EXHIBIT 4.3
THIS CONVERTIBLE DEBENTURE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, AND MAY NOT BE SOLD,
ASSIGNED OR OTHERWISE TRANSFERRED WITHOUT REGISTRATION
THEREUNDER EXCEPT IN ACCORDANCE WITH AN APPLICABLE EXEMPTION
FROM THE REGISTRATION PROVISIONS OF THE SECURITIES ACT OF
1933, AS AMENDED.
$3,400,000
ADVANCED MEDICAL SCIENCES, INC.
CONVERTIBLE DEBENTURE DUE JUNE 1, 2004
FOR VALUE RECEIVED, the undersigned, ADVANCED MEDICAL
SCIENCES, INC., a corporation duly organized and existing under the laws of the
State of Virginia (the "Payor"), with its principal business address at 382 Rte.
59 #310, Monsey, New York 10952 hereby promises to pay to the order of DEERSKIN
TRADING POST, INC. (the "Payee"), with its principal business address at 2500
Arrowhead Drive, Carson City, Nevada 89701, the principal amount of Three
Million Four Hundred Thousand Dollars ($3,400,000) on June 1, 2004 (the
"Maturity Date"), plus interest at the rate of 8% per annum on the unpaid
principal balance, such interest to be paid on the last day of each July,
October, January and April prior to the Maturity Date and on the Maturity Date
together with the repayment of the principal balance and with all charges,
amounts, sums and interest which have accrued and have not been paid. All
payments to be made pursuant to this Debenture shall be made in such coin or
currency of the United States of America which, at the time of payment, is legal
tender for the payment of public and private debts. All such payments shall be
made by electronic funds wire transfer in accordance with the wire transfer
instructions submitted by Payee as the first payment method option; however,
Payee may designate that payments may be made by bank or certified check, at the
offices of the Payee set forth above or such other place as the Payee shall
designate in writing to the Payor. In the event that any installment of
principal or interest on this Debenture is not paid when due, such overdue
principal or interest shall bear interest from thirty days after the due date
until paid (to the extent permitted by law) at the rate of 15% per annum. In
addition, in the event such overdue principal or interest is not
paid for a period of ten days after the date due, the Payor shall promptly pay
the Payee a late payment fee equal to 5% of such overdue principal or interest.
In the event the rate of interest hereunder shall exceed the maximum rate
permitted by applicable law, such rate of interest shall automatically and
without further action on the part of any person be reduced to the maximum rate
permitted by applicable law.
1. Optional Redemption. This Debenture may not be redeemed, called or
prepaid without Payee's prior written consent prior to June 1, 2001. Thereafter,
this Convertible Debenture will be subject to redemption at any time at the
option of the Payor, in whole or in part, on not less than 30 nor more than 60
days' prior notice in amounts of $100,000 or an integral multiple thereof at the
following redemption prices (expressed as percentages of the principal amount),
if redeemed during the 12-month period beginning on June 1 of each of the years
indicated below:
Year Redemption Prices
---- -----------------
2001 105%
2002 104%
2003 103%
and thereafter at 100% of the principal amount, in each case, together with
accrued and unpaid interest if any, to the redemption date.
2. Security Interest. Concurrently with the issuance of this Debenture,
Payor is executing and delivering to Payee a Security Agreement dated as of the
date hereof (the "Security Agreement") pursuant to which the Payor has granted a
security interest in certain collateral to secure the payment of this Debenture.
3. Conversion.
3.1 Right to Convert. The Payee shall have the right, one or more times
at its option, at any time and from time to time, to convert the principal
amount of this Debenture, or any portion of such principal which is at least Two
Hundred Thousand Dollars ($200,000), into that number of fully-paid and
nonassessable shares of Common Stock of the Payor, obtained by dividing the
principal amount of the Debenture or portion thereof surrendered for conversion
by the conversion price equal to the lesser of (i) the current market price per
share of Payor's Common Stock on that date which is five days after the date
hereof (or if such day shall not be a business day, then the following business
day), computed in accordance with Section 3.4(c) hereof and (ii) the current
market price per share of Payor's Common Stock on June 1, 2000, computed in
accordance with Section 3.4(c) hereof, provided however, that no adjustment
2
in the conversion price shall be required unless such adjustment would require a
decrease of at least 5% in such price.
