TYDE Crptyde Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 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 event reported): March 15, 2024

 

EIGHTCO HOLDINGS INC.

(Exact name of registrant as specified in its charter)

 

Delaware		001-41033		87-2755739
(State or other jurisdiction of incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

101 Larry Holmes Dr., Suite 313, Easton, PA		18042
(Address of principal executive offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (888) 765-8933

 

909 New Brunswick Avenue Phillipsburg, New Jersey 08865

(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. below):

 

☐	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 CFR 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, $0.001 par value		OCTO		The Nasdaq Stock Market LLC

 

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.

 

Series D Financing

 

On March 15, 2024, Forever 8 Fund, LLC (“Forever 8”), a wholly owned subsidiary of Eightco Holdings Inc. (the “Company”), entered into the Series D Loan and Security Agreement (the “Series D Agreement”), with the lenders party thereto from to time (collectively, the “Lenders”) for an amount of up to $5,000,000.

 

In connection with the Series D Agreement, on March 15, 2024, Forever 8 also entered into a Subordination Agreement (the “Subordination Agreement”) with each of the Lenders, the several individuals, financial institutions or entities from time to time party thereto (collectively, the “Senior Lenders”) and the collateral agent for the Senior Lenders. Forever 8 additionally entered into an Intercreditor Agreement (the “Intercreditor Agreement”) with the lenders party thereto and the collateral agent for such lenders.

 

The foregoing descriptions of the Series D Agreement, the Subordination Agreement and the Intercreditor Agreement contained in this Item 1.01 do not purport to be a complete description of the terms and provisions therein and are qualified in their entirety by reference to the full text of the Series D Agreement, the Subordination Agreement and the Intercreditor Agreement, copies of which are attached hereto as Exhibits 10.1, 10.2 and 10.3, respectively, and incorporated herein by reference herein.

 

Seller Notes Amendment

 

As previously reported on the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on September 15, 2022, the Company previously entered into that certain Membership Interest Purchase Agreement dated February 14, 2022 (the “MIPA”), by and among the Company, Forever 8, the members of Forever 8 as set forth on the signature pages thereto (the “Sellers”), and Paul Vassilakos, solely in his capacity as representative of the Sellers (the “Sellers’ Representative”). In connection with the MIPA, the Sellers received convertible promissory notes in an aggregate principal amount of $27.5 million (the “Seller Notes”).

 

On March 17, 2024, the Company entered into an agreement to amend certain provisions of the Seller Notes (the “Seller Notes Amendment”). Pursuant to the Seller Notes Amendment, the Sellers agreed, among other things, to (i) forgive, without the payment of any additional consideration, accrued interest on the Seller Notes in an aggregate amount of approximately $3.0 million, (ii) convert approximately $1.1 million of accrued interest on the Seller Notes into 1.4 million shares of common stock of the Company, par value $0.001 per share (the “Common Stock”), and (iii) defer interest and any payments due on the Seller Notes until October 30, 2024.

 

The foregoing description of the Seller Notes Amendment contained in this Item 1.01 does not purport to be a complete description of the terms and provisions therein and is qualified in its entirety by reference to the full text of the Seller Note Amendment, a copy of which is attached hereto as Exhibit 10.4 and incorporated herein by reference herein.

 

Item 2.03.

Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of the Registrant.

 

The information under Item 1.01 of this Current Report on Form 8-K as related to the Series D Agreement and the Seller Notes Amendment is incorporated herein by reference.

 

 

Item 3.02

Unregistered Sales of Equity Securities.

 

The information under Item 1.01 of this Current Report on Form 8-K as related to the Seller Notes Amendment is incorporated herein by reference.

 

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

 

First Amendment to McFadden Severance Agreement

 

As previously reported on the Company’s Current Report on Form 8-K filed with the SEC on February 26, 2024, the Company and Brian McFadden entered into that certain General Release and Severance Agreement, dated February 26, 2024 (the “McFadden Severance Agreement”), in connection with Mr. McFadden’s resignation as Chief Executive Officer of the Company, effective as of December 31, 2023 (the “Separation Date”). Pursuant to the terms of the McFadden Severance Agreement, Mr. McFadden was to remain a director of the Company’s board (the “Board”) from the Separation Date through March 31, 2024, at which time Mr. McFadden would resign from the Board. On March 17, 2024, the Board approved the entry by the Company into the First Amendment to General Release and Severance Agreement (the “McFadden Amendment”) to amend Mr. McFadden’s end date of service on the Board to March 17, 2024.

 

The foregoing description of the McFadden Amendment contained in this Item 5.02 does not purport to be a complete description of the terms and provisions therein and is qualified in its entirety by reference to the full text of the McFadden Amendment, a copy of which is attached hereto as Exhibit 10.5 and incorporated herein by reference herein.

 

O’Donnell Severance Agreement

 

On March 17, 2024, Kevin O’Donnell resigned as Executive Chairman and Interim Chief Executive Officer of the Company, effective immediately. Mr. O’Donnell’s resignation was not the result of any disagreement regarding any matter relating to the Company’s operations, policies, or practices.

 

In connection with Mr. O’Donnell’s resignation from these positions, on March 17, 2024, the Company and Kevin O’Donnell entered into a General Release and Severance Agreement (the “O’Donnell Severance Agreement”), effective as of March 17, 2024 (the “O’Donnell Effective Date”). The O’Donnell Severance Agreement terminated of the amended and restated employment agreement, by and between the Company and Mr. O’Donnell, effective as of October 21, 2022 (the “O’Donnell Employment Agreement”). Pursuant to the O’Donnell Severance Agreement, as of the O’Donnell Effective Date, the O’Donnell Employment Agreement shall terminate forever, and no party shall have any further obligation or liability thereunder except as related to any obligations that survive employment termination, including but not limited to the obligations set forth under the Employee Confidential Disclosure, Invention Assignment, Non-Competition, Non-Solicitation and Non-Interference Agreement, attached to the O’Donnell Employment Agreement.

 

Pursuant to the O’Donnell Severance Agreement, the Company will provide Mr. O’Donnell with (i) back pay wages through the Separation Date in the amount of $138,000, less all lawful and authorized withholdings and deductions, to be paid as soon as practicable following the O’Donnell Effective Date and (ii) severance equal to 24 months of Mr. O’Donnell’s base salary, less all lawful and authorized withholdings and deductions, under the O’Donnell Employment Agreement. Pursuant to the O’Donnell Severance Agreement, the Company shall also provide Mr. O’Donnell with (i) reimbursement of the premiums associated with the continuation of Mr. O’Donnell’s health insurance for the period commencing on the Separation Date through and including September 27, 2024, pursuant to applicable law, (ii) reimbursement of expenses in accordance with the Company’s expense reimbursement policy, and (iii) the full vesting of any earned, outstanding and unvested shares of Common Stock subject to the Plan (as define below). The O’Donnell Severance Agreement also provides for a mutual waiver and release of any claims in connection with Mr. O’Donnell’s employment, separation and departure from the Company, and for certain customary covenants regarding confidentiality.

 

 

The foregoing description of the O’Donnell Severance Agreement contained in this Item 5.02 does not purport to be a complete description of the terms and provisions therein and is qualified in its entirety by reference to the full text of the O’Donnell Severance Agreement, a copy of which is attached hereto as Exhibit 10.6 and incorporated herein by reference herein.

 

Appointment of Executive Chairman and Chief Executive Officer

 

In connection with Mr. O’Donnell’s resignation from his positions as Executive Chairman and Interim Chief Executive Officer, on March 17, 2024, the Board appointed Paul Vassilakos as Executive Chairman and Chief Executive Officer of the Company, effective immediately, to serve until a successor is chosen and qualified, or until his earlier resignation or removal.

 

Mr. Vassilakos, age 47, has served as a director of Adamas One Corp. (NASDAQ) since October 2021. Mr. Vassilakos co-founded, and since July 2020 has been a partner of Forever 8 Fund, LLC, a subsidiary of Eightco Holdings Inc., a consumer products inventory capital provider. Since 2013 Mr. Vassilakos has served and held various Board, CEO and CFO positions on several publicly listed companies. In July 2007, Mr. Vassilakos founded Petrina Advisors, Inc., a privately held advisory firm formed to provide investment banking services for public and privately held companies, and has served as its President since its formation. Mr. Vassilakos also founded and has served as the President of Petrina Properties Ltd., a privately held real estate holding company, since December 2006. Earlier in his career, Mr. Vassilakos was engaged as a consultant to assist several SPACs with business combinations. Mr. Vassilakos started his career an Analyst at Salomon Smith Barney’s New York Investment Banking Division and later as an Associate within the Greek Coverage Group of Citigroup Inc.’s UK Investment Banking Division. While attending university, Mr. Vassilakos was a Registered Securities Representative at Paine Webber CSC - DJS Securities Ltd, during which time he provided securities brokerage services to private clients. Mr. Vassilakos holds a Bachelor of Science in finance from the Leonard N. Stern Undergraduate School of Business and was a licensed Registered Securities Representative (Series 7 and 63) from February 1996 to February 2002.

 

There is no family relationship between Mr. Vassilakos and any director or executive officer of the Company.

 

In connection with Mr. Vassilakos’ appointment as the Executive Chairman and Chief Executive Officer of the Company, on March 17, 2024, the Company and Mr. Vassilakos entered into an Employment Agreement (the “Vassilakos Employment Agreement”), which supersedes and replaces the Employment Agreement dated October 16, 2022, by and between Mr. Vassilakos, the Company and Forever 8. The Vassilakos Employment Agreement provides for an initial term of two year, unless earlier terminated in accordance therein, and automatic renewals for successive one (1) year terms unless either party provides timely written notice otherwise.

 

Pursuant to the terms of the Vassilakos Employment Agreement, Mr. Vassilakos will be entitled to a base salary payable at the annualized rate of $300,000 per year (the “Vassilakos Base Salary”). Mr. Vassilakos is eligible for an annual cash bonus opportunity equal to up to 75% of the Vassilakos Base Salary and awards of restricted stock units up to 100% of the Vassilakos Base Salary, subject to the terms and conditions of the Eightco Holdings Inc. (f/k/a Cryptyde, Inc.) 2022 Long-Term Incentive Plan (the “Plan”) and the Company’s form of restricted stock unit agreement (the “Vassilakos Bonus”), based on certain milestones to be determined in the sole and absolute discretion of the Board. Mr. Vassilakos may also be eligible for additional compensation in the sole and complete discretion of the Board or the Compensation Committee of the Board.

 

Mr. Vassilakos will be eligible to participate in all health, medical, dental and life insurance policies offered to employees of the Company, and the Company will pay all applicable premiums. The Company will reimburse Mr. Vassilakos for all reasonable out-of-pocket expenses incurred by him in the conduct of the Company’s business. The Vassilakos Employment Agreement provides Mr. Vassilakos with four (4) weeks of paid vacation and five (5) days of paid personal time. The Vassilakos Employment Agreement also provides Mr. Vassilakos with liability insurance coverage and shall reimburse certain financial planning expenses incurred by Mr. Vassilakos. Pursuant to the terms and provisions of the Vassilakos Employment Agreement, Mr. Vassilakos and the Company have entered into a standard indemnification agreement (the “Indemnification Agreement”).

 

 

In the event the Company terminates Mr. Vassilakos’ employment without cause (as defined in the Vassilakos Employment Agreement), Mr. Vassilakos will receive (i) the Accrued Obligations (as defined in the Vassilakos Employment Agreement) and (ii) severance in the amount of equal to the Vassilakos Base Salary for twelve (12) months, less applicable payroll deductions and tax withholdings. In addition, this termination will cause the vesting of all equity awards subject to the terms of the Plan held by Mr. Vassilakos and entitle Mr. Vassilakos to reimbursement of premiums associated with the continuation of health insurance benefits provided under the Vassilakos Employment Agreement during the remaining Term of Employment (as defined in the Vassilakos Employment Agreement).

 

The foregoing descriptions of the Vassilakos Employment Agreement and the Indemnification Agreement contained in this Item 5.02 do not purport to be complete descriptions of the terms and provisions therein and are qualified in their entirety by reference to the full text of the Vassilakos Employment Agreement and the Indemnification Agreement, copies of which are attached hereto as Exhibits 10.7 and 10.8, respectively, and incorporated herein by reference herein.

 

Item 7.01

Regulation FD Disclosure.

 

On March 18, 2024, the Company issued a press release, attached hereto as Exhibit 99.1, announcing the appointment of Mr. Vassilakos as Executive Chairman and Chief Executive Officer, as well as the Note Amendment. The Company undertakes no obligation to update, supplement or amend the materials attached hereto as Exhibit 99.1.

 

In accordance with General Instruction B.2 of Form 8-K, the information in this Item 7.01 of this Current Report on Form 8-K, including Exhibit 99.1, shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Exchange Act or the Securities Act of 1933, as amended, except as shall be expressly set forth by reference in such a filing. Furthermore, the furnishing of information under Item 7.01 of this Current Report on Form 8-K is not intended to constitute a determination by the Company that the information contained herein, including the exhibits hereto, is material or that the dissemination of such information is required by Regulation FD.

 

Item 8.01

Other Events.

 

On March 17, 2024, the Board approved grants of fully vested stock options in the aggregate amount of 451,560 shares of Common Stock to certain officers, employees and consultants of the Company, subject to the terms and conditions of the Plan and the form of the nonqualified stock option agreement. The Board also approved grants of fully vested stock options outside of the Plan in the aggregate amount of 648,110 shares of Common Stock to certain officers, employees and consultants of the Company, subject to the terms and conditions of the form of the nonqualified stock option agreement.

 

On March 17, 2024, the Board approved compensation for services to be rendered by its independent directors in 2024 in the following amounts: (i) $40,000 in cash, paid quarterly in four installments during 2024, (ii) 42,500 fully-vested restricted shares of Common Stock, subject to the terms and conditions of the Plan and the Company’s standard restricted stock award agreement and (iii) grants of fully vested stock options permitting each director to acquire up to 100,000 shares of Common Stock with (a) a date of grant as of March 17, 2024, (b) an exercise price equal to the greater of (x) the Fair Market Value (as defined in the Plan) on the date of grant and (y) $0.82 and (c) a five-year term, subject to the terms and conditions of the Plan and the form of the nonqualified stock option agreement.

 

The foregoing description of the form of the nonqualified stock option agreement contained in this Item 8.01 does not purport to be a complete description of the terms and provisions therein and is qualified in its entirety by reference to the full text of the form of the nonqualified stock option agreement, a copy of which is attached hereto as Exhibit 10.9 and incorporated herein by reference herein.

 

 

Item 9.01

Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit No.		Description
10.1		Series D Loan and Guaranty Agreement, dated as of March 15, 2024
10.2		Subordination Agreement, dated as of March 15, 2024
10.3		Intercreditor Agreement, dated as of March 15, 2024
10.4		Seller Notes Amendment, dated as of March 17, 2024
10.5		First Amendment to the General Release and Severance Agreement, dated as of March 17, 2024, by and between Eightco Holdings Inc. and Brian McFadden
10.6		General Release and Severance Agreement, dated as of March 17, 2024, by and between Eightco Holdings Inc. and Kevin O’Donnell
10.7		Employment Agreement, dated as of March 17, 2024, by and between Eightco Holdings Inc. and Paul Vassilakos
10.8		Indemnification Agreement, dated as of March 17, 2024, by and between Eightco Holdings Inc. and Paul Vassilakos
10.9		Form of Non-Qualified Stock Option Agreement
99.1		Press Release, dated March 18, 2024
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

SIGNATURES

 

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.

 

Date: March 18, 2024

 

	eightco holdings Inc.
	By:	/s/ Paul Vassilakos
	Name:	Paul Vassilakos
	Title:	Chief Executive Officer

 

 

 

Exhibit 10.1

 

LOAN AND SECURITY AGREEMENT

 

SERIES D

 

THIS LOAN AND SECURITY AGREEMENT (this “Agreement”) is made and dated as of March 15, 2024 and is entered into by and among (a) FOREVER 8 FUND, LLC, a Delaware limited liability company (the “Borrower”); (b) the several individuals, financial institutions or entities from time to time parties to this Agreement as lenders (collectively, referred to as “Lenders” and each a “Lender”); and (c) the administrative and collateral agent for the Lender (s). Otherwise, the term “Agent” shall refer to each Lender and the Lenders collectively if applicable (the “Agent”).

 

RECITALS

 

A. Borrower has requested Lenders make available to Borrower a Loan in the initial principal amount of Two Hundred and Fifty Thousand US Dollars ($250,000), with Aggregate Commitments from existing and Subsequent Lenders (as defined herein) not to exceed Five Million US Dollars ($5,000,000); and

 

B. Lenders are willing to make such Loan on the terms and conditions set forth in this Agreement.

 

AGREEMENT

 

NOW, THEREFORE, Borrower, Lenders and Agent, if any, agree as follows:

 

SECTION 1. DEFINITIONS AND RULES OF CONSTRUCTION

 

1.1 Unless otherwise defined herein, the following capitalized terms shall have the following meanings:

 

“Advance Date” means the funding date of any Subsequent Draw.

 

“Advance Request” means a request for a Subsequent Draw submitted by Borrower to Agent and Escrow Agent in substantially the form of Exhibit C.

 

“Affiliate” means, as to any Person, (a) any other Person that directly or indirectly controls, is controlled by, or is under common control with such Person or (b) any Person related by blood or marriage to any Person described in subsection (a) of this paragraph. As used in the definition of “Affiliate,” the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise.

 

“Agent” has the meaning given to it in the preamble to this Agreement. In the event that an Agent is not selected, then each Lender, individually and/or collectively with other Lenders, shall assume all tasks and obligations as the Agent under this Agreement. In said event, anywhere in this Agreement referring to the Agent shall mean the Lender or Lenders collectively.

 

“Aggregate Commitment” has the meaning set forth in Section 2.1(a), as may be amended pursuant to Section 2.6(c)(iii).

 

“Agreement” means this Loan and Security Agreement, as it may be amended, modified, supplemented or restated from time to time.

 

 

“Applicable Percentage” means, with respect to any Lender, the percentage (carried to the ninth decimal place) of the Aggregate Commitment represented by the amount of such Lender’s Commitment at such time.

 

“Assignee” has the meaning given to it in Section 11.13.

 

“Board” means Borrower’s board of directors or equivalent governing body.

 

“Business Day” means any day other than Saturday, Sunday and any other day on which banking institutions in the State of New York are closed for business.

 

“Claims” has the meaning given to it in Section 11.10. “Closing Date” means the date of this Agreement.

 

“Collateral” means the property described in Section 3.1.

 

“Commitment” means as to any Lender, the obligation of such Lender to (i) make the Initial Loan Advance to Borrower and (ii) deposit the Escrow Funds with the Escrow Agent in accordance with Section 2.1(a), in an aggregate principal amount not to exceed the amount set forth on the signature page of Lender. under the heading “Commitment.”

 

“Contingent Obligation” means, as applied to any Person, any direct or indirect liability, contingent or otherwise, of that Person with respect to (i) any Indebtedness, lease, dividend, letter of credit or other obligation of another, including any such obligation directly or indirectly guaranteed, endorsed, co-made or discounted or sold with recourse by that Person, or in respect of which that Person is otherwise directly or indirectly liable; (ii) any obligations with respect to undrawn letters of credit, corporate credit cards or merchant services issued for the account of that Person; and (iii) all obligations arising under any interest rate, currency or commodity swap agreement, interest rate cap agreement, interest rate collar agreement, or other agreement or arrangement designated to protect a Person against fluctuation in interest rates, currency exchange rates or commodity prices; provided, however, that the term “Contingent Obligation” shall not include endorsements for collection or deposit in the ordinary course of business. The amount of any Contingent Obligation shall be deemed to be an amount equal to the stated or determined amount of the primary obligation in respect of which such Contingent Obligation is made or, if not stated or determinable, the maximum reasonably anticipated liability in respect thereof as determined by such Person in good faith; provided, however, that such amount shall not in any event exceed the maximum amount of the obligations under the guarantee or other support arrangement.

 

“Default” means any circumstance, event or condition that, with the giving of any notice, the passage of time, or both, would be an Event of Default.

 

“Dollars” and the sign “$” mean lawful currency of the United States of America. “Escrow Account” means an account, if any, in accordance with the Escrow Agreement.

 

“Escrow Agent” means an escrow agent selected by Borrower, if any, and reasonably acceptable to the Agent.

 

“Escrow Agreement” means an escrow agreement if applicable, executed and delivered by Escrow Agent, Borrower and Agent.

 

 

“Escrow Funds” has the meaning set forth in Section 2.1(a).

 

“Event of Default” has the meaning given to it in Section 8.1.

 

“Facility Increase” has the meaning given to it in Section 2.6(a).

 

“Facility Increase Request” means a notice substantially in the form attached hereto as Exhibit F pursuant to which Borrower requests a Facility Increase.

 

“GAAP” means generally accepted accounting principles in the United States of America, as in effect from time to time.

 

“Increase Effective Date” has the meaning given to it in Section 2.6(b).

 

“Increasing Lender” has the meaning given to it in Section 2.6(a).

 

“Indebtedness” means, with respect to any Person, indebtedness of any kind, including (a) all indebtedness for borrowed money or the deferred purchase price of property or services (excluding trade credit entered into in the ordinary course of business), including reimbursement and other obligations with respect to surety bonds and letters of credit, (b) all obligations evidenced by notes, bonds, debentures or similar instruments, (c) all capital lease obligations, (d) any obligation arising with respect to any other transaction that is the functional equivalent of borrowing but which does not constitute a liability on the balance sheet of such Person (such as merchant cash advances), and (e) all Contingent Obligations.

 

“Indemnified Persons” has the meaning given to it in Section 6.2.

 

“Initial Loan Advance” has the meaning set forth in Section 2.1(a).

 

“Interest Rate” means twelve percent (12.00%) per annum. “Invited

 

“Lender” has the meaning given to it in the preamble to this Agreement.

 

“Liabilities” has the meaning given to it in Section 6.2.

 

“Lien” means any mortgage, deed of trust, pledge, hypothecation, assignment for security, security interest, encumbrance, levy, lien or charge of any kind, whether voluntarily incurred or arising by operation of law or otherwise, against any property, any conditional sale or other title retention agreement, and any lease in the nature of a security interest.

 

“Loan” means the extension by Lenders of the Initial Loan Advance to Borrower and the deposit of the Escrow Funds with the Escrow Agent hereunder.

 

“Loan Documents” means this Agreement, the Note, the Escrow Agreement, all UCC financing statements, the Subordination Agreements and any other documents executed in connection with the Secured Obligations or the transactions contemplated hereby, as the same may from time to time be amended, modified, supplemented or restated.

 

“Material Adverse Effect” means a material adverse effect upon: (i) the business, operations, properties, assets or financial condition of Borrower taken as a whole; or (ii) the ability of Borrower to perform or pay the Secured Obligations in accordance with the terms of the Loan Documents, or the ability of Agent or Lenders to enforce any of its rights or remedies with respect to the Secured Obligations; or (iii) the Collateral or Agent’s Liens on the Collateral or the priority of such Liens.

 

 

“Maturity Date” means on or before February 28, 2025 for the Initial Loan Advance and for all Subsequent Draws (“Maturity Date”). Neither Party shall have the unilateral right to extend the Maturity Date.

 

“Maximum Rate” shall have the meaning assigned to such term in Section 2.2.

 

“Note” means a promissory note or promissory notes to evidence Lenders’ Commitment substantially in the form of Exhibit A.

 

“Permitted Liens” means any and all of the following: (i) Liens in favor of Agent or Lenders; (ii) Liens for taxes, fees, assessments or other governmental charges or levies, either not delinquent or being contested in good faith by appropriate proceedings; provided, that Borrower maintains adequate reserves therefor in accordance with GAAP; (iii) Liens securing claims or demands of materialmen, artisans, mechanics, carriers, warehousemen, landlords and other like Persons arising in the ordinary course of Borrower’s business and imposed without action of such parties, and which claims or demands are either not delinquent or are being contested in good faith by appropriate proceedings; provided, that Borrower maintains adequate reserves therefor in accordance with GAAP; (iii) Liens on Equipment constituting purchase money Liens and Liens in connection with capital leases; (iv) security deposits in connection with real property leases in an aggregate amount not to exceed One Hundred Thousand Dollars ($100,000) at any time; (v) pledges or deposits made in the ordinary course of business in connection with workmen’s compensation, unemployment insurance, social security and other like laws; (vi) Liens arising from the filing of precautionary UCC financing statements with respect to any lease not prohibited by this Agreement; (vii) Liens pursuant to the Series A Loan Agreement, the Series B Loan Agreement and Series C Loan Agreement (each as defined in the Subordination Agreements), subject to the Subordination Agreements and (viii) other Liens securing other obligations not in excess of Five Hundred Thousand Dollars ($500,000) in the aggregate.

 

“Person” means any individual, sole proprietorship, partnership, joint venture, trust, unincorporated organization, association, corporation, limited liability company, institution, other entity or government.

 

“Release Notice” means an irrevocable authorization to release proceeds in the form of a Subsequent Draw, submitted by Agent to Escrow Agent in substantially the form of Exhibit E.

 

“Secured Obligations” means Borrower’s obligations under this Agreement and any Loan Document, including any obligation to pay any amount now owing or later arising.

 

“Securities Act” means the Securities Act of 1933, as amended.

 

“Subordination Agreements” means those certain subordination agreements executed and delivered by Lenders, Borrower, Agent and the Subordinated Lenders (as defined therein).

 

“Subsequent Draw” shall have the meaning assigned to such term in Section 2.1(b).

 

“Subsequent Lender” has the meaning given to it in Section 2.6(a).

 

 

“UCC” means the Uniform Commercial Code as the same is, from time to time, in effect in the State of New York; provided, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of, or remedies with respect to, Agent’s Lien on any Collateral is governed by the Uniform Commercial Code as the same is, from time to time, in effect in a jurisdiction other than the State of New York, then the term “UCC” shall mean the Uniform Commercial Code as in effect, from time to time, in such other jurisdiction solely for purposes of the provisions thereof relating to such attachment, perfection, priority or remedies and for purposes of definitions related to such provisions.

 

“Unused Commitment Amount” means, at any time of determination, the Aggregate Commitment, minus, the Initial Loan Advance, minus, the aggregate amount of all Subsequent Draws.

 

“Unused Commitment Fee” shall have the meaning assigned to such term in Section 2.1(d).

 

Unless otherwise specified, all references in this Agreement or any Annex hereto to a “Section,” “subsection,” “Exhibit,” or “Annex” shall refer to the corresponding Section, subsection, Exhibit or Annex in or to this Agreement. Unless otherwise specifically provided herein, any accounting term used in this Agreement or the other Loan Documents shall have the meaning customarily given such term in accordance with GAAP, and all financial computations hereunder shall be computed in accordance with GAAP, consistently applied. Unless otherwise defined herein or in the other Loan Documents, terms that are used herein or in the other Loan Documents and defined in the UCC shall have the meanings given to them in the UCC.

 

SECTION 2. THE LOAN

2.1 The Loan.

 

(a) The Initial Loan Advance. Subject to the terms and conditions of this Agreement and the Escrow Agreement, on the Closing Date, each Lender will severally (and not jointly) make available to Borrower, in an amount not to exceed its respective Commitment, a Loan Advance of Two Hundred and Fifty Thousand Dollars ($250,000) (as such amount may be increased pursuant to Section 2.6, the “Aggregate Commitment”) in the aggregate, of which (x) $250,000 will be deposited into an account of the Borrower in accordance with its written instructions (the “Initial Loan Advance”) and (y) the remaining balance of the Aggregate Commitment after deducting the Initial Loan Advance shall be deposited into the Escrow Account (the “Escrow Funds”).

 

(b) Subsequent Draws. Subject to the terms and conditions of this Agreement and the Escrow Agreement, if any, Borrower may, at any time, request an advance for all or a portion of the Escrow Funds from Escrow Agent (each such advance, a “Subsequent Draw”). Proceeds of each Subsequent Draw shall be deposited directly to Borrower in accordance with the terms of the Escrow Agreement.

 

(c) Advance Request. To obtain the proceeds of a Subsequent Draw, Borrower shall complete, sign and deliver to Agent and Escrow Agent an Advance Request, for all or a portion of the Escrow Funds, at least five (5) Business Day before the requested Advance Date.

 

(d) Unused Commitment Fee. Separate from, and not in addition to, the interest provided for in Section (e)2.1(e), Borrower shall pay to Agent, for the account of each Lender, according to its Applicable Percentage, an unused commitment fee on the actual daily amount of the Unused Commitment Amount during the immediately preceding calendar quarter at the rate of five percent (5.00%) per annum (the “Unused Commitment Fee”). For the avoidance of doubt, once all or any portion of the Aggregate Commitment is advanced to Borrower as a Subsequent Draw, no Unused Commitment Fee shall be payable on the amount of such Subsequent Draw under any circumstances. Any interest generated on the funds held in the Escrow Account shall first be applied to the Unused Commitment Fee and any remaining balance shall be returned to the Borrower.

 

 

(e) Interest. The principal balance of the Initial Loan Advance and each Subsequent Draw, shall bear interest thereon from the Closing Date and applicable Advance Date, respectively, at the Interest Rate based on a year consisting of three hundred sixty (360) days, with interest computed daily based on the actual number of days elapsed. No interest shall be payable by the Borrower or otherwise accrue on the funds held in the Escrow Account.

 

(f) Payment.

 

(i) The Unused Commitment Fee shall be payable in arrears on the fifth (5th) Business Day of each calendar quarter for the preceding calendar quarter and on the Maturity Date for the period from the end of the preceding calendar quarter until the Maturity Date.

 

(ii) Interest shall be payable in arrears on the fifth (5th) Business Day of each calendar month for the preceding calendar month and on the Maturity Date for the period from the end of the preceding calendar month until the Maturity Date.

 

(iii) The entire principal balance of all Secured Obligations (including all accrued but unpaid interest hereunder) shall be due and payable on Maturity Date.

 

(iv) Borrower shall make all payments under this Agreement without setoff, recoupment or deduction and regardless of any counterclaim or defense.

 

(v) Borrower will make all payments of principal and interest in Dollars by wire transfer of immediately available funds to one or more accounts identified in writing by Agent.

 

(vi) Once repaid, the Secured Obligations or any portion thereof may not be re-borrowed.

 

(g) Pro Rata Treatment. Each Lender shall be entitled to receive its Applicable Percentage (or other applicable share as provided herein) of each payment received by Agent hereunder for the account of Lenders on the Secured Obligations. Each payment received by Agent hereunder for the account of a Lender shall be promptly distributed by Agent to such Lender. If any payment to be made by Borrower shall come due on a day other than a Business Day, payment shall be made on the next following Business Day, and such extension of time shall be reflected in computing interest or fees, as the case may be.

 

2.2 Maximum Interest. Notwithstanding any provision in this Agreement or any other Loan Document, it is the parties’ intent not to contract for, charge or receive interest at a rate that is greater than the maximum rate permissible by law that a court of competent jurisdiction shall deem applicable hereto (the “Maximum Rate”). If a court of competent jurisdiction shall finally determine that Borrower has actually paid to Lenders an amount of interest in excess of the amount that would have been payable if all of the Secured Obligations had at all times borne interest at the Maximum Rate, then such excess interest actually paid by Borrower shall be applied as follows: first, to the payment of the Secured Obligations consisting of the outstanding principal amount of the Initial Loan Advance; second, after all principal is repaid, to the payment of Lenders’ accrued interest, costs, expenses, professional fees and any other Secured Obligations; and third, after all Secured Obligations are repaid, the excess (if any) shall be refunded to Borrower.

 

 

2.3 Default Interest. In the event any payment is not paid on or within five (5) Business Days of the scheduled payment date, an amount equal to two percent (2.00%) of the past due amount shall be payable on demand, in addition to interest accruing pursuant to Section 2.1(e). In addition, upon the occurrence and during the continuation of an Event of Default hereunder, the Initial Loan Advance and all Subsequent Draws, including principal, interest, compounded interest, and professional fees thereupon, shall upon the election of the Agent or the Lenders bear interest at the Interest Rate, plus five (5) percentage points. In the event any interest is not paid when due hereunder, delinquent interest shall be added to principal and shall bear interest on interest, compounded at the rate set forth in Section 2.1(e) or this Section 2.3, as applicable.

 

2.4 Prepayment. Borrower may not prepay all or a portion of the Secured Obligations without the prior written consent of the Lender.

 

2.5 Notes. On the Closing Date, Borrower shall execute and deliver to each Lender a Note to evidence the Loan.

 

2.6 Increases to the Aggregate Commitment.

 

(a) Requests for Facility Increases. Subject to compliance with the terms of this Section 2.6, Borrower may request permanent increases to the Aggregate Commitment (each such increase, a “Facility Increase”), by: (x) admitting additional Lenders in accordance with Section 0 (each, a “Subsequent Lender”); or (y) obtaining an increase in the Commitment of any Lender (each, an “Increasing Lender”), or both, in each case as invited to participate in such increase at Borrower’s option (each such Subsequent Lender or Increasing Lender, an “Invited Lender”).

 

(b) Effective Date and Term. Agent and Borrower shall determine the effective date of any Facility Increase (the “Increase Effective Date”), which shall be a Business Day.

 

(c) Conditions to Effectiveness of Facility Increase. The following are conditions precedent to the effectiveness of any Facility Increase:

 

(i) Borrower shall have delivered to Lenders a Facility Increase Request which shall specify the Invited Lenders;

 

(ii) Borrower shall have, as applicable, executed: (A) if requested, a new Note payable to the order of each Subsequent Lender; or (B) a replacement Note payable to the order of each Increasing Lender;

 

(iii) After giving effect to the Facility Increase, the Aggregate Commitment will not exceed $5,000,000;

 

(iv) No Event of Default or Default shall have occurred and be continuing as of the Increase Effective Date, or immediately after giving effect to the related Facility Increase;

 

(v) As of the Increase Effective Date, the representations and warranties contained in SECTION 5 and in each other Loan Document are true and correct in all material respects, with the same force and effect as if made on and as of such date; except to the extent that such representations and warranties specifically refer to any earlier date, in which case they were true and correct in all material respects as of such earlier date; and

 

(vi) On the applicable Increase Effective Date (x) one or more Increasing Lenders has provided an increased Commitment, or (y) one or more Subsequent Lenders shall have joined this Agreement in accordance with Section 0, to provide Commitments in the aggregate sufficient to support the requested Facility Increase.

 

 

(d) Specific Terms. Any Facility Increase will be on the same terms as contained herein and in the other Loan Documents.

 

(e) Documentation. Upon the effectiveness of any such increase in the Aggregate Commitment, the aggregate Loan Commitment amount will be automatically updated to reflect any corresponding increase in any Lender’s Commitment or the Commitment of any Subsequent Lender.

 

(f) Lender Acceptance; Allocation.

 

(i) Non-Pro Rata. For the avoidance of doubt, Borrower may request that one or more Lenders provide a Facility Increase on a non-pro rata basis, provided that (x) no Lender shall be required to increase its Commitment, (y) Subsequent Lenders may join this Agreement to provide Commitments as set forth above and (c) no consent shall be required in connection with any Facility Increase other than that of Borrower and the Lenders providing the Commitments therefor.

 

(ii) Allocation of Secured Obligations. On any Increase Effective Date with respect to any Facility Increase with respect to which either a Subsequent Lender has provided a Commitment or an Increasing Lender has increased its Commitment, Borrower and Agent will reallocate the outstanding Loans hereunder such that, after giving effect thereto, the ratio of each Lender’s (including each Subsequent Lender’s and Increasing Lender’s) share of the Secured Obligation over the Aggregate Commitment will be equivalent to its new Commitment divided by the aggregate Commitment of all Lenders holding a Commitment. For the avoidance of doubt, such reallocation may require the reallocation of Loans from an existing Lender to a Subsequent Lender or Increasing Lender.

 

2.7 Commitment Shares. The Borrower shall issue shares of Eightco Holdings, LLC’s common stock (Nasdaq: OCTO) to each Lender and Subsequent Lender as consideration for the Commitment equal the quotient of (x) percent (10%) of the amount of such Lender’s or Subsequent Lender’s Commitment and (y) the on a share price of [$0.82] for the common stock (the “Commitment Shares”).

 

SECTION 3. SECURITY INTEREST

 

3.1 Collateral. As security for the prompt and complete payment when due (whether on the payment dates or otherwise) of all the Secured Obligations, Borrower grants to Agent a security interest in all of Borrower’s right, title, and interest in and to all Inventory or Equipment and machinery, in each case, purchased (or refinanced) with the proceeds of the Initial Loan Advance and any Subsequent Draw, and, to the extent not otherwise included, all Proceeds of each of the foregoing and all products, additions, increases and accessions to, substitutions and replacements for, and rents, profits and products of each of the foregoing (collectively, the “Collateral”).

 

SECTION 4. CONDITIONS PRECEDENT TO LOAN

 

The obligation of each Lender to make the Initial Loan Advance hereunder is subject to the satisfaction by Borrower of the following conditions:

 

4.1 Borrower Deliveries. On or prior to the Closing Date, Borrower shall have delivered to Lenders the following:

 

(a) executed copies of the Loan Documents (provided that in the case of the Note, original copies thereof shall be delivered to Lenders promptly after the Closing Date), and all other documents and instruments reasonably required by Agent to effectuate the transactions contemplated hereby or to create and perfect the Liens of Agent with respect to all Collateral, in all cases in form and substance reasonably acceptable to Agent;

 

 

(b) certified copy of resolutions of the Board, evidencing approval of (i) the Initial Loan Advances and the other transactions evidenced by the Loan Documents; and (ii) the security interest granted to the Agent under this Agreement;

 

(c) certified copies of the organizational documents of Borrower;

 

(d) invoices or bills of sale of the Equipment, Inventory and machinery being acquired with the proceeds of the Initial Loan Advance or that was already acquired and is being refinanced with the proceeds of the Initial Loan Advance; and

 

(e) a certificate of good standing for Borrower from its state of incorporation or formation.

 

4.2 Conditions to Subsequent Draws. With respect to each Subsequent Draw:

 

(a) the representations and warranties set forth in this Agreement shall be true and correct in all material respects on and as of the initial Advance Date (unless any such representation and warranty is qualified as to materiality or Material Adverse Effect in which case such representation and warranty shall be true and correct in all respects), except to the extent such representations and warranties expressly relate to an earlier date, in which case they shall be true and correct in all material respects as of such earlier date;

 

(b) Borrower shall be in compliance with all the terms and provisions set forth herein and in each other Loan Document on its part to be observed or performed, and at the time of and immediately after the Advance Date no Default or Event of Default shall have occurred and be continuing;

 

(c) no event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing;

 

(d) invoices or bills of sale for the Inventory, Equipment or machinery being acquired with the proceeds of such Subsequent Draw (or that was already acquired and is being refinanced with the proceeds of the Subsequent Draw) shall have been delivered to Lenders; and

 

(e) Lenders shall complete, sign and deliver to Escrow Agent a Release Notice authorizing the release of such Subsequent Draw.

 

SECTION 5. REPRESENTATIONS AND WARRANTIES OF BORROWER

 

Borrower represents and warrants that:

 

5.1 Corporate Status. Borrower is an entity duly organized, legally existing and in good standing under the laws of the jurisdiction of its formation, and is duly qualified as a foreign corporation in all jurisdictions in which the nature of its business or location of its properties require such qualifications and where the failure to be qualified could reasonably be expected to have a Material Adverse Effect. Borrower’s present name, former names and locations (if any) for the five (5) years prior to the Closing Date), place of formation, tax identification number, organizational identification number and other information are correctly set forth in Exhibit B, as may be updated by Borrower in a written notice provided to Agent after the Closing Date.

 

5.2 Collateral. Borrower owns, or will own, the Collateral, free of all Liens, except for Permitted Liens. Borrower has the power and authority to grant to Agent a Lien in the Collateral as security for the Secured Obligations.

 

 

5.3 Consents. Borrower’s execution, delivery and performance of the Note, this Agreement and all other Loan Documents (i) have been duly authorized by all necessary corporate action or resolutions of Borrower, (ii) will not result in the creation or imposition of any Lien upon the Collateral, other than the Liens created by this Agreement and the other Loan Documents, (iii) do not violate any provisions of Borrower’s organizational documents, or any law, regulation, order, injunction, judgment, decree or writ to which Borrower is subject and (iv) do not violate any contract or agreement or require the consent or approval of any other Person which has not already been obtained. The individual or individuals executing the Loan Documents are duly authorized to do so.

 

5.4 Material Adverse Effect. No event that has had or could reasonably be expected to have a Material Adverse Effect has occurred and is continuing.

 

5.5 Actions Before Governmental Authorities. There are no actions, suits or proceedings at law or in equity or by or before any governmental authority now pending or, to the knowledge of Borrower, threatened against or affecting Borrower or its property, that is reasonably expected to result in a Material Adverse Effect.

 

5.6 Laws. Borrower is not in violation of any law, rule or regulation, or in default with respect to any judgment, writ, injunction or decree of any governmental authority, where such violation or default is reasonably expected to result in a Material Adverse Effect. Borrower is not in material default in any manner under any provision of any material agreement to which it is a party or by which it is bound. Borrower, its controlled Affiliates and, to the knowledge of the Borrower, any agent or other party acting on behalf of Borrower or its controlled Affiliates are in material compliance with all applicable anti-money laundering, economic sanctions and anti-bribery laws and regulations, and none of the funds to be provided under this Agreement will be used, directly or indirectly, for any activities in violation of such laws and regulations.

 

5.7 Information Correct and Current. No written information, report, financial statement, exhibit or schedule furnished, by or on behalf of Borrower to Agent or any Lender in connection with any Loan Document or included therein or delivered pursuant thereto contained, or, when taken as a whole, contains or will contain any material misstatement of fact or, when taken together with all other such written information or documents, omitted, omits or will omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were, are or will be made, not materially misleading at the time such statement was made or deemed made.

 

SECTION 5A. REPRESENTATIONS AND WARRANTIES OF LENDERS

 

Each Lender (severally and not jointly) represents and warrants that:

 

5A.1 Suitability. Alone, or together with any professional advisor(s), it has adequately analyzed and fully considered the risks of making the Loan required by it hereunder and determined that it is able at this time and in the foreseeable future to bear the economic risk of a total loss of such Lender’s Loan to Borrower.

 

5A.2 Access to Information. It acknowledges and agrees that (i) it has received and has had an adequate opportunity to review, such financial and other information as it deems necessary in order to make the Loan required by it hereunder and made its own assessment and is satisfied concerning the relevant other economic considerations relevant to its lending such funds to Borrower; (ii) it has had the full opportunity to ask such questions, receive such answers, and conducted and completed its own independent due diligence with respect to the Loan and obtain such information as it has deemed necessary.

 

 

5A.3 Power and Authority. It has all necessary power, authority or capacity, as applicable, to enter into, deliver and perform its obligations under this Agreement.

 

5A.4 Financial Capacity. On the Closing Date, it will have sufficient funds to make the Loan required of it hereunder.

 

SECTION 6. INSURANCE; INDEMNIFICATION

 

6.1 Coverage. Borrower shall cause to be carried and maintained commercial general liability insurance, on an occurrence form, against risks customarily insured against in Borrower’s line of business. So long as there are any Secured Obligations outstanding, Borrower shall also cause to be carried and maintained insurance upon the Collateral, insuring against all risks of physical loss or damage howsoever caused, in an amount not less than the full replacement cost of the Collateral, provided that such insurance may be subject to standard exceptions and deductibles.

 

6.2 Indemnity. Borrower agrees to indemnify and hold Agent, Lenders and their officers, directors, employees, agents, attorneys, representatives and shareholders (each, an “Indemnified Person”) harmless from and against any and all claims, documented reasonable out-of-pocket costs and expenses, damages and liabilities (including such claims and documented reasonable out-of-pocket costs and expenses, damages and liabilities based on liability in tort, including strict liability in tort), including documented reasonable out-of-pocket attorneys’ fees and disbursements and other costs of investigation or defense (including those incurred upon any appeal) (collectively, “Liabilities”), that may be instituted or asserted against or incurred by such Indemnified Person as the result of credit having been extended, suspended or terminated under this Agreement and the other Loan Documents or the administration of such credit, or in connection with or arising out of the transactions contemplated hereunder and thereunder, or any actions or failures to act in connection therewith, or arising out of the disposition or utilization of the Collateral. Borrower agrees to pay, and to hold Agent and Lenders harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all excise, sales or other similar taxes (excluding taxes imposed on or measured by the net income of Agent or Lenders) that may be payable or determined to be payable with respect to any of the Collateral or this Agreement. In no event shall any Indemnified Person be liable on any theory of liability for any special, indirect, consequential or punitive damages (including any loss of profits, business or anticipated savings). This Section shall survive the repayment of indebtedness under, and otherwise shall survive the expiration or other termination of, the Loan Agreement.

 

SECTION 7. COVENANTS OF BORROWER

 

Borrower agrees as follows:

 

7.1 Further Assurances. Borrower shall from time to time execute, deliver and file, alone or with Agent, any financing statements, security agreements, collateral assignments, notices, control agreements, or other documents to perfect or give the highest priority (subject to Permitted Liens) to Agent’s Lien on the Collateral. Borrower shall from time to time procure any instruments or documents as may be reasonably requested by Agent, and take all further action that may be necessary, or that Agent may reasonably request, to perfect and protect the Liens granted hereby and thereby. In addition, and for such purposes only, Borrower hereby authorizes Agent to execute and deliver on behalf of Borrower and to file such financing statements, collateral assignments, notices, control agreements, security agreements and other documents without the signature of Borrower either in Agent’s name or in the name of Agent as agent and attorney-in-fact for Borrower. Borrower shall protect and defend Borrower’s title to the Collateral and Agent’s Lien thereon against all Persons claiming any interest adverse to Borrower or Agent other than Permitted Liens.

 

 

7.2 Collateral. Borrower shall at all times keep the Collateral and all other property and assets used in Borrower’s business or in which Borrower now or hereafter holds any interest free and clear from any legal process or Liens whatsoever (except for Permitted Liens), and shall give Agent prompt written notice of any legal process affecting the Collateral, such other property and assets, or any Liens thereon, provided however, that the Collateral and such other property and assets may be subject to Permitted Liens.

 

7.3 Notification of Event of Default. Borrower shall notify Agent immediately upon obtaining knowledge of the occurrence of any Event of Default.

 

7.4 Use of Proceeds. Borrower shall use the proceeds of each Subsequent Draw for purposes of purchasing Equipment, Inventory and Machinery.

 

SECTION 8. EVENTS OF DEFAULT

 

8.1 An “Event of Default” shall exist if any one or more of the following events shall occur:

 

(a) Payments. Borrower fails to pay principal, interest or any other amount due under this Agreement, the Note or any of the other Loan Documents on the due date; provided, however, that an Event of Default shall not occur on account of a failure to pay due solely to an administrative or operational error of Lenders or Borrower’s bank if Borrower had the funds to make the payment when due and makes the payment within thirty (30) days following the applicable due date for such payment; or

 

(b) Covenants. Borrower breaches or defaults in the performance of any covenant or Secured Obligation under this Agreement, or any of the other Loan Documents or any other agreement among Borrower, Agent and Lenders, and (a) with respect to a default under any covenant under this Agreement, any other Loan Document or any other agreement among Borrower, Agent and Lenders, such default continues for more than twenty (20) days after the earlier of the date on which (i) Agent or any Lender has given notice of such default to Borrower and (ii) Borrower has actual knowledge of such default; or

 

(c) Material Adverse Effect. A circumstance has occurred that would reasonably be expected to have a Material Adverse Effect; or

 

(d) Representations. Any representation or warranty made by Borrower in any Loan Document shall have been false or misleading in any material respect when made or when deemed made; or

 

(e) Insolvency. Borrower (A) (i) shall make an assignment for the benefit of creditors; or (ii) shall be unable to pay its debts as they become due, or be unable to pay or perform under the Loan Documents, or shall become insolvent; or (iii) shall file a voluntary petition in bankruptcy; or (iv) shall file any petition, answer, or document seeking for itself any reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation pertinent to such circumstances; or (v) shall seek or consent to or acquiesce in the appointment of any trustee, receiver, or liquidator of Borrower or of all or any substantial part (i.e., 33-1/3% or more) of the assets or property of Borrower; or (vi) shall cease operations of its business as its business has normally been conducted, or terminate substantially all of its employees; or (vii) Borrower or any of their respective directors or majority shareholders shall take any action initiating any of the foregoing actions described in clauses (i) through (vi); or (B) either (i) sixty (60) days shall have expired after the commencement of an involuntary action against Borrower seeking reorganization, arrangement, composition, readjustment, liquidation, dissolution or similar relief under any present or future statute, law or regulation, without such action being dismissed or all orders or proceedings thereunder affecting the operations or the business of Borrower being stayed; or (ii) a stay of any such order or proceedings shall thereafter be set aside and the action setting it aside shall not be timely appealed; or (iii) Borrower shall file any answer admitting or not contesting the material allegations of a petition filed against it in any such proceedings; or (iv) the court in which such proceedings are pending shall enter a decree or order granting the relief sought in any such proceedings; or (v) sixty (60) days shall have expired after the appointment, without the consent or acquiescence of Borrower, of any trustee, receiver or liquidator of Borrower or of all or any substantial part of the properties of Borrower without such appointment being vacated; or

 

 

(f) Attachments; Judgments. Any portion of Borrower’s assets is attached or seized, or a levy is filed against any such assets, or a judgment or judgments is/are entered for the payment of money (not covered by independent third party insurance as to which liability has not been rejected by such insurance carrier), individually or in the aggregate, of at least Two Hundred Thousand Dollars ($200,000) and Borrower fails to satisfy and discharge the same within thirty (30) days; or

 

(g) Other Obligations. The occurrence of any default (after the expiration of any notice or grace period) under any agreement or obligation of Borrower involving any Indebtedness in excess of Two Hundred Thousand Dollars ($200,000).

 

SECTION 9. REMEDIES

 

9.1 General. Upon and during the continuance of any one or more Events of Default, (i) Agent may, at its option, accelerate and demand payment of all or any part of the Secured Obligations and declare them to be immediately due and payable (provided, that upon the occurrence of an Event of Default of the type described in Section 8.1(e), all of the Secured Obligations shall automatically be accelerated and made due and payable, in each case without any further notice or act), (ii) Agent may, at its option, sign and file in Borrower’s name any and all collateral assignments, notices, control agreements, security agreements and other documents it deems necessary or appropriate to perfect or protect the repayment of the Secured Obligations, and in furtherance thereof, Borrower hereby grants Agent an irrevocable power of attorney coupled with an interest, and (iii) Agent may notify any of Borrower’s account debtors to make payment directly to Agent, compromise the amount of any such account on Borrower’s behalf and endorse Agent’s name without recourse on any such payment for deposit directly to Agent’s account. Agent may exercise all rights and remedies with respect to the Collateral under the Loan Documents or otherwise available to it under the UCC and other applicable law, including the right to release, hold, sell, lease, liquidate, collect, realize upon, or otherwise dispose of all or any part of the Collateral and the right to occupy, utilize, process and commingle the Collateral. All Agent’s rights and remedies shall be cumulative and not exclusive.

 

9.2 Collection; Foreclosure. Upon the occurrence and during the continuance of any Event of Default, Agent may, at any time or from time to time, apply, collect, liquidate, sell in one or more sales, lease or otherwise dispose of, any or all of the Collateral, in its then condition or following any commercially reasonable preparation or processing, in such order as Agent may elect. Any such sale may be made either at public or private sale at its place of business or elsewhere. Borrower agrees that any such public or private sale may occur upon ten (10) calendar days’ prior written notice to Borrower. Agent may require Borrower to assemble the Collateral and make it available to Agent at a place designated by Agent that is reasonably convenient to Agent and Borrower. The proceeds of any sale, disposition or other realization upon all or any part of the Collateral shall be applied by Agent in the following order of priorities:

 

First, to Agent and Lenders in an amount sufficient to pay in full Agent’s and Lenders’ reasonable costs and professionals’ and advisors’ fees and expenses as described in Section 11.11;

 

Second, to Lenders in an amount equal to the then unpaid amount of the Secured Obligations (including principal and interest), in such order and priority as Agent may choose in its sole discretion; and

 

 

Finally, after the full and final payment in cash of all of the Secured Obligations (other than inchoate obligations), to Borrower or its representatives or as a court of competent jurisdiction may direct.

 

Agent shall be deemed to have acted reasonably in the custody, preservation and disposition of any of the Collateral if it complies with the obligations of a secured party under the UCC.

 

9.3 No Waiver. Agent shall be under no obligation to marshal any of the Collateral for the benefit of Borrower or any other Person, and Borrower expressly waives all rights, if any, to require Agent to marshal any Collateral.

 

9.4 Cumulative Remedies. The rights, powers and remedies of Agent hereunder shall be in addition to all rights, powers and remedies given by statute or rule of law and are cumulative. The exercise of any one or more of the rights, powers and remedies provided herein shall not be construed as a waiver of or election of remedies with respect to any other rights, powers and remedies of Agent.

 

SECTION 10. REPRESENTATIONS AND WARRANTIES OF THE LENDERS

 

10.1 Understandings or Arrangements. Without limiting such Lender’s right to sell the Commitment Shares pursuant to an effective registration statement, if any, or otherwise in compliance with the Securities Act, such Lender is acquiring the Commitment Shares for its own account for investment only and not with a view towards the public sale or distribution thereof and not with a view to or for sale in connection with any distribution thereof, and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of the Commitment Shares. Each Lender is acquiring the Commitment Shares hereunder in the ordinary course of its business. Such Lender understands that the Commitment Shares is a “restricted security” and has not been registered under the Securities Act or any applicable state securities law and is acquiring such Commitment Shares as principal for his, her or its own account and not with a view to or for distributing or reselling such Commitment Shares or any part thereof in violation of the Securities Act or any applicable state securities law, has no present intention of distributing any of the Commitment Shares in violation of the Securities Act or any applicable state securities law and has no direct or indirect arrangement or understandings with any other persons to distribute or regarding the distribution of such Lender’s in violation of the Securities Act or any applicable state securities law (this representation and warranty not limiting such Lender’s right to sell the Commitment Shares pursuant to a registration statement or otherwise in compliance with applicable federal and state securities laws).

