EXHIBIT 4.5
10% CONVERTIBLE DEBENTURE
NEITHER THESE SECURITIES NOR THE SECURITIES ISSUABLE UPON CONVERSION
HEREOF HAVE BEEN REGISTERED WITH THE UNITED STATES SECURITIES AND
EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE OR UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"). THE SECURITIES ARE
RESTRICTED AND MAY NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED
EXCEPT AS PERMITTED UNDER THE ACT PURSUANT TO AN EFFECTIVE REGISTRATION
STATEMENT OR AN EXEMPTION FROM SUCH REGISTRATION REQUIREMENTS.
NO. US $
DETOUR MAGAZINE, INC.
10% CONVERTIBLE DEBENTURE DUE JUNE __, 2003
THIS DEBENTURE is issued by Detour Magazine, Inc., a
corporation organized and existing under the laws of the State of Colorado (the
"Company"), and is designated as its 10% Convertible Debenture Due June __,
2003.
FOR VALUE RECEIVED, the Company promises to pay to [ ] or
registered assigns (the "Holder"), the principal sum _______________ and 00/100
(US $xx,000) Dollars on June __, 2003 (the "Maturity Date") and to pay interest
on the principal sum outstanding from time to time quarterly in arrears at the
rate of 10% per annum accruing from the date of initial issuance. Accrual of
interest shall commence on the first business day to occur after the date of
initial issuance and continue until payment in full of the principal sum has
been made or duly provided for. Quarterly interest payments shall be due and
payable on July 1, October 1, January 1 and May 1 of each year, commencing with
July 1, 2000. If any interest payment date or the Maturity Date is not a
business day in the State of New York, then such payment shall be made on the
next succeeding business day. The Company will pay the principal of and any
accrued but unpaid interest due upon this Debenture on the Maturity Date, less
any amounts required by law to be deducted, to the registered holder of this
Debenture and addressed to such holder at the last address appearing on the
Debenture Register. The forwarding of such check on the Maturity Date, shall
constitute a payment of principal and interest hereunder and shall satisfy and
discharge the liability for principal and interest on this Debenture to the
extent of the sum represented by such check plus any amounts so deducted.
This Debenture is subject to the following additional
provisions:
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1. The Company shall be entitled to withhold from all payments
of interest on this Debenture any amounts required to be withheld under the
applicable provisions of the United States income tax laws or other applicable
laws at the time of such payments, and Holder shall execute and deliver all
required documentation in connection therewith.
2. The rate of interest on this Debenture shall be ten percent
(10%), per annum, compounded annually, on the outstanding principal until paid
or converted. The Company shall have the right to cause the Holder to accept
Common Stock in exchange for interest otherwise payable in cash pursuant to this
Debenture; provided, however, that the Holder shall have the right to request
interest payments in cash if there has been an occurrence of an Event of Default
as defined below. The exact number of Common Stock into which such interest
payment is convertible shall be determined as set forth in Section 4.
3. This Debenture has been issued subject to investment
representations of the original purchaser hereof and may be transferred or
exchanged only in compliance with the Securities Act of 1933, as amended (the
"Act"), and other applicable state and foreign securities laws. The Holder shall
deliver written notice to the Company of any proposed transfer of this
Debenture. In the event of any proposed transfer of this Debenture, the Company
may require, prior to issuance of a new Debenture in the name of such other
person, that it receive reasonable transfer documentation including legal
opinions that the issuance of the Debenture in such other name does not and will
not cause a violation of the Act or any applicable state or foreign securities
laws. Prior to due presentment for transfer of this Debenture, the Company and
any agent of the Company may treat the person in whose name this Debenture is
duly registered on the Company's Debenture Register as the owner hereof for the
purpose of receiving payment as herein provided and for all other purposes,
whether or not this Debenture be overdue, and neither the Company nor any such
agent shall be affected by notice to the contrary. This Debenture has been
executed and delivered pursuant to the Convertible Debenture and Warrants
Purchase and Agreement dated as of June 12, 2000 between the Company and the
original Holder (the "Purchase Agreement"), and is subject to the terms and
conditions of the Purchase Agreement, which are, by this reference, incorporated
herein and made a part hereof. Capitalized terms used and not otherwise defined
herein shall have the meanings set forth for such terms in the Purchase
Agreement.
