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.
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Maturity Date. This Convertible Note
shall mature on December 31, 2009 (the “Maturity Date”)
unless earlier terminated by prepayment as provided herein.
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| 2. |
Interest and Payment |
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2.1.
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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).
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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).
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2.3.
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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.
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| 3.
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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.
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| 4. |
Conversion Privilege. |
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4.1
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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.
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4.2 |
The Conversion Effective Time shall be any prepayment date
established by Payor under Section 3, Prepayment. |
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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
conversion shall be in amounts evenly divisible by
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