THIS SECURED
DEBENTURE (THE “SECURITIES”) HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES HAVE
BEEN ACQUIRED SOLELY FOR INVESTMENT PURPOSES AND NOT WITH A VIEW TOWARD RESALE
AND MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE
OF AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS, OR AN OPINION OF
COUNSEL, IN A GENERALLY ACCEPTABLE FORM, THAT REGISTRATION IS NOT REQUIRED
UNDER SAID ACT OR APPLICABLE STATE SECURITIES LAWS. 


SECURED REDEEMABLE DEBENTURE


NATIONAL AUTOMATION SERVICES, INC.


July 21, 2008


	
 

	
 


	
No. NAS – 1

	
US$750,000





          This
Secured Redeemable Debenture (the “Debenture”) is issued on July 21,
2008 (the “Closing Date”) by National Automation Services, Inc. a Nevada
corporation (the “Company”), to Trafalgar Capital Specialized Investment
Fund, Luxembourg (together with its permitted successors and assigns, the “Holder”)
pursuant to exemptions from registration under the Securities Act of 1933, as
amended. 


ARTICLE I. 


          Section
1.01 Principal and Interest. For
value received, the Company hereby promises to pay to the order of the Holder
on January ____, 2010 in lawful money of the United States of America and in
immediately available funds any then unpaid portion of the principal sum of
Seven Hundred Fifty Thousand U.S. Dollars (US$750,000)
together with interest on the unpaid principal of this Debenture at the
rate of ten percent (10%) per annum (the “Interest Rate”). Interest shall be
payable monthly in cash or, in the Holder’s sole discretion, shares of the
Company’s common stock (“Common Stock”) on the outstanding balance commencing
two (2) months from the date hereof. Interest shall be computed on the basis of
a 360-day year and the actual days elapsed and the Holder shall deduct the
first two (2) interest payments at the Closing (as defined in the Securities
Purchase Agreement). Any unpaid interest shall be compounded monthly.
Additionally, upon the occurrence of an Event of Default (as defined herein)
the Interest Rate shall be increased to a rate of eighteen percent (18%) per
annum. 






          Section
1.02 [Reserved]


          Section
1.03 [Reserved]


          Section
1.04 [Reserved]


          Section
1.05 Mandatory Redemption.
The Company shall begin redeeming on this Debenture monthly beginning on the
one (1) month anniversary following the Closing by making equal payments over
the remaining term of this Debenture (each payment, a “Redemption”). The
Company shall pay a fifteen percent (15%) redemption premium on the principal
redeemed each month. For the avoidance of doubt, the Company shall make
payments according to the schedule set forth on Exhibit A hereto (the date of
each payment, a “Repayment Date”). The Company shall have the option to prepay
the outstanding balance at any time with the fifteen percent (15%) redemption
premium. 


          Section
1.06 Interest Payments.
Holder shall deduct the first two (2) interest payments at the Closing. At the
time such interest is payable, the Holder, in its sole discretion, may elect to
receive the interest in cash (via wire transfer or certified funds) or in the
form of Common Stock. In the event of default, as described in Article III
Section 3.01 hereunder, the Holder may elect that the interest be paid in cash
(via wire transfer or certified funds) or in the form of Common Stock. If paid
in the form of Common Stock, the amount of stock to be issued will be
calculated as follows: the value of the stock shall be the closing bid price of
the Common Stock on the Pink Sheets or the Over-The-Counter Bulletin Board, as
the case may be, on the date the interest payment is due. A number of shares of
Common Stock with a value equal to the amount of interest due shall be issued.
No fractional shares will be issued; therefore, in the event that the value of
the Common Stock per share does not equal the total interest due, the Company
will pay the balance in cash. 


          Section
1.07 Paying Agent and Registrar.
Initially, the Company will act as paying agent and registrar. The Company may
change any paying agent, registrar, or Company-registrar by giving the Holder
not less than ten (10) business days’ written notice of its election to do so,
specifying the name, address, telephone number and facsimile number of the
paying agent or registrar. The Company may act in any such capacity. 


          Section
1.08 Secured Nature of Debenture.
This Debenture is secured by all of the assets and property of the Company and
its present and future acquired subsidiaries (including specifically Summit
Controls, LLC.) as set forth on Exhibit A to the Security Agreement dated as of
the date hereof between the Company and the Holder (the “Security Agreement”).
As set forth in the Security Agreement, Holder’s security interest shall
terminate upon the satisfaction of the Obligations as defined in the Security
Agreement. 


