Document:

ex10_83.htm

Exhibit 10.83

                  

 

 

National Automation Services, Inc.

PO Box 400775

Las Vegas, NV 89140

Wellington Shields & Co.

140 Broadway, 44th Floor

New York, NY 10005

July 15, 2013

 

  

  

  

 

    

	 	
July 15, 2013

 

Robert Chance

National Automation Services, Inc.

PO Box 400775

Las Vegas, NV 89140

Dear Mr. Robert Chance,

This letter (together with Exhibits A, B and C annexed hereto and made a part hereof, all of which taken together constitute this “Engagement Agreement”) confirms our complete understanding with respect to the retention of Wellington Shields & Co. (“Wellington”), a registered broker/dealer, as exclusive financial advisor to National Automation Services, Inc. (the “Company” or “NASV"), as it relates to potential acquisitions.

Upon the terms and subject to the conditions set forth hereinafter, the parties hereto agree as follows:

	
1.

	
                    Appointment.  The Company hereby retains Wellington and Wellington hereby agrees to act as the Company’s financial advisor as more specifically set forth in paragraph 2 below, effective as of the date hereof (the “Effective Date”).

	
2.

	
                    Scope and Certain Conditions of Services.  The Company hereby retains Wellington to consult with and advise the Company with respect to various financial matters, including:

	
  

	
a.

	
Providing introductions to or strategic advice with respect to approaches to Target investors;

 

	
  

	
b.

	
providing other general corporate finance or strategic financial advisory services as required by the company;

 

	
  

	
c.

	
provide advisory services in connection with potential sale, capital raising, recapitalization, or restructuring by the Company, including, raising capital by means of senior secured debt, unsecured or subordinated debt, preferred stock or common equity;

 

	
  

	
d.

	
identifying, investigating and evaluating persons or entities (each a “Target Investor”) with whom the Company may effect a sale of the Company in whole or in part or any of the Company’s operations, or operating assets; any strategic alliance, joint venture or other similar business combination (a “Businesses Combination”);

 

 

 

 

 

	
  

	
e.

	
Providing general advisory service in connection with any mergers with, or acquisitions of, corporate or operating assets of the Company; and

 

	
  

	
f.

	
Additional services incidental to the above, as directed by the Company.

 

	
  

	
3.                 Fees and Compensation.  In consideration for the services rendered by Wellington   hereunder during the term of this Agreement, the Company agrees to pay Wellington the following fees and other compensation:

	 	
a.

	
A nonrefundable advisory fee (the “Advisory Fee”) of $50,000, payable at the signing of this engagement letter.

	
  

	
b.

	
A success fee (the “Placement Success Fee”) for capital raises, payable upon the successful completion of the Placement, equal to eight percent (8%) of the gross proceeds of the Placement (or in the case of a revolving line of credit, the commitment amount). The Placement Success Fee is due and payable to Wellington immediately upon the closing of the Placement and shall be disbursed directly to Wellington simultaneously with the delivery of the proceeds of the Placement to the Company.

	
  

	
c.

	
Non-callable warrants of the Company (the “Placement Agent Warrants”) issuable to Wellington or its designee, simultaneously with the closing of the Placement, equal to eight percent (8%) of the aggregate number of Securities sold in the Placement.  The Placement Agent Warrants shall entitle the holder thereof to purchase securities of the Company at a purchase price equal to 120% of the price per share of the Placement. The warrants shall be exercisable for a period of five years after the closing of the Placement.  The Placement Agent Warrants shall be satisfactory in form and substance to Wellington and its counsel and shall contain provisions for, among other things, cashless exercise, and anti-dilution protection in the event of merger, consolidation, reclassification, reorganization and other similar events.  Wellington  will also be entitled to compensation set forth in Section 3(b) resulting from any cash generated by the Company from the exercise of any warrants issued to investors introduced to the Company by Wellington  that participate in the offering.

	
  

	
d.

	
The Company agrees to reimburse Wellington for pre-approved expenses within 10 days of submission, but must get prior approval from the Company.

	
  

	
e.

