Document:

Agreement

 EXHIBIT 4.5 
  
 AGREEMENT 
  
 THIS AGREEMENT (this “Agreement”) is made and entered into as of December 19, 2003, by and among Global Payments, Inc., a Georgia corporation
(the “Company”), MRY Partners, L.P., a Georgia limited partnership (“MRY”) and Robert A. Yellowlees, an individual resident of the state of Georgia and general partner of MRY (“RAY”). 
  
 R E C I T A L S 
  
 WHEREAS, RAY has requested and the Company has agreed to file a registration
statement on Form S-3 in connection with the shares of the Company’s common stock to be issued upon exercise of options to purchase 564,160 shares of such common stock (the “Options”), which Options are currently held by MRY; and

  
 WHEREAS, the Company, MRY, and RAY have reached certain
agreements with respect to the registration of the sale of such common stock as set forth in this Agreement. 
  
 NOW, THEREFORE, in consideration of the foregoing, the mutual covenants contained herein and for other good and valuable consideration, the parties hereby
agree as follows: 
  
 1. DEFINITIONS 
  
 As used in this Agreement, the following terms have the respective meanings
set forth below: 
  
 Commission: shall mean the Securities
and Exchange Commission or any other federal agency at the time administering the Securities Act; 
  
 Person: shall mean an individual, partnership, limited liability company, joint stock company, corporation, trust or unincorporated organization,
or a government or agency or political subdivision thereof; 
  
 register, registered and registration: shall mean a registration effected by preparing and filing a registration statement in compliance with the Securities Act (and any post-effective amendments filed or required to be
filed) and the declaration or ordering of effectiveness of such registration statement; 
  
 Registrable Securities: shall mean (A) 564,160 shares of the Company’s common stock that may be issued upon exercise of the Options and (B) any securities of the Company issued as a dividend or other
distribution with respect to, or in exchange for or in replacement of, the shares of Company common stock referred to in clause (A); provided, that Registrable Securities shall not include (i) any securities referred to in clause (B) sold pursuant
to an effective registration statement relating thereto or Rule 144 (as defined below), (ii) any securities referred to in clause (B) eligible for sale pursuant to subparagraph (k) under Rule 144 (or any successor provision thereto) under the
Securities Act (“Rule 144”), or (iii) such securities as are acquired by the Company or any of its subsidiaries; 
  
 Registration Expenses: shall mean all expenses incurred by the Company in compliance with Section 2(a) hereof, including, without limitation, all
registration and filing fees, printing expenses, fees and disbursements of counsel for the Company, and blue sky fees and expenses but shall not include expenses or fees incurred by RAY or MRY; 
  
 Security, Securities: shall have the meaning set forth in Section
2(a)(1) of the Securities Act; 
  
 Securities Act: shall
mean the Securities Act of 1933, as amended; and 
  
 Selling
Expenses: shall mean all underwriting discounts and selling commissions and other expenses applicable to the sale of Registrable Securities and all fees and disbursements of counsel for MRY. 

 2. REGISTRATION 
  
 (a) Shelf Registration. 
  
 (i) Within a reasonable time from the date hereof, the Company shall file a “shelf” registration statement on Form S-3 pursuant
to Rule 415 under the Securities Act (including any documents incorporated or deemed to be incorporated by reference therein, the “Shelf Registration”) with respect to the Registrable Securities, with a base prospectus containing a plan of
distribution in the form attached hereto as Exhibit A. The Company shall, subject to Section 2(f) hereof, use its reasonable efforts to cause the Shelf Registration to become effective as soon as practicable after the date of filing thereof, and
shall use its reasonable efforts to keep the Shelf Registration continuously effective from the date such Shelf Registration is effective until the earlier of (A) the second anniversary of the effective date of such Shelf Registration and (B) the
date on which all Registrable Securities may first be sold pursuant to Rule 144(k) under the Securities Act in order to permit the prospectus forming a part thereof to be usable by MRY during such period. Notwithstanding any other provision of this
Agreement, the obligations of the Company hereunder shall be suspended at all times during which the Company is not eligible to effect and maintain the Shelf Registration on Form S-3 (or any successor form thereto). The Company will supplement the
Shelf Registration as provided in Section 2(a)(ii) and Section 2(c)(iv), but nothing in this Agreement shall otherwise obligate the Company to amend the Shelf Registration after it becomes effective. 
  
