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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

 

Date of Report (Date of earliest reported): August 16, 2024

 

EZFILL HOLDINGS, INC.

(Exact name of registrant as specified in its charter)

 

Delaware   001-40809   84-4260623
(State or other jurisdiction   (Commission   (IRS Employer
of Incorporation)   File Number)   Identification Number)

 

67 NW 183rd Street, Miami, Florida 33169

(Address of principal executive offices)

 

(305) 791-1169

(Registrant’s telephone number, including area code)

 

N/A

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.)

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
   
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CF$ 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of Each Class   Trading Symbol(s)   Name of Each Exchange on which Registered
Common Stock, $0.0001 par value per share   EZFL   Nasdaq Capital Market

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

 

 

 

 

Item 1.01. Entry into a Material Definitive Agreement.

 

On August 16, 2024, EzFill Holdings, Inc., a Delaware corporation (the “Company”) entered into a Stock Purchase Agreement (the “SPA”) by and between the Company and NextNRG Holding Corp., a Nevada corporation (“Next”). Pursuant to the terms and conditions of the SPA, at the Closing (as defined in the SPA), the Company shall issue and sell to Next, and Next shall purchase from the Company, 140,000 shares of Series B Convertible Preferred Stock of the Company (“Series B Preferred Stock”) for a purchase price of $10.00 per Share, and a resulting total purchase price of $1,400,000. The information provided in this paragraph is qualified in its entirety by reference to the SPA, which is incorporated herein by reference and attached hereto as Exhibit 10.1.

 

Further, on August 16, 2024, the Company entered into an Exchange Agreement (the “Next Exchange Agreement”) by and between the Company and Next. Pursuant to the terms and conditions of the Next Exchange Agreement, certain promissory notes of the Company issued to Next (as set forth in the Next Exchange Agreement) shall be exchanged and converted into 3,525,341 shares of common stock of the Company, par value $0.0001 per share (“Common Stock”). The information provided in this paragraph is qualified in its entirety by reference to the Next Exchange Agreement, which is incorporated herein by reference and attached hereto as Exhibit 10.2.

 

Finally, on August 16, 2024, the Company entered into an Exchange Agreement (the “AJB Exchange Agreement”, and together with the SPA and the Next Exchange Agreement, the “Agreements”) by and between the Company and AJB Capital Investments LLC, a Delaware limited liability company (“AJB”). Pursuant to the terms and conditions of the AJB Exchange Agreement, certain promissory notes of the Company issued to AJB (as set forth in the AJB Exchange Agreement) shall be exchanged and converted into 363,000 shares of Series A Preferred Stock of the Company (“Series A Preferred Stock”). The information provided in this paragraph is qualified in its entirety by reference to the AJB Exchange Agreement, which is incorporated herein by reference and attached hereto as Exhibit 10.3.

 

The Company expects that entry into the Agreements will be in furtherance of its regaining compliance with the minimum stockholders’ equity requirement of $2.5 million under the Nasdaq Listing Rule 5550(b)(1) (the “Minimum Stockholders’ Equity Requirement”) for continued listing on The Nasdaq Capital Market.

 

Item 5.03. Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year.

 

On August 16, 2024, the Company filed a certificate of designations of preferences and rights of Series A Convertible Preferred Stock (the “Series A Certificate of Designations”) with the Department of State, Division of Corporations, of the State of Delaware, which provides for the designation of 513,000 shares of Series A Preferred Stock of the Company, par value $0.0001 per share, upon the terms and conditions as set forth in the Series A Certificate of Designations. The information set forth in this paragraph is qualified in its entirety by reference to the Series A Certificate of Designations, which is incorporated herein by reference and attached hereto as Exhibit 10.4.

 

Further, on August 16, 2024, the Company filed a certificate of designations of preferences and rights of Series B Convertible Preferred Stock (the “Series B Certificate of Designations”) with the Department of State, Division of Corporations, of the State of Delaware, which provides for the designation of 150,000 shares of Series B Preferred Stock of the Company, par value $0.0001 per share, upon the terms and conditions as set forth in the Series B Certificate of Designations. The information set forth in this paragraph is qualified in its entirety by reference to the Series B Certificate of Designations, which is incorporated herein by reference and attached hereto as Exhibit 10.5.

 

Finally, on August 16, 2024, the Company filed with the Department of State, Division of Corporations, of the State of Delaware: (i) a certificate of amendment to certificate of designations of preferences and rights of Series A Convertible Preferred Stock (the “Series A Certificate of Amendment”) and; (ii) a certificate of amendment to certificate of designations of preferences and rights of Series B Convertible Preferred Stock (the “Series B Certificate of Amendment”). The information set forth in this paragraph is qualified in its entirety by reference to the Series A Certificate of Amendment and the Series B Certificate of Amendment, each of which are incorporated herein by reference and attached hereto as Exhibit 10.6 and Exhibit 10.7, respectively.

 

Item 7.01 Regulation FD Disclosure.

 

On August 19, 2024, the Company issued a press release announced a series of strategic transactions aimed at bolstering its financial position and regaining compliance with Nasdaq listing requirements, subject to Nasdaq confirmation announcing the consummation of the Business Combination. A copy of the press release is filed as Exhibit 99.1 to this Current Report on Form 8-K.

 

The information in this Item 7.01, including Exhibit 99.1 attached hereto, is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any of the Company’s filings under the Securities Act, or the Exchange Act, whether made before or after the date hereof, except as shall be expressly set forth by specific reference to this report in such filing.

 

 

 

Item 8.01. Other Events.

 

As a result of the transactions described above in this Current Report on Form 8-K, the Company believes it has regained compliance with the Minimum Stockholders’ Equity Requirement. As previously disclosed in its Form 8-K filed on August 23, 2023, the Nasdaq Listing Qualifications staff (the “Staff”), in its letter dated August 22, 2023, notified the Company that it was not in compliance with the Minimum Stockholders’ Equity Requirement. On October 1, 2023 and January 19, 2024, the Company submitted its compliance plan to Nasdaq. Based on the Staff’s review and the materials submitted by the Company, the Staff granted the Company’s request for an extension until February 20, 2024, to comply with the Minimum Stockholders’ Equity Requirement. On February 21, 2024, the Company was further notified that because it had not regained compliance with the Minimum Stockholders’ Equity Requirement, its securities would be delisted unless it requested a hearing. On February 28, 2024, the Company requested a hearing before the Nasdaq Hearings Panel (the “Panel”), which was held on May 2, 2024.

 

Forward-Looking Statements

 

This Current Report contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements can be identified by the use of words such as “should,” “may,” “intends,” “anticipates,” “believes,” “estimates,” “projects,” “forecasts,” “expects,” “plans,” “proposes” and similar expressions. Forward-looking statements contained in this Current Report include statements regarding the Company’s intent and ability to regain compliance with the Minimum Bid Price Requirements or maintain compliance with other applicable Nasdaq listing rules, and the risk that the Company may not ultimately meet applicable Nasdaq requirements, among other risks, uncertainties, and important factors discussed under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as updated by its other filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date of the document in which they are contained, and the Company does not undertake any duty to update any forward-looking statements, except as may be required by law.

 

Item 9.01. Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.   Description
10.1   Stock Purchase Agreement, by and between the Company and Next, dated as of August 16, 2024.
10.2   Exchange Agreement, by and between the Company and Next, dated as of August 16, 2024.
10.3   Exchange Agreement, by and between the Company and AJB, dated as of August 16, 2024.
10.4  

Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock of the Company, as filed on August 16, 2024, with the Department of State, Division of Corporations, of the State of Delaware.

10.5   Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock of the Company, as filed on August 16, 2024 with the Department of State, Division of Corporations, of the State of Delaware.
10.6   Certificate of Amendment to Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock of the Company, as filed on August 16, 2024, with the Department of State, Division of Corporations, of the State of Delaware.
10.7   Certificate of Amendment to Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock of the Company, as filed on August 16, 2024, with the Department of State, Division of Corporations, of the State of Delaware.
99.1   Press Release of the Registrant, dated as of August 19, 2024.
104   Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

SIGNATURE

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  EzFill Holdings, Inc.
   
Dated: August 19, 2024 By:  /s/ Yehuda Levy
    Yehuda Levy
    Interim Chief Executive Officer

 

 

EX-10.1 2 ex10-1.htm

 

Exhibit 10.1

 

 

 

Stock Purchase Agreement

 

by and among

 

EzFill Holdings, Inc.

 

and

 

NextNRG Holding Corp.

 

 

 

 

 

Table of Contents

 

      PAGE
ARTICLE I. Definitions and Interpretation 1
  Section 1.01 Definitions. 1
  Section 1.02 Interpretive Provisions. 2
ARTICLE II. Purchase of Shares 3
  Section 2.01 Purchase. 3
  Section 2.02 Closing 3
  Section 2.03 Stockholder Approval. 3
  Section 2.04 Unwinding. 3
ARTICLE III. Registration Rights. 4
  Section 3.01 Definitions. 4
  Section 3.02 Registrations. 5
  Section 3.03 Registration Procedures. 6
  Section 3.04 Registration Expenses. 9
  Section 3.05 Indemnification. 9
ARTICLE IV. Representations and Warranties of the Buyer 11
  Section 4.01 Existence and Power. 11
  Section 4.02 No Conflict; Due Authorization 11
  Section 4.03 Valid Obligation 12
  Section 4.04 Governmental Authorization. 12
  Section 4.05 Broker’s, Finder’s or Similar Fees 12
  Section 4.06 Investment Representations 12
  Section 4.07 Full Disclosure. 14
ARTICLE V. Representations and Warranties of the Company 14
  Section 5.01 Organization 14
  Section 5.02 No Conflict; Due Authorization 14
  Section 5.03 Valid Obligation 15
  Section 5.04 Governmental Authorization 15
  Section 5.05 Approval of Agreement 15
  Section 5.06 Broker’s, Finder’s or Similar Fees 15
ARTICLE VI. Miscellaneous 15
  Section 6.01 Notices 15
  Section 6.02 Governing Law; Jurisdiction. 16
  Section 6.03 Waiver of Jury Trial. 16
  Section 6.04 Mediation. 17
  Section 6.05 Limitation on Damages. 17
  Section 6.06 Attorneys’ Fees 17
  Section 6.07 Third Party Beneficiaries 17
  Section 6.08 Expenses 18
  Section 6.09 Entire Agreement 18
  Section 6.10 Amendment; Waiver 18
  Section 6.11 No Presumption Against Drafter. 18
  Section 6.12 Headings. 18
  Section 6.13 No Assignment or Delegation. 18
  Section 6.14 Commercially Reasonable Efforts 19
  Section 6.15 Further Assurances. 19
  Section 6.16 Specific Performance. 19
  Section 6.17 Counterparts 19

 

i

 

Stock Purchase Agreement

 

Dated as of August 16, 2024

 

This Stock Purchase Agreement (together with the exhibits and other attachments hereto, this “Agreement”) is entered into as of the date first set forth above (the “Closing Date”) by and between (i) EzFill Holdings, Inc., a Delaware corporation (the “Company”) and (ii) NextNRG Holding Corp., a Nevada corporation (“Buyer”). Each of the Company and Buyer may be referred to herein collectively as the “Parties” and separately as a “Party.”

 

WHEREAS, the Company desires to sell to Buyer, and Buyer desires to acquire from the Company, certain shares of Series B Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Series B Stock”), in reliance upon the exemption from registration provided by the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”);

 

NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the Parties to be derived herefrom, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:

 

ARTICLE I. Definitions and Interpretation

 

Section 1.01 Definitions. In addition to the other terms defined herein, the following terms, as used herein, have the following meanings

 

  (a) “Action” means any legal action, suit, claim, investigation, hearing or proceeding, including any audit, claim or assessment for Taxes or otherwise.

 

  (b) “Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person.

 

  (c) “Authority” means any governmental, regulatory or administrative body, agency or authority, any court or judicial authority, any arbitrator, or any public, private or industry regulatory authority, whether international, national, Federal, state, or local.

 

  (d) “Certificate of Designations” means the Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock as filed with the Secretary of State of the State of Delaware on August 16, 2024.

 

  (e) “Common Stock” means the common stock, par value $0.0001 per share, of the Company.

 

  (f) “Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.” Controlled”, “Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing a Person (the “Controlled Person”) shall be deemed Controlled by (a) any other Person (the “10% Owner”) (i) owning beneficially, as meant in Rule 13d-3 under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, securities entitling such Person to cast 10% or more of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive 10% or more of the profits, losses, or distributions of the Controlled Person; (b) an officer, director, general partner, partner (other than a limited partner), manager, or member (other than a member having no management authority that is not a 10% Owner ) of the Controlled Person; or (c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew, mother-in-law, father-in-law, sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a trust for the benefit of an Affiliate of the Controlled Person or of which an Affiliate of the Controlled Person is a trustee.

 

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  (g) “Enforceability Exceptions” means (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar Laws of general application affecting enforcement of creditors’ rights generally and (b) general principles of equity.

 

  (h) “Law” means any domestic or foreign, federal, state, municipality or local law, statute, ordinance, code, rule, or regulation.

 

  (i) “Lien” means any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, and any conditional sale or voting agreement or proxy, including any agreement to give any of the foregoing.

 

  (j) “Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.

 

  (k) “Tax(es)” means any federal, state, local or foreign tax, charge, fee, levy, custom, duty, deficiency, or other assessment of any kind or nature imposed by the Internal Revenue Service and any other Authority responsible for the collection, assessment or imposition of any Tax or the administration of any Law relating to any Tax (including any income (net or gross), gross receipts, profits, windfall profit, sales, use, goods and services, ad valorem, franchise, license, withholding, employment, social security, workers compensation, unemployment compensation, employment, payroll, transfer, excise, import, real property, personal property, intangible property, occupancy, recording, minimum, alternative minimum, environmental or estimated tax), including any liability therefor as a transferee (including under Section 6901 of the Internal Revenue Code of 1986, as amended, or similar provision of applicable Law) or successor, as a result of Treasury Regulation Section 1.1502-6 or similar provision of applicable Law or as a result of any Tax sharing, indemnification or similar agreement, together with any interest, penalty, additions to tax or additional amount imposed with respect thereto.

 

Section 1.02 Interpretive Provisions. Unless the express context otherwise requires (i) the words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (ii) terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa; (iii) the terms “Dollars” and “$” mean United States Dollars; (iv) references herein to a specific Section, Subsection, Recital, or Exhibit shall refer, respectively, to Sections, Subsections, Recitals or Exhibits of this Agreement; (v) wherever the word “include,” “includes,” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”; (vi) references herein to any gender shall include each other gender; (vii) references herein to any Person shall include such Person’s heirs, executors, personal representatives, administrators, successors and assigns; provided, however, that nothing contained herein is intended to authorize any assignment or transfer not otherwise permitted by this Agreement; (viii) references herein to a Person in a particular capacity or capacities shall exclude such Person in any other capacity; (ix) references herein to any contract or agreement (including this Agreement) mean such contract or agreement as amended, supplemented or modified from time to time in accordance with the terms thereof; (x) with respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”; (xi) references herein to any Law or any license mean such Law or license as amended, modified, codified, reenacted, supplemented or superseded in whole or in part, and in effect from time to time; and (xii) references herein to any Law shall be deemed also to refer to all rules and regulations promulgated thereunder.

 

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ARTICLE II. Purchase of Shares

 

Section 2.01 Purchase. Pursuant to the terms and conditions here, at the Closing, the Company shall issue and sell to Buyer, and the Buyer shall purchase from the Company, 140,000 shares of Series B Stock (the “Shares”) for a purchase price of $10.00 per Share, and a resulting total purchase price of $1,400,000 (the “Purchase Price”).

 

Section 2.02 Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date simultaneously with the execution and delivery of this Agreement by remote exchange of electronic documents. At the Closing, the Company shall issue to Buyer the Shares, which shall be recorded in book entry form and shall not be certificated unless requested by Buyer, and the Buyer shall pay the Purchase Price to the Company via wire transfer pursuant to wire transfer instructions as provided by the Company to the Buyer. At and following the Closing, the Parties shall execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged, and delivered), any and all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required by this Agreement to be so delivered at or prior to the Closing, together with such other items as may be reasonably requested by the Parties and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby.

 

Section 2.03 Stockholder Approval. The Company covenants and agrees that it shall utilize its commercially reasonable efforts to obtain the Stockholder Approval (as defined in the Certificate of Designations) as soon as reasonably practicable following the Closing Date, and in any event will submit the matters included in the Stockholder Approval to the stockholders of the Company for a vote within 60 days of the Closing Date, and if the Stockholder Approval is not obtained within such time period, the Company will submit the matters included in the Stockholder Approval to the stockholders of the Company for a vote at least every 4 months thereafter until the Stockholder Approval is obtained.

 

Section 2.04 Unwinding. The Parties acknowledge and agree that in the event that The Nasdaq Stock Market (“Nasdaq”) informs the Company, at any time prior to the occurrence of the Stockholder Approval Date, that the transactions as set forth herein and the other transactions being undertaken by the Company on and around the date hereof are not sufficient to cure the stockholder equity deficiency matters as previously communicated by Nasdaq to the Company, then the Parties shall undertake such actions as required to unwind the Closing and the purchase of the Shares as set forth in Section 2.01, and in connection therewith, the Buyer shall return all of the Shares to the Company, and the Company shall return the Purchase Price to the Buyer.

 

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ARTICLE III. Registration Rights.

 

Section 3.01 Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

 

  (a) “Filing Date” means the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities.

 

  (b) “Investor” shall mean the Buyer and any other Person holding Registrable Securities.

 

  (c) “Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the SEC pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

 

  (d) “Registrable Securities” means any Conversion Shares (as defined in the Certificate of Designations) which have been issued to the Investor on any conversion of the Series B Stock and which continue to be held by the Investor, provided that such Conversion Shares shall cease to be Registrable Securities when: (1) a registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such Registrable Securities shall have been sold, transferred, disposed of or exchanged in accordance with such registration statement; (2) such Registrable Securities shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of them shall not require registration under the Securities Act; (3) such Registrable Securities shall have ceased to be outstanding; (4) such Registrable Securities are freely saleable under Rule 144 without volume limitations; or (5) such Registrable Securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction, and provided that, with respect to any Investor other than Buyer, “Registrable Securities” shall include any shares of stock of the Company with respect to which such Investor has similar registration rights to those set forth in this Article III.

 

  (e) “Registration Statement” means any registration statement required to be filed hereunder pursuant to this Article III, including the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.

 

  (f) “Rule 144” means Rule 144 promulgated under the Securities Act or any successor rule thereto.

 

  (g) “SEC Guidance” means (i) any publicly-available written or oral guidance of the SEC staff, or any comments, requirements or requests of the SEC staff and (ii) the Securities Act.

 

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  (h) “SEC” means the United States Securities and Exchange Commission.

 

  (i) “Trading Day” means any day that shares of Common Stock are listed for trading or quotation on any Trading Market.

 

  (j) “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, The Nasdaq Capital Market, The Nasdaq Global Market, The Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).

 

Section 3.02 Registrations.

 

  (a) Subject to the provisions herein, at any time and from time to time after the Stockholder Approval Date, the Investor may make a written demand for registration under the Securities Act of all or part of their Registrable Securities (a “Demand Registration”). Any demand for a Demand Registration shall specify the number of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. Within thirty (30) days following receipt of any request for a Demand Registration, the Company will notify all other Investors holding Registrable Securities of the demand, and each Investor holding Registrable Securities who wishes to include all or a portion of such Investor’s Registrable Securities in the Demand Registration shall have the right to do so, subject to the terms and conditions applicable.

 

  (b) Subject to the terms of this Agreement, the Company shall use its commercially reasonable efforts to cause a Registration Statement filed under this Agreement pursuant to a Demand Registration to be filed by the Filing Date and to be be declared effective under the Securities Act within forty-five (45) days after the filing thereof, and shall use its commercially reasonable efforts to keep such Registration Statement continuously effective under the Securities Act until all Registrable Securities covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Investor (the “Effectiveness Period”). The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day. The Company shall immediately notify the Investor of the effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the SEC, which shall be the date requested for effectiveness of such Registration Statement. The Company shall, by 9:30 a.m. Eastern Time on the Trading Day after the effective date of such Registration Statement, file a final Prospectus with the SEC as required by Rule 424.

 

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  (c) Notwithstanding any other provision of this Agreement, if the SEC or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the SEC for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by the Investor, the number of Registrable Securities to be registered on such Registration Statement will be reduced (i) first, by reducing the shares of Common Stock that the Company proposes to sell; and (ii) second, by reducing the Registrable Securities to be included therein by the Investors, such cutbacks to be apportioned amongst all Investors including Registrable Securities in such Registration Statement, pro rata based on the number of Registrable Securities initially proposed to be registered by such Investors. In the event of a cutback pursuant to this Section 3.02(c), the Company shall give the Investor at least five (5) Trading Days prior written notice along with the calculations as to the Investor’s allotment. In the event the Company amends the Registration Statement in accordance with the foregoing, the Company will use its commercially reasonable efforts to file with the SEC, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Registration Statement, as amended.

 

Section 3.03 Registration Procedures. In connection with the Company’s registration obligations hereunder, the Company shall have the following obligations:

 

  (a) Not less than three (3) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to the Investor copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of the Investor, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to the Investor, to conduct a reasonable investigation within the meaning of the Securities Act. Notwithstanding the above, the Company shall not be obligated to provide the Investor advance copies of any universal registration statement registering securities in addition to those required hereunder, or any Prospectus prepared thereto. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Investor shall reasonably object in good faith, provided, that, the Company is notified of such objection in writing no later than five (5) Trading Days after the Investor has been so furnished copies of a Registration Statement or one (1) Trading Day after the Investor has been furnished copies of any related Prospectus or amendments or supplements thereto. Investor agrees to furnish to the Company a completed questionnaire in the form as determined by the Company (a “Selling Stockholder Questionnaire”) on a date that is not less than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4th) Trading Day following the date on which the Investor receives draft materials in accordance with this Section 3.03(a).

 

  (b) (i) The Company shall prepare and file with the SEC such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the SEC such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably practicable to any comments received from the SEC with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably practicable to the Investor true and complete copies of all correspondence from and to the SEC relating to a Registration Statement (provided, that the Company shall excise any information contained therein which would constitute material non-public information regarding the Company or any of its subsidiaries), and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Investor thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

 

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  (c) The Company shall notify the Investor (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Trading Day following the day: (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the SEC notifies the Company whether there will be a “review” of such Registration Statement and whenever the SEC comments in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided, however, in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company or any of its subsidiaries.

 

  (d) By its acquisition of Registrable Securities, the Investor agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3.03(c) (iii) through (vi), the Buyer will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.

 

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  (e) The Company shall use its commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

 

  (f) The Company shall furnish to the Investor, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the SEC; provided, that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form.

 

  (g) Upon the occurrence of any event contemplated by Section 3.03(c), as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Investor in accordance with clauses (iii) through (vi) of Section 3.03(c) to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Investor shall suspend use of such Prospectus. The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3.03(g) to suspend the availability of a Registration Statement and Prospectus for a period not to exceed sixty (60) calendar days (which need not be consecutive days) in any 12-month period.

 

  (h) The Company shall comply with all applicable rules and regulations of the SEC.

 

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Section 3.04 Registration Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with the SEC, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities) and (D) if not previously paid by the Company in connection with an Issuer Filing, with respect to any filing that may be required to be made by any broker through which the Investor intends to make sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of Investor or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Investor.

 

Section 3.05 Indemnification.

 

  (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, in addition to and not in substitution for, any other indemnification provision by the Company, indemnify and hold harmless the Investor, the officers, directors, managers, managing members, members, partners, advisors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), staff members (whether or not classified as employees or independent contractors), investment advisors and (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who controls any the Investor (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, managers, managing members, members, stockholders, staff members (whether or not classified as employees or independent contractors), partners, advisors, agents (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding the Investor furnished in writing to the Company by the Investor expressly for use therein, or to the extent that such information relates to the Investor or the Investor’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by the Investor expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto or (ii) in the case of an occurrence of an event of the type specified in Section 3.03(c) (iii)-(vi), the use by the Investor of an outdated, defective or otherwise unavailable Prospectus after the Company has notified the Investor in writing that the Prospectus is outdated, defective or otherwise unavailable for use by the Investor and prior to the receipt by the Investor of the Advice contemplated in Section 3.03(h), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Investor promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the transfer of any Registrable Securities by the Investor.

 

  (b) Indemnification by Investor. Investor shall indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: (x) the Investor’s failure to comply with any applicable prospectus delivery requirements of the Securities Act through no fault of the Company or (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by the Investor to the Company expressly for inclusion in such Registration Statement or such Prospectus, (ii) to the extent, but only to the extent, that such information relates to the Investor’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by the Investor expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence of an event of the type specified in Section 3.03(c) (iii)-(vi), to the extent, but only to the extent, related to the use by the Investor of an outdated, defective or otherwise unavailable Prospectus after the Company has notified the Investor in writing that the Prospectus is outdated, defective or otherwise unavailable for use by the Investor and prior to the receipt by the Investor of the Advice contemplated in Section 3.03(d), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability of Investor under this Section 3.05(b) be greater in amount than the dollar amount of the net proceeds received by the Investor upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 

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  (c) Conduct of Indemnification Proceedings.

 

  (i) If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

 

  (ii) An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

  (iii) Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section 3.05(c)) shall be paid to the Indemnified Party, as incurred, within ten (10) Trading Days of written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.