	
If outside investors are found (those not already close to the Company) and located by someone else other than Wellington,  Wellington will receive a Success fee equal to three (3%) of the gross proceeds and three (3%) warrant coverage of the gross proceeds.

 

	
4.

	
                    Term of Retention.  This Engagement Agreement shall be effective as of the date hereof and extend to the close of business October 15, 2013. After the Term of Retention expires, the Engagement Agreement will continue unless cancelled by one (1) month’s written notice.

 

 

 

 

 

Notwithstanding anything herein to the contrary, the obligation to pay the Fees and Compensation set forth in paragraph 3 shall survive any termination or expiration of this Engagement Agreement.  Moreover, it is expressly understood and agreed by the parties hereto that any financing, whether debt or equity, of the Company, secured or placed within twelve (12) months of the termination or expiration of this Engagement Agreement with any investors or lenders first identified and/or contacted by Wellington and with which the Company had direct discussions or negotiations while this Engagement Agreement was in effect, shall result in such fees and compensation being due and payable by the Company to Wellington as required by paragraph 3 of this Engagement Agreement.

	
5.

	
                   Due Diligence.  The role of Wellington  as placement agent and financial advisor to the Company is subject to and contingent upon the satisfactory completion of a due diligence review of, among other things, the Company’s assets, business, future prospects and current and projected financial condition.  If at the completion of its due diligence review Wellington is not satisfied with the results of its due diligence, this Engagement Agreement shall be immediately terminated by Wellington.

	
6.

	
                    Preferential Right.  If the Company closes a Placement or a Transaction during the Term, for the twelve month period commencing on the later of (i) the date of the closing of the Placement or (ii) the date of the closing of any Transaction, Wellington shall have a preferential right whereby the Company will offer Wellington the first opportunity to provide any financing arrangements to the Company.

            

	
7.

	
                   Public Announcements.  Prior to any press release or other public disclosure relating to services hereunder which is legally allowed by law, the Company and Wellington shall confer and reach agreement upon the contents of any such disclosure. Prior to the funding, Wellington shall not be mentioned in any Company press releases.

 

	
8.

	
                   No General Solicitation.  Any offers made in connection with the placement of the Securities will be made only to prospective purchasers on an individual basis and no general solicitation or general advertising in any form will be used to place the Securities.

	
9.

	
                   Miscellaneous.  As more specifically set forth in Exhibit C, this Engagement Agreement shall be governed in accordance with the laws of the State of New York without giving effect to conflicts of laws generally.

 

This Engagement Agreement constitutes the entire understanding and agreement between the parties hereto with respect to the subject matter hereof and there is no agreements or understandings with respect hereto which are not contained in this Engagement Agreement.  This Engagement Agreement may be modified only in writing signed by the party to be charged.

 

If the foregoing correctly sets forth out understanding with respect to the subject matter hereto, please confirm the same by executing and returning to us the duplicate copy of this Engagement Agreement.

 

Wellington will remain committed to entering into this agreement provided it is executed by you on or before August 2, 2013.

 

 

 

 

 

	  	
Very Truly Yours,

	  
	  	  	  
	  	  	  
	  	  	  
	  	  	  
	  	
Edward Cabrera

	  
	  	
Head of Investment Banking

	  
	  	
Wellington Shields & Co.

	  

	  	  
	
Mr. Robert Chance

	  
	
Chief Executive Officer

	  
	
National Automation Services, Inc.

	  
	  	  
	  	  
	
Agreed and Accepted

	  
	
As of this 2nd day of August 2013

	  

 

 

 

 

EXHIBIT A

STANDARD TERMS AND CONDITIONS

	
  

	
1.

	
The Company shall promptly provide Wellington Shields with all relevant information about the Company (to the extent available to the Company) that shall be reasonably requested or required by Wellington Shields which information shall be true, accurate and correct in all material respects at the time furnished.

	
  

	
2.

