DEBENTURE
THE SECURITIES REPRESENTED HEREBY HAVE NOT
BEEN AND WILL NOT BE REGISTERED WITH THE
UNITED STATES SECURITIES AND EXCHANGE
COMMISSION OR THE SECURITIES COMMISSION OF
ANY STATE PURSUANT TO AN EXEMPTION FROM
REGISTRATION PROVIDED BY SECTION 3(b) OF THE
SECURITIES ACT OF 1933, AS AMENDED AND THE
RULES AND REGULATIONS PROMULGATED THERE
UNDER (THE "1933 ACT"), AND RULE 504 OF
REGULATION D PROMULGATED THEREUNDER.
A-001 US $500,000
WORLDNET RESOURCE GROUP, INC.
8%SERIES A SENIOR SUBORDINATED CONVERTIBLE REDEEMABLE
DEBENTURE
DUE FEBRUARY 3, 2002
THIS DEBENTURE of WorldNet Resource Group, Inc., a
corporation duly organized and existing under the laws of
Utah ("Company"), designated as its 8% Series A Senior
Subordinated Convertible Redeemable debentures Due February
3, 2002, In an aggregate principal face amount not exceeding
Five Hundred Thousand Dollars (U.S. $500,000), which
Debentures are being purchased at 100% of the face amount of
such Debentures.
FOR VALUE RECEIVED, the Company promises to pay to
Rim Capital Group, L.L.C. the registered holder hereof and
his authorized successors and permitted assigns ("Holder"),
the aggregate principal face sum not to exceed Five Hundred
Thousand Dollars (U.S. $500,000) on February 3, 2002
("Maturity Date"), and to pay interest on the principal sum
outstanding, at the rate of 8% per annum commencing March 3,
2000 and due in full at the Maturity Date pursuant to
paragraph 4(b) herein. Accrual of outstanding principal sum
has been made or duly provided for. The interest so payable
will be paid to the person in whose name this Debenture is
registered on the records of the Company regarding
registration and transfers of the Debentures ("Debenture
Register"); provided, however, that the Company's obligation
to a transferee of this Debenture arises only if such
transfer, sale or other disposition is made an accordance
with the terms and conditions of the Securities Subscription
Agreement dated as of February 3, 2000 between the Company
and Rim Capital Group, L.L.C. ("Subscription Agreement").
The principal of, and interest on, this Debenture are
payable at the address last appearing on the Debenture
Register of the Company as designated in writing by the
Holder hereof from time to time. The Company will pay the
outstanding principal due upon this Debenture before or on
the Maturity Date, less any amounts required by law to be
deducted or withheld, to the Holder of this Debenture by
check if paid more that 10 days prior to the Maturity Date
or by wire transfer and addressed to such Holder at the last
address appearing on the Debenture Register. The for warding
of such check or wire transfer shall constitute a payment of
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outstanding principal hereunder and shall satisfy and
discharge the liability for principal on this Debenture to
the extent of the sum represents by such check or wire
transfer. Interest shall be payable in Common Stock (as
defined below) pursuant to paragraph 4(b) herein.
This Debenture is subject to the following
additional provisions:
1. The Debenture are issuable in denominations of Ten
Thousand Dollars (U.S.$10,000) and integral multiples
thereof. The Debentures are exchangeable for an equal
aggregate principal amount of Debentures of different
authorized denominations, as requested by the Holders
surrendering the same, but not less than U.S. $ 10,000. No
service charge will be made for such registration or
transfer or exchange, except that Holder shall pay any tax
or other governmental charges payable in connection
therewith.
2. The Company shall be entitled to withhold from all
payments any amounts required to be withheld under the
applicable laws.
3. This Debenture may be transferred or exchanged only in
compliance with the Securities Act of 1933, as amended
("Act") and applicable state securities law. Prior to due
presentment for transfer of this Debenture, the Company and
any agent of the Company may treat the person whose name
this Debenture is duly registered on the Company's Debenture
Register as the owner hereof for all other purposes, whether
or not this Debenture be overdue, and neither the Company
nor any such agent shall be affected or bound by notice to
the contrary. Any Holder of this Debenture, electing to
exercise the right of conversion set forth in Section 4(a)
hereof, in addition to the requirements set forth in Section
4(a), and any prospective transferee of this Debenture, are
also required to give the Company written confirmation that
the Debenture is being converted ("Notice of Conversion") in
the form annexed hereto as Exhibit I.