4. The Holder of this Debenture is entitled, at its option, to
convert at any time commencing on the date hereof, the principal amount of this
Debenture or any portion thereof into shares of Common Stock of the Company
("Conversion Shares") at a conversion price for each share of Common Stock
("Conversion Price") equal to the lesser of (i) $.90 (subject to adjustment for
stock splits and the like)(the "Ceiling Price") or (ii) 80% of the average of
the three (3) lowest closing bid prices during the twenty-two (22) Trading Days
immediately preceding the Conversion Date. Except for any sales (i) pursuant to
any presently existing employee benefit plan which plan has been approved by the
Company's stockholders, (ii) pursuant to any compensatory plan for a full-time
employee, director, officer or key consultant, (iii) pursuant to any options and
warrants issued by the Company and outstanding as of the date hereof, (iv)
pursuant to a currently anticipated capital raising transaction, including a
$1.5 million financing of debt securities with warrants, and a $5 million
financing of equity securities, whereby the Company sells shares of its Common
Stock at a per share selling price
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greater than the Conversion Price per share (and without any reset provisions),
(v) in connection with a strategic partnership or other business transaction,
the principal purpose of which is not simply to raise money and (vi) with the
prior approval of a majority in interest of the Investors of the Purchase
Agreement, which will not be unreasonably withheld, if during the period ending
when the Holder no longer holds any of the principal amount of this Debenture or
any accrued but unpaid interest of this Debenture (the "MFN Period"), the
Company sells any shares of its Common Stock at a per share selling price ("Per
Share Selling Price") lower than the Ceiling Price per share, then the Ceiling
Price shall be adjusted downward to equal such lower Per Share Selling Price.
The Company shall give to each Investor written notice of any such sale within
24 hours of the closing of any such sale.
(a) For the purpose of this Section 4, the term "Per Share
Selling Price" shall mean the amount actually paid by third parties for each
share of Common Stock. A sale of shares of Common Stock shall include the sale
or issuance of rights, options, warrants or convertible securities ("derivative
securities") under which the Company is or may become obligated to issue shares
of Common Stock, and in such circumstances the sale of Common Stock shall be
deemed to have occurred at the time of the issuance of the derivative securities
and the Per Share Selling Price of the Common Stock covered thereby shall also
include the exercise or conversion price thereof (in addition to the
consideration per underlying share of Common Stock received by the Company upon
such sale or issuance of the derivative security). In case of any such security
issued within the MFN Period in a "Variable Rate Transaction" or an "MFN
Transaction" (each as defined below), the Per Share Selling Price shall be
deemed to be the lowest conversion or exercise price at which such securities
are converted or exercised in the case of a Variable Rate Transaction, or the
lowest adjustment price in the case of an MFN Transaction. If shares are issued
for a consideration other than cash, the per share selling price shall be the
fair value of such consideration as determined in good faith by the Board of
Directors of the Company.
(b) For the purpose of Section 4(a), the term "Variable Rate
Transaction" shall mean a transaction in which the Company issues or sells (a)
any debt or equity securities that are convertible into, exchangeable or
exercisable for, or include the right to receive additional shares of Common
Stock either (x) at a conversion, exercise or exchange rate or other price that
is based upon and/or varies with the trading prices of or quotations for the
Common Stock at any time after the initial issuance of such debt or equity
securities, or (y) with a fixed conversion, exercise or exchange price that is
subject to being reset at some future date after the initial issuance of such
debt or equity security or upon the occurrence of specified or contingent events
directly or indirectly related to the business of the Company or the market for
the Common Stock (but excluding standard stock split anti-dilution provisions),
or (b) any securities of the Company pursuant to an "equity line" structure
which provides for the sale, from time to time, of securities of the Company
which are registered for resale pursuant to the Securities Act.
(c) For the purposes of Section 4(a), the term "MFN
Transaction" shall mean a transaction in which the Company issues or sells any
securities in a capital raising transaction or series of related transactions
(the "New Offering") which grants to an investor (the
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"New Investor") the right to receive additional shares based upon future
transactions of the Company on terms more favorable than those granted to the
New Investor in the New Offering.
(d) In case of any stock split or reverse stock split, stock
dividend, reclassification of the common stock, recapitalization, merger or
consolidation, or like capital adjustment affecting the Common Stock of the
Company, the provisions of this Section 4 shall be applied in a fair, equitable
and reasonable manner so as to give effect, as nearly as may be, to the purposes
hereof.
5. The entire unpaid balance of this Debenture and accrued
interest thereon outstanding on the Maturity Date hereof shall be due and
payable without notice on, but not before, the Maturity Date, unless the parties
mutually agree otherwise (this Section 5 does not in any way limit the Company's
right to redeem the Convertible Debentures as set forth in Section 6 herein).