 

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  (d) Contribution. If the indemnification under Section 3.05(a) or Section 3.05(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the Parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a Party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such Party in connection with any Proceeding to the extent such Party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 3.05 was available to such Party in accordance with its terms. The Parties agree that it would not be just and equitable if contribution pursuant to this Section 3.05(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 3.05(d), Investor shall not be required to contribute pursuant to this Section 3.05(d), in the aggregate, any amount in excess of the amount by which the net proceeds actually received by the Investor from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that the Investor has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The indemnity and contribution agreements contained in this Section 3.05(d) are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

 

ARTICLE IV. Representations and Warranties of the Buyer

 

As an inducement to, and to obtain the reliance of the Company, Buyer represents and warrants to the Company as of the Closing Date as follows:

 

Section 4.01 Existence and Power. Buyer is corporation, duly formed and in good standing under the laws of the State of Nevada, and has the full power and is duly authorized under all applicable Laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted and to enter into this Agreement and fulfill its obligations herein.

 

Section 4.02 No Conflict; Due Authorization. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of the Articles of Incorporation or Bylaws of the Buyer as in effect on the Closing Date (the “Buyer Organizational Documents”). The Buyer has taken all action required by Law, the Buyer Organizational Documents, or otherwise to authorize the execution and delivery of this Agreement, and the Buyer has full power, authority, and legal right and has taken all action required by Law, the Buyer Organizational Documents or otherwise to consummate the transactions herein contemplated.

 

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Section 4.03 Valid Obligation. This Agreement and all agreements and other documents executed by Buyer in connection herewith constitute the valid and binding obligations of Buyer, enforceable in accordance with its or their terms, except as may be limited by the Enforceability Exceptions

 

Section 4.04 Governmental Authorization. Neither the execution, delivery nor performance of this Agreement by Buyer requires any consent, approval, license or other action by or in respect of, or registration, declaration or filing with any Authority.

 

Section 4.05 Broker’s, Finder’s or Similar Fees. There are no brokerage commissions, finder’s fees or similar fees or commissions payable by Buyer in connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with Buyer or any action taken by Buyer.

 

Section 4.06 Investment Representations.

 

  (a) Investment Purpose. Buyer understands and agrees that the consummation of this Agreement including the delivery of the Shares to Buyer, as contemplated hereby constitutes the offer and sale of securities under the Securities Act and applicable state statutes and that the Shares, together with any share of Common Stock as may be issued to Buyer upon any conversion of the Shares pursuant to the Certificate of Designations (collectively, the “Securities”) are being acquired for Buyer’s own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the Securities Act.

 

  (b) Investor Status. Buyer is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”) promulgated under the Securities Act. Buyer has been furnished with all documents and materials relating to the business, finances and operations of the Company and its subsidiaries and information that Buyer requested and deemed material to making an informed decision regarding this Agreement and the underlying transactions.

 

  (c) Reliance on Exemptions. Buyer understands that the Securities are being offered and sold to the Buyer in reliance upon specific exemptions from the registration requirements of United States federal and state securities Laws and that the Company is relying upon the truth and accuracy of, and the Buyer’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of the Buyer to acquire the Securities.

 

  (d) Information. Buyer and Buyer’s advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by Buyer or its advisors. Buyer and Buyer’s advisors, if any, have been afforded the opportunity to ask questions of the Company. Buyer has received and reviewed the filings and reports made or filed by the Company with the Securities and Exchange Commission, including, without limitation, the risk factors as set forth therein. Buyer understands that Buyer’s investment in the Securities involves a significant degree of risk. The Buyer represents and warrants that the Buyer (i) can bear the economic risk of the Buyer’s respective investments, and (ii) possesses such knowledge and experience in financial and business matters that the Buyer is capable of evaluating the merits and risks of the investment in the Company and the Securities. The Buyer acknowledges that Buyer has carefully reviewed such information as the Buyer has deemed necessary to evaluate an investment in the Company and the Securities.

 

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  (e) Governmental Review. Buyer understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities. The Buyer further acknowledges that neither the Securities and Exchange Commission nor the securities regulatory body of any other jurisdiction, has received, considered or passed upon the accuracy or adequacy of the information and representations made in this Agreement.

 

  (f) Transfer or Resale. Buyer understands that (i) the sale or re-sale of the Securities has not been and is not being registered under the Securities Act or any applicable state securities Laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the Securities Act, (b) Buyer shall have delivered to the Company, at the cost of Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the Securities Act (or a successor rule) (“Rule 144”)) of Buyer who agree to sell or otherwise transfer the Securities only in accordance with this Section 4.06 and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the Securities Act (or a successor rule) (“Regulation S”), and Buyer shall have delivered to the Company, at the cost of Buyer, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities under the Securities Act or any state securities Laws or to comply with the terms and conditions of any exemption thereunder (in each case).

 

  (g) Legends. Buyer understands that the Securities, until such time as the Securities have been registered under the Securities Act, or may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Securities may bear a standard Rule 144 legend and a stop-transfer order may be placed against transfer of the certificates for such Securities, and that any certificate representing the Securities shall be endorsed with the following legends, in addition to any other legend required to be placed thereon by applicable federal or state securities Laws:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (TOGETHER WITH THE RULES AND REGULATIONS THEREUNDER, 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 AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.”

 

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  (h) Removal. The legend(s) referenced in Section 4.06(g) shall be removed and the Company shall issue a certificate without such legend to the holder of any Securities upon which it is stamped, if, unless otherwise required by applicable state securities Laws, (a) the Securities are registered for sale under an effective registration statement filed under the Securities Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the Securities Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. Buyer agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, only in compliance with applicable prospectus delivery requirements, if any.

 

Section 4.07 Full Disclosure. No representation or warranty by Buyer in this Agreement or any certificate or other document furnished or to be furnished to the Company pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

 

ARTICLE V. Representations and Warranties of the Company

 

As an inducement to, and to obtain the reliance of the Buyer, the Company represents and warrants to the Buyer as of the Closing Date as follows:

 

Section 5.01 Organization. The Company is a corporation duly organized, validly existing, and in good standing under the Laws of the State of Delaware and has the corporate power and is duly authorized under all applicable Laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted.

 

Section 5.02 No Conflict; Due Authorization. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of the Certificate of Incorporation and Bylaws of the Company as in effect on the Closing Date (the “Company Organizational Documents”). The Company has taken all action required by Law, the Company Organizational Documents, or otherwise to authorize the execution and delivery of this Agreement, and the Company has full power, authority, and legal right and has taken all action required by Law, the Company Organizational Documents or otherwise to consummate the transactions herein contemplated.

 

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Section 5.03 Valid Obligation. This Agreement and all agreements and other documents executed by the Company in connection herewith constitute the valid and binding obligation of the Company, enforceable in accordance with its or their terms, except as may be limited by the Enforceability Exceptions.

 

Section 5.04 Governmental Authorization. Neither the execution and delivery nor performance of this Agreement by any the Company Party requires any consent, approval, license or other action by or in respect of, or registration, declaration or filing with any Authority.

 

Section 5.05 Approval of Agreement. The Board of Directors of the Company has authorized the execution and delivery of this Agreement by the Company and has approved this Agreement and the transactions contemplated hereby.

 

Section 5.06 Broker’s, Finder’s or Similar Fees. There are no brokerage commissions, finder’s fees or similar fees or commissions payable by the Company in connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with the Company or any action taken by the Company.

 

ARTICLE VI. Miscellaneous

 

Section 6.01 Notices.

 

  (a) Any notice or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered to it or sent by email, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:

 

If to Buyer, to:

 

NextNRG Holding Corp.

Attn: Michael D. Farkas

407 Lincoln Road, Suite 701

Miami Beach, FL 33139

Email: MDF@FarkasGroup.com

 

If to the Company, to:

 

EZFill Holdings, Inc.

Attn: Yehuda Levy

2999 NE 191st Street

Aventura, Florida 33180

Email: yehuda@ezfl.com

 

With a copy, in each case, which shall not constitute notice, to:

 

Anthony, Linder & Cacomanolis, PLLC

Attn: Laura Anthony

1700 Palm Beach Lakes Blvd., Suite 820

West Palm Beach, FL 33401

Email: lanthony@alclaw.com

 

  (b) Any Party may change its address for notices hereunder upon notice to each other Party in the manner for giving notices hereunder.

 

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  (c) Any notice hereunder shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by email with return receipt requested and received and (iv) three (3) days after mailing, if sent by registered or certified mail.

 

Section 6.02 Governing Law; Jurisdiction.

 

  (a) This Agreement, and any and all claims, proceedings or causes of action relating to this Agreement or arising from this Agreement or the transactions contemplated herein, including, without limitation, tort claims, statutory claims and contract claims, shall be interpreted, construed, governed and enforced under and solely in accordance with the substantive and procedural Laws of the State of Delaware, in each case as in effect from time to time and as the same may be amended from time to time, and as applied to agreements performed wholly within the State of Delaware.

 

  (b) Subject to the provisions of Section 6.04, each of the Parties irrevocably consents and agrees that any legal or equitable action or proceedings arising under or in connection with this Agreement shall be brought exclusively in the state or federal courts of the United States with jurisdiction in Miami-Dade County, Florida (the “Selected Courts”). By execution and delivery of this Agreement, each Party hereby (a) submits to the exclusive jurisdiction of any Selected Court for the purpose of any Action arising out of or relating to this Agreement brought by any Party hereto and (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the Selected Courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Selected Court. Each Party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each Party irrevocably consents to the service of the summons and complaint and any other process in any other Action relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such Party at the applicable address set forth in Section 6.01, provided that nothing in this Section 6.02(b) shall affect the right of any Party to serve legal process in any other manner permitted by Law.

 

Section 6.03 Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.03. EACH OF THE PARTIES ACKNOWLEDGE THAT EACH HAS BEEN REPRESENTED IN CONNECTION WITH THE SIGNING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED BY THE RESPECTIVE PARTY AND THAT SUCH PARTY HAS DISCUSSED THE LEGAL CONSEQUENCES AND IMPORT OF THIS WAIVER WITH LEGAL COUNSEL. EACH OF THE PARTIES FURTHER ACKNOWLEDGE THAT EACH HAS READ AND UNDERSTANDS THE MEANING OF THIS WAIVER AND GRANTS THIS WAIVER KNOWINGLY, VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER CONSIDERATION OF THE CONSEQUENCES OF THIS WAIVER WITH LEGAL COUNSEL.

 

16

 

Section 6.04 Mediation.

 

  (a) The Parties shall promptly submit any dispute, claim, or controversy arising out of or relating to this Agreement (including with respect to the meaning, effect, validity, termination, interpretation, performance, or enforcement of this Agreement) or any alleged breach thereof (including any action in tort, contract, equity, or otherwise), to mediation before one mediator who is generally experienced in industries in which the Company and Buyer operate, to be jointly selected by the Parties (the “Mediator”). If the Parties cannot agree upon the Mediator within ten (10) Business Days of the commencement of the efforts to so agree on a Mediator, each Party shall select one person as a mediator and the two mediators so selected shall select the sole Mediator who shall hear and resolve the dispute.

 

  (b) The Parties will endeavor to resolve the applicable dispute with the assistance of the Mediator for a period of thirty (30) days following the selection of the Mediator, and in the event that they are unable to do so, each Party shall be free to pursue other rights and remedies as may be available to them hereunder and under applicable Law.

 

  (c) In any mediation hereunder, this Agreement and any agreement contemplated hereby shall be governed by the laws of the State of Delaware applicable to a contract negotiated, signed, and wholly to be performed in the State of Delaware, which laws the Mediator shall apply. The mediation shall be held in Miami-Beach, Florida.

 

Section 6.05 Limitation on Damages. In no event will any Party be liable to any other Party under or in connection with this Agreement or in connection with the transactions contemplated herein for special, general, indirect or consequential damages, including damages for lost profits or lost opportunity, even if the Party sought to be held liable has been advised of the possibility of such damage.

 

Section 6.06 Attorneys’ Fees. In the event that any Party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing Party shall be reimbursed by the losing Party for all costs, including reasonable attorneys’ fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.

 

Section 6.07 Third Party Beneficiaries. This contract is strictly between the Parties, and except as specifically provided herein, no other Person and no director, officer, shareholder, employee, agent, independent contractor or any other Person shall be deemed to be a third-party beneficiary of this Agreement.

 

17

 

Section 6.08 Expenses. Subject to Section 6.04 and Section 6.06 and other than as specifically set forth herein, whether or not the transactions contemplated herein are consummated, each of the Parties will bear their own respective expenses, including legal, accounting and professional fees, incurred in connection with the transactions as set forth herein.

 

Section 6.09 Entire Agreement. This Agreement, the other Transaction Documents and the other agreements and documents references herein represent the entire agreement between the Parties relating to the subject matter thereof and supersede all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter.

 

Section 6.10 Amendment; Waiver; Remedies.

 

  (a) This Agreement may be amended, modified, superseded, terminated or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by both Parties.

 

  (b) Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any Party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing.

 

  (c) Neither any failure or delay in exercising any right or remedy hereunder or in requiring satisfaction of any condition herein nor any course of dealing shall constitute a waiver of or prevent any Party from enforcing any right or remedy or from requiring satisfaction of any condition. No notice to or demand on a Party waives or otherwise affects any obligation of that Party or impairs any right of the Party giving such notice or making such demand, including any right to take any action without notice or demand not otherwise required by this Agreement. No exercise of any right or remedy with respect to a breach of this Agreement shall preclude exercise of any other right or remedy, as appropriate to make the aggrieved Party whole with respect to such breach, or subsequent exercise of any right or remedy with respect to any other breach.

 

Section 6.11 No Presumption Against Drafter. This Agreement creates no fiduciary or other special relationship between the Parties, and no such relationship otherwise exists. No presumption in favor of or against any Party in the construction or interpretation of this Agreement or any provision hereof shall be made based upon which Person might have drafted this Agreement or such provision.

 

Section 6.12 Headings. The headings contained in this Agreement are intended solely for convenience and shall not affect the rights of the Parties.

 

Section 6.13 No Assignment or Delegation. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. No Party shall have any power or any right to assign or transfer, in whole or in part, this Agreement, or any of its rights or any of its obligations hereunder, including, without limitation, any right to pursue any claim for damages pursuant to this Agreement or the transactions contemplated herein, or to pursue any claim for any breach or default of this Agreement, or any right arising from the purported assignor’s due performance of its obligations hereunder, without the prior written consent of the other Party and any such purported assignment in contravention of the provisions herein shall be null and void and of no force or effect.

 

18

 

Section 6.14 Commercially Reasonable Efforts. Subject to the terms and conditions herein provided, each Party shall use their respective commercially reasonable efforts to perform or fulfill all conditions and obligations to be performed or fulfilled by it under this Agreement so that the transactions contemplated herein shall be consummated as soon as practicable, and to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws and regulations to consummate and make effective this Agreement and the transactions contemplated herein.

 

Section 6.15 Further Assurances. From and after the Closing Date, each Party shall execute and deliver such documents and take such action, as may reasonably be considered within the scope of such Party’s obligations hereunder, necessary to effectuate the transactions contemplated herein.

 

Section 6.16 Specific Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by them in accordance with the terms hereof or were otherwise breached and that each Party hereto shall be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent breaches of the provisions hereof and to enforce specifically the terms and provisions hereof, without the proof of actual damages, in addition to any other remedy to which they are entitled at law or in equity. Each Party agrees to waive any requirement for the security or posting of any bond in connection with any such equitable remedy, and agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that (a) the other Party has an adequate remedy at law, or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity.

 

Section 6.17 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

[Signatures Appear on Following Pages]

 

19

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Closing Date.

 

  NextNRg Holding Corp.
     
  By: /s/ Michael Farkas
  Name: Michael Farkas
  Title: Chief Executive Officer
     
  EZFill Holdings, Inc.
     
  By: /s/ Yehuda Levy
  Name: Yehuda Levy
  Title: Interim Chief Executive Officer

 

20

 

EX-10.2 3 ex10-2.htm

 

Exhibit 10.2

 

 

Exchange Agreement

 

by and among

 

EzFill Holdings, Inc.

 

and

 

NextNRG Holding Corp.

 

 

 

 

Table of Contents

 

    PAGE
     
ARTICLE I. Definitions and Interpretation 1
Section 1.01 Definitions. 1
Section 1.02 Interpretive Provisions. 2
     
ARTICLE II. Conversion and Exchange 3
Section 2.01 Conversion and Exchange. 3
Section 2.02 Closing 3
Section 2.03 Taxes. 3
Section 2.04 Unwinding. 4
     
ARTICLE III. Registration Rights. 4
Section 3.01 Definitions. 4
Section 3.02 Registrations. 5
Section 3.03 Registration Procedures. 6
Section 3.04 Registration Expenses. 9
Section 3.05 Indemnification. 9
     
ARTICLE IV. Representations and Warranties of the Holder 11
Section 4.01 Existence and Power. 11
Section 4.02 No Conflict; Due Authorization 12
Section 4.03 Valid Obligation 12
Section 4.04 Governmental Authorization. 12
Section 4.05 Title to and Issuance of Notes. 12
Section 4.06 Broker’s, Finder’s or Similar Fees 12
Section 4.07 Investment Representations 12
Section 4.08 Full Disclosure. 14
     
ARTICLE V. Representations and Warranties of the Company 14
Section 5.01 Organization 14
Section 5.02 No Conflict; Due Authorization 15
Section 5.03 Valid Obligation 15
Section 5.04 Governmental Authorization 15
Section 5.05 Approval of Agreement 15
Section 5.06 Broker’s, Finder’s or Similar Fees 15
     
ARTICLE VI. Miscellaneous 15
Section 6.01 Notices 15
Section 6.02 Governing Law; Jurisdiction. 16
Section 6.03 Waiver of Jury Trial. 17
Section 6.04 Mediation. 17
Section 6.05 Limitation on Damages. 17
Section 6.06 Attorneys’ Fees 18
Section 6.07 Third Party Beneficiaries 18
Section 6.08 Expenses 18
Section 6.09 Entire Agreement 18
Section 6.10 Amendment; Waiver 18
Section 6.11 No Presumption Against Drafter. 18
Section 6.12 Headings. 18
Section 6.13 No Assignment or Delegation. 19
Section 6.14 Commercially Reasonable Efforts 19
Section 6.15 Further Assurances. 19
Section 6.16 Specific Performance. 19
Section 6.17 Counterparts 19
     
Exhibit A Notes  

 

i

 

Exchange Agreement

 

Dated as of August 16, 2024

 

This Exchange Agreement (together with the exhibits and other attachments hereto, this “Agreement”) is entered into as of the date first set forth above (the “Closing Date”) by and between (i) EzFill Holdings, Inc., a Delaware corporation (the “Company”) and (ii) NextNRG Holding Corp., a Nevada corporation (“Holder”). Each of the Company and Holder may be referred to herein collectively as the “Parties” and separately as a “Party.”

 

WHEREAS, Holder is the owner of certain promissory notes of the Company as identified on Exhibit A (the “Notes”); and

 

WHEREAS, the Parties now desire to enter into this Agreement pursuant to which the Notes and all of the principal amount and accrued interest owed to the Holder pursuant to the Notes as of the Closing Date shall be converted into and exchanged for shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”), in reliance upon the exemption from registration provided by the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”);

 

NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the Parties to be derived herefrom, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:

 

ARTICLE I. Definitions and Interpretation

 

Section 1.01 Definitions. In addition to the other terms defined herein, the following terms, as used herein, have the following meanings

 

  (a) “Action” means any legal action, suit, claim, investigation, hearing or proceeding, including any audit, claim or assessment for Taxes or otherwise.
     
  (b) “Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person.
     
  (c) “Authority” means any governmental, regulatory or administrative body, agency or authority, any court or judicial authority, any arbitrator, or any public, private or industry regulatory authority, whether international, national, Federal, state, or local.
     
  (d) “Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.” Controlled”, “Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing a Person (the “Controlled Person”) shall be deemed Controlled by (a) any other Person (the “10% Owner”) (i) owning beneficially, as meant in Rule 13d-3 under the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder, securities entitling such Person to cast 10% or more of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive 10% or more of the profits, losses, or distributions of the Controlled Person; (b) an officer, director, general partner, partner (other than a limited partner), manager, or member (other than a member having no management authority that is not a 10% Owner ) of the Controlled Person; or (c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew, mother-in-law, father-in-law, sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a trust for the benefit of an Affiliate of the Controlled Person or of which an Affiliate of the Controlled Person is a trustee.

 

  1  

 

  (e) “Enforceability Exceptions” means (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar Laws of general application affecting enforcement of creditors’ rights generally and (b) general principles of equity.
     
  (f) “Law” means any domestic or foreign, federal, state, municipality or local law, statute, ordinance, code, rule, or regulation.
     
  (g) “Lien” means any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, and any conditional sale or voting agreement or proxy, including any agreement to give any of the foregoing.
     
  (h) “Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.
     
  (i) “Tax(es)” means any federal, state, local or foreign tax, charge, fee, levy, custom, duty, deficiency, or other assessment of any kind or nature imposed by the Internal Revenue Service and any other Authority responsible for the collection, assessment or imposition of any Tax or the administration of any Law relating to any Tax (including any income (net or gross), gross receipts, profits, windfall profit, sales, use, goods and services, ad valorem, franchise, license, withholding, employment, social security, workers compensation, unemployment compensation, employment, payroll, transfer, excise, import, real property, personal property, intangible property, occupancy, recording, minimum, alternative minimum, environmental or estimated tax), including any liability therefor as a transferee (including under Section 6901 of the Internal Revenue Code of 1986, as amended, or similar provision of applicable Law) or successor, as a result of Treasury Regulation Section 1.1502-6 or similar provision of applicable Law or as a result of any Tax sharing, indemnification or similar agreement, together with any interest, penalty, additions to tax or additional amount imposed with respect thereto.

 

Section 1.02 Interpretive Provisions. Unless the express context otherwise requires (i) the words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (ii) terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa; (iii) the terms “Dollars” and “$” mean United States Dollars; (iv) references herein to a specific Section, Subsection, Recital, or Exhibit shall refer, respectively, to Sections, Subsections, Recitals or Exhibits of this Agreement; (v) wherever the word “include,” “includes,” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”; (vi) references herein to any gender shall include each other gender; (vii) references herein to any Person shall include such Person’s heirs, executors, personal representatives, administrators, successors and assigns; provided, however, that nothing contained herein is intended to authorize any assignment or transfer not otherwise permitted by this Agreement; (viii) references herein to a Person in a particular capacity or capacities shall exclude such Person in any other capacity; (ix) references herein to any contract or agreement (including this Agreement) mean such contract or agreement as amended, supplemented or modified from time to time in accordance with the terms thereof; (x) with respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”; (xi) references herein to any Law or any license mean such Law or license as amended, modified, codified, reenacted, supplemented or superseded in whole or in part, and in effect from time to time; and (xii) references herein to any Law shall be deemed also to refer to all rules and regulations promulgated thereunder.

 

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ARTICLE II. Conversion and Exchange

 

Section 2.01 Conversion and Exchange.

 

  (a) The Parties acknowledge and agree that the Holder has the right to declare that the Notes are in default, and therefore the total principal amount, accrued interest and other payment obligations of the Company pursuant to the Notes as of the Closing Date is $9,800,449 (the “Exchanged Indebtedness”). On the terms and subject to the conditions set forth in this Agreement, on the Closing Date, the Notes and the Exchanged Indebtedness shall be deemed converted into and exchanged for 3,525,341 shares of Common Stock (the “Shares”), being an exchange based on a value of the Common Stock of $2.78, which, as of the Closing Date, is the “Minimum Price” as defined in Rule 5635 of The Nasdaq Stock Market LLC Rules.
     
  (b) Promptly following the recordation of the Holder as the beneficial owner of the Shares, the Exchanged Indebtedness shall be automatically repaid in full and the Notes shall be deemed automatically terminated and null and void and of no further force, and this Agreement shall be deemed an amendment to the Notes to the extent required to give effect thereto. The Holder hereby waives any and all defaults occurring pursuant to the Notes at any time up to the Closing Date and agree that the issuance of the Shares to the Holder shall constitute full and complete satisfaction of all obligations of the Company pursuant to the Notes.
     
  (c) The Parties intend that the exchange as set forth herein is being made in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act and the Parties agree not to take any position contrary thereto.

 

Section 2.02 Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date simultaneously with the execution and delivery of this Agreement by remote exchange of electronic documents. At the Closing, the Company shall issue to Holder the Shares, which shall be recorded in book entry form and shall not be certificated unless requested by Holder. At and following the Closing, the Parties shall execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged, and delivered), any and all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required by this Agreement to be so delivered at or prior to the Closing, together with such other items as may be reasonably requested by the Parties and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby.

 

Section 2.03 Taxes. Holder will pay all income, gain, sales, use, value added, transfer, stamp, registration, documentary, excise, real property transfer or gains, or similar Taxes incurred as a result of the transactions contemplated by this Agreement with respect to Holder.

 

  3  

 

Section 2.04 Unwinding. The Parties acknowledge and agree that in the event that The Nasdaq Stock Market (“Nasdaq”) informs the Company, at any time prior to the occurrence of the Stockholder Approval Date (as defined in the Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock of the Company, being filed with the Secretary of State of the State of Delaware on or about the date hereof), that the transactions as set forth herein and the other transactions being undertaken by the Company on and around the date hereof are not sufficient to cure the stockholder equity deficiency matters as previously communicated by Nasdaq to the Company, then the Parties shall undertake such actions as required to unwind the Closing and the exchange as set forth in Section 2.01, and in connection therewith, the Holder shall return all of the Shares to the Company, and the Company shall issue to the Holder a replacement promissory note in the amount of the Exchanged Indebtedness, and otherwise having terms and conditions materially the same as the Notes, and preserving the other rights and preferences held by the Holder pursuant to the Notes as of immediately prior to the Closing Date, and the Holder shall have registration rights substantially similar to those in Article III with respect to any shares of Common Stock issuable on any conversion of such replacement note.

 

ARTICLE III. Registration Rights.

