Exhibit 10.1

 

Note: November 10, 2015

 

NEITHER THESE SECURITIES NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE
CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION IN
RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933,
AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD
EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT
OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO,
THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT.

 

THIS NOTE DOES NOT REQUIRE PHYSICAL SURRENDER OF THE NOTE IN THE EVENT OF A
PARTIAL REDEMPTION OR CONVERSION. AS A RESULT, FOLLOWING ANY REDEMPTION OR
CONVERSION OF ANY PORTION OF THIS NOTE, THE OUTSTANDING PRINCIPAL SUM
REPRESENTED BY THIS NOTE MAY BE LESS THAN THE PRINCIPAL SUM AND ACCRUED INTEREST
SET FORTH BELOW.

 

10% CONVERTIBLE PROMISSORY NOTE

 

OF

 

PACIFIC GREEN TECHNOLOGIES INC.

 

Issuance Date: November 10, 2015

Total Face Value of Note: $110,000

 

This Note is a duly authorized Convertible Promissory Note of Pacific Green
Technologies Inc. a corporation duly organized and existing under the laws of
the State of Delaware (the “Company”), designated as the Company's 10%
Convertible Promissory Note due November 10, 2016 (“Maturity Date”) in the
principal amount of $110,000 (the “Note”).

 

For Value Received, the Company hereby promises to pay to the order of Tangiers
Investment Group, LLC or its registered assigns or successors-in-interest
(“Holder”) the Principal Sum of $110,000 (the “Principal Sum”) and to pay
“guaranteed” interest on the principal balance hereof at an amount equivalent to
10% of the Principal Sum, to the extent such Principal Sum and “guaranteed”
interest and any other interest, fees, liquidated damages and/or items due to
Holder herein have been repaid or converted into the Company's Common Stock (the
“Common Stock”), in accordance with the terms hereof. The sum of $100,000 shall
be remitted and delivered to the Company, and $10,000 shall be retained by the
Purchaser through an original issue discount (the “OID”) for due diligence and
legal bills related to this transaction. The OID is set at 10% of any
consideration paid. In the event of partial payment by the Holder, the principal
sum due to the Holder shall be prorated based on the consideration actually paid
by Holder such that the company is only required to repay the amount funded and
the company is not required to repay any unfunded portion of this note.

 

 1 

 

 

In addition to the “guaranteed” interest referenced above, and in the Event of
Default pursuant to Section 2(a), additional interest will accrue from the date
of the Event of Default at the rate equal to the lower of 20% per annum or the
highest rate permitted by law (the “Default Rate”).

 

This Note will become effective only upon the execution by both parties,
including the execution of Exhibits B, C and D and the Irrevocable Transfer
Agent Instructions and delivery of the initial payment of consideration by the
Holder (the “Effective Date”).

 

This Note may be prepaid by the Company, in whole or in part, according to the
following schedule:

 

Days Since Effective Date  Prepayment Amount 1-60  110% of Principal Amount
61-121  115% of Principal Amount 121-180  140% of Principal Amount

 

After 180 days from the Effective Date this Note may not be prepaid without
written consent from Holder, which consent may be withheld, delayed, denied, or
conditions in Holder’s sole and absolute discretion. Whenever any amount
expressed to be due by the terms of this Note is due on any day which is not a
Business Day (as defined below), the same shall instead be due on the next
succeeding day which is a Business Day.

 

For purposes hereof the following terms shall have the meanings ascribed to them
below:

 

“Business Day” shall mean any day other than a Saturday, Sunday or a day on
which commercial banks in the City of New York are authorized or required by law
or executive order to remain closed.

 

“Conversion Price” shall be equal to the lower of: (a) $.40 or (b) 60% of the
lowest trading price of the Company’s common stock during the 20 consecutive
trading days prior to the date on which Holder elects to convert all or part of
the Note. For the purpose of calculating the Conversion Price only, any time
after 4:00 pm Eastern Time (the closing time of the Principal Market) shall be
considered to be the beginning of the next Business Day. If the Company is
placed on “chilled” status with the Depository Trust Company (“DTC”), the
discount shall be increased by 10%, i.e., from 50% to 60%, until such chill is
remedied. If the Company is not Deposits and Withdrawal at Custodian (“DWAC”)
eligible through their Transfer Agent and DTC’s Fast Automated Securities
Transfer (“FAST”) system, the discount will be increased by 5%, i.e., from 50%
to 55%,. In the case of both, the discount shall be a cumulative increase of
15%, i.e., from 50% to 65%. Any default of this Note not remedied within the
applicable cure period will result in a permanent additional 10% increase, i.e.,
from 50% to 60%, in addition to any other discount, as provided above, to the
Conversion Price discount.