6. Prior to the Effective Date, if the closing bid price of
the Common Stock on the Principal Market is less than $0.90, then the Company
shall have the right to deliver to the Holder a written notice of the Company's
intent to redeem all or any part of the entire outstanding amount of this
Debenture at a price of 135% of the outstanding principal balance, plus all
accrued but unpaid interest. At any time on or after the Effective Date, the
Company shall have the right to deliver to the Holder a written notice of the
Company's intent to redeem all or any part of the entire outstanding amount of
this Debenture at a price of 135% of the outstanding principal balance, plus all
accrued but unpaid interest. The written notice shall set forth the Redemption
Payment Date, which shall be not later than six (6) Trading Days after the
notice of redemption is tendered. The Company shall make the redemption payment
to the Holder on the later of (i) one (1) Trading Day after the Company receives
the Convertible Debenture from the Investor (or two (2) Trading Days from the
date the Company receives the Convertible Debenture, if the Company receives the
Convertible Debenture after 12:00 noon, New York time on a day) or (ii) the
Redemption Payment Date or else the redemption notice shall be void, and the
Company shall thereafter not have any further right to redeem this Debenture.
Provided that the closing bid price of the Common Stock on the Principal Market
is equal to or greater than $0.90 on any Trading Day from the date of the notice
of redemption to and including the Redemption Payment Date, the Holder shall
have the right to convert this Debenture as set forth in Section 8 until the
Trading Day prior to the Redemption Payment Date. The last day on which interest
on the Convertible Debenture or the portion of the Convertible Debenture
redeemed thereof shall accrue shall be the Redemption Payment Date. In the event
that the Holder's right to convert pursuant to this Paragraph 6 is limited by
the limitation contained in Paragraph 16, the Company may redeem only such
amount as could otherwise be converted by the Holder pursuant to this Paragraph
6 and Paragraph 16.
7. At any time after the date hereof, provided that (i) the
closing bid price of the Common Stock is greater than $3.00 for ten (10)
consecutive Trading Days, (ii) the trading volume of the Common Stock on the
Principal Market exceeds 100,000 shares of Common Stock on such Trading Days and
(iii) the Registration Statement has been effective during such ten (10)
consecutive Trading Days and is effective on the date notice is given
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pursuant to this Section 7, the Company shall have the right, by written notice
to the Holder, to require the Holder to convert the entire principal amount of
this Debenture, plus all accrued but unpaid interest, into shares of Common
Stock of the Company as provided in Section 4 hereof. Conversion shall be deemed
to have occurred as of the Conversion Date, which shall be the conversion date
set forth in the notice, which shall not be prior to the date the notice is
tendered. From and after the Conversion Date, the Debenture shall no longer
accrue interest. Upon receipt of the notice, the Holder shall promptly tender
the Debenture for conversion to shares as provided in Section 8 of this
Agreement.
8. (a) Conversion shall be effectuated by surrendering this
Debenture to the Company (if such Conversion will convert all outstanding
principal) together with the form of conversion notice attached hereto as
Exhibit A (the "Notice of Conversion"), executed by the Holder of this Debenture
evidencing such Holder's intention to convert this Debenture or a specified
portion (as above provided) hereof, and accompanied, if required by the Company,
by proper assignment hereof in blank. Interest accrued or accruing from the date
of issuance to the date of conversion shall be paid in cash as set forth above.
No fraction of a share or scrip representing a fraction of a share will be
issued on conversion, but the number of shares issuable shall be rounded to the
nearest whole share. The date on which Notice of Conversion is given (the
"Conversion Date") shall be deemed to be the date on which the Holder faxes the
Notice of Conversion duly executed to the Company. Facsimile delivery of the
Notice of Conversion shall be accepted by the Company at facsimile number (631)
423-9394 Attn.: Edward T. Stein. Certificates representing Common Stock upon
conversion will be delivered to the Holder within the later of (i) one (1)
Trading Day from the date the Company receives the Convertible Debenture (or two
(2) Trading Days from the date the Company receives the Convertible Debenture if
the Company receives the Convertible Debenture after 12:00 noon, New York time
on a Trading Day) or (ii) three (3) Trading Days from the date the Notice of
Conversion is delivered to the Company. Delivery of shares upon conversion shall
be made to the address specified by the Holder in the Notice of Conversion.
