1
AMENDED AND RESTATED DEBENTURE
$7,050,000 As of April 15, 1999
FOR VALUE RECEIVED, on or before June 30, 2000 ("Maturity Date"), the
undersigned (hereinafter referred to as "Borrower"), promises to pay to the
order of INFINITY INVESTORS LIMITED ("Lender") at its account set forth on
Exhibit A hereto (as such account may be changed from time to time by written
notice from Lender to Borrower, the principal amount of SEVEN MILLION FIFTY
THOUSAND and 00/100 DOLLARS ($7,050,000) ("Total Principal Amount"), or such
amount less than the Total Principal Amount which is outstanding from time to
time if the total amount outstanding under this Debenture ("Debenture") is less
than the Total Principal Amount, together with interest on such portion of the
Total Principal Amount which has been advanced to Borrower from the date
advanced until paid at a fixed rate per annum equal to the lesser of (a) the
Maximum Rate (as hereinafter defined) or (b) eight percent (8%), calculated on
the basis of actual days elapsed but computed as if each year consisted of 360
days. The term "Maximum Rate," as used herein, shall mean at the particular time
in question the maximum rate of interest, if any, which, under applicable law,
may then be charged on this Debenture. If such maximum rate of interest changes
after the date hereof and this Debenture provides for a fluctuating rate of
interest, the Maximum Rate shall be automatically increased or decreased, as the
case may be, without notice to Borrower from time to time as of the effective
date of each change in such maximum rate. If applicable law ceases to provide
for such a maximum rate of interest, the Maximum Rate shall be equal to eighteen
percent (18%) per annum.
This Debenture (i) has been executed and delivered pursuant to that
certain Securities Purchase Agreement dated as of June 11, 1998 among Borrower,
Lender, Kerry Rogers, Jack Higgins and Bob Michaels, which has been amended by
the letter agreement (the "Letter Agreement") dated the date hereof (as so
amended and as the same may otherwise be amended, the "Securities Purchase
Agreement") among Borrower, Lender and the other parties thereto and (ii) amends
and restates, but does not extinguish, the Original Debentures (as such term is
defined in the Letter Agreement). All of the priorities of the rights, remedies,
liens, equities, powers and privileges securing the payment of the indebtedness
hereby amended, restated and increased are hereby recognized, renewed, extended
and preserved in full to secure payment of this Debenture. This Debenture is
secured by, inter alia, the Security Agreement (as such term is defined in the
Securities Purchase Agreement).
This Debenture, the Securities Purchase Agreement, the Security
Agreement, the Letter Agreement, the Related Agreements (as such term is defined
in the Securities Purchase Agreement) and all other documents evidencing,
securing, governing, guaranteeing and/or pertaining to this Debenture are
hereinafter collectively referred to as the "Loan Documents." The holder of this
Debenture is entitled to the benefits and security provided in the Loan
Documents.
The principal of and all accrued but unpaid interest on this Debenture
shall be due and payable as follows:
(a) interest shall be due and payable monthly as it accrues,
commencing on the last day of April, 1999, and continuing on the last
day of each successive month thereafter during the term of this
Debenture;
(b) he remaining principal of the Debenture shall be due and
payable as follows, in each case on the last day of the applicable
month:
AMENDED AND RESTATED DEBENTURE - PAGE 1
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LAST DAY OF
APPLICABLE MONTH REQUIRED PAYMENT PER MONTH
April 1999 $ 50,000
May 1999 $ 50,000
June 1999 $100,000
July 1999 $100,000
August 1999 $100,000
September 1999 $150,000
October 1999 $150,000
November 1999 $200,000
December 1999 $250,000
January 2000 $250,000
February 2000 $250,000
March 2000 $250,000
April 2000 $250,000
May 2000 $250,000
June 2000 Remainder ($4,650,000 assuming all prior monthly
payments are timely made)
(d) in addition to the payments pursuant to subsection (b)
above, Borrower shall, on the last day of each calendar month, prepay
all or a portion of the principal balance of this Debenture from all
Available Cash Flow of Borrower as of the last day of the immediately
preceding month. As used herein, Available Cash Flow means the amount
of cash on hand on such last day of such month and received by Borrower
from any source (including, without limitation, debt and equity
financings and asset sales), less the accrued expenses of Borrower, any
approved budgeted capital expenditures of Borrower, any principal and
interest payments on indebtedness of Borrower and a reserve maintained
in an amount determined by Borrower's Board of Directors, considering
current needs for operating capital and prudent reserves for future
operating capital (Borrower shall deliver to Lender, with each
financial statement required to be delivered by it to Lender under
Section 9(b) of the Purchase Agreement, a schedule in form satisfactory
to Lender of Available Cash Flow for the immediately preceding month);
and
(e) if not sooner paid pursuant to the terms of this
Debenture, the remaining outstanding principal balance of this
Debenture, together with all accrued but unpaid interest, shall be due
and payable on the Maturity Date.
