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NEITHER THIS DEBENTURE NOR THE SECURITIES INTO WHICH THIS DEBENTURE IS
CONVERTIBLE (COLLECTIVELY, THE "SECURITIES") HAVE BEEN REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION") OR THE
SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES
ACT"), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN
EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN
AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE
SECURITIES LAWS AS EVIDENCED BY A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO
SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE
COMPANY. THESE SECURITIES AND THE SECURITIES ISSUABLE UPON CONVERSION OF THESE
SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER
LOAN SECURED BY SUCH SECURITIES.
9% CONVERTIBLE DEBENTURE
FOOTHILLS RESOURCES, INC.
DUE MARCH , 2009
Original Issue Date_________ US$________
This Debenture is one of a series of duly authorized and issued
convertible debentures of Foothills Resources, Inc., a Nevada corporation (the
"Company") designated its 9% Convertible Debentures due March __, 2009 (the
"Debenture") issued to __________ (together with its permitted successors and
assigns, the "Holder") pursuant to exemptions from registration under the
Securities Act of 1933, as amended, pursuant to a Securities Purchase Agreement,
dated March ____, 2006 (the "Securities Purchase Agreement") among the Company
and the Holder.
ARTICLE I.
Section 1.01 Principal and Interest. For value received, the Company
hereby promises to pay to the order of the Holder, in lawful money of the
United States of America and in immediately available funds the principal sum
of ___________________.
(a) Interest shall accrue on the unpaid principal balance of the Debenture at
the rate of nine percent (9%) per year (compounded monthly) commencing 120 days
from the Original Issue Date until March ___ , 2009 (the "Maturity Date").
Interest shall be calculated on the basis of a 360-day year.
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(b) Commencing 150 days from the Original Issue Date, the Company shall pay the
Holder equal monthly installments of principal, together with accrued interest
as aforesaid. Thereafter, on the first business day of each month through and
including the month in which the Maturity Date occurs, the Company shall pay
such monthly installments of principal and interest. On the Maturity Date, the
entire unpaid principal amount and all accrued and unpaid interest shall be paid
to the Holder on the Maturity Date, unless this Debenture is converted in
accordance with Section 1.02 herein.
(c) Except as otherwise set forth in this Debenture, the Company may not prepay
any portion of the principal amount of this Debenture without the prior written
consent of the Holder.
Section 1.02 Conversion.
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(a) Optional Conversion. From and after the earlier of (i) August 24, 2006, or
(ii) seventy (70) days following the date on which the Company and Brasada
California, Inc., a Delaware corporation ("Brasada") mutually agree to
terminate, or otherwise abandon (each, a "Merger Termination") their
negotiations regarding a proposed reverse triangular merger (as more
particularly described in the Company's Current Report on Form 8-K filed with
the Commission on February 17, 2006, the "Merger"), the Holder shall be
entitled, at its option, to convert, at any time and from time to time, until
payment in full of this Debenture, all or any part of the principal amount of
the Debenture, plus accrued and unpaid interest thereon, into units ("Units") of
the Company's securities, at a price (the "Conversion Price") of $0.70 per Unit.
Each Unit shall consist of one share (the "Conversion Shares") of the Company's
common stock, par value $.001 per share (the "Common Stock"), and three quarters
(3/4) of a common stock purchase warrant (the "Warrants"). Each whole Warrant
shall entitle the holder to purchase one share of Common Stock (the "Warrant
Shares") at an exercise price (the "Exercise Price") of $1.00 per share, and
shall be exercisable for a period of five years from issuance. No fraction of
shares 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 number of Units issuable upon a conversion hereunder shall be determined by
the quotient obtained by dividing (x) the outstanding principal amount of this
Debenture, plus accrued and unpaid interest thereon, to be converted as set
forth in the applicable Conversion Notice by (y) the Conversion Price. To
convert this Debenture, the Holder hereof shall deliver written notice thereof,
substantially in the form of Exhibit A to this Debenture, with appropriate
insertions (the "Conversion Notice"), to the Escrow Agent (as defined in the
Securities Purchase Agreement) and the Company at its address as set forth
herein. The date upon which the conversion shall be effective (the "Conversion
Date") shall be deemed to be the date set forth in the Conversion Notice. Except
as otherwise provided herein, the Company shall not have the right to object to
the conversion or the calculation of the applicable conversion price, absent
manifest error and the Escrow Agent shall release the shares of Common Stock
from escrow one business day after providing the Company written notice of the
conversion. Any conversion of any portion of the Debenture to Common Stock shall
be deemed to be a pre-payment of principal plus accrued and unpaid interest,
without any penalty, and shall be credited against any future payments of
principal and interest in the order that such payments become due and payable.
