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EXHIBIT 99(f)
Number 6
DISCOVERY INVESTMENTS, INC.
2980 S. Rainbow Boulevard, Suite 108
Las Vegas, Nevada 89146
LLO-GAS, INC.
23805 Stewart Ranch Road, Suite 265
Malibu, California 90265
3-Year 10 Percent Convertible Debenture
Due October 31, 2002
Discovery Investments, Inc., a Nevada corporation, subject to the
closing of that certain business combination contemplated with the shareholders
of LLO-Gas, Inc., wherein LLO-Gas, Inc. will become a subsidiary of Discovery
Investments, Inc. and LLO-Gas, Inc., a Delaware corporation, and each of them,
jointly and severally, (individually and collectively referred to as the
"Corporation"), for value received, promises to pay to CRS Financial Corp.,
Ltd., c/o Milligan-Whyte & Smith, Richmond House, 5th Floor, 12 Par-la- Ville
Road, Hamilton HM 11, Bermuda or registered assigns or order, the sum of
$250,000 on October 31, 2002, and to pay interest at the rate of 10 percent per
annum quarterly on the first day of January, April, July and October of each
year, computed from November 1, 1999 (the "issue date"). Payment of principal
and interest shall be made by mailing to the registered owner or owners hereof
in lawful money of the United States of America at the address appearing on the
Corporation's books and records.
This Debenture is one of a duly authorized issue of the Corporation's
debentures in the aggregate amount of $1,500,000, dated as of November 1, 1999,
and issued in denominations of $250,000, all of like tenor and maturity, except
variations necessary to express the number, principal amount and payee of each
debenture.
1. Equal rank. All debentures of this issue rank equally and ratably
without priority over one another.
2. Conversion. Provided that Discovery Investments, Inc., a Nevada
corporation becomes obligated pursuant to the terms and conditions of this
Debenture, the holder or holders of this Debenture may at any time prior to the
maturity hereof (except that, if Discovery Investments, Inc. has called this
Debenture for redemption, the right to convert shall terminate at the close of
business on the second business day prior to the day fixed as the date for such
redemption), convert the principal amount hereof into Discovery
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Investments, Inc.'s common stock at the conversion ratio of $5.00 of debenture
principal for one share of common stock. To convert this Debenture, the holder
or holders hereof must surrender the same at the office of Discovery
Investments, Inc., together with a written instrument of transfer in a form
satisfactory to Discovery Investments, Inc., properly completed and executed and
with a written notice of conversion.
3. Adjustments to conversion. If Discovery Investments, Inc. at any time
pays to the holders of its common stock a dividend in common stock, the number
of shares of common stock issuable upon the conversion of this Debenture shall
be proportionally increased, effective at the close of business on the record
date for determination of the holders of the common stock entitled to the
dividend.
If Discovery Investments, Inc. at any time subdivides or combines in a
larger or smaller number of shares its outstanding shares of common stock, then
the number of shares of common stock issuable upon the conversion of this
Debenture shall be proportionally increased in the case of a subdivision and
decrease in the case of a combination, effective in either case at the close of
business on the date that the subdivision or combination becomes effective.
If Discovery Investments, Inc. is recapitalized, consolidated with or
merged into any other corporation, or sells or conveys to any other corporation
all or substantially all of its property as an entity, provision shall be made
as part of the terms of the recapitalization, consolidation, merger, sale, or
conveyance so that the holder or 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 or assets as may
be distributable upon the recapitalization, consolidation, merger, sale, or
conveyance with respect to the common stock.
4. Fractional shares. In lieu of issuing any fraction of a share upon
the conversion of this Debenture, Discovery Investments, Inc. shall pay to the
holder hereof for any fraction of a share otherwise issuable upon the conversion
cash equal to the same fraction of the then current per share market price of
the common stock.
5. Default and forbearance from suit. In the event the Corporation fails
to make any payment of principal and interest, said failure to pay shall
constitute a default under the terms of this Debenture and, subject to the terms
and conditions contained in this paragraph 5, the entire unpaid principal and
interest shall be due and payable. No debenture holder of this issue may
institute any suit or proceeding for the enforcement of the payment of principal
or interest unless the holders of more than 25 percent in amount of all
outstanding debentures of this issue join in the suit or proceeding.
Notwithstanding anything contained in this paragraph to the contrary, in the
event Discovery Investments, Inc. and the shareholders of LLO-Gas, Inc. do not
entered into a business combination which closes on or before December 31, 1999,
an individual debenture holder may institute any suit or proceeding in the event
of default.
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6. Redemption. The Corporation may at any time prepay in whole or in
part, the principal amount, plus accrued interest to the date of prepayment, of
all outstanding debentures of this issue, upon 30 days' written notice by
certified or registered mail to the registered owners of all outstanding
debentures. Such notice shall be mailed to their addresses appearing on the
Corporation's books.
7. Registered owner. The Corporation may treat the person or person
whose name or names appear on this Debenture as the absolute owner or owners
hereof for the purpose of receiving payment of, or on account of, the principal
and interest due on this Debenture and for all other purposes.
8. Release of shareholders, officers and directors. Except for debenture
number 1 and 2, for which John Castellucci is obligated for an amount equal to
$150,000, this Debenture is the obligation of the Corporation only, and no
recourse shall be had for the payment of any principal or interest hereof
against any shareholder, officers or director of the Corporation, either
directly or through the Corporation, by virtue of any statute for the
enforcement of any assessment or otherwise. The holder or holders of this
Debenture, by the acceptance hereof, and as a part of the consideration for this
Debenture, release all claims and waive all liabilities against the foregoing
persons in connection with this Debenture.
IN WITNESS WHEREOF, the Corporation has signed and sealed this Debenture
as of this 1st day of November, 1999.
DISCOVERY INVESTMENT, INC.
/s/ KIMBERLY LYNN JACK
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Kimberly Lynn Jack
President
LLO-GAS, INC.
/s/ JOHN CASTELLUCCI
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John Castellucci
President