 (ii) Subject to Section 2(f) hereof, the Company shall amend
or supplement the Shelf Registration as promptly as practicable, (A) as required by Form S-3 or by the instructions applicable to Form S-3 or by the Securities Act or the rules and regulations promulgated thereunder and (B) to include in such Shelf
Registration any additional securities that become Registrable Securities by operation of the definition thereof. 
  
 (b) Expenses of Registration. All Registration Expenses incurred in connection with the Shelf Registration and any supplements thereto, whether or
not it becomes effective, and whether all, none or some of the Registrable Securities are sold pursuant to the Shelf Registration shall be borne by the Company, and all Selling Expenses shall be borne by MRY. 
  
 (c) Registration Procedures. The Company will keep MRY advised in
writing as to the filing of the Shelf Registration and as to the effectiveness of the Shelf Registration. At its expense, the Company will: 
  
 (i) furnish to MRY before filing with the Commission, copies of any registration statement (excluding all exhibits) and any prospectus
forming a part of the Shelf Registration and any amendments or supplements thereto prior to the effectiveness of such registration statement and including each preliminary prospectus, any summary prospectus or any term sheet (as such term is used in
Rule 434 under the Securities Act) and any post-effective amendment to such registration statement and any other prospectus that materially amends or supplements the Shelf Registration filed under Rule 424 under the Securities Act, which documents,
other than documents incorporated or deemed incorporated by reference, will be subject to the review of MRY for a period of at least five business days, and the Company shall not file any such registration statement or such prospectus or any
amendment or supplement to such registration statement or prospectus to which MRY shall reasonably object within five business days after the receipt thereof; MRY shall be deemed to have reasonably objected to such filing only if the registration
statement, prospectus or amendment or supplement, as applicable, as proposed to be filed, contains a material misstatement or omission; 
  
 (ii) furnish to MRY such number of conformed copies of the Shelf Registration and of each amendment or supplement thereto (in each case
excluding all exhibits) and such number of copies of the prospectus forming a part of the Shelf Registration (including each preliminary prospectus, any summary prospectus or any term sheet (as such term is used in Rule 434 under the Securities
Act)) and any other prospectus whether or not filed under Rule 424 under the Securities Act, in conformity with the requirements of the Securities Act, and such other documents, excluding documents filed with the Commission and incorporated or
deemed to be incorporated by reference, all as MRY from time to time may reasonably request; 

 (iii) use its reasonable efforts (x) to register or qualify all Registrable Securities
under such other securities or blue sky laws of such States of the United States of America where an exemption is not available and as MRY shall reasonably request, (y) to keep such registration or qualification in effect for so long as the Shelf
Registration remains in effect, and (z) to take any other action which may be reasonably necessary or advisable to enable MRY to consummate the disposition in such jurisdictions of the securities to be sold by it, except that the Company shall not
for any such purpose be required to qualify generally to do business as a foreign corporation in any jurisdiction where it is not so qualified, or to subject itself to taxation in any such jurisdiction, or to execute a general consent to service of
process in effecting such registration, qualification or compliance, unless the Company is already subject to service in such jurisdiction and except as may be required by the Securities Act or applicable rules or regulations thereunder; 

 
 (iv) subject to Section 2(f) hereof, promptly notify MRY
(A) upon discovery that, or upon the happening of any event or the existence of any condition or fact as a result of which, the prospectus forming a part of the Shelf Registration, as then in effect, includes an untrue statement of a material fact
or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, (B) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration or the initiation of proceedings for that purpose, (C) of any request by the Commission for (1) amendments to the Shelf Registration or any document incorporated or deemed to be incorporated by
reference therein, (2) supplements to the prospectus forming a part of the Shelf Registration or (3) additional information, or (D) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any jurisdiction or the initiation of any proceeding for such purpose, and at the request of MRY promptly prepare and furnish to it a reasonable number of copies of a supplement to
or an amendment of the Shelf Registration or such prospectus as may be necessary so that, as thereafter delivered to the purchasers of such securities, such prospectus shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; 
  
 (v) use its reasonable efforts to obtain the withdrawal of any order suspending the effectiveness of the
Shelf Registration, or the lifting of any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction; 
  