 

“Principal Amount” shall refer to the sum of (i) the original principal amount
of this Note (including the original issue discount, prorated if the Note has
not been funded in full), (ii) all guaranteed and other accrued but unpaid
interest hereunder, (iii) any fees due hereunder, (iv) liquidated damages, and
(v) any default payments owing under the Note, in each case previously paid or
added to the Principal Amount.

 

 2 

 

 

“Principal Market” shall refer to the primary exchange on which the Company’s
common stock is traded or quoted.

 

“Trading Day” shall mean a day on which there is trading or quoting for any
security on the Principal Market.

 

“Underlying Shares” means the shares of common stock into which the Note is
convertible (including interest, fees, liquidated damages and/or principal
payments in common stock as set forth herein) in accordance with the terms
hereof.

 

The following terms and conditions shall apply to this Note:

 

Section 1.00 Conversion.

 

(a) Conversion Right. Subject to the terms hereof and restrictions and
limitations contained herein, the Holder shall have the right, at the Holder's
sole option, at any time and from time to time to convert in whole or in part
the outstanding and unpaid Principal Amount under this Note into shares of
Common Stock as per the Conversion Formula. The date of any conversion notice
(“Conversion Notice”) hereunder shall be referred to herein as the “Conversion
Date”.

 

(b) Stock Certificates or DWAC. The Company will deliver to the Holder, or
Holder’s authorized designee, no later than 2 Trading Days after the Conversion
Date, a certificate or certificates (which certificate(s) shall be free of
restrictive legends and trading restrictions if the shares of Common Stock
underlying the portion of the Note being converted are eligible under a resale
exemption pursuant to Rule 144(b)(1)(ii) and Rule 144(d)(1)(ii) of the
Securities Act of 1933, as amended) representing the number of shares of Common
Stock being acquired upon the conversion of this Note. In lieu of delivering
physical certificates representing the shares of Common Stock issuable upon
conversion of this Note, provided the Company's transfer agent is participating
in DTC’s FAST program, the Company shall instead use commercially reasonable
efforts to cause its transfer agent to electronically transmit such shares
issuable upon conversion to the Holder (or its designee), by crediting the
account of the Holder’s (or such designee’s) broker with DTC through its DWAC
program (provided that the same time periods herein as for stock certificates
shall apply).

 

(c) Charges and Expenses. Issuance of Common Stock to Holder, or any of its
assignees, upon the conversion of this Note shall be made without charge to the
Holder for any issuance fee, transfer tax, postage/mailing charge or any other
expense with respect to the issuance of such Common Stock. Company shall pay all
Transfer Agent fees incurred from the issuance of the Common stock to Holder.
Any such charges related to the issuance of Common Stock required to be paid by
the Holder (whether from the Company’s delays or outright refusal to pay) will
be automatically added to the Principal Sum of the Note and tack back to the
Effective Date for purposes of Rule 144.

 

 3 

 

 

(d) Delivery Timeline. If the Company fails to deliver to the Holder such
certificate or certificates (or shares through the DWAC program) pursuant to
this Section (free of any restrictions on transfer or legends, if eligible)
prior to 3 Trading Days after the Conversion Date, the Company shall pay to the
Holder as liquidated damages an amount equal to $2,000 per day, until such
certificate or certificates are delivered. The Company acknowledges that it
would be extremely difficult or impracticable to determine the Holder’s actual
damages and costs resulting from a failure to deliver the Common Stock and the
inclusion herein of any such additional amounts are the agreed upon liquidated
damages representing a reasonable estimate of those damages and costs. Such
liquidated damages will be automatically added to the Principal Sum of the Note
and tack back to the Effective Date for purposes of Rule 144.

 

(e) Reservation of Underlying Securities. The Company covenants that it will at
all times reserve and keep available for Holder, out of its authorized and
unissued Common Stock solely for the purpose of issuance upon conversion of this
Note, free from preemptive rights or any other actual contingent purchase rights
of persons other than the Holder, four times the number of shares of Common
Stock as shall be issuable (taking into account the adjustments under this
Section 1, but without regard to any ownership limitations contained herein)
upon the conversion of this Note (consisting of the Principal Amount) to Common
Stock (the “Required Reserve”), provided, however, that the Required Reserve
shall be reduced to not less than four times the number of shares of Common
Stock (as calculated above) upon one or more such conversions as shall have
caused the Required Reserve to be reduced to such “four times” level. The
Company covenants that all shares of Common Stock that shall be issuable will,
upon issue, be duly authorized, validly issued, fully-paid, non-assessable and
freely-tradable (if eligible). If the amount of shares on reserve in Holder’s
name at the Company’s transfer agent for this Note shall drop below the Required
Reserve, the Company will, within 2 Trading Days of notification from Holder,
instruct the transfer agent to increase the number of shares so that the
Required Reserve is met. In the event that the Company does not instruct the
transfer agent to increase the number of shares so that the Required Reserve is
met, the Holder will be allowed, if applicable, to provide this instruction as
per the terms of the Irrevocable Transfer Agent Instructions attached to this
Note. The Company agrees that the maintenance of the Required Reserve is a
material term of this Note and any breach of this Section 1.00(e) will result in
a default of the Note.

