EXHIBIT 10.34

 

SECURITIES PURCHASE AGREEMENT
 

THIS SECURITIES PURCHASE AGREEMENT (this “Agreement”), dated as of April 28,
2015, is entered into by and between Cybergy Holdings, Inc., a Nevada
corporation (“Company”), and St. GEORGE INVESTMENTS LLC, a Utah limited
liability company, its successors and/or assigns (“Investor”).

 

A. Company and Investor are executing and delivering this Agreement in reliance
upon the exemption from securities registration afforded by the rules and
regulations promulgated by the United States Securities and Exchange Commission
(the “SEC”) under the Securities Act of 1933, as amended (the “1933 Act”).

 

B. Investor desires to purchase and Company desires to issue and sell, upon the
terms and conditions set forth in this Agreement (i) a Promissory Note, in the
form attached hereto as Exhibit A, in the original principal amount of
$705,000.00 (the “Note”), and (ii) a Warrant to Purchase Shares of Common Stock,
substantially in the form attached hereto as Exhibit B (the “Warrant”).

 

C. This Agreement, the Note, the Warrant, and all other certificates, documents,
agreements, resolutions and instruments delivered to any party under or in
connection with this Agreement, as the same may be amended from time to time,
are collectively referred to herein as the “Transaction Documents”.

 

D. For purposes of this Agreement: Warrant Shares” means all shares of common
stock, $0.0001 par value per share, of Company (the “Common Stock”), issuable
upon the exercise of or pursuant to the Warrant; and “Securities” means the
Note, the Warrant and the Warrant Shares.

 

NOW, THEREFORE, in consideration of the above recitals and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Company and Investor hereby agree as follows:

 

1. Purchase and Sale of Securities.

 

1.1. Purchase of Securities. Company shall issue and sell to Investor and
Investor agrees to purchase from Company the Note and the Warrant. In
consideration thereof, Investor shall pay the Purchase Price (as defined below)
to Company.

 

1.2. Form of Payment. On the Closing Date, Investor shall pay the Purchase Price
to Company via wire transfer of immediately available funds against delivery of
the Note and the Warrant.

 

1.3. Closing Date. Subject to the satisfaction (or written waiver) of the
conditions set forth in Section 5 and Section 6 below, the date and time of the
issuance and sale of the Securities pursuant to this Agreement (the “Closing
Date”) shall be 5:00 p.m., Eastern Time on or about April 28, 2015, or such
other mutually agreed upon time. The closing of the transactions contemplated by
this Agreement (the “Closing”) shall occur on the Closing Date by means of the
exchange by express courier and email of .pdf documents, but shall be deemed to
have occurred at the offices of Hansen Black Anderson Ashcraft PLLC in Lehi,
Utah.

 

1.4. Collateral for the Note. The Note shall not be secured.

 

1.5. Original Issue Discount; Transaction Expenses. The Note carries an original
issue discount of $200,000.00 (the “OID”). In addition, Company agrees to pay
$5,000.00 to Investor to cover Investor’s legal fees, accounting costs, due
diligence, monitoring and other transaction costs incurred in connection with
the purchase and sale of the Securities (the “Transaction Expense Amount”), all
of which amount is included in the initial principal balance of the Note. The
“Purchase Price”, therefore, shall be $500,000.00, computed as follows:
$705,000.00 original principal balance, less the OID, less the Transaction
Expense Amount.

 

 
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2. Investor’s Representations and Warranties. Investor represents and warrants
to Company that: (i) this Agreement has been duly and validly authorized; (ii)
this Agreement constitutes a valid and binding agreement of Investor enforceable
in accordance with its terms; and (iii) Investor is an “accredited investor” as
that term is defined in Rule 501(a) of Regulation D of the 1933 Act.

 