If a payment is ten (10) or more days late, Borrower will pay a
delinquency charge in an amount equal to the greater of (i) 5.0% of the amount
of the delinquent payment up to the maximum amount of $250.00, or (ii) $25.00.
Upon an Event of Default, including failure to pay upon final maturity, Lender,
at its option, may also, if permitted under applicable law, do one or both of
the following: (a) increase the interest rate provided for herein by three
(3.00) percentage points and (b) add any unpaid accrued interest to principal
and such sum will bear interest therefrom until paid at the rate provided in
this Debenture.
Borrower may from time to time prepay all or any portion of the
principal of this Debenture without premium or penalty. Unless otherwise agreed
to in writing, or otherwise required by applicable law, payments will be applied
first to unpaid accrued interest, then to principal, and any remaining amount to
any unpaid collection costs, delinquency charges and other charges; provided,
however, upon delinquency or other Event of Default, Lender reserves the right
to apply payments among principal, interest, delinquency charges, collection
costs and other charges, at its discretion. All prepayments shall be applied to
the indebtedness owing hereunder in such order and manner as Lender may from
time to time determine in its sole discretion. All payments and prepayments of
principal of or interest on this Debenture shall be made in lawful money of the
United States of America in immediately available funds, at the address of
Lender indicated above, or such other place as the holder of this Debenture
shall designate in writing to Borrower. If any payment of principal of or
interest on this Debenture shall become due on a day which is not a Business Day
(as hereinafter defined), such payment shall be made on the next succeeding
Business Day and any such extension of time shall be included in computing
interest in connection with such payment. As used herein, the term "Business
Day" shall mean any day other than a Saturday, Sunday or any other day on which
national banking associations are authorized to be closed. The books and records
of Lender shall be prima facie evidence of all outstanding principal of and
accrued and unpaid interest on this Debenture.
AMENDED AND RESTATED DEBENTURE - PAGE 2
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Borrower agrees that no advances under this Debenture shall be used for
personal, family or household purposes, and that all advances hereunder shall be
used solely for business, commercial, investment or other similar purposes.
Borrower agrees that upon the occurrence of any one or more of the
following events of default ("Event of Default"):
(a) failure of Borrower to pay when due all or any part of the
principal on this Debenture, any other debenture issued pursuant to the
terms of the Securities Purchase Agreement or the February Debenture
(as such term is defined in the Letter Agreement);
(b) failure of Borrower to pay (i) within five (5) Business
Days of the due date thereof any interest on this Debenture, or any
other debenture issued pursuant to the terms of the Securities Purchase
Agreement or the February Debenture or (ii) within five (5) Business
Days following the delivery of notice to Borrower of any fees or any
other amount payable (not otherwise referred to in (a) above or this
clause (b)) by Borrower under this Debenture or any other debenture
issued pursuant to the terms of the Securities Purchase Agreement;
(c) any representation, warranty, certification or statement
made by Borrower in the Letter Agreement, the Securities Purchase
Agreement or any Related Agreement (as such term is defined in the
Securities Purchase Agreement) or which is contained in any
certificate, document or financial or other statement furnished at any
time under or in connection with the Securities Purchase Agreement or
any Related Agreement shall prove to have been untrue in any material
respect when made;
(d) failure on the part of Borrower or any Founder to observe
or perform any of the covenants or agreement contained in Section 10 of
the Securities Purchase Agreement (Negative Covenants);
(e) failure on the part of Borrower or any Founder to observe
or perform any covenant or agreement contained in the Letter Agreement,
the Securities Purchase Agreement (including without limitation the
Affirmative Covenants contained in Section 9 thereof) or any Related
Document (other than those covered by clauses (a) through (d) above),
which failure is not cured within thirty (30) days of such failure;
(f) any of the Founders (as such term is defined in the
Securities Purchase Agreement) shall fail to perform, in any material
respect, any of their respective obligations under, or shall have
breached any material item of, the Letter Agreement, the Securities
Purchase Agreement or any Related Agreement;
(g) Borrower or any Subsidiary (as such term is defined in the
Securities Purchase Agreement) has commenced a voluntary case or other
proceeding seeking liquidation, winding-up, reorganization or other
relief with respect to itself or its debts under any bankruptcy,
insolvency, moratorium or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator,
custodian or other similar official of it or any substantial part of
its property, or has consented to any such relief or to the appointment
of or taking possession by any such official in an involuntary case or
other proceeding commenced against it, or has made a general assignment
for the benefit of creditors, or has failed generally to pay its debts
as they become due, or has taken any corporate action to authorize any
of the foregoing;
(h) an involuntary case or other proceeding has been commenced