 (vi) if requested by MRY, promptly incorporate in the Shelf Registration or prospectus, pursuant to an
amendment or supplement if necessary, such information as MRY may reasonably request to have included therein, including, without limitation, information with respect to the number of shares of Registrable Securities being sold, the purchase price
being paid therefor and any other terms of the offering of the Registrable Securities to be sold in such offering; and make all required filings of any such prospectus supplement as soon as practicable after the Company is notified of the matters to
be incorporated in such prospectus supplement; 
  
 (vii) use its reasonable efforts to cause all Registrable Securities included in any registration pursuant hereto to be listed on each securities exchange on which securities of the same class are then listed, or, if not then listed on any
securities exchange, to be eligible for trading in any over-the-counter market or trading system in which securities of the same class are then traded; and 
  
 (viii) furnish to MRY, addressed to MRY and RAY, a notification from the General Counsel of the Company, dated the date of the
effectiveness of the Shelf Registration, to the effect that the registration statement has become effective under the Securities Act and that the registration statement and the prospectus (other than the financial statements and the notes thereto
and the related schedules and other financial and statistical data included or incorporated by reference therein or omitted therefrom, as to all of which such counsel shall make no statement) as of their respective effective or issue dates, complied
as to form in all material respects with the applicable requirements of the Securities Act and the rules and regulations of the Commission thereunder. 

 (d) Indemnification. 
  
 (i) The Company will indemnify and hold harmless MRY, each of its partners, including RAY, and each person
controlling MRY within the meaning of the Securities Act or the Securities Exchange Act of 1934, with respect to the Shelf Registration which has been effected pursuant to this Section 2, against all claims, losses, damages and liabilities (or
actions in respect thereof) arising out of or based on any untrue statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any registration statement or prospectus relating thereto (including any
preliminary prospectus), or any amendment or supplement thereto, or based on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will
reimburse MRY, each of its partners, including RAY, and each such person controlling MRY, as incurred, for any legal and any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or
action; provided that the Company will not be liable in any such case to the extent that any such claim, loss, damage, liability or expense arises out of or is based on any untrue statement or omission based upon written information furnished to the
Company by MRY or RAY and stated to be specifically for use therein. 
  
 (ii) Each of MRY and RAY will, jointly and severally, indemnify and hold harmless the Company, each of its directors and officers and each person who controls the Company within the meaning of the Securities Act or
the Securities Exchange Act of 1934, with respect to the Shelf Registration which has been effected pursuant to this Section 2, against all claims, losses, damages and liabilities (or actions in respect thereof) arising out of or based on any untrue
statement (or alleged untrue statement) of a material fact contained or incorporated by reference in any registration statement or prospectus relating thereto (including any preliminary prospectus), or any amendment or supplement thereto, or based
on any omission (or alleged omission) to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse the Company and such directors, officers, partners, members, persons
or control persons, as incurred, for any legal and any other expenses reasonably incurred in connection with investigating and defending any such claim, loss, damage, liability or action, in each case to the extent, but only to the extent, that such
untrue statement (or alleged untrue statement) or omission (or alleged omission) is made in such registration statement or prospectus in reliance upon and in conformity with written information furnished to the Company by MRY or RAY and stated to be
specifically for use therein, including, but not limited to, the information included in the Questionnaire for Selling Stockholders attached hereto as Exhibit B. 
  
 (iii) Each party entitled to indemnification under this Section 2(d) (the “Indemnified Party”)
shall give notice to the party required to provide indemnification (the “Indemnifying Party”) promptly after such Indemnified Party has actual knowledge of any claim as to which indemnity may be sought, and shall permit the Indemnifying
Party to assume the defense of any such claim or any litigation resulting therefrom; provided that counsel for the Indemnifying Party, who shall conduct the defense of such claim or any litigation resulting therefrom, shall be approved by the
Indemnified Party (whose approval shall not unreasonably be withheld or delayed) and the Indemnified Party may participate in such defense at such party’s expense (unless the Indemnified Party shall have concluded, based on the advice of
counsel, that there may be a conflict of interest between the Indemnifying Party and the Indemnified Party in such action, in which case the fees and expenses of one such counsel for all Indemnified Parties shall be at the expense of the
Indemnifying Party), and provided further that the failure of any Indemnified Party to give notice as provided herein shall not relieve the Indemnifying Party of its obligations under this Section 2(d) unless the Indemnifying Party is materially
prejudiced thereby. Neither the omission to deliver such notice nor any provision of this Section 2(d) will relieve the Indemnifying Party of any liability that it may have to the Indemnified Party otherwise than under this Section 2(d) or affect
any rights that the Indemnifying Party may have with respect to the Indemnified Party otherwise than under this Section 2(d). No Indemnifying Party, in the defense of any such claim or litigation shall, except with the consent of each Indemnified
Party (which consent shall not be unreasonably withheld or delayed), consent to entry of any judgment or enter into any settlement which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such Indemnified
Party of a release from all liability in respect to such claim or 

 
litigation. Each Indemnified Party shall furnish such information regarding itself or the claim in question as an Indemnifying Party may reasonably request
in writing and as shall be reasonably required in connection with the defense of such claim and litigation resulting therefrom. 
  
