ANNEX I
TO
SECURITIES PURCHASE AGREEMENT
<PROTOTYPE FOR EACH ISSUANCE>
FORM OF 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 SECURITIES ARE RESTRICTED AND MAY
NOT BE OFFERED, RESOLD, PLEDGED OR TRANSFERRED EXCEPT AS PERMITTED UNDER
THE ACT PURSUANT TO REGISTRATION OR EXEMPTION OR SAFE HARBOR THEREFROM.
No. 99- US $ ___________________________
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LJ INTERNATIONAL INC.
3% CONVERTIBLE DEBENTURE DUE __________, 200 (1)
THIS DEBENTURE is one of a duly authorized issue of up to $10,500,000 in
Debentures of LJ INTERNATIONAL INC. , a corporation organized and existing under
the laws of the British Virgin Islands (the "Company") designated as its 3%
Convertible Debentures. Such Debentures may be issued in series, each of which
may have a different maturity date, but which otherwise have substantially
similar terms. Capitalized terms not otherwise defined herein shall have the
meanings ascribed to them in the Securities Purchase Agreement, dated October
____, 1999 (the "Securities Purchase Agreement"), by and among the Company and
the Buyers (as that term is defined therein).
(1) Insert date which is third anniversary of Closing Date (the "Maturity
Date").
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FOR VALUE RECEIVED, the Company promises to pay to
____________________________________, the registered holder hereof (the
"Holder"), the principal sum of __________________________________and 00/100
Dollars (US $ ____________________________) on __________, 200 (2) (the
"Maturity Date") and to pay interest on the principal sum outstanding from time
to time in arrears (i) prior to the Maturity Date, semi-annually, on the last
day of June and December of each year, (ii) upon conversion as provided herein
or (iii) on the Maturity Date, at the rate of 3% per annum accruing from
______________________________________,(3) the date of initial issuance of this
Debenture. Accrual of interest shall commence on the first such business day to
occur after the date hereof and shall continue to accrue on a daily basis until
payment in full of the principal sum has been made or duly provided for.
This Debenture is subject to the following additional provisions:
1. The Debentures are issuable in denominations of Ten Thousand Dollars
(US$10,000) and integral multiples thereof. The Debentures are exchangeable for
an equal aggregate principal amount of Debentures of different authorized
denominations, as requested by the Holder surrendering the same. No service
charge will be made for such registration or transfer or exchange.
2. The Company shall be entitled to withhold from all payments of
principal of, and interest on, this Debenture any amounts required to be
withheld under the applicable provisions of the United States income tax laws or
other applicable laws at the time of such payments, and Holder shall execute and
deliver all required documentation in connection therewith.
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. 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.
4. A. The Holder of this Debenture is entitled, at its option, subject to
the following provisions of this Section 4, to convert all or a portion of this
Debenture into shares of Common Stock of the Company, $.01 par value per share
("Common Stock") of the Company at any time until
- ----------------------
(2) Insert the Maturity Date per fn 1.
(3) Insert Closing Date.
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the Maturity Date, at a conversion price for each share of Common Stock (the
"Conversion Rate") equal to the lower of
(x) the amount (which amount is subject to adjustment as hereinafter
provided; the "Fixed Conversion Price") which is equal to the greater of
(i) the Initial Market Price or (ii) $5.00 per share, or
(y) the Variable Conversion Price (as defined below).
B. For purposes of this Debenture, the following terms have the
meanings indicated below:
(i) "Market Price of the Common Stock" means the closing bid price
of the Common Stock for the period indicated in the relevant provision, as
reported by Bloomberg, LP or, if not so reported, as reported on the over-the-
counter market.
(ii) "Initial Market Price" means (x) one hundred twenty-five
percent (125%) of (y) the average Market Price of the Common Stock for the
fifteen (15) trading days ending on the trading day immediately before the
Initial Closing Date.