	
Wellington Shields shall keep all information obtained from the Company strictly confidential except: (a) for information which is otherwise publicly available, or previously known to Wellington Shields or was obtained by Wellington Shields independently of the Company and without breach of Wellington Shields’ agreement with the Company; (b) Wellington Shields may disclose such information to its affiliates, shareholders, officers, directors, representatives, agents, employees and attorneys, and to financial institutions, but shall ensure, to the best of its ability, that all such persons will keep such information strictly confidential; (c) pursuant to any order of a court of competent jurisdiction or other governmental body (Wellington Shields will give written notice to the Company of such order within forty-eight (48) hours of receipt of such order); and (d) upon prior written consent of the Company.

	
  

	
3.

	
The Company recognizes that in order for Wellington Shields to perform properly its obligations in a professional manner, it is necessary that Wellington Shields be informed of and, to the extent practicable, participate in meetings and discussions between the Company, on the one hand, and investors and potential investors introduced relating to the matters covered by the terms of Wellington Shields’ engagement.

	
  

	
4.

	
The Company agrees that any report or opinion, oral or written, delivered to it by Wellington Shields is prepared solely for its confidential use and shall not be reproduced, summarized, or referred to in any public document or given or otherwise divulged to any other person, other than its employees and attorneys, without Wellington Shields’ prior written consent, except as may be required by applicable law or regulation, which consent shall not be unreasonably withheld or delayed.

	
  

	
5.

	
No fee payable by the Company to any other financial advisor or lender shall reduce or otherwise affect any fee payable by the Company to Wellington Shields.

	
  

	
6.

	
The  Company represents and warrants that; (a) it has full right, power and authority to enter into this Agreement and to perform all of its obligations hereunder; (b) the Agreement has been duly authorized and executed and constitutes a valid and binding agreement of the Company, enforceable in accordance with its terms; and (c) the execution and delivery of the Agreement and the consummation of the transactions contemplated hereby does not conflict with or result in a breach of (i) the Company’s certificate of incorporation or by-laws or (ii) any agreement to which the Company is a party by which any of their property or assets is bound.

	
  

	
7.

	
Nothing contained in the Agreement shall be constituted to place Wellington Shields and the Company in the relationship of partners or joint ventures.  Neither Wellington Shields nor the Company shall represent itself as the agent or legal representative of the other for any purpose whatsoever nor shall either have the power to obligate or bind the other in any manner whatsoever.  Wellington Shields in performing its services hereunder shall at all times be an independent contractor.

 

 

 

 

	
  

	
8.

	
The Agreement has been and is made solely for the benefit of Wellington Shields, the Company and each of the persons, agents, employees, officers, directors and controlling persons referred to in Exhibit B and their respective heirs, executors, personal representatives, successors and assigns, and nothing contained in the Agreement shall confer any rights upon, nor shall this Agreement be construed to create any rights in, any person who is not a party to such Agreement, other than as set forth in this paragraph.

	
  

	
9.

	
The rights and obligations of either party under this Agreement may not be assigned without the prior written consent of the other party hereto and any other purported assignment shall be null and void without force and effect.

	
  

	
10.

	
All communications hereunder, except as may be otherwise specifically provided herein, shall be in writing and shall be mailed, hand delivered, or faxed and confirmed by letter or sent by overnight delivery service, to the party whom it is addressed at the following addresses or such other address as such party may advise the other in writing:

To the Company:

National Automation Services, Inc.

PO Box 400775

Las Vegas, NV 89140

To Wellington Shields:

Wellington Shields and Co.

	
140 Broadway, 44th floor

	
Telephone: (212) 320-2030

New York, NY 10005

	 	
Attention: 

	
Edward Cabrera

Head of Investment Banking

 

 

 