3. Representations and Warranties of Company. Company represents and warrants to
Investor that: (i) Company is a corporation duly organized, validly existing and
in good standing under the laws of its state of incorporation and has the
requisite corporate power to own its properties and to carry on its business as
now being conducted; (ii) Company is duly qualified as a foreign corporation to
do business and is in good standing in each jurisdiction where the nature of the
business conducted or property owned by it makes such qualification necessary;
(iii) Company has registered its Common Stock under Section 12(g) of the
Securities Exchange Act of 1934, as amended (the “1934 Act”), and is obligated
to file reports pursuant to Section 13 or Section 15(d) of the 1934 Act; (iv)
each of the Transaction Documents and the transactions contemplated hereby and
thereby, have been duly and validly authorized by Company; (v) this Agreement,
the Note, the Warrant, and the other Transaction Documents have been duly
executed and delivered by Company and constitute the valid and binding
obligations of Company enforceable in accordance with their terms, subject as to
enforceability only to general principles of equity and to bankruptcy,
insolvency, moratorium, and other similar laws affecting the enforcement of
creditors’ rights generally; (vi) the execution and delivery of the Transaction
Documents by Company, the issuance of Securities in accordance with the terms
hereof, and the consummation by Company of the other transactions contemplated
by the Transaction Documents do not and will not conflict with or result in a
breach by Company of any of the terms or provisions of, or constitute a default
under (a) Company’s formation documents or bylaws, each as currently in effect,
(b) any indenture, mortgage, deed of trust, or other material agreement or
instrument to which Company is a party or by which it or any of its properties
or assets are bound, including any listing agreement for the Common Stock, or
(c) to Company’s knowledge, any existing applicable law, rule, or regulation or
any applicable decree, judgment, or order of any court, United States federal or
state regulatory body, administrative agency, or other governmental body having
jurisdiction over Company or any of Company’s properties or assets; (vii) no
further authorization, approval or consent of any court, governmental body,
regulatory agency, self-regulatory organization, or stock exchange or market or
the stockholders or any lender of Company is required to be obtained by Company
for the issuance of the Securities to Investor; (viii) none of Company’s filings
with the SEC (“SEC Filings”) contained, at the time they were filed, any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements made therein, in light of
the circumstances under which they were made, not misleading; (ix) Company has
filed all periodic reports, schedules, forms, statements and other documents
required to be filed by Company with the SEC under the 1934 Act on a timely
basis or has received a valid extension of such time of filing and has filed any
such report, schedule, form, statement or other document prior to the expiration
of any such extension; (x) Company has not consummated any financing transaction
that has not been disclosed in the Company’s SEC Filings under the 1934 Act;
(xi) Company is not a “Shell Company,” as such type of “issuer” is described in
Rule 144(i)(1) under the 1933 Act; (xii) with respect to any commissions,
placement agent or finder’s fees or similar payments that will or would become
due and owing by Company to any person or entity as a result of this Agreement
or the transactions contemplated hereby (“Broker Fees”), any such Broker Fees
will be made in full compliance with all applicable laws and regulations and
only to a person or entity that is a registered investment adviser or registered
broker-dealer; (xiii) Investor shall have no obligation with respect to any
Broker Fees or with respect to any claims made by or on behalf of other persons
for fees of a type contemplated in this subsection that may be due in connection
with the transactions contemplated hereby and Company shall indemnify and hold
harmless each of Investor, Investor’s employees, officers, directors,
stockholders, managers, agents, and partners, and their respective affiliates,
from and against all claims, losses, damages, costs (including the costs of
preparation and attorneys’ fees) and expenses suffered in respect of any such
claimed or existing Broker Fees; (xiv) when issued and the consideration for the
exercise of the warrants has been paid by the Investor to the Company, the
Warrant Shares will be duly authorized, validly issued, fully paid for and
non-assessable, free and clear of all liens, claims, charges and encumbrances;
(xv) neither Investor nor any of its officers, directors, members, managers,
employees, agents or representatives has made any representations or warranties
to Company or any of its officers, directors, employees, agents or
representatives except as expressly set forth in the Transaction Documents and,
in making its decision to enter into the transactions contemplated by the
Transaction Documents, Company is not relying on any representation, warranty,
covenant or promise of Investor or its officers, directors, members, managers,
employees, agents or representatives other than as set forth in the Transaction
Documents; and (xvi) Company has performed due diligence and background research
on Investor and its affiliates including, without limitation, John M. Fife, and,
to its satisfaction, has made inquiries with respect to all matters Company may
consider relevant to the undertakings and relationships contemplated by the
Transaction Documents including, among other things, the following:
http://investing.businessweek.com/research/stocks/people/person.asp?personId=7505107&ticker=UAHC;SEC
Civil Case No. 07-C-0347 (N.D. Ill.); SEC Civil Action No. 07-CV-347 (N.D.
Ill.); and FINRA Case #2011029203701. Company, being aware of the matters
described in subsection (xvi) above, acknowledges and agrees that such matters,
or any similar matters, have no bearing on the transactions contemplated by the
Transaction Documents and covenants and agrees it will not use any such
information as a defense to performance of its obligations under the Transaction
Documents or in any attempt to avoid, modify or reduce such obligations and
shall not pay such proceeds to any other party pursuant to any financing
transaction effected prior to the date hereof.

 

 
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4. Company Covenants. Until all of Company’s obligations hereunder are paid and
performed in full, or within the timeframes otherwise specifically set forth
below, Company shall comply with the following covenants: (i) so long as
Investor beneficially owns the Warrant or any Warrant Shares and for at least
twenty (20) Trading Days (as defined in the Warrant) thereafter, Company shall
file all reports required to be filed with the SEC pursuant to Sections 13 or
15(d) of the 1934 Act, and shall take all reasonable action under its control to
ensure that adequate current public information with respect to Company, as
required in accordance with Rule 144 of the 1933 Act, is publicly available, and
shall not terminate its status as an issuer required to file reports under the
1934 Act even if the 1934 Act or the rules and regulations thereunder would
permit such termination; (ii) the Common Stock shall be listed or quoted for
trading on any of (a) NYSE, (b) NASDAQ, (c) OTCQX, or (d) OTCQB; (iii) when
issued and and the consideration for the exercise of the warrants has been paid
by the Investor to the Company, the Warrant Shares will be duly authorized,
validly issued, fully paid for and non-assessable, free and clear of all liens,
claims, charges and encumbrances; and (iv) Company shall use the net proceeds
received hereunder for working capital and general corporate purposes only and
shall not pay such proceeds to any other party pursuant to any financing
transaction effected prior to the date hereof.