(iii) "Variable Conversion Price" means (x) ninety-two percent (92%)
of (y) the average of the two (2) lowest Market Price of the Common Stock during
the twenty (20) trading days immediately preceding the relevant Conversion Date
(as defined below), except that, to the extent any such trading day occurs prior
to the effectuation of a stock split or similar transaction occurring after the
date hereof and on or prior to the relevant Conversion Date, the Market Price of
the Common Stock used in determining the Variable Conversion Price will be
equitably adjusted to reflect such transaction.
C. Conversion shall be effectuated by surrendering the Debentures
to be converted to the Company or to the Company's transfer agent, American
Securities Transfer & Trust, Inc., accompanied by or preceded by facsimile or
other delivery to the Company of the form of conversion notice attached hereto
as Exhibit A, executed by the Holder of the Debenture evidencing such Holder's
intention to convert this Debenture or a specified portion hereof, and
accompanied, if required by the Company, by proper assignment hereof in blank.
Subject to the provisions of Section 2(E) hereof, interest accrued or accruing
from the date of issuance to the date of conversion shall, at the option of the
Company, be paid in cash or Common Stock upon conversion at the Conversion Rate
applicable to such conversion. No fractional shares of Common Stock or scrip
representing fractions of shares will be issued on conversion, but the number of
shares issuable shall be rounded to the nearest whole share. The date on which
notice of conversion is given (the "Conversion Date") shall be deemed to be the
date on which the Holder faxes or otherwise delivers the conversion notice
("Notice of Conversion"), substantially in the form annexed hereto as Exhibit A,
duly executed, to the Company, provided that the Holder shall deliver to the
Company's transfer agent or the Company the original Debentures being converted
within seven (7)
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business days thereafter (and if not so delivered with such time, the Conversion
Date shall be the date on which the later of the Notice of Conversion and the
original Debentures being converted is received by the Company). Facsimile
delivery of the Notice of Conversion shall be accepted by the Company at
facsimile number (852) 2764-3783; ATTN: Yu Chuan Yih, Chairman. Certificates
representing Common Stock upon conversion will be delivered within three (3)
business days from the date later of the Notice of Conversion is delivered to
the Company as contemplated in the first sentence of this paragraph C or the
original Debenture is delivered to the Company's transfer agent or the Company.
D. Notwithstanding any other provision hereof or of any of the other
Transaction Agreements, in no event (except (i) with respect to a Mandatory
Conversion or a Redemption Notice Conversion [as those terms are defined below],
(ii) as specifically provided in this Debenture as an exception to this
provision, or (iii) while there is outstanding a tender offer for any or all of
the shares of the Company's Common Stock) shall the Holder be entitled to
convert any Debenture or shall the Company have the obligation to convert all or
any portion of this Debenture (and the Company shall not have the right to pay
interest on this Debenture) to the extent that, after such conversion, the sum
of (1) the number of shares of Common Stock beneficially owned by the Holder and
its affiliates (other than shares of Common Stock which may be deemed
beneficially owned through the ownership of the unconverted portion of the
Debentures or unexercised portion of the Warrants), and (2) the number of shares
of Common Stock issuable upon the conversion of the Debentures or exercise of
the Warrants with respect to which the determination of this proviso is being
made, would result in beneficial ownership by the Holder and its affiliates of
more than 4.9% of the outstanding shares of Common Stock (after taking into
account the shares to be issued to the Holder upon such conversion or exercise).
For 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 (the "1934 Act"), except as otherwise provided
in clause (1) of such sentence. The Holder, by its acceptance of this
Debenture, further agrees that if the Holder transfers or assigns any of the
Debentures to a party who or which would not be considered such an affiliate,
such assignment shall be made subject to the transferee's or assignee's specific
agreement to be bound by the provisions of this Section 4(D) as if such
transferee or assignee were the original Holder hereof.