EXHIBIT B

INDEMNIFICATION

Recognizing that transactions of the type contemplated in this engagement sometimes result in litigation and that the role of Wellington Shields is advisory, the Company agrees to indemnify and hold harmless Wellington Shields and its affiliates and their irrespective officers, directors, employees, agents and controlling persons within the meaning of Section 15 of the Securities Act of 1933, as amended (the “Act”) or Section 20(a) of the Securities Exchange Act and against any and all loss, charge, claim, damage, expense and liability whatsoever, including, but not limited to, all attorneys' fees and expenses (hereinafter a “Claim” or “Claims”), related to or arising in any manner out of, based upon, or in connection with (i) any untrue statement or alleged untrue statement of a material fact made by the Company or any omission or alleged omission of the Company to state a material fact required to be stated therein or necessary to make the statements therein not misleading or (ii) any transaction, proposal or any other matter (items (i) and (ii) being hereinafter referred to as a “Matter” or “Matters”) contemplated by the engagement of Wellington Shields hereunder, and will promptly reimburse the Indemnified Parties for all expenses (including reasonable fees and expenses of legal counsel) as incurred in connection with the investigation of, preparation for or defense of any pending or threatened Claim related to or arising in any manner out of any Matter contemplated by the engagement of Wellington Shields hereunder, or any action or proceeding arising there from (collectively, “Proceedings”), whether or not such Indemnified party is a formal party to any such Proceeding.  Notwithstanding the foregoing, the Company shall not be liable in respect of any Claims that a court of competent jurisdiction has judicially determined by final judgment (and the time to appeal has expired or the last right of appeal has been denied) resulted solely from the gross negligence or willful misconduct of an Indemnified Party.  The Company further agrees that it will not, without the prior written consent of Wellington Shields settle compromise or consent to the entry of any judgment in any pending or threatened proceeding in respect of which indemnification may be sought hereunder (whether or not Wellington Shields or any Indemnified Party is an actual or potential party to such Proceeding), unless such settlement, compromise or consent includes an unconditional release of Wellington Shields and each other Indemnified Party hereunder from all liability arising out of such proceeding.

In order to provide for just and equitable contribution in any case in which (i) an Indemnified Party is entitled to indemnification pursuant to this Engagement Agreement but it is judicially determined by the entry of a final judgment decree by a court of competent jurisdiction and the time to appeal has expired or the last right of appeal has been denied) that such indemnification may not be enforced in such case, or (ii) contribution may be required by the Company in circumstances for which an Indemnified party is otherwise entitled to indemnification under the Agreement, then, and in each such case, the Company shall contribute to the aggregate losses, Claims, damages and/or liabilities in an amount equal to the amount for which indemnification was held unavailable. Notwithstanding the foregoing, Wellington Shields shall not be obligated to contribute any amount hereunder that exceeds the amount of fees previously received by Wellington Shields pursuant to this Agreement.

The Company further agrees that no Indemnified Party shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with Wellington Shields’ engagement hereunder except for Claims that a court of competent jurisdiction shall have determined by final judgment (and the time to appeal has expired or the last right of appeal has been denied) resulted solely from the gross negligence or willful misconduct of such Indemnified Party. The indemnity, re imbursement and contribution obligations of the Company set forth herein shall be in addiction to any liability which the Company may otherwise have an shall be binding upon and inure to the benefit of any successors, assigns, heirs and personal representatives of the Company or an Indemnified Party.

 

 

 

 

The indemnity, reimbursement and contribution provisions set forth herein shall remain operative and full force and effect regardless of (i) any withdrawal, termination or consummation of or failure to initiate or consummate any Matter referred to herein, (ii) any investigation made by or on behalf of any party hereto or any person controlling (within the meaning of Section 15 of the Securities act of 1933 as amended, or Section 20 of the Securities Exchange Act of 1934, as amended) any party hereto, (iii) any termination or the completion or expiration of this Engagement Agreement with Wellington Shields and (iv) whether or not Wellington Shields shall, or shall not be called upon to, render any formal or informal advice in the course of such engagement.

Unless otherwise defined, capitalized terms used herein shall have the meaning ascribed to them in the Engagement Agreement.

 

 

 

 

 

 

 

 

 

EXHIBIT C

JURISDICTION

Each of the Company and Wellington Shields hereby irrevocably; (a) submits to the jurisdiction of any court of the State of New York or any federal court sitting in the State of New York for the purposes of any suit, action or other proceeding arising out of the Agreement between the Company and Wellington Shields which is brought by or against either party; (b) agrees that all claims in respect of any suit, action or proceeding may be heard and determined in any such court; and (c) to the extent that the Company or Wellington Shields has acquired, or hereafter may acquire, any immunity from jurisdiction of any such court or from any legal process therein, each of them hereby waives, to the fullest extent permitted by law, such immunity.