3.2 Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion; No Adjustment for Interest or Dividends. In order to exercise the
conversion privilege, the Payee shall surrender this Debenture to the Payor and
shall give written notice of conversion in the form provided herein to the Payor
that the Payee elects to convert this Debenture or the portion thereof specified
in said notice.
As promptly as practicable (but not more than 10 days) after the
surrender of this Debenture and the receipt of such notice as aforesaid, the
Payor shall issue and shall deliver to the Payee a certificate or certificates
for the number of full shares issuable upon the conversion of this Debenture or
portion thereof in accordance with the provisions of this Debenture and a check
or cash in respect of any fractional interest in respect of a share of Common
Stock arising upon such conversion as provided in Section 3.3 of this Debenture.
In each case this Debenture shall be surrendered for partial conversion, the
Payor shall also promptly execute and deliver to the Payee a new Debenture or
Debentures in an aggregate principal amount equal to the unconverted portions of
the surrendered Debenture.
Each conversion shall be deemed to have been effected on the date on
which this Debenture shall have been surrendered and such notice shall have been
received by the Payor, as aforesaid, and the Payee shall be deemed to have
become on said date the holder of record of the shares issuable upon such
conversion; provided, however, that any such surrender on any date when the
stock transfer books of the Payor shall be closed shall constitute the Payee as
the record holder thereof for all purposes on the next succeeding day on which
such stock transfer books are open.
No adjustment of the number of shares to be issued upon conversion
shall be made for interest accrued on this Debenture prior to the date it is
surrendered or for cash dividends on any shares issued upon the conversion of
this Debenture prior to the date it is surrendered. However, all accrued
interest shall be payable by wire transfer, or in cash or cash equivalents.
3.3 Cash Payments in Lieu of Fractional Shares. No fractional shares of
Common Stock or scrip representing fractional shares shall be issued upon
conversion of Debentures. If any fractional shares of stock would be issuable
upon the conversion of this Debenture, the Payor shall make a payout therefor in
cash at the current market value thereof. The current market value of a share of
Common Stock shall be the closing price of the day (which is not a legal
holiday) immediately preceding the day on which this Debenture (or specified
3
portions thereof) is deemed to have been converted and such closing price shall
be determined as provided in subsection (c) of Section 3.4.
3.4 Adjustment of Conversion Price. The conversion price shall be
adjusted from time to time as follows:
(a) Dividends. In case the Payor shall on any one or
more occasions after the date of this Debenture (i) pay a
dividend or make a distribution in shares of its capital stock
(whether shares of Common Stock or of capital stock of any
other class), (ii) subdivide its outstanding Common Stock, or
(iii) combine its outstanding Common Stock into a smaller
number of shares, the conversion price in effect immediately
prior thereto shall be adjusted so that the holder of any
Debenture thereafter surrendered for conversion shall be
entitled to receive the number of shares of capital stock of
the Payor which it would have owned or have been entitled to
receive after the happening of any of the events described
above had this Debenture been converted immediately prior to
the happening of such event. An adjustment made pursuant to
this subsection (a) shall become effective immediately after
the record date.