 

Section 3.01 Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

 

  (a) “Filing Date” means the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities.
     
  (b) “Investor” shall mean the Holder and any other Person holding Registrable Securities.
     
  (c) “Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the SEC pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.
     
  (d) “Registrable Securities” means the Shares, provided that such Shares shall cease to be Registrable Securities when: (1) a registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such Registrable Securities shall have been sold, transferred, disposed of or exchanged in accordance with such registration statement; (2) such Registrable Securities shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of them shall not require registration under the Securities Act; (3) such Registrable Securities shall have ceased to be outstanding; (4) such Registrable Securities are freely saleable under Rule 144 without volume limitations; or (5) such Registrable Securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction, and provided that, with respect to any Investor other than Holder, “Registrable Securities” shall include any shares of stock of the Company with respect to which such Investor has similar registration rights to those set forth in this Article III.

 

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  (e) “Registration Statement” means any registration statement required to be filed hereunder pursuant to this Article III, including the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.
     
  (f) “Rule 144” means Rule 144 promulgated under the Securities Act or any successor rule thereto.
     
  (g) “SEC Guidance” means (i) any publicly-available written or oral guidance of the SEC staff, or any comments, requirements or requests of the SEC staff and (ii) the Securities Act.
     
  (h) “SEC” means the United States Securities and Exchange Commission.
     
  (i) “Trading Day” means any day that shares of Common Stock are listed for trading or quotation on any Trading Market.
     
  (j) “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, The Nasdaq Capital Market, The Nasdaq Global Market, The Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).

 

Section 3.02 Registrations.

 

  (a) Subject to the provisions herein, at any time and from time to time after the Stockholder Approval Date, the Investor may make a written demand for registration under the Securities Act of all or part of their Registrable Securities (a “Demand Registration”). Any demand for a Demand Registration shall specify the number of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. Within thirty (30) days following receipt of any request for a Demand Registration, the Company will notify all other Investors holding Registrable Securities of the demand, and each Investor holding Registrable Securities who wishes to include all or a portion of such Investor’s Registrable Securities in the Demand Registration shall have the right to do so, subject to the terms and conditions applicable.
     
  (b) Subject to the terms of this Agreement, the Company shall use its commercially reasonable efforts to cause a Registration Statement filed under this Agreement pursuant to a Demand Registration to be filed by the Filing Date and to be be declared effective under the Securities Act within forty-five (45) days after the filing thereof, and shall use its commercially reasonable efforts to keep such Registration Statement continuously effective under the Securities Act until all Registrable Securities covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Investor (the “Effectiveness Period”). The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day. The Company shall immediately notify the Investor of the effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the SEC, which shall be the date requested for effectiveness of such Registration Statement. The Company shall, by 9:30 a.m. Eastern Time on the Trading Day after the effective date of such Registration Statement, file a final Prospectus with the SEC as required by Rule 424.

 

  5  

 

  (c) Notwithstanding any other provision of this Agreement, if the SEC or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the SEC for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by the Investor, the number of Registrable Securities to be registered on such Registration Statement will be reduced (i) first, by reducing the shares of Common Stock that the Company proposes to sell; and (ii) second, by reducing the Registrable Securities to be included therein by the Investors, such cutbacks to be apportioned amongst all Investors including Registrable Securities in such Registration Statement, pro rata based on the number of Registrable Securities initially proposed to be registered by such Investors. In the event of a cutback pursuant to this Section 3.02(c), the Company shall give the Investor at least five (5) Trading Days prior written notice along with the calculations as to the Investor’s allotment. In the event the Company amends the Registration Statement in accordance with the foregoing, the Company will use its commercially reasonable efforts to file with the SEC, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Registration Statement, as amended.

 

Section 3.03 Registration Procedures. In connection with the Company’s registration obligations hereunder, the Company shall have the following obligations:

 

  (a) Not less than three (3) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to the Investor copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of the Investor, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to the Investor, to conduct a reasonable investigation within the meaning of the Securities Act. Notwithstanding the above, the Company shall not be obligated to provide the Investor advance copies of any universal registration statement registering securities in addition to those required hereunder, or any Prospectus prepared thereto. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Investor shall reasonably object in good faith, provided, that, the Company is notified of such objection in writing no later than five (5) Trading Days after the Investor has been so furnished copies of a Registration Statement or one (1) Trading Day after the Investor has been furnished copies of any related Prospectus or amendments or supplements thereto. Investor agrees to furnish to the Company a completed questionnaire in the form as determined by the Company (a “Selling Stockholder Questionnaire”) on a date that is not less than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4th) Trading Day following the date on which the Investor receives draft materials in accordance with this Section 3.03(a).

 

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  (b) (i) The Company shall prepare and file with the SEC such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the SEC such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably practicable to any comments received from the SEC with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably practicable to the Investor true and complete copies of all correspondence from and to the SEC relating to a Registration Statement (provided, that the Company shall excise any information contained therein which would constitute material non-public information regarding the Company or any of its subsidiaries), and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Investor thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.
     
  (c) The Company shall notify the Investor (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Trading Day following the day: (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the SEC notifies the Company whether there will be a “review” of such Registration Statement and whenever the SEC comments in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided, however, in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company or any of its subsidiaries.

 

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  (d) By its acquisition of Registrable Securities, the Investor agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3.03(c) (iii) through (vi), the Buyer will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.
     
  (e) The Company shall use its commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.
     
  (f) The Company shall furnish to the Investor, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the SEC; provided, that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form.
     
  (g) Upon the occurrence of any event contemplated by Section 3.03(c), as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Investor in accordance with clauses (iii) through (vi) of Section 3.03(c) to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Investor shall suspend use of such Prospectus. The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3.03(g) to suspend the availability of a Registration Statement and Prospectus for a period not to exceed sixty (60) calendar days (which need not be consecutive days) in any 12-month period.
     
  (h) The Company shall comply with all applicable rules and regulations of the SEC.

 

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Section 3.04 Registration Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with the SEC, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities) and (D) if not previously paid by the Company in connection with an Issuer Filing, with respect to any filing that may be required to be made by any broker through which the Investor intends to make sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of Investor or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Investor.

 

Section 3.05 Indemnification.

 

  (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, in addition to and not in substitution for, any other indemnification provision by the Company, indemnify and hold harmless the Investor, the officers, directors, managers, managing members, members, partners, advisors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), staff members (whether or not classified as employees or independent contractors), investment advisors and (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who controls any the Investor (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, managers, managing members, members, stockholders, staff members (whether or not classified as employees or independent contractors), partners, advisors, agents (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding the Investor furnished in writing to the Company by the Investor expressly for use therein, or to the extent that such information relates to the Investor or the Investor’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by the Investor expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto or (ii) in the case of an occurrence of an event of the type specified in Section 3.03(c) (iii)-(vi), the use by the Investor of an outdated, defective or otherwise unavailable Prospectus after the Company has notified the Investor in writing that the Prospectus is outdated, defective or otherwise unavailable for use by the Investor and prior to the receipt by the Investor of the Advice contemplated in Section 3.03(h), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Investor promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the transfer of any Registrable Securities by the Investor.

 

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  (b) Indemnification by Investor. Investor shall indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: (x) the Investor’s failure to comply with any applicable prospectus delivery requirements of the Securities Act through no fault of the Company or (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by the Investor to the Company expressly for inclusion in such Registration Statement or such Prospectus, (ii) to the extent, but only to the extent, that such information relates to the Investor’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by the Investor expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence of an event of the type specified in Section 3.03(c) (iii)-(vi), to the extent, but only to the extent, related to the use by the Investor of an outdated, defective or otherwise unavailable Prospectus after the Company has notified the Investor in writing that the Prospectus is outdated, defective or otherwise unavailable for use by the Investor and prior to the receipt by the Investor of the Advice contemplated in Section 3.03(d), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability of Investor under this Section 3.05(b) be greater in amount than the dollar amount of the net proceeds received by the Investor upon the sale of the Registrable Securities giving rise to such indemnification obligation.
     
  (c) Conduct of Indemnification Proceedings.

 

  (i) If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.
     
  (ii) An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

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  (iii) Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section 3.05(c)) shall be paid to the Indemnified Party, as incurred, within ten (10) Trading Days of written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.

 

  (d) Contribution. If the indemnification under Section 3.05(a) or Section 3.05(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the Parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a Party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such Party in connection with any Proceeding to the extent such Party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 3.05 was available to such Party in accordance with its terms. The Parties agree that it would not be just and equitable if contribution pursuant to this Section 3.05(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 3.05(d), Investor shall not be required to contribute pursuant to this Section 3.05(d), in the aggregate, any amount in excess of the amount by which the net proceeds actually received by the Investor from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that the Investor has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The indemnity and contribution agreements contained in this Section 3.05(d) are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

 

ARTICLE IV. Representations and Warranties of the Holder

 

As an inducement to, and to obtain the reliance of the Company, Holder represents and warrants to the Company as of the Closing Date as follows:

 

Section 4.01 Existence and Power. Holder is corporation, duly formed and in good standing under the laws of the State of Nevada, and has the full power and is duly authorized under all applicable Laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted and to enter into this Agreement and fulfill its obligations herein.

 

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Section 4.02 No Conflict; Due Authorization. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of the Articles of Incorporation or Bylaws of the Holder as in effect on the Closing Date (the “Holder Organizational Documents”). The Holder has taken all action required by Law, the Holder Organizational Documents, or otherwise to authorize the execution and delivery of this Agreement, and the Holder has full power, authority, and legal right and has taken all action required by Law, the Holder Organizational Documents or otherwise to consummate the transactions herein contemplated.

 

Section 4.03 Valid Obligation. This Agreement and all agreements and other documents executed by Holder in connection herewith constitute the valid and binding obligations of Holder, enforceable in accordance with its or their terms, except as may be limited by the Enforceability Exceptions

 

Section 4.04 Governmental Authorization. Neither the execution, delivery nor performance of this Agreement by Holder requires any consent, approval, license or other action by or in respect of, or registration, declaration or filing with any Authority.

 

Section 4.05 Title to and Issuance of Notes. Holder is the record and beneficial owner and holder of the Notes free and clear of all Liens. No part of the Notes is subject to pre-emptive or similar rights and Holder does not have any pre-emptive rights or similar rights to purchase or receive any interest in the Notes. Holder has the power and authority to convert and exchange the Notes and the Exchanged Indebtedness as contemplated pursuant to the terms of this Agreement.

 

Section 4.06 Broker’s, Finder’s or Similar Fees. There are no brokerage commissions, finder’s fees or similar fees or commissions payable by Holder in connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with Holder or any action taken by Holder.

 

Section 4.07 Investment Representations.

 

  (a) Investment Purpose. Holder understands and agrees that the consummation of this Agreement including the delivery of the Shares to Holder, as contemplated hereby constitutes the offer and sale of securities under the Securities Act and applicable state statutes and that the Shares are being acquired for Holder’s own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the Securities Act.
     
  (b) Investor Status. Holder is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”) promulgated under the Securities Act. Holder has been furnished with all documents and materials relating to the business, finances and operations of the Company and its subsidiaries and information that Holder requested and deemed material to making an informed decision regarding this Agreement and the underlying transactions.
     
  (c) Reliance on Exemptions. Holder understands that the Shares are being offered and sold to the Holder in reliance upon specific exemptions from the registration requirements of United States federal and state securities Laws and that the Company is relying upon the truth and accuracy of, and the Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of the Holder to acquire the Shares.

 

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  (d) Information. Holder and Holder’s advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Shares which have been requested by Holder or its advisors. Holder and Holder’s advisors, if any, have been afforded the opportunity to ask questions of the Company. Holder has received and reviewed the filings and reports made or filed by the Company with the Securities and Exchange Commission, including, without limitation, the risk factors as set forth therein. Holder understands that Holder’s investment in the Shares involves a significant degree of risk. The Holder represents and warrants that the Holder (i) can bear the economic risk of the Holder’s respective investments, and (ii) possesses such knowledge and experience in financial and business matters that the Holder is capable of evaluating the merits and risks of the investment in the Company and the Shares. The Holder acknowledges that Holder has carefully reviewed such information as the Holder has deemed necessary to evaluate an investment in the Company and the Shares.
     
  (e) Governmental Review. Holder understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Shares. The Holder further acknowledges that neither the Securities and Exchange Commission nor the securities regulatory body of any other jurisdiction, has received, considered or passed upon the accuracy or adequacy of the information and representations made in this Agreement.
     
  (f) Transfer or Resale. Holder understands that (i) the sale or re-sale of the Shares has not been and is not being registered under the Securities Act or any applicable state securities Laws, and the Shares may not be transferred unless (a) the Shares are sold pursuant to an effective registration statement under the Securities Act, (b) Holder shall have delivered to the Company, at the cost of Holder, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Shares are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the Securities Act (or a successor rule) (“Rule 144”)) of Holder who agree to sell or otherwise transfer the Shares only in accordance with this Section 4.07 and who is an Accredited Investor, (d) the Shares are sold pursuant to Rule 144, or (e) the Shares are sold pursuant to Regulation S under the Securities Act (or a successor rule) (“Regulation S”), and Holder shall have delivered to the Company, at the cost of Holder, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Shares made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Shares under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Shares under the Securities Act or any state securities Laws or to comply with the terms and conditions of any exemption thereunder (in each case).

 

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  (g) Legends. Holder understands that the Shares, until such time as the Shares have been registered under the Securities Act, or may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Shares may bear a standard Rule 144 legend and a stop-transfer order may be placed against transfer of the certificates for such Shares, and that any certificate representing the Shares shall be endorsed with the following legends, in addition to any other legend required to be placed thereon by applicable federal or state securities Laws:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (TOGETHER WITH THE RULES AND REGULATIONS THEREUNDER, 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 AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.”

 

  (h) Removal. The legend(s) referenced in Section 4.07(g) shall be removed and the Company shall issue a certificate without such legend to the holder of any Shares upon which it is stamped, if, unless otherwise required by applicable state securities Laws, (a) the Shares are registered for sale under an effective registration statement filed under the Securities Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Shares may be made without registration under the Securities Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. Holder agrees to sell all Shares, including those represented by a certificate(s) from which the legend has been removed, only in compliance with applicable prospectus delivery requirements, if any.

 

Section 4.08 Full Disclosure. No representation or warranty by Holder in this Agreement or any certificate or other document furnished or to be furnished to the Company pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

 

ARTICLE V. Representations and Warranties of the Company

 

As an inducement to, and to obtain the reliance of the Holder, the Company represents and warrants to the Holder as of the Closing Date as follows:

 

Section 5.01 Organization. The Company is a corporation duly organized, validly existing, and in good standing under the Laws of the State of Delaware and has the corporate power and is duly authorized under all applicable Laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted.

 

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Section 5.02 No Conflict; Due Authorization. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of the Certificate of Incorporation and Bylaws of the Company as in effect on the Closing Date (the “Company Organizational Documents”). The Company has taken all action required by Law, the Company Organizational Documents, or otherwise to authorize the execution and delivery of this Agreement, and the Company has full power, authority, and legal right and has taken all action required by Law, the Company Organizational Documents or otherwise to consummate the transactions herein contemplated.

 

Section 5.03 Valid Obligation. This Agreement and all agreements and other documents executed by the Company in connection herewith constitute the valid and binding obligation of the Company, enforceable in accordance with its or their terms, except as may be limited by the Enforceability Exceptions.

 

Section 5.04 Governmental Authorization. Neither the execution and delivery nor performance of this Agreement by any the Company Party requires any consent, approval, license or other action by or in respect of, or registration, declaration or filing with any Authority.

 

Section 5.05 Approval of Agreement. The Board of Directors of the Company has authorized the execution and delivery of this Agreement by the Company and has approved this Agreement and the transactions contemplated hereby.

 

Section 5.06 Broker’s, Finder’s or Similar Fees. There are no brokerage commissions, finder’s fees or similar fees or commissions payable by the Company in connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with the Company or any action taken by the Company.

 

ARTICLE VI. Miscellaneous

 

Section 6.01 Notices.

 

  (a) Any notice or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered to it or sent by email, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:

 

If to Holder, to:

 

NextNRG Holding Corp.

Attn: Michael D. Farkas

407 Lincoln Road, Suite 701

Miami Beach, FL 33139

Email: MDF@FarkasGroup.com

 

If to the Company, to:

 

EZFill Holdings, Inc.

Attn: Yehuda Levy

2999 NE 191st Street

Aventura, Florida 33180

Email: yehuda@ezfl.com

 

  15  

 

With a copy, in each case, which shall not constitute notice, to:

 

Anthony, Linder & Cacomanolis, PLLC

Attn: Laura Anthony

1700 Palm Beach Lakes Blvd., Suite 820

West Palm Beach, FL 33401

Email: lanthony@alclaw.com

 

  (b) Any Party may change its address for notices hereunder upon notice to each other Party in the manner for giving notices hereunder.
     
  (c) Any notice hereunder shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by email with return receipt requested and received and (iv) three (3) days after mailing, if sent by registered or certified mail.

 

Section 6.02 Governing Law; Jurisdiction.

 

  (a) This Agreement, and any and all claims, proceedings or causes of action relating to this Agreement or arising from this Agreement or the transactions contemplated herein, including, without limitation, tort claims, statutory claims and contract claims, shall be interpreted, construed, governed and enforced under and solely in accordance with the substantive and procedural Laws of the State of Delaware, in each case as in effect from time to time and as the same may be amended from time to time, and as applied to agreements performed wholly within the State of Delaware.
     
  (b) Subject to the provisions of Section 6.04, each of the Parties irrevocably consents and agrees that any legal or equitable action or proceedings arising under or in connection with this Agreement shall be brought exclusively in the state or federal courts of the United States with jurisdiction in Miami-Dade County, Florida (the “Selected Courts”). By execution and delivery of this Agreement, each Party hereby (a) submits to the exclusive jurisdiction of any Selected Court for the purpose of any Action arising out of or relating to this Agreement brought by any Party hereto and (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the Selected Courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Selected Court. Each Party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each Party irrevocably consents to the service of the summons and complaint and any other process in any other Action relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such Party at the applicable address set forth in Section 6.01, provided that nothing in this Section 6.02(b) shall affect the right of any Party to serve legal process in any other manner permitted by Law.

 

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Section 6.03 Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.03. EACH OF THE PARTIES ACKNOWLEDGE THAT EACH HAS BEEN REPRESENTED IN CONNECTION WITH THE SIGNING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED BY THE RESPECTIVE PARTY AND THAT SUCH PARTY HAS DISCUSSED THE LEGAL CONSEQUENCES AND IMPORT OF THIS WAIVER WITH LEGAL COUNSEL. EACH OF THE PARTIES FURTHER ACKNOWLEDGE THAT EACH HAS READ AND UNDERSTANDS THE MEANING OF THIS WAIVER AND GRANTS THIS WAIVER KNOWINGLY, VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER CONSIDERATION OF THE CONSEQUENCES OF THIS WAIVER WITH LEGAL COUNSEL.

 

Section 6.04 Mediation.

 

  (a) The Parties shall promptly submit any dispute, claim, or controversy arising out of or relating to this Agreement (including with respect to the meaning, effect, validity, termination, interpretation, performance, or enforcement of this Agreement) or any alleged breach thereof (including any action in tort, contract, equity, or otherwise), to mediation before one mediator who is generally experienced in industries in which the Company and Holder operate, to be jointly selected by the Parties (the “Mediator”). If the Parties cannot agree upon the Mediator within ten (10) Business Days of the commencement of the efforts to so agree on a Mediator, each Party shall select one person as a mediator and the two mediators so selected shall select the sole Mediator who shall hear and resolve the dispute.
     
  (b) The Parties will endeavor to resolve the applicable dispute with the assistance of the Mediator for a period of thirty (30) days following the selection of the Mediator, and in the event that they are unable to do so, each Party shall be free to pursue other rights and remedies as may be available to them hereunder and under applicable Law.
     
  (c) In any mediation hereunder, this Agreement and any agreement contemplated hereby shall be governed by the laws of the State of Delaware applicable to a contract negotiated, signed, and wholly to be performed in the State of Delaware, which laws the Mediator shall apply. The mediation shall be held in Miami-Beach, Florida.

 

Section 6.05 Limitation on Damages. In no event will any Party be liable to any other Party under or in connection with this Agreement or in connection with the transactions contemplated herein for special, general, indirect or consequential damages, including damages for lost profits or lost opportunity, even if the Party sought to be held liable has been advised of the possibility of such damage.

 

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Section 6.06 Attorneys’ Fees. In the event that any Party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing Party shall be reimbursed by the losing Party for all costs, including reasonable attorneys’ fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.

 

Section 6.07 Third Party Beneficiaries. This contract is strictly between the Parties, and except as specifically provided herein, no other Person and no director, officer, shareholder, employee, agent, independent contractor or any other Person shall be deemed to be a third-party beneficiary of this Agreement.

 

Section 6.08 Expenses. Subject to Section 6.04 and Section 6.06 and other than as specifically set forth herein, whether or not the transactions contemplated herein are consummated, each of the Parties will bear their own respective expenses, including legal, accounting and professional fees, incurred in connection with the transactions as set forth herein.

 

Section 6.09 Entire Agreement. This Agreement, the other Transaction Documents and the other agreements and documents references herein represent the entire agreement between the Parties relating to the subject matter thereof and supersede all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter.

 

Section 6.10 Amendment; Waiver; Remedies.

 

  (a) This Agreement may be amended, modified, superseded, terminated or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by both Parties.
     
  (b) Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any Party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing.
     
  (c) Neither any failure or delay in exercising any right or remedy hereunder or in requiring satisfaction of any condition herein nor any course of dealing shall constitute a waiver of or prevent any Party from enforcing any right or remedy or from requiring satisfaction of any condition. No notice to or demand on a Party waives or otherwise affects any obligation of that Party or impairs any right of the Party giving such notice or making such demand, including any right to take any action without notice or demand not otherwise required by this Agreement. No exercise of any right or remedy with respect to a breach of this Agreement shall preclude exercise of any other right or remedy, as appropriate to make the aggrieved Party whole with respect to such breach, or subsequent exercise of any right or remedy with respect to any other breach.

 

Section 6.11 No Presumption Against Drafter. This Agreement creates no fiduciary or other special relationship between the Parties, and no such relationship otherwise exists. No presumption in favor of or against any Party in the construction or interpretation of this Agreement or any provision hereof shall be made based upon which Person might have drafted this Agreement or such provision.

 

Section 6.12 Headings. The headings contained in this Agreement are intended solely for convenience and shall not affect the rights of the Parties.

 

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Section 6.13 No Assignment or Delegation. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. No Party shall have any power or any right to assign or transfer, in whole or in part, this Agreement, or any of its rights or any of its obligations hereunder, including, without limitation, any right to pursue any claim for damages pursuant to this Agreement or the transactions contemplated herein, or to pursue any claim for any breach or default of this Agreement, or any right arising from the purported assignor’s due performance of its obligations hereunder, without the prior written consent of the other Party and any such purported assignment in contravention of the provisions herein shall be null and void and of no force or effect.

 

Section 6.14 Commercially Reasonable Efforts. Subject to the terms and conditions herein provided, each Party shall use their respective commercially reasonable efforts to perform or fulfill all conditions and obligations to be performed or fulfilled by it under this Agreement so that the transactions contemplated herein shall be consummated as soon as practicable, and to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws and regulations to consummate and make effective this Agreement and the transactions contemplated herein.

 

Section 6.15 Further Assurances. From and after the Effective Date, each Party shall execute and deliver such documents and take such action, as may reasonably be considered within the scope of such Party’s obligations hereunder, necessary to effectuate the transactions contemplated herein.

 

Section 6.16 Specific Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by them in accordance with the terms hereof or were otherwise breached and that each Party hereto shall be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent breaches of the provisions hereof and to enforce specifically the terms and provisions hereof, without the proof of actual damages, in addition to any other remedy to which they are entitled at law or in equity. Each Party agrees to waive any requirement for the security or posting of any bond in connection with any such equitable remedy, and agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that (a) the other Party has an adequate remedy at law, or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity.

 

Section 6.17 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

[Signatures Appear on Following Pages]

 

  19  

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

 

  NextNRg Holding Corp.
     
  By: /s/ Michael Farkas
  Name: Michael Farkas
  Title: Chief Executive Officer
     
  EZFill Holdings, Inc.
     
  By: /s/ Yehuda Levy
  Name: Yehuda Levy
  Title: Interim Chief Executive Officer

 

  20  

 

Exhibit A

Notes

 

Issue Date   Current Outstanding
Principal Amount
    Total Amount
After Default
 
July 5, 2023   $ 440,000     $ 742,747  
August 2, 2023   $ 440,000     $ 733,814  
August 23, 2023   $ 110,000     $ 181,741  
August 30, 2023   $ 165,000     $ 271,761  
September 6, 2023   $ 220,000     $ 361,211  
September 13, 2023   $ 110,000     $ 180,031  
November 3, 2023   $ 165,000     $ 265,082  
November 21, 2023   $ 220,000     $ 352,144  
December 4, 2023   $ 220,000     $ 349,802  
December 13, 2023   $ 165,000     $ 261,862  
December 18, 2023   $ 110,000     $ 174,389  
December 20, 2023   $ 55,000     $ 87,165  
December 27, 2023   $ 165,000     $ 261,103  
January 5, 2024   $ 110,000     $ 173,062  
January 16, 2024   $ 165,000     $ 259,000  
January 25, 2024   $ 165,000     $ 258,512  
February 7, 2024   $ 165,000     $ 257,807  
February 20, 2024   $ 165,000     $ 257,101  
February 28, 2024   $ 165,000     $ 256,667  
March 8, 2024   $ 165,000     $ 256,180  
March 15, 2024   $ 165,000     $ 255,800  
March 26, 2024   $ 110,000     $ 170,134  
April 2, 2024   $ 165,000     $ 254,824  
April 8, 2024   $ 165,000     $ 254,498  
April 22, 2024   $ 165,000     $ 253,738  
May 8, 2024   $ 165,000     $ 252,817  
May 15, 2024   $ 165,000     $ 252,491  
May 20, 2024   $ 165,000     $ 252,220  
May 28, 2024   $ 110,000     $ 167,855  
June 10, 2024   $ 165,000     $ 251,080  
June 28, 2024   $ 165,000     $ 250,321  
July 5, 2024   $ 165,000     $ 249,750  
July 10, 2024   $ 165,000     $ 249,479  
July 22, 2024   $ 165,000     $ 248,585  
August 6, 2024   $ 165,000     $ 248,178  
August 14, 2024   $ 165,000     $ 247,500  
    $ 6,215,000     $ 9,800,449  

 

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EX-10.3 4 ex10-3.htm

 

Exhibit 10.3

 

 

 

Exchange Agreement

 

by and among

 

EzFill Holdings, Inc.