Each of Wellington Shields and the Company hereby waives, and the Company agrees not to assert in any such suit, action or proceeding, in each case, to the fullest extent permitted by applicable law, any claim that: (a) the Company is not personally subject to the jurisdiction of any such court; (b) it is immune from any legal process (whether through service or notice, attachment prior to judgment, attachment in the aid of execution, execution or otherwise) with respect to it or its property; (c) any such suit, action or proceeding is brought in an inconvenient forum; (d) the venue of any such suit, action or proceeding is improper; or (e) this Agreement may not be enforced in or by any such court.

Nothing in these provisions shall affect any party’s right to serve process in any manner permitted by law or limit its rights to bring a proceeding in the competent courts of any jurisdiction or jurisdictions or to enforce any lawful manner a judgment obtained in one jurisdiction in any other jurisdiction.

 

 

 

 

 

 

 

 

 

ATTACHMENT 1

AUTHORIZATION OF PAYMENT

I, Robert Chance, Chief Executive Officer of National Automation Services, Inc. and on behalf of National Automation Services Inc., authorize the lender/investor to pay Wellington Shields & Co. LLC directly from escrow at the time of closing of any funding as mentioned in clause 3B of the engagement letter dated July 15, 2013. This authorization is to remain in full force and effect unless written authorization by Wellington Shields & Co., LLC is provided to the lender/investor to revoke this agreement. Please wire the funds to the wire instructions provided below.

	  	  
	
Robert Chance

	  
	
Chief Executive Officer

	  
	
National Automation Services, Inc.

	  

Agreed and Accepted

 

 

As of this 2nd day of August 2013

WELLINGTON SHIELDS & CO., LLC WIRE INSTRUCTIONS

	
Bank: 

	
JPMorgan Chase Bank

One Chase Manhattan Plaza

New York, N.Y. 10005

	
ABA No.

	
021000021

	
Acct Name: 

	
Wellington Shields & Co., LLC

140 Broadway, 44th Floor

New York, N.Y. 10005

	
Acct No. 

	
806376612Unassociated Document

Exhibit 10.84

 

NEITHER THIS NOTE NOR THE SECURITIES INTO WHICH IT IS CONVERTIBLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER SECTION 3(b), 4(2) OR 4(6) OF THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED, SOLD, PLEDGED, TRANSFERRED, ASSIGNED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION OR EXCLUSION FROM THE REGISTRATION REQUIREMENTS THEREUNDER AND IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS.

 

	No. CE-4	 $2,500.00

                 

10% CONVERTIBLE NOTE DUE 6 MONTHS FROM ORIGINAL ISSUANCE DATE

 

THIS NOTE is a duly authorized note issued by National Automation Services, Inc., a corporation organized and existing under the laws of the State of Nevada (the “Company”), designated as its 10% Convertible Notes (the “Notes”) due in 6 months from the Original Issuance Date (the “Maturity Date”), issued on September 11, 2013 (the “Original Issuance Date”)  in  an  aggregate  principal  amount  of  Two  Thousand  Five  Hundred  Dollars  (US $2,500.00).

 

FOR VALUE RECEIVED, the Company promises to pay to Michael R Hayek & Debra A Hayek JT WROS located at the address listed below (the “Holder”) the principal sum of Two Thousand Five Hundred Dollars (US $2,500.00), on or prior to the Maturity Date and to pay interest to the Holder on the principal sum at a flat rate of 10% of the principal amount of the Note (20% per annum).  Interest shall accrue daily commencing on the Original Issuance Date until payment in full of the principal sum, together with all accrued and unpaid interest, has been made.   If at any time after the Original Issuance Date an Event of Default has occurred, the Holder shall be entitled to remedies under Section 2 hereof. This is not a Public Offering and is being offered to accredited investors only.

 

This Note is subject to the following additional provisions:

 

	
Section  1. 

	
Events of Default and Remedies.