(b) Other Distributions. The purpose of this
subsection is to provide a means to reduce the Payee's
conversion price in the event the assets of the Payor are
materially diluted through distributions to the Payor's common
stockholders and/or any other security holder of the Payor. In
case the Payor shall distribute to all holders of its Common
Stock evidence of its indebtedness or assets (excluding cash
dividends or distributions paid from retained earnings of the
Payor) or subscription rights or warrants, then in each such
case the conversion price shall be adjusted so that the same
shall equal the price determined by multiplying the conversion
price in effect immediately prior to the date of such
distribution by a fraction of which the numerator shall be the
current market price per share (as defined in subsection (c)
of this Section 3.4) of the Common Stock on the record date as
set forth below less the then fair market value (as determined
by the Board of Directors, whose determination shall be
conclusive) of the portion of the assets or evidences of
indebtedness so distributed or of such rights or warrants
applicable to one (1) share of Common Stock, and the
denominator shall be the current market price per share (as
defined in subsection (c) below) of the Common Stock. In the
event that securities of a subsidiary of the Payor
4
shall be distributed to the Payor's common stockholders and/or
any other security holder of the Payor, such subsidiary shall,
no later than the date of such distribution, jointly assume
the obligation of repaying this Debenture and this Debenture
shall become convertible at, the Payee's option, into Common
Stock of such subsidiary, initially at a conversion price
equal to the reduction in the conversion price with respect to
the Payor's Common Stock as provided herein. Such adjustments
shall become effective immediately after the record date for
the determination of stockholders entitled to receive such
distribution.
(c) Conversion Price Adjustment. For the purpose of
any computation under this Section 3.4, the current market
price per share of Common Stock at any date shall be deemed to
be the average of the daily closing prices (disregarding the
three highest closing prices and the three lowest closing
prices) for the twenty six consecutive trading days commencing
thirty-one trading days before the day in question. The
closing price for each day shall be (i) the last sale price of
the Common Stock on the National Association of Securities
Dealers, Inc., Automated Quotation System or any other
automated quotation system or, if no sale occurred on such
date, the closing bid price of the Common Stock on such
quotation system on such date or (ii) if the Common Stock
shall be listed or admitted for trading on the New York or
American Stock Exchange or any successor exchange, the last
sale price, or if no sale occurred on such date, the closing
bid price of the Common Stock on such exchange, or (iii) if
the Common Stock shall not be included in any automated
quotation system or listed on any such exchange, the closing
bid quotation for Common Stock as reported by the National
Quotation Bureau Incorporated if at least two securities
dealers have inserted both bid and asked quotations for Common
Stock on at least five of the ten preceding days. If none of
the conditions set forth above is met, the closing price of
Common Stock on any day or the average of such closing prices
for any period shall be the fair market value of Common Stock
as determined by a member firm of the New York Stock Exchange,
Inc. selected by the Board of Directors, provided such firm
shall be reasonably acceptable to Payee.
(d) No Nominal Adjustments. No adjustment in the
conversion price shall be required unless such adjustment
would require an increase or decrease of at least two percent
(2%) in such price; provided, however, that any adjustments
which by reason of this subsection (d) are not required to be
made shall be
5
carried forward and taken into account in any subsequent
adjustment. All calculations under this Section shall be made
to the nearest cent or to the nearest one-hundredth (1/100th)
of a share, as the case may be.
(e) Conversion Price Adjustment Notice. Whenever the
conversion price is adjusted, as herein provided, the Payor
shall prepare a notice of such adjustment of the conversion
price setting forth the adjusted conversion price and the date
on which such adjustment becomes effective and shall mail such
notice of such adjustment of the conversion price to the
Payee.
3.5 Effect of Reclassification, Consolidation, Merger or Sale. If any
of the following events occur, namely (i) any reclassification or change of
outstanding shares of Common Stock issuable upon conversion of this Debenture
(other than a change in par value, or from par value to no par value, or from no
par value to par value, or as a result of a subdivision or combination), (ii)
any consolidation or merger to which the Payor is a party other than a
consolidation or merger in which the Payor is the continuing corporation and
which does not result in any reclassification of, or change (other than a change
in par value, or from par value to no par value, or from no par value to par
value or as a result of a subdivision or combination) in, outstanding shares of
Common Stock, or (iii) any sale or conveyance of the properties and assets of
the Payor as, or substantially as, an entirety to any other corporation; then
this Debenture shall be convertible into the kind and amount of shares of stock
and other securities or property receivable upon such reclassification, change,
consolidation, merger, sale or conveyance by a holder of the number of shares of
Common Stock issuable upon conversion of this Debenture immediately prior to
such reclassification, change, consolidation, merger, sale or conveyance. The
above provisions of this Section shall similarly apply to successive
reclassifications, consolidations, mergers and sales.
