Exhibit 10.2

 

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THIS DEBENTURE, AND THE SECURITIES INTO WHICH IT IS CONVERTIBLE (COLLECTIVELY,
THE “SECURITIES”), HAVE NOT BEEN REGISTERED WITH THE UNITED STATES SECURITIES
AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE. THE
SECURITIES ARE BEING OFFERED PURSUANT TO A SAFE HARBOR FROM REGISTRATION UNDER
REGULATION D PROMULGATED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
“ACT”). THE SECURITIES ARE “RESTRICTED” AND MAY NOT BE OFFERED OR SOLD UNLESS
THE SECURITIES ARE REGISTERED UNDER THE ACT, PURSUANT TO REGULATION D OR
PURSUANT TO AVAILABLE EXEMPTIONS FROM THE REGISTRATION REQUIREMENTS OF THE ACT
AND THE COMPANY WILL BE PROVIDED WITH OPINION OF COUNSEL OR OTHER SUCH
INFORMATION AS IT MAY REASONABLY REQUIRE TO CONFIRM THAT SUCH EXEMPTIONS ARE
AVAILABLE. FURTHER HEDGING TRANSACTIONS INVOLVING THE SECURITIES MAY NOT BE MADE
EXCEPT IN COMPLIANCE WITH THE ACT.

 

CONVERTIBLE DEBENTURE

 

Date:

 

March 15, 2005

 

 

 

Maker/Company:

 

BLUE WIRELESS & DATA, INC.

 

 

3001 Knox St., Suite 401, Dallas, TX 75205

 

 

Contact: John W. Mills, III, COO

 

 

 

Payee/Holder:

 

GREG MARTIN

 

 

6032 Canvas Back Dr., Frisco, TX 75034

 

 

fax: (214) 853-5538

 

 

 

 

 

STEVEN BENAVIDES

 

 

1740 Elmhurst Ct., Prosper, TX 75078

 

 

fax: (214) 853-5538

 

 

 

 

 

The singular term “Holder” herein shall collectively include both of the current
Holders as identified above, and all of their heirs, successors and assigns.

 

 

 

Panaband:

 

DSG TECHNOLOGY, INC. d/b/a PANABAND

 

 

4760 Preston Road, Suite 244-272, Frisco, Texas 75034

 

 

 

Limited Guarantor:

 

TRENTON LIGHTHOUSE, L.P.

 

 

3001 Knox St., Suite 403, Dallas, TX 75205

 

 

 

Full Guarantor:

 

TKM OIL & GAS, INC.

 

 

3001 Knox St., Suite 403, Dallas, TX 75205

 

 

 

Principal:

 

ONE MILLION AND NO/100 DOLLARS ($1,000,000.00)

 

Annual Interest Rate on Unpaid Principal:

0.00% per annum, provided that the interest payable shall not exceed the maximum
amount that may be lawfully charged.  Interest will be calculated on the unpaid
principal to the date of each payment.

 

Maturity Date:

 

March 15, 2006

 

 

 

Terms of Payment:

 

On or before the Maturity Date, Holder may elect at its sole and absolute
discretion to require one of the following for full payment of and performance
under this Debenture:

 

 

Initials:

 

 

 

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1.

Receive the outstanding principal and interest (if any) in one lump sum; or

 

 

2.

Convert this Debenture under the Conversion Terms herein.

 

 

 

Obligation:

 

Maker promises to pay or convert this Debenture under the Terms of Payment.

 

 

 

Security:

 

This Debenture is secured by 100% of the stock equity of Panaband, which is

 

 

perfected in a Stock Pledge Agreement attached hereto as Exhibit 2 hereto.

 

General Terms

 

1.             Conversion Terms.  Under the Terms of Payment, Holder may elect,
at its sole and absolute discretion, to convert the principal amount of this
Debenture into common stock of the Company. Such conversion shall occur within
ten (10) days of Holder’s election to so convert. Upon such election, Holder
shall be entitled to receive the Calculated Number of fully paid and
non-assessable shares of the common stock (the “Common Stock”) of the Company. 
The Calculated Number shall be equal to the greater of the following:

 

a.             The number of common shares sufficient to cause the Holder, after
said conversion, to be owners of ten percent (10%) of the equity value of the
Company; or

b.             $1,000,000 of the Common Stock of the Company.

 

For any share price valuation required in the Conversion calculation, the share
price shall be equal to the trailing 30 day average trading price of Maker’s
common stock.

 

2.             Limited Guarantee.  Trenton Lighthouse, LP (“Trenton”), hereby
guarantees this Debenture to the extent that under the terms of Paragraph 1
herein, on the date of conversion, there are not sufficient shares of the
Company to issue to the Holders.  In that instance only, the Holders may look to
Trenton and hold Trenton responsible to provide such shares of the Company from
Trenton’s reserve, or such other equity of equivalent value to the Holder’s
satisfaction.  Trenton guarantees and promises to provide such shares upon such
demand.  Holder may from time to time, but no more often than once per month
during the Term, request and receive a copy of the financial statements of any
Guarantor.