 

I.               “Event of Default,” when used herein, means any one of the following events (whatever the reason and whether any such event shall be voluntary or involuntary or effected by operation of law or pursuant to any judgment, decree or order of any court, or any order, rule or regulation of any administrative or governmental body):

 

(a)       any default in the payment of the principal of or interest on this Note as and when the same shall become due and payable either at the Maturity Date, by acceleration, conversion, or otherwise;

 

  

  

  

 

(b)       the  Company  shall  fail  to  observe  or  perform  any  other  covenant, agreement or warranty contained in, or otherwise commit any breach of, this Note, and such failure or breach shall not have been remedied within fifteen (15) Business Days of its receipt of notice of such failure or breach;

 

(c)       the Company shall commence a voluntary case under the United States Bankruptcy Code as now or hereafter in effect or any successor thereto (the “Bankruptcy Code”); or an involuntary case is commenced against the Company under the Bankruptcy Code and the petition is not controverted within thirty (30) days, or is not dismissed within sixty (60) days, after commencement of the case; or a “custodian” (as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or any substantial part of the property of the Company or the Company commences any other proceeding under any reorganization, arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or liquidation or similar law of any jurisdiction whether now or hereafter in effect relating to the Company or there is commenced against the Company any such proceeding which remains un-dismissed for a period of sixty (60) days; or the Company is adjudicated insolvent or bankrupt; or any order of relief or other order approving any such case or proceeding is entered; or the Company suffers any appointment of any custodian or the like for it or any substantial part of its property which continues un- discharged or un-stayed for a period of thirty (30) days; or the Company makes a general assignment for the benefit of creditors; or the Company shall fail to pay, or shall state that it is unable to pay, or shall be unable to pay, its debts generally as they become due; or the Company shall call a meeting of its creditors with a view to arranging a composition or adjustment of its debts; or the Company shall by any act or failure to act indicate its consent to, approval of or acquiescence in any of the foregoing; or any corporate or other action is taken by the Company for the purpose of effecting any of the foregoing;

 

II.        Remedies    If  any  Event of  Default occurs  and  continues, then  the Holder may, by notice to the Company, accelerate all of the payments due under this Note by declaring all amounts so due under this Note, whereupon the same shall become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are waived by the Company, notwithstanding anything contained herein to the contrary, 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 declaration may be rescinded and annulled by the Holder at any time prior to payment hereunder. No such rescission or annulment shall affect any subsequent Event of Default or impair any right consequent thereon.  This shall include, but not be limited to the right to temporary, preliminary and permanent injunctive relief without the requirement of posting any bond or undertaking.

 

(a)       The Holder may thereupon proceed to protect and enforce its rights either by suit in equity and/or by action at law or by other appropriate proceedings whether for the specific performance (to the extent permitted by law) of any covenant or agreement contained in this Note or in aid of the exercise of any power granted in this Note, and proceed to enforce the payment of this Note. The Company agrees to pay reasonable costs of collection incurred by Holder and its counsel upon a default and failure of the Company to pay the Note in a timely manner.

  

  

  

 

(b)       Except as expressly provided for herein, the Company specifically (i) waives all rights it may have (A) to notice of nonpayment, notice of default, demand, presentment, protest and notice of protest with respect to any of the obligations hereunder or the shares of Common Stock and (B) notice of acceptance hereof or of any other action taken in reliance hereon, notice and opportunity to be heard before the exercise by the Holder of the remedies of self-help, set-off, or other summary procedures and all other demands and notices of any type or description except for cure periods; and (ii) releases the Holder, its officers, directors, agents, employees and attorneys from all claims for loss or damage caused by any act or failure to act on the part of the Holder, its officers, attorneys, agents, directors and employees except for gross negligence or willful misconduct.

 

(c)       As a non-exclusive remedy, upon the occurrence of an Event of Default, the Holder may convert the remaining principal amount of the Notes and accrued interest thereon at the Conversion Price upon  giving a Notice of  Conversion to the Company.   Except as otherwise provided herein, the Company shall not have the right to object to the conversion and it shall release the shares of Common Stock so elected.

 

	
Section 2.

	
Conversion.