 

The Company agrees that this is a material term of this Note and any breach of
this Section 1.00(e) will result in a default of the Note.

 

(f) Conversion Limitation. The Holder will not submit a conversion to the
Company that would result in the Holder owning more than 9.99% of the then total
outstanding shares of the Company (“Restricted Ownership Percentage”).

 

(g) Conversion Delays. If the Company fails to deliver shares in accordance with
the timeframe stated in Section 1.00(b), the Holder, at any time prior to
selling all of those shares, may rescind any portion, in whole or in part, of
that particular conversion attributable to the unsold shares. The rescinded
conversion amount will be returned to the Principal Sum with the rescinded
conversion shares returned to the Company, under the expectation that any
returned conversion amounts will tack back to the Effective Date.

 

(h) Shorting and Hedging. Holder may not engage in any “shorting” or “hedging”
transaction(s) in the Common Stock prior to conversion.

 

 4 

 

 

(i) Conversion Right Unconditional. If the Holder shall provide a Conversion
Notice as provided herein, the Company's obligations to deliver Common Stock
shall be absolute and unconditional, irrespective of any claim of setoff,
counterclaim, recoupment, or alleged breach by the Holder of any obligation to
the Company.

 

Section 2.00 Defaults and Remedies.

 

(a) Events of Default. An “Event of Default” is: (i) a default in payment of any
amount due hereunder which default continues for more than 5 Trading Days after
the due date; (ii) a default in the timely issuance of underlying shares upon
and in accordance with terms of Section 2.00, which default continues for 2
Trading Days after the Company has failed to issue shares or deliver stock
certificates within the 3rd Trading Day following the Conversion Date; (iii)
failure by the Company for 3 days after notice has been received by the Company
to comply with any material provision of this Note; (iv) failure of the Company
to remain compliant with DTC, thus incurring a “chilled” status with DTC; (v) if
the Company is subject to any Bankruptcy Event; (vi) any failure of the Company
to satisfy its “filing” obligations under Securities Exchange Act of 1934, as
amended (the “1934 Act”) and the rules and guidelines issued by OTC Markets News
Service, OTCMarkets.com and their affiliates; (vii) any failure of the Company
to provide the Holder with information related to its corporate structure
including, but not limited to, the number of authorized and outstanding shares,
public float, etc. within 1 Trading Day of request by Holder; (viii) failure by
the Company to maintain the Required Reserve in accordance with the terms of
Section 1.00(e); (ix) failure of Company’s Common Stock to maintain a closing
bid price in its Principal Market for more than 3 consecutive Trading Days; (x)
any delisting from a Principal Market for any reason; (xi) failure by Company to
pay any of its Transfer Agent fees in excess of $2,000 or to maintain a Transfer
Agent of record; (xii) any trading suspension imposed by the Securities and
Exchange Commission (“SEC”) under Sections 12(j) or 12(k) of the 1934 Act;
(xiii) failure by the Company to meet all requirements necessary to satisfy the
availability of Rule 144 to the Holder or its assigns, including but not limited
to the timely fulfillment of its filing requirements as a fully-reporting issuer
registered with the SEC, requirements for XBRL filings, and requirements for
disclosure of financial statements on its website.

