EXHIBIT A FOR NOTE PURCHASE AGREEMENT
EXHIBIT
A FOR NOTE PURCHASE AGREEMENT
THIS
NOTE AND THE SECURITIES ISSUABLE UPON CONVERSION HEREOF HAVE NOT BEEN REGISTERED
UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES
LAWS. THE SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT 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
FORM ACCEPTABLE TO THE COMPANY, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT
OR APPLICABLE STATE SECURITIES LAWS OR UNLESS SOLD PURSUANT TO RULE 144 UNDER
SAID ACT.
TIGA
ENERGY SERVICES, INC.
12%
CONVERTIBLE PROMISSORY NOTE
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US
$250,000
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June
16, 2010
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FOR VALUE
RECEIVED, Tiga Energy Services, Inc., a Texas corporation (the “Company”), promises to pay to
Xxxxx Xxxx (the “Holder”), the principal sum of
Two Hundred Fifty Thousand Dollars ($250,000) (the "Principal") in lawful money of
the United States of America, with interest payable thereon at the rate of
twelve percent (12%) per annum ("Interest") compounded
quarterly. The principal amount of this Convertible Promissory Note
(“Note”) and all accrued
but unpaid interest thereon shall be paid in full to the Holder on June 16, 2012
(the “Maturity
Date”). If all or a portion of the principal amount of this
Note or Interest shall not be paid when due (whether at its stated maturity, by
acceleration or otherwise), the Company hereby promises to pay, on demand,
interest on such overdue amount from and including the due date to, but
excluding, the date such amount is paid in full at 14% per annum (and until the
date such overdue amount is paid in full, "Interest" on such overdue amount
shall mean interest at such rate).
1. Repayment.
(a) Principal. Except as otherwise
provided for herein, the outstanding Principal shall be payable on or before the
Maturity Date, unless this Note has been earlier converted as described
below.
(b) Interest.
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(i)
Computation. Interest shall accrue on the unpaid principal
amount of this Note from the date hereof until such principal amount is
repaid in full. All computations of Interest hereunder shall be
made on the basis of a 360-day year of twelve 30-day months compounded
every 3 months (quarterly). In the event that any Interest
provided for herein shall be determined to be unlawful, such interest rate
shall be computed at the highest rate permitted by applicable
law. Any payment by the Company of any Interest in excess of
that permitted by law shall be considered an error, with the excess being
applied to the principal of this Note without prepayment premium or
penalty.
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(ii)
Interest Payment. Interest shall be payable on the Maturity
Date, or such earlier date as such amounts may be due
hereunder.
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(d)
Prepayment. The Company may prepay the entire principal amount of this Note and
all accrued interest thereon without premium or penalty, at any time upon thirty
(30) day’s prior written notice to the Holder. Upon any prepayment of
this Note, all accrued interest on the Principal shall be paid to the Holder on
the date of prepayment. The Holder will have the option of converting
the principle and accrued interest to stock within thirty (30) days of receiving
written notice from the Company of its intent to prepay the entire amount of
this Note.
(e)
Application of Payments. All payments received by the Holder hereunder will be
applied first to Interest and the balance to Principal.
2. Conversion.
(a) Generally. The Holder shall
have the right, exercisable at any time prior to the Maturity Date, to convert
all, but not less than all, of the Principal, plus all accrued but unpaid
interest thereon, into shares of the Company’s common stock, no par value per
share (the "Common
Stock"), at a conversion price (the "Conversion Price," including
any adjustments thereto) equal to $2.00 per share (the Common Stock issuable
upon conversion of this Note being referred to herein as the "Conversion Shares").
Immediately upon surrender of this Note for conversion as herein provided, this
Note shall no longer be deemed to be outstanding and all rights with respect to
this Note shall immediately cease and terminate on the conversion date, except
only the right of the holder to receive Conversion Shares in exchange therefor.
This Note, when so surrendered for conversion, shall be cancelled.