 

(a)        Upon Maturity, the unpaid principal amount of this Note plus all accrued interest thereon shall be convertible into shares of Common Stock at $0.005 per share (the “Conversion Price”), at the option of the Holder, in whole or in part. Shares issued upon conversion shall become free trading stock as promulgated by the rules and regulations of the U. S. Securities and Exchange Commission. The date on which such conversion is to be effected (the “Conversion Date”). The Holder shall effect conversions by surrendering the Note to be converted to the Company,  together  with  the  form  of  notice  attached  hereto  as  Exhibit  A  (“Notice  of Conversion”).  The Notice of Conversion shall specify the amount of principal and accrued interest to be converted. The Notice of Conversion, once given, shall be irrevocable.  If, at Maturity, the Holder is converting less than all of the principal and interest amounts represented by this Note, the Company shall deliver to the Holder a cash payment equal to the amount of principal and interest, which is not converted at Maturity. Upon conversion in full of the Note or upon payment in full on or before the Maturity Date, the Purchaser shall return the Note to the Company for cancellation.  Upon maturity of this Note, the debt owed by the Company is considered to comply with the Securities Act of 1933 and Holder, upon conversion, can seek and render a legal opinion from qualified legal counsel to have the restrictions lifted from the security.

 

(b)       The Company shall use reasonable efforts to deliver to the Holder not later than ten (10) Business Days after the Conversion Date, (i) a certificate or certificates representing the number of shares of Common Stock being acquired upon the conversion of this Note, and once this Note so converted in part shall have been surrendered to the Company, the Company shall deliver to the Holder a Note in the principal amount, if any, of this Note not then converted; provided, however, that the Company shall not be obligated to issue certificates evidencing the shares of Common Stock issuable upon conversion of this Note until this Note is either delivered for conversion to the Company or the Holder notifies the Company that this Note has been lost, stolen or destroyed and provides an affidavit of loss and an agreement reasonably acceptable to the Company indemnifying the Company from any loss incurred by it in connection with such loss, theft or destruction.

 

  

  

  

 

(c)        No  fractional shares  of  Common Stock  shall  be  issuable upon  a  conversion hereunder and the number of shares to be issued shall be rounded up or down to the nearest whole share.

 

(d)      The issuance of a certificate or certificates for shares of Common Stock upon conversion of this Note shall be made without charge to the Holder for any documentary stamp or similar taxes that may be payable in respect of the issuance or delivery of such certificate, provided that the Company shall not be required to pay any tax that may be payable in respect of any transfer involved in the issuance and delivery of any such certificate upon conversion in a name other than that of the Holder and the Company shall not be required to issue or deliver such certificates unless or until the person or persons requesting the issuance thereof shall have paid to the Company the amount of such tax or shall have established to the satisfaction of the Company that such tax has been paid.

 

(e)       The portion of the principal amount and accrued but unpaid interest on the Note, if any, which is converted into Common Stock shall be canceled upon conversion.

 

(f)        The Notice of Conversion (Exhibit A) shall be given to the Company ten (10) days prior to Maturity and shall be effected on the Maturity Date no later than 5:00 p.m. Nevada time on such Day.  In the event that the Notice of Conversion is deemed given to the Company after 5:00 p.m. Nevada time on any Business Day or at any time on a day that is not a Business Day, Notice of Conversion will be deemed given on the following Business Day.

 

Section 3.                 Absolute Payment Obligation;  Except as expressly provided herein, no provision of this Note shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of, and interest on, this Note at the time, place, and rate, and in the coin or currency, herein prescribed. This Note is a direct obligation of the Company. This Note ranks pari passu with all other Notes now or hereafter issued under the terms set forth herein. The Company represents that it shall not issue more than $250,000 of Convertible Notes inclusive of this Note during the period from the Issuance Date to the Maturity Date and that if any subsequent Note under this provision is issued with more favorable terms, then this Note shall be imbued with such more favorable terms retroactive to the issuance Date. Notwithstanding the foregoing, the Company reserves the right to enter into a variety of funding agreements at any time during the period of this Note with terms and conditions dictated by market conditions and the capital needs of the Company.