          Section
1.09 Currency Exchange Rate Protections.


	
 

	
 


	
 

	
          (a)
  “Closing Date Exchange Rate” means the Euro to US dollar spot exchange rate
  as converted by the Holder’s Custodian on the date funds are transferred into
  escrow. 





2






	
 

	
 


	
 

	
          (b)
  “Repayment Exchange Rate”means
  in relation to each date of a Redemption or a Repayment Date, the Euro to US dollar spot exchange rate as
  quoted by Bloomberg or Proquote on such date. 


	
 

	
 


	
 

	
          (c)
  If on the date of any Redemption, the Repayment Exchange Rate is more than
  the Closing Date Exchange Rate then the number of Shares to be issued shall
  be increased by the same percentage as results from dividing the Repayment
  Exchange Rate by the Closing Date Exchange Rate. By way of example, if the
  number of Shares to be issued in respect of a particular Redemption would,
  but for this Section, be 1,000 and if the Closing Date Exchange Rate is 1.75
  and the relevant Repayment Exchange Rate is 1.80, then 1,029 Shares will be
  issued in relation to that Redemption, as the case may be. For the avoidance
  of doubt, the formula for such calculation, by way of example for this
  Section, equals ((1.80 /1.75)-1)*1000 = 29 additional shares. 


	
 

	
 


	
 

	
          (d)
  If on the Repayment Date, the Cash Payment Date Exchange Rate, as defined
  below is more than the Closing Date Exchange Rate then the amount of cash
  required to satisfy the amounts due at such time shall be increased by the
  same percentage as results from dividing the Cash Payment Date Exchange Rate
  by the relevant Closing Date Exchange Rate. “Cash Payment Date Exchange Rate”meansin
  relation to each Repayment Date the Euro to US dollar spot exchange rate as
  quoted by Bloomberg or Proquote on such date. By way of example, if the
  amount of cash required to repay all amounts due on such date would, but for
  this Section, be $1,000 and if the Closing Date Exchange Rate is 1.75 and the
  relevant Repayment Date Exchange Rate is 1.80 then the amount of cash from
  the Cash Payment required to repay all amounts due on such date will be
  $1,028.57. For the avoidance of doubt, the formula for such calculation, by
  way of example for this Section, equals ((1.80/1.75)-1)*$1000 = $28.57
  additional dollars. 





ARTICLE II.


          Section
2.01 Amendments and Waiver of Default.
The Debenture may not be amended without the written consent of both the Holder
and the Company. Notwithstanding the above, without the consent of the Holder,
the Debenture may be amended to cure any ambiguity, defect or inconsistency, or
to provide for assumption of the Company obligations to the Holder. 


ARTICLE III.


          Section
3.01 Events of Default. An
Event of Default is defined as follows: (a) failure by the Company to pay
amounts due hereunder within fifteen (15) days of the date of maturity of this
Debenture; (b) failure by the Company for ten (10) days after notice to it to
comply with any of its other agreements in the Debenture; (c) events of
bankruptcy or insolvency; or (d) a breach by the Company of its obligations
under the Securities Purchase Agreement which is not cured by the Company
within ten (10) days after receipt of written notice thereof. Upon the
occurrence of an Event of Default, the Holder may, in its sole discretion,
accelerate full repayment of all debentures outstanding and accrued interest
thereon or may, notwithstanding any limitations contained in this Debenture
and/or the Securities Purchase Agreement dated as of the date hereof between
the Company and Trafalgar Capital Specialized Investment Fund, Luxembourg (the
“Securities Purchase Agreement”). 


3






          Section
3.02 [Reserved]


ARTICLE IV.


          Section
4.01 [Reserved]


ARTICLE V.