(b) Mechanics of Conversion. The
conversion of this Note shall be conducted in the following manner: upon any
conversion of all but not less than all of the Principal, plus all accrued but
unpaid interest thereon: (i) the Holder shall deliver a completed and executed
Notice of Conversion
attached hereto as Exhibit A and surrender and deliver this Note, duly endorsed,
to the Company’s office or such other address which the Company shall designate;
(ii) in exchange for the surrendered Note, the Company shall prepare and deliver
irrevocable instructions addressed to the Company’s transfer agent, if
applicable, to issue such required number of Conversion Shares, which Conversion
Shares shall be delivered to the Holder within ten (10) business days of the
delivery of the documentation to the Company; and (iii) upon delivery of the
Conversion Shares, this Note shall be fully paid and satisfied. The
Company shall, upon the written request of the Holder, use its best efforts to
deliver, or cause to be delivered, the Conversion Shares hereunder
electronically through the Depository Trust and Clearing Corporation or another
established clearing corporation performing similar functions, if
available.
(c) Conversion
Adjustments.
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(i)
Stock Dividends and Stock Splits. In case the Company shall (A) pay
a dividend in shares of Common Stock or make a distribution in shares of
Common Stock to holders of its outstanding Common Stock, (B) subdivide its
outstanding shares of Common Stock into a greater number of shares, (C)
combine its outstanding shares of Common Stock into a smaller number of
shares of Common Stock, or (D) issue any shares of its capital stock in a
reclassification of the Common Stock, then the number of shares
issued and the Conversion Price shall be adjusted proportionately. An
adjustment made pursuant to this paragraph shall become effective
immediately after the effective date of such event retroactive to the
record date, if any, for such
event.
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(ii)
Reorganization, Reclassification, Merger, Consolidation or
Disposition of Assets. In case the Company shall reorganize its capital,
reclassify its capital stock, consolidate or merge with or into another
corporation (where the Company is not the surviving corporation or where
there is a change in or distribution with respect to the Common Stock), or
sell, transfer or otherwise dispose of all or substantially all its
property, assets or business to another corporation and, pursuant to the
terms of such reorganization, reclassification, merger, consolidation or
disposition of assets, shares of common stock of the successor or
acquiring corporation, or any cash, shares of stock or other securities or
property of any nature whatsoever (including warrants or other
subscription or purchase rights) in addition to or in lieu of common stock
of the successor or acquiring corporation ("Other Property"), are to
be received by or distributed to the holders of Common Stock of the
Company, then the Holder shall have the right thereafter to receive upon
conversion of this Note, the number of shares of common stock of the
successor or acquiring corporation or of the Company, if it is the
surviving corporation, and Other Property receivable upon or as a result
of such reorganization, reclassification, merger, consolidation or
disposition of assets by a Holder of the number of shares of Common Stock
for which this Note is convertible immediately prior to such
event. In case of any such reorganization, reclassification,
merger, consolidation or disposition of assets, the Company shall use its
best efforts to cause the successor or acquiring corporation (if other
than the Company) to assume the due and punctual observance and
performance of each and every covenant and condition of this Note to be
performed and observed by the Company and all the obligations and
liabilities hereunder, subject to such modifications as may be deemed
appropriate (as determined in good faith by resolution of the Board of
Directors of the Company) in order to provide for adjustments of shares
for which this Note is convertible which shall be as nearly equivalent as
practicable to the adjustments provided for in this
Section. For purposes of this Section, "common stock of the
successor or acquiring corporation" shall include stock of such
corporation of any class which is not preferred as to dividends or assets
over any other class of stock of such corporation and which is not subject
to redemption and shall also include any evidences of indebtedness, shares
of stock or other securities which are convertible into or exchangeable
for any such stock, either immediately or upon the arrival of a specified
date or the happening of a specified event and any warrants or other
rights to subscribe for or purchase any such stock. The
foregoing provisions of this Section shall similarly apply to successive
reorganizations, reclassifications, mergers, consolidations or disposition
of assets.
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(d) In case:
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(i)
the Company shall declare a dividend or other distribution on its Common
Stock that would require any adjustment pursuant to Section 2(c);
or
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(ii)
the Company shall authorize the granting to the holders of its Common
Stock of rights, options or warrants to subscribe for or purchase any
shares of capital stock of any class or of any other rights;
or
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(iii)
of any reclassification of the Common Stock of the Company, or of any
consolidation, merger or share exchange to which the Company is a party
and for which approval of any shareholders of the Company is required, or
of the conveyance, sale, transfer or lease of all or substantially all of
the assets of the Company;
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then the
Company shall cause to be delivered to the Holder, at least ten (10) days prior
to the applicable record, expiration or effective date hereinafter specified, a
notice stating (A) the date on which a record is to be taken for the purpose of
such dividend, distribution, rights, options or warrants, or, if a record is not
to be taken, the date as of which the holders of Common Stock of record to be
entitled to such dividend, distribution, rights, options or warrants are to be
determined or (B) the date on which such reclassification, consolidation,
merger, conveyance, transfer, sale, lease, dissolution, liquidation or winding
up is expected to become effective, and the date as of which it is expected that
holders of Common Stock of record shall be entitled to exchange their Common
Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, conveyance, transfer, sale, lease,
dissolution, liquidation or winding up. Neither the failure to give
such notice nor any defect therein shall affect the legality or validity of the
proceedings described in clauses (i) through (iii) of this Section
2(d).