3.6 Reservation of Shares; Shares to be Fully Paid. As of the date
hereof, the Payor has reserved, free from preemptive rights, out of its
authorized but unissued shares, or out of shares held in its treasury,
sufficient shares to provide for the conversion of this Debenture. Before taking
any action which would cause an adjustment reducing the conversion price below
the then par value, if any, of the shares of Common Stock issuable upon
conversion of this Debenture, the Payor shall promptly take all corporate action
which may be necessary in order that the Payor may validly and legally issue
shares of such Common Stock at such adjusted conversion price. The Payor
covenants that all shares of Common Stock which may be issued upon conversion of
Debentures will upon issue be fully paid and nonassessable.
6
3.7 Notice to Payee Prior to Certain Actions. In case:
(a) the Payor shall declare a dividend (or any other
distribution) on its Common Stock (other than in cash out of
retained earnings); or
(b) the Payor shall authorize the granting to the
holders of its Common Stock of rights or warrants to subscribe
for or purchase any share of any class or any other rights or
warrants; or
(c) of any reclassification of the Common Stock of
the Payor (other than a subdivision or combination of its
outstanding Common Stock, or a change in par value, or from
par value to no par value, or from no par value to par value)
or, of any consolidation or merger to which the Payor is a
party and for which approval of any shareholders of the Payor
is required, or of the sale or transfer of all or
substantially all of the assets of the Payor; or
(d) of the voluntary or involuntary dissolution,
liquidation or winding up of the Payor;
the Payor shall give notice to the Payee in accordance with this Debenture as
promptly as possible but, in any event, at least thirty days prior to the
applicable date hereinafter specified, a notice stating (x) the date on which a
record is to be taken for the purpose of such dividend, distribution or rights
or warrants, or, if a record is not to be taken, the date as of which the
holders of Common Stock of record to be entitled to such dividend, distribution
or rights are to be determined, or (y) the date on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up is
expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their Common
Stock for securities or other property deliverable upon such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up.
Failure to give such notice, or any defect therein, shall not affect the
legality or validity of such dividend, distribution, reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation or winding up;
without limiting the definition of a breach of this Debenture, such failure
shall constitute a breach hereunder.
4. Registration Rights.
4.1 Grant of Piggyback Right. So long as there shall be outstanding any
principal or interest under this Debenture or the Payee shall hold any shares of
Common Stock issuable to the Payee pursuant to this Debenture ("Conversion
Shares"), the Payor
7
shall send written notice to the Payee in accordance with this Agreement at
least one month prior to the filing by the Payor of any registration statement
filed by the Payor on Form S-1, Form S-2, Form S-3 or Form SB-2, or any
successor form, covering the sale of common stock, and shall give to the Payee
the right to have included in any such registration statement any Conversion
Shares. In order to have the Conversion Shares included in such registration
statement, the Payee must give written notice to the Payor within 15 days after
the date of the Payee's receipt of written notice from the Payor indicating the
number of Conversion Shares requested to be included for sale in such
registration statement. Upon receipt of such notice from the Payee, the Payor
shall use its best efforts to cause all of the Common Stock specified in such
notice to be registered under the Securities Act of 1933, as amended (the
"Securities Act"). The registration expenses in connection with such
registration statement shall be paid by the Payor (exclusive of underwriter's
spread and commissions with respect to stock sold by the Payee or fees and
disbursements of the Payee's counsel). If the registration statement to be filed
by the Payor pertains to an underwritten public offering of shares of common
stock to be sold solely for the account of the Payor and, if in the judgment of
the prospective managing or lead underwriter for the Payor as set forth in a
letter to the Payor, the registration of the Conversion Shares would materially
adversely affect the proposed public offering by the Payor, the Payor shall not
be obligated to register such number of Conversion Shares in such registration
statement for inclusion in such public offering as such underwriter shall have
identified as having, in its judgment, such material adverse effect.