The Company undertakes to provide the Holder with prompt notification of a
Merger Termination.
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(b) Mandatory Conversion. Simultaneously with the closing of (i) the Merger and
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(ii) a private placement offering (the "PPO") by the Company of Units, this
Debenture will automatically convert as to all unpaid principal, plus accrued
interest, if any, into Units at the Conversion Price. The Company shall afford
the Holder the opportunity to become a party to all agreements and instruments
executed by the investors in the PPO, including, but not limited to, a
registration rights agreement (the "Registration Rights Agreement"). The
Registration Rights Agreement shall, among other things, register the Conversion
Shares and the Warrant Shares under the Securities Act.
Section 1.03 Reservation of Common Stock. As set forth in Section 4(e) of the
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Securities Purchase Agreement, the Company shall reserve and keep available out
of its authorized but unissued shares of Common Stock, solely for the purpose of
effecting the conversion of this Debenture and the exercise of the Warrants,
that number of shares of Common Stock equal to the sum of (i) the number of
shares of Common Stock into which the Debenture is convertible from time to time
based upon the Conversion Price, plus (ii) the number of shares of Common Stock
for which the Warrants are exercisable from time to time based upon the Exercise
Price.
Section 1.04 Absolute Obligation/Ranking. Except as expressly provided herein,
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no provision of this Debenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the principal of, interest
and liquidated damages (if any) on, this Debenture at the time, place, and rate,
and in the coin or currency, herein prescribed. This Debenture is a direct debt
obligation of the Company. This Debenture ranks pari passu with all other
Debentures now or hereinafter issued pursuant to the Securities Purchase
Agreement.
Section 1.05 Paying Agent and Registrar. Initially, the Company will act as
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paying agent and registrar. The Company may change any paying agent, registrar,
or Company-registrar by giving the Holder not less than ten (10) business days'
written notice of its election to do so, specifying the name, address, telephone
number and facsimile number of the paying agent or registrar. The Company may
act in any such capacity.
Section 1.06 Different Denominations. This Debenture is exchangeable for an
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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 of transfer or exchange.
Section 1.07 Investment Representations. This Debenture has been issued subject
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to certain investment representations of the original Holder set forth in the
Securities Purchase Agreement and may be transferred or exchanged only in
compliance with the Securities Purchase Agreement and applicable federal and
state securities laws and regulations.
Section 1.08 Reliance on Debenture Register. Prior to due presentment to the
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Company for transfer or conversion 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 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 is overdue, and neither the Company nor any such agent shall be
affected by notice to the contrary.
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ARTICLE II.
Section 2.01 Amendments and Waiver of Default. The Debenture may not be amended
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without the consent of the Holder. Notwithstanding the above, without the
consent of the Holder, the Debenture may be amended to cure any ambiguity,
defect or inconsistency or to make any change that does not adversely affect the
rights of the Holder.
ARTICLE III.
Section 3.01 Events of Default. Each of the following events shall
constitute a default under this Agreement (each an "Event of Default"):
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(a) failure by the Company to pay principal amount or
interest due hereunder within ten (10) days of the date such payment is due;
(b) failure by the Company's transfer agent to issue Common
Stock to the Holder within five (5) days of the Company's receipt of the
attached Conversion Notice from Holder in accordance with the Securities
Purchase Agreement;
(c) failure by the Company for ten (10) days after notice
to it to comply with any of its other agreements in the Debenture;
(d) the Company shall: (1) make a general assignment for the
benefit of its creditors; (2) apply for or consent to the appointment of a
receiver, trustee, assignee, custodian, sequestrator, liquidator or similar
official for itself or any of its assets and properties; (3) commence a
voluntary case for relief as a debtor under the United States Bankruptcy Code;
(4) file with or otherwise submit to any governmental authority any petition,
answer or other document seeking: (A) reorganization, (B) an arrangement with
creditors or (C) to take advantage of any other present or future applicable law
respecting bankruptcy, reorganization, insolvency, readjustment of debts, relief
of debtors, dissolution or liquidation; (5) file or otherwise submit any answer
or other document admitting or failing to contest the material allegations of a
petition or other document filed or otherwise submitted against it in any
proceeding under any such applicable law, or (6) be adjudicated a bankrupt or
insolvent by a court of competent jurisdiction;
(e) any case, proceeding or other action shall be
commenced against the Company for the purpose of effecting, or an order,
judgment or decree shall be entered by any court of competent jurisdiction
approving (in whole or in part) anything specified in Section 3.01(d) hereof, or
any receiver, trustee, assignee, custodian, sequestrator, liquidator or other
official shall be appointed with respect to the Company, or shall be appointed
to take or shall otherwise acquire possession or control of all or a substantial
part of the assets and properties of the Company, and any of the foregoing shall
continue unstayed and in effect for any period of sixty (60) days;
(f) any material obligation of the Company for the payment
of borrowed money is not paid when due or within any applicable grace period,
or such obligation becomes or is declared to be due and payable before the
expressed maturity of the obligation, or there shall have occurred an event
that, with the giving of notice or lapse of time, or both, would cause any such
obligation to become, or allow any such obligation to be declared to be,
due and payable before the expressed maturity date of the obligation;
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(g) a breach by the Company of any material contract
that would have a Material Adverse Effect (as defined in the Securities
Purchase Agreement);
(h) the Common Stock shall not be eligible for quotation
on or quoted for trading on the OTC Bulletin Board and shall not again be
eligible for and quoted for trading thereon within five (5) trading days; or
(i) any default, whether in whole or in part, shall
occur in the due observance or performance of any obligations or other
covenants, terms or provisions to be performed under the Securities Purchase
Agreement which is not cured by the Company within ten (10) days after receipt
of written notice thereof.
If any Event of Default occurs, the full principal amount of this
Debenture, together with interest and other amounts owing in respect thereof, to
the date of acceleration shall become, at the Holder's election, immediately due
and payable in cash. Commencing five (5) days after the occurrence of any Event
of Default that results in the eventual acceleration of this Debenture, the
interest rate on this Debenture shall accrue at the rate of 18% per annum, or
such lower maximum amount of interest permitted to be charged under applicable
law. All Debentures for which the full amount hereunder shall have been paid in
accordance herewith shall promptly be surrendered to or as directed by the
Company. The Holder need not provide and the Company hereby waives any
presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law. Such declaration may be rescinded and annulled by Holder at any
time prior to payment hereunder and the Holder shall have all rights as a
Debenture holder until such time, if any, as the full payment under this Section
shall have been received by it. No such rescission or annulment shall affect any
subsequent Event of Default or impair any right consequent thereon.
ARTICLE IV.
Section 4.01 Re-issuance of Debenture. When the Holder elects to convert a part
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of the Debenture, then the Company shall reissue a new Debenture in the same
form as this Debenture to reflect the new principal amount and the Holder shall
return the Debenture to the Company for cancellation.
ARTICLE V.
Section 5.01 Anti-dilution. Adjustment of Conversion Price.
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The Conversion Price shall be adjusted from time to time as follows:
(a) Adjustment of Conversion Price and Number of Shares upon Issuance of Common
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Stock. If at any time after the Original Issue Date, the Company issues or
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sells, or is deemed to have issued or sold, any shares of Common Stock (other
than (i) Excluded Securities (as defined herein) and (ii) shares of Common Stock
which are issued or deemed to have been issued by the Company in connection with
an Approved Stock Plan (as defined herein) or upon issuance, exercise or
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conversion of the Other Securities (as defined herein)) for a consideration per
share less than a price (the "Applicable Price") equal to the Conversion Price
in effect immediately prior to such issuance or sale, then immediately after
such issue or sale the Conversion Price then in effect shall be reduced to an
amount equal to such consideration per share, provided that in no event shall
the Conversion Price be reduced below $.001.
(b) Effect on Conversion Price of Certain Events. For purposes of
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determining the adjusted Conversion Price under Section 5.01(a) above, the
following shall be applicable:
(i) Issuance of Options. If after the date hereof, the Company in any manner
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grants any rights, warrants or options to subscribe for or purchase Common Stock
or convertible securities ("Options"), other than Excluded Securities or Other
Securities issued or deemed to have been issued in connection with any Approved
Stock Plan, and the lowest price per share for which one share of Common Stock
is issuable upon the exercise of any such Option or upon conversion or exchange
of any convertible securities issuable upon exercise of any such Option is less
than the Conversion Price then in effect, then such share of Common Stock shall
be deemed to be outstanding and to have been issued and sold by the Company at
the time of the granting or sale of such Option for such price per share. For
purposes of this Section 5.01(b)(i), the lowest price per share for which one
share of Common Stock is issuable upon exercise of such Options or upon
conversion or exchange of such convertible securities shall be equal to the sum
of the lowest amounts of consideration (if any) received or receivable by the
Company with respect to any one share of Common Stock upon the granting or sale
of the Option, upon exercise of the Option or upon conversion or exchange of any
other convertible security other than this Debenture issuable upon exercise of
such Option. No further adjustment of the Conversion Price shall be made upon
the actual issuance of such Common Stock or of such convertible securities upon
the exercise of such Options or upon the actual issuance of such Common Stock
upon conversion or exchange of such convertible securities.
(ii) Issuance of Convertible Securities. If the Company in any manner issues or
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sells any convertible securities after the Original Issue Date, other than
Excluded Securities or Other Securities issued or deemed to have been issued in
connection with an Approved Stock Plan, and the lowest price per share for which
one share of Common Stock is issuable upon the conversion or exchange thereof is
less than the Conversion Price then in effect, then such share of Common Stock
shall be deemed to be outstanding and to have been issued and sold by the
Company at the time of the issuance or sale of such convertible securities for
such price per share. For the purposes of this Section 5.01(b)(ii), the lowest
price per share for which one share of Common Stock is issuable upon such
conversion or exchange shall be equal to the sum of the lowest amounts of
consideration (if any) received or receivable by the Company with respect to one
share of Common Stock upon the issuance or sale of the convertible security and
upon conversion or exchange of such convertible security. No further adjustment
of the Conversion Price shall be made upon the actual issuance of such Common
Stock upon conversion or exchange of such convertible securities, and if any
such issue or sale of such convertible securities is made upon exercise of any
Options for which adjustment of the Conversion Price had been or are to be made
pursuant to other provisions of this Section 5.01(b), no further adjustment of
the Conversion Price shall be made by reason of such issue or sale.
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(iii) Change in Option Price or Rate of Conversion. If the purchase price
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provided for in any Options, the additional consideration, if any, payable upon
the issue, conversion or exchange of any convertible securities, or the rate at
which any convertible securities are convertible into or exchangeable for Common
Stock changes at any time, the Conversion Price in effect at the time of such
change shall be adjusted to the Conversion Price which would have been in effect
at such time had such Options or convertible securities provided for such
changed purchase price, additional consideration or changed conversion rate, as
the case may be, at the time initially granted, issued or sold and the number of
shares of Common Stock issuable upon conversion of this Debenture shall be
correspondingly readjusted. For purposes of this Section 5.01(b)(iii), if the
terms of any Option or convertible security that was outstanding as of the
Original Issue Date are changed in the manner described in the immediately
preceding sentence, then such Option or convertible security and the Common
Stock deemed issuable upon exercise, conversion or exchange thereof shall be
deemed to have been issued as of the date of such change. No adjustment pursuant
to this Section 5.01(b) shall be made if such adjustment would result in an
increase of the Conversion Price then in effect.
(c) Effect on Conversion Price of Certain Events. For purposes
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of determining the adjusted Conversion Price under Sections 5.01(a) and 5.01(b),
the following shall be applicable:
(i) Calculation of Consideration Received. If any Common
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Stock, Options or convertible securities are issued or sold or deemed to have
been issued or sold for cash, the consideration received therefore will be
deemed to be the net amount received by the Company therefore. If any Common
Stock, Options or convertible securities are issued or sold for a consideration
other than cash, the amount of such consideration received by the Company will
be the fair value of such consideration, except where such consideration
consists of marketable securities, in which case the amount of consideration
received by the Company will be the market price of such securities on the date
of receipt of such securities (measured by the closing sale price of such
securities on the Over-the-Counter Bulletin Board or its principal trading
market). If any Common Stock, Options or convertible securities are issued to
the owners of the non-surviving entity in connection with any merger in which
the Company is the surviving entity, the amount of consideration therefore will
be deemed to be the fair value of such portion of the net assets and business of
the non-surviving entity as is attributable to such Common Stock, Options or
convertible securities, as the case may be. The fair value of any consideration
other than cash or securities will be determined jointly by the Company and the
holders of the principal amount of the Debentures then outstanding. If such
parties are unable to reach agreement within ten (10) days after the occurrence
of an event requiring valuation (the "Valuation Event"), the fair value of such
consideration will be determined within five (5) Business Days after the tenth
(10th) day following the Valuation Event by an independent, reputable appraiser
jointly selected by the Company and the holders of the principal amount of the
Debentures then outstanding. The determination of such appraiser shall be final
and binding upon all parties and the fees and expenses of such appraiser shall
be borne by the Company.
(ii) Integrated Transactions. In case any Option is issued
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in connection with the issue or sale of other securities of the Company,
together comprising one integrated transaction in which no specific
consideration is allocated to such Options by the parties thereto, the Options
will be deemed to have been issued for a consideration of $.001.
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(iii) Treasury Shares. The number of shares of Common Stock
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outstanding at any given time does not include shares owned or held by or for
the account of the Company, and the disposition of any shares so owned or held
will be considered an issue or sale of Common Stock.
(iv) Record Date. If the Company takes a record of the
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holders of Common Stock for the purpose of entitling them (1) to receive
a dividend or other distribution payable in Common Stock, Options or in
convertible securities or (2) to subscribe for or purchase Common Stock, Options
or convertible securities, then such record date will be deemed to be the date
of the issue or sale of the shares of Common Stock deemed to have been issued or
sold upon the declaration of such dividend or the making of such other
distribution or the date of the granting of such right of subscription or
purchase, as the case may be.
(d) Adjustment of Conversion Price upon Subdivision or Combination
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of Common Stock. If at any time after the date of issuance of this Debenture
subdivides (by any stock split, stock dividend, recapitalization or otherwise)
one or more classes of its outstanding shares of Common Stock into a greater
number of shares, the Conversion Price or Future Price in effect immediately
prior to such subdivision will be proportionately reduced. If the Company at any
time after the date of issuance of this Debenture combines (by combination,
reverse stock split or otherwise) one or more classes of its outstanding shares
of Common Stock into a smaller number of shares, the Conversion Price or Future
Price in effect immediately prior to such combination will be proportionately
increased. Any adjustment under this Section 5.01(d) shall become effective at
the close of business on the date the subdivision or combination becomes
effective.