(e) Reservation of Conversion Shares.
The Company shall at all times reserve and keep available out of its authorized
but unissued Common Stock, for the purpose of effecting the conversion of this
Note, the full number of shares of Common Stock then issuable upon the
conversion of this Note.
(f) Taxes. Except as provided in the
next sentence, the Company will pay any and all taxes and duties that may be
payable in respect of the issue or delivery of Common Stock on conversion of
this Note. The Company shall not, however, be required to pay any tax
or duty which may be payable in respect of any transfer involved in the issue
and delivery of Common Stock in a name other than that of the Holder, and no
such issue or delivery shall be made unless and until the person requesting such
issue has paid to the Company the amount of any such tax or duty, or has
established to the satisfaction of the Company that such tax or duty has been
paid.
(g) Due and Valid Issuance of
Conversion Shares. The Company agrees that all Common Stock which may be
delivered upon conversion of this Note, upon such delivery, will have been duly
authorized and validly issued and will be fully paid, nonassessable and free of
preemptive rights (and shall be issued out of the Company's authorized but
unissued Common Stock) and, except as provided in Section 2(f), the Company will
pay all taxes, liens and charges with respect to the issue thereof.
(h) Elimination of Fractional
Interests. No fractional shares of Common Stock shall be issued upon conversion
of this Note, nor shall the Company be required to pay cash in lieu of
fractional interests, it being the intent of the parties that all fractional
interests shall be eliminated and that all issuances of Common Stock shall be
rounded up to the nearest whole share.
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3. Restrictions
on Transfer of Note and Conversions Shares
The Holder acknowledges that neither
this Note nor the Conversion Shares have been or will be registered under the
Securities Act, and that such securities are subject to restrictions on transfer
imposed by federal and state securities laws, as described in that certain Note
Purchase Agreement by and between the Holder and the Company dated the date
hereof.
The occurrence of any of the following
events shall be an "Event of
Default" under this Note:
(a) the Company shall fail to make the
payment of any amount of Principal on the date such payment shall
become due and payable hereunder and such failure shall continue for ten (10)
days after written notice of such failure; or
(b) the Company shall fail to make the
interest payments on the date such payment shall become due and payable
hereunder and such failure shall continue for ten (10) days after written notice
of such failure; or
(c) any representation or warranty made
by the Company herein, in the Transaction Documents or in any certificate or
financial statement shall prove to have been false or incorrect or breached in a
material respect on the date as of which made; or
(d) the holder of any indebtedness of
the Company shall accelerate any payment of any amount or amounts of principal
or interest on any indebtedness (the "Indebtedness") (other than the
Indebtedness hereunder) prior to its stated maturity or payment date the
aggregate principal amount of which Indebtedness of all such persons is in
excess of $1,500,000, whether such Indebtedness now exists or shall hereinafter
be created, and such accelerated payment entitles the holder thereof to
immediate payment of such Indebtedness which is due and owing and such
indebtedness has not been discharged in full or such acceleration has not been
stayed, rescinded or annulled within ten (10) business days of such
acceleration; or
(e) a judgment or order for the payment
of money shall be rendered against the Company in excess of $1,500,000 in the
aggregate (net of any applicable insurance coverage) for all such judgments or
orders against the Company (treating any deductibles, self insurance or
retention as not so covered) that shall not be discharged, and all such
judgments and orders remain outstanding, and there shall be any period of sixty
(60) consecutive days following entry of the judgment or order in excess of
$1,500,000 or the judgment or order which causes the aggregate amount described
above to exceed $1,500,000 during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or
(f) the Company shall (i) apply for or
consent to the appointment of, or the taking of possession by, a receiver,
custodian, trustee or liquidator of itself or of all or a substantial part of
its property or assets, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under federal bankruptcy laws or
under the comparable laws of any jurisdiction (foreign or
domestic), (iv) file a petition seeking to take advantage of any
bankruptcy, insolvency, moratorium, reorganization or other similar law
affecting the enforcement of creditors' rights generally, (v) acquiesce in
writing to any petition filed against it in an involuntary case under federal