against Borrower or any Subsidiary, seeking liquidation, winding-up,
reorganization or other relief with respect to it or its debts under
any bankruptcy, insolvency, moratorium or other similar law now or
hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed
AMENDED AND RESTATED DEBENTURE - PAGE 3
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for a period of 60 days, or an order for relief has been entered
against Borrower or any Subsidiary under the federal bankruptcy laws as
now or hereafter in effect; or
(i) judgments or orders for the payment of money which in the
aggregate at any one time exceed $250,000 and are not covered by
insurance have been rendered against Borrower or any Subsidiary by a
court of competent jurisdiction and such judgments or orders shall
continue unsatisfied and unstayed for a period of 60 days,
the holder of this Debenture may, at its option, without further notice or
demand, (i) declare the outstanding principal balance of and accrued but unpaid
interest on this Debenture at once due and payable, (ii) refuse to advance any
additional amounts under this Debenture, (iii) foreclose all liens securing
payment hereof, (iv) pursue any and all other rights, remedies and recourses
available to the holder hereof, including but not limited to any such rights,
remedies or recourses under the Related Agreements and Loan Documents, at law or
in equity, or (v) pursue any combination of the foregoing.
The failure to exercise the option to accelerate the maturity of this
Debenture or any other right, remedy or recourse available to the holder hereof
upon the occurrence of an Event of Default hereunder shall not constitute a
waiver of the right of the holder of this Debenture to exercise the same at that
time or at any subsequent time with respect to such Event of Default or any
other Event of Default. The rights, remedies and recourses of the holder hereof,
as provided in this Debenture and in any of the other Loan Documents, shall be
cumulative and concurrent and may be pursued separately, successively or
together as often as occasion therefore shall arise, at the sole discretion of
the holder hereof. The acceptance by the holder hereof of any payment under this
Debenture which is less than the payment in full of all amounts due and payable
at the time of such payment shall not (i) constitute a waiver of or impair,
reduce, release or extinguish any right, remedy or recourse of the holder
hereof, or nullify any prior exercise of any such right, remedy or recourse, or
(ii) impair, reduce, release or extinguish the obligations of any party liable
under any of the Loan Documents as originally provided herein or therein.
This Debenture and all of the other Loan Documents and Related
Agreements are intended to be performed in accordance with, and only to the
extent permitted by, all applicable usury laws. If any provision hereof or of
any of the other Loan Documents or Related Agreements or the application thereof
to any person or circumstance shall, for any reason and to any extent, be
invalid or unenforceable, neither the application of such provision to any other
person or circumstance nor the remainder of the instrument in which such
provision is contained shall be affected thereby and shall be enforced to the
greatest extent permitted by law. It is expressly stipulated and agreed to be
the intent of the holder hereof to at all times comply with the usury and other
applicable laws now or hereafter governing the interest payable on the
indebtedness evidenced by this Debenture. If the applicable law is ever revised,
repealed or judicially interpreted so as to render usurious any amount called
for under this Debenture or under any of the other Loan Documents, or contracted
for, charged, taken, reserved or received with respect to the indebtedness
evidenced by this Debenture, or if Lender's exercise of the option to accelerate
the maturity of this Debenture, or if any prepayment by Borrower results in
Borrower having paid any interest in excess of that permitted by law, then it is
the express intent of Borrower and Lender that all excess amounts theretofore
collected by Lender be credited on the principal balance of this Debenture (or,
if this Debenture and all other indebtedness arising under or pursuant to the
other Loan Documents have been paid in full, refunded to Borrower), and the
provisions of this Debenture and the other Loan Documents and Related Documents
immediately be deemed reformed and the amounts thereafter collectable hereunder
and thereunder reduced, without the necessity of the execution of any new
document, so as to comply with the then applicable law, but so as to permit the
recovery of the fullest amount otherwise called for hereunder or thereunder. All
sums paid, or agreed to be paid, by Borrower for the use, forbearance,
detention, taking, charging, receiving or reserving of the indebtedness of
Borrower to Lender under this Debenture or arising under or pursuant to the
other Loan Documents and Related Agreements shall, to the maximum extent
permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full term of such indebtedness until payment in full so that the
rate or amount of interest on account of such indebtedness does not exceed the
usury ceiling from time to time in effect and applicable to such indebtedness
for so long as such indebtedness is outstanding. Notwithstanding anything to the
contrary contained herein or in any of the other Loan Documents and Related
Agreements, it is not the intention of Lender to accelerate the maturity of any
interest that has not accrued at the time of such acceleration or to collect
unearned interest at the time of such acceleration.