 

and

 

AJB Capital Investments LLC

 

 

 

 

 

Table of Contents

 

    PAGE
ARTICLE I. Definitions and Interpretation 1
Section 1.01 Definitions. 1
Section 1.02 Interpretive Provisions. 3
     
ARTICLE II. Conversion and Exchange 3
Section 2.01 Conversion and Exchange. 3
Section 2.02 Closing 4
Section 2.03 Taxes. 4
Section 2.04 Stockholder Approval. 4
Section 2.05 Unwinding. 4
     
ARTICLE III. Registration Rights. 4
Section 3.01 Definitions. 4
Section 3.02 Registrations. 6
Section 3.03 Registration Procedures. 7
Section 3.04 Registration Expenses. 9
Section 3.05 Indemnification. 10
     
ARTICLE IV. Representations and Warranties of the Holder 13
Section 4.01 Existence and Power. 13
Section 4.02 No Conflict; Due Authorization 13
Section 4.03 Valid Obligation 13
Section 4.04 Governmental Authorization. 13
Section 4.05 Title to and Issuance of Notes. 13
Section 4.06 Broker’s, Finder’s or Similar Fees 13
Section 4.07 Investment Representations 14
Section 4.08 Full Disclosure. 16
     
ARTICLE V. Representations and Warranties of the Company 16
Section 5.01 Organization 16
Section 5.02 No Conflict; Due Authorization 16
Section 5.03 Valid Obligation 16
Section 5.04 Governmental Authorization 16
Section 5.05 Approval of Agreement 16
Section 5.06 Broker’s, Finder’s or Similar Fees 16
     
ARTICLE VI. Miscellaneous 17
Section 6.01 Notices 17
Section 6.02 Governing Law; Jurisdiction. 17
Section 6.03 Waiver of Jury Trial. 18
Section 6.04 Mediation. 19
Section 6.05 Limitation on Damages. 19
Section 6.06 Attorneys’ Fees 19
Section 6.07 Third Party Beneficiaries 19
Section 6.08 Expenses 19
Section 6.09 Entire Agreement 19
Section 6.10 Amendment; Waiver 19
Section 6.11 No Presumption Against Drafter. 20
Section 6.12 Headings. 20
Section 6.13 No Assignment or Delegation. 20
Section 6.14 Commercially Reasonable Efforts 20
Section 6.15 Further Assurances. 20
Section 6.16 Specific Performance. 20
Section 6.17 Counterparts 20
     
Exhibit A Notes 1

 

i

 

Exchange Agreement

 

Dated as of August 16, 2024

 

This Exchange Agreement (together with the exhibits and other attachments hereto, this “Agreement”) is entered into as of the date first set forth above (the “Closing Date”) by and between (i) EzFill Holdings, Inc., a Delaware corporation (the “Company”) and (ii) AJB Capital Investments LLC, a Delaware limited liability company (“Holder”). Each of the Company and Holder may be referred to herein collectively as the “Parties” and separately as a “Party.”

 

WHEREAS, Holder is the owner of certain promissory notes of the Company as identified on Exhibit A (the “Notes”); and

 

WHEREAS, the Parties now desire to enter into this Agreement pursuant to which the Notes and all of the principal amount and accrued interest owed to the Holder pursuant to the Notes as of the Closing Date shall be converted into and exchanged for shares of Series A Convertible Preferred Stock, par value $0.0001 per share, of the Company (the “Series A Stock”) in reliance upon the exemption from registration provided by the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”);

 

NOW THEREFORE, on the stated premises and for and in consideration of the mutual covenants and agreements hereinafter set forth and the mutual benefits to the Parties to be derived herefrom, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the Parties hereby agree as follows:

 

ARTICLE I.Definitions and Interpretation

 

Section 1.01 Definitions. In addition to the other terms defined herein, the following terms, as used herein, have the following meanings

 

  (a) “Action” means any legal action, suit, claim, investigation, hearing or proceeding, including any audit, claim or assessment for Taxes or otherwise.

 

  (b) “Affiliate” means, with respect to any Person, any other Person directly or indirectly Controlling, Controlled by, or under common Control with such Person.

 

  (c) “Authority” means any governmental, regulatory or administrative body, agency or authority, any court or judicial authority, any arbitrator, or any public, private or industry regulatory authority, whether international, national, Federal, state, or local.

 

  (d) “Business Day” means any date on which commercial banks are generally open for business in New York City, New York.

 

1

 

  (e) “Control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of such Person, whether through the ownership of voting securities, by contract, or otherwise.” Controlled”, “Controlling” and “under common Control with” have correlative meanings. Without limiting the foregoing a Person (the “Controlled Person”) shall be deemed Controlled by (a) any other Person (the “10% Owner”) (i) owning beneficially, as meant in Rule 13d-3 under the Securities Exchange Act, securities entitling such Person to cast 10% or more of the votes for election of directors or equivalent governing authority of the Controlled Person or (ii) entitled to be allocated or receive 10% or more of the profits, losses, or distributions of the Controlled Person; (b) an officer, director, general partner, partner (other than a limited partner), manager, or member (other than a member having no management authority that is not a 10% Owner ) of the Controlled Person; or (c) a spouse, parent, lineal descendant, sibling, aunt, uncle, niece, nephew, mother-in-law, father-in-law, sister-in-law, or brother-in-law of an Affiliate of the Controlled Person or a trust for the benefit of an Affiliate of the Controlled Person or of which an Affiliate of the Controlled Person is a trustee.

 

  (f) “Enforceability Exceptions” means (a) applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance and other similar Laws of general application affecting enforcement of creditors’ rights generally and (b) general principles of equity.

 

  (g) “Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

 

  (h) “Law” means any domestic or foreign, federal, state, municipality or local law, statute, ordinance, code, rule, or regulation.

 

  (i) “Lien” means any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such asset, and any conditional sale or voting agreement or proxy, including any agreement to give any of the foregoing.

 

  (j) “Person” means an individual, corporation, partnership (including a general partnership, limited partnership or limited liability partnership), limited liability company, association, trust or other entity or organization, including a government, domestic or foreign, or political subdivision thereof, or an agency or instrumentality thereof.

 

  (k) “Tax(es)” means any federal, state, local or foreign tax, charge, fee, levy, custom, duty, deficiency, or other assessment of any kind or nature imposed by the Internal Revenue Service and any other Authority responsible for the collection, assessment or imposition of any Tax or the administration of any Law relating to any Tax (including any income (net or gross), gross receipts, profits, windfall profit, sales, use, goods and services, ad valorem, franchise, license, withholding, employment, social security, workers compensation, unemployment compensation, employment, payroll, transfer, excise, import, real property, personal property, intangible property, occupancy, recording, minimum, alternative minimum, environmental or estimated tax), including any liability therefor as a transferee (including under Section 6901 of the Internal Revenue Code of 1986, as amended, or similar provision of applicable Law) or successor, as a result of Treasury Regulation Section 1.1502-6 or similar provision of applicable Law or as a result of any Tax sharing, indemnification or similar agreement, together with any interest, penalty, additions to tax or additional amount imposed with respect thereto.

 

2

 

Section 1.02 Interpretive Provisions. Unless the express context otherwise requires (i) the words “hereof,” “herein,” and “hereunder” and words of similar import, when used in this Agreement, shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (ii) terms defined in the singular shall have a comparable meaning when used in the plural, and vice versa; (iii) the terms “Dollars” and “$” mean United States Dollars; (iv) references herein to a specific Section, Subsection, Recital, or Exhibit shall refer, respectively, to Sections, Subsections, Recitals or Exhibits of this Agreement; (v) wherever the word “include,” “includes,” or “including” is used in this Agreement, it shall be deemed to be followed by the words “without limitation”; (vi) references herein to any gender shall include each other gender; (vii) references herein to any Person shall include such Person’s heirs, executors, personal representatives, administrators, successors and assigns; provided, however, that nothing contained herein is intended to authorize any assignment or transfer not otherwise permitted by this Agreement; (viii) references herein to a Person in a particular capacity or capacities shall exclude such Person in any other capacity; (ix) references herein to any contract or agreement (including this Agreement) mean such contract or agreement as amended, supplemented or modified from time to time in accordance with the terms thereof; (x) with respect to the determination of any period of time, the word “from” means “from and including” and the words “to” and “until” each means “to but excluding”; (xi) references herein to any Law or any license mean such Law or license as amended, modified, codified, reenacted, supplemented or superseded in whole or in part, and in effect from time to time; and (xii) references herein to any Law shall be deemed also to refer to all rules and regulations promulgated thereunder.

 

ARTICLE II.Conversion and Exchange

 

Section 2.01 Conversion and Exchange.

 

  (a) The Parties acknowledge and agree that the Holder has the right to declare that the Notes are in default, and therefore the total principal amount, accrued interest and other payment obligations of the Company pursuant to the Notes as of the Closing Date is $3,630,000 (the “Exchanged Indebtedness”). On the terms and subject to the conditions set forth in this Agreement, on the Closing Date, the Notes and the Exchanged Indebtedness shall be deemed converted into and exchanged for 363,000 shares of Series A Stock (the “Shares”), which Shares are convertible into shares of common stock, par value $0.0001 per share, of the Company (the “Common Stock”) as set forth in the Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock (the “Certificate of Designations”) as filed with the Secretary of State of the State of Delaware on August 15, 2024.

 

  (b) Promptly following the recordation of the Holder as the beneficial owner of the Shares, the Exchanged Indebtedness shall be automatically repaid in full and the Notes shall be deemed automatically terminated and null and void and of no further force, and this Agreement shall be deemed an amendment to the Notes to the extent required to give effect thereto. The Holder hereby waives any and all defaults occurring pursuant to the Notes at any time up to the Closing Date and agree that the issuance of the Shares to the Holder shall constitute full and complete satisfaction of all obligations of the Company pursuant to the Notes.

 

  (c) The Parties intend that the exchange as set forth herein is being made in reliance upon the exemption from registration provided by Section 3(a)(9) of the Securities Act and the Parties agree not to take any position contrary thereto.

 

3

 

Section 2.02 Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall occur on the Closing Date simultaneously with the execution and delivery of this Agreement by remote exchange of electronic documents. At the Closing, the Company shall issue to Holder the Shares, which shall be recorded in book entry form and shall not be certificated unless requested by Holder. At and following the Closing, the Parties shall execute, acknowledge, and deliver (or shall ensure to be executed, acknowledged, and delivered), any and all certificates, opinions, financial statements, schedules, agreements, resolutions, rulings or other instruments required by this Agreement to be so delivered at or prior to the Closing, together with such other items as may be reasonably requested by the Parties and their respective legal counsel in order to effectuate or evidence the transactions contemplated hereby.

 

Section 2.03 Taxes. Holder will pay all income, gain, sales, use, value added, transfer, stamp, registration, documentary, excise, real property transfer or gains, or similar Taxes incurred as a result of the transactions contemplated by this Agreement with respect to Holder.

 

Section 2.04 Stockholder Approval. The Company covenants and agrees that it shall utilize its commercially reasonable efforts to obtain the Stockholder Approval (as defined in the Certificate of Designations) as soon as reasonably practicable following the Closing Date, and in any event will submit the matters included in the Stockholder Approval to the stockholders of the Company for a vote within 60 days of the Closing Date, and if the Stockholder Approval is not obtained within such time period, the Company will submit the matters included in the Stockholder Approval to the stockholders of the Company for a vote at least every 4 months thereafter until the Stockholder Approval is obtained.

 

Section 2.05 Unwinding. The Parties acknowledge and agree that in the event that The Nasdaq Stock Market (“Nasdaq”) informs the Company, at any time prior to the occurrence of the Stockholder Approval Date, that the transactions as set forth herein and the other transactions being undertaken by the Company on and around the date hereof are not sufficient to cure the stockholder equity deficiency matters as previously communicated by Nasdaq to the Company, then the Parties shall undertake such actions as required to unwind the Closing and the exchange as set forth in Section 2.01, and in connection therewith, the Holder shall return all of the Shares to the Company, and the Company shall issue to the Holder a replacement promissory note in the amount of the Exchanged Indebtedness, and otherwise having terms and conditions materially the same as the Notes, and preserving the other rights and preferences held by the Holder pursuant to the Notes as of immediately prior to the Closing Date, and the Holder shall have registration rights substantially similar to those in Article III with respect to any shares of Common Stock issuable on any conversion of such replacement note.

 

ARTICLE III.Registration Rights.

 

Section 3.01 Definitions. For purposes of this Agreement, the following terms shall have the following meanings:

 

  (a) “Filing Date” means the earliest practical date on which the Company is permitted by SEC Guidance to file such additional Registration Statement related to the Registrable Securities.

 

  (b) “Investor” shall mean the Holder and any other Person holding Registrable Securities.

 

  (c) “Prospectus” means the prospectus included in a Registration Statement (including, without limitation, a prospectus that includes any information previously omitted from a prospectus filed as part of an effective registration statement in reliance upon Rule 430A promulgated by the SEC pursuant to the Securities Act), as amended or supplemented by any prospectus supplement, with respect to the terms of the offering of any portion of the Registrable Securities covered by a Registration Statement, and all other amendments and supplements to the Prospectus, including post-effective amendments, and all material incorporated by reference or deemed to be incorporated by reference in such Prospectus.

 

4

 

  (d) “Registrable Securities” means any Conversion Shares (as defined in the Certificate of Designations) which have been issued to the Investor on any conversion of the Series A Stock and which continue to be held by the Investor, provided that such Conversion Shares shall cease to be Registrable Securities when: (1) a registration Statement with respect to the sale of such securities shall have become effective under the Securities Act and such Registrable Securities shall have been sold, transferred, disposed of or exchanged in accordance with such registration statement; (2) such Registrable Securities shall have been otherwise transferred, new certificates for them not bearing a legend restricting further transfer shall have been delivered by the Company and subsequent public distribution of them shall not require registration under the Securities Act; (3) such Registrable Securities shall have ceased to be outstanding; (4) such Registrable Securities are freely saleable under Rule 144 without volume limitations; or (5) such Registrable Securities have been sold to, or through, a broker, dealer or underwriter in a public distribution or other public securities transaction, and provided that, with respect to any Investor other than Holder, “Registrable Securities” shall include any shares of stock of the Company with respect to which such Investor has similar registration rights to those set forth in this Article III.

 

  (e) “Registration Statement” means any registration statement required to be filed hereunder pursuant to this Article III, including the Prospectus, amendments and supplements to any such registration statement or Prospectus, including pre- and post-effective amendments, all exhibits thereto, and all material incorporated by reference or deemed to be incorporated by reference in any such registration statement.

 

  (f) “Rule 144” means Rule 144 promulgated under the Securities Act or any successor rule thereto.

 

  (g) “SEC Guidance” means (i) any publicly-available written or oral guidance of the SEC staff, or any comments, requirements or requests of the SEC staff and (ii) the Securities Act.

 

  (h) “SEC” means the United States Securities and Exchange Commission.

 

  (i) “Trading Day” means any day that shares of Common Stock are listed for trading or quotation on any Trading Market.

 

  (j) “Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, The Nasdaq Capital Market, The Nasdaq Global Market, The Nasdaq Global Select Market or the New York Stock Exchange (or any successors to any of the foregoing).

 

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Section 3.02 Registrations.

 

  (a) Subject to the provisions herein, at any time and from time to time after the Stockholder Approval Date, the Investor may make a written demand for registration under the Securities Act of all or part of their Registrable Securities (a “Demand Registration”). Any demand for a Demand Registration shall specify the number of Registrable Securities proposed to be sold and the intended method(s) of distribution thereof. Within thirty (30) days following receipt of any request for a Demand Registration, the Company will notify all other Investors holding Registrable Securities of the demand, and each Investor holding Registrable Securities who wishes to include all or a portion of such Investor’s Registrable Securities in the Demand Registration shall have the right to do so, subject to the terms and conditions applicable.

 

  (b) Subject to the terms of this Agreement, the Company shall use its commercially reasonable efforts to cause a Registration Statement filed under this Agreement pursuant to a Demand Registration to be filed by the Filing Date and to be be declared effective under the Securities Act within forty-five (45) days after the filing thereof, and shall use its commercially reasonable efforts to keep such Registration Statement continuously effective under the Securities Act until all Registrable Securities covered by such Registration Statement (i) have been sold, thereunder or pursuant to Rule 144, or (ii) may be sold without volume or manner-of-sale restrictions pursuant to Rule 144 and without the requirement for the Company to be in compliance with the current public information requirement under Rule 144, as determined by the counsel to the Company pursuant to a written opinion letter to such effect, addressed and acceptable to the Investor (the “Effectiveness Period”). The Company shall telephonically request effectiveness of a Registration Statement as of 5:00 p.m. Eastern Time on a Trading Day. The Company shall immediately notify the Investor of the effectiveness of a Registration Statement on the same Trading Day that the Company telephonically confirms effectiveness with the SEC, which shall be the date requested for effectiveness of such Registration Statement. The Company shall, by 9:30 a.m. Eastern Time on the Trading Day after the effective date of such Registration Statement, file a final Prospectus with the SEC as required by Rule 424.

 

  (c) Notwithstanding any other provision of this Agreement, if the SEC or any SEC Guidance sets forth a limitation on the number of Registrable Securities permitted to be registered on a particular Registration Statement as a secondary offering (and notwithstanding that the Company used diligent efforts to advocate with the SEC for the registration of all or a greater portion of Registrable Securities), unless otherwise directed in writing by the Investor, the number of Registrable Securities to be registered on such Registration Statement will be reduced (i) first, by reducing the shares of Common Stock that the Company proposes to sell; and (ii) second, by reducing the Registrable Securities to be included therein by the Investors, such cutbacks to be apportioned amongst all Investors including Registrable Securities in such Registration Statement, pro rata based on the number of Registrable Securities initially proposed to be registered by such Investors. In the event of a cutback pursuant to this Section 3.02(c), the Company shall give the Investor at least five (5) Trading Days prior written notice along with the calculations as to the Investor’s allotment. In the event the Company amends the Registration Statement in accordance with the foregoing, the Company will use its commercially reasonable efforts to file with the SEC, as promptly as allowed by Commission or SEC Guidance provided to the Company or to registrants of securities in general, one or more registration statements on Form S-3 or such other form available to register for resale those Registrable Securities that were not registered for resale on the Registration Statement, as amended.

 

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Section 3.03 Registration Procedures. In connection with the Company’s registration obligations hereunder, the Company shall have the following obligations:

 

  (a) Not less than three (3) Trading Days prior to the filing of each Registration Statement and not less than one (1) Trading Day prior to the filing of any related Prospectus or any amendment or supplement thereto (including any document that would be incorporated or deemed to be incorporated therein by reference), the Company shall (i) furnish to the Investor copies of all such documents proposed to be filed, which documents (other than those incorporated or deemed to be incorporated by reference) will be subject to the review of the Investor, and (ii) cause its officers and directors, counsel and independent registered public accountants to respond to such inquiries as shall be necessary, in the reasonable opinion of respective counsel to the Investor, to conduct a reasonable investigation within the meaning of the Securities Act. Notwithstanding the above, the Company shall not be obligated to provide the Investor advance copies of any universal registration statement registering securities in addition to those required hereunder, or any Prospectus prepared thereto. The Company shall not file a Registration Statement or any such Prospectus or any amendments or supplements thereto to which the Investor shall reasonably object in good faith, provided, that, the Company is notified of such objection in writing no later than five (5) Trading Days after the Investor has been so furnished copies of a Registration Statement or one (1) Trading Day after the Investor has been furnished copies of any related Prospectus or amendments or supplements thereto. Investor agrees to furnish to the Company a completed questionnaire in the form as determined by the Company (a “Selling Stockholder Questionnaire”) on a date that is not less than two (2) Trading Days prior to the Filing Date or by the end of the fourth (4th) Trading Day following the date on which the Investor receives draft materials in accordance with this Section 3.03(a).

 

  (b) (i) The Company shall prepare and file with the SEC such amendments, including post-effective amendments, to a Registration Statement and the Prospectus used in connection therewith as may be necessary to keep a Registration Statement continuously effective as to the applicable Registrable Securities for the Effectiveness Period and prepare and file with the SEC such additional Registration Statements in order to register for resale under the Securities Act all of the Registrable Securities, (ii) cause the related Prospectus to be amended or supplemented by any required Prospectus supplement (subject to the terms of this Agreement), and, as so supplemented or amended, to be filed pursuant to Rule 424, (iii) respond as promptly as reasonably practicable to any comments received from the SEC with respect to a Registration Statement or any amendment thereto and provide as promptly as reasonably practicable to the Investor true and complete copies of all correspondence from and to the SEC relating to a Registration Statement (provided, that the Company shall excise any information contained therein which would constitute material non-public information regarding the Company or any of its subsidiaries), and (iv) comply in all material respects with the applicable provisions of the Securities Act and the Exchange Act with respect to the disposition of all Registrable Securities covered by a Registration Statement during the applicable period in accordance (subject to the terms of this Agreement) with the intended methods of disposition by the Investor thereof set forth in such Registration Statement as so amended or in such Prospectus as so supplemented.

 

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  (c) The Company shall notify the Investor (which notice shall, pursuant to clauses (iii) through (vi) hereof, be accompanied by an instruction to suspend the use of the Prospectus until the requisite changes have been made) as promptly as reasonably possible (and, in the case of (i)(A) below, not less than one (1) Trading Day prior to such filing) and (if requested by any such Person) confirm such notice in writing no later than one (1) Trading Day following the day: (i)(A) when a Prospectus or any Prospectus supplement or post-effective amendment to a Registration Statement is proposed to be filed, (B) when the SEC notifies the Company whether there will be a “review” of such Registration Statement and whenever the SEC comments in writing on such Registration Statement, and (C) with respect to a Registration Statement or any post-effective amendment, when the same has become effective, (ii) of any request by the SEC or any other federal or state governmental authority for amendments or supplements to a Registration Statement or Prospectus or for additional information, (iii) of the issuance by the SEC or any other federal or state governmental authority of any stop order suspending the effectiveness of a Registration Statement covering any or all of the Registrable Securities or the initiation of any Proceedings for that purpose, (iv) of the receipt by the Company of any notification with respect to the suspension of the qualification or exemption from qualification of any of the Registrable Securities for sale in any jurisdiction, or the initiation or threatening of any Proceeding for such purpose, (v) of the occurrence of any event or passage of time that makes the financial statements included in a Registration Statement ineligible for inclusion therein or any statement made in a Registration Statement or Prospectus or any document incorporated or deemed to be incorporated therein by reference untrue in any material respect or that requires any revisions to a Registration Statement, Prospectus or other documents so that, in the case of a Registration Statement or the Prospectus, as the case may be, it will not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and (vi) of the occurrence or existence of any pending corporate development with respect to the Company that the Company believes may be material and that, in the determination of the Company, makes it not in the best interest of the Company to allow continued availability of a Registration Statement or Prospectus; provided, however, in no event shall any such notice contain any information which would constitute material, non-public information regarding the Company or any of its subsidiaries.

 

  (d) By its acquisition of Registrable Securities, the Investor agrees that, upon receipt of a notice from the Company of the occurrence of any event of the kind described in Section 3.03(c) (iii) through (vi), the Buyer will forthwith discontinue disposition of such Registrable Securities under a Registration Statement until it is advised in writing (the “Advice”) by the Company that the use of the applicable Prospectus (as it may have been supplemented or amended) may be resumed. The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable.

 

  (e) The Company shall use its commercially reasonable efforts to avoid the issuance of, or, if issued, obtain the withdrawal of (i) any order stopping or suspending the effectiveness of a Registration Statement, or (ii) any suspension of the qualification (or exemption from qualification) of any of the Registrable Securities for sale in any jurisdiction, at the earliest practicable moment.

 

  (f) The Company shall furnish to the Investor, without charge, at least one conformed copy of each such Registration Statement and each amendment thereto, including financial statements and schedules, all documents incorporated or deemed to be incorporated therein by reference to the extent requested by such Person, and all exhibits to the extent requested by such Person (including those previously furnished or incorporated by reference) promptly after the filing of such documents with the SEC; provided, that any such item which is available on the EDGAR system (or successor thereto) need not be furnished in physical form.

 

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  (g) Upon the occurrence of any event contemplated by Section 3.03(c), as promptly as reasonably possible under the circumstances taking into account the Company’s good faith assessment of any adverse consequences to the Company and its stockholders of the premature disclosure of such event, prepare a supplement or amendment, including a post-effective amendment, to a Registration Statement or a supplement to the related Prospectus or any document incorporated or deemed to be incorporated therein by reference, and file any other required document so that, as thereafter delivered, neither a Registration Statement nor such Prospectus will contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Company notifies the Investor in accordance with clauses (iii) through (vi) of Section 3.03(c) to suspend the use of any Prospectus until the requisite changes to such Prospectus have been made, then the Investor shall suspend use of such Prospectus. The Company will use its commercially reasonable efforts to ensure that the use of the Prospectus may be resumed as promptly as is practicable. The Company shall be entitled to exercise its right under this Section 3.03(g) to suspend the availability of a Registration Statement and Prospectus for a period not to exceed sixty (60) calendar days (which need not be consecutive days) in any 12-month period.