 (iv) If the indemnification provided for in this Section 2(d) is held by a court of competent jurisdiction to be unavailable to an
Indemnified Party with respect to any loss, liability, claim, damage or expense referred to herein, then the Indemnifying Party, in lieu of indemnifying such Indemnified Party hereunder, shall contribute to the amount paid or payable by such
Indemnified Party as a result of such loss, liability, claim, damage or expense in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party on the one hand and of the Indemnified Party on the other in connection with
the statements or omissions which resulted in such loss, liability, claim, damage or expense, as well as any other relevant equitable considerations. The relative fault of the Indemnifying Party and of the Indemnified Party shall be determined by
reference to, among other things, whether the untrue (or alleged untrue) statement of a material fact or the omission (or alleged omission) to state a material fact relates to information supplied by the Indemnifying Party or by the Indemnified
Party and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. 
  
 (v) The foregoing indemnity agreement of the Company, MRY and RAY is subject to the condition that, insofar as it relates to any loss,
claim, liability or damage arising out of or based on any untrue statement (or alleged untrue statement) of a material fact or omission (or alleged omission) to state a material fact made in a preliminary prospectus but eliminated or remedied in (A)
the amended prospectus on file with the Commission at the time the registration statement in question becomes effective or (B) the amended prospectus filed with the Commission pursuant to Commission Rule 424(b) (in either case, the “Final
Prospectus”), such indemnity or contribution agreement shall not inure to the benefit of MRY, any of its partners, including RAY, or any person controlling MRY if a copy of the Final Prospectus was furnished to MRY or RAY but was not furnished
to the person asserting the loss, liability, claim or damage at or prior to the time such action is required by the Securities Act. 
  
 (e) Information by MRY and RAY. Each of MRY and RAY shall promptly furnish to the Company such information regarding MRY and the distribution
proposed by MRY as the Company may reasonably request in writing and as shall be reasonably required in connection with any registration, qualification or compliance referred to in this Section 2, and shall promptly notify the Company of any change
in such information previously provided. 
  
 (f) Holdback
Agreement; Postponement. Notwithstanding any other provision in this Agreement and as a condition to the Company’s maintaining the effectiveness of the Shelf Registration provided in this Agreement: (A) Neither RAY nor MRY shall sell any of
the Registrable Securities for a period of 45 days after October 22, 2003 and (B) At least three (3) business days prior to selling Registrable Securities pursuant to the Shelf Registration, MRY shall notify the Company in accordance with Section
3(d) of its expectation to sell Registrable Securities pursuant to the Shelf Registration in the thirty (30) day period following such notice. Notwithstanding any other provision of this Section 2, upon the occurrence or existence of any pending
material corporate development or any other material event that, in the sole judgment of the Company, makes it appropriate to suspend the registration rights set forth herein, the Company may, by notice to MRY in accordance with Section 3(d), (A)
postpone the filing of the Shelf Registration pursuant to Section 2(a) or (B) suspend the rights of MRY to make sales pursuant to the Shelf Registration for such a period of time as the management of the Company may determine in good faith; provided
that, once the Shelf Registration has become effective, if periods of suspension exceed sixty (60) days in the aggregate during any period of twelve (12) consecutive months, management of the Company shall consult with and obtain the agreement of a
majority of its Board of Directors regarding such additional period of suspension. MRY and RAY expressly agree in consideration of the Company’s filing of the Shelf Registration to maintain any communication by the Company pursuant to this
Section (2)(f) in confidence such that the Company may rely on the safe harbor provision of Rule 100(b)(2)(ii) of Regulation FD with respect to such communications. 
  