(b) The Company understands that a delay in the issuance of
shares of Common Stock upon a conversion beyond the three (3) Trading Day period
described in Paragraph 8(a) could result in economic loss to the Holder. As
compensation to the Holder for such loss, the Company agrees to pay late
payments to the Holder for late issuance of shares of Common Stock upon
conversion in accordance with the following schedule (where "No. Trading Days
Late" is defined as the number of Trading Days beyond three (3) Trading Days
from the date the Notice of Conversion is delivered to the Company).
- ----------------------------------- -----------------------------------------
No. Trading Days Late Late Payment for Each
$5,000 of Principal Amount
Being Converted
- ----------------------------------- -----------------------------------------
1 $100
- ----------------------------------- -----------------------------------------
2 $200
- ----------------------------------- -----------------------------------------
3 $300
- ----------------------------------- -----------------------------------------
4 $400
- ----------------------------------- -----------------------------------------
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- ----------------------------------- -----------------------------------------
No. Trading Days Late Late Payment for Each
$5,000 of Principal Amount
Being Converted
- ----------------------------------- -----------------------------------------
5 $500
- ----------------------------------- -----------------------------------------
6 $600
- ----------------------------------- -----------------------------------------
7 $700
- ----------------------------------- -----------------------------------------
8 $800
- ----------------------------------- -----------------------------------------
9 $900
- ----------------------------------- -----------------------------------------
10 $1,000
- ----------------------------------- -----------------------------------------
More than 10 $1,000 +$200 for each Trading Day
Late beyond 10 Trading Days
- ----------------------------------- -----------------------------------------
The Company shall pay any payments incurred under this
Paragraph 8(b) in immediately available funds upon demand. Nothing herein shall
limit Holder's right to pursue injunctive relief and/or actual damages for the
Company's failure to issue and deliver Common Stock to the holder, including,
without limitation, the Holder's actual losses occasioned by any "buy-in" of
Common Stock necessitated by such late delivery. Furthermore, in addition to any
other remedies which may be available to the Holder, in the event that the
Company fails for any reason to effect delivery of such shares of Common Stock
within three (3) Trading Days from the date the Notice of Conversion is
delivered to the Company, the Holder will be entitled to revoke the relevant
Notice of Conversion by delivering a notice to such effect to the Company,
whereupon the Company and the Holder shall each be restored to their respective
positions immediately prior to delivery of such Notice of Conversion, and in
such event any and all accrued late payments shall be due in connection with
such withdrawn conversion up to and including the date on which the Holder
revoked the relevant Notice of Conversion.
(c) If at any time (a) the Company challenges, disputes or
denies the right of the Holder to effect the conversion of this Debenture into
Common Stock or otherwise dishonors or rejects any Notice of Conversion properly
delivered in accordance with this Paragraph 8 or (b) any Company stockholder who
is not and has never been an Affiliate (as defined in Rule 405 under the
Securities Act of 1933, as amended) of the Holder obtains a judgment or any
injunctive relief from any court or public or governmental authority which
denies, enjoins, limits, modifies, delays or disputes the right of the holder
hereof to effect the conversion of this Debenture into Common Stock, then the
Holder shall have the right, by written notice, to require the Company to
promptly redeem this Debenture for cash at a redemption price equal to 135% of
the outstanding principal amount hereof and all accrued and unpaid interest
hereon. Under any of the circumstances set forth above, the Company shall be
responsible for the payment of all costs and expenses of the Holder, including
reasonable legal fees and expenses, as and when incurred in disputing any such
action or pursuing its rights hereunder (in addition to any other rights of the
Holder), subject in the case of clause (b) to the Company's right to control and
assume the defense of any such action. In the absence of an injunction
precluding the same, the Company shall issue shares upon a properly noticed
conversion. If an injunction precludes the Holder's right to convert, the
Company shall post a bond on the day such injunction is to begin for the benefit
of the Investors in an amount equal to
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the 135% of the outstanding principal amount of the Convertible Debentures
outstanding on such date.
9. No provision of this Debenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay the
principal of, and interest on, this Debenture at the time, place, and rate, and
in the coin or currency herein prescribed. This Debenture is a direct obligation
of the Company.
10. No recourse shall be had for the payment of the principal
of, or the interest on, this Debenture, or for any claim based hereon, or
otherwise in respect hereof, against any incorporator, shareholder, employee,
officer or director, as such, past, present or future, of the Company or any
successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by the acceptance hereof and as part of the consideration for
the issue hereof, expressly waived and released.