4. (a) the holder of this Debenture is
entitled, at its option. At any time immediately
following execution of this Agreement and delivery
of the Debenture hereof, to convert all or any
amount over $10,000 of the principal face amount
of this Debenture then outstanding into shares of
Class A Common Stock, $.001 par value per share of
the Company ("Common Stock"), which shall be free
trading and without restrictive legend of any kind
whatsoever, at a conversion price ("Conversion
Price") for each share of Common Stock equal to
the lower of 75% of the lowest closing bid price
of the Common Stock of the Common Stock as
reported on the National Association of Securities
Dealers Electronic Bulletin Board ("OTC Bulletin
Board") for the 3 consecutive trading days
immediately preceding the date of receipt by the
Company of a Notice of Conversion, or $.08
("Conversion Shares"). In the event the Company is
delisted for any reason from the OTC Bulletin
Board, including but not limited to failure of the
Company to timely clear Comments from the
Securities and Exchange Commission on its form
10SB, then the Holder shall be entitled to convert
any unpaid portion of the Debenture, or to
recalculate and reconvert any part of the
Debenture already converted into Common Stock at a
conversion price which is 50% of the lowest
closing bid price of the Common Stock as reported
on the OTC Bulletin Board for the 3 consecutive
trading days immediately preceding the date of
receipt by the Company of a Notice of Conversion
or recalculate Notice of Conversion. If the number
of resultant Conversion Shares would as a matter
of law or pursuant to regulatory authority require
the Company to seek shareholder approval of such
issuance, the Company shall, as soon as
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practicable, take the necessary steps to seek such
approval. Such conversion shall be effectuated,
as provided in a certain Escrow Agreement executed
simultaneously with this Debenture, by the Company
delivering the Conversion Shares to the Holder
within 5 business days of receipt by the Company
of the Notice of the Conversion. Once the Holder
has received such Conversion Shares, the Escrow
Agent shall surrender the Debenture to be
converted to the Company, executed by the Holder
of this Debenture evidencing such Holder's
intention to convert this Debenture or a specified
portion hereof, and accompanied by proper
assignment hereof in blank. Accrued but unpaid
interest shall be subject to conversion. No
fractional shares or script representing fractions
of shares will be issued on conversion, but the
number of shares issuable shall be rounded to the
nearest whole share.
(b) Interest at rate of 8% per annum shall be paid by
issuing Common Stock of the Company as follows: Based on the
lowest closing bid price of the Common Stock as reported on
the OTC Bulletin Board for the 3 consecutive trading days
immediately preceding the date of the monthly interest
payments due ("Market Price"), the Company shall issue to
the Holder shares of Common Stock in an amount equal to the
monthly interest accrued and due divided by the lower of 75%
of the Market Price, or $.08("Interest Shares"). The dollar
amount of interest payable pursuant to this paragraph 4(b)
shall be calculated based upon the total amount of payments
actually made by the Holder in connection with the purchase
of the Debenture at the time any interest payment due. If
such payment is made by check, interest shall accrue
beginning 10 days from the date the check is received by the
Company. If such payment is made by wire transfer directly
into the Company's account, interest shall accrue beginning
on the date the wire transfer is received by the Company.
Common Stock issued pursuant hereto shall be issued pursuant
to rule 504 of Regulation D in accordance with the term of
the Subscription Agreement which shall be free trading
and without restrictive legend of any kind whatsoever.
(c) At any time after 90 days the Company shall have the
option to pay to the Holder 125% of the principal amount
of the Debenture, in full to the extent conversion has not
occurred pursuant to paragraph 4(b) herein, or pay upon
maturity if the Debenture is not converted. The Company
shall give the Holder 5 days written notice and the Holder
during such 5 days shall have the option to convert the
Debenture or any part thereof into shares of Common Stock at
the Conversion Price set forth in paragraph 4(a)of this
Debenture.
5. No provision of this debenture shall
alter or impair the obligation of the
Company, which is absolute and unconditional
to pay the principal of, and interest on,
this Debenture at the time, place, and rate,
and in the form, herein prescribed.
6. The Company hereby expressly waives demand and presentment
for payment,notice of non-payment, protest, notice of
protest, notice of dishonor, notice of acceleration or intent to
accelerate, and diligence in taking any action to collect
amounts called for hereunder and shall be directly and primarily
liable for the payment of all sums owing and to be owing hereto.
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7. The Company agrees to pay all costs and expenses,
including reasonable attorneys fees, which may be incurred
by the Holder in collecting any amount due under this Debenture.