 

3.             Full Guarantee.  TKM Oil & Gas, Inc. (“TKM”), does hereby
guaranty to Holder the prompt, punctual and full payment of all monies owed to
Holder from Maker.  Until termination, this guaranty is unlimited as to amount
or duration and shall remain in full force and effect notwithstanding any
extension, compromise, adjustment, forbearance, waiver, release or discharge of
any party obligor or guarantor, or release in whole or in part of any security
granted for said indebtedness or compromise or adjustment thereto, and TKM
waives all notices thereto.  The obligations of TKM shall be at the election of
Holder, shall be primary and Holder shall not be required to exhaust its
remedies as against Maker prior to enforcing its rights under this guaranty
against TKM.  The guaranty hereunder shall be unconditional and absolute.  TKM
waives all rights of subrogation and set-off until all sums under this guaranty
are fully paid.  In the event payments due under this guaranty are not paid upon
demand, TKM shall pay all reasonable costs and attorney’s fees necessary for
collection, and enforcement of this guaranty.  TKM warrants and represents it
has full authority to enter into this guaranty.  This guaranty shall be binding
upon and inure to the benefit of the parties, their successors, assigns and
personal representatives.  Holder may from time to time, but no more often than
once per month during the Term, request and receive a copy of the financial
statements of any Guarantor.

 

4.             Adjustments to Conversion.  If Maker is recapitalized,
consolidated with or merged into any other corporation, or sells or conveys to
any other corporation all or substantially all of the its property as an entity,
provision shall be made as part of the terms of any such transaction so that the
Holders of this Debenture may receive, in lieu of the Common Stock otherwise
issuable to them upon conversion hereof, at the same conversion ratio, the same
kind and amount of securities

 

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or assets as may be distributable upon the recapitalization, consolidation,
merger, sale or conveyance with respect to the Common Stock.

 

5.             Assignment.  This Debenture and the obligations herein may not be
assigned by Maker without prior written consent of the Holder.  Holder may
freely assign all or any portion of its right, title and interest in and to this
Debenture.

 

6.             Default and Remedies.  If Maker defaults hereunder, Holder may,
at its sole option, seek one of the following remedies, here listed in no
particular order:

a.             Require and cause the Conversion contemplated herein under the
Conversion Terms;

b.             Exercise its rights under the Stock Pledge Agreement; or

c.             Be made whole from the Guarantors hereto, in accordance with the
guaranty terms hereof.

 

 

7.             Notices.  Any notices required or permitted to be given under
this Agreement shall be sufficient if in writing and delivered or sent by fax,
registered or certified mail, or by Federal Express or other nationally
recognized overnight couriers to the principal office of each party and
addressed to its principal executive officer at the address set forth herein. 
Faxes should be marked for the attention of the principal executive officer and
sent to the fax number of the recipient.

 

5.             Tender.  All cash amounts payable hereunder are payable in lawful
money of the United States.

 

6.             Nonusurious.  All agreements between Maker and the holder hereof,
whether now existing or hereafter arising and whether written or oral, are
hereby limited so that in no contingency, whether by reason of demand for
payment or acceleration of the maturity hereof or otherwise, shall the interest
contracted for, charged or received by the holder hereof exceed the maximum
amount permissible under applicable law.  If, from any circumstance whatsoever,
interest would otherwise be payable to the holder hereof in excess of the
maximum lawful amount, the interest payable to the holder hereof shall be
reduced to the maximum amount permitted under applicable law; and if from any
circumstance the holder hereof shall ever receive anything of value deemed
interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive interest shall be applied to the reduction of the
principal hereof and not to the payment of interest, or if such excessive
interest exceeds the unpaid balance of principal hereof such excess shall be
refunded to Maker.  All interest paid or agreed to be paid to the holder hereof
shall, to the extent permitted by applicable law, be amortized, prorated,
allocated, and spread throughout the full period until payment in full of the
principal (including the period of any renewal or extension hereof) so that the
interest hereon for such full period shall not exceed the maximum amount
permitted by applicable law.  This paragraph shall control all agreements
between Maker and the Holder hereof.

 

7.             Headings.  The article, paragraph and subparagraph headings
hereof are inserted for convenience of reference only and shall not alter,
define, or be used in construing the text of such articles, paragraphs or
subparagraphs.

 

8.             Plurality.  When the context requires, singular nouns and
pronouns include the plural.

 

9.             Governing Law and Jurisdiction.  This Debenture and all matters
related hereto shall be governed, construed and interpreted strictly in
accordance with the laws of the State of Texas, without regard to its principles
of conflicts of laws.  Jurisdiction and venue shall reside exclusively in the
courts of Dallas County, Texas.

 

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10.           Severability.  If any provision of this Debenture is held to be
invalid or unenforceable by any court of competent jurisdiction, it is the
intent of all of the parties that all other provisions of this Debenture be
construed to remain fully valid, enforceable and binding on the parties.

 

11.           Power to Bind.  A responsible officer of the Maker has read and
understands the contents of this Debenture and is empowered and duly authorized
on behalf of the Maker to execute it.

 

IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Convertible Debenture effective on the Date
first stated herein.

 

MAKER:

 

 

 

 

 

/s/ John W. Mills, III

 

 

BLUE WIRELESS & DATA, INC.

 

John W. Mills, III, COO

 

 

 

PAYEE / HOLDER:

 

 

 

 

 

/s/ Greg Martin

 

/s/ Steven Benavides

 

GREG MARTIN

STEVEN BENAVIDES

 

 

LIMTED GUARANTOR:

FULL GUARANTOR:

 

 

 

 

/s/ Dennis G. McLaughlin, III

 

/s/ Dennis G. McLaughlin, III

 

TRENTON LIGHTHOUSE, L.P.

TKM OIL & GAS, INC.

Dennis G. McLaughlin, III, Managing Partner

Dennis G. McLaughlin, III, CEO

 

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