 

  (h) The Company shall comply with all applicable rules and regulations of the SEC.

 

Section 3.04 Registration Expenses. All fees and expenses incident to the performance of or compliance with, this Agreement by the Company shall be borne by the Company whether or not any Registrable Securities are sold pursuant to a Registration Statement. The fees and expenses referred to in the foregoing sentence shall include, without limitation, (i) all registration and filing fees (including, without limitation, fees and expenses of the Company’s counsel and independent registered public accountants) (A) with respect to filings made with the SEC, (B) with respect to filings required to be made with any Trading Market on which the Common Stock is then listed for trading, (C) in compliance with applicable state securities or Blue Sky laws reasonably agreed to by the Company in writing (including, without limitation, fees and disbursements of counsel for the Company in connection with Blue Sky qualifications or exemptions of the Registrable Securities) and (D) if not previously paid by the Company in connection with an Issuer Filing, with respect to any filing that may be required to be made by any broker through which the Investor intends to make sales of Registrable Securities with FINRA pursuant to FINRA Rule 5110, so long as the broker is receiving no more than a customary brokerage commission in connection with such sale, (ii) printing expenses (including, without limitation, expenses of printing certificates for Registrable Securities), (iii) messenger, telephone and delivery expenses, (iv) fees and disbursements of counsel for the Company, (v) Securities Act liability insurance, if the Company so desires such insurance, and (vi) fees and expenses of all other Persons retained by the Company in connection with the consummation of the transactions contemplated by this Agreement. In addition, the Company shall be responsible for all of its internal expenses incurred in connection with the consummation of the transactions contemplated by this Agreement (including, without limitation, all salaries and expenses of its officers and employees performing legal or accounting duties), the expense of any annual audit and the fees and expenses incurred in connection with the listing of the Registrable Securities on any securities exchange as required hereunder. In no event shall the Company be responsible for any broker or similar commissions of Investor or, except to the extent provided for in the Transaction Documents, any legal fees or other costs of the Investor.

 

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Section 3.05 Indemnification.

 

  (a) Indemnification by the Company. The Company shall, notwithstanding any termination of this Agreement, in addition to and not in substitution for, any other indemnification provision by the Company, indemnify and hold harmless the Investor, the officers, directors, managers, managing members, members, partners, advisors, agents, brokers (including brokers who offer and sell Registrable Securities as principal as a result of a pledge or any failure to perform under a margin call of Common Stock), staff members (whether or not classified as employees or independent contractors), investment advisors and (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each of them, each Person who controls any the Investor (within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act) and the officers, directors, managers, managing members, members, stockholders, staff members (whether or not classified as employees or independent contractors), partners, advisors, agents (and any other Persons with a functionally equivalent role of a Person holding such titles, notwithstanding a lack of such title or any other title) of each such controlling Person, to the fullest extent permitted by applicable law, from and against any and all losses, claims, damages, liabilities, costs (including, without limitation, reasonable attorneys’ fees) and expenses (collectively, “Losses”), as incurred, arising out of or relating to (1) any untrue or alleged untrue statement of a material fact contained in a Registration Statement, any Prospectus or any form of prospectus or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading or (2) any violation or alleged violation by the Company of the Securities Act, the Exchange Act or any state securities law, or any rule or regulation thereunder, in connection with the performance of its obligations under this Agreement, except to the extent, but only to the extent, that (i) such untrue statements or omissions are based solely upon information regarding the Investor furnished in writing to the Company by the Investor expressly for use therein, or to the extent that such information relates to the Investor or the Investor’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by the Investor expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto or (ii) in the case of an occurrence of an event of the type specified in Section 3.03(c) (iii)-(vi), the use by the Investor of an outdated, defective or otherwise unavailable Prospectus after the Company has notified the Investor in writing that the Prospectus is outdated, defective or otherwise unavailable for use by the Investor and prior to the receipt by the Investor of the Advice contemplated in Section 3.03(h), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. The Company shall notify the Investor promptly of the institution, threat or assertion of any Proceeding arising from or in connection with the transactions contemplated by this Agreement of which the Company is aware. Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of such indemnified person and shall survive the transfer of any Registrable Securities by the Investor.

 

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  (b) Indemnification by Investor. Investor shall indemnify and hold harmless the Company, its directors, officers, agents and employees, each Person who controls the Company (within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act), and the directors, officers, agents or employees of such controlling Persons, to the fullest extent permitted by applicable law, from and against all Losses, as incurred, to the extent arising out of or based solely upon: (x) the Investor’s failure to comply with any applicable prospectus delivery requirements of the Securities Act through no fault of the Company or (y) any untrue or alleged untrue statement of a material fact contained in any Registration Statement, any Prospectus, or in any amendment or supplement thereto or in any preliminary prospectus, or arising out of or relating to any omission or alleged omission of a material fact required to be stated therein or necessary to make the statements therein (in the case of any Prospectus or supplement thereto, in light of the circumstances under which they were made) not misleading (i) to the extent, but only to the extent, that such untrue statement or omission is contained in any information so furnished in writing by the Investor to the Company expressly for inclusion in such Registration Statement or such Prospectus, (ii) to the extent, but only to the extent, that such information relates to the Investor’s proposed method of distribution of Registrable Securities and was reviewed and expressly approved in writing by the Investor expressly for use in a Registration Statement, such Prospectus or in any amendment or supplement thereto or (iii) in the case of an occurrence of an event of the type specified in Section 3.03(c) (iii)-(vi), to the extent, but only to the extent, related to the use by the Investor of an outdated, defective or otherwise unavailable Prospectus after the Company has notified the Investor in writing that the Prospectus is outdated, defective or otherwise unavailable for use by the Investor and prior to the receipt by the Investor of the Advice contemplated in Section 3.03(d), but only if and to the extent that following the receipt of the Advice the misstatement or omission giving rise to such Loss would have been corrected. In no event shall the liability of Investor under this Section 3.05(b) be greater in amount than the dollar amount of the net proceeds received by the Investor upon the sale of the Registrable Securities giving rise to such indemnification obligation.

 

  (c) Conduct of Indemnification Proceedings.

 

  (i) If any Proceeding shall be brought or asserted against any Person entitled to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall promptly notify the Person from whom indemnity is sought (the “Indemnifying Party”) in writing, and the Indemnifying Party shall have the right to assume the defense thereof, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of all fees and expenses incurred in connection with defense thereof; provided, that the failure of any Indemnified Party to give such notice shall not relieve the Indemnifying Party of its obligations or liabilities pursuant to this Agreement, except (and only) to the extent that it shall be finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) that such failure shall have materially and adversely prejudiced the Indemnifying Party.

 

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  (ii) An Indemnified Party shall have the right to employ separate counsel in any such Proceeding and to participate in the defense thereof, but the fees and expenses of such counsel shall be at the expense of such Indemnified Party or Parties unless: (1) the Indemnifying Party has agreed in writing to pay such fees and expenses; (2) the Indemnifying Party shall have failed promptly to assume the defense of such Proceeding and to employ counsel reasonably satisfactory to such Indemnified Party in any such Proceeding; or (3) the named parties to any such Proceeding (including any impleaded parties) include both such Indemnified Party and the Indemnifying Party, and counsel to the Indemnified Party shall reasonably believe that a material conflict of interest is likely to exist if the same counsel were to represent such Indemnified Party and the Indemnifying Party (in which case, if such Indemnified Party notifies the Indemnifying Party in writing that it elects to employ separate counsel at the expense of the Indemnifying Party, the Indemnifying Party shall not have the right to assume the defense thereof and the reasonable fees and expenses of no more than one separate counsel shall be at the expense of the Indemnifying Party). The Indemnifying Party shall not be liable for any settlement of any such Proceeding effected without its written consent, which consent shall not be unreasonably withheld or delayed. No Indemnifying Party shall, without the prior written consent of the Indemnified Party, effect any settlement of any pending Proceeding in respect of which any Indemnified Party is a party, unless such settlement includes an unconditional release of such Indemnified Party from all liability on claims that are the subject matter of such Proceeding.

 

  (iii) Subject to the terms of this Agreement, all reasonable fees and expenses of the Indemnified Party (including reasonable fees and expenses to the extent incurred in connection with investigating or preparing to defend such Proceeding in a manner not inconsistent with this Section 3.05(c)) shall be paid to the Indemnified Party, as incurred, within ten (10) Trading Days of written notice thereof to the Indemnifying Party; provided, that the Indemnified Party shall promptly reimburse the Indemnifying Party for that portion of such fees and expenses applicable to such actions for which such Indemnified Party is finally determined by a court of competent jurisdiction (which determination is not subject to appeal or further review) not to be entitled to indemnification hereunder.

 

  (d) Contribution. If the indemnification under Section 3.05(a) or Section 3.05(b) is unavailable to an Indemnified Party or insufficient to hold an Indemnified Party harmless for any Losses, then each Indemnifying Party shall contribute to the amount paid or payable by such Indemnified Party, in such proportion as is appropriate to reflect the relative fault of the Indemnifying Party and Indemnified Party in connection with the actions, statements or omissions that resulted in such Losses as well as any other relevant equitable considerations. The relative fault of such Indemnifying Party and Indemnified Party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission of a material fact, has been taken or made by, or relates to information supplied by, such Indemnifying Party or Indemnified Party, and the Parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such action, statement or omission. The amount paid or payable by a Party as a result of any Losses shall be deemed to include, subject to the limitations set forth in this Agreement, any reasonable attorneys’ or other fees or expenses incurred by such Party in connection with any Proceeding to the extent such Party would have been indemnified for such fees or expenses if the indemnification provided for in this Section 3.05 was available to such Party in accordance with its terms. The Parties agree that it would not be just and equitable if contribution pursuant to this Section 3.05(d) were determined by pro rata allocation or by any other method of allocation that does not take into account the equitable considerations referred to in the immediately preceding paragraph. Notwithstanding the provisions of this Section 3.05(d), Investor shall not be required to contribute pursuant to this Section 3.05(d), in the aggregate, any amount in excess of the amount by which the net proceeds actually received by the Investor from the sale of the Registrable Securities subject to the Proceeding exceeds the amount of any damages that the Investor has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. The indemnity and contribution agreements contained in this Section 3.05(d) are in addition to any liability that the Indemnifying Parties may have to the Indemnified Parties.

 

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ARTICLE IV.Representations and Warranties of the Holder

 

As an inducement to, and to obtain the reliance of the Company, Holder represents and warrants to the Company as of the Closing Date as follows:

 

Section 4.01 Existence and Power. Holder is limited liability company, duly formed and in good standing under the laws of the State of Delaware, and has the full power and is duly authorized under all applicable Laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted and to enter into this Agreement and fulfill its obligations herein.

 

Section 4.02 No Conflict; Due Authorization. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of the Certificate of Formation or limited liability company operating agreement of the Holder as in effect on the Closing Date (the “Holder Organizational Documents”). The Holder has taken all action required by Law, the Holder Organizational Documents, or otherwise to authorize the execution and delivery of this Agreement, and the Holder has full power, authority, and legal right and has taken all action required by Law, the Holder Organizational Documents or otherwise to consummate the transactions herein contemplated.

 

Section 4.03 Valid Obligation. This Agreement and all agreements and other documents executed by Holder in connection herewith constitute the valid and binding obligations of Holder, enforceable in accordance with its or their terms, except as may be limited by the Enforceability Exceptions

 

Section 4.04 Governmental Authorization. Neither the execution, delivery nor performance of this Agreement by Holder requires any consent, approval, license or other action by or in respect of, or registration, declaration or filing with any Authority.

 

Section 4.05 Title to and Issuance of Notes. Holder is the record and beneficial owner and holder of the Notes free and clear of all Liens. No part of the Notes is subject to pre-emptive or similar rights and Holder does not have any pre-emptive rights or similar rights to purchase or receive any interest in the Notes. Holder has the power and authority to convert and exchange the Notes and the Exchanged Indebtedness as contemplated pursuant to the terms of this Agreement.

 

Section 4.06 Broker’s, Finder’s or Similar Fees. There are no brokerage commissions, finder’s fees or similar fees or commissions payable by Holder in connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with Holder or any action taken by Holder.

 

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Section 4.07 Investment Representations.

 

  (a) Investment Purpose. Holder understands and agrees that the consummation of this Agreement including the delivery of the Shares to Holder, as contemplated hereby constitutes the offer and sale of securities under the Securities Act and applicable state statutes and that the Shares, together with any share of Common Stock as may be issued to Holder upon any conversion of the Shares pursuant to the Certificate of Designations (collectively, the “Securities”) are being acquired for Holder’s own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the Securities Act.

 

  (b) Investor Status. Holder is an “accredited investor” as that term is defined in Rule 501(a) of Regulation D (an “Accredited Investor”) promulgated under the Securities Act. Holder has been furnished with all documents and materials relating to the business, finances and operations of the Company and its subsidiaries and information that Holder requested and deemed material to making an informed decision regarding this Agreement and the underlying transactions.

 

  (c) Reliance on Exemptions. Holder understands that the Securities are being offered and sold to the Holder in reliance upon specific exemptions from the registration requirements of United States federal and state securities Laws and that the Company is relying upon the truth and accuracy of, and the Holder’s compliance with, the representations, warranties, agreements, acknowledgments and understandings of the Holder set forth herein in order to determine the availability of such exemptions and the eligibility of the Holder to acquire the Securities.

 

  (d) Information. Holder and Holder’s advisors, if any, have been furnished with all materials relating to the business, finances and operations of the Company and materials relating to the offer and sale of the Securities which have been requested by Holder or its advisors. Holder and Holder’s advisors, if any, have been afforded the opportunity to ask questions of the Company. Holder has received and reviewed the filings and reports made or filed by the Company with the Securities and Exchange Commission, including, without limitation, the risk factors as set forth therein. Holder understands that Holder’s investment in the Securities involves a significant degree of risk. The Holder represents and warrants that the Holder (i) can bear the economic risk of the Holder’s respective investments, and (ii) possesses such knowledge and experience in financial and business matters that the Holder is capable of evaluating the merits and risks of the investment in the Company and the Securities. The Holder acknowledges that Holder has carefully reviewed such information as the Holder has deemed necessary to evaluate an investment in the Company and the Securities.

 

  (e) Governmental Review. Holder understands that no United States federal or state agency or any other government or governmental agency has passed upon or made any recommendation or endorsement of the Securities. The Holder further acknowledges that neither the Securities and Exchange Commission nor the securities regulatory body of any other jurisdiction, has received, considered or passed upon the accuracy or adequacy of the information and representations made in this Agreement.

 

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  (f) Transfer or Resale. Holder understands that (i) the sale or re-sale of the Securities has not been and is not being registered under the Securities Act or any applicable state securities Laws, and the Securities may not be transferred unless (a) the Securities are sold pursuant to an effective registration statement under the Securities Act, (b) Holder shall have delivered to the Company, at the cost of Holder, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in comparable transactions to the effect that the Securities to be sold or transferred may be sold or transferred pursuant to an exemption from such registration, which opinion shall be accepted by the Company, (c) the Securities are sold or transferred to an “affiliate” (as defined in Rule 144 promulgated under the Securities Act (or a successor rule) (“Rule 144”)) of Holder who agree to sell or otherwise transfer the Securities only in accordance with this Section 4.07 and who is an Accredited Investor, (d) the Securities are sold pursuant to Rule 144, or (e) the Securities are sold pursuant to Regulation S under the Securities Act (or a successor rule) (“Regulation S”), and Holder shall have delivered to the Company, at the cost of Holder, an opinion of counsel that shall be in form, substance and scope customary for opinions of counsel in corporate transactions, which opinion shall be accepted by the Company; (ii) any sale of such Securities made in reliance on Rule 144 may be made only in accordance with the terms of said Rule and further, if said Rule is not applicable, any re-sale of such Securities under circumstances in which the seller (or the person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC thereunder; and (iii) neither the Company nor any other person is under any obligation to register such Securities under the Securities Act or any state securities Laws or to comply with the terms and conditions of any exemption thereunder (in each case).

 

  (g) Legends. Holder understands that the Securities, until such time as the Securities have been registered under the Securities Act, or may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, the Securities may bear a standard Rule 144 legend and a stop-transfer order may be placed against transfer of the certificates for such Securities, and that any certificate representing the Securities shall be endorsed with the following legends, in addition to any other legend required to be placed thereon by applicable federal or state securities Laws:

 

“THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (TOGETHER WITH THE RULES AND REGULATIONS THEREUNDER, 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 AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS.”

 

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  (h) Removal. The legend(s) referenced in Section 4.07(g) shall be removed and the Company shall issue a certificate without such legend to the holder of any Securities upon which it is stamped, if, unless otherwise required by applicable state securities Laws, (a) the Securities are registered for sale under an effective registration statement filed under the Securities Act or otherwise may be sold pursuant to Rule 144 or Regulation S without any restriction as to the number of securities as of a particular date that can then be immediately sold, or (b) such holder provides the Company with an opinion of counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that a public sale or transfer of such Securities may be made without registration under the Securities Act, which opinion shall be accepted by the Company so that the sale or transfer is effected. Holder agrees to sell all Securities, including those represented by a certificate(s) from which the legend has been removed, only in compliance with applicable prospectus delivery requirements, if any.

 

Section 4.08 Full Disclosure. No representation or warranty by Holder in this Agreement or any certificate or other document furnished or to be furnished to the Company pursuant to this Agreement contains any untrue statement of a material fact, or omits to state a material fact necessary to make the statements contained therein, in light of the circumstances in which they are made, not misleading.

 

ARTICLE V.Representations and Warranties of the Company

 

As an inducement to, and to obtain the reliance of the Holder, the Company represents and warrants to the Holder as of the Closing Date as follows:

 

Section 5.01 Organization. The Company is a corporation duly organized, validly existing, and in good standing under the Laws of the State of Delaware and has the corporate power and is duly authorized under all applicable Laws, regulations, ordinances, and orders of public authorities to carry on its business in all material respects as it is now being conducted.

 

Section 5.02 No Conflict; Due Authorization. The execution and delivery of this Agreement does not, and the consummation of the transactions contemplated hereby will not, violate any provision of the Certificate of Incorporation and Bylaws of the Company as in effect on the Closing Date (the “Company Organizational Documents”). The Company has taken all action required by Law, the Company Organizational Documents, or otherwise to authorize the execution and delivery of this Agreement, and the Company has full power, authority, and legal right and has taken all action required by Law, the Company Organizational Documents or otherwise to consummate the transactions herein contemplated.

 

Section 5.03 Valid Obligation. This Agreement and all agreements and other documents executed by the Company in connection herewith constitute the valid and binding obligation of the Company, enforceable in accordance with its or their terms, except as may be limited by the Enforceability Exceptions.

 

Section 5.04 Governmental Authorization. Neither the execution and delivery nor performance of this Agreement by any the Company Party requires any consent, approval, license or other action by or in respect of, or registration, declaration or filing with any Authority.

 

Section 5.05 Approval of Agreement. The Board of Directors of the Company has authorized the execution and delivery of this Agreement by the Company and has approved this Agreement and the transactions contemplated hereby.

 

Section 5.06 Broker’s, Finder’s or Similar Fees. There are no brokerage commissions, finder’s fees or similar fees or commissions payable by the Company in connection with the transactions contemplated hereby based on any agreement, arrangement or understanding with the Company or any action taken by the Company.

 

16

 

ARTICLE VI.Miscellaneous

 

Section 6.01 Notices.

 

  (a) Any notice or other communications required or permitted hereunder shall be in writing and shall be sufficiently given if personally delivered to it or sent by email, overnight courier or registered mail or certified mail, postage prepaid, addressed as follows:

 

If to Holder, to:

 

AJB Capital Investments LLC

4700 Sheridan Street, Suite J

Hollywood, FL 33021

Attn: Ari Blaine

Email: ari@ajbcapitalinvestments.com

 

If to the Company, to:

 

EZFill Holdings, Inc.

Attn: Yehuda Levy

2999 NE 191st Street

Aventura, Florida 33180

Email: yehuda@ezfl.com

 

With a copy, which shall not constitute notice, to:

 

Anthony, Linder & Cacomanolis, PLLC

Attn: Laura Anthony

1700 Palm Beach Lakes Blvd., Suite 820

West Palm Beach, FL 33401

Email: lanthony@alclaw.com

 

  (b) Any Party may change its address for notices hereunder upon notice to each other Party in the manner for giving notices hereunder.

 

  (c) Any notice hereunder shall be deemed to have been given (i) upon receipt, if personally delivered, (ii) on the day after dispatch, if sent by overnight courier, (iii) upon dispatch, if transmitted by email with return receipt requested and received and (iv) three (3) days after mailing, if sent by registered or certified mail.

 

Section 6.02 Governing Law; Jurisdiction.

 

  (a) This Agreement, and any and all claims, proceedings or causes of action relating to this Agreement or arising from this Agreement or the transactions contemplated herein, including, without limitation, tort claims, statutory claims and contract claims, shall be interpreted, construed, governed and enforced under and solely in accordance with the substantive and procedural Laws of the State of Delaware, in each case as in effect from time to time and as the same may be amended from time to time, and as applied to agreements performed wholly within the State of Delaware.

 

17

 

  (b) Subject to the provisions of Section 6.04, each of the Parties irrevocably consents and agrees that any legal or equitable action or proceedings arising under or in connection with this Agreement shall be brought exclusively in the state or federal courts of the United States with jurisdiction in Miami-Dade County, Florida (the “Selected Courts”). By execution and delivery of this Agreement, each Party hereby (a) submits to the exclusive jurisdiction of any Selected Court for the purpose of any Action arising out of or relating to this Agreement brought by any Party hereto and (b) irrevocably waives, and agrees not to assert by way of motion, defense or otherwise, in any such Action, any claim that it is not subject personally to the jurisdiction of the Selected Courts, that its property is exempt or immune from attachment or execution, that the Action is brought in an inconvenient forum, that the venue of the Action is improper, or that this Agreement or the transactions contemplated hereby may not be enforced in or by any Selected Court. Each Party agrees that a final judgment in any Action shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by Law. Each Party irrevocably consents to the service of the summons and complaint and any other process in any other Action relating to the transactions contemplated by this Agreement, on behalf of itself, or its property, by personal delivery of copies of such process to such Party at the applicable address set forth in Section 6.01, provided that nothing in this Section 6.02(b) shall affect the right of any Party to serve legal process in any other manner permitted by Law.

 

Section 6.03 Waiver of Jury Trial. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 6.03. EACH OF THE PARTIES ACKNOWLEDGE THAT EACH HAS BEEN REPRESENTED IN CONNECTION WITH THE SIGNING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED BY THE RESPECTIVE PARTY AND THAT SUCH PARTY HAS DISCUSSED THE LEGAL CONSEQUENCES AND IMPORT OF THIS WAIVER WITH LEGAL COUNSEL. EACH OF THE PARTIES FURTHER ACKNOWLEDGE THAT EACH HAS READ AND UNDERSTANDS THE MEANING OF THIS WAIVER AND GRANTS THIS WAIVER KNOWINGLY, VOLUNTARILY, WITHOUT DURESS AND ONLY AFTER CONSIDERATION OF THE CONSEQUENCES OF THIS WAIVER WITH LEGAL COUNSEL.

 

18

 

Section 6.04 Mediation.

 

  (a) The Parties shall promptly submit any dispute, claim, or controversy arising out of or relating to this Agreement (including with respect to the meaning, effect, validity, termination, interpretation, performance, or enforcement of this Agreement) or any alleged breach thereof (including any action in tort, contract, equity, or otherwise), to mediation before one mediator who is generally experienced in industries in which the Company and Holder operate, to be jointly selected by the Parties (the “Mediator”). If the Parties cannot agree upon the Mediator within ten (10) Business Days of the commencement of the efforts to so agree on a Mediator, each Party shall select one person as a mediator and the two mediators so selected shall select the sole Mediator who shall hear and resolve the dispute.

 

  (b) The Parties will endeavor to resolve the applicable dispute with the assistance of the Mediator for a period of thirty (30) days following the selection of the Mediator, and in the event that they are unable to do so, each Party shall be free to pursue other rights and remedies as may be available to them hereunder and under applicable Law.

 

  (c) In any mediation hereunder, this Agreement and any agreement contemplated hereby shall be governed by the laws of the State of Delaware applicable to a contract negotiated, signed, and wholly to be performed in the State of Delaware, which laws the Mediator shall apply. The mediation shall be held in Miami-Beach, Florida.

 

Section 6.05 Limitation on Damages. In no event will any Party be liable to any other Party under or in connection with this Agreement or in connection with the transactions contemplated herein for special, general, indirect or consequential damages, including damages for lost profits or lost opportunity, even if the Party sought to be held liable has been advised of the possibility of such damage.

 

Section 6.06 Attorneys’ Fees. In the event that any Party institutes any action or suit to enforce this Agreement or to secure relief from any default hereunder or breach hereof, the prevailing Party shall be reimbursed by the losing Party for all costs, including reasonable attorneys’ fees, incurred in connection therewith and in enforcing or collecting any judgment rendered therein.

 

Section 6.07 Third Party Beneficiaries. This contract is strictly between the Parties, and except as specifically provided herein, no other Person and no director, officer, shareholder, employee, agent, independent contractor or any other Person shall be deemed to be a third-party beneficiary of this Agreement.

 

Section 6.08 Expenses. Subject to Section 6.04 and Section 6.06 and other than as specifically set forth herein, whether or not the transactions contemplated herein are consummated, each of the Parties will bear their own respective expenses, including legal, accounting and professional fees, incurred in connection with the transactions as set forth herein.