 

(b) Remedies. If an event of default occurs, the outstanding Principal Amount of
this Note owing in respect thereof through the date of acceleration, shall
become, at the Holder's election, immediately due and payable in cash at the
“Mandatory Default Amount”. The Mandatory Default Amount means 125% of the
outstanding Principal Amount of this Note. Commencing 5 days after the
occurrence of any Event of Default that results in the eventual acceleration of
this Note, this Note shall accrue additional interest, in addition to the Note’s
“guaranteed” interest, at a rate equal to the lesser of 10% per annum or the
maximum rate permitted under applicable law. Finally, commencing 5 days after
the occurrence of any Event of Default that results in the eventual acceleration
of this Note, an additional permanent 10% increase to the Conversion Price
discount will go into effect. In connection with such acceleration described
herein, the Holder need not provide, and the Issuer hereby waives, any
presentment, demand, protest or other notice of any kind, and the Holder may
immediately and without expiration of any grace period enforce any and all of
its rights and remedies hereunder and all other remedies available to it under
applicable law. Such acceleration may be rescinded and annulled by the Holder at
any time prior to payment hereunder and the Holder shall have all rights as a
holder of the note until such time, if any, as the Holder receives full payment
pursuant to this Section 2.00(b). No such rescission or annulment shall affect
any subsequent event of default or impair any right consequent thereon. Nothing
herein shall limit the Holder's right to pursue any other remedies available to
it at law or in equity including, without limitation, a decree of specific
performance and/or injunctive relief with respect to the Issuer's failure to
timely deliver certificates representing shares of Common Stock upon conversion
of the Note as required pursuant to the terms hereof.

 

 5 

 

 

Section 3.00 General.

 

(a) Payment of Expenses. The Company agrees to pay all reasonable charges and
expenses, including attorneys' fees and expenses, which may be incurred by the
Holder in successfully enforcing this Note and/or collecting any amount due
under this Note.

 

(b) Assignment, Etc. The Holder may assign or transfer this Note to any
transferee at its sole discretion. This Note shall be binding upon the Company
and its successors and shall inure to the benefit of the Holder and its
successors and permitted assigns.

 

(c) Funding Window. The Company agrees that it will not enter into a convertible
debt financing transaction with any party other than the Holder for a period of
15 Trading Days following the Effective Date. The Company agrees that this is a
material term of this Note and any breach of this will result in a default of
the Note.

 

(d) Piggyback Registration Rights. The Company shall include on the next
registration statement that the Company files with the SEC (or on the subsequent
registration statement if such registration statement is withdrawn) all shares
issuable upon conversion of this Note. Failure to do so will result in
liquidated damages of 30% of the outstanding Principal Sum of this Note, but not
less than $20,000, being immediately due and payable to the Holder at its
election in the form of a cash payment or an addition to the Principal Sum of
this Note.

 

(e) Terms of Future Financings. So long as this Note is outstanding, upon any
issuance by the Company or any of its subsidiaries of any convertible debt
security (whether such debt begins with a convertible feature or such feature is
added at a later date) with any term more favorable to the holder of such
security or with a term in favor of the holder of such security that was not
similarly provided to the Holder in this Note, then the Company shall notify the
Holder of such additional or more favorable term and such term, at the Holder's
option, shall become a part of this Note and its supporting documentation.. The
types of terms contained in the other security that may be more favorable to the
holder of such security include, but are not limited to, terms addressing
conversion discounts, conversion look back periods, interest rates, original
issue discount percentages and warrant coverage.

 

(f) Governing Law; Jurisdiction.

 

(i) Governing Law. This Note will be governed by and construed in accordance
with the laws of the state of California without regard to any conflicts of laws
or provisions thereof that would otherwise require the application of the law of
any other jurisdiction.

 

(ii) Jurisdiction and Venue. Any dispute or claim arising to or in any way
related to this Note or the rights and obligations of each of the parties shall
be brought only in the state courts of California or in the federal courts
located in San Diego County, California.

 

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(iii) No Jury Trial. The Company hereto knowingly and voluntarily waives any and
all rights it may have to a trial by jury with respect to any litigation based
on, or arising out of, under, or in connection with, this Note.

 

(iv) Delivery of Process by the Holder to the Company. In the event of an action
or proceeding by the Holder against the Company, and only by the Holder against
the Company, service of copies of summons and/or complaint and/or any other
process that may be served in any such action or proceeding may be made by the
Holder via U.S. Mail, overnight delivery service such as FedEx or UPS, email,
fax, or process server, or by mailing or otherwise delivering a copy of such
process to the Company at its last known attorney as set forth in its most
recent SEC filing.

 

(v) Notices. Any notice required or permitted hereunder (including Conversion
Notices) must be in writing and either personally served, sent by facsimile or
email transmission, or sent by overnight courier. Notices will be deemed
effectively delivered at the time of transmission if by facsimile or email, and
if by overnight courier the business day after such notice is deposited with the
courier service for delivery.

 

(g) No Bad Actor. No officer or director of the Company would be disqualified
under Rule 506(d) of the Securities Act of 1933, as amended, on the basis of
being a “bad actor” as that term is established in the September 13, 2013 Small
Entity Compliance Guide published by the SEC.