 

5. Conditions to Company’s Obligation to Sell. The obligation of Company
hereunder to issue and sell the Securities to Investor at the Closing is subject
to the satisfaction, at or before the Closing Date, of each of the following
conditions:

 

5.1. Investor shall have executed this Agreement and delivered the same to
Company.

 

5.2. Investor shall have delivered the Purchase Price to Company in accordance
with Section 1.2 above.

 

6. Conditions to Investor’s Obligation to Purchase. The obligation of Investor
hereunder to purchase the Securities at the Closing is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for Investor’s sole benefit and
may be waived by Investor at any time in its sole discretion:

 

6.1. Company shall have executed this Agreement and delivered the same to
Investor.

 

6.2. Company shall have delivered to Investor the duly executed Note and Warrant
in accordance with Section 1.2 above.

 

6.3. Company shall have delivered to Investor a fully executed Irrevocable
Letter of Instructions to Transfer Agent substantially in the form attached
hereto as Exhibit C acknowledged in writing by Company’s transfer agent (the
“Transfer Agent”).

 

6.4. Company shall have delivered to Investor a fully executed Secretary’s
Certificate substantially in the form attached hereto as Exhibit D evidencing
Company’s approval of the Transaction Documents.

 

6.5. Company shall have delivered to Investor a fully executed Share Issuance
Resolution substantially in the form attached hereto as Exhibit E to be
delivered to the Transfer Agent.

 

6.6. Company shall have delivered to Investor fully executed copies of all other
Transaction Documents required to be executed by Company herein or therein.

 

 
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7. Reservation of Shares. At all times during which the Warrant is exercisable,
Company will reserve from its authorized and unissued Common Stock to provide
for the issuance of Common Stock upon the full exercise of the Warrant not less
than 225,000 shares of Common Stock shall be reserved at all times for such
purpose (the “Transfer Agent Reserve”). In furtherance thereof, from and after
the date hereof and until such time that the Note has been paid in full and the
Warrant exercised in full, Company shall require the Transfer Agent to reserve
for the purpose of issuance of Warrant Shares under the Warrant, a number of
shares of Common Stock equal to the Transfer Agent Reserve. Company shall
further require the Transfer Agent to hold such shares of Common Stock
exclusively for the benefit of Investor and to issue such shares to Investor
promptly upon Investor’s delivery of a notice of exercise under the Warrant.

 

8. Miscellaneous. The provisions set forth in this Section 8 shall apply to this
Agreement, as well as all other Transaction Documents as if these terms were
fully set forth therein.

 

8.1. Original Signature Pages. Each party agrees to deliver its original
signature pages to the Transaction Documents to the other party within five (5)
Trading Days of the date hereof. Notwithstanding the foregoing, the Transaction
Documents shall be fully effective upon exchange of electronic signature pages
by the parties and payment of the Purchase Price by Investor. For the avoidance
of doubt, the failure by either party to deliver its original signature pages to
the other party shall not affect in any way the validity or effectiveness of any
of the Transaction Documents, provided that such failure to deliver original
signatures shall be a breach of the party’s obligations hereunder.

 

8.2. Arbitration of Claims. The parties shall submit all Claims (as defined in
Exhibit F) arising under this Agreement or any other Transaction Document or
other agreements between the parties and their affiliates to binding arbitration
pursuant to the arbitration provisions set forth in Exhibit F attached hereto
(the “Arbitration Provisions”). The parties hereby acknowledge and agree that
the Arbitration Provisions are unconditionally binding on the parties hereto and
are severable from all other provisions of this Agreement. By executing this
Agreement, Company represents, warrants and covenants that Company has reviewed
the Arbitration Provisions carefully, consulted with legal counsel about such
provisions (or waived its right to do so), understands that the Arbitration
Provisions are intended to allow for the expeditious and efficient resolution of
any dispute hereunder, agrees to the terms and limitations set forth in the
Arbitration Provisions, and that Company will not take a position contrary to
the foregoing representations. Company acknowledges and agrees that Investor may
rely upon the foregoing representations and covenants of Company regarding the
Arbitration Provisions.

 

8.3. Governing Law; Venue. This Agreement shall be governed by and interpreted
in accordance with the laws of the State of Utah for contracts to be wholly
performed in such state and without giving effect to the principles thereof
regarding the conflict of laws. Each party consents to and expressly agrees that
the exclusive venue for arbitration of any dispute arising out of or relating to
any Transaction Document or the relationship of the parties or their affiliates
shall be in Salt Lake County or Utah County, Utah. Without modifying the parties
obligations to resolve disputes hereunder pursuant to the Arbitration
Provisions, for any litigation arising in connection with any of the Transaction
Documents, each party hereto hereby (i) consents to and expressly submits to the
exclusive personal jurisdiction of any state or federal court sitting in Salt
Lake County, Utah, (ii) expressly submits to the exclusive venue of any such
court for the purposes hereof, and (iii) waives any claim of improper venue and
any claim or objection that such courts are an inconvenient forum or any other
claim or objection to the bringing of any such proceeding in such jurisdictions
or to any claim that such venue of the suit, action or proceeding is improper.

