction within the later of five (5) business days
after the date of notice to the Company of Purchaser exercise of such
right of first refusal or delivery to Purchaser of all documents
required to complete such transaction. If Purchaser shall fail fail to
give such notice of its election to exercise right of first refusal in
full with the respect to the offer of the Securities set forth in the
notice or shall fail to deliver all such consideration and execute and
deliver all such documents within the required periods, such right of
first refusal with respect to the Securities offered in the notice
shall lapse.
13. Change in Regulation S. During the twelve month Period
following issuance of the Debentures, if there is any change in
Reguation S that would restrict the conversion of the Debentures into
Common Stock according to the terms and conditions set forth in this
Agreement, then in such event the Company shall immediately seek
registration by way of a Form S-3 filing. All such action required by
the Company to complete the registration shall be done as soon as
possible at the Company's sole cost and expense.
14. Independent Counsel. The undersigned ackowledge that they
have been advised to consult with thier own attorneys and finanical
advisors regarding this Agreement.
15. Arbitration. The parties shall resolve any dispute arising
hereunder before a panel of three arbitrators selected pursuant to and
run in accordance with the rules of the American Arbitration
Association. The arbitration shall be held in New York, New York. The
winning party shall be entitled to an award of reasonable attorney's
fees and costs. Disputes under this Agreement as well as all of the
terms and conditions of this Agreement shall be goverened in accordance
with and by the laws of the State of Nevada.
16. Miscellaneous.
a) Except as specifically referenced herein, this
Agreement consititutes the entire contract between the parties, and
neither party shall be liable or bound to the other in any manner by
any warranties, representations or covenants exept as specifically set
forth herein. Any previous agreement among the parties related to the
transactions described herein is superseded hereby. The terms and
conditins of this Agreement shal insure to the benefit of and be
binding upon the respective successors and assigns fo the parteis
hereto. Nothing in this Agreement, express or implied, is intended to
confer upon any party, other than the parties hereto, and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement, except as expressly
provided herein.
b) Purchaser is an independent contractor, and is not the
agent of Seller. Purchaser is not authorized to bind Seller, or to
make any representations or warranties on behalf of Seller.
c) Seller makes no representations or warranty with respect to
Seller, its finances, assets, business prospects or otherwise. Seller
will advise each purchaser, if any, and potential purchaser of the
Securities, of the foregoing senntence, and that such pruchaser is
relying on its own investigation with respect to all such mattes, and
that such purchaser wil be given access to any and all docments and
Seller personnel as it may reasonably request for such investigation.
d) All representations and warranties contained in the
Agreement by Seller and Purchaser shall survive the closing
transactions contemplated by this Agreement.
e) This Agreement shall be construed in accordance with the
internal laws of the State of Nevada, and shall be binding upon the
successors and assigns of each party hereto. This Agreement may be
executed in counterparts, and the facsimile transmission of an executed
counterpart to this Agreement shal be effective as an original.
Whereever used, the singular number shall include the plural, and the
plural the singular, and the use of any gender shall be applicable to
all genders.
[Balance of this page intentionally left blank.]
IN WITNESS WHEREOF, the undersigned have executed this Agreement as
of the date first set forth above.
Official Signatory of Seller:
State of Utah )
) ss. CYBERAMERICA CORPORATION
County of Salt Lake )
On this 11th day of September, 1996, before me, Randall
Heiner, a notary public, personally appeared Richard By:/s/ Richard Surber
Surber, personally known to me to be the person whose Richard Surber
name is subscribed to this instrument, and acknowledged
that he executed the same. Title: President
/s/Randall Heiner
Notary Public
June 7, 2000
My Commission Expires
RANDALL HEINER
Notary Public
State of Utah
My Commission Expires June 7, 2000
8312 S. 1275 E. Sandy, UT 84094
Official Signatory of Purchaser:
By:/s/ M.I. Sankatung
Title: Director
Curacao Neth Antilles
Country of Execution
Address of Purchaser:
Int Trade Center TMT 26
Piscadero Bay
Curacao Neth Antilles
Phone 011 599(9)636198
Fax 011 599(9)636533
Exhibit A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert
the Debentures.)
The undersigned hereby irrevocably elects, as of___________________ ,
199__ to convert $__________________ of the Debentures into Shares of Common
Stock (the "Shares") of CYBERAMERICA CORPORATION (the "Company") according to
the conditions set forth in the Subscription Agreement dated
______________________, 1996.
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 Debentures on behalf of any U.S. Person.