 

Section 4.          Loss, Theft, Mutilation or Destruction.  If this Note shall be mutilated, lost, stolen or destroyed, the Company shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated Note, or in lieu of or in substitution for a lost, stolen or destroyed Note, a new Note for the principal amount of this Note so mutilated, lost, stolen or destroyed but only upon receipt of an affidavit of such loss, theft or destruction of such Note, and, if requested by the Company, an agreement to indemnify the Company in form reasonably acceptable to the Company.

 

  

  

  

 

Section 5.         Payment Dates.   Whenever any payment or other obligation hereunder shall be due on a day other than a Business Day, such payment shall be made on the next following Business Day.

 

Section 6.         Notices.   All notices, requests and other communications hereunder must be in writing and will be deemed to have been duly given only if delivered personally against written receipt, by facsimile transmission against facsimile confirmation, or mailed by recognized overnight courier prepaid, to the parties at the following addresses:

 

 

	 	If to the Company:   	National Automation Services, Inc.
	 	 	P.O. Box 400775 

Las Vegas, NV  89140

Attn: Robert W. Chance, President & CEO

	 	 	 
	 	If to the Holder: 	Michael R Hayek & Debra A Hayek JT WROS
	 	 	20345 Windflower Court 

Mundelein IL 60060

 

All such notices, requests and other communications will (a) if delivered personally to the address as provided in this Section 8, be deemed given upon delivery, (b) if delivered by facsimile transmission to the facsimile number as provided for in this Section 8, be deemed given upon facsimile confirmation, (c) if delivered by overnight courier to the address as provided in this Section 8, be deemed given on the earlier of the first Business Day following the date sent by such overnight courier or upon receipt and (d) if by electronic mail, when directed to an electronic mail address provided for in this Section 8, be deemed given upon delivery (in each case regardless of whether such notice, request or other communication is received by any other Person to whom a copy of such notice is to be delivered pursuant to this Section 8). Any party from time to time may change its address, facsimile number, email address or other information for the purpose of notices to that party by giving notice specifying such change to the other party hereto.

 

Section 7.         Waiver.  Any waiver by the Company or the Holder of a breach of any provision of this Note shall not operate as or be construed to be a waiver of any other breach of such provision or of any breach of any other provision of this Note.  The failure of the Company or the Holder to insist upon strict adherence to any term of this Note on one or more occasions shall not be considered a waiver or deprive that party of the right thereafter to insist upon strict adherence to that term or any other term of this Note. Any waiver must be in writing.

 

Section 8.         Invalidity.    If any  provision of this Note is held to be invalid, illegal or unenforceable, the balance of this Note shall remain in effect, and if any provision is held to be inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances.

 

  

  

  

 

Section 9.         Rules of Construction. By its acceptance of this Note, Holder acknowledges and agrees that he has been represented by counsel during the negotiation and execution of this Note, and therefore he waives the application of any law, regulation, holding or rule of construction providing that ambiguities in an agreement or other document will be construed against the party drafting such agreement or document.

Section 10.       Governing Law.   This Note shall be construed and enforced in accordance with and governed  by the internal laws of the State of Nevada, without regard to its principles of conflicts of laws.

Section 11.        Consent to Jurisdiction; Service of Process.   The Company and Holder, by his acceptance of this Note, each irrevocably consents and agrees that any proceeding commenced by it arising out of or relating to this Note shall be brought only in the applicable court in the State of Nevada in any other manner provided by applicable law.

Section 12.      Waiver of Jmy Trial. The Company and Holder, by his acceptance of this Note, each irrevocably waives any and all right to trial by jury in any proceeding arising out of or related to this Note.

Section 13.    Transfer; Assignment.  This Note is not transferable, negotiable or assignable by Holder except pursuant to the laws of descent and distribution.

Section 14.        Headings.  Headings are for convenience of reference only and shall not limit or otherwise affect or be used in the construction of any of the terms or provisions hereof.

 

IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed by an officer thereunto duly authorized as of the date first above indicated.

 

	 	NATIONAL AUTOMATION SERVICES, INC.
	 	 
	 	  

 

Note Holder:

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