 

(h) Usury. If it shall be found that any interest or other amount deemed
interest due hereunder violates any applicable law governing usury, the
applicable rate of interest due hereunder shall automatically be lowered to
equal the maximum rate of interest permitted under applicable law. The Company
covenants (to the extent that it may lawfully do so) that it will not seek to
claim or take advantage of any law that would prohibit or forgive the Company
from paying all or a portion of the principal, fees, liquidated damages or
interest on this Note.

 

[Signature Page to Follow]

 

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IN WITNESS WHEREOF, the Company has caused this Convertible Promissory Note to
be duly executed on the day and in the year first above written.

 

  PACIFIC GREEN TECHNOLOGIES INC.         By: /s/ Alex Shead   Name: Alex Shead
  Title: Director   Email: alex.shead@pacificgreen   Address: 10/50 Berry ST N.
Sydney, NSW 2060, Australia

 

This Convertible Promissory Note of November 10, 2015 is accepted this 10 day of
November, 2015 by Tangiers Investment Group, LLC 

 

By: /s/ Justin Ederle     Name: Justin Ederle     Title: Managing Member  

 

 8 

 

 

EXHIBIT A

 

FORM OF CONVERSION NOTICE

 

(To be executed by the Holder in order to convert all or part of that certain
$110,000 Convertible Promissory Note identified as the Note)

 

DATE:           FROM: Tangiers Investment Group, LLC  

 

  Re: $110,000 Convertible Promissory Note (this “Note”) originally issued by
Pacific Green Technologies Inc., a Delaware corporation, to Tangiers Investment
Group, LLC on November 10, 2015.

 

The undersigned on behalf of Tangiers Investment Group, LLC, hereby elects to
convert $_______________________ of the aggregate outstanding Principal Sum (as
defined in the Note) indicated below of this Note into shares of Common Stock,
$0.001 par value per share, of Pacific Green Technologies Inc. (the “Company”),
according to the conditions hereof, as of the date written below. If shares are
to be issued in the name of a person other than undersigned, the undersigned
will pay all transfer taxes payable with respect thereto and is delivering
herewith such certificates and opinions as reasonably requested by the Company
in accordance therewith. No fee will be charged to the holder for any
conversion, except for such transfer taxes, if any. The undersigned represents
as of the date hereof that, after giving effect to the conversion of this Note
pursuant to this Conversion Notice, the undersigned will not exceed the
“Restricted Ownership Percentage” contained in this Note.

 

Conversion information:     Date to Effect Conversion           Aggregate
Principal Sum of Note Being Converted           Aggregate Interest on Amount
Being Converted           Remaining Principal Balance           Number of Shares
of Common Stock to be Issued           Applicable Conversion Price          
Signature           Name           Address

 

  

 

 

EXHIBIT B

 

WRITTEN CONSENT OF THE BOARD OF DIRECTORS OF 

PACIFIC GREEN TECHNOLOGIES INC.

 

The undersigned, being directors of Pacific Green Technologies Inc., a Delaware
corporation (the "Company"), acting pursuant to the Bylaws of the Corporation,
do hereby consent to, approve and adopt the following preamble and resolutions:

 

Convertible Note with Tangiers Investment Group, LLC

 

The board of directors of the Company has reviewed and authorized the following
documents relating to the issuance of a Convertible Promissory Note in the
amount of $110,000 with Tangiers Investment Group, LLC.

 

The documents agreed to and dated November 10, 2015 are as follows:

 

10% Convertible Promissory Note of Pacific Green Technologies Inc.
Irrevocable Transfer Agent Instructions

Notarized Certificate of Corporate Secretary

Disbursement Instructions

 

IN WITNESS WHEREOF, the undersign member(s) of the board of the Company executed
this unanimous written consent as of November 10, 2015.

 

   

 

 [image_001.jpg]

    By:       Its:  

  

  

 

 

EXHIBIT D

 

TO: Tangiers Investment Group, LLC     FROM: Pacific Green Technologies Inc.    
DATE: November 10, 2015     RE: Disbursement of Funds

 

Pursuant to that certain Note Purchase Agreement between the parties listed
above and dated November 10, 2015, a disbursement of funds will take place in
the amount and manner described below:

 

Please disburse to:   Amount to disburse: $100,000 Form of distribution Wire
Name Pacific Green Technologies Inc. Company Address               Wire
Instructions:

Bank:

ABA Routing Number:
Account Number:
SWIFT Code:
Account Name:
Phone:

     

TOTAL: $100,000

  

For: Pacific Green Technologies Inc.

 

By:     Dated: November 10, 2015 Name:       Its: