7% CONVERTIBLE DEBENTURE
of
SPEEDEMISSIONS, INC., a Georgia corporation (together with its successors, the "Company"), for value received hereby promises to pay to:
GCA Strategic Investment Fund Limited
(The "Holder") and registered assigns, the principal sum of ______________________ ($_______) or, if less, the principal amount of this Debenture then outstanding, on the Maturity Date by wire transfer of immediately available funds to the Holder in such coin or currency of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest, which shall begin to accrue on the date of this Debenture, quarterly in arrears, on (i) the last day of March, June, September and December of each year until the Maturity Date, commencing _______, ____ (unless such day is not a Business Day, in which event on the next succeeding Business Day) (each an "Interest Payment Date"), (ii) the Maturity Date, (iii) each Conversion Date, as hereafter defined, and (iv) the date the principal amount of the Convertible Debentures shall be declared to be or shall automatically become due and payable, on the principal sum hereof outstanding in like coin or currency, at the rates per annum set forth below, from the most recent Interest Payment Date to which interest has been paid on this Convertible Debenture, or if no interest has been paid on this Convertible Debenture, from the date of this Convertible Debenture until payment in full of the principal sum hereof has been made. The Maturity Date is _____, ____.
The interest rate shall be seven percent (7%) per annum (the "Interest Rate") or, if less, the maximum rate permitted by applicable law. Past due amounts (including interest, to the extent permitted by law) will also accrue interest at the Interest Rate plus 2% per annum or, if less, the maximum rate permitted by applicable law, and will be payable on demand ("Default Interest"). Interest on this Convertible Debenture will be calculated on the basis of a 360-day year of twelve 30 day months. All payments of principal and interest hereunder shall be made for the benefit of the Holder pursuant to the terms of the Agreement (hereafter defined). At the option of the Fund, interest may be paid in cash or in shares of Common Stock. On each Conversion Date, interest shall be paid in shares of Common Stock on the portion of the principal balance of the Convertible Debenture then being converted. The number of shares of Common Stock issued as interest shall be determined by dividing the dollar amount of interest due on the applicable Interest Payment Date by the Conversion Price then in effect.
This Convertible Debenture (this "Convertible Debenture") is one of a duly authorized issuance of up to $_________ aggregate principal amount of Convertible Debentures of the Company referred to in that certain Securities Purchase Agreement dated as of the date hereof between the Company and the Purchaser named therein (the "Agreement"). The Agreement contains certain additional agreements among the parties with respect to the terms of this Convertible Debenture, including, without limitation, provisions which (A) limit the conversion rights of the Holder, (B) specify voluntary and mandatory repayment, prepayment and redemption rights and obligations and (C) specify Events of Default following which the remaining balance due and owing hereunder may be accelerated. All such provisions are an integral part of this Convertible Debenture and are incorporated herein by reference. This Convertible Debenture is transferable and assignable to one or more Persons, in accordance with the limitations set forth in the Agreement.
The Company shall keep a register (the "Register") in which shall be entered the names and addresses of the registered holder of this Convertible Debenture and particulars of this Convertible Debenture held by such holder and of all transfers of this Convertible Debenture. References to the Holder or "Holders" shall mean the Person listed in the Register as registered holder of such Convertible Debentures. The ownership of this Convertible Debenture shall be proven by the Register.
1. Certain Terms Defined. All terms defined in the Agreement and not otherwise defined herein shall have for purposes hereof the meanings provided for in the Agreement.
2. Covenants. The Company covenants and agrees to observe and perform each of its covenants, obligations and undertakings contained in the Agreement, which obligations and undertakings are expressly assumed herein by the Company and made for the benefit of the holder hereof.
3. Payment of Principal. The Company shall repay the remaining unpaid balance of this Convertible Debenture on the Maturity Date. The Company may, and shall be obligated to, prepay all or a portion of this Convertible Debenture on the terms specified in the Agreement.