 

 
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8.4. Calculation Disputes. Notwithstanding the Arbitration Provisions, in the
case of a dispute as to any determination or arithmetic calculation under the
Transaction Documents, including without limitation, calculating the outstanding
balance of the Note or Warrant Shares (each, a “Calculation”), Company or
Investor (as the case may be) shall submit any disputed Calculation via email or
facsimile with confirmation of receipt (i) within two (2) Trading Days after
receipt of the applicable notice giving rise to such dispute to Company or
Investor (as the case may be) or (ii) if no notice gave rise to such dispute, at
any time after Investor learned of the circumstances giving rise to such
dispute. If Investor and Company are unable to agree upon such Calculation
within two (2) Trading Days of such disputed Calculation being submitted to
Company or Investor (as the case may be), then Investor shall, within two (2)
Trading Days, submit via email or facsimile the disputed Calculation to Unkar
Systems Inc. (“Unkar Systems”). Company shall cause Unkar Systems to perform the
Calculation and notify Company and Investor of the results no later than ten
(10) Trading Days from the time it receives such disputed Calculation. Unkar
Systems’ determination of the disputed Calculation shall be binding upon all
parties absent demonstrable error. Unkar Systems’ fee for performing such
Calculation shall be paid by the incorrect party, or if both parties are
incorrect, by the party whose Calculation is furthest from the correct
Calculation as determined by Unkar Systems. In the event Company is the losing
party, no extension of the Delivery Date (as defined in the Warrant) shall be
granted and Company shall incur all effects for failing to deliver the
applicable shares in a timely manner as set forth in the Transaction Documents.
Notwithstanding the foregoing, Investor may, in its sole discretion, designate
an independent, reputable investment bank or accounting firm other than Unkar
Systems to resolve any such dispute and in such event, all references to “Unkar
Systems” herein will be replaced with references to such independent, reputable
investment bank or accounting firm so designated by Investor.

  

8.5. Counterparts. Each Transaction Document may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one instrument. The parties hereto confirm that any
electronic copy of another party’s executed counterpart of a Transaction
Document (or such party’s signature page thereof) will be deemed to be an
executed original thereof.

 

8.6. Headings. The headings of this Agreement are for convenience of reference
only and shall not form part of, or affect the interpretation of, this
Agreement.

 

8.7. Severability. In the event that any provision of this Agreement is invalid
or unenforceable under any applicable statute or rule of law, then such
provision shall be deemed inoperative to the extent that it may conflict
therewith and shall be deemed modified to conform to such statute or rule of
law. Any provision hereof which may prove invalid or unenforceable under any law
shall not affect the validity or enforceability of any other provision hereof.

 

8.8. Entire Agreement. This Agreement, together with the other Transaction
Documents, contains the entire understanding of the parties with respect to the
matters covered herein and therein and, except as specifically set forth herein
or therein, neither Company nor Investor makes any representation, warranty,
covenant or undertaking with respect to such matters.

 

8.9. No Reliance. Company acknowledges and agrees that neither Investor nor any
of its officers, directors, members, managers, representatives or agents has
made any representations or warranties to Company or any of its officers,
directors, representatives, agents or employees except as expressly set forth in
the Transaction Documents and, in making its decision to enter into the
transactions contemplated by the Transaction Documents, Company is not relying
on any representation, warranty, covenant or promise of Investor or its
officers, directors, members, managers, agents or representatives other than as
set forth in the Transaction Documents.

 

8.10. Amendments. No provision of this Agreement may be waived or amended other
than by an instrument in writing signed by the parties hereto.

 

 
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8.11. Notices. Any notice required or permitted hereunder shall be given in
writing (unless otherwise specified herein) and shall be deemed effectively
given on the earliest of: (i) the date delivered, if delivered by personal
delivery as against written receipt therefor or by email to an executive
officer, or by facsimile (with successful transmission confirmation), (ii) the
earlier of the date delivered or the third Trading Day after deposit, postage
prepaid, in the United States Postal Service by certified mail, or (iii) the
earlier of the date delivered or the third Trading Day after mailing by express
courier, with delivery costs and fees prepaid, in each case, addressed to each
of the other parties thereunto entitled at the following addresses (or at such
other addresses as such party may designate by five (5) calendar days’ advance
written notice similarly given to each of the other parties hereto):

  

If to Company:

 

Cybergy Holdings, Inc.

Attn: Mark Gray 

10333 E. Dry Creek Rd., Suite 200 

Englewood, Colorado 80112

 

With a copy to (which copy shall not constitute notice):

 

Sichenzia Ross Friedman Ference LLC

Attn: Andrea Cataneo 

61 Broadway, 32nd Floor 

New York, New York 10006 

 

If to Investor:

 

St. George Investments LLC 

Attn: John Fife 

303 East Wacker Drive, Suite 1040 

Chicago, Illinois 60601

 

With a copy to (which copy shall not constitute notice):

 

Hansen Black Anderson Ashcraft PLLC 

Attn: Jonathan K. Hansen 

3051 West Maple Loop Drive, Suite 325 

Lehi, Utah 84043

 

 
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8.12. Successors and Assigns. This Agreement or any of the severable rights and
obligations inuring to the benefit of or to be performed by Investor hereunder
may be assigned by Investor to a third party, including its financing sources,
in whole or in part, without the need to obtain Company’s consent thereto.
Company may not assign its rights or obligations under this Agreement or
delegate its duties hereunder without the prior written consent of Investor.

 

8.13. Survival. The representations and warranties of Company and the agreements
and covenants set forth in this Agreement shall survive the Closing hereunder
notwithstanding any due diligence investigation conducted by or on behalf of
Investor. Company agrees to indemnify and hold harmless Investor and all its
officers, directors, employees, attorneys, and agents for loss or damage arising
as a result of or related to any breach or alleged breach by Company of any of
its representations, warranties and covenants set forth in this Agreement or any
of its covenants and obligations under this Agreement, including advancement of
expenses as they are incurred.

