BF ACQUISITION GROUP I, INC. DEBENTURE NOTE
-------------------------------------------
Debenture Number:
Debenture Amount: $1,000 Effective Date: ____________
FOR VALUE RECEIVED, BF Acquisition Group I, Inc., a Florida
corporation, (hereinafter called "Corporation"), promises to pay
to _____________________________________________________, or
registered assigns (hereinafter called "Debenture Holder"), the
sum of ONE THOUSAND DOLLARS ($1,000), together with simple
interest on the outstanding principal balance at ten percent
(10%) per annum. The interest is due and payable along with the
principal twelve months (12) months from the date of this
Debenture Note ("Note"), unless extended in writing by the
parties hereto. If at any time there shall occur and be
continuing an event of default ("Event of Default") in payment of
principal or interest or both, Corporation shall pay to Debenture
Holder an additional five percent (5%) interest on the
outstanding principal amount of this Note, computed on a simple
basis, from the date of such Event of Default until such Event of
Default shall be cured or waived or, if earlier, until this Note,
with interest thereon, is fully paid. This Note is not secured.
Said principal and interest shall be payable at the principal
office of Corporation by deposit of U.S. funds, or shares of the
Corporation's common stock (as designated by the Debenture
Holder), as determined below, in the U.S. Mail, first class
postage prepaid, addressed to the Debenture Holder at his address
registered on the books of the Corporation or at such other
address as Debenture Holder may designate from time to time.
Interest on the outstanding principal balance of this Note shall
accrue commencing on the Effective Date described above, and
interest shall accrue on a simple basis thereafter.
It is understood that the Corporation intends to register as a
"Business Development Company" ("BDC") with the Securities and
Exchange Commission (the "SEC"). Upon the SEC's acceptance of the
Corporation's election to register as a BDC, the Corporation
intends to conduct an exchange offering, rights offering or other
similar type of offering whereby the Debenture Holder will have
the opportunity to exchange their Debenture Note(s) into shares
of common stock of the Company. The Company expects the shares
will be exchangeable into the common stock at an exchange price
of $0.25 per share.
This Note has not been registered under any federal or state
securities laws in reliance on the exemption provided by Sections
3(b), 4(2) or 4(6) of the Securities Act of 1933, as amended, and
comparable statutes of states in which this Note may be issued.
Notwithstanding any other provision of this Note it is expressly
agreed that the amounts payable under this Note or any other
payment in the nature of or which would be considered as interest
or other charge for the use or loan of money shall not exceed the
highest contract rate allowable by law of the State of Florida.
1
BF Acquisition Group I, Inc.
Convertible Debenture No.
The Corporation does hereby:
(a) Agree that no course of dealing or delay or omission or
forbearance on the part of Debenture Holder in exercising or
enforcing any of Debenture Holder's rights or remedies hereunder
or under any instrument securing this Note or under any other
instrument executed in connection with the loan evidenced by this
Note shall impair or prejudice any of Debenture Holder's rights
and remedies hereunder or the enforcement hereof and that
Debenture Holder may extend or renew this Note for any term
(whether or not longer than the original term of this Note), may
extend, modify or postpone the time and manner of payment and
performance of this Note; and
(b) Waive notice of acceptance of this Note, notice of the
occurrence of any default under this Note and presentment,
demand, protest, notice of dishonor and notice of protest.
The happening of any of the following events shall constitute a
default hereunder:
(a) Default in the payment of any principal on this Note as and
when the same shall become due and payable; or
(b) Default in the payment of any interest on this Note as and
when the same shall become due and payable (it being understood
that such payments become payable on a date subsequent to the
date they become due in accordance with the provisions hereof);
or
(c) Breach, failure or default on the part of Corporation in
the performance or observance of any covenant, condition or
agreement of Corporation under this Note for a period of thirty
days following written notice thereof unless such breach, failure
or default shall have been cured within such thirty day period;
or
(d) A receiver, liquidator, assignee, custodian, trustee,
conservator, sequestrator, regulatory authority (or other similar
official) shall take possession of Corporation or its property or
business, or exercise control thereof or thereover, without its
consent or a court having jurisdiction in the premises shall
enter a decree or order for relief in respect of Corporation in
an involuntary case under any applicable bankruptcy, insolvency
or other similar laws now or hereafter in effect, or appointing a
receiver, liquidator, assignee, custodian, trustee, conservator,
sequestrator, regulatory authority (or other similar official) of
Corporation or for the property or business thereof, or ordering
the winding-up or liquidation of its affairs and such decree or
order shall continue unstayed and in effect for a period of
thirty consecutive days, or Corporation shall commence a
voluntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect, or shall consent to
the entry of an order for relief in an involuntary case under any
such law, or shall consent to the appointment of or taking
possession by a receiver, liquidator, assignee, trustee,
custodian, conservator, sequestrator, regulatory authority (or
other similar official) of Corporation or of any substantial part
of its property or business, or shall make any general assignment
for the benefit of creditors, or shall take any corporate action
in furtherance of any of the foregoing.
If a default occurs hereunder, then at the option of
Debenture Holder (a) the entire principal amount then remaining
unpaid and accrued interest thereon shall immediately become due
and payable without notice or demand, it being agreed that
interest not paid when due shall, at the option of Debenture
Holder, be added to the outstanding principal amount and draw
interest at the rate provided herein; (b) the unpaid principal
amount shall accrue interest at the highest rate of interest
2
BF Acquisition Group I, Inc.
Convertible Debenture No.
allowable by law; and (c) all other liabilities of Corporation to
Debenture Holder (notwithstanding any provisions thereof), shall
immediately become due and payable without notice or demand (but
with such adjustments, if any, with respect to any interest or
other charges as may be provided for in this Note or other
writing evidencing such liability). Failure to exercise this
option shall not constitute a waiver of the right to exercise the
same in the event of any subsequent default.
Corporation shall have no right of set-off against
Debenture Holder under this Note or under any instruments
securing this Note or executed in connection with the loan
evidenced by this Note. Debenture Holder shall have the right,
however, immediately and without further action or notice by it,
to set-off against this Note all money owed by Debenture Holder
in any capacity to Corporation, whether or not due, and also to
set-off against all other liabilities of Debenture Holder to
Corporation all money owed by Debenture Holder in any capacity to
Corporation.
This Note is executed under seal, constitutes a contract under
the laws of the State of Florida, and shall be enforceable in a
court of competent jurisdiction in said State, without regard to
the place in which this Note is executed.
THE FOLLOWING LEGEND WILL BE IMPRINTED ON ANY DEBENTURE NOTES
ISSUED TO CANADIAN RESIDENTS:
"Unless permitted under securities legislation, the holder of the
securities shall not trade the securities before the earlier of
(i) the date that is 12 months and a day after the date the
Corporation first became a reporting issuer in any of Alberta,
British Columbia, Manitoba, Nova Scotia, Ontario, Quebec and
Saskatchewan, if the Corporation is a SEDAR filer; and (ii) the
date that is 12 months and a day after the later of (A) the
distribution date, and (B) the date the Corporation became a
reporting issuer in the local jurisdiction of the purchaser of
the securities that are the subject of the trade."
Signed and sealed this ____ day of ______ 2003.
(CORPORATE SEAL) BF ACQUISITION GROUP I, INC.,
Attest:________________________ By: _________________________
Xxxxxxx Xxxxxxx, Xxxxxxx Xxxxx,
Secretary President
DEBENTURE HOLDER
By:____________________________
Signature
3
BF Acquisition Group I, Inc.
Convertible Debenture No.