4.2 Demand Registration Right. If at any time after six months from the
date hereof while there shall be outstanding any principal or interest under
this Debenture or while the Payee shall hold Conversion Shares, the Payee shall
give notice to the Payor to the effect that the Payee desires to register under
the Securities Act any Conversion Shares, under such circumstances that a public
distribution (within the meaning of the Securities Act)of any such Conversion
Shares will be involved, then the Payor will as promptly as practicable after
receipt of such notice, but not later than ninety (90) days after receipt of
such notice, at the Payee's option, file a registration statement pursuant to
the Securities Act (the "Demand Registration") to the end that the Conversion
Shares may be publicly sold under the Securities Act as promptly as practicable
thereafter and the Payor will use its best efforts to cause such registration to
become and remain effective as provided herein (including the taking of such
steps as are reasonably necessary to obtain the removal of any stop order);
provided, that the Payee shall furnish the Payor with appropriate information in
connection therewith as the Payor may reasonably request; and provided that the
Payor shall not be required to file such a registration statement pursuant to
this Section on more than one occasion; and
8
provided, further, that the registration rights of the Payee under this Section
shall be subject to the "piggyback" registration rights of other holders of
securities of the Payor to include such securities in any registration statement
filed pursuant to this Section; however, all costs and expenses of the Demand
Registration shall then be shared proportionately with any other parties
desiring to piggyback onto the Payee's Demand Registration. The exercise by the
Payee of its demand registration right under this Section shall be deemed to be
an irrevocable election to convert this Debenture to the extent of the
Conversion Shares which the Payee has elected to have registered (but no more)
no later than the effective date of the registration statement required
hereunder. The Payee shall bear the entire cost and expense of any registration
of Conversion Shares initiated by it under this Section, provided, however, that
if the Payor registers any securities within six months of the effective date of
the Demand Registration, then the Payor shall reimburse the Payee its actual
costs incurred in registering its securities pursuant to the Section. The Payor
shall only be required to grant a Demand Registration as contemplated by this
Section on one occasion. The Payor shall not be required to grant a Demand
Registration as contemplated by this Section in the event that (i) the Payee
shall be able to sell Conversion Shares pursuant to Rule 144 under the
Securities Act, but only to the extent that Rule 144 is available for the sale
of Conversion Shares during the three month period immediately following demand,
(ii) such demand shall relate to less than the conversion of $1 million of
principal amount under this Debenture unless the entire unpaid principal amount
of this Debenture shall be less than $1 million and (iii) if "piggy back" rights
pursuant to Section 4.1 hereof had been extended to the Payee within six months
prior to its making such demand.
4.3 Undertaking to File Documents. The Payee shall execute, deliver
and/or file with or supply to the Payor, the Securities and Exchange Commission
and/or any state or other regulatory authority such information, documents,
representations, undertakings and/or agreements necessary to carry out the
provisions of the registration covenants contained herein and/or to effect the
registration or qualification of the Conversion Shares under the Securities Act
and/or any of the laws and regulations of any state or governmental
instrumentality.
4.4 Commitment to Keep Effective. The Payor will be obligated to keep
any registration statement filed by it hereunder and any registration or
qualification pursuant to Section 4.5 below effective under the Securities Act
for a period of six months after the actual effective date of such registration
statement and to prepare and file such supplements and amendments which may be
necessary to maintain an effective registration statement for such period. The
Payor will furnish
9
to the Payee such number of prospectuses and other appropriate documents as the
Payee may from time to time reasonably request.