(e) Distribution of Assets. If the Company shall declare or make any
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dividend or other distribution of its assets (or rights to acquire its assets)
to holders of Common Stock, by way of return of capital or otherwise
(including, without limitation, any distribution of cash, stock or other
securities, property or options by way of a dividend, spin off,
reclassification, corporate rearrangement or other similar transaction) (a
"Distribution"), at any time after the issuance of this Debenture, then, in
each such case the Conversion Price in effect immediately prior to the close
of business on the record date fixed for the determination of holders of
Common Stock entitled to receive the Distribution shall be reduced, effective
as of the close of business on such record date, to a price determined by
multiplying such Conversion Price by a fraction of which (A) the numerator
shall be the closing bid price of the Common Stock on the trading day
immediately preceding such record date minus the value of the Distribution (as
determined in good faith by the Company's Board of Directors) applicable to
one share of Common Stock, and (B) the denominator shall be the closing bid
price of the Common Stock on the trading day immediately preceding such
record date. Notwithstanding the foregoing, the Distribution in the form of
a stock dividend (the "Forward Split") to be effected prior to, and in
connection with, the Merger shall in no event cause an adjustment to the
Conversion Price, nor shall any similar adjustment to the capital structure of
the Company effected in connection with the Merger.
(f) Certain Events. If any event occurs of the type contemplated by
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the provisions of this Section 5.01 but not expressly provided for by such
provisions (including, without limitation, the granting of stock appreciation
rights, phantom stock rights or other rights with equity features), then the
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Company's Board of Directors will make an appropriate adjustment in the
Conversion Price so as to protect the rights of the holders of the Debenture;
provided, except as set forth in Section 5.01(d), that no such adjustment
pursuant to this Section 5.01(f) will increase the Conversion Price as otherwise
determined pursuant to this Section 5.01.
(g) Notices.
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(i) Immediately upon any adjustment of the Conversion Price,
the Company will give written notice thereof to the holder of this Debenture,
setting forth in reasonable detail, and certifying, the calculation of such
adjustment.
(ii) The Company will give written notice to the holder of
this Debenture at least ten (10) days prior to the date on which the Company
closes its books or takes a record (A) with respect to any dividend or
distribution upon the Common Stock, (B) with respect to any pro rata
subscription offer to holders of Common Stock or (C) for determining rights to
vote with respect to any dissolution or liquidation, provided that such
information shall be made known to the public prior to or in conjunction with
such notice being provided to such holder.
(h) Definitions.
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(i) "Approved Stock Plan" means any employee benefit plan
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which has been approved by the Board of Directors of the Company, or any
successor thereto, pursuant to which the Company's securities may be issued
to any employee, officer or director for services provided to the Company.
(ii) "Excluded Securities" means any of the following: (a)
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any issuance by the Company of securities in connection with a strategic
partnership or a joint venture (the primary purpose of which is not to raise
equity capital), (b) any issuance by the Company of securities as
consideration for a merger or consolidation or the acquisition of a
business, product, license, or other assets of another person or entity and
(c) options to purchase shares of Common Stock, or other stock based awards or
grants under an Approved Stock Plan.
(iii) "Other Securities" means (i) those options and
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warrants of the Company issued prior to, and outstanding on, the Original
Issue Date, (ii) the Units, including the Common Stock and Warrants included
in the Units, issued in the PPO, (ii) the shares of Common Stock issuable on
exercise of such options and warrants, provided such options and warrants are
not amended after the Original Issue Date, (iii) the shares of Common Stock
issued in connection with the Forward Split and (iv) the shares of Common Stock
issuable upon exercise of the Warrants or conversion of this Debenture.
(i) Nothing in this Section 5.01 shall be deemed to
authorize the issuance of any securities by the Company in violation of Section
5.02.
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ARTICLE VI.
Section 6.01 Notice. Notices regarding this Debenture shall be sent to the
parties at the following addresses, unless a party notifies the other parties,
in writing, of a change of address:
If to the Company, to: Foothills Resources, Inc.