8. If one or more of the following described "Events of
Default" shall occur and continue for 30 days, unless a
different time frame is noted below:
(a) The Company shall default in the payment of principal
or interest on this Debenture; or
(b) Any of the representations or warranties made by the
Company herein, in the Subscription Agreement, or in any
certificate or financial or other written statements
heretofore or hereafter furnished by or on behalf of the
Company in connection with the execution and delivery of
this Debenture or the Subscription Agreement shall be false
or misleading in any material respect at the time made or
the Company shall violate covenants in the Subscription
Agreement including but not limited to Section 5(b) or 10;
or
(c) The Company shall fail to perform or observe, in any
material respect, any other covenant, term,
provision, condition, agreement or obligation of the
Company under this Debenture, the Subscription
Agreement or the Escrow Agreement and such failure
shall continue uncured for a period of thirty (30)
days after notice from the Holder of such failure; or
(d) The Company shall (1) become insolvent; (2) admit in
writing its inability to pay its debts generally as
they mature; (3)make an assignment for the benefit
of creditors or commence proceedings for its dissolution;
(4) apply for or consent to the appointment of a trustee,
liquidator or receiver for its or for a substantial part
of its property or business; (5) file a petition for
bankruptcy relief, consent to a filing of such
petition or have filed against it an involuntary
petition for bankruptcy relief, all under federal or
state laws as applicable; or
(e) A trustee, liquidator or receiver shall be appointed
for the Company or for a substantial part of its property
or business without its consent and shall not be
discharged within thirty (30) days after such
appointment; or
(f) Any governmental agency or any court of competent
jurisdiction at the instance of any governmental agency
shall assume custody or control of the whole or any
substantial portion of the properties or assets of the
Company; or
(g) Any money judgment, writ or warrant of attachment, or
similar process, in excess of One Hundred Thousand
($100,000) Dollars in the aggregate shall be entered or
filed against the Company or any of its properties or other
assets and shall remain unpaid, unvacated, unbonded or
unstayed for a period of fifteen (15) days or in any event
later than five (5) days prior to the date of any proposed
sale thereunder; or
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(h) Bankruptcy, reorganization, insolvency or liquidation
proceedings, or other proceedings for relief under any
bankruptcy law or any law for the relief of debtors shall
be instituted voluntarily by or involuntarily against
the Company; or
(i) The Company shall have its Common Stock delisted from
the over-the-counter market or other market or exchange on
which the Common Stock is or becomes listed or trading in
the Common Stock shall be suspended for more than 10
consecutive days; or
(j) The Company shall not deliver to the Buyer the Common
Stock pursuant to paragraph 4 herein without restrictive
legend within 5business days.
Then, or at any time thereafter, unless cured, and in each an every such case,
unless such Event of Default shall have been waived in writing by the Holder
(which waiver shall not be deemed to be a waiver of any subsequent default)
at the option of the Holder and in the Holder's sole discretion, the Holder
may consider this Debenture immediately due and payable, without presentment,
demand, protest or (further)notice of any kind (other than notice of
acceleration), all of which are hereby expressly waived, anything herein or
in any note or other instruments contained to the contrary notwithstanding,
and the Holder may immediately, and without expiration of any period of
grace, enforce any and all of the Holder's rights and remedies provided here
in or any other rights or remedies afforded by law.
9. This Debenture represents a prioritized obligation of
the Company. However, no recourse shall be had for the
payment of the principal of, or the interest on, this
Debenture, or for any claim based hereon, or otherwise in
respect hereof, against any incorporator, shareholder,
officer or director, as such, past, present or future, of
the Company or any successor corporation, whether by virtue
of any constitution, statue or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all
such liability being, by the acceptance hereof and as part
of the consideration for the issue hereof, expressly waived
and released.
10. In case any provision of this Debenture is held by a
court of competent jurisdiction to be excessive in scope or
otherwise invalid or unenforceable, such provision shall be
adjusted rather than voided, if possible, so that it is
enforceable to the maximum extent possible, and the validity
and enforceability of the remaining provision of this
Debenture will not in any way be affected or impaired thereby.
11. This Debenture and the agreement referred to in thios
Debenture constitute the full and entire understanding and
agreement between the Company and the Holder with respect to
the subject hereof. Neither this Debenture nor any term
hereof may be amended, waived, discharged or terminated
other than by a written instrument signed by the Company and
the Holder.
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12. This Debenture shall be governed by the construed in
accordance with the laws of Texas applicable to contracts
made and wholly to be performed within the State of Texas
and shall be binding upon the successors and assigns of each
party hereto. The Holder and the Company herby mutually
waive trail by jury and consent to exclusive jurisdiction
and venue in the courts of the State of Texas. At Holder's
election, ant dispute between the parties may be arbitrated
rather than litigated in the courts, before the American
Arbitration Association in Dallas and pursuant to its rules.
Upon demand made by the Holder to the Company, the Company
agrees to submit to and participate in such arbitration.
This Agreement may be executed in counterparts, and the
facsimile transmission of an executed counter part to this
Agreement shall be effective as an original.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.
Dated: February 3, 2000
WORLDNET RESOURCE GROUP, INC.
BY:______________________________
SAMY SALEM, PRESIDENT
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