AMENDED AND RESTATED DEBENTURE - PAGE 4
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If this Debenture is placed in the hands of an attorney for collection,
or is collected in whole or in part by suit or through probate, bankruptcy or
other legal proceedings of any kind, Borrower agrees to pay, in addition to all
other sums payable hereunder, all costs and expenses of collection, including
but not limited to reasonable attorneys' fees.
Borrower and any and all endorsers and guarantors of this Debenture
severally waive presentment for payment, notice of nonpayment, protest, demand,
notice of protest, notice of intent to accelerate, notice of acceleration and
dishonor, diligence in enforcement and indulgences of every kind and without
further notice hereby agree to renewals, extensions, exchanges or releases of
collateral, taking of additional collateral, indulgences or partial payments,
either before or after maturity.
Any and all payments by Borrower hereunder to any holder of this
Debenture and each "qualified assignee" thereof shall be made free and clear of
and without deduction or withholding for any and all present or future taxes,
levies, imposts, deductions, charges or withholdings, and all liabilities with
respect thereto (all such taxes, levies, imposts, deductions, charges,
withholdings and liabilities being hereinafter referred to as "Taxes") unless
such Taxes are required by law or the administration thereof to be deducted or
withheld. If Borrower shall be required by law or the administration thereof to
deduct or withhold any Taxes from or in respect of any sum payable with respect
to this Debenture (i) the sum payable shall be increased as may be necessary so
that after making all required deductions or withholdings (including deductions
or withholdings applicable to additional amounts paid under this paragraph) such
holder of this Debenture receives an amount equal to the sum it would have
received if no such deduction or withholding had been made; (ii) Borrower shall
make such deductions or withholdings; and (iii) Borrower shall forthwith pay the
full amount deducted or withheld to the relevant taxation or other authority in
accordance with applicable law. A "qualified assignee" of a holder of this
Debenture is a person that is organized under the laws of (I) the United States
or (II) any jurisdiction other than the United States or any political
subdivision thereof and that (y) represents and warrants to Borrower that
payments of Borrower to such assignee under applicable law would not be subject
to any Taxes and (z) from time to time, as and when requested by Borrower,
executes and delivers to Borrower and the Internal Revenue Service forms, and
provides Borrower with any information, necessary to establish such assignee's
continued exemption from Taxes under applicable law. Borrower shall forthwith
pay any present or future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies (all such taxes, charges and levies
hereinafter referred to as "Other Taxes") which arise from any payment made
under this Debenture or the transactions contemplated hereby. Borrower shall
indemnify each holder of this Debenture, or qualified assignee, for the full
amount of Taxes or Other Taxes (including, without limitation, any Taxes or
Other Taxes imposed by any jurisdiction on amounts payable under this paragraph)
paid by each holder of this Debenture, or qualified assignee, and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally
asserted. Payment under this indemnification shall be made within 30 days from
the date such holder of this Debenture or assignee makes written demand
therefor. A certificate as to the amount of such Taxes or Other Taxes submitted
to Borrower by such holder of this Debenture or assignee shall be conclusive
evidence of the amount due from Borrower to such party. Within 30 days after the
date of any payment of Taxes, Borrower will furnish to each holder of this
Debenture the original or a certified copy of a receipt evidencing payment
thereof.
[SIGNATURE PAGE FOLLOWS]
AMENDED AND RESTATED DEBENTURE - PAGE 5
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THIS DEBENTURE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF
THE STATE OF NEVADA AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SAID STATE.
BORROWER:
ORIX GLOBAL COMMUNICATIONS, INC.
By:
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Name:
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Title:
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AMENDED AND RESTATED DEBENTURE - PAGE 6
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EXHIBIT A
PAYMENT ACCOUNT INFORMATION