Date of Conversion________________________________________________
Applicable Conversin Price_________________________________________
Number of Shares Issuable upon this conversion_____________________
Signature__________________________________________________________
[Name]
Address____________________________________________________________
___________________________________________________________________
Phone_______________________ Fax____________________
EXHIBIT B
PURCHASER REPRESENTATION LETTER
Dear Sirs:
The undersigned ____________________, has purchased on
_______________________, 1996, Convertible Debentures of CYBERAMERICA
CORPORATION (the "Company") in the amount of $300,000, (the "Debentures"). In
connection with such purchase, the undersigned, has executed and delivered a
subscription agreement ("Subscription Agreement") of your design. As the forty
(40) day transaction restriction period has expired, the undersigned hereby
requests that the Debentures be transferred into "Street Name" of
_________________________.
The undersigned represents and warrants as follows:
(1) The offer to purchase the Debentures was made to it outside of the United
States and theundersigned was, at the time the Subscription Agreement was
executed and delivered, and is now, outside the United States;
(2) It is not a U.S. Persion (as such term is defined in Section 902(a) of
Regulation S promulgated under the United States Securiteies Act of 1933 (the
"Securities Act"); and it has purchased the Debentures for its own account and
not for the account or benefit of any U.S. Person;
(3) All offers and sales by the undersigned of the Debentures shall be
made purusant to an effective registration statment under the Securities Act or
pursuant to and exemption from, or in a transaction not subject to the
registration requirments of, the Securities Act;
(4) It is familiar with and understands the terms, conditions and
requirements contained in Regulation S and definitins of U.S. Persons contained
in Regulation S;
(5) The undersigned has not engaged in any "directed selling efforts" (as
such term is defined in Regultion S) with respect to the Debentures or the
Common Stock that is issuable upon conversion; and
(6) The undersigned purchased its Debentures with investment intent and at
the time of the purchase of said Debentures had no interest to sell, dispose of
or otherwise transfer the Debentures or the Common Sotck that is issuable upon
conversion. The purpose for this request is to facilitate the management of the
undersigned's investment accounts.
(7) The undersigned agrees to the provisions of Paragraph 2(a)(xiv) of the
Offshore Securities Subscription Agreement which is incorporated herein and made
a part hereof as if fully written.
Dated this _____ Day of the month of___________________, 1996.
By:
_______________________________ _________________________
Official Signature of Purchaser Title
DEBENTURE ESCROW AGREEMENT
THIS AGREEMENT is made as of the 16th day of September, 1996 by and
between CYBERAMERICA CORPORATION with its principal office at 268 West 400
South, Suite 300, Salt Lake City, Utah 84101 (hereinafter "Company"), and Joseph
B. LaRocco, Esq., 1055 Washington Boulevard, Stamford, CT 06901 (hereinafter
"Escrow Agent")
W I T N E S S E T H:
WHEREAS, certain Purchasers will be purchasing the Company's Debentures
in an amount as set forth in an Offshore Securities Subscription Agreement
signed by the Company and eash Purchaser; and
WHEREAS, it is intended that each purchase of a Debentures be
consummated in accordance with the requirments set forth by Regualtion "S"
promulgated under the Securities Act of 1933, as amended; and
WHEREAS, the Company has requested that the Escrow Agent hold the funds
of each Purchaser in escrow until the Escrow Agent has received the Debentures
representing the amount being purchased by that particular Purchaser. The Excrow
Agent will tehn immediately wire transfer or otherwise deliver at the Company's
direction immediately available funds in the face amount of the Debentures, less
fourteen percent (14%) to the Company or the Company's account and arrange for
delivery of the certificates to the Purchaser per the Purch's written
instructions.
NOW, THEREFORE, in consideration of the covenants and mutual promises
containted herein and other good and valuable consideration, the receipt and
legal sufficiency of which are hereby acknowledges and intending to be legally
bound hereby, the parties agree as follows:
ARTICLE 1
TERMS OF THE ESCROW
1.1 The parties hereby agree to establish escrow account with the
Escrow Agent whereby the Escrow Agent shall hold the funds for the purchase of
the Debentures.
1.2 Upon Escrow Agent's receipt of funds into his attorney's trustee
account he shall notify the Company, or the Company's sedignated attorney or
agent, of the following:
a) the amount of funds he has received into his account;
b) the name of Purchaser that sent in the funds;
c) the amount of the Debentures sought to be purchased.
1.3 The Company upon receipt of said notice and acceptance of such
Purchaser's Subscription Agreement, as evidenced by the Comopany's execution
thereof, from Escrow Agent shall deliver to Escrow Agent the Debentures
representing that amount of the Company's Debentures being purchased.
1.4 Upon Delivery of the Debentures, Escrow Agent shal immediately
wire that amount of funds necessary to purchase the Debentures, per the written
instructions of the Company. Once the funds have been sent per the Company's
instructions, the Escrow Agent shall then arrange to have the Debentures
delivered by overnight delivery, if possible, per the written instructions of
the Purchaser.
1.5 This Agreement may be altered or amended only with the consent of
all the parties hereto. Should the Company attempt to change this Agreement in a
manner which, in the Escrow Agent's discretion, shall be undesirable, the Escrow
Agent may resign as Escrow Agent by notifying the Company and the Purchaser in
writing. In the case of the Excrow Agent's resignation or removal pursuant ot
the foregoing, his only duty, until receipt of notice from the Company and the
Purch's Agent that a successor escrow agent shall have been appointed, shall be
to hold and preserve the Debentures and/or funds. Upon receipt by the Escrow
Agent of said notice from the Company and the Purchaser of the appointment of a
successor escrow agent, the name of a successor escrow account and a direction
to transfer the Debentures and/or funds, the Escrow Agent shall promptly
therheafter thansfer all of the Debentures and/or funds held in escrow to said
successor escrow agent. Immediately after said transfer of Debentures, the
Escrow Agent shall furnish thhe Company and the Purchaser with proof of such
transfer. The Escrow Agent is authorized to desregard any notices, requests,
instructions or demands received by it form the Company or the Purchaser after
notice of resignation or removal shall have been given, unless the same shall be
the aforementioned notice form the Company and the Purchaser to transfer the
Debentures and funds to a successor escrow agent or to return to the same
perspective parties.
1.6 The Escrow Agent shall be reimbursed by the Company and the
Purchaser for any reasonable expenses incurred in the event there is a conflict
between the parties and the Escrow Agent shall deem it necessary to retain
counsel.
1.7 The Escrow Agent shall not be liable or repsonsible except for the
Escrow Agent's own negligence or willful misconduct.
1.8 The Company and the Purchaser warrant to and agree with the Escrow
Agent that, unless otherwise expressly set forth in this Ag:
(I) there is no security interest in the
Debentures or any part thereof;
(ii) no financing statement under the Uniform
Commercial Code is on file in any
jurisdiction claiming a security interest
or in describing (whether specifcially or
generally) the Debentures or any part
thereof; and
(iii) the Escrow Agent shall have no
responsibility at any time to ascertain
whether or not any security interest exists
in the Debentures or any part thereof or to
file any financing statement under the
Uniform Commerical Code with respect to the
Debentures or any part thereof.
1.9 The Escrow Agent has made no representations or warranties in
connection with this transaction. The Escrow Agent has no liability hereunder to
either party other than to hold the Debentures and funds and to deliver them
under the terms hereof (except as provided in paragraph 1.7). Each party hereto
agrees to indemnify and hold harmless the Escrow Agent from and with respect to
any suits, claims, actions or liabilities arising in any way out of this
transaction including the obligation to defend any legal action brought which in
any way arises out of or is related to this Escrow.
ARTICLE 2
MISCELLANEOUS
2.1 No waiver of any breach of any covenant or provision herein
contained shall be deemed a vaiver of any preceding or succeeding breach
thereof, or of any other covoenant or provision herein contained. No extension
of time for performance of any obligation or act shall be deemed any extension
of the time for performance of any other obligatio or act.
2.2 All notices or other communications required or permitted
hereunder shall be in writing, and shall be sent by hand delivery, fax,
overnight courier, registered or certified mail, postage prepaid, return receipt
requested, and shall be deemed received upon receipt thereof, as follows:
(I) CyberAmerica Corporation
Richard Surber, President
268 West 400 South, Suite 301
Salt Lake City, Utah 84101
(P) 801-575-8073
(F) 801-575-8092
(ii) Joseph B. LaRocco, Esq.
1055 Washington Boulevard
Stamford, CT 06901
(P) 203-353-1922
(F) 203-353-0323
2.3 This Agreement shall be binding upon and shall inure to the
benefit of the permitted successors and assigns of the parties hereto.
2.4 The Agreement is the final expression of, and contains the entire
Ag between, the parties with respect to the subject matter hereof and supersedes
all prior understandings with respect thereto. This Ag many not be modified,
changed, supplemented or terminated, nor may any obligations hereunder be
waived, excpet by writen insturment signed by the parties to be charged or by
its agent duly authorized in writing or as otherwise expressly permitted herein.
2.5 Whenever required by the context of this Ag, the singular shall
include the plural and masculine shall include the feminine. This Ag shall not
be construed as if it had been prepared by one of the parties, but rather as if
both parties had prepared the same. Unless otherwise indicated, all references
to Articles are to this Ag.
2.6 The Company acknowledges and confirms that it is not being
represented in a legal capacity by Joseph B. LaRocco, and it has had the
opportunity to consult with its own legal advisors prior to the signing of the
agreement.
2.7 The parties hereto expressly agree that this Ag thall be
govenrened by, interpreted under, and constured and enforced in accordance of
the laws of the State of Connecticut. An action to enforce, arising out of, or
relating in any way to, any provisions of this Ag shall be brought through the
American Arbitration Association at the desingated locale of Stamford,
Connecticut.
IN WITNESS WHEREOF, the parties hereto have executed this Ag as of the
day of September, 1996.
CYBERAMERICA CORPORATION
By: /s/ Richard Surber
Richard Surber, President
JOSEPH B. LaROCCO, ESCROW AGENT
By: /s/ Joseph B. LaRocco
Joseph B. LaRocco, Esq.