E. Anything herein to the contrary notwithstanding, in the event the
Company breaches the provisions of Section 4(g) of the Securities Purchase
Agreement, the Conversion Rate shall be amended to be equal to (i) 90% of (ii)
the Conversion Rate determined in accordance with the other provisions of this
Debenture without regard to this Section 4(E), and the Holder may require the
Company to immediately redeem the outstanding portion of this Debenture in
accordance with clause (y) of Section 6 hereof.
5. A. (i) Notwithstanding any other provision hereof to the contrary,
at any time prior to the Conversion Date, the Company shall have the right to
redeem (a "Redemption") all or any portion of the then outstanding principal
amount of the Debentures then held by the Holder in cash for an amount (the
"Redemption Amount") equal to one hundred twenty-four percent (124%)
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of the sum of the outstanding principal of such Debentures plus all accrued but
unpaid interest thereon through the date the Redemption Amount is paid to the
Holder (the "Redemption Payment Date").
(ii) If the Company elects to make a Redemption, the Company
shall give written notice thereof to the Holder (the "Notice of Redemption").
The Redemption Payment Date shall be the date which is twenty (20) business days
after the Holder's receipt of the Notice of Redemption. Anything in the other
provisions of this Debenture, including, but not limited to the preceding
provisions of this Section 5, to the contrary notwithstanding, with respect to
any Debentures for which a Notice of Redemption is given, the Holder shall have
the right, exercisable by giving a Notice of Conversion is submitted to the
Company within ten (10) business days of the Holder's receipt of the Company's
Notice of Redemption, to convert any or all of the Debentures sought to be
redeemed (a "Redemption Notice Conversion") and the Redemption Notice Conversion
shall take precedence over the redemption contemplated by the Notice of
Redemption. Such Debentures shall be converted in accordance with the terms
hereof.
(iii) The Redemption Amount shall, unless otherwise agreed to
in writing by the Holder after receiving the Notice of Redemption, be paid to
the Holder in cash.
(iv) In the event payment of the Redemption Amount is not
timely made, the Holder shall have the right, in the Holder's sole discretion,
to determine that (i) any rights of the Company to redeem outstanding Debentures
shall terminate, and/or (ii) the Notice of Redemption shall be null and void.
(B) Any Debentures not previously converted as of the Maturity Date
shall be deemed to be automatically converted, without further action of any
kind by the Company or any of its agents, employees or representatives, as of
the Maturity Date at the Conversion Rate applicable on the Maturity Date
("Mandatory Conversion").
6. The Holder recognizes that the Company may be limited in the number of
shares of Common Stock it may issue by (X) reason of its authorized shares, or
(Y) the applicable rules and regulations of the principal securities market on
which the Common Stock is listed or traded (collectively, the"Cap Regulations").
Without limiting the other provisions hereof, (i) the Company will take all
steps reasonably necessary to be in a position to issue shares of Common Stock
on conversion of the Debentures without violating the Cap Regulations and (ii)
if, despite taking such steps, the Company still can not issue such shares of
Common Stock without violating the Cap Regulations, the Holder of this Debenture
(to the extent the same can not be converted in compliance with the Cap
Regulations (an "Unconverted Debenture"), shall have the option, exercisable in
the Holder's sole and absolute discretion, to elect any one of the following
remedies:
(x) if permitted by the Cap Regulations, require the Company to issue
shares of Common Stock in accordance with such Holder's Notice of
Conversion relating to the Unconverted Debenture at a conversion purchase
price equal to the average of
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the closing bid price per share of Common Stock for any five (5)
consecutive trading days (subject to the equitable adjustments for certain
events occurring during such period as provided in this Debenture) during
the sixty (60) trading days immediately preceding the date of the Notice of
Conversion; or
(y) require the Company to redeem each Unconverted Debenture for an
amount (the _Redemption Amount_), payable in cash, equal to the sum of (i)
one hundred twenty-four percent (124%) of the principal of an Unconverted
Debenture, plus (ii) any accrued but unpaid interest thereon through and
including the date (the _Redemption Date_) on which the Redemption Amount
is paid to the Holder.