 (g) Sales and Transfer of Shares Sold. MRY and RAY agree that MRY will dispose of Registrable Securities, the sale of
which is covered by the Shelf Registration, only in a manner described under the heading “PLAN OF DISTRIBUTION” attached hereto as Exhibit A, and in accordance with all applicable 

 
securities laws, provided that MRY may sell Registrable Securities under Rule 144 if available. MRY and RAY represent that they have no current plans to
effect the sale of any Registrable Securities pursuant to the Shelf Registration through short sales of the Company’s securities or sales to cover short sales. RAY agrees to cause MRY to deliver, or cause its broker or other agent to deliver, a
copy of any prospectus forming a part of the Shelf Registration, together with any amendments or supplements thereto, to purchasers of the Registrable Securities whenever MRY sells any of the Registrable Securities. Upon a sale of any Registrable
Securities, MRY or its broker will be required to deliver to the Company’s transfer agent (1) the restricted stock certificate(s) representing such shares, (2) a stock power in a form reasonably acceptable to the Company or other appropriate
instructions for transfer of the shares sold, and (3) a representation letter from its broker, or from it in the event of a sale in a privately negotiated transaction, in the form of Exhibit C attached hereto. Upon receipt of these required items,
the Company will cause the transfer agent to coordinate the transfer of shares to the purchaser. Certificates for the balance of shares not sold will be issued to MRY, unless other instructions are provided by MRY to the transfer agent. 

 
 (h) Compliance with Rule 144. The Company shall use its
commercially reasonable efforts to facilitate and expedite sales or other transfers of the Registrable Securities pursuant to such Rule 144, which efforts shall include timely notice to its transfer agent to process such sales or other transfers
promptly. 
  
 3. MISCELLANEOUS 
  
 (a) Directly or Indirectly. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited from taking, such provision shall be applicable whether such action is taken directly or indirectly by such Person. 
  
 (b) Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Georgia. 
  
 (c)
Section Headings. The headings of the sections and subsections of this Agreement are inserted for convenience only and shall not be deemed to constitute a part thereof. 
  
 (d) Notices. 
  
 (i) All communications under this Agreement shall be in writing and shall be delivered by facsimile or by hand or sent by overnight mail
or by registered or certified mail, postage prepaid: 
  
 if to the Company, to: Global Payments Inc. 
  
 Four Corporate Square 
 Atlanta, Georgia 30329 
 Attention: Suellyn Tornay, General Counsel 
 Facsimile: 404-728-3278 
  
 With a copy to: 
 Global Payments Inc. 
 Four Corporate Square 
 Atlanta, Georgia 30329 
 Attention: Paul R. Garcia, 
 Chairman,Chief Executive Officer, and President 
 Facsimile: 404-728-3130 
  
 or at such other addresses and facsimile numbers as it may have furnished in writing to MRY and RAY. 
  

	 if to MRY or RAY, to:
	  	The street address and facsimile number set forth on Exhibit D or at the most recent street address or facsimile number as may have been furnished to the Company from time to time
in writing by MRY or RAY. 

 (ii) Any notice so addressed shall be deemed to be given: if delivered by facsimile, on
the date of actual receipt to the addressee; if delivered by hand, on the date of such delivery; if mailed by overnight mail, on the first business day following the date of such mailing; and if mailed by registered or certified mail, on the third
business day after the date of such mailing. 
  
 (e) Entire
Agreement; Amendment and Waiver. This Agreement constitutes the entire understanding of the parties hereto and supersedes all prior understanding among such parties. This Agreement may be amended, and the observance of any term of this Agreement
may be waived, with (and only with) the written consent of the Company and MRY. 
  
 (f) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. 
  
 (g) Severability. In the event that any one or more of the provisions
contained herein, or the application thereof in any circumstances, is held invalid, illegal or unenforceable in any respect for any reason, the validity, legality and enforceability of any such provision in every other respect and of the remaining
provisions contained herein shall not be in any way impaired thereby. 
  
 (h) Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the successors and assigns of each of the parties; provided, however, that neither MRY nor RAY may assign this Agreement (and the benefits
thereof) without the prior written consent of the Company except that if MRY sells or otherwise transfers any of the Registrable Securities to RAY, MRY may assign this Agreement (and the benefits thereof) with respect to any such Registrable
Securities to RAY only upon reasonable prior written notice to the Company. In the event MRY wishes to transfer the Registrable Securities and assign this Agreement (and the benefits thereof) to an entity controlled by RAY or primarily for the
benefit of RAY, his spouse, or lineal descendants, the Company will not unreasonably withhold consent to such assignment but RAY and MRY shall reimburse the Company for all reasonable costs (including, but not limited to, reasonable legal fees)
incurred which directly relate to such assignment, such as modifications to this Agreement and to the Shelf Registration. 
  