4.5 Blue Sky Registration. The Payor will use its best efforts to
register or qualify the shares of Common Stock covered by any registration
statement under the Securities Act which includes Conversion Shares to be sold
on behalf of the Payee pursuant hereto under such securities or blue sky laws in
such jurisdictions within the United States as the Payee may reasonably request;
provided, however, that the Payor reserves the right, in its sole discretion,
not to register or qualify such shares of Common Stock in any jurisdiction in
which such shares of Common Stock do not satisfy the requirements of such
jurisdiction or in which the Payor would be required to qualify as a foreign
corporation to do business in such jurisdiction and is not so qualified therein
or is required to file any general consent to service of process.
4.6 Deregistration. In the event the Payee has not sold all of the
Conversion Shares included in the registration statement or prior to the
expiration of the six-month period specified above, the Payee hereby agrees that
the Payor may deregister by post-effective amendment any Conversion Shares of
the Payee covered by the registration statement but not sold on or prior to such
date. The Payor agrees that it will notify the Payee of the filing and effective
date of each such post-effective amendment.
4.7 Right to Delay. The Payor shall have the right at any time after it
shall have received written notice pursuant to Section 4.1 to elect not to file
or to delay any such proposed registration statement, or to withdraw the same
after the filing but prior to the effective date thereof. In addition, the Payor
may delay the filing of any registration statement requested pursuant to Section
4.2 hereof by not more than 120 days if the Payor, prior to the time it would
otherwise have been required to file such registration statement, determines in
good faith that the filing of the registration statement would require the
disclosure of non-public material information that, in its judgment, would be
detrimental to the Payor if so disclosed or would otherwise adversely affect a
financing, acquisition, disposition, merger or other material transaction.
4.8 Selection of Underwriters. If a registration pursuant to Section
4.1 hereof involves an underwritten offering, the Payor shall have the right to
select the investment banker or investment bankers and manager or managers that
will serve as underwriter with respect to the underwritten offering. The Payee
may not participate in any underwritten offering under this Debenture unless the
Payee completes and executes all questionnaires, powers of attorney,
indemnities, underwriting agreements and other documents required under the
terms of such underwritten
10
offering, in each case, in the form and upon terms reasonably acceptable to the
Payor and the underwriters. The requested registration pursuant to Section 4.2
hereof shall not involve an underwritten offering unless the Payor shall first
give its written approval of each underwriter that participates in the offering,
such approval not to be unreasonably withheld.
4.9 Principal Shareholders. The Payor will not file a registration
statement on behalf of any person who beneficially owns more than 10% if the
Payor's issued and outstanding common stock (other than Pioneer Venture
Associates Limited Partnership), as a selling shareholder, without the prior
written approval of the Payee, which approval shall not be unreasonably
withheld.
5. Acceleration. In the event that (i) the Payor shall default in the
due and punctual payment of any installment of interest on this Debenture when
and as the same shall become due and payable and such default shall continue for
fifteen days after written notice from the Payee to the Payor or (ii) the Payor
shall be in default under the Security Agreement, after the passage of any
applicable grace period; or (iii) the Payor shall commence a voluntary case
concerning itself under Title 11 of the United States Code entitled "Bankruptcy"
as now or hereafter in effect, or any successor thereto (the "Bankruptcy Code");
or (iv) in the event of the appointment of a custodian (as defined in the
Bankruptcy Code) for all or substantially all of the property of the Payor; or
(v) in the event the Payor shall commence any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction, whether now or
hereafter in effect, relating to the Payor or in the event of the commencement
against the Payor of any such proceeding which remains undismissed for a period
of 90 days; or (vi) if the Payor is adjudicated insolvent or bankrupt; or (vii)
if any order of relief or other order approving any such case or proceeding is
entered; or (viii) if the Payor shall allow any appointment of any custodian or
the like for it or any substantial part of its property to continue undischarged
or unstayed for a period of 90 days; or (ix) if the Payor shall make a general
assignment for the benefit of creditors; or (x) if the Payor shall cease doing
business as a going concern; or (xi) if the Payor shall take action for the
purpose of effecting any of the foregoing; (the foregoing being hereinafter
collectively referred to as "Events of Default") then, in any such Event of
Default and at any time thereafter while such Event of Default is continuing,
the Payee may, in addition to any other rights and remedies, the Payee may have
hereunder or otherwise, including, without limitation, the right to an increased
rate of interest and to late payment fees as set forth on the first page of this
Debenture, declare this Debenture to be due and payable without presentment,
demand, protest or other notice of any kind, all of which are hereby expressly
waived.