 

10.2 Lender Status. Each Lender is (i) an “accredited investor” as that term is defined in Rule 501 of the General Rules and Regulations under the Securities Act by reason of Rule 501(a), (ii) experienced in making investments of the kind described in this Agreement and the related documents or is not a “U.S. Person” within the meaning of Regulation S, (iii) able, by reason of the business and financial experience of its officers (if an entity) and professional advisors (who are not affiliated with or compensated in any way by the Company or any of its Affiliates or selling agents), to protect its own interests in connection with the transactions described in this Agreement, and the related documents, and to evaluate the merits and risks of an investment in the Commitment Shares, and (iv) able to afford the entire loss of its investment in the Commitment Shares.

 

10.3 Experience of the Lender. Each Lender, either alone or together with its representatives, has such knowledge, sophistication and experience in business and financial matters so as to be capable of evaluating the merits and risks of the prospective investment in the Commitment Shares, and has so evaluated the merits and risks of such investment. Each Lender understands that its investment in the Commitment Shares involves a high degree of risk. Each Lender is able to bear the economic risk of an investment in the Commitment Shares and, at the present time, is able to afford a complete loss of such investment. Each Lender understands that no U.S. federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Commitment Shares.

 

 

10.4 No General Solicitation. Each Lender is not purchasing the Commitment Shares as a result of any advertisement, article, notice or other communication regarding the Commitment Shares published in any newspaper, magazine or similar media or broadcast over television or radio or presented at any seminar or, to the knowledge of such Lender, any other general solicitation or general advertisement.

 

10.5 Restrictive Legend. Each Lender acknowledges and agrees that, until such time as the relevant Commitment Shares have been registered under the Securities Act and may be sold in accordance with an effective registration statement, or until such Commitment Shares can otherwise be sold without restriction, whichever is earlier, the certificates and other instruments representing any of the Commitment Shares shall bear a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of any such Commitment Shares):

 

THIS SECURITY HAS 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 (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. THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT WITH A REGISTERED BROKER-DEALER OR OTHER LOAN WITH A FINANCIAL INSTITUTION THAT IS AN “ACCREDITED INVESTOR” AS DEFINED IN RULE 501(a) UNDER THE SECURITIES ACT OR OTHER LOAN SECURED BY SUCH SECURITIES.

 

SECTION 11. MISCELLANEOUS

 

11.1 Severability. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under such law, such provision shall be ineffective only to the extent and duration of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

11.2 Notice. Except as otherwise provided herein, any notice, demand, request, consent, approval, declaration, service of process or other communication (including the delivery of Financial Statements) that is required, contemplated, or permitted under the Loan Documents or with respect to the subject matter hereof shall be in writing, and shall be deemed to have been validly served, given, delivered, and received upon the earlier of: (i) the day of transmission by facsimile, electronic mail or hand delivery or delivery by an overnight express service or overnight mail delivery service; or (ii) the third calendar day after deposit in the United States mails, with proper first class postage prepaid, in each case addressed to the party to be notified as follows:

 

If to Agent:		At the address set forth on their respective signature page.
If to a Lender:		At the address set forth on their respective signature page.
		If to Borrower:	Forever 8 Fund, LLC
			306 S. New Street, Suite 110
			Bethlehem, PA 18015
			Attention:
			Email:
With a copy to :		Legal Counsel:
			Email: legal@8co.holdings

 

or to such other address as each party may designate for itself by like notice.

 

 

11.3 Entire Agreement; Amendments.

 

(a) This Agreement and the other Loan Documents constitute the entire agreement and understanding of the parties hereto in respect of the subject matter hereof and thereof, and supersede and replace in their entirety any prior proposals, term sheets, non-disclosure or confidentiality agreements, letters, negotiations or other documents or agreements, whether written or oral, with respect to the subject matter hereof or thereof.

 

(b) Neither this Agreement, any other Loan Document, nor any terms hereof or thereof may be amended, supplemented or modified except in accordance with the provisions of this Section 11.3(b). The Lenders, Agent and Borrower party to the relevant Loan Document may, from time to time, (i) enter into written amendments, supplements or modifications hereto and to the other Loan Documents for the purpose of adding any provisions to this Agreement or the other Loan Documents or changing in any manner the rights of Lenders or of Borrower hereunder or thereunder or (ii) waive, on such terms and conditions as the Lenders or Agent, as the case may be, may specify in such instrument, any of the requirements of this Agreement or the other Loan Documents or any default or Event of Default and its consequences. Any such waiver and any such amendment, supplement or modification shall apply equally to each Lender and shall be binding upon Borrower, Lenders, Agent, and all future holders of the Initial Loan Advance.

 

11.4 No Strict Construction. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement.

 

11.5 No Waiver. The powers conferred upon Agent and Lenders by this Agreement are solely to protect its rights hereunder and under the other Loan Documents and its interest in the Collateral and shall not impose any duty upon Agent or Lenders to exercise any such powers. No omission or delay by Agent or Lenders at any time to enforce any right or remedy reserved to it, or to require performance of any of the terms, covenants or provisions hereof by Borrower at any time designated, shall be a waiver of any such right or remedy to which Agent or Lenders is entitled, nor shall it in any way affect the right of Agent or Lenders to enforce such provisions thereafter.

 

11.6 Survival. All agreements, representations and warranties contained in this Agreement and the other Loan Documents or in any document delivered pursuant hereto or thereto shall be for the benefit of Agent and Lenders and shall survive the execution and delivery of this Agreement and the expiration or other termination of this Agreement.

 

11.7 Successors and Assigns. The provisions of this Agreement and the other Loan Documents shall inure to the benefit of and be binding on Borrower and its permitted assigns (if any). Borrower shall not assign its obligations under this Agreement or any of the other Loan Documents without Agent’s express prior written consent, and any such attempted assignment shall be void and of no effect. Agent and Lenders may assign, transfer, or endorse its rights hereunder and under the other Loan Documents with notice to Borrower, and all of such rights shall inure to the benefit of Agent’s and Lenders’ successors and assigns; provided that neither Agent nor any Lender may assign, transfer or endorse its rights hereunder or under the Loan Documents (i) as long as no Event of Default has occurred and is continuing, without the prior written consent of the Borrower (not to be unreasonably withheld, delayed or conditioned) or (ii) to any party that is a direct competitor of Borrower (as reasonably determined by Agent), it being acknowledged that in all cases, any transfer to an Affiliate of any Lender or Agent shall be allowed.

 

 

11.8 Governing Law. This Agreement and the other Loan Documents have been negotiated and delivered to Agent and Lenders in the State of New York, and shall have been accepted by Agent and Lenders in the State of New York. Payment to Agent and Lenders by Borrower of the Secured Obligations is due in the State of New York. This Agreement and the other Loan Documents shall be governed by, and construed and enforced in accordance with, the laws of the State of New York, excluding conflict of laws principles that would cause the application of laws of any other jurisdiction.

 

11.9 Consent to Jurisdiction and Venue. All judicial proceedings arising in or under or related to this Agreement or any of the other Loan Documents may be brought in any state or federal court located in the State of New York. By execution and delivery of this Agreement, each party hereto generally and unconditionally: (a) consents to nonexclusive personal jurisdiction in New York County, State of New York; (b) waives any objection as to jurisdiction or venue in New York County, State of New York; (c) agrees not to assert any defense based on lack of jurisdiction or venue in the aforesaid courts; and (d) irrevocably agrees to be bound by any judgment rendered thereby in connection with this Agreement or the other Loan Documents. Service of process on any party hereto in any action arising out of or relating to this Agreement shall be effective if given in accordance with the requirements for notice set forth in Section 11.2, and shall be deemed effective and received as set forth in Section 11.2. Nothing herein shall affect the right to serve process in any other manner permitted by law or shall limit the right of either party to bring proceedings in the courts of any other jurisdiction.

 

11.10 Mutual Waiver of Jury Trial / Judicial Reference.

 

(a) Because disputes arising in connection with complex financial transactions are most quickly and economically resolved by an experienced and expert Person and the parties wish applicable state and federal laws to apply (rather than arbitration rules), the parties desire that their disputes be resolved by a judge applying such applicable laws. EACH OF BORROWER, AGENT AND LENDERS SPECIFICALLY WAIVE ANY RIGHT IT MAY HAVE TO TRIAL BY JURY OF ANY CAUSE OF ACTION, CLAIM, CROSS-CLAIM, COUNTERCLAIM, THIRD PARTY CLAIM OR ANY OTHER CLAIM (COLLECTIVELY, “CLAIMS”) ASSERTED BY BORROWER AGAINST AGENT, LENDERS OR THEIR RESPECTIVE ASSIGNEE OR BY AGENT, LENDERS OR THEIR RESPECTIVE ASSIGNEE AGAINST BORROWER. This waiver extends to all such Claims, including Claims that involve Persons other than Agent, Borrower and Lenders; Claims that arise out of or are in any way connected to the relationship among Borrower, Agent and Lenders; and any Claims for damages, breach of contract, tort, specific performance, or any equitable or legal relief of any kind, arising out of this Agreement, any other Loan Document.

 

(b) In the event Claims are to be resolved by judicial reference, either party may seek from a court identified in Section 11.9, any prejudgment order, writ or other relief and have such prejudgment order, writ or other relief enforced to the fullest extent permitted by law notwithstanding that all Claims are otherwise subject to resolution by judicial reference.

 

11.11 Professional Fees.

 

(a) On the Closing Date, Borrower promises to pay up to $2,500 of Agent’s and Lenders’ reasonable and documented out-of-pocket fees and expenses which are (x) necessary to finalize the loan documentation, including but not limited to reasonable and documented out-of-pocket attorney’s fees, UCC searches, filing costs, and other miscellaneous expenses and (y) incurred by Agent and Lenders after the Closing Date in connection with or related to: (1) the Initial Loan Advances and Subsequent Draws; (2) the administration, collection, or enforcement of the Initial Loan Advance, the Subsequent Draws and/or the Loan Documents; (3) the amendment or modification of the Loan Documents; and (4) any waiver, consent, release, or termination under the Loan Documents.

 

 

(b) In addition, Borrower promises to pay any and all reasonable and documented out-of-pocket attorneys’ and other professionals’ fees and expenses incurred by Agent and Lenders after the Closing Date in connection with or related to: (x) the protection, preservation, audit, field exam, sale, lease, liquidation, or disposition of Collateral or the exercise of remedies with respect to the Collateral; (y) any legal, litigation, administrative, arbitration, or out of court proceeding in connection with or related to Borrower or the Collateral, and any appeal or review thereof; and (z) any bankruptcy, restructuring, reorganization, assignment for the benefit of creditors, workout, foreclosure, or other action related to Borrower, the Collateral, the Loan Documents, including representing Agent or Lenders in any adversary proceeding or contested matter commenced or continued by or on behalf of Borrower’s estate, and any appeal or review thereof.