 (i) Reproduction of Documents. This Agreement and all documents relating thereto, including, without limitation, any consents, waivers and
modifications which may hereafter be executed may be reproduced by any party hereto by any photographic, photostatic, microfilm, microcard, miniature photographic or other similar process and such party may destroy any original document so
reproduced. The parties hereto agree and stipulate that any such reproduction shall be admissible in evidence as the original itself in any judicial or administrative proceeding (whether or not the original is in existence and whether or not such
reproduction was made by such party in the regular course of business) and that any enlargement, facsimile or further reproduction of such reproduction shall likewise be admissible in evidence. 
  
 [Signatures to Agreement among Global Payments, Inc, 
 MRY Partners, L.P. and Robert A. Yellowlees] 

 IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first set forth above.

  

	 GLOBAL PAYMENTS INC.

		
	 By:
	 	 /s/ Suellyn P. Tornay

	 Name:
	 	 Suellyn P. Tornay

		
	 Title:
	 	 General Counsel

	
	 MRY PARTNERS, L.P.

		
	 By:
	 	 /s/ Robert A. Yellowlees

	 Name:
	 	 Robert A. Yellowlees

		
	 Title:
	 	 General Partner

	
	                 /s/
Robert A. Yellowlees

	ROBERT A. YELLOWLEESEXHIBIT 4.1

                                   DEBENTURES

                  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 THEREUNDER (THE "1933 ACT"), AND RULE
                  504 OF REGULATION D PROMULGATED THEREUNDER.

                  THIS INFORMATION IS DISTRIBUTED PURSUANT TO AN EXEMPTION FOR
                  SMALL OFFERINGS UNDER THE RULES OF THE COLORADO SECURITIES
                  DIVISION. THE SECURITIES DIVISION HAS NEITHER REVIEWED OR
                  APPROVED ITS FORM OR CONTENT. THE SECURITIES DESCRIBED MAY
                  ONLY BE PURCHASED BY "ACCREDITED INVESTORS" AS DEFINED BY RULE
                  504 OF SEC REGULATION D AND THE RULES OF THE COLORADO
                  DIVISION.

SPB-001                                                            US $1,000,000

                      NATIONAL RESIDENTIAL PROPERTIES INC.

       8% SERIES SPB SENIOR SUBORDINATED CONVERTIBLE REDEEMABLE DEBENTURES
                              DUE NOVEMBER 3, 2002

         THIS DEBENTURE of NATIONAL RESIDENTIAL PROPERTIES, INC., a corporation
duly organized and existing under the laws of Nevada ("Company"), designated as
its 8% Series A Senior Subordinated Convertible Debentures Due November 3, 2002,
in an aggregate principal face amount not exceeding One Million Dollars (U.S.
$1,000,000 ), which Debentures are being purchased at 90% of the face amount of
such Debentures.

         FOR VALUE RECEIVED, the Company promises to pay to Louvre Investors
LLC, Yellow Stream Company LLC and Carlsbad Capital LLC, the registered holders
hereof and its authorized successors and permitted assigns, as set forth on
Schedule A hereto ("Holder"), the aggregate principal face of One Million
Dollars (U.S. $1,000.000) on November 3, 2002 ("Maturity Date"), and to pay
interest on the principal sum outstanding, at the rate of 8% per annum
commencing December 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 in accordance with the
terms and conditions of a certain Securities Subscription Agreement dated as of
October 10, 2000 between the Company and the Holder ("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 than 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 forwarding of such check or wire transfer shall
constitute a payment of outstanding principal hereunder and shall satisfy and
discharge the liability for principal on this Debenture to the extent of the sum
represented 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 Debentures are issuable in denominations of Ten Thousand Dollars
(US$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 laws. Prior to due presentment for transfer of this Debenture, the
Company and any agent of the Company may treat the person in 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. The date of receipt (including receipt by telecopy) of such Notice of
Conversion shall be the Conversion Date.