bankruptcy laws or under the comparable laws of any jurisdiction (foreign or
domestic), or (vi) take any action under the laws of any jurisdiction (foreign
or domestic) analogous to any of the foregoing; provided,
however, that any "going concern" limitation or qualification
contained in any report of the Company's independent public accountants
contained in the Company's financial statements shall not be an Event
of Default under this Note; or
(g) a proceeding or case shall be
commenced in respect of the Company without its application or consent, in any
court of competent jurisdiction, seeking (i) the liquidation,
reorganization, moratorium, dissolution, winding up, or composition or
readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of it or of all or any substantial part of its
assets or (iii) similar relief in respect of it under any law providing for the
relief of debtors, and such proceeding or case described in clause (i), (ii) or
(iii) shall continue undismissed, or unstayed and in effect, for a
period of sixty (60) consecutive days or any order for relief shall be entered
in an involuntary case under the federal bankruptcy laws or under the comparable
laws of any jurisdiction (foreign or domestic) against the Company or action
under the laws of any jurisdiction (foreign or domestic) analogous to any of the
foregoing shall be taken with respect to the Company and shall continue
undismissed, or unstayed and in effect for a period of sixty (60) consecutive
days.
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5. Remedies
Upon An Event of Default. If an Event of Default shall have occurred and shall
be continuing, the Holder may at any time at its option, (a) declare the entire
unpaid principal balance of this Note, together with all accrued but unpaid
interest, due and payable, and thereupon, the same shall be accelerated and so
due and payable; provided, however, that upon the occurrence of an Event of
Default described in Sections 4(f) and (g), without presentment,
demand, protest, or notice, all of which are hereby expressly unconditionally
and irrevocably waived by the Company, the Principal plus all accrued but unpaid
interest shall be automatically due and payable; or
(b) exercise or otherwise enforce any one or
more of the Holder's rights, powers, privileges, remedies and interests under
this Note or applicable law. No course of dealing or delay
on the part of the Holder shall operate as a waiver thereof or otherwise
prejudice the right of the Holder. No remedy conferred hereby shall
be exclusive of any other remedy referred to herein or now or hereafter
available at law, in equity, by statute or otherwise.
Notwithstanding the foregoing, Holder
agrees that his rights and remedies hereunder are limited to receipt of cash or
shares of Common Stock in the amounts described herein.
6. Further
Assurances. The Company shall execute and deliver any and all such further
documents and take any and all such other actions as may be reasonably necessary
or appropriate to carry out the intent and purposes of this Note and to
consummate the transactions contemplated herein.
7. Holder
Not Deemed a Shareholder. The Holder shall not be entitled to vote or receive
dividends or be deemed the holder of shares of the Company for any purpose, nor
shall anything contained in this Note be construed to confer upon the Holder
hereof, as such, any of the rights at law of a shareholder of the Company prior
to the issuance to the Holder of the shares of Common Stock which the Holder is
then entitled to receive upon the due conversion of this Note.
8. Mutilated,
Destroyed, Lost or Stolen Note. In case this Note shall become mutilated or
defaced, or be destroyed, lost or stolen, the Company shall execute and deliver
a new note of like principal amount in exchange and substitution for the
mutilated or defaced Note, or in lieu of and in substitution for the destroyed,
lost or stolen Note. In the case of a mutilated or defaced Note, the
Holder shall surrender such Note to the Company. In the case of any destroyed,
lost or stolen Note, the Holder shall furnish to the Company: (i) evidence to
its satisfaction of the destruction, loss or theft of such Note and (ii) such
security or indemnity as may be reasonably required by the Company to hold the
Company harmless.
9. Waiver
of Demand, Presentment, etc. The Company hereby expressly waives demand and
presentment for payment, notice of nonpayment, protest, notice of protest,
notice of dishonor, notice of acceleration or intent to accelerate, bringing of
suit 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 hereunder, regardless of and without any notice, diligence, act or
omission as or with respect to the collection of any amount called for
hereunder. The Company agrees that, in the event of an Event of
Default, to reimburse the Holder for all reasonable costs and expenses
(including reasonable legal fees of one counsel) incurred in connection with the
enforcement and collection of this Note.