11
6. Waivers; Modifications.
6.1 In General. No forbearance, indulgence, delay or failure to
exercise any right or remedy with respect to this Debenture shall operate as a
waiver nor as an acquiescence in any default. No single or partial exercise of
any right or remedy shall preclude any other or further exercise thereof or any
exercise of any other right or remedy.
6.2 Presentment, Etc.; Jury Trial Waived. The Payor hereby waives
presentment, demand, notice of dishonor, protest and notice of protest. The
Payor hereby waives all rights to a trial by jury in any litigation arising out
of or in connection with this Debenture.
6.3 Modifications. This Debenture may not be modified or discharged
orally, but only in writing duly executed by the Payee and the Payor.
7. Successors and Assigns. All the covenants, stipulations, promises
and agreements in this Debenture made by the Payor shall bind its successors and
assigns, whether so expressed or not, and inure to the benefit of the Payee and
its successors and assigns.
8. Miscellaneous.
8.1 Headings. The headings of the various paragraphs of this Debenture
are for convenience of reference only and shall in no way modify any of the
terms or provisions of this Debenture.
8.2 Governing Law. This Debenture and the obligations of the Payor and
the rights of the Payee shall be governed by and construed in accordance with
the laws of the State of New York applicable to instruments made and to be
performed entirely within such State.
8.3 Collection Costs. The Payor shall pay all costs and expenses
incurred by the Payee to enforce its rights under this Debenture, including
reasonable counsel fees and other reasonable out-of-pocket expenses, provided,
however, that the foregoing shall not relate to the issuance of routine notices
sent no more frequently than once in any twelve-month period.
8.4 Notices. All notices, requests, demands and other communications
required or permitted under this Debenture shall be in writing and shall be
deemed to have been duly given if personally delivered or if mailed by first
class registered or certified mail return receipt requested, or by first class
mail if received, addressed to the parties at their respective
12
addresses set forth or referred to on the first page and signature page of this
Agreement, with copies to their respective counsel, Milberg Weiss Bershad Hynes
& Lerach LLP, Att: Arnold N. Bressler, Esq., One Pennsylvania Plaza, New York,
New York 10119, in the case of the Payee, and Caro & Associates, P.C.,
Attention: Chase A. Caro, Esq., 60 East 42nd Street, Suite 2001, New York, New
York 10165, in the case of Payor or to such other person or address as may be
designated by like notice hereunder.
13
IN WITNESS WHEREOF, the Payor has caused this Debenture to be
signed in its corporate name by a duly authorized officer and to be dated as of
the day and year written below.
Dated: May 21, 1999
ADVANCED MEDICAL SCIENCES, INC.
By /s/ [ILLEGIBLE]
--------------------------------
(Title)
14
FORM OF CONVERSION NOTICE
TO: Advanced Medical Sciences, Inc.
The undersigned owner of this Debenture hereby irrevocably
exercises the option to convert this Debenture, or portion hereof (which is at
least $200,000) below designated, into shares of Common Stock of America's
Shopping Mall, Inc. in accordance with the terms of this Debenture and directs
that the shares issuable and deliverable upon the conversion, together with any
check in payment for fractional shares and any Debentures representing any
unconverted principal amount hereof, be issued and delivered to the registered
holder hereof.
Dated:
Name of Owner:__________________________
Signature:______________________________
Title:__________________________________
Address:________________________________
________________________________
Taxpayer Identification
No.:__________________________________
Amount to be Converted:_________________
15