 

8.14. Further Assurances. Each party shall do and perform, or cause to be done
and performed, all such further acts and things, and shall execute and deliver
all such other agreements, certificates, instruments and documents, as the other
party may reasonably request in order to carry out the intent and accomplish the
purposes of this Agreement and the consummation of the transactions contemplated
hereby.

 

8.15. Investor’s Rights and Remedies Cumulative; Liquidated Damages. All rights,
remedies, and powers conferred in this Agreement and the Transaction Documents
are cumulative and not exclusive of any other rights or remedies, and shall be
in addition to every other right, power, and remedy that Investor may have,
whether specifically granted in this Agreement or any other Transaction
Document, or existing at law, in equity, or by statute, and any and all such
rights and remedies may be exercised from time to time and as often and in such
order as Investor may deem expedient. The parties acknowledge and agree that
upon Company’s failure to comply with the provisions of the Transaction
Documents, Investor’s damages would be uncertain and difficult (if not
impossible) to accurately estimate because of the parties’ inability to predict
future interest rates and future share prices, Investor’s increased risk, and
the uncertainty of the availability of a suitable substitute investment
opportunity for Investor, among other reasons. Accordingly, any fees, charges,
and default interest due under the Note, the Warrant, and the other Transaction
Documents are intended by the parties to be, and shall be deemed, liquidated
damages (under Company’s and Investor’s expectations that any such liquidated
damages will tack back to the Closing Date for purposes of determining the
holding period under Rule 144 under the 1933 Act). The parties agree that such
liquidated damages are a reasonable estimate of Investor’s actual damages and
not a penalty, and shall not be deemed in any way to limit any other right or
remedy Investor may have hereunder, at law or in equity. The parties acknowledge
and agree that under the circumstances existing at the time this Agreement is
entered into, such liquidated damages are fair and reasonable and are not
penalties. All fees, charges, and default interest provided for in the
Transaction Documents are agreed to by the parties to be based upon the
obligations and the risks assumed by the parties as of the Closing Date and are
consistent with investments of this type. The liquidated damages provisions of
the Transaction Documents shall not limit or preclude a party from pursuing any
other remedy available at law or in equity; provided, however, that the
liquidated damages provided for in the Transaction Documents are intended to be
in lieu of actual damages.

 

 
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8.16. Ownership Limitation. Notwithstanding anything to the contrary contained
in this Agreement or the other Transaction Documents, if at any time Investor
shall or would be issued shares of Common Stock under any of the Transaction
Documents, but such issuance would cause Investor (together with its affiliates)
to beneficially own a number of shares exceeding the Maximum Percentage (as
defined in the Warrant), then Company must not issue to Investor the shares that
would cause Investor to exceed the Maximum Percentage. The shares of Common
Stock issuable to Investor that would cause the Maximum Percentage to be
exceeded are referred to herein as the “Ownership Limitation Shares”. Company
will reserve the Ownership Limitation Shares for the exclusive benefit of
Investor. From time to time, Investor may notify Company in writing of the
number of the Ownership Limitation Shares that may be issued to Investor without
causing Investor to exceed the Maximum Percentage. Upon receipt of such notice,
Company shall be unconditionally obligated to immediately issue such designated
shares to Investor, with a corresponding reduction in the number of the
Ownership Limitation Shares. For purposes of this Section, beneficial ownership
of Common Stock will be determined under Section 13(d) of the 1934 Act.

 

8.17. Attorneys’ Fees and Cost of Collection. In the event of any arbitration or
action at law or in equity to enforce or interpret the terms of this Agreement
or any of the other Transaction Documents, the parties agree that the party who
is awarded the most money shall be deemed the prevailing party for all purposes
and shall therefore be entitled to an additional award of the full amount of the
attorneys’ fees, deposition costs, and expenses paid by such prevailing party in
connection with arbitration or litigation without reduction or apportionment
based upon the individual claims or defenses giving rise to the fees and
expenses. Nothing herein shall restrict or impair an arbitrator’s or a court’s
power to award fees and expenses for frivolous or bad faith pleading. If (i) the
Note or Warrant is placed in the hands of an attorney for collection or
enforcement prior to commencing arbitration or legal proceedings, or is
collected or enforced through any arbitration or legal proceeding, or Investor
otherwise takes action to collect amounts due under the Note or to enforce the
provisions of the Note or the Warrant; or (ii) there occurs any bankruptcy,
reorganization, receivership of Company or other proceedings affecting Company’s
creditors’ rights and involving a claim under the Note or the Warrant; then
Company shall pay the costs incurred by Investor for such collection,
enforcement or action or in connection with such bankruptcy, reorganization,
receivership or other proceeding, including, without limitation, attorneys’
fees, expenses, deposition costs, and disbursements.

 

8.18. Waiver. No waiver of any provision of this Agreement shall be effective
unless it is in the form of a writing signed by the party granting the waiver.
No waiver of any provision or consent to any prohibited action shall constitute
a waiver of any other provision or consent to any other prohibited action,
whether or not similar. No waiver or consent shall constitute a continuing
waiver or consent or commit a party to provide a waiver or consent in the future
except to the extent specifically set forth in writing.