11. If the Company merges or consolidates with another
corporation or sells or transfers all or substantially all of its assets to
another person and the holders of the Common 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 transfer, the Company
and any such successor, purchaser or transferee agree that the Debenture may
thereafter be converted on the terms and subject to the conditions set forth
above into the kind and amount of stock, securities or property receivable upon
such merger, consolidation, sale or transfer by a holder of the number of shares
of Common Stock into which this Debenture might have been converted immediately
before such merger, consolidation, sale or transfer, subject to adjustments
which shall be as nearly equivalent as may be practicable. In the event of any
proposed merger, consolidation or sale or transfer of all or substantially all
of the assets of the Company (a "Sale"), the Holder hereof shall have the right
to convert by delivering a Notice of Conversion to the Company within fifteen
(15) days of receipt of notice of such Sale from the Company. In the event the
Holder hereof shall elect not to convert, the Company must prepay all
outstanding principal and accrued interest on this Debenture as provided in
Section 4, less all amounts required by law to be deducted, upon which tender of
payment following such notice, the right of conversion shall terminate.
12. The Holder of the Debenture, by acceptance hereof, agrees
that this Debenture is being acquired for investment and that such Holder will
not offer, sell or otherwise dispose of this Debenture or the Shares of Common
Stock issuable upon conversion thereof except under circumstances which will not
result in a violation of the Act or any applicable state Blue Sky or foreign
laws or similar laws relating to the sale of securities.
13. This Debenture shall be governed by and construed in
accordance with the laws of the State of New York. Each of the parties consents
to the jurisdiction of the federal courts whose districts encompass any part of
the City of New York or the state courts of the State of New York sitting in the
City of New York in connection with any dispute arising under this Agreement and
hereby waives, to the maximum extent permitted by law, any
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objection, including any objection based on forum non conveniens, to the
bringing of any such proceeding in such jurisdictions.
14. The following shall constitute an "Event of Default":
a. The Company shall default in the payment of principal
or interest on this Debenture and same shall continue
for a period of three (3) days; or
b. Any of the material representations or warranties
made by the Company herein, in the Purchase
Agreement, the Registration Rights Agreement, or in
any agreement, certificate heretofore or hereafter
furnished by the Company in connection with the
execution and delivery of this Debenture or the
Purchase Agreement shall be false or misleading in
any material respect at the time made; or
c. The Company fails to issue shares of Common Stock to
the Holder or to cause its Transfer Agent to issue
shares of Common Stock upon proper exercise by the
Holder of the conversion rights of the Holder in
accordance with the terms of this Debenture, fails to
transfer or to cause its Transfer Agent to transfer
any certificate for shares of Common Stock issued to
the Holder upon conversion of this Debenture as and
when required by this Debenture or the Registration
Rights Agreement, and such transfer is otherwise
lawful, or fails to remove any restrictive legend or
to cause its Transfer Agent to transfer any
certificate or any shares of Common Stock issued to
the Holder upon conversion of this Debenture as and
when required by this Debenture, the Purchase
Agreement or the Registration Rights Agreement and
such legend removal is otherwise lawful, and any such
failure shall continue uncured for five (5) business
days; or
d. The Company shall fail to perform or observe, in any
material respect, any other covenant, term,
provision, condition, agreement or obligation of the
Company under the Purchase Agreement, the
Registration Rights Agreement or this Debenture and
such failure shall continue uncured for a period of
thirty (30) days after written notice from the Holder
of such failure; or
e. The Company shall (1) admit in writing its inability
to pay its debts generally as they mature; (2) make
an assignment for the benefit of creditors or
commence proceedings for its dissolution; or (3)
apply for or consent to the appointment of a trustee,
liquidator or receiver for its or for a substantial
part of its property or business; or
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f. A trustee, liquidator or receiver shall be appointed
for the Company or for a substantial part of its
property or business without its consent and shall
not be discharged within sixty (60) days after such
appointment; or
g. Any governmental agency or any court of competent
jurisdiction at the instance of any governmental
agency shall assume custody or control of the whole
or any substantial portion of the properties or
assets of the Company and shall not be dismissed
within sixty (60) days thereafter; or
h. Any money judgment, writ or warrant of attachment, or
similar process in excess of One Hundred Thousand
($100,000) Dollars in the aggregate shall be entered
or filed against the Company or any of its properties
or other assets and shall remain unpaid, unvacated,
unbonded or unstayed for a period of sixty (60) days
or in any event later than five (5) days prior to the
date of any proposed sale thereunder; or
i. Bankruptcy, reorganization, insolvency or liquidation
proceedings or other proceedings for relief under any
bankruptcy law or any law for the relief of debtors
shall be instituted by or against the Company and, if
instituted against the Company, shall not be
dismissed within sixty (60) days after such
institution or the Company shall by any action or
answer approve of, consent to, or acquiesce in any
such proceedings or admit the material allegations
of, or default in answering a petition filed in any
such proceeding;
j. The Company shall have its Common Stock suspended or
delisted from trading on a Principal Market for in
excess of five (5) Trading Days; or
k. The Registration Statement shall not have been
declared effective within 180 days from the date
hereof.