The holder of an Unconverted Debenture may elect one of the above remedies with
respect to a portion of such Unconverted Debenture and the other remedy with
respect to other portions of the Unconverted Debenture.
7. Subject to the terms of the Securities Purchase Agreement, 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 and all other Debentures now or hereafter issued of
similar terms are direct obligations of the Company.
8. No recourse shall be had for the payment of the principal of, or the
interest on, this Debenture, or for any claim based hereon, or otherwise in
respect hereof, against any incorporator, shareholder, officer or director, as
such, past, present or future, of the Company or any successor corporation,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issue hereof,
expressly waived and released.
9. 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 may prepay all outstanding
principal and accrued interest on this Debenture by paying the Redemption Amount
contemplated by Section 5(A) hereof, less all amounts required by law to be
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deducted, upon which tender of payment following such notice, the right of
conversion shall terminate.
10. If, for any reason, prior to the Conversion Date or the Redemption
Payment Date, the Company spins off or otherwise divests itself of a part of its
business or operations or disposes all or of a part of its assets in a
transaction (the "Spin Off") in which the Company does not receive compensation
for such business, operations or assets, but causes securities of another entity
(the "Spin Off Securities") to be issued to security holders of the Company,
then the Company shall cause (i) to be reserved Spin Off Securities equal to the
number thereof which would have been issued to the Holder had all of the
Holder's Debentures outstanding on the record date (the "Record Date") for
determining the amount and number of Spin Off Securities to be issued to
security holders of the Company (the "Outstanding Debentures") been converted as
of the close of business on the trading day immediately before the Record Date
(the "Reserved Spin Off Shares"), and (ii) to be issued to the Holder on the
conversion of all or any of the Outstanding Debentures, such amount of the
Reserved Spin Off Shares equal to (x) the Reserved Spin Off Shares multiplied by
(y) a fraction, of which (I) the numerator is the principal amount of the
Outstanding Debentures then being converted, and (II) the denominator is the
principal amount of the Outstanding Debentures.
11. If, at any time while any portion of this Debenture remains
outstanding, the Company effectuates a stock split or reverse stock split of
its Common Stock or issues a dividend on its Common Stock consisting of shares
of Common Stock, the Fixed Conversion Price shall be equitably adjusted to
reflect such action. By way of illustration, and not in limitation, of the
foregoing, (i) if the Company effectuates a 2:1 split of its Common Stock,
thereafter, with respect to any conversion for which the Company issues the
shares after the record date of such split, the Fixed Conversion Price shall be
deemed to be one-half of what it had been calculated to be immediately prior to
such split; (ii) if the Company effectuates a 1:10 reverse split of its Common
Stock, thereafter, with respect to any conversion for which the Company issues
the shares after the record date of such reverse split, the Fixed Conversion
Price shall be deemed to be ten times what it had been calculated to be
immediately prior to such reverse split; and (iii) if the Company declares a
stock dividend of one share of Common Stock for every 10 shares outstanding,
thereafter, with respect to any conversion for which the Company issues the
shares after the record date of such dividend, the Fixed Conversion Price shall
be deemed to be the amount of such Fixed Conversion Price calculated immediately
prior to such record date multiplied by a fraction, of which the numerator is
the number of shares (10) for which a dividend share will be issued and the
denominator is such number of shares plus the dividend share(s) issuable or
issued thereon (11).
12. All payments contemplated hereby to be made "in cash" shall be made in
immediately available good funds in such coin or currency of the United States
of America as at the time of payment is legal tender for payment of public and
private debts. All payments of cash and each delivery of shares of Common Stock
issuable to the Holder as contemplated hereby shall be made to the Holder at
the address last appearing on the Debenture Register of the Company as
designated in writing by the Holder from time to time; except that the Holder
can designate, by
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notice to the Company, a different delivery address for any one or more specific
payments or deliveries.
13. 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.
14. 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 objection, including
any objection based on forum non coveniens, to the bringing of any such
proceeding in such jurisdictions. To the extent determined by such court, the
Company shall reimburse the Holder for any reasonable legal fees and
disbursements incurred by the Holder in enforcement of or protection of any of
its rights under any of this Debenture.