 

8.19. Waiver of Jury Trial. EACH PARTY TO THIS AGREEMENT IRREVOCABLY WAIVES ANY
AND ALL RIGHTS SUCH PARTY MAY HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE
RELATIONSHIPS OF THE PARTIES HERETO BE TRIED BY JURY. THIS WAIVER EXTENDS TO ANY
AND ALL RIGHTS TO DEMAND A TRIAL BY JURY ARISING UNDER COMMON LAW OR ANY
APPLICABLE STATUTE, LAW, RULE OR REGULATION. FURTHER, EACH PARTY HERETO
ACKNOWLEDGES THAT SUCH PARTY IS KNOWINGLY AND VOLUNTARILY WAIVING SUCH PARTY’S
RIGHT TO DEMAND TRIAL BY JURY.

 

8.20. Time of the Essence. Time is expressly made of the essence with respect to
each and every provision of this Agreement and the other Transaction Documents.

 

[Remainder of page intentionally left blank; signature page follows]

 

 
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IN WITNESS WHEREOF, the undersigned Investor and Company have caused this
Agreement to be duly executed as of the date first above written.

 

SUBSCRIPTION AMOUNT:

 

Principal Amount of Note:  

$

705,000.00

        Purchase Price:  

$

500,000.00

 

 

  INVESTOR:    

ST. GEORGE INVESTMENTS LLC

      By: Fife Trading, Inc. Manager          

By: 

 

John M. Fife President

 

COMPANY:

   

CYBERGY HOLDINGS, INC.

 

 

By: Printed Name: Mark Gray Title: Chief Executive Officer

 

 
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EXHIBIT A

 

PROMISSORY NOTE

 

U.S. $705,000.00   

 

April 28, 2015

 

FOR VALUE RECEIVED, Cybergy Holdings, Inc., a Nevada corporation (“Borrower”),
promises to pay in lawful money of the United States of America to the order of
St. George Investments LLC, a Utah limited liability company (“Lender”), the
principal sum of $705,000.00, unless reduced by the prepayment discounts set
forth in Section 4 below, together with all other amounts due under this
Promissory Note (this “Note”). This Note is issued pursuant to that certain
Securities Purchase Agreement of even date herewith between Borrower and Lender
(the “Purchase Agreement”).

 

1. PAYMENT. Borrower shall pay to Lender the entire outstanding balance of this
Note on or before the date that is six (6) months from the date hereof. Borrower
will make all payments of sums due hereunder to Lender at Lender’s address set
forth in the Purchase Agreement, or at such other place as Lender may designate
in writing. Unless otherwise agreed or required by applicable law, payments will
be applied first to any unpaid collection costs and late charges, then to
accrued interest and finally to principal.

 

2. INTEREST. Interest shall not accrue on the unpaid principal balance of this
Note unless an Event of Default (as defined below) occurs. Upon the occurrence
of an Event of Default, the outstanding balance of this Note shall bear interest
at the lesser of the rate of eighteen percent (18%) per annum or the maximum
rate permitted by applicable law, compounding monthly on the first day of each
month and calculated on the basis of a 360-day year, from the date due until
paid.

 

3. ORIGINAL ISSUE DISCOUNT; TRANSACTION EXPENSES. This Note carries an original
issue discount of $200,000.00. In addition, Borrower agrees to pay $5,000.00 to
Lender, included in the principal sum of this Note, to cover Lender’s legal
fees, accounting costs, due diligence, monitoring and other transaction costs
incurred in connection with the purchase and sale of this Note, all of which
amounts are included in the initial principal balance of this Note and are fully
earned and payable as of the date hereof (subject only to the prepayment
discounts set forth in Section 4 below).

 

4. PREPAYMENT. Borrower may pay without penalty all or a portion of the amount
owed earlier than it is due. Early payments of less than all principal, fees and
interest outstanding will not, unless agreed to by Lender in writing, relieve
Borrower of any of Borrower’s obligations hereunder. Should Borrower make any
prepayment in accordance with the schedule set forth below, the amount payable
shall be the amount set forth below under the heading “Prepayment Amount,” and
upon Lender’s receipt of such amount, this Note shall be deemed paid in full
notwithstanding the fact that such payment may be less than the initial
outstanding balance of this Note:

 

Prepayment Deadline

 

Prepayment Amount

Borrower pays the entire outstanding balance of this Note on or before the date
that is ninety (90) days from the date this Note is issued

 

$605,000.00 (which reflects a $100,000 discount to the original outstanding
balance)

 

 

 

Borrower pays the entire outstanding balance of this Note at any time after the
date that is ninety (90) days from the date this Note is issued but on or before
the date that is one hundred thirty-five (135) days from the date this Note is
issued

 

$655,000.00 (which reflects a $50,000 discount to the original outstanding
balance)

 

 
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5. EVENT OF DEFAULT. The occurrence and continuance of any of the following
shall constitute an “Event of Default” under this Note:

 

(a) Failure to Pay. Borrower shall fail to pay when due, whether at stated
maturity, upon acceleration or otherwise, any principal or interest payment, or
any other payment required under the terms of this Note on the date due;

 