          Section
5.01 [Reserved]


          Section
5.02 Consent of Holder to Sell Capital
Stock, Incur Debt or Grant Security Interests. Except for the
Securities Purchase Agreement, so long as any of the principal of or interest
on this Debenture remains unpaid, the Company shall not, without the prior
consent of the Holder, issue or sell (i) any Common Stock or Preferred Stock
without consideration or for a consideration per share less than the bid price
of the Common Stock determined immediately prior to its issuance except for
shares of Common Stock issued to Richardson & Patel, LLP, (ii) issue or
sell any Preferred Stock, warrant, option, right, contract, call, or other
security or instrument granting the holder thereof the right to acquire Common
Stock without consideration or for a consideration per share less than such
Common Stock’s bid price value determined immediately prior to its issuance,
(iii) enter into any security instrument granting the holder a security
interest in any of the assets of the Company, (iv) file any registration
statement on Form S-8 except for a registration statement for Richardson &
Patel, LLP, or (v) incur any additional debt without the Holder’s prior written
consent with the exception of equipment purchases and real estate acquisitions
used in the normal course of business. 


ARTICLE VI.


          Section
6.01 Notice. Notices
regarding this Debenture shall be sent to the parties at the following
addresses, unless a party notifies the other parties, in writing, of a change
of address: 


	
 

	
 

	
 

	
 


	
If to the
  Company, to:

	
National
  Automation Services, Inc.

	
 


	
 

	
2053 Pabco
  Road

	
 


	
 

	
Henderson,
  NV 89011

	
 


	
 

	
Attention:
  Mr. Bob Chance, President

	
 


	
 

	
Telephone:
  (702) 642-7720

	
 


	
 

	
Facsimile:
  (702) 564-5411

	
 





4






	
 

	
 

	
 


	
With a copy
  to (which shall not

	
 


	
constitute
  notice):

	
Richardson
  & Patel, LLP


	
 

	
10900
  Wilshire Blvd., Suite 500


	
 

	
Los Angeles,
  CA 90024


	
 

	
Attention:
  Peter Hogan, Esq.


	
 

	
Telephone:

	
(310)
  208-1182


	
 

	
Facsimile:

	
(310)
  208-1154


	
 

	
 


	
If to the
  Holder:

	
Trafalgar
  Capital Specialized Investment Fund


	
 

	
8-10 Rue
  Mathias Hardt


	
 

	
BP 3023


	
 

	
L-1030
  Luxembourg


	
 

	
Attention:

	
Andrew
  Garai, Chairman of the Board of


	
 

	
Facsimile:

	
011-44-207-405-0161
  and


	
 

	
 

	
001-786-323-1651


	
 

	
 


	
With a copy
  to (which shall not

	
 


	
constitute
  notice):

	
James G.
  Dodrill II, P.A.


	
 

	
5800
  Hamilton Way


	
 

	
Boca Raton,
  FL 33496


	
 

	
Attention:

	
James
  Dodrill, Esq.


	
 

	
Telephone:

	
(561)
  862-0529


	
 

	
Facsimile:

	
(561)
  892-7787





          Section
6.02 Governing Law. This
Debenture shall be deemed to be made under and shall be construed in accordance
with the laws of the State of Florida without giving effect to the principals
of conflict of laws thereof. Each of the parties consents to the jurisdiction
of the U.S. District Court sitting in the Southern District of the State of
Florida or the state courts of the State of Florida sitting in Broward County,
Florida in connection with any dispute arising under this Debenture and hereby
waives, to the maximum extent permitted by law, any objection, including any
objection based on forum non conveniens to the bringing of any such proceeding
in such jurisdictions.  


          Section
6.03 Severability. The
invalidity of any of the provisions of this Debenture shall not invalidate or
otherwise affect any of the other provisions of this Debenture, which shall
remain in full force and effect. 


          Section
6.04 Entire Agreement and Amendments.
This Debenture represents the entire agreement between the parties hereto
with respect to the subject matter hereof and there are no representations,
warranties or commitments, except as set forth herein. This Debenture may be
amended only by an instrument in writing executed by the parties hereto. 


          Section
6.05 Counterparts. This
Debenture may be executed in multiple counterparts, each of which shall be an
original, but all of which shall be deemed to constitute on instrument. 


5






          IN
WITNESS WHEREOF, with the intent to be legally bound
hereby, the Company as executed this Debenture as of the date first written
above. 


	
 

	
 

	
 


	
 

	
NATIONAL AUTOMATION SERVICES, INC.


	
 

	
 

	
 


	
 

	
By:

	
 


	
 

	
 

	



	
 

	
Name: 

	
Bob Chance


	
 

	
Title:

	
President


	
	




6






EXHIBIT “A”


[Franklin to provide]


A-1