 

Section 6.09 Entire Agreement. This Agreement, the other Transaction Documents and the other agreements and documents references herein represent the entire agreement between the Parties relating to the subject matter thereof and supersede all prior agreements, understandings and negotiations, written or oral, with respect to such subject matter.

 

Section 6.10 Amendment; Waiver; Remedies.

 

  (a) This Agreement may be amended, modified, superseded, terminated or cancelled, and any of the terms, covenants, representations, warranties or conditions hereof may be waived, only by a written instrument executed by both Parties.

 

19

 

  (b) Every right and remedy provided herein shall be cumulative with every other right and remedy, whether conferred herein, at law, or in equity, and may be enforced concurrently herewith, and no waiver by any Party of the performance of any obligation by the other shall be construed as a waiver of the same or any other default then, theretofore, or thereafter occurring or existing.

 

  (c) Neither any failure or delay in exercising any right or remedy hereunder or in requiring satisfaction of any condition herein nor any course of dealing shall constitute a waiver of or prevent any Party from enforcing any right or remedy or from requiring satisfaction of any condition. No notice to or demand on a Party waives or otherwise affects any obligation of that Party or impairs any right of the Party giving such notice or making such demand, including any right to take any action without notice or demand not otherwise required by this Agreement. No exercise of any right or remedy with respect to a breach of this Agreement shall preclude exercise of any other right or remedy, as appropriate to make the aggrieved Party whole with respect to such breach, or subsequent exercise of any right or remedy with respect to any other breach.

 

Section 6.11 No Presumption Against Drafter. This Agreement creates no fiduciary or other special relationship between the Parties, and no such relationship otherwise exists. No presumption in favor of or against any Party in the construction or interpretation of this Agreement or any provision hereof shall be made based upon which Person might have drafted this Agreement or such provision.

 

Section 6.12 Headings. The headings contained in this Agreement are intended solely for convenience and shall not affect the rights of the Parties.

 

Section 6.13 No Assignment or Delegation. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective successors and permitted assigns. No Party shall have any power or any right to assign or transfer, in whole or in part, this Agreement, or any of its rights or any of its obligations hereunder, including, without limitation, any right to pursue any claim for damages pursuant to this Agreement or the transactions contemplated herein, or to pursue any claim for any breach or default of this Agreement, or any right arising from the purported assignor’s due performance of its obligations hereunder, without the prior written consent of the other Party and any such purported assignment in contravention of the provisions herein shall be null and void and of no force or effect.

 

Section 6.14 Commercially Reasonable Efforts. Subject to the terms and conditions herein provided, each Party shall use their respective commercially reasonable efforts to perform or fulfill all conditions and obligations to be performed or fulfilled by it under this Agreement so that the transactions contemplated herein shall be consummated as soon as practicable, and to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under applicable Laws and regulations to consummate and make effective this Agreement and the transactions contemplated herein.

 

Section 6.15 Further Assurances. From and after the Closing Date, each Party shall execute and deliver such documents and take such action, as may reasonably be considered within the scope of such Party’s obligations hereunder, necessary to effectuate the transactions contemplated herein.

 

Section 6.16 Specific Performance. The Parties agree that irreparable damage would occur in the event that any of the provisions of this Agreement were not performed by them in accordance with the terms hereof or were otherwise breached and that each Party hereto shall be entitled to an injunction or injunctions, specific performance and other equitable relief to prevent breaches of the provisions hereof and to enforce specifically the terms and provisions hereof, without the proof of actual damages, in addition to any other remedy to which they are entitled at law or in equity. Each Party agrees to waive any requirement for the security or posting of any bond in connection with any such equitable remedy, and agrees that it will not oppose the granting of an injunction, specific performance or other equitable relief on the basis that (a) the other Party has an adequate remedy at law, or (b) an award of specific performance is not an appropriate remedy for any reason at law or equity.

 

Section 6.17 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which taken together shall be but a single instrument. Counterparts may be delivered via facsimile, electronic mail (including pdf or any electronic signature complying with the U.S. federal ESIGN Act of 2000, e.g., www.docusign.com) or other transmission method and any counterpart so delivered shall be deemed to have been duly and validly delivered and be valid and effective for all purposes.

 

[Signatures Appear on Following Pages]

 

20

 

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Closing Date.

 

  AJB Capital Investments LLC
     
  By: /s/ Ari Blaine
  Name: Ari Blaine
  Title: Partner
     
  EZFill Holdings, Inc.
     
  By: /s/ Yehuda Levy
  Name: Yehuda Levy
  Title: Interim Chief Executive Officer

 

21

 

Exhibit A

 

Notes

 

Issue Date   Current Outstanding Principal Amount     Total Amount After Default  
July 5, 2023   $ 1,500,000     $ 2,250,000  
April 19, 2023   $ 600,000     $ 900,000  
September 22, 2023   $ 320,000     $ 480,000  
    $ 2,420,000     $ 3,630,000  

 

1

 

EX-10.4 5 ex10-4.htm

 

Exhibit 10.4

 

CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS OF

 

SERIES A CONVERTIBLE PREFERRED STOCK

 

OF

 

EzFill Holdings, Inc.

 

a Delaware corporation

 

Pursuant to Section 151 of the General Corporation Law of the State of Delaware, EzFill Holdings, Inc. (the “Corporation”), a corporation organized and existing under the laws of the State of Delaware, does hereby file this Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock and DOES HEREBY CERTIFY that pursuant to the authority contained in the Corporation’s Certificate of Incorporation, and pursuant to Section 151 of the General Corporation Law of the State of Delaware and in accordance with the provisions of the resolution creating a series of the class of the Corporation’s authorized Preferred Stock designated as Series A Preferred Stock, as follows:

 

FIRST: The Certificate of Incorporation of the Corporation authorizes the issuance by the Corporation of 500,000,000 shares of common stock, $0.0001 par value per share (the “Common Stock”) and 50,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”), and, further, authorizes the Board of Directors of the Corporation, to provide for the issue of all or any of the shares of the Preferred Stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the Delaware General Corporation law.

 

SECOND: By unanimous written consent of the Board of Directors of the Corporation dated August 15, 2024, the Board of Directors designated 513,000 shares of the Preferred Stock as Series A Convertible Preferred Stock, par value $0.0001 per share, pursuant to a resolution providing that a series of preferred stock of the Corporation be and hereby is created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows:

 

SERIES A CONVERTIBLE PREFERRED STOCK

 

Section 1. Powers and Rights of Series A Convertible Preferred Stock. There is hereby designated a class of Preferred Stock of the Corporation as the Series A Convertible Preferred Stock, par value $0.0001 per share, of the Corporation (the “Series A Stock”). The number of shares, powers, terms, conditions, designations, preferences and privileges, relative, participating, optional and other special rights, and qualifications, limitations and restrictions, if any, of the Series A Stock shall be as set forth in this Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock (this “Certificate of Designations”). For purposes hereon, a holder of a share or shares of Series A Stock, with respect to their rights as related to the Series A Stock, shall be referred to as a “Series A Holder”.

 

 

 

Section 2. Number and Stated Value. The number of authorized shares of Series A Stock is 513,000 shares. Each share of Series A Stock shall have initially have a stated value of $10.00 (the “Stated Value”). The Stated Value shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Stock occurring following the date hereof.

 

Section 3. Dividends and Distributions.

 

  (a) Series A Dividends. The Series A Stock shall accrue dividends at the rate of 10% per annum of the Stated Value, which shall be accrue on a quarterly basis per calendar quarter following the issuance date of the applicable shares of Series A Stock (the “Series A Dividend”). The Series A Dividend shall be due and payable within five Business Days (as defined below) of the end of each such calendar quarter, and shall be payable to the Series A Holder thereof via the issuance to the Series A Holder of a number of shares of common stock, par value $0.001 per share of the Corporation (the “Common Stock”) equal to (i) the amount of the Series A Dividend, divided by (ii) the Conversion Price (as defined below) as in effect on the last Business Day of the preceding calendar quarter, in each case rounded to the nearest whole share of Common Stock (such shares of Common Stock, the “Dividend Shares”), provided that no Dividend Shares shall be issued, or shall be due to be issued prior to the receipt of the Stockholder Approval (as defined below) and prior to the Stockholder Approval Date (as defined below). In the event that any Series A Dividend is not paid when otherwise due due to the limitations as set forth in this Certificate of Designations, such Series A Dividend shall accrue and the applicable Dividend Shares shall be issued when permissible pursuant to the provisions of this Certificate of Designations. The Series A Dividend shall accrue commencing on the date of issuance with respect to the applicable Series A Stock and shall cease to accrue on conversion of the applicable shares of Series A Stock, and the Series A Dividend for any partial calendar quarter shall be appropriately pro-rated. For purposes herein, a “Business Day” shall mean any day on which commercial banks are generally open for business in the State of Delaware

 

  (b) Participation. The Series A Stock shall not participate in any other dividends or distributions made with respect to the Common Stock.

 

  (c) Other Distributions. Other than as specifically set forth herein, including, without limitation, in Section 3(a) or Section 3(b), the Series A Stock is not entitled to receive any dividends or distributions due solely to its status as Series A Stock, and the Series A Stock shall not participate in any dividends, distributions or payments to the holders of any other classes of stock of the Corporation other than the Common Stock as set forth herein.

 

2

 

Section 4. Conversion.

 

  (a) General Provisions. Subject to the terms and conditions herein, a Series A Holder shall have the right from time to time, and at any time following Stockholder Approval Date (defined below) to convert the Series A Stock, and the Series A Stock shall following the Stockholder Approval Date be convertible, into shares of Common Stock as set forth herein (such shares of Common Stock being referred to as the “Conversion Shares”) as set forth herein (each, a “Conversion”). For purposes herein, the “Stockholder Approval” shall mean (i) the approval of the stockholders of the Corporation for the issuance of the Conversion Shares and the Dividend Shares pursuant to this Certificate of Designations and (ii) any other approvals as required by the Corporation such that the Corporation shall be in compliance with its obligations under the rules or regulations of the Nasdaq Capital Market or any other United States national securities exchange on which the Common Stock is then listed for trading, in each case as determined by the Board of Directors of the Corporation (the “Board”), and the date of receipt of the Stockholder Approval is referred to as the “Stockholder Approval Date”.

 

  (b) Conversion Price.

 

  (i) For purposes herein, the “Conversion Price” means 80% of the Minimum Price, as defined in Rule 5635 of The Nasdaq Stock Market LLC Rules, as of the date of issuance of the shares of Series A Stock, subject to adjustment as set forth herein.

 

  (ii) Each share of Series A Stock converted in a Conversion shall be convertible into a number of Conversion Shares equal to (1) the Stated Value; divided by (2) the then-applicable Conversion Price, in each case rounded to the nearest whole share of Common Stock, calculated collectively with respect to all shares of Series A Stock being converted pursuant to any Notice of Conversion.

 

  (iii) A Series A Holder shall elect a Conversion by delivering to the Corporation a notice of conversion in the form as attached hereto as Exhibit A (the “Notice of Conversion”) at any time after the Stockholder Approval Date. Together with the Notice of Conversion, the Series A Holder shall surrender any certificate or certificates for the Series A Stock being converted, duly endorsed. The calculation of Conversion Shares to be issued as set forth in the Notice of Conversion shall be subject to confirmation and approval of the Corporation. The Corporation shall, within three Business Days (as defined below) of receipt of a Notice of Conversion, issue to the applicable Series A Holder the number of Conversion Shares to which such Series A Holder shall be entitled. A Conversion shall be deemed to have been effected on the date the Notice of Conversion is submitted to the Corporation if delivered by facsimile, e-mail or other reasonable means of communication dispatched prior to 6:00 p.m., Eastern time, and provided that if the Notice of Conversion is not delivered by such time then the conversion date shall be the next Business Day and the Notice of Conversion shall be deemed automatically updated accordingly.

 

3

 

  (c) Concerning the Conversion Shares. The Conversion Shares and any Dividend Shares may not be sold or transferred unless: (i) such Conversion Shares or Dividend Shares are sold pursuant to an effective registration statement under the Securities Act of 1933, as amended (together with the rules and regulations thereunder, the “Securities Act”) or (ii) the Corporation and its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such Conversion Shares or Dividend Shares are transferred to an “affiliate” (as defined in Rule 144) of the applicable Series A Holder who agrees to sell or otherwise transfer the shares only in accordance with this section and who is an accredited investor (as defined in Rule 501 under Regulation D promulgated pursuant to the Securities Act). Any restrictive legend on any certificates representing the Conversion Shares or any Dividend Shares shall be removed and the Corporation shall issue to the applicable Series A Holder a new certificate therefore free of any transfer legend if the Corporation or its transfer agent shall have received an opinion of counsel from applicable Series A Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Conversion Shares or Dividend Shares may be made without registration under the Securities Act, which opinion shall be accepted by the Corporation so that the sale or transfer is effected; or (ii) in the case of Conversion Shares or Dividend Shares such security is registered for sale by the applicable Series A Holder under an effective registration statement filed under the Securities Act; or otherwise may be sold pursuant to an exemption from registration.

 

  (d) Adjustment Due to Merger, Consolidation, Etc. If, at any time when the Series A Stock is issued and outstanding and prior to conversion of the applicable share(s) of Series A Stock, the Common Stock is converted into another class of securities of the Corporation or any successor entity to the Corporation, whether by way of merger, reorganization, re-incorporation or otherwise (the “Replacement Securities”), any reference herein to the Common Stock (whether standing alone or as part of another defined term herein) automatically upon the consummation of the applicable transaction shall be deemed a reference to such Replacement Securities. In the event that the Corporation completes a share exchange with another entity wherein all of the issued and outstanding shares of Common Stock are exchanged for equity interests in the other entity (the “Exchanged Securities”), any reference herein to the Common Stock (whether standing alone or as part of another defined term herein) automatically upon the consummation of the applicable transaction shall be deemed a reference to such Exchanged Securities. The adjustments in this Section 4(d) shall be undertaken each time any such event occurs.

 

  (e) Adjustment to Conversion Price Due to Splits. Without limiting any provision herewith, if the Corporation at any time on or after the date of the filing of this Certificate of Designations subdivides (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) the outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately increased. Without limiting any provision herewith, if the Corporation at any time on or after the date of the filing of this Certificate of Designations (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) combines the outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately decreased. By way of example and not limitation, in the event of a two-for-one forward split of the Common Stock, whereby each share of Common Stock is converted into two shares of Common Stock, the Conversion Price shall be decreased by 50% and, in the event of a one-for-two reverse split of the Common Stock, whereby each two shares of Common Stock are converted into one share of Common Stock, the Conversion Price shall be increased by 100%. Any adjustment pursuant to this Section 4(e) shall become effective immediately after the effective date of such subdivision or combination.

 

4

 

  (f) Additional Provisions.

 

  (i) No fractional shares or scrip representing fractional shares of Common Stock shall be issued upon the Conversion of the Series A Stock or with respect to any issuance of any Dividend Shares. As to any fraction of a share of Common Stock which the Series A Holder would otherwise be entitled to acquire upon such Conversion or upon payment of any Series A Dividend, the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board, or round up to the next whole share of Common Stock.

 

  (ii) The issuance of Conversion Shares or Dividend Shares shall be made without charge to any Series A Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares or Dividend Shares, provided that the Corporation 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 Conversion Shares or Dividend Shares in a name other than that of the Series A Holders of such shares of Series A Stock and the Corporation shall not be required to issue or deliver such Conversion Shares or Dividend Shares unless or until the Person (as defined below) or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. For purposes hereof, “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

 

  (iii) The Corporation covenants that during the period the Conversion right exists, the Corporation will reserve from its authorized and unissued Common Stock a number of shares of Common Stock equal to at least 100% of the number of Conversion Shares then issuable on conversion of all shares of Series A Stock, free from preemptive rights, to provide for the issuance of Conversion Shares upon the full conversion of the Series A Stock issued and outstanding.

 

  (g) Beneficial Ownership Limitation. Notwithstanding anything herein to the contrary, in no event shall any Series A Holder be entitled to elect to complete any Conversion, and such Series A Holder shall not have any right to be issued any Dividend Shares, to the extent that following such Conversion or issuance of Dividend Shares, the sum of (1) the number of shares of Common Stock beneficially owned by such Series A Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted/un-redeemed portion of the Series A Stock or the unexercised or unconverted portion of any other security of the Corporation subject to a limitation on conversion, issuance or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion or redemption of the portion of the Series A Stock with respect to which the determination of this proviso is being made, would result in beneficial ownership by such Series A Holder and its affiliates of more than 9.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion or redemption as set forth herein may be waived or increased by the applicable Series A Holder upon, at the election of the applicable Series A Holder, not less than 61 days’ prior notice to the Corporation, and the provisions of the conversion or redemption limitation shall continue to apply until such 61st day (or such later date, as determined by the applicable Series A Holder, as may be specified in such notice of waiver).

 

5

 

Section 5. Vote. Other than as set forth in Section 6, following the receipt of the Stockholder Approval and the occurrence of the Stockholder Approval Date, each share of Series A Stock shall, on any matter submitted to the holders of the Common Stock, or any class thereof, for a vote, vote together with the Common Stock, or any class thereof, as applicable, as one class on such matter for as long as the share of Series A Stock is issued and outstanding and each share of Series A Stock shall have a number of votes on such matter equal to the number of Conversion Shares which would be issuable with respect to such Series A Stock as of the date of such vote, and, for purposes of this Section 5. For the avoidance of doubt, other than as set forth in Section 6, the Series A Stock shall not have any voting power or any voting rights prior to receipt of the Stockholder Approval or prior to the occurrence of the Stockholder Approval Date.

 

Section 6. Amendment and Protective Provisions. The Corporation may not, and shall not, amend or repeal this Certificate of Designations without the prior written consent of Series A Holders holding a majority of the Series A Stock then issued and outstanding, in which vote each share of Series A Stock then issued and outstanding shall have one vote, voting separately as a single class, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of such Series A Holders, or in a written consent executed by Series A Holders holding a majority of the issued and outstanding shares of Series A Stock, and any such act or transaction entered into without such vote or consent shall be null and void ab initio, and of no force or effect.

 

Section 7. Miscellaneous.

 

  (a) Legend. Any certificates representing the Series A Stock shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such stock certificates):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.

 

6

 

  (b) Lost or Mutilated Series A Stock Certificate. If the certificate for the Series A Stock held by the Series A Holder thereof shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the share of Series A Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.

 

  (c) No Registration Rights. The Series A Holders shall not have the right to require the Corporation to register any shares of Series A Stock or any Conversion Shares for sale pursuant to the securities laws of the United States, except as may be separately agreed between a Series A Holder and the Corporation

 

  (d) Interpretation. If a Series A Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designations, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

 

  (e) Waiver. Any waiver by the Corporation or the Series A Holder of a breach of any provision of this Certificate of Designations 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 Certificate of Designations. The failure of the Corporation or the Series A Holder to insist upon strict adherence to any term of this Certificate of Designations 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 Certificate of Designations. Any waiver must be in writing.

 

Section 8. Severability. If any provision of this Certificate of Designations is invalid, illegal or unenforceable, the balance of this Certificate of Designations shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.

 

7

 

IN WITNESS WHEREOF, EzFill Holdings, Inc. has caused this Certificate of Designations to be signed by a duly authorized officer on this 15th day of August, 2024.

 

  EzFill Holdings, Inc.
     
    /s/ Yehuda Levy
  Name: Yehuda Levy
  Title: Chief Executive Officer

 

8

 

EXHIBIT A

EzFill Holdings, Inc.

 

Notice of Conversion

 

Reference is made to the Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock of EzFill Holdings, Inc. (the “Corporation”) dated as of August [___], 2024, designating the rights and preferences of the Series A Convertible Preferred Stock of the Corporation (the “Certificate of Designations”). In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to convert the number of shares of Series A Convertible Preferred Stock, $0.0001 par value per share (the “Preferred Shares”), of the Corporation indicated below into shares of common stock, $0.0001 par value per share (the “Common Stock”), of the Corporation, as of the date specified below.

 

  Date of Conversion: ______________________________
     
  Number of Preferred Shares to be converted: ______________________________
     
  Tax ID Number (If applicable): ______________________________
     
  Conversion Price: $______________
     
  Number of shares of Common Stock to be issued: ______________________________

 

Please issue the shares of Common Stock into which the Preferred Shares are being converted in the following name and to the following address:

 

  Issue to: __________________________________________
     
  Address: __________________________________________
    __________________________________________
    __________________________________________
     
  Telephone Number: __________________________________________
     
  Facsimile Number: __________________________________________
     
  Holder Name: __________________________________________
     
  By: __________________________________________
    (signature)
     
  Title: __________________________________________
     
  Dated: __________________________________________

 

Account Number (if electronic book entry transfer):__________________________

 

Transaction Code Number (if electronic book entry transfer): ___________________

 

9

 

EX-10.5 6 ex10-5.htm

 

Exhibit 10.5

 

CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS OF

 

SERIES B CONVERTIBLE PREFERRED STOCK

 

OF

 

EzFill Holdings, Inc.

a Delaware corporation

 

Pursuant to Section 151 of the General Corporation Law of the State of Delaware, EzFill Holdings, Inc. (the “Corporation”), a corporation organized and existing under the laws of the State of Delaware, does hereby file this Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock and DOES HEREBY CERTIFY that pursuant to the authority contained in the Corporation’s Certificate of Incorporation, and pursuant to Section 151 of the General Corporation Law of the State of Delaware and in accordance with the provisions of the resolution creating a series of the class of the Corporation’s authorized Preferred Stock designated as Series B Convertible Preferred Stock, as follows:

 

FIRST: The Certificate of Incorporation of the Corporation authorizes the issuance by the Corporation of 500,000,000 shares of common stock, $0.0001 par value per share (the “Common Stock”) and 50,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”), and, further, authorizes the Board of Directors of the Corporation, to provide for the issue of all or any of the shares of the Preferred Stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the Delaware General Corporation law.

 

SECOND: By unanimous written consent of the Board of Directors of the Corporation dated August 16, 2024, the Board of Directors designated 150,000 shares of the Preferred Stock as Series B Convertible Preferred Stock, par value $0.0001 per share, pursuant to a resolution providing that a series of preferred stock of the Corporation be and hereby is created, and that the designation and number of shares thereof and the voting and other powers, preferences and relative, participating, optional or other rights of the shares of such series and the qualifications, limitations and restrictions thereof are as follows:

 

SERIES B CONVERTIBLE PREFERRED STOCK

 

Section 1. Powers and Rights of Series B Convertible Preferred Stock. There is hereby designated a class of Preferred Stock of the Corporation as the Series B Convertible Preferred Stock, par value $0.0001 per share, of the Corporation (the “Series B Stock”). The number of shares, powers, terms, conditions, designations, preferences and privileges, relative, participating, optional and other special rights, and qualifications, limitations and restrictions, if any, of the Series B Stock shall be as set forth in this Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock (this “Certificate of Designations”). For purposes hereon, a holder of a share or shares of Series B Stock, with respect to their rights as related to the Series B Stock, shall be referred to as a “Series B Holder”.

 

 

 

Section 2. Number and Stated Value. The number of authorized shares of Series B Stock is 150,000 shares. Each share of Series B Stock shall have initially have a stated value of $10.00 (the “Stated Value”). The Stated Value shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series B Stock occurring following the date hereof.

 

Section 3. Dividends and Distributions.

 

  (a) Series B Dividends. The Series B Stock shall accrue dividends at the rate of 12% per annum of the Stated Value, which shall be accrue on a quarterly basis per calendar quarter following the issuance date of the applicable shares of Series B Stock (the “Series B Dividend”). The Series B Dividend shall be due and payable within five Business Days (as defined below) of the end of each such calendar quarter, and shall be payable to the Series B Holder thereof via the issuance to the Series B Holder of a number of shares of common stock, par value $0.001 per share of the Corporation (the “Common Stock”) equal to (i) the amount of the Series B Dividend, divided by (ii) the Conversion Price (as defined below) as in effect on the last Business Day of the preceding calendar quarter, in each case rounded to the nearest whole share of Common Stock (such shares of Common Stock, the “Dividend Shares”), provided that no Dividend Shares shall be issued, or shall be due to be issued prior to the receipt of the Stockholder Approval (as defined below) and prior to the Stockholder Approval Date (as defined below). In the event that any Series B Dividend is not paid when otherwise due due to the limitations as set forth in this Certificate of Designations, such Series B Dividend shall accrue and the applicable Dividend Shares shall be issued when permissible pursuant to the provisions of this Certificate of Designations. The Series B Dividend shall accrue commencing on the date of issuance with respect to the applicable Series B Stock and shall cease to accrue on conversion of the applicable shares of Series B Stock, and the Series B Dividend for any partial calendar quarter shall be appropriately pro-rated. For purposes herein, a “Business Day” shall mean any day on which commercial banks are generally open for business in the State of Delaware
     
  (b) Participation. The Series B Stock shall not participate in any other dividends or distributions made with respect to the Common Stock.
     
  (c) Other Distributions. Other than as specifically set forth herein, including, without limitation, in Section 3(a) or Section 3(b), the Series B Stock is not entitled to receive any dividends or distributions due solely to its status as Series B Stock, and the Series B Stock shall not participate in any dividends, distributions or payments to the holders of any other classes of stock of the Corporation other than the Common Stock as set forth herein.

 

2

 

Section 4. Conversion.