         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 freely tradeable shares of
common stock, no par value per share, of the Company without restrictive legend
of any nature ("Common Stock"), at a conversion price ("Conversion Price") for
each share of Common Stock equal to 70% of the lowest closing bid price of the
Common Stock as reported on the Over the Counter Electronic Bulletin Board
("OTCBB") for any of the 3 consecutive trading days (such date selected by the
Holder being the "Conversion Date") immediately preceding the date of receipt by
the Company of each Notice of Conversion ("Conversion Shares"). 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 practicable, take the necessary steps to seek such
approval. Such conversion shall be effectuated, by the Company delivering the
Conversion Shares to the Holder within 5 business days of receipt by the Company
of the Notice of Conversion. Once the Holder has received such Conversion
Shares, the Holder shall surrender the Debentures 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 scrip 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 the 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 OTCBB for any of the 3 consecutive trading
days immediately preceding the date of the monthly interest payment due ("Market
Price"), the Company shall issue to the Holder shares of Common Stock in an
amount equal to the total monthly interest accrued and due divided by 70% of the
Market Price ("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
Debentures at the time any interest payment is 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 terms of
the Subscription Agreement.

         (c) At any time after 90 days the Company shall have the option to pay
to the Holder 130% of the principal amount of the Debenture, in full, to the
extent conversion has not occurred pursuant to paragraph 4(a) 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.

         (c) Upon (i) a transfer of all or substantially all of the assets of
the Company to any person in a single transaction or series of related
transactions, or (ii) a consolidation, merger or amalgamation of the Company
with or into another person or entity in which the Company is not the surviving
entity (other than a merger which is effected solely to change the jurisdiction
of incorporation of the Company and results in a reclassification, conversion or
exchange of outstanding shares of Common Stock solely into shares of Common
Stock) (each of items (i) and (ii) being referred to as a "Sale Event"), then,
in each case, the Company shall, upon request of any Holder, redeem the
Debentures registered in the name of such Holder in cash for 130% of the
principal amount, plus accrued but unpaid interest through the date of
redemption, or at the election of the Holder, such Holder may convert the unpaid
principal amount of this Debenture (together with the amount of accrued but
unpaid interest) into shares of Common Stock of the surviving entity at the
Conversion Price.

         (d) In case of any reclassification, capital reorganization or other
change or exchange of outstanding shares of the Common Stock, or in case of any
consolidation or merger of the Company with or into another corporation (other
than a consolidation or merger in which the Seller is the continuing corporation
and which does not result in any reclassification, capital reorganization or
other change of outstanding shares of Common Stock), the Company shall cause
effective provision to be made so that the Holder of this Debenture shall have
the right thereafter, by converting this Debenture, to purchase or convert this
Debenture into the kind and number of shares of stock or other securities or
property (including cash) receivable upon such reclassification, capital
reorganization or other change, consolidation or merger by a holder of the
number of shares of Common Stock that could have been purchased upon exercise of
the Debentures and at the same Conversion Price, as defined in the Debenture,
immediately prior to such reclassification, capital reorganization or other
change, consolidation or merger. The foregoing provisions shall similarly apply
to successive reclassifications, capital reorganizations and other changes of
outstanding shares of Common Stock and to successive consolidations or mergers.
If the consideration received by the holders of Common Stock is other than cash,
the value shall be as determined by the Board of Directors of the Company or
successor person or entity acting in good faith.

         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.

         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 any 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, and the Subscription 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 the 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

         (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, if the Common Stock trades, then 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 5 business
days.

Then, or at any time thereafter, unless cured, and in each and 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 herein 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, statute 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 provisions of this Debenture will not in any way
be affected or impaired thereby.

         11. This Debenture and the agreements referred to in this 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.

         12. This Debenture shall be governed by and construed in accordance
with the laws of Colorado applicable to contracts made and wholly to be
performed within the State of Colorado and shall be binding upon the successors
and assigns of each party hereto. The Holder and the Company hereby mutually
waive trial by jury and consent to exclusive jurisdiction and venue in the
courts of the State of Colorado. At Holder's election, any dispute between the
parties may be arbitrated rather than litigated in the courts, before the
American Arbitration Association in Denver 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 counterpart to this Agreement
shall be effective as an original.

         13. This Debenture is subject to the provisions of the Subscription
Agreement.

                  {REMAINDER OF PAGE INTENTIONALLY LEFT BLANK}

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by an officer thereunto duly authorized.

Dated: November 3, 2000

                                NATIONAL RESIDENTIAL PROPERTIES, INC.

                                By:          /s/ Richard Astrom
                                   --------------------------------------------
                                                 Richard Astrom

                                Title: President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}]]