 

11.12 Borrower Liability. Borrower shall be obligated to repay all Secured Obligations hereunder. Borrower waives (a) any suretyship defenses available to it under the Code or any other applicable law, and (b) any right to require Agent to: (i) proceed against any other person; (ii) proceed against or exhaust any security; or (iii) pursue any other remedy. Agent may exercise or not exercise any right or remedy it has against Borrower or any security it holds (including the right to foreclose by judicial or non-judicial sale) without affecting Borrower’s liability. Notwithstanding any other provision of this Agreement or other related document, Borrower irrevocably waives all rights that it may have at law or in equity (including, without limitation, any law subrogating Borrower to the rights of Agent under this Agreement) to seek contribution, indemnification or any other form of reimbursement from any other Person now or hereafter primarily or secondarily liable for any of the Secured Obligations, for any payment made by Borrower with respect to the Secured Obligations in connection with this Agreement or otherwise and all rights that it might have to benefit from, or to participate in, any security for the Obligations as a result of any payment made by Borrower with respect to the Secured Obligations in connection with this Agreement or otherwise. Any agreement providing for indemnification, reimbursement or any other arrangement prohibited under this Section shall be null and void. If any payment is made to Borrower in contravention of this Section, Borrower shall hold such payment in trust for Lenders and such payment shall be promptly delivered to Lenders, for application to the Obligations, whether matured or unmatured.

 

11.13 Assignment of Rights. Borrower acknowledges and understands that Agent or any Lender may, subject to Section 11.7, sell and assign all or part of its interest hereunder and under the Loan Documents to any Person or entity (an “Assignee”). After such assignment the term “Agent” or “Lender” as used in the Loan Documents shall mean and include such Assignee, and such Assignee shall be vested with all rights, powers and remedies of Agent and such Lender hereunder with respect to the interest so assigned; but with respect to any such interest not so transferred, Agent and such Lender shall retain all rights, powers and remedies hereby given. No such assignment by Agent or such Lender shall relieve Borrower of any of its obligations hereunder. Each Lender agrees that in the event of any transfer by it of the Note(s)(if any), it will endorse thereon a notation as to the portion of the principal of the Note(s), which shall have been paid at the time of such transfer and as to the date to which interest shall have been last paid thereon.

 

11.14 Revival of Secured Obligations. This Agreement and the Loan Documents shall remain in full force and effect and continue to be effective if any petition is filed by or against Borrower for liquidation or reorganization, if Borrower becomes insolvent or makes an assignment for the benefit of creditors, if a receiver or trustee is appointed for all or any significant part of Borrower’s assets, or if any payment or transfer of Collateral is recovered from Agent or Lenders. The Loan Documents and the Secured Obligations and Collateral security shall continue to be effective, or shall be revived or reinstated, as the case may be, if at any time payment and performance of the Secured Obligations or any transfer of Collateral to Agent, or any part thereof is rescinded, avoided or avoidable, reduced in amount, or must otherwise be restored or returned by, or is recovered from, Agent, Lenders or by any obligee of the Secured Obligations, whether as a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though such payment, performance, or transfer of Collateral had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, avoided, avoidable, restored, returned, or recovered, the Loan Documents and the Secured Obligations shall be deemed, without any further action or documentation, to have been revived and reinstated except to the extent of the full, final, and indefeasible payment to Agent or Lenders in cash.

 

 

11.15 Counterparts. This Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts, and by different parties hereto in separate counterparts, each of which when so delivered shall be deemed an original, but all of which counterparts shall constitute but one and the same instrument.

 

11.16 No Third Party Beneficiaries. No provisions of the Loan Documents are intended, nor will be interpreted, to provide or create any third-party beneficiary rights or any other rights of any kind in any Person other than Agent, Lenders and Borrower unless specifically provided otherwise herein, and, except as otherwise so provided, all provisions of the Loan Documents will be personal and solely among Agent, Lenders and Borrower.

 

11.17 Agency.

 

(a) Lenders hereby irrevocably appoint Paul Vassilakos to act on their behalf as Agent hereunder and under the other Loan Documents and authorize Agent to take such actions on its behalf and to exercise such powers as are delegated to Agent by the terms hereof or thereof, together with such actions and powers as are reasonably incidental thereto, including, without limitation, to act as administrative agent and collateral agent and (i) to maintain, in accordance with its customary business practices, ledgers and records reflecting the Lenders and the status of the Collateral and related matters; (ii) to execute or file any and all financing or similar statements or notices, amendments, renewals, supplements, documents, instruments, proofs of claim, notices and other written agreements with respect to this Agreement or any other Loan Document; (iii) to perform, exercise, and enforce any and all other rights and remedies of the Lenders with respect to the Borrower, the obligations, or otherwise related to any of same to the extent reasonably incidental to the exercise by such Agent of the rights and remedies specifically authorized to be exercised by such Agent by the terms of this Agreement or any other Loan Document; (iv) to incur and pay such fees necessary or appropriate for the performance and fulfillment of its functions and powers pursuant to this Agreement or any other Loan Document; and (v) to act with respect to all Collateral under the Loan Documents, including for purposes of acquiring, holding and enforcing any and all Liens on Collateral granted by Borrower to secure any of the obligations created by the Loan Documents.

 

(b) Lenders agree to indemnify Agent in its capacity as such (to the extent not reimbursed by Borrower and without limiting the obligation of Borrower to do so), according to their respective Applicable Percentages (based upon the total outstanding Commitments) in effect on the date on which indemnification is sought under this Section 11.17, from and against any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind whatsoever that may at any time be imposed on, incurred by or asserted against Agent in any way relating to or arising out of, this Agreement, any of the other Loan Documents or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby or any action taken or omitted by Agent under or in connection with any of the foregoing; The agreements in this Section shall survive the payment of the Secured Obligations and all other amounts payable hereunder.

 

(c) Agent in Its Individual Capacity. The Person serving as Agent hereunder shall have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not Agent and the term “Lender” shall, unless otherwise expressly indicated or unless the context otherwise requires, include each such Person serving as Agent hereunder in its individual capacity.

 

 

(d) Exculpatory Provisions. Agent shall have no duties or obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, Agent shall not:

 

(i) be subject to any fiduciary or other implied duties, regardless of whether any default or any Event of Default has occurred and is continuing;

 

(ii) have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that Agent is required to exercise as directed in writing by Lenders, provided that Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose Agent to liability or that is contrary to any Loan Document or applicable law; and

 

(iii) except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and Agent shall not be liable for the failure to disclose, any information relating to Borrower or any of its Affiliates that is communicated to or obtained by any Person serving as Agent or any of its Affiliates in any capacity.

 

(e) Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of Lenders or as Agent shall believe in good faith shall be necessary, under the circumstances or (ii) in the absence of its own gross negligence or willful misconduct.

 

(f) Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any default or Event of Default, (iv) the validity, enforceability, effectiveness or genuineness of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Section 4 or elsewhere herein, other than to confirm receipt of items expressly required to be delivered to Agent.

 

(g) Reliance by Agent. Agent may rely, and shall be fully protected in acting, or refraining to act, upon, any resolution, statement, certificate, instrument, opinion, report, notice, request, consent, order, bond or other paper or document that it has no reason to believe to be other than genuine and to have been signed or presented by the proper party or parties or, in the case of cables, telecopies and telexes, to have been sent by the proper party or parties. In the absence of its gross negligence or willful misconduct, Agent may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon any certificates or opinions furnished to Agent and conforming to the requirements of the Loan Agreement or any of the other Loan Documents. Agent may consult with counsel, and any opinion or legal advice of such counsel shall be full and complete authorization and protection in respect of any action taken, not taken or suffered by Agent hereunder or under any Loan Documents in accordance therewith. Agent shall have the right at any time to seek instructions concerning the administration of the Collateral from any court of competent jurisdiction. Agent shall not be under any obligation to exercise any of the rights or powers granted to Agent by this Agreement, the Loan Agreement and the other Loan Documents at the request or direction of Lenders unless Agent shall have been provided by Lenders with adequate security and indemnity against the costs, expenses and liabilities that may be incurred by it in compliance with such request or direction.

 

 

(h) Collateral Matters. Lenders irrevocably authorize Agent, and Agent agrees,

 

(i) to release any Lien on any Collateral or other property granted to or held by Agent under any Loan Document (A) upon the payment in full of all Secured Obligations, (B) that is or is to be sold or otherwise disposed of in the ordinary course of business, or (C) subject to Section 11.3(b), if approved, authorized or ratified in writing by the Lenders; and

 

(ii) to subordinate or release any Lien on any Equipment granted to or held by Agent under any Loan Document to the holder of any Lien on such Equipment constituting a purchase money Lien or a Lien in connection with capital leases, in each case solely to the extent such Lien is permitted in clause (iii) of the definition of “Permitted Liens”.

 

11.18 Addition of Lenders. Subject to Section 2.6 hereof, at the request of the Borrower, a new lender may join this Agreement as a Lender by delivering a lender joinder agreement to Borrower in substantially the form of Exhibit G, and such new Lender shall assume all rights and obligations of a Lender under this Agreement and the other Loan Documents; provided that:

 

(i) the Commitment of the new Lender shall be in addition to the Commitments of the existing Lenders in effect on the date of such new Lender’s joinder and the Aggregate Commitment shall be increased in a corresponding amount;

 

(j) Borrower shall execute such new Notes as Agent or the new Lender may reasonably request; and

 

(k) the outstanding Loans shall be reallocated in accordance with Section 2.6(f)(ii) hereof.

 

(SIGNATURES TO FOLLOW)

 

 

IN WITNESS WHEREOF, Borrower, Agent and Lenders have duly executed and delivered this Loan and Security Agreement as of the day and year first above written.

 

	BORROWER:
	FOREVER 8 FUND, LLC, a Delaware limited liability company
	/s/ Kevin O’Donnell
	By:	Kevin O’Donnell, Authorized Representative

 

(Signature Page to Loan and Security Agreement)

 

 

	AGENT:
	Paul Vassilakos
	/s/ Paul Vassilakos

 

(Signature Page to Loan and Security Agreement)

 

 

	LENDER(S):
	COMMITMENT AMOUNT: $250,000
	/s/ Joseph Allen Johnston
	Rose Capital
	/s/ Lelainya Ferguson
	Name:	Lelainya Ferguson
	Title:	Manager

 

(Signature Page to Loan and Security Agreement)

 

 

Table of Exhibits

 

Exhibit A:		Promissory Note
Exhibit B:		Name, Locations, and Other Information for Borrower
Exhibit C:		Advance Request
Exhibit D:		Escrow Agreement (N/A)
Exhibit E:		Release Notice
Exhibit F:		Lender Joinder Agreement

 

 

 

Exhibit 10.2

 

SUBORDINATION AGREEMENT

 

This Subordination Agreement (this “Agreement”) is made as of March 15, 2024, by and among the several individuals, financial institutions or entities from time to time parties to this Agreement as subordinated lenders (collectively referred to as “Subordinated Lenders” and each a “Subordinated Lender”), Forever 8 Fund, LLC, a Delaware limited liability company (the “Obligor”), the several individuals, financial institutions or entities from time to time parties to this Agreement as Senior Lenders (collectively referred to as “Senior Lenders” and each a “Senior Lender”) and Paul Vassilakos, an individual, having an address at 234 5^th Avenue, Suite 509, New York, New York 10001, in his capacity as administrative and collateral agent (“Agent”) for the Senior Lenders.

