EIGHTCO HOLDINGS INC. Item 1.01 Entry into a Material Definitive Agreement
On
In connection with the Private Placement, the Company will enter into or provide a Registration Rights Agreement (the "Registration Rights Agreement"), a Security and Pledge Agreement (the "Pledge Agreement"), and various ancillary certificates, disclosure schedules and exhibits in support thereof prior to the closing of the Securities Purchase Agreement.
Securities Purchase Agreement
The Securities Purchase Agreement provides for the purchase by the Investor and the sale by the Company of the Note and the Warrant. The Securities Purchase Agreement contains representations and warranties of the Company and the Investor that are typical for transactions of this type. The representations and warranties made by the Company in the Securities Purchase Agreement are qualified by reference to certain exceptions contained in disclosure schedules delivered to the Investor. Accordingly, the representations and warranties contained in the Securities Purchase Agreement should not be relied upon by third parties who have not reviewed those disclosure schedules and the documentation surrounding the transaction as a whole.
The Securities Purchase Agreement will close upon the satisfaction of certain conditions of the Investor and the Company that are typical for transactions of this type, as well certain other condition including the following:
? the Company shall have delivered to the Investor a lock up agreement (the
"Lock-Up Agreement"), executed by each of the parties identified in the
Securities Purchase Agreement;
? the Company shall have received stockholder approval of a resolution to
increase the amount of authorized shares of the Company, and have filed with
the Delaware Secretary of State a Certificate of Amendment to the Company's
Certificate of Incorporation causing the increase in the amount of authorized
shares of the Company; and
? the Company, the Investor and the certain creditors of the Company shall have
amended, in form and substance satisfactory to the Investor, that certain
Subordination Agreement, dated as of September 13, 2022 , by and among the
Company, the Investor and certain persons identified in that Subordination
Agreement (the "Subordination Agreement Amendment").
The Securities Purchase Agreement also obligates the Company to indemnify the Investor for certain losses resulting from (1) any misrepresentation or breach of any representation or warranty made by the Company or any subsidiary of the Company, (2) any breach of any obligation of the Company or, any subsidiary of the Company, of the Securities Purchase Agreement or any agreements and instruments entered into or connection with the Securities Purchase Agreement and (3) certain third party claims.
The Investor or the Company may terminate its obligations under the Securities
Purchase Agreement if the closing has not occurred by
Senior Secured Convertible Note
The Company shall issue the Note upon the closing. The entire outstanding
principal balance and any outstanding fees or interest shall be due and payable
in full on
The Maturity Date may be extended at the sole option of the Investor for so long as certain events of default is continuing or for so long as an event is continuing that if not cured and with the passage of time would result in an event of default.
The Note will be convertible at the option of the Investor into shares of Common
Stock at an initial conversion price of
The Note will contain certain limitations on conversion. It provides that no conversion may be made if, after giving effect to the conversion, the Investor would own in excess of 9.99% of the Company's outstanding shares of Common Stock. This percentage may be increased or decreased to a percentage not to exceed 9.99%, at the option of the Investor, except any increase will not be effective until 61-days' prior notice to the Company.
The conversion price of the Note will be subject to adjustments for stock splits, combinations or similar events. In addition, the conversion price of the Note will also subject to anti-dilution adjustment which, subject to specified exceptions, in the event that the Company issues or is deemed to have issued certain securities at a price lower than the then applicable conversion price, immediately reduces the conversion price of the Note to equal the price at which the Company issues or is deemed to have issued its Common Stock.
The Note will impose penalties on the Company for any failure to timely deliver any shares of its Common Stock issuable upon conversion.
The Note will contain events of default that are typical for transactions of this type, as well as the following events:
? the failure of any registration statement required by the Registration Rights
Agreement to be filed within five trading days after the date required by the
Registration Rights Agreement or the failure of any such registration
statement to become effective within five trading days after the date required
by the Registration Rights Agreement;
? the lapse or unavailability of any registration statement required by the
Registration Rights Agreement for more than 5 consecutive trading days or more
than an aggregate of 10 trading days in any 365-day period (other than certain
allowable grace periods);
? the suspension from trading or failure of the Common Stock to be listed for
trading on an eligible market for more than 2 consecutive trading days or more . . .
Item 2.03. Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant.
The information required to be disclosed under this Item 2.03 is set forth above under Item 1.01.
Item 3.02 Unregistered Sales of
The information required to be disclosed under this Item 3.02 is set forth above under Item 1.01.
The Note, the Warrant, and the warrants issued to the Placement Agent will be
issued to accredited investors in reliance upon the exemption from registration
provided by Section 4(a)(2) of the Securities Act and Rule 506 promulgated by
the
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
Exhibit No. Description
10.1* Securities Purchase Agreement.
10.2 Form of Warrant.
10.3 Form of Note.
10.4* Form of Registration Rights Agreement.
10.5 Form of Lock-Up Agreement.
10.6* Form of Pledge and Security Agreement.
10.7 Form of Guarantee Agreement
10.8 Form of Subordination Agreement Amendment.
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document).
* Certain schedules and exhibits to this agreement have been omitted pursuant to
Item 601(a)(5) of Regulation S-K. A copy of any omitted exhibit or schedule will
be furnished supplementally to the
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