 

  (a) General Provisions. Subject to the terms and conditions herein, a Series B Holder shall have the right from time to time, and at any time following Stockholder Approval Date (defined below) to convert the Series B Stock, and the Series B Stock shall following the Stockholder Approval Date be convertible, into shares of Common Stock as set forth herein (such shares of Common Stock being referred to as the “Conversion Shares”) as set forth herein (each, a “Conversion”). For purposes herein, the “Stockholder Approval” shall mean (i) the approval of the stockholders of the Corporation for the issuance of the Conversion Shares and the Dividend Shares pursuant to this Certificate of Designations and (ii) any other approvals as required by the Corporation such that the Corporation shall be in compliance with its obligations under the rules or regulations of the Nasdaq Capital Market or any other United States national securities exchange on which the Common Stock is then listed for trading, in each case as determined by the Board of Directors of the Corporation (the “Board”), and the date of receipt of the Stockholder Approval is referred to as the “Stockholder Approval Date”.
     
  (b) Conversion Price.

 

  (i) For purposes herein, the “Conversion Price” means 70% of the Minimum Price, as defined in Rule 5635 of The Nasdaq Stock Market LLC Rules, as of the date of issuance of the shares of Series B Stock, subject to adjustment as set forth herein.
     
  (ii) Each share of Series B Stock converted in a Conversion shall be convertible into a number of Conversion Shares equal to (1) the Stated Value; divided by (2) the then-applicable Conversion Price, in each case rounded to the nearest whole share of Common Stock, calculated collectively with respect to all shares of Series B Stock being converted pursuant to any Notice of Conversion.
     
  (iii) A Series B Holder shall elect a Conversion by delivering to the Corporation a notice of conversion in the form as attached hereto as Exhibit A (the “Notice of Conversion”) at any time after the Stockholder Approval Date. Together with the Notice of Conversion, the Series B Holder shall surrender any certificate or certificates for the Series B Stock being converted, duly endorsed. The calculation of Conversion Shares to be issued as set forth in the Notice of Conversion shall be subject to confirmation and approval of the Corporation. The Corporation shall, within three Business Days (as defined below) of receipt of a Notice of Conversion, issue to the applicable Series B Holder the number of Conversion Shares to which such Series B Holder shall be entitled. A Conversion shall be deemed to have been effected on the date the Notice of Conversion is submitted to the Corporation if delivered by facsimile, e-mail or other reasonable means of communication dispatched prior to 6:00 p.m., Eastern time, and provided that if the Notice of Conversion is not delivered by such time then the conversion date shall be the next Business Day and the Notice of Conversion shall be deemed automatically updated accordingly.

 

3

 

  (c) Concerning the Conversion Shares. The Conversion Shares and any Dividend Shares may not be sold or transferred unless: (i) such Conversion Shares or Dividend Shares are sold pursuant to an effective registration statement under the Securities Act of 1933, as amended (together with the rules and regulations thereunder, the “Securities Act”) or (ii) the Corporation and its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such Conversion Shares or Dividend Shares are transferred to an “affiliate” (as defined in Rule 144) of the applicable Series B Holder who agrees to sell or otherwise transfer the shares only in accordance with this section and who is an accredited investor (as defined in Rule 501 under Regulation D promulgated pursuant to the Securities Act). Any restrictive legend on any certificates representing the Conversion Shares or any Dividend Shares shall be removed and the Corporation shall issue to the applicable Series B Holder a new certificate therefore free of any transfer legend if the Corporation or its transfer agent shall have received an opinion of counsel from applicable Series B Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Conversion Shares or Dividend Shares may be made without registration under the Securities Act, which opinion shall be accepted by the Corporation so that the sale or transfer is effected; or (ii) in the case of Conversion Shares or Dividend Shares such security is registered for sale by the applicable Series B Holder under an effective registration statement filed under the Securities Act; or otherwise may be sold pursuant to an exemption from registration.
     
  (d) Adjustment Due to Merger, Consolidation, Etc. If, at any time when the Series B Stock is issued and outstanding and prior to conversion of the applicable share(s) of Series B Stock, the Common Stock is converted into another class of securities of the Corporation or any successor entity to the Corporation, whether by way of merger, reorganization, re-incorporation or otherwise (the “Replacement Securities”), any reference herein to the Common Stock (whether standing alone or as part of another defined term herein) automatically upon the consummation of the applicable transaction shall be deemed a reference to such Replacement Securities. In the event that the Corporation completes a share exchange with another entity wherein all of the issued and outstanding shares of Common Stock are exchanged for equity interests in the other entity (the “Exchanged Securities”), any reference herein to the Common Stock (whether standing alone or as part of another defined term herein) automatically upon the consummation of the applicable transaction shall be deemed a reference to such Exchanged Securities. The adjustments in this Section 4(d) shall be undertaken each time any such event occurs.
     
  (e) Adjustment to Conversion Price Due to Splits. Without limiting any provision herewith, if the Corporation at any time on or after the date of the filing of this Certificate of Designations subdivides (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) the outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately increased. Without limiting any provision herewith, if the Corporation at any time on or after the date of the filing of this Certificate of Designations (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) combines the outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately decreased. By way of example and not limitation, in the event of a two-for-one forward split of the Common Stock, whereby each share of Common Stock is converted into two shares of Common Stock, the Conversion Price shall be decreased by 50% and, in the event of a one-for-two reverse split of the Common Stock, whereby each two shares of Common Stock are converted into one share of Common Stock, the Conversion Price shall be increased by 100%. Any adjustment pursuant to this Section 4(e) shall become effective immediately after the effective date of such subdivision or combination.

 

4

 

  (f) Additional Provisions.

 

  (i) No fractional shares or scrip representing fractional shares of Common Stock shall be issued upon the Conversion of the Series B Stock or with respect to any issuance of any Dividend Shares. As to any fraction of a share of Common Stock which the Series B Holder would otherwise be entitled to acquire upon such Conversion or upon payment of any Series B Dividend, the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board, or round up to the next whole share of Common Stock.
     
  (ii) The issuance of Conversion Shares or Dividend Shares shall be made without charge to any Series B Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares or Dividend Shares, provided that the Corporation 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 Conversion Shares or Dividend Shares in a name other than that of the Series B Holders of such shares of Series B Stock and the Corporation shall not be required to issue or deliver such Conversion Shares or Dividend Shares unless or until the Person (as defined below) or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. For purposes hereof, “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
     
  (iii) The Corporation covenants that during the period the Conversion right exists, the Corporation will reserve from its authorized and unissued Common Stock a number of shares of Common Stock equal to at least 100% of the number of Conversion Shares then issuable on conversion of all shares of Series B Stock, free from preemptive rights, to provide for the issuance of Conversion Shares upon the full conversion of the Series B Stock issued and outstanding.

 

Section 5. Vote. Other than as set forth in Section 6, following the receipt of the Stockholder Approval and the occurrence of the Stockholder Approval Date, each share of Series B Stock shall, on any matter submitted to the holders of the Common Stock, or any class thereof, for a vote, vote together with the Common Stock, or any class thereof, as applicable, as one class on such matter for as long as the share of Series B Stock is issued and outstanding and each share of Series B Stock shall have a number of votes on such matter equal to the number of Conversion Shares which would be issuable with respect to such Series B Stock as of the date of such vote, and, for purposes of this Section 5. For the avoidance of doubt, other than as set forth in Section 6, the Series B Stock shall not have any voting power or any voting rights prior to receipt of the Stockholder Approval or prior to the occurrence of the Stockholder Approval Date.

 

5

 

Section 6. Amendment and Protective Provisions. The Corporation may not, and shall not, amend or repeal this Certificate of Designations without the prior written consent of Series B Holders holding a majority of the Series B Stock then issued and outstanding, in which vote each share of Series B Stock then issued and outstanding shall have one vote, voting separately as a single class, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of such Series B Holders, or in a written consent executed by Series B Holders holding a majority of the issued and outstanding shares of Series B Stock, and any such act or transaction entered into without such vote or consent shall be null and void ab initio, and of no force or effect.

 

Section 7. Miscellaneous.

 

  (a) Legend. Any certificates representing the Series B Stock shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such stock certificates):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.

 

(b) Lost or Mutilated Series B Stock Certificate. If the certificate for the Series B Stock held by the Series B Holder thereof shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the share of Series B Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.

 

  (c) No Registration Rights. The Series B Holders shall not have the right to require the Corporation to register any shares of Series B Stock or any Conversion Shares for sale pursuant to the securities laws of the United States, except as may be separately agreed between a Series B Holder and the Corporation
     
  (d) Interpretation. If a Series B Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designations, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
     
  (e) Waiver. Any waiver by the Corporation or the Series B Holder of a breach of any provision of this Certificate of Designations 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 Certificate of Designations. The failure of the Corporation or the Series B Holder to insist upon strict adherence to any term of this Certificate of Designations 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 Certificate of Designations. Any waiver must be in writing.

 

Section 8. Severability. If any provision of this Certificate of Designations is invalid, illegal or unenforceable, the balance of this Certificate of Designations shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.

 

6

 

IN WITNESS WHEREOF, EzFill Holdings, Inc. has caused this Certificate of Designations to be signed by a duly authorized officer on this 16th day of August, 2024.

 

  EzFill Holdings, Inc.
     
    /s/ Yehuda Levy
  Name: Yehuda Levy
  Title: Chief Executive Officer

 

7

 

EXHIBIT A

EzFill Holdings, Inc.

 

Notice of Conversion

 

Reference is made to the Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock of EzFill Holdings, Inc. (the “Corporation”) dated as of August 16, 2024, designating the rights and preferences of the Series B Convertible Preferred Stock of the Corporation (the “Certificate of Designations”). In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to convert the number of shares of Series B Convertible Preferred Stock, $0.0001 par value per share (the “Preferred Shares”), of the Corporation indicated below into shares of common stock, $0.0001 par value per share (the “Common Stock”), of the Corporation, as of the date specified below.

 

  Date of Conversion: ______________________________
     
  Number of Preferred Shares to be converted: ______________________________
     
  Tax ID Number (If applicable): ______________________________
     
  Conversion Price: $______________
     
  Number of shares of Common Stock to be issued: ______________________________

 

8

 

Please issue the shares of Common Stock into which the Preferred Shares are being converted in the following name and to the following address:

 

  Issue to: __________________________________________
     
  Address: __________________________________________
    __________________________________________
    __________________________________________
     
  Telephone Number: __________________________________________
     
  Facsimile Number: __________________________________________
     
  Holder Name: __________________________________________
     
  By: __________________________________________
    (signature)
     
  Title: __________________________________________
     
  Dated: __________________________________________

 

Account Number (if electronic book entry transfer):__________________________

 

Transaction Code Number (if electronic book entry transfer): ___________________

 

9

 

EX-10.6 7 ex10-6.htm

 

Exhibit 10.6

 

CERTIFICATE OF AMENDMENT TO

CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS OF

SERIES A CONVERTIBLE PREFERRED STOCK

 

OF

 

EzFill Holdings, Inc.

a Delaware corporation

 

Pursuant to Section 151 of the General Corporation Law of the State of Delaware, the undersigned Chief Executive Officer of EzFill Holdings, Inc. (the “Corporation”), a corporation organized and existing under the laws of the State of Delaware, does hereby file this Certificate of Amendment to Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock (this “Certificate of Designations”) and DOES HEREBY CERTIFY that pursuant to the authority contained in the Corporation’s Certificate of Incorporation, as follows:

 

FIRST: The name of the Corporation is EzFill Holdings, Inc.

 

SECOND: The Corporation’s Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock was filed with the Secretary of State of the State of Delaware on August 16, 2024.

 

THIRD: There are no shares shares of the Series A Convertible Preferred Stock issued and outstanding as of the date hereof.

 

FOURTH: The Certificate of Incorporation of the Corporation authorizes the issuance by the Corporation of 500,000,000 shares of common stock, $0.0001 par value per share (the “Common Stock”) and 50,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”), and, further, authorizes the Board of Directors of the Corporation, to provide for the issue of all or any of the shares of the Preferred Stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the Delaware General Corporation law.

 

FIFTH: By unanimous written consent of the Board of Directors of the Corporation dated August 16, 2024, and acting in accordance with the provision of Sections 141 and 151 of the Delaware General Corporation Law, the Board of Directors of the Corporation adopted resolutions to amend and restate the Certificate of Designations of Preferences and Rights of Series A Convertible in its entirety to provide as follows:

 

 

 

SERIES A CONVERTIBLE PREFERRED STOCK

 

Section 1. Powers and Rights of Series A Convertible Preferred Stock. There is hereby designated a class of Preferred Stock of the Corporation as the Series A Convertible Preferred Stock, par value $0.0001 per share, of the Corporation (the “Series A Stock”). The number of shares, powers, terms, conditions, designations, preferences and privileges, relative, participating, optional and other special rights, and qualifications, limitations and restrictions, if any, of the Series A Stock shall be as set forth in this Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock (this “Certificate of Designations”). For purposes hereon, a holder of a share or shares of Series A Stock, with respect to their rights as related to the Series A Stock, shall be referred to as a “Series A Holder”.

 

Section 2. Number and Stated Value. The number of authorized shares of Series A Stock is 513,000 shares. Each share of Series A Stock shall have initially have a stated value of $10.00 (the “Stated Value”). The Stated Value shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series A Stock occurring following the date hereof.

 

Section 3. Dividends and Distributions.

 

  (a) Series A Dividends. The Series A Stock shall accrue dividends at the rate of 10% per annum of the Stated Value, which shall be accrue on a quarterly basis per calendar quarter following the issuance date of the applicable shares of Series A Stock (the “Series A Dividend”). The Series A Dividend shall be due and payable within five Business Days (as defined below) of the end of each such calendar quarter, and shall be payable to the Series A Holder thereof via the issuance to the Series A Holder of a number of shares of common stock, par value $0.001 per share of the Corporation (the “Common Stock”) equal to (i) the amount of the Series A Dividend, divided by (ii) the Conversion Price (as defined below) as in effect on the last Business Day of the preceding calendar quarter, in each case rounded to the nearest whole share of Common Stock (such shares of Common Stock, the “Dividend Shares”), provided that no Dividend Shares shall be issued, or shall be due to be issued prior to the receipt of the Stockholder Approval (as defined below) and prior to the Stockholder Approval Date (as defined below). In the event that any Series A Dividend is not paid when otherwise due due to the limitations as set forth in this Certificate of Designations, such Series A Dividend shall accrue and the applicable Dividend Shares shall be issued when permissible pursuant to the provisions of this Certificate of Designations. The Series A Dividend shall accrue commencing on the date of issuance with respect to the applicable Series A Stock and shall cease to accrue on conversion of the applicable shares of Series A Stock, and the Series A Dividend for any partial calendar quarter shall be appropriately pro-rated. For purposes herein, a “Business Day” shall mean any day on which commercial banks are generally open for business in the State of Delaware
     
  (b) Participation. The Series A Stock shall not participate in any other dividends or distributions made with respect to the Common Stock.
     
  (c) Other Distributions. Other than as specifically set forth herein, including, without limitation, in Section 3(a) or Section 3(b), the Series A Stock is not entitled to receive any dividends or distributions due solely to its status as Series A Stock, and the Series A Stock shall not participate in any dividends, distributions or payments to the holders of any other classes of stock of the Corporation other than the Common Stock as set forth herein.

 

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Section 4. Conversion.

 

  (a) General Provisions. Subject to the terms and conditions herein, a Series A Holder shall have the right from time to time, and at any time following Stockholder Approval Date (defined below) to convert the Series A Stock, and the Series A Stock shall following the Stockholder Approval Date be convertible, into shares of Common Stock as set forth herein (such shares of Common Stock being referred to as the “Conversion Shares”) as set forth herein (each, a “Conversion”). For purposes herein, the “Stockholder Approval” shall mean (i) the approval of the stockholders of the Corporation for the issuance of the Conversion Shares and the Dividend Shares pursuant to this Certificate of Designations and (ii) any other approvals as required by the Corporation such that the Corporation shall be in compliance with its obligations under the rules or regulations of the Nasdaq Capital Market or any other United States national securities exchange on which the Common Stock is then listed for trading, in each case as determined by the Board of Directors of the Corporation (the “Board”), and the date of receipt of the Stockholder Approval is referred to as the “Stockholder Approval Date”.
     
  (b) Conversion Price.

 

  (i) For purposes herein, the “Conversion Price” means 80% of the Minimum Price, as defined in Rule 5635 of The Nasdaq Stock Market LLC Rules, as of the date of issuance of the shares of Series A Stock, subject to adjustment as set forth herein.
     
  (ii) Each share of Series A Stock converted in a Conversion shall be convertible into a number of Conversion Shares equal to (1) the Stated Value; divided by (2) the then-applicable Conversion Price, in each case rounded to the nearest whole share of Common Stock, calculated collectively with respect to all shares of Series A Stock being converted pursuant to any Notice of Conversion.
     
  (iii) A Series A Holder shall elect a Conversion by delivering to the Corporation a notice of conversion in the form as attached hereto as Exhibit A (the “Notice of Conversion”) at any time after the Stockholder Approval Date. Together with the Notice of Conversion, the Series A Holder shall surrender any certificate or certificates for the Series A Stock being converted, duly endorsed. The calculation of Conversion Shares to be issued as set forth in the Notice of Conversion shall be subject to confirmation and approval of the Corporation. The Corporation shall, within three Business Days (as defined below) of receipt of a Notice of Conversion, issue to the applicable Series A Holder the number of Conversion Shares to which such Series A Holder shall be entitled. A Conversion shall be deemed to have been effected on the date the Notice of Conversion is submitted to the Corporation if delivered by facsimile, e-mail or other reasonable means of communication dispatched prior to 6:00 p.m., Eastern time, and provided that if the Notice of Conversion is not delivered by such time then the conversion date shall be the next Business Day and the Notice of Conversion shall be deemed automatically updated accordingly.

 

  3  

 

  (c) Concerning the Conversion Shares. The Conversion Shares and any Dividend Shares may not be sold or transferred unless: (i) such Conversion Shares or Dividend Shares are sold pursuant to an effective registration statement under the Securities Act of 1933, as amended (together with the rules and regulations thereunder, the “Securities Act”) or (ii) the Corporation and its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such Conversion Shares or Dividend Shares are transferred to an “affiliate” (as defined in Rule 144) of the applicable Series A Holder who agrees to sell or otherwise transfer the shares only in accordance with this section and who is an accredited investor (as defined in Rule 501 under Regulation D promulgated pursuant to the Securities Act). Any restrictive legend on any certificates representing the Conversion Shares or any Dividend Shares shall be removed and the Corporation shall issue to the applicable Series A Holder a new certificate therefore free of any transfer legend if the Corporation or its transfer agent shall have received an opinion of counsel from applicable Series A Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Conversion Shares or Dividend Shares may be made without registration under the Securities Act, which opinion shall be accepted by the Corporation so that the sale or transfer is effected; or (ii) in the case of Conversion Shares or Dividend Shares such security is registered for sale by the applicable Series A Holder under an effective registration statement filed under the Securities Act; or otherwise may be sold pursuant to an exemption from registration.
     
  (d) Adjustment Due to Merger, Consolidation, Etc. If, at any time when the Series A Stock is issued and outstanding and prior to conversion of the applicable share(s) of Series A Stock, the Common Stock is converted into another class of securities of the Corporation or any successor entity to the Corporation, whether by way of merger, reorganization, re-incorporation or otherwise (the “Replacement Securities”), any reference herein to the Common Stock (whether standing alone or as part of another defined term herein) automatically upon the consummation of the applicable transaction shall be deemed a reference to such Replacement Securities. In the event that the Corporation completes a share exchange with another entity wherein all of the issued and outstanding shares of Common Stock are exchanged for equity interests in the other entity (the “Exchanged Securities”), any reference herein to the Common Stock (whether standing alone or as part of another defined term herein) automatically upon the consummation of the applicable transaction shall be deemed a reference to such Exchanged Securities. The adjustments in this Section 4(d) shall be undertaken each time any such event occurs.
     
  (e) Adjustment to Conversion Price Due to Splits. Without limiting any provision herewith, if the Corporation at any time on or after the date of the filing of this Certificate of Designations subdivides (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) the outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately increased. Without limiting any provision herewith, if the Corporation at any time on or after the date of the filing of this Certificate of Designations (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) combines the outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately decreased. By way of example and not limitation, in the event of a two-for-one forward split of the Common Stock, whereby each share of Common Stock is converted into two shares of Common Stock, the Conversion Price shall be decreased by 50% and, in the event of a one-for-two reverse split of the Common Stock, whereby each two shares of Common Stock are converted into one share of Common Stock, the Conversion Price shall be increased by 100%. Any adjustment pursuant to this Section 4(e) shall become effective immediately after the effective date of such subdivision or combination.

 

  4  

 

  (f) Additional Provisions.

 

  (i) No fractional shares or scrip representing fractional shares of Common Stock shall be issued upon the Conversion of the Series A Stock or with respect to any issuance of any Dividend Shares. As to any fraction of a share of Common Stock which the Series A Holder would otherwise be entitled to acquire upon such Conversion or upon payment of any Series A Dividend, the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board, or round up to the next whole share of Common Stock.
     
  (ii) The issuance of Conversion Shares or Dividend Shares shall be made without charge to any Series A Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares or Dividend Shares, provided that the Corporation 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 Conversion Shares or Dividend Shares in a name other than that of the Series A Holders of such shares of Series A Stock and the Corporation shall not be required to issue or deliver such Conversion Shares or Dividend Shares unless or until the Person (as defined below) or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. For purposes hereof, “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
     
  (iii) The Corporation covenants that during the period the Conversion right exists, the Corporation will reserve from its authorized and unissued Common Stock a number of shares of Common Stock equal to at least 100% of the number of Conversion Shares then issuable on conversion of all shares of Series A Stock, free from preemptive rights, to provide for the issuance of Conversion Shares upon the full conversion of the Series A Stock issued and outstanding.

 

  5  

 

  (g) Beneficial Ownership Limitation. Notwithstanding anything herein to the contrary, in no event shall any Series A Holder be entitled to elect to complete any Conversion, and such Series A Holder shall not have any right to be issued any Dividend Shares, to the extent that following such Conversion or issuance of Dividend Shares, the sum of (1) the number of shares of Common Stock beneficially owned by such Series A Holder and its affiliates (other than shares of Common Stock which may be deemed beneficially owned through the ownership of the unconverted/un-redeemed portion of the Series A Stock or the unexercised or unconverted portion of any other security of the Corporation subject to a limitation on conversion, issuance or exercise analogous to the limitations contained herein) and (2) the number of shares of Common Stock issuable upon the conversion or redemption of the portion of the Series A Stock with respect to which the determination of this proviso is being made, would result in beneficial ownership by such Series A Holder and its affiliates of more than 9.99% of the outstanding shares of Common Stock. For purposes of the proviso to the immediately preceding sentence, beneficial ownership shall be determined in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Regulations 13D-G thereunder, except as otherwise provided in clause (1) of such proviso, provided, further, however, that the limitations on conversion or redemption as set forth herein may be waived or increased by the applicable Series A Holder upon, at the election of the applicable Series A Holder, not less than 61 days’ prior notice to the Corporation, and the provisions of the conversion or redemption limitation shall continue to apply until such 61st day (or such later date, as determined by the applicable Series A Holder, as may be specified in such notice of waiver).

 

Section 5. Vote. Other than as set forth in Section 6, following the receipt of the Stockholder Approval and the occurrence of the Stockholder Approval Date, each share of Series A Stock shall, on any matter submitted to the holders of the Common Stock, or any class thereof, for a vote, vote together with the Common Stock, or any class thereof, as applicable, as one class on such matter for as long as the share of Series A Stock is issued and outstanding and each share of Series A Stock shall have a number of votes on such matter equal to the number of Conversion Shares which would be issuable with respect to such Series A Stock as of the date of such vote, and, for purposes of this Section 5, provided, that, for purposes of this Section 5, the “Conversion Price” used for the determination of the number of Conversion Shares which would be issuable with respect to such Series A Stock shall be the Minimum Price, as defined in Rule 5635 of The Nasdaq Stock Market LLC Rules, as of the date of issuance of the shares of Series A Stock. For the avoidance of doubt, other than as set forth in Section 6, the Series A Stock shall not have any voting power or any voting rights prior to receipt of the Stockholder Approval or prior to the occurrence of the Stockholder Approval Date.

 

Section 6. Amendment and Protective Provisions. The Corporation may not, and shall not, amend or repeal this Certificate of Designations without the prior written consent of Series A Holders holding a majority of the Series A Stock then issued and outstanding, in which vote each share of Series A Stock then issued and outstanding shall have one vote, voting separately as a single class, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of such Series A Holders, or in a written consent executed by Series A Holders holding a majority of the issued and outstanding shares of Series A Stock, and any such act or transaction entered into without such vote or consent shall be null and void ab initio, and of no force or effect.

 

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Section 7. Miscellaneous.

 

(a) Legend. Any certificates representing the Series A Stock shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such stock certificates):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.

 

  (b) Lost or Mutilated Series A Stock Certificate. If the certificate for the Series A Stock held by the Series A Holder thereof shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the share of Series A Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.
     
  (c) No Registration Rights. The Series A Holders shall not have the right to require the Corporation to register any shares of Series A Stock or any Conversion Shares for sale pursuant to the securities laws of the United States, except as may be separately agreed between a Series A Holder and the Corporation
     
  (d) Interpretation. If a Series A Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designations, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
     
  (e) Waiver. Any waiver by the Corporation or the Series A Holder of a breach of any provision of this Certificate of Designations 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 Certificate of Designations. The failure of the Corporation or the Series A Holder to insist upon strict adherence to any term of this Certificate of Designations 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 Certificate of Designations. Any waiver must be in writing.

 

Section 8. Severability. If any provision of this Certificate of Designations is invalid, illegal or unenforceable, the balance of this Certificate of Designations shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.

 

  7  

 

IN WITNESS WHEREOF, EzFill Holdings, Inc. has caused this Certificate of Amendment to Certificate of Designations to Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock be signed by a duly authorized officer on this 16th day of August, 2024.