15. 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 representations or warranties made by the Company
herein, in the Securities Purchase Agreement, the Registration
Rights Agreement or in any certificate or financial or other
written statements heretofore or hereafter furnished by the
Company in connection with the execution and delivery of this
Debenture or the Securities 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 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 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 on 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
Securities Purchase Agreement or the Registration Rights
Agreement and such legend removal is otherwise lawful, and any
such failure
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shall continue uncured for five (5) business days after written
notice from the Holder of such failure; or
d. The Company shall fail to perform or observe, in any material
respect, any other covenant, term, provision, condition,
agreement or obligation of any Debenture in this series 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 fail to perform or observe, in any material
respect, any covenant, term, provision, condition, agreement or
obligation of the Company under the Securities Purchase Agreement
or the Registration Rights Agreement and such failure shall
continue uncured for a period of thirty (30) days after written
notice from the Holder of such failure (other than a failure to
cause the Registration Statement to become effective no later
than the Required Effective Date, as defined and provided in the
Registration Rights Agreement, as to which no such cure period
shall apply); or
f. 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
g. 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
h. 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
i. Any money judgment, writ or warrant of attachment, or similar
process in excess of Two Hundred Thousand ($200,000) 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
j. 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
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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; or
k. The Company shall have its Common Stock suspended or delisted
from an exchange or over-the-counter market from trading for in
excess of five (5) trading days.
Then, or at any time thereafter, and in each and every such case, unless such
Event of Default shall have been waived in writing by the Holder (which waiver
shall not be deemed to be a waiver of any subsequent default) at the option of
the Holder and in the Holder's sole discretion, the Holder may consider this
Debenture immediately due and payable, without presentment, demand, protest or
notice of any kinds, all of which are hereby expressly waived, anything herein
or in any note or other instruments contained to the contrary notwithstanding,
and the Holder may immediately enforce any and all of the Holder's rights and
remedies provided herein or any other rights or remedies afforded by law.
16. 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 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.
17. In the event for any reason, any payment by or act of the Company or
the Holder shall result in payment of interest which would exceed the limit
authorized by or be in violation of the law of the jurisdiction applicable to
this Debenture, then ipso facto the obligation of the Company to pay interest or
perform such act or requirement shall be reduced to the limit authorized under
such law, so that in no event shall the Company be obligated to pay any such
interest, perform any such act or be bound by any requirement which would result
in the payment of interest in excess of the limit so authorized. In the event
any payment by or act of the Company shall result in the extraction of a rate of
interest in excess of a sum which is lawfully collectible as interest, then such
amount (to the extent of such excess not returned to the Company) shall, without
further agreement or notice between or by the Company or the Holder, be deemed
applied to the payment of principal, if any, hereunder immediately upon receipt
of such excess funds by the Holder, with the same force and effect as though the
Company had specifically designated such sums to be so applied to principal and
the Holder had agreed to accept such sums as an interest-free prepayment of this
Debenture. If any part of such excess remains after the principal has been paid
in full, whether by the provisions of the preceding sentences of this Section 17
or otherwise, such excess shall be deemed to be an interest-free loan from the
Company to the Holder, which loan shall be payable immediately upon demand by
the Company. The provisions of this Section 17 shall control every other
provision 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: ____________________, 1999
LJ INTERNATIONAL INC.
By: /s/ Yu Chuan Yih
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Yu Chuan Yih
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(Print Name)
President
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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 LJ INTERNATIONAL INC. (the "Company") according to the conditions hereof, as
of the date written below.
Conversion Date*
___________________________________________________________________
Applicable Conversion Price
___________________________________________________________
Signature
____________________________________________________________________________
[Name]
Address:
____________________________________________________________________________
_____________________________________________________________________________
* This original Debenture must be received by the Company or its transfer agent
by the seventh business date following the Conversion Date.
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