10. Assignment.
The rights and obligations of the Company and the Holder shall be binding upon,
and inure to the benefit of, the successors and permitted assigns of the parties
hereto. The Holder may not assign, pledge or otherwise transfer this
Note or any interest therein without the prior written consent of the
Company.
11. Waiver
and Amendment. Any provision of this Note, including, without limitation, the
due date hereof, and the observance of any term hereof, may be amended, waived
or modified (either generally or in a particular instance and either
retroactively or prospectively) only with the written consent of the Company and
the Holder.
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12. Notices.
Any notice, request or other communication required or permitted hereunder shall
be in writing at such address as the parties may designate from time to
time.
13. Governing
Law. This Note shall be governed by and construed in accordance with the laws of
the State of Texas excluding that body of law relating to conflicts of
laws.
14. Consent
to Jurisdiction. Each party agrees that all legal proceedings concerning the
interpretations, enforcement and defense of the transactions contemplated by
this Note (whether brought against a party hereto or its respective affiliates,
directors, officers, shareholders, employees or agents) shall be commenced
exclusively in the state and federal courts sitting in the City of Austin,
Texas. Each party hereto hereby irrevocably submits to the exclusive
jurisdiction of the state and federal courts sitting in the City of Austin,
Texas, for the adjudication of any dispute hereunder or in connection herewith
or with any transaction contemplated hereby or discussed herein (including with
respect to the enforcement of this Note, and hereby irrevocably waives, and
agrees not to assert in any suit, action or proceeding, any claim that it is not
personally subject to the jurisdiction of any such court, that such suit, action
or proceeding is improper. Each party hereto hereby irrevocably waives personal
service of process and consents to process being served in any such suit, action
or proceeding by mailing a copy thereof via registered or certified mail or
overnight delivery (with evidence of delivery) to such party at the address in
effect for notices to it under this Note and agrees that such service shall
constitute good and sufficient service of process and notice thereof. Nothing
contained herein shall be deemed to limit in any way any right to serve process
in any manner permitted by law. THE COMPANY AND, BY ITS ACCEPTANCE
HEREOF, THE HOLDER (INCLUDING THEIR RESPECTIVE AFFILIATES, AGENTS, OFFICERS,
DIRECTORS AND EMPLOYEES) HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL
PROCEEDING ARISING OUT OF OR RELATING TO THIS NOTE OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
15. Severability.
If one or more provisions of this Note are held to be unenforceable under
applicable law, such provisions shall be excluded from this Note, and the
balance of this Note shall be interpreted as if such provisions were so excluded
and shall be enforceable in accordance with its terms.
16. Headings.
Section headings in this Note are for convenience only, and shall not be used in
the construction of this Note.
[Signature
Page Follows]
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| TIGA ENERGY SERVICES, INC. | |||
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By:
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/s/ Xxxxxxx Xxxxxxxx | ||
| Name: Xxxxxxx Xxxxxxxx | |||
| Title: President | |||
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Exhibit
A
TIGA
ENERGY SERVICES, INC.
NOTE
CONVERSION NOTICE
Reference is made to the 12%
Convertible Promissory Note in the original principal amount of $250,000 of Tiga
Energy Services, Inc., a Texas corporation (the “Company”), issued to the
undersigned (the “Note”).
In accordance with and pursuant to the
terms of the Note, the undersigned hereby elects to convert the entire
outstanding principal amount due and owing under the Note, together with all
accrued but unpaid interest thereon, into shares of Common Stock, no par value
per share, of the Company (the “Common Stock”), by tendering the original of the
Note for cancellation.
Please
confirm the following information:
Principal
Amount Outstanding
under the
Note:
_____________________________________
Accrued
but unpaid interest
under the
Note:
_____________________________________
Conversion
Price:
_____________________________________
Number of
Shares to be issued:
_____________________________________
Please
issue the Conversion Shares into which the Note is being converted in the
following name and to the following address:
Issue
to: ___________________________
Address: ______________________________
_____________________________________
Facsimile
Number: __________________________
Authorization: _____________________________
By: ____________________________
Title: _______________________
Dated: _____________________________
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