CONVERTIBLE NOTE
THIS CONVERTIBLE NOTE HAS NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. THIS
CONVERTIBLE NOTE MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO (i)
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF
1993, AS AMENDED, OR (ii) AN EXEMPTION FROM REGISTRATION UNDER SAID
ACT WHERE THE HOLDER HAS FURNISHED TO THE COMPANY AN OPINION OF ITS
COUNSEL, IF SUCH OPINION SHALL BE SATISFACTORY TO THE COMPANY, THAT
AN EXEMPTION FROM REGISTRATION UNDER SUCH ACT IS
AVAILABLE.
6 % CONVERTIBLE NOTE
|
$375,000.00
|
January 14, 2005
|
FOR VALUE RECEIVED
, the undersigned, ENCORE CLEAN
ENERGY, INC., a Delaware corporation (the “Payor” or
the “Company”), having its executive offices located at
Suite 610-375 Water Street, Vancouver, BC, Canada, V6B 5C6 hereby
promises to pay to Robert D. Hunt, an individual residing at 23707
Redfish Lane, Pass Christian, Mississippi 39571 (the
“Payee”), on December 31, 2009 (the “Maturity
Date”) at the Payee’s address set forth hereinabove or,
at such other place as the Payee shall hereafter specify in
writing, the principal sum of Three Hundred Seventy-Five Thousand
Dollars ($375,000), in such coin or currency of the United States
of America as at the time shall be legal tender for the payment of
public and private debts.
|
1.
|
Maturity
Date. This Convertible
Note shall mature on December 31, 2009 (the “Maturity
Date”) unless earlier terminated by prepayment as provided
herein.
|
|
|
|
2.
|
Interest and
Payment
|
|
|
|
|
2.1.
|
The unpaid
principal amount hereof shall bear no interest through December 31,
2006 and thereafter shall bear simple interest from January 1, 2007
at the rate of 6 % per annum until the Maturity Date (or until any
such earlier date of payment if this Convertible Note is prepaid as
hereinafter provided).
|
|
|
|
|
2.2.
|
Interest shall
be payable in full on the Maturity Date (or on any such earlier
date of payment if this Convertible Note is prepaid as hereinafter
provided).
|
|
|
|
|
2.3.
|
If payment of
the principal amount hereof and interest accrued thereon is not
made when due and payable, at the Maturity Date or upon
acceleration, then interest shall accrue on such unpaid amount from
the date of nonpayment to the date of payment at the lesser
interest rate of 12 % simple interest per annum or the maximum
interest rate permitted by applicable law.
|
|
|
|
3.
|
Prepayment. At the option of the Payor, and with not less
than ten days prior notice to the registered holder hereof, this
Convertible Note may be prepaid in whole or in part at any time or
from time to time, without penalty or premium. Each partial
prepayment of this Convertible Note shall first be applied to
interest accrued through the date of prepayment and then to
principal.
|
|
|
|
4.
|
Conversion
Privilege.
|
|
|
|
|
4.1
|
At any time
prior to payment of this Convertible Note in full by the Company,
the registered holder of this Convertible Note may convert the
principal balance and any accrued and unpaid interest then owing on
this Convertible Note, into shares of the common stock of the
Company (no par value) at a price per share of US$0.50, provided
that the Company may elect to pay all or a portion of any accrued
interest in cash, and if such payment is elected by the Company,
such interest will not be converted into stock. This conversion
right must be exercised at or prior to the date of Maturity or, if
a Conversion Effective Time has been set as provided for under
Sections 3.1 and 4.2, at or prior to the Conversion Effective
Time.
|
|
|
|
|
4.2
|
The Conversion
Effective Time shall be any prepayment date established by Payor
under Section 3, Prepayment.
|
|
|
|
|
4.3
|
This conversion
privilege may be exercised as to amounts less than the full face
value of this Convertible Note, provided however, that such
incremental amounts of exercise and
|
|
