CONVERTIBLE DEBENTURE
THIS CONVERTIBLE DEBENTURE is made on the 22nd day of October, 1999 BY AND
BETWEEN:
X0XX.XXX a company organized and existing under the laws of the State of
Nevada (the "Company") and ELECTRIC LIGHT & GAS TECHNOLOGY, INC., a company
incorporated and existing under the laws of the State of Texas, (the
"Holder").
NOW THIS CONVERTIBLE DEBENTURE WITNESSES and IT IS AGREED as follows:
1. INTERPRETATION
1.01 In this Debenture, the following terms shall have the following
meanings:
"OBLIGATION" means all obligations and liabilities, actual
or contingent, now or hereafter due, owing or incurred to the Holder
by the Company in whatever currency denominated, whether on any
banking or other account or otherwise in any manner whatsoever
(whether alone or jointly and in whatever style, name or form and
whether as principal or surety) including all liabilities in
connection with foreign exchange transactions, accepting, endorsing
or discounting any notes or bills, or under bonds, guarantees,
indemnities, documentary or other credits or any other instruments
from time to time entered into by the Holder for or at the request of
the Company, together with interest to date of payment at such rates
and upon such terms as may from time to time be agreed;
"PRINCIPAL" shall mean the amount of FIVE HUNDRED DOLLARS
($500,000.00) of the currency of the United States of America;
"TERM" shall mean the time period of TWO (2) years commencing
on the date first above written.
1.02 Except where otherwise stated, any reference in this Debenture to any
Act of the Legislature or any Section of, Schedule to or other
provision of an Act of the Legislature shall be construed, at any
particular time, as including references to any modification,
extension or re-enactment thereof then in force and instruments,
orders and regulations in force and made under or deriving validity
from such Act.
1.03 Headings shall be ignored in construing this Debenture.
1.04 This Debenture shall be governed by, and construed in accordance with,
the laws of the State of Nevada.
2. COVENANT TO PAY
2.01 The Company hereby covenants that it will discharge each Obligation
when due in accordance with its terms or, in the case of an Obligation
the terms of which do not provide a time for payment, immediately on
demand by the Holder.
3. INTEREST
3.01 The Company shall pay interest to date of repayment in full of the
Principal (as well after as before any demand or judgment or the
liquidation of the Company) at the rate of eight percent (8%) per
annum, monthly in arrears until maturity, and such interest shall be
compounded in the event of it not being punctually paid with quarterly
rests in accordance with the usual practice of the Holder but without
prejudice to the right of the Holder to require payment of such
interest when due.
4. CONVERTIBILITY
4.01 At the sole option of the Holder and upon 30 days written notice from
the Holder to the Company, the Holder shall have the right, at any
time during the Term of the Debenture, to convert up to one hundred
percent (100%) of the Principal outstanding into Class A common stock
of the Company at the conversion price of two dollars ($2.00) per
share at any time prior to maturity.
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5. COVENANTS
5.01 The Company hereby covenants with the Holder that during the
continuance of this security the Company will and shall procure that
each of its Subsidiaries will at all times:
(a) conduct and carry on its business in a proper and efficient
manner and not make any substantial alteration in the nature of or
mode of conduct of that business and keep or cause to be kept proper
books of account and records relating to such business;
(b) observe and perform all covenants and stipulations from time to
time affecting its freehold or leasehold property or the mode of user
or enjoyment of the same and not, without the prior consent in writing
of the Holder, enter into any onerous or restrictive obligations
affecting any such property or do or suffer to be done on any such
property anything which is 'development' as defined in the Development
and Planning Act, 1974 as from time to time amended nor do or suffer
or omit to be done any act, matter or thing whereby any provision of
any Act of the legislature, order or regulation from time to time in
force affecting any such property is infringed;
(c) observe and perform all covenants and stipulations from
time to time affecting its patents, patent applications, trade marks,
trade names, registered designs and copyrights and all other
industrial or intangible property or any license or ancillary or
connected rights from time to time relating to industrial or
intangible property and preserve, maintain and renew when necessary
or desirable all such licenses and rights;
6. MISCELLANEOUS
6.01 No failure or delay by the Holder in exercising any right or
remedy shall operate as a waiver thereof nor shall any single
or any partial exercise or waiver of any right or remedy
preclude its further exercise or the exercise of any other
right or remedy.
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6.02 Each of the provisions of this Debenture is severable and
distinct from the others and if at any time one or more of
such provisions is or becomes invalid, illegal or
unenforceable, the validity, legality and enforceability of
the remaining provisions hereof shall not in any way be
affected or impaired thereby.
6.03 The Company hereby certifies that neither the execution of
this Debenture nor the creation of the charges herein
contained contravenes any of the provisions of the Memorandum
of Association or By-laws or other constitutional documents
of the Company.
6.04 Any notice or demand for payment by the Holder hereunder shall
without prejudice to any other effective mode of making the
same be deemed to have been properly served on the Company if
served on any one of the directors or on the secretary of the
Company or delivered or sent by letter, post, telex, fax or
cable to the Company at its registered office or at any of its
principal places of business. Any such notice or demand sent
by letter post shall if posted before the last scheduled
collection of letters from the place of posting on any day be
deemed to have been served on the addressee at 10 a.m. on the
next succeeding business day following the day of posting
notwithstanding that it be undelivered or returned undelivered
and in proving such service it shall be sufficient to prove
that the notice or demand was properly addressed and posted.
Any notice or demand sent by telex fax or cable on a business
day shall be deemed to have been served at that time of
dispatch. Any such notice or demand or any certificates as to
the amount at any time secured hereby shall be conclusive and
binding upon the Company if signed by an officer of the
Holder.
6.05 In this Debenture the headings to clauses are for convenience
only and have no legal effect and references to clauses and
schedules are to clauses and schedules of this Debenture
unless otherwise stated.
6.06 In this Debenture the expression "the Company" where the
context admits includes its permitted successors and assigns
whether immediate or derivative and the expression "the
Holder" includes its successors and assigns whether immediate
or derivative.
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IN WITNESS whereof this Debenture has been entered into the day and year first
above written.
X0XX.XXX ELECTRIC LIGHT & GAS
TECHNOLOGY, INC.
by: /s/ Xxxx X. Xxxxxx by: /s/ S. Xxxx Xxxxxxxxx
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President President