Candiana Lodge, Wellfield X0, Xxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx, Xxxxxxx
Attention: J. Xxxx Xxxxxx
Telephone: (000)000000000000
Facsimile: (000)000000000000
With a copy to: Gottbetter & Partners, LLP
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxx X. Xxxxxxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
If to the Holder:
Telephone: (
Facsimile:
With a copy to:
e
Telephone:
Facsimile:
Section 6.02 Governing Law. All questions concerning the construction, validity,
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enforcement and interpretation of this Debenture shall be governed by and
construed and enforced in accordance with the internal laws of the State of New
York, without regard to the principles of conflicts of law thereof. Each party
agrees that all legal proceedings concerning the interpretations, enforcement
and defense of the transactions contemplated by any of the Transaction Documents
(whether brought against a party hereto or its respective affiliates, directors,
officers, shareholders, employees or agents) shall be commenced in the state and
federal courts sitting in the City of New York, Borough of Manhattan (the "New
York Courts"). Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the New York Courts for the adjudication of any dispute
hereunder or in connection herewith or with any transaction contemplated hereby
or discussed herein (including with respect to the enforcement of any of the
Transaction Documents), and hereby irrevocably waives, and agrees not to assert
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in any suit, action or proceeding, any claim that it is not personally subject
to the jurisdiction of any such court, or such New York Courts are improper or
inconvenient venue for such proceeding. Each party hereby irrevocably waives
personal service of process and consents to process being served in any such
suit, action or proceeding by mailing a copy thereof via registered or certified
mail or overnight delivery (with evidence of delivery) to such party at the
address in effect for notices to it under this Debenture and agrees that such
service shall constitute good and sufficient service of process and notice
thereof. Nothing contained herein shall be deemed to limit in any way any right
to serve process in any manner permitted by law. Each party hereto hereby
irrevocably waives, to the fullest extent permitted by applicable law, any and
all right to trial by jury in any legal proceeding arising out of or relating to
this Debenture or the transactions contemplated hereby. If either party shall
commence an action or proceeding to enforce any provisions of this Debenture,
then the prevailing party in such action or proceeding shall be reimbursed by
the other party for its attorneys fees and other costs and expenses incurred
with the investigation, preparation and prosecution of such action or
proceeding.
Section 6.03 Severability. The invalidity of any of the provisions of this
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Debenture shall not invalidate or otherwise affect any of the other provisions
of this Debenture, which shall remain in full force and effect.
Section 6.04 Entire Agreement and Amendments. This Debenture represents the
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entire agreement between the parties hereto with respect to the subject matter
hereof and there are no representations, warranties or commitments, except as
set forth herein. This Debenture may be amended only by an instrument in writing
executed by the parties hereto.
[Remainder Of Page Intentionally Left Blank]
11
IN WITNESS WHEREOF, with the intent to be legally bound hereby, the
Company as executed this Debenture as of the date first written above.
Foothills Resources, Inc.
By:
Name: J. Xxxx Xxxxxx
Title: Chief Executive Officer
12
EXHIBIT A
NOTICE OF CONVERSION
(To be executed by the Holder in order to convert the Debenture)
TO:
The undersigned hereby irrevocably elects to convert $ of the
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principal amount of the above Debenture into Shares of Common Stock of
Foothills Resources, Inc., according to the conditions stated therein, as
of the Conversion Date written below.
Conversion Date:
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Applicable Conversion Price:
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Signature:
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Name:
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Address:
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Amount to be converted: $
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Amount of Debenture unconverted: $
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Conversion Price per Unit: $
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Interest on the Principal being
converted shall be paid is
Number of shares of Common Stock and
Warrants to be issued including as
payment of interest, if applicable:
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Please issue the shares of Common Stock
and Warrants in the following name and
to the following address:
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Issue to the following account of the
Holder:
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Authorized Signature:
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Name:
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Title:
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Phone Number:
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Broker DTC Participant Code:
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Account Number:
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