 

  EzFill Holdings, Inc.
     
  /s/ Yehuda Levy
  Name: Yehuda Levy
  Title: Chief Executive Officer

 

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EXHIBIT A

EzFill Holdings, Inc.

 

Notice of Conversion

 

Reference is made to the Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock of EzFill Holdings, Inc. (the “Corporation”) dated as of August 15, 2024, as amended by the Certificate of Amendment to Certificate of Designations to Certificate of Designations of Preferences and Rights of Series A Convertible Preferred Stock, dated as of August 16, 2024, designating the rights and preferences of the Series A Convertible Preferred Stock of the Corporation (the “Certificate of Designations”). In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to convert the number of shares of Series A Convertible Preferred Stock, $0.0001 par value per share (the “Preferred Shares”), of the Corporation indicated below into shares of common stock, $0.0001 par value per share (the “Common Stock”), of the Corporation, as of the date specified below.

 

Date of Conversion:   ___________________________________________
     
Number of Preferred Shares to be converted:   ___________________________________________
     
Tax ID Number (If applicable):   ___________________________________________
     
Conversion Price:   $_____________________
     
Number of shares of Common Stock to be issued:   ___________________________________________

 

Please issue the shares of Common Stock into which the Preferred Shares are being converted in the following name and to the following address:

 

Issue to:   _____________________________________________________________
     
Address:   _____________________________________________________________
     
    _____________________________________________________________
     
    _____________________________________________________________
     
Telephone Number:   _____________________________________________________________
     
Facsimile Number:   _____________________________________________________________
     
Holder Name:   _____________________________________________________________
     
By:   _____________________________________________________________
    (signature)
     
Title:   _____________________________________________________________
     
Dated:   _____________________________________________________________

 

Account Number (if electronic book entry transfer): _________________________________________________

 

Transaction Code Number (if electronic book entry transfer): __________________________________________

 

  9  

 

EX-10.7 8 ex10-7.htm

 

Exhibit 10.7

 

CERTIFICATE OF AMENDMENT TO

CERTIFICATE OF DESIGNATIONS OF PREFERENCES AND RIGHTS OF

SERIES B CONVERTIBLE PREFERRED STOCK

 

OF

 

EzFill Holdings, Inc.

a Delaware corporation

 

Pursuant to Section 151 of the General Corporation Law of the State of Delaware, the undersigned Chief Executive Officer of EzFill Holdings, Inc. (the “Corporation”), a corporation organized and existing under the laws of the State of Delaware, does hereby file this Certificate of Amendment to Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock (this “Certificate of Designations”) and DOES HEREBY CERTIFY that pursuant to the authority contained in the Corporation’s Certificate of Incorporation, as follows:

 

FIRST: The name of the Corporation is EzFill Holdings, Inc.

 

SECOND: The Corporation’s Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock was filed with the Secretary of State of the State of Delaware on August 16, 2024.

 

THIRD: There are no shares shares of the Series B Convertible Preferred Stock issued and outstanding as of the date hereof.

 

FOURTH: The Certificate of Incorporation of the Corporation authorizes the issuance by the Corporation of 500,000,000 shares of common stock, $0.0001 par value per share (the “Common Stock”) and 50,000,000 shares of preferred stock, par value $0.0001 per share (the “Preferred Stock”), and, further, authorizes the Board of Directors of the Corporation, to provide for the issue of all or any of the shares of the Preferred Stock in one or more series, and to fix the number of shares and to determine or alter for each such series, such voting powers, full or limited, or no voting powers, and such designation, preferences, and relative, participating, optional, or other rights and such qualifications, limitations, or restrictions thereof, as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issuance of such shares and as may be permitted by the Delaware General Corporation law.

 

 

 

FIFTH: By unanimous written consent of the Board of Directors of the Corporation dated August 16, 2024, and acting in accordance with the provision of Sections 141 and 151 of the Delaware General Corporation Law, the Board of Directors of the Corporation adopted resolutions to amend and restate the Certificate of Designations of Preferences and Rights of Series B Convertible in its entirety to provide as follows:

 

SERIES B CONVERTIBLE PREFERRED STOCK

 

Section 1. Powers and Rights of Series B Convertible Preferred Stock. There is hereby designated a class of Preferred Stock of the Corporation as the Series B Convertible Preferred Stock, par value $0.0001 per share, of the Corporation (the “Series B Stock”). The number of shares, powers, terms, conditions, designations, preferences and privileges, relative, participating, optional and other special rights, and qualifications, limitations and restrictions, if any, of the Series B Stock shall be as set forth in this Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock (this “Certificate of Designations”). For purposes hereon, a holder of a share or shares of Series B Stock, with respect to their rights as related to the Series B Stock, shall be referred to as a “Series B Holder”.

 

Section 2. Number and Stated Value. The number of authorized shares of Series B Stock is 150,000 shares. Each share of Series B Stock shall have initially have a stated value of $10.00 (the “Stated Value”). The Stated Value shall be subject to appropriate adjustment in the event of any stock dividend, stock split, combination or other similar recapitalization with respect to the Series B Stock occurring following the date hereof.

 

Section 3. Dividends and Distributions.

 

  (a) Series B Dividends. The Series B Stock shall accrue dividends at the rate of 12% per annum of the Stated Value, which shall be accrue on a quarterly basis per calendar quarter following the issuance date of the applicable shares of Series B Stock (the “Series B Dividend”). The Series B Dividend shall be due and payable within five Business Days (as defined below) of the end of each such calendar quarter, and shall be payable to the Series B Holder thereof via the issuance to the Series B Holder of a number of shares of common stock, par value $0.001 per share of the Corporation (the “Common Stock”) equal to (i) the amount of the Series B Dividend, divided by (ii) the Conversion Price (as defined below) as in effect on the last Business Day of the preceding calendar quarter, in each case rounded to the nearest whole share of Common Stock (such shares of Common Stock, the “Dividend Shares”), provided that no Dividend Shares shall be issued, or shall be due to be issued prior to the receipt of the Stockholder Approval (as defined below) and prior to the Stockholder Approval Date (as defined below). In the event that any Series B Dividend is not paid when otherwise due due to the limitations as set forth in this Certificate of Designations, such Series B Dividend shall accrue and the applicable Dividend Shares shall be issued when permissible pursuant to the provisions of this Certificate of Designations. The Series B Dividend shall accrue commencing on the date of issuance with respect to the applicable Series B Stock and shall cease to accrue on conversion of the applicable shares of Series B Stock, and the Series B Dividend for any partial calendar quarter shall be appropriately pro-rated. For purposes herein, a “Business Day” shall mean any day on which commercial banks are generally open for business in the State of Delaware
     
  (b) Participation. The Series B Stock shall not participate in any other dividends or distributions made with respect to the Common Stock.
     
  (c) Other Distributions. Other than as specifically set forth herein, including, without limitation, in Section 3(a) or Section 3(b), the Series B Stock is not entitled to receive any dividends or distributions due solely to its status as Series B Stock, and the Series B Stock shall not participate in any dividends, distributions or payments to the holders of any other classes of stock of the Corporation other than the Common Stock as set forth herein.

 

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Section 4. Conversion.

 

  (a) General Provisions. Subject to the terms and conditions herein, a Series B Holder shall have the right from time to time, and at any time following Stockholder Approval Date (defined below) to convert the Series B Stock, and the Series B Stock shall following the Stockholder Approval Date be convertible, into shares of Common Stock as set forth herein (such shares of Common Stock being referred to as the “Conversion Shares”) as set forth herein (each, a “Conversion”). For purposes herein, the “Stockholder Approval” shall mean (i) the approval of the stockholders of the Corporation for the issuance of the Conversion Shares and the Dividend Shares pursuant to this Certificate of Designations and (ii) any other approvals as required by the Corporation such that the Corporation shall be in compliance with its obligations under the rules or regulations of the Nasdaq Capital Market or any other United States national securities exchange on which the Common Stock is then listed for trading, in each case as determined by the Board of Directors of the Corporation (the “Board”), and the date of receipt of the Stockholder Approval is referred to as the “Stockholder Approval Date”.
     
  (b)

Conversion Price.

 

  (i) For purposes herein, the “Conversion Price” means 70% of the Minimum Price, as defined in Rule 5635 of The Nasdaq Stock Market LLC Rules, as of the date of issuance of the shares of Series B Stock, subject to adjustment as set forth herein.
     
  (ii) Each share of Series B Stock converted in a Conversion shall be convertible into a number of Conversion Shares equal to (1) the Stated Value; divided by (2) the then-applicable Conversion Price, in each case rounded to the nearest whole share of Common Stock, calculated collectively with respect to all shares of Series B Stock being converted pursuant to any Notice of Conversion.
     
  (iii) A Series B Holder shall elect a Conversion by delivering to the Corporation a notice of conversion in the form as attached hereto as Exhibit A (the “Notice of Conversion”) at any time after the Stockholder Approval Date. Together with the Notice of Conversion, the Series B Holder shall surrender any certificate or certificates for the Series B Stock being converted, duly endorsed. The calculation of Conversion Shares to be issued as set forth in the Notice of Conversion shall be subject to confirmation and approval of the Corporation. The Corporation shall, within three Business Days (as defined below) of receipt of a Notice of Conversion, issue to the applicable Series B Holder the number of Conversion Shares to which such Series B Holder shall be entitled. A Conversion shall be deemed to have been effected on the date the Notice of Conversion is submitted to the Corporation if delivered by facsimile, e-mail or other reasonable means of communication dispatched prior to 6:00 p.m., Eastern time, and provided that if the Notice of Conversion is not delivered by such time then the conversion date shall be the next Business Day and the Notice of Conversion shall be deemed automatically updated accordingly.

 

  3  

 

  (c) Concerning the Conversion Shares. The Conversion Shares and any Dividend Shares may not be sold or transferred unless: (i) such Conversion Shares or Dividend Shares are sold pursuant to an effective registration statement under the Securities Act of 1933, as amended (together with the rules and regulations thereunder, the “Securities Act”) or (ii) the Corporation and its transfer agent shall have been furnished with an opinion of counsel (which opinion shall be in form, substance and scope customary for opinions of counsel in comparable transactions) to the effect that the shares to be sold or transferred may be sold or transferred pursuant to an exemption from such registration (such as Rule 144 or a successor rule) (“Rule 144”); or (iii) such Conversion Shares or Dividend Shares are transferred to an “affiliate” (as defined in Rule 144) of the applicable Series B Holder who agrees to sell or otherwise transfer the shares only in accordance with this section and who is an accredited investor (as defined in Rule 501 under Regulation D promulgated pursuant to the Securities Act). Any restrictive legend on any certificates representing the Conversion Shares or any Dividend Shares shall be removed and the Corporation shall issue to the applicable Series B Holder a new certificate therefore free of any transfer legend if the Corporation or its transfer agent shall have received an opinion of counsel from applicable Series B Holder’s counsel, in form, substance and scope customary for opinions of counsel in comparable transactions, to the effect that (i) a public sale or transfer of such Conversion Shares or Dividend Shares may be made without registration under the Securities Act, which opinion shall be accepted by the Corporation so that the sale or transfer is effected; or (ii) in the case of Conversion Shares or Dividend Shares such security is registered for sale by the applicable Series B Holder under an effective registration statement filed under the Securities Act; or otherwise may be sold pursuant to an exemption from registration.
     
  (d) Adjustment Due to Merger, Consolidation, Etc. If, at any time when the Series B Stock is issued and outstanding and prior to conversion of the applicable share(s) of Series B Stock, the Common Stock is converted into another class of securities of the Corporation or any successor entity to the Corporation, whether by way of merger, reorganization, re-incorporation or otherwise (the “Replacement Securities”), any reference herein to the Common Stock (whether standing alone or as part of another defined term herein) automatically upon the consummation of the applicable transaction shall be deemed a reference to such Replacement Securities. In the event that the Corporation completes a share exchange with another entity wherein all of the issued and outstanding shares of Common Stock are exchanged for equity interests in the other entity (the “Exchanged Securities”), any reference herein to the Common Stock (whether standing alone or as part of another defined term herein) automatically upon the consummation of the applicable transaction shall be deemed a reference to such Exchanged Securities. The adjustments in this Section 4(d) shall be undertaken each time any such event occurs.
     
  (e) Adjustment to Conversion Price Due to Splits. Without limiting any provision herewith, if the Corporation at any time on or after the date of the filing of this Certificate of Designations subdivides (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) the outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision will be proportionately increased. Without limiting any provision herewith, if the Corporation at any time on or after the date of the filing of this Certificate of Designations (by any stock split, stock dividend, stock combination, recapitalization or other similar transaction) combines the outstanding shares of Common Stock into a smaller number of shares, the Conversion Price in effect immediately prior to such combination will be proportionately decreased. By way of example and not limitation, in the event of a two for one forward split of the Common Stock, whereby each share of Common Stock is converted into two shares of Common Stock, the Conversion Price shall be decreased by 50% and, in the event of a one-for-two reverse split of the Common Stock, whereby each two shares of Common Stock are converted into one share of Common Stock, the Conversion Price shall be increased by 100%. Any adjustment pursuant to this Section 4(e) shall become effective immediately after the effective date of such subdivision or combination.

 

  4  

 

  (f)

Additional Provisions.

 

  (i) No fractional shares or scrip representing fractional shares of Common Stock shall be issued upon the Conversion of the Series B Stock or with respect to any issuance of any Dividend Shares. As to any fraction of a share of Common Stock which the Series B Holder would otherwise be entitled to acquire upon such Conversion or upon payment of any Series B Dividend, the Corporation shall at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board, or round up to the next whole share of Common Stock.
     
  (ii) The issuance of Conversion Shares or Dividend Shares shall be made without charge to any Series B Holder for any documentary stamp or similar taxes that may be payable in respect of the issue or delivery of such Conversion Shares or Dividend Shares, provided that the Corporation 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 Conversion Shares or Dividend Shares in a name other than that of the Series B Holders of such shares of Series B Stock and the Corporation shall not be required to issue or deliver such Conversion Shares or Dividend Shares unless or until the Person (as defined below) or Persons requesting the issuance thereof shall have paid to the Corporation the amount of such tax or shall have established to the satisfaction of the Corporation that such tax has been paid. For purposes hereof, “Person” means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.
     
  (iii) The Corporation covenants that during the period the Conversion right exists, the Corporation will reserve from its authorized and unissued Common Stock a number of shares of Common Stock equal to at least 100% of the number of Conversion Shares then issuable on conversion of all shares of Series B Stock, free from preemptive rights, to provide for the issuance of Conversion Shares upon the full conversion of the Series B Stock issued and outstanding.

 

  5  

 

Section 5. Vote. Other than as set forth in Section 6, following the receipt of the Stockholder Approval and the occurrence of the Stockholder Approval Date, each share of Series B Stock shall, on any matter submitted to the holders of the Common Stock, or any class thereof, for a vote, vote together with the Common Stock, or any class thereof, as applicable, as one class on such matter for as long as the share of Series B Stock is issued and outstanding and each share of Series B Stock shall have a number of votes on such matter equal to the number of Conversion Shares which would be issuable with respect to such Series B Stock as of the date of such vote, and, for purposes of this Section 5, provided, that, for purposes of this Section 5, the “Conversion Price” used for the determination of the number of Conversion Shares which would be issuable with respect to such Series B Stock shall be the Minimum Price, as defined in Rule 5635 of The Nasdaq Stock Market LLC Rules, as of the date of issuance of the shares of Series B Stock. For the avoidance of doubt, other than as set forth in Section 6, the Series B Stock shall not have any voting power or any voting rights prior to receipt of the Stockholder Approval or prior to the occurrence of the Stockholder Approval Date.

 

Section 6. Amendment and Protective Provisions. The Corporation may not, and shall not, amend or repeal this Certificate of Designations without the prior written consent of Series B Holders holding a majority of the Series B Stock then issued and outstanding, in which vote each share of Series B Stock then issued and outstanding shall have one vote, voting separately as a single class, in person or by proxy, either in writing without a meeting or at an annual or a special meeting of such Series B Holders, or in a written consent executed by Series B Holders holding a majority of the issued and outstanding shares of Series B Stock, and any such act or transaction entered into without such vote or consent shall be null and void ab initio, and of no force or effect.

 

  6  

 

Section 7. Miscellaneous.

 

(a) Legend. Any certificates representing the Series B Stock shall bear a restrictive legend in substantially the following form (and a stop transfer order may be placed against transfer of such stock certificates):

 

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, NOR REGISTERED NOR QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE, TRANSFERRED, PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR UNLESS, IN THE OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY, SUCH QUALIFICATION AND REGISTRATION IS NOT REQUIRED. ANY TRANSFER OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE IS FURTHER SUBJECT TO OTHER RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.

 

  (b) Lost or Mutilated Series B Stock Certificate. If the certificate for the Series B Stock held by the Series B Holder thereof shall be mutilated, lost, stolen or destroyed, the Corporation shall execute and deliver, in exchange and substitution for and upon cancellation of a mutilated certificate, or in lieu of or in substitution for a lost, stolen or destroyed certificate, a new certificate for the share of Series B Stock so mutilated, lost, stolen or destroyed but only upon receipt of evidence of such loss, theft or destruction of such certificate, and of the ownership hereof, and indemnity, if requested, all reasonably satisfactory to the Corporation.
     
  (c) No Registration Rights. The Series B Holders shall not have the right to require the Corporation to register any shares of Series B Stock or any Conversion Shares for sale pursuant to the securities laws of the United States, except as may be separately agreed between a Series B Holder and the Corporation
     
  (d) Interpretation. If a Series B Holder shall commence an action or proceeding to enforce any provisions of this Certificate of Designations, then the prevailing party in such action or proceeding shall be reimbursed by the other party for its attorney’s fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.
     
  (e) Waiver. Any waiver by the Corporation or the Series B Holder of a breach of any provision of this Certificate of Designations 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 Certificate of Designations. The failure of the Corporation or the Series B Holder to insist upon strict adherence to any term of this Certificate of Designations 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 Certificate of Designations. Any waiver must be in writing.

 

Section 8. Severability. If any provision of this Certificate of Designations is invalid, illegal or unenforceable, the balance of this Certificate of Designations shall remain in effect, and if any provision is inapplicable to any person or circumstance, it shall nevertheless remain applicable to all other persons and circumstances. If it shall be found that any interest or other amount deemed interest due hereunder violates applicable laws governing usury, the applicable rate of interest due hereunder shall automatically be lowered to equal the maximum permitted rate of interest.

 

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IN WITNESS WHEREOF, EzFill Holdings, Inc. has caused this Certificate of Amendment to Certificate of Designations to Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock be signed by a duly authorized officer on this 16th day of August, 2024.

 

  EzFill Holdings, Inc.
     
  /s/ Yehuda Levy
  Name: Yehuda Levy
  Title: Chief Executive Officer

 

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EXHIBIT A

EzFill Holdings, Inc.

 

Notice of Conversion

 

Reference is made to the Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock of EzFill Holdings, Inc. (the “Corporation”) dated as of August 16, 2024, as amended by the Certificate of Amendment to Certificate of Designations to Certificate of Designations of Preferences and Rights of Series B Convertible Preferred Stock, dated as of August 16, 2024, designating the rights and preferences of the Series B Convertible Preferred Stock of the Corporation (the “Certificate of Designations”). In accordance with and pursuant to the Certificate of Designations, the undersigned hereby elects to convert the number of shares of Series B Convertible Preferred Stock, $0.0001 par value per share (the “Preferred Shares”), of the Corporation indicated below into shares of common stock, $0.0001 par value per share (the “Common Stock”), of the Corporation, as of the date specified below.

 

Date of Conversion:   ___________________________________________
     
Number of Preferred Shares to be converted:   ___________________________________________
     
Tax ID Number (If applicable):   ___________________________________________
     
Conversion Price:   $_____________________
     
Number of shares of Common Stock to be issued:   ___________________________________________

 

Please issue the shares of Common Stock into which the Preferred Shares are being converted in the following name and to the following address:

 

Issue to:   _____________________________________________________________
     
Address:   _____________________________________________________________
     
    _____________________________________________________________
     
    _____________________________________________________________
     
Telephone Number:   _____________________________________________________________
     
Facsimile Number:   _____________________________________________________________
     
Holder Name:   _____________________________________________________________
     
By:   _____________________________________________________________
    (signature)
     
Title:   _____________________________________________________________
     
Dated:   _____________________________________________________________

 

Account Number (if electronic book entry transfer): _________________________________________________

 

Transaction Code Number (if electronic book entry transfer): __________________________________________

 

  9  

 

EX-99.1 9 ex99-1.htm

 

Exhibit 99.1

 

 

EzFill Holdings, Inc. Announces Strategic Transactions and Debt Restructuring

 

Converts $13.5 Million of Debt to Equity

 

NextNRG Invests an Additional $1.4 Million

 

MIAMI, FL, August 19, 2024 – EzFill Holdings, Inc. (“EzFill” or the “Company”) (NASDAQ: EZFL), a pioneer and emerging leader in the mobile fueling industry, today announced a series of strategic transactions aimed at bolstering its financial position and regaining compliance with Nasdaq listing requirements, subject to Nasdaq confirmation. The transactions, which have closed, leave the Company essentially debt free except for a small outstanding loan, current payables, and certain vehicle financing; and augment the Company’s cash position. The debt conversions alone are expected to eliminate an estimated $1.2 million in annual interest expense.

 

EzFill has entered into a Stock Purchase Agreement with NextNRG Holding Corp (“Next”). Under this agreement, Next purchased 140,000 shares of EzFill’s Series B Convertible Preferred Stock for $10.00 per share, resulting in a total investment of $1,400,000.

 

Separately, EzFill has executed two significant debt-to-equity conversion agreements which converted approximately $13.5 million of debt into equity. In the first, certain promissory notes issued by EzFill to Next were exchanged and converted into 3,525,341 shares of common stock of EzFill at the Nasdaq minimum price of $2.78 per share. In addition, certain promissory notes issued by EzFill to AJB Capital Investments, were exchanged and converted into 363,000 shares of Series A Preferred stock in EzFill.

 

In conjunction with these agreements, EzFill has filed certificates of designation for 513,000 shares of Series A Preferred Stock and 150,000 shares of Series B Convertible Preferred Stock with the Delaware Department of State.

 

Commenting on these corporate actions, CEO Yehuda Levy stated, “We are pleased to have successfully secured the $1.4 million investment from Next and to have executed the two debt-to-equity conversions. We believe that the elimination of nearly all our debt and adding cash to our balance sheet will lay the groundwork for future growth and profitability. We also believe these steps will help EzFill regain compliance with Nasdaq’s minimum equity requirement and helps put the company in a position to close the acquisition of NextNRG. Additionally, with these actions and others, we look forward to continuing to execute our strategic business plan.”

 

 

 

NextNRG CEO and Executive Chairman, Michael D. Farkas, commented, “These transactions have created an ideal foundation for EzFill to proceed with the acquisition of NextNRG and enhance the Company’s growth. EzFill is at a key inflection point. With fewer and fewer gas stations, and consumers demanding on-time delivery more and more, EzFill is providing the right service at the right time. Their growth to date has been impressive, posting revenue growth of more than 100% in 2022, and more than 50% in 2023. We believe that EzFill’s public valuation is misaligned with its private competitors such as Booster and Yoshi which have been valued significantly higher than EzFill in private market transactions and we believe that ultimately bodes well for EzFill’s valuation.”

 

About EzFill

 

EzFill is a leader in the fast-growing mobile fuel industry, with the largest market share in its home state of Florida. Its mission is to disrupt the gas station fueling model by providing consumers and businesses with the convenience, safety, and touch-free benefits of on-demand fueling services brought directly to their locations. For commercial and specialty customers, at-site delivery during downtimes enables operators to begin their daily operations with fully fueled vehicles. For more information, visit www.ezfl.com

 

With the number of gas stations in the U.S. continuing to decline, corporate giants such as Shell, Exxon, GM, Bridgestone, Enterprise, and Mitsubishi have recognized the increasing shift in consumer behavior and are investing in the fast growing on-demand mobile fueling industry, in companies such as Booster and Yoshi. As the only company to provide fuel delivery in three verticals – consumer, commercial, and specialty including marine and construction equipment, we believe EzFill is well positioned to capitalize on the growing demand for convenient and cost-efficient mobile fueling options.

 

Forward Looking Statements

 

This press release contains “forward-looking statements” Forward-looking statements reflect our current view about future events. When used in this press release, the words “anticipate,” “believe,” “estimate,” “expect,” “future,” “intend,” “plan,” or the negative of these terms and similar expressions, as they relate to us or our management, identify forward-looking statements. Such statements, include, but are not limited to, statements contained in this press release relating to our business strategy, our future operating results and liquidity and capital resources outlook. Forward-looking statements are based on our current expectations and assumptions regarding our business, the economy and other future conditions. Because forward–looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict. Our actual results may differ materially from those contemplated by the forward-looking statements. They are neither statements of historical fact nor guarantees of assurance of future performance. We caution you therefore against relying on any of these forward-looking statements. Important factors that could cause actual results to differ materially from those in the forward-looking statements include, without limitation, our ability to raise capital to fund continuing operations; our ability to protect our intellectual property rights; the impact of any infringement actions or other litigation brought against us; competition from other providers and products; our ability to develop and commercialize products and services; changes in government regulation; our ability to complete capital raising transactions; and other factors relating to our industry, our operations and results of operations. Actual results may differ significantly from those anticipated, believed, estimated, expected, intended or planned. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We cannot guarantee future results, levels of activity, performance or achievements. The Company assumes no obligation to update any forward-looking statements in order to reflect any event or circumstance that may arise after the date of this release except as may be required under applicable securities law.

 

For further information, please contact:

 

Investor Contact

 

TraDigital IR

John McNamara

john@tradigitalir.com