(b) Breaches of Covenants. Borrower or any other person or entity fails to
comply with or to perform when due any other term, obligation, covenant, or
condition contained in this Note, in the Purchase Agreement, any other
Transaction Document (as defined in the Purchase Agreement), or in any other
agreement securing payment of this Note;

 

(c) Representations and Warranties. Any representation or warranty made by
Borrower to Lender in this Note, the Purchase Agreement, any other Transaction
Document, or any related agreement shall be materially false, incorrect,
incomplete or misleading in any material respect when made or furnished;

 

(d) Voluntary Bankruptcy or Insolvency Proceedings. Borrower shall (i) apply for
or consent to the appointment of a receiver, trustee, liquidator or custodian of
itself or of all or a substantial part of its property, (ii) be unable, or admit
in writing its inability, to pay its debts generally as they mature, (iii) make
a general assignment for the benefit of its or any of its creditors, (iv) be
dissolved or liquidated, or (v) commence a voluntary case or other proceeding
seeking liquidation, reorganization or other relief with respect to itself or
its debts under any bankruptcy, insolvency or other similar law now or hereafter
in effect or consent to any such relief or to the appointment of or taking
possession of its property by any official in an involuntary case or other
proceeding commenced against it;

 

(e) Involuntary Bankruptcy or Insolvency Proceedings. Proceedings for the
appointment of a receiver, trustee, liquidator, or custodian of Borrower or of
all or a substantial part of its property, or an involuntary case or other
proceedings seeking liquidation, reorganization, or other relief with respect to
Borrower or its debts under any bankruptcy, insolvency or other similar law now
or hereafter in effect shall be commenced and an order for relief entered or
such proceeding shall not be dismissed or discharged within sixty (60) days of
commencement;

 

(f) Government Action. If any governmental or regulatory authority takes or
institutes any action that will materially affect Borrower’s financial
condition, operations or ability to pay or perform Borrower’s obligations under
this Note;

 

(g) Judgment. A judgment or judgments for the payment of money in excess of the
sum of $500,000.00 in the aggregate shall be rendered against Borrower and
either (i) the judgment creditor executes on such judgment or (ii) such judgment
remains unpaid or undischarged for more than sixty (60) days from the date of
entry thereof or such longer period during which execution of such judgment
shall be stayed during an appeal from such judgment;

 

(h) Share Reserve. Borrower shall fail to maintain the Share Reserve (as defined
in the Purchase Agreement) as required under the Purchase Agreement;

 

(i) Attachment. Any execution or attachment shall be issued whereby any
substantial part of the property of Borrower shall be taken or attempted to be
taken and the same shall not have been vacated or stayed within thirty (30) days
after the issuance thereof; or

 

(j) Failure to Make Required Filings. Borrower shall become delinquent in its
filing requirements as a fully-reporting issuer registered with the United
States Securities and Exchange Commission.

 

 
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6. ACCELERATION; REMEDIES.

 

(a) Ten (10) calendar days following the occurrence of an Event of Default
(other than an Event of Default referred to in Sections 5(d) and 5(e)) and at
any time thereafter, Lender may, by written notice to Borrower, declare all
unpaid principal, plus all accrued interest and other amounts due hereunder to
be immediately due and payable at the Mandatory Default Amount (as defined
below) without presentment, demand, protest or any other notice of any kind, all
of which are hereby expressly waived, anything contained herein to the contrary
notwithstanding. Upon the occurrence or existence of any Event of Default
described in Sections 5(d) and 5(e), immediately and without notice, all
outstanding unpaid principal, plus all accrued interest and other amounts due
hereunder shall automatically become immediately due and payable at the
Mandatory Default Amount, without presentment, demand, protest or any other
notice of any kind, all of which are hereby expressly waived, anything contained
herein to the contrary notwithstanding. In addition to the foregoing remedies,
upon the occurrence or existence of any Event of Default, Lender may exercise
any other right, power or remedy permitted to it by law, either by suit in
equity or by action at law, or both. For purposes hereof, the term “Mandatory
Default Amount” means an amount equal to 110% of the outstanding balance of this
Note as of the date the applicable Event of Default occurred, plus all interest,
fees, and charges that may accrue on such outstanding balance thereafter.

 

(b) If Borrower is an entity, upon the occurrence of a Change in Control (as
defined below), and without further notice to Borrower, all unpaid principal,
plus all accrued interest and other amounts due hereunder, shall become
immediately due and payable. For purposes hereof, a “Change in Control” means a
sale of all or substantially all of a Borrower’s assets, or a merger,
consolidation, significant equity financing, or other capital reorganization of
a Borrower with or into another company; provided however that a merger,
consolidation, significant equity financing, or other capital reorganization in
which the holders of more than fifty percent (50%) of the equity of a Borrower
outstanding immediately prior to such transaction continue to hold (either by
the voting securities remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent (50%) of the total
voting power represented by the voting securities of such Borrower, or such
surviving entity, outstanding immediately after such transaction shall not
constitute a Change in Control.

 

7. NO OFFSET. Borrower hereby waives any rights of offset it now has or may have
hereafter against Lender, its successors and assigns, and agrees to make the
payments called for herein in accordance with the terms of this Note.