Then, or at any time thereafter, for so long as the Event of Default shall be
continuing, and in each and every such case, unless such Event of Default shall
have been waived in writing by the Holder (which waiver shall not be deemed to
be a waiver of any subsequent default) at the option of the Holder and in the
Holder's sole discretion, the Holder may consider this Debenture immediately due
and payable, without presentment, demand, protest or notice of any kind, all of
which are hereby expressly waived, anything herein or in any note or other
instruments contained to the contrary notwithstanding, and the Holder may
immediately enforce any and all of the Holder's rights and remedies provided
herein or any other rights or remedies afforded by law.
15. Nothing contained in this Debenture shall be construed as
conferring upon the Holder the right to vote or to receive dividends or to
consent or receive
9
notice as a shareholder in respect of any meeting of shareholders or any rights
whatsoever as a shareholder of the Company, unless and to the extent converted
in accordance with the terms hereof.
16. The Holder shall not be entitled to convert on a
Conversion Date that amount of this Debenture in connection with that number of
shares of Common Stock which would be in excess of the sum of (i) the number of
shares of Common Stock beneficially owned by the Holder and its affiliates on a
Conversion Date, and (ii) the number of shares of Common Stock issuable upon the
conversion of this Debenture with respect to which the determination of this
proviso is being made on a Conversion Date, which would result in beneficial
ownership by the Holder and its affiliates of more than 9.99% of the outstanding
shares of Common Stock of the Company on such Conversion Date. For the purposes
of the proviso to the immediately preceding sentence, beneficial ownership shall
be determined in accordance with Section 13(d) of the Securities Exchange Act of
1934, as amended, and Regulation 13d-3 thereunder. Subject to the foregoing, the
Holder shall not be limited to aggregate conversions of only 9.99%. The Holder
may void the conversion limitation described in this Section 9.3 upon 75 days
prior notice to the Company. The Holder may allocate which of the equity of the
Company deemed beneficially owned by the Holder shall be included in the 9.99%
amount described above and which shall be allocated to the excess above 9.99%.
No conversion of this Debenture in violation of this Paragraph 16 but otherwise
in accordance with this Debenture shall affect the status of the Common Stock
issued upon such conversion as validly issued, fully-paid and nonassessable. If
instead of receiving cash on the Maturity Date the Holder instead exercises its
right to convert this Debenture into Common Stock pursuant to Paragraph 4 by
delivery of a Notice of Conversion prior to receipt of payment, and such
conversion would cause the limit contained in the first sentence of this
Paragraph 16 to be exceeded, such conversion of this Debenture shall occur up to
such limit and the remaining unconverted portion of this Debenture shall be
converted into Common Stock (1) in accordance with one or more Notices of
Conversion delivered by the Holder or (2) 65 days after the Maturity Date,
whichever is earlier. Notwithstanding anything contained herein to the contrary,
no interest shall accrue after the Maturity Date on any such unconverted portion
of this Debenture.
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IN WITNESS WHEREOF, the Company has caused this instrument to
be duly executed by an officer thereunto duly authorized.
Dated: June __, 2000
DETOUR MAGAZINE, INC.
By: /s/ Edward T. Stein
--------------------------------------
Edward T. Stein, Chairman of the Board
Attest:
- -------------------------------------
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EXHIBIT A
NOTICE OF CONVERSION
(To be Executed by the Registered Holder in order to Convert the Debenture)
The undersigned hereby irrevocably elects to convert $
________________ of the principal amount of the above Debenture No. ___ into
Shares of Common Stock of Detour Magazine, Inc. (the "Company") according to the
conditions hereof, as of the date written below.
Date of Conversion ____________________________________________________________
Conversion Price ____________________________________________________
Accrued Interest________________________________________________________________
Signature_____________________________________________________________________
[Name]
Address:______________________________________________________________________
______________________________________________________________________
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