 

8. NO USURY. Notwithstanding any other provision contained in this Note or in
any instrument given to evidence the obligations evidenced hereby: (a) the rates
of interest and charges provided for herein and therein shall in no event exceed
the rates and charges which result in interest being charged at a rate equaling
the maximum allowed by law; and (b) if, for any reason whatsoever, Lender ever
receives as interest in connection with the transaction of which this Note is a
part an amount which would result in interest being charged at a rate exceeding
the maximum allowed by law, such amount or portion thereof as would otherwise be
excessive interest shall automatically be applied toward reduction of the unpaid
principal balance then outstanding hereunder and not toward payment of interest.

 

9. ATTORNEYS’ FEES. If this Note is placed in the hands of an attorney for
collection or enforcement prior to commencing arbitration or legal proceedings,
or is collected or enforced through any arbitration or legal proceeding, or
Lender otherwise takes action to collect amounts due under this Note or to
enforce the provisions of this Note, then Borrower shall pay the costs incurred
by Lender for such collection, enforcement or action including, without
limitation, attorneys’ fees and disbursements.

 

10. JURISDICTION. This Note shall be construed and enforced in accordance with,
and all questions concerning the construction, validity, interpretation and
performance of this Note shall be governed by, the internal laws of the State of
Utah, without giving effect to any choice of law or conflict of law provision or
rule (whether of the State of Utah or any other jurisdictions) that would cause
the application of the laws of any jurisdictions other than the State of Utah.
The provisions set forth in the Purchase Agreement to determine the proper venue
for any disputes are incorporated herein by this reference.

 

 
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11. ARBITRATION OF DISPUTES. Borrower agrees that any dispute arising under this
Note shall be subject to the Arbitration Provisions (as defined in the Purchase
Agreement) set forth as an exhibit to the Purchase Agreement.

 

12. OBLIGATION UNCONDITIONAL. Except as may otherwise be set forth in this Note,
no provision in this Note or any other agreement shall alter, impair or render
conditional the obligation of Borrower, which is absolute and unconditional, to
pay the principal of and interest on this Note at the place, at the time, and in
the currency herein prescribed.

 

13. WAIVERS. Borrower hereby waives presentment, notice of nonpayment, notice of
dishonor, protest, demand and diligence.

 

14. LOSS OR MUTILATION. On receipt by Borrower of evidence reasonably
satisfactory to Borrower of the loss, theft, destruction or mutilation of this
Note and, in the case of any such loss, theft or destruction of this Note, on
delivery of an indemnity agreement reasonably satisfactory in form and amount to
Borrower or, in the case of any such mutilation, on surrender and cancellation
of such Note, Borrower at its expense will execute and deliver, in lieu thereof,
a new Note of like tenor.

 

15. NOTICES. Any notice required or permitted hereunder shall be given in the
manner provided in the subsection titled “Notices” in the Purchase Agreement,
the terms of which are incorporated herein by this reference.

 

16. AMENDMENT AND WAIVER. This Note and its terms and conditions may be amended,
waived or modified only in writing by Borrower and Lender.

 

17. SEVERABILITY. If any part of this Note is construed to be in violation of
any law, such part shall be modified to achieve the objective of the parties to
the fullest extent permitted and the balance of this Note shall remain in full
force and effect.

 

18. ASSIGNMENTS. Borrower may not assign this Note without the prior written
consent of Lender. This Note may be offered, sold, assigned or transferred by
Lender without the consent of Borrower.

 

19. FINAL NOTE. This Note, together with the other Transaction Documents,
contains the complete understanding and agreement of Borrower and Lender and
supersedes all prior representations, warranties, agreements, arrangements,
understandings, and negotiations. THIS NOTE, TOGETHER WITH THE OTHER TRANSACTION
DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF ANY ALLEGED PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT
ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.

 

20. WAIVER OF JURY TRIAL BORROWER IRREVOCABLY WAIVES ANY AND ALL RIGHTS IT MAY
HAVE TO DEMAND THAT ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR IN
ANY WAY RELATED TO THIS AGREEMENT OR THE RELATIONSHIPS OF THE PARTIES HERETO BE
TRIED BY JURY. THIS WAIVER EXTENDS TO ANY AND ALL RIGHTS TO DEMAND A TRIAL BY
JURY ARISING UNDER COMMON LAW OR ANY APPLICABLE STATUTE, LAW, RULE OR
REGULATION. FURTHER, BORROWER ACKNOWLEDGES THAT IT KNOWINGLY AND VOLUNTARILY IS
WAIVING SUCH PARTY’S RIGHT TO DEMAND TRIAL BY JURY.

 

21. TIME IS OF THE ESSENCE. Time is of the essence of this Note and each and
every provision hereof in which time is an element.

 

22. LIQUIDATED DAMAGES. Lender and Borrower agree that in the event Borrower
fails to comply with any of the terms or provisions of this Note, Lender’s
damages would be uncertain and difficult (if not impossible) to accurately
estimate because of the parties’ inability to predict future interest rates and
other relevant factors. Accordingly, Lender and Borrower agree that any fees,
balance adjustments, default interest or other charges assessed under this Note
are not penalties but instead are intended by the parties to be, and shall be
deemed, liquidated damages.

 

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IN WITNESS WHEREOF, Borrower has caused this Note to be issued as of the date
first set forth above.

 

BORROWER:

 

 

CYBERGY HOLDINGS, INC.

      By:     Name: Mark Gray    

Title:

Chief Executive Officer  

 

 

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