 

Recitals

 

A. Subordinated Lender has extended loans or other credit accommodations to the Obligor or the Obligor is otherwise indebted to the Subordinated Lender pursuant to one more promissory notes, loan agreements, joinder agreements, evidences of indebtedness and security instruments including that certain Loan and Security Agreement dated April 1, 2023, by and among the Obligor and the lenders party thereto (the “Series A Loan Agreement”) and that certain Loan and Security Agreement dated October 4, 2023, by and among the Obligor, the lenders party thereto and the Agent, if any (the “Series B Loan Agreement”) (collectively, the “Subordinated Loan Documents”). Copies of the Series A Loan Agreement and the Series B Loan Agreement are attached hereto as Exhibits A and Exhibit B respectively.

 

B. The Obligor has requested and/or obtained certain loans or other credit accommodations from the Senior Lenders or is otherwise indebted to the Senior Lenders (which loans, credit accommodations and debts are or may be from time to time be secured by assets and property of the Obligor, pursuant to the terms of: (i) the Loan and Security Agreement dated October 19, 2023 (the “Series C Loan Agreement”) and the Loan and Security Agreement dated as of March 15, 2024 (the “Series D Loan Agreement”) and capitalized terms used herein but not defined herein shall have the respective meanings give such terms in the Series C Loan Agreement and Series D Loan Agreement by and among (1) the Obligors, as a borrower, (2) the other loan parties party thereto, (3) the Senior Lenders, and (4) the Agents and (ii) each other Loan Documents executed by the Obligor in favor or for the benefit of the Senior Lenders and/or the Agent, collectively “the Senior Loan Documents”. Copies of the Series C Loan Agreement and the Series C Loan Agreement are attached hereto as Exhibits C and Exhibit D respectively.

 

C. Subordinated Lender is willing to subordinate: (i) all of the Obligor’s indebtedness and obligations to Subordinated Lender pursuant to the Subordinated Loan Documents, including, without limitation, all interest, premium payments, make-wholes and other obligations and liabilities arising thereunder whatsoever, whether presently existing or arising in the future (the “Subordinated Debt”) to all of the Obligor’s indebtedness and obligations under the Senior Loan Documents, including, without limitation, all interest, premium payments, make-wholes and other obligations and liabilities whatsoever, to the Senior Lenders; and (ii) all of Subordinated Lender’s security interests, if any, in the Collateral, to all of the Senior Lenders’ security interests in the Collateral.

 

NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS:

 

1. Subordinated Lender hereby subordinates any security interest and/or lien that Subordinated Lender may have in the Collateral (the “Junior Liens”) to the security interest and/or liens that Senior Lenders and the Agent now or hereafter after acquires in the Collateral (the “Senior Liens”). Notwithstanding the respective dates of attachment or perfection of the Junior Liens and the Senior Liens, the Senior Liens shall at all times be prior and senior to the Junior Liens.

 

 

2. All Subordinated Debt is subordinated in right of payment to all obligations of the Obligor to the Senior Lenders and the Agent, now existing or hereafter arising, under the Senior Loan Documents together with all costs of collecting such obligations, including, without limitation, all accrued and unpaid interest, original issue discount, all premium payments, make- whole payments, exit charges, interest accruing after the commencement by or against the Obligor of any bankruptcy, reorganization or similar proceeding, attorneys’ fees, reimbursement obligations, and all other obligations and liabilities of the Obligor arising under the Senior Loan Documents (the “Senior Debt”).

 

3. Subordinated Lender will not demand or receive from the Obligor (and Obligor will not pay to Subordinated Lender) all or any part of the Subordinated Debt, by way of payment, prepayment, setoff, lawsuit or otherwise, whether in cash or in kind, nor will Subordinated Lender exercise any remedy with respect to the Subordinated Debt or the Junior Liens, nor will Subordinated Lender commence, or cause to commence, prosecute or participate in any administrative, legal or equitable action against any Obligor, for so long as any portion of the Senior Debt remains outstanding. For the avoidance, Subordinated Lender shall not exercise any remedy under or otherwise seek to enforce any term or provision of the Subordinated Loan Documents for so long as any portion of the Senior Debt remains outstanding. Notwithstanding the foregoing, so long as no event of default under the Senior Loan Documents has occurred and is continuing, the Subordinated Lenders shall be entitled to received regularly scheduled payments of interest under the Subordinated Loan Documents.

 

4. Subordinated Lender shall promptly deliver to the Senior Lenders in the form received (except for endorsement or assignment by Subordinated Lender where required by the Senior Lenders) for application to the Senior Debt any payment, distribution, security or proceeds received by Subordinated Lender with respect to the Subordinated Debt other than in accordance with this Agreement.

 

5. In the event of the Obligor’s bankruptcy, insolvency, reorganization or any case or proceeding under any bankruptcy or insolvency law or laws relating to the relief of debtors, these provisions shall remain in full force and effect, and the Senior Lenders’ claims against the Obligor shall be paid in full before any payment is made to the Subordinated Lender.

 

6. Subordinated Lender consents to the entry into the Series C Loan Agreement and the Series D Loan Agreement by the Senior Lenders, the Obligor, the Agent and the other parties thereto.

 

7. Senior Lenders and the Agent shall have the exclusive right to enforce rights, exercise remedies in respect of the Senior Debt and the Senior Liens (including set-off and the right to credit bid the Senior Debt) and make determinations regarding the release, disposition, or restrictions with respect to any collateral for the Senior Debt (the “Collateral”) without any notice to, consultation with or consent of the Subordinated Lender. Subordinated Lender will, in connection with the Senior Lenders’ and Agents’ exercise of their rights and remedies under the Senior Loan Documents, immediately, upon the written request of Senior Lenders, release any Junior Lien in any Collateral. Senior Lenders may enforce the provisions of the Senior Loan Documents and exercise remedies thereunder in such order and in such manner as it may determine in its sole discretion and such exercise and enforcement shall include the rights to sell or otherwise dispose of Collateral upon foreclosure, to incur expenses in connection with such sale or disposition, and to exercise all the rights and remedies of a secured lender under the Uniform Commercial Code of any applicable jurisdiction, of a secured creditor under Title 11 of the United States Code (the “Bankruptcy Code”) and under other applicable law.

 

8. Subordinated Lender will not object to the forbearance by Senior Lenders from commencing or pursuing any foreclosure action or proceeding or any other enforcement or exercise of any rights or remedies with respect to all or any part of the Collateral.

 

9. Subordinated Lender agrees that it will not support or vote in favor of any plan of reorganization in any bankruptcy, insolvency or similar proceeding unless such plan either (x) results in the Senior Debt being paid in full in cash on the effective date of such plan, (y) is accepted by the class of holders of the Senior Debt voting thereon and is supported by the Senior Lenders or (z) incorporates this Agreement by reference and continues the rights and priorities of the Senior Lenders and Subordinated Lender after the effective date of such plan.

 

 

10. For so long as any of the Senior Debt remains unpaid, Subordinated Lender irrevocably appoints Agent as Subordinated Lender’s attorney-in-fact, and grants to Agent a power of attorney with full power of substitution, in the name of Subordinated Lender or in the name of the Agent, for the use and benefit of the Senior Lenders, without notice to Subordinated Lender, to perform at Agent’s option the following acts in any bankruptcy, insolvency or similar proceeding involving the Obligor:

 

(i) To file the appropriate claim or claims in respect of the Subordinated Debt on behalf of Subordinated Lender if Subordinated Lender does not do so prior to 30 days before the expiration of the time to file claims in such proceeding and if Agent elects, in its sole discretion, to file such claim or claims; and

 

(ii) To accept or reject any plan of reorganization or arrangement on behalf of Subordinated Lender and to otherwise vote Subordinated Lender’s claims in respect of any Subordinated Debt in any manner that the Agent deems appropriate for the enforcement of its rights hereunder.

 

11. In the event of the Obligor’s bankruptcy, insolvency, reorganization or any case or proceeding, arrangement or transaction under any federal or state bankruptcy or insolvency law or similar laws or proceedings involving the Obligor, for so long as any of the Senior Debt remains unpaid, if the Senior Lenders shall seek to provide the Obligor with any financing under Section 364 of the Bankruptcy Code, or the Senior Lenders support or consent to such financing provided by a third party, or consents to any order for the use of cash collateral under Section 363 of the Bankruptcy Code (each, a “DIP Financing” or “Cash Collateral Use”), with such DIP Financing or Cash Collateral Use to be secured by all or any portion of the Collateral (including assets that, but for the application of Section 552 of the Bankruptcy Code (or any similar provision of any foreign laws relating to the relief of debtors) would be Collateral), then Subordinated Lender agrees that it will not raise any objection and will not support, directly or indirectly, any objection to such DIP Financing or Cash Collateral Use nor object to the liens or claims granted in connection therewith on any grounds, including a failure to provide “adequate protection” for the liens, if any, securing any Subordinated Debt (and will not request any adequate protection as a result of such DIP Financing or Cash Collateral Use, and will not support any debtor-in-possession financing or Cash Collateral Use which would compete with such DIP Financing or Cash Collateral Use which is provided to or consented to by the Senior Lenders). In addition, Subordinated Lender agrees that it will not provide nor seek to provide or support any debtor-in-possession financing without the prior written consent of the Senior Lenders and the Agent.

 

12. No amendment of the Subordinated Loan Documents shall directly or indirectly modify the provisions of this Agreement in any manner which might terminate or impair the subordination of the Subordinated Debt or the subordination of the Junior Liens. In addition, such instruments shall not be amended in any manner adverse to the Senior Lenders without the prior written consent of the Senior Lenders. For the avoidance of doubt, any amendment that increases the principal amount of the Subordinated Debt, increases the rate of interest payable thereon, advances the maturity date of the Subordinated Date to a date that is earlier than the current maturity date thereof, or imposes more burdensome conditions on the Obligor shall be deemed adverse to the Senior Lenders.

 

13. This Agreement shall remain effective for so long as any Senior Lender has any obligation to make credit extensions to the Obligor or the Obligor owes any amounts to any Senior Lender or the Agent on account of the Senior Debt or the Senior Liens. If, at any time after payment in full of the Senior Debt any payments of the Senior Debt must be disgorged by the Senior Lenders for any reason (including, without limitation, the bankruptcy of the Obligor), this Agreement and the relative rights and priorities set forth herein shall be reinstated as to all such disgorged payments as though such payments had not been made and Subordinated Lender shall immediately pay over to the Senior Lenders all payments received with respect to the Subordinated Debt to the extent that such payments would have been prohibited hereunder. At any time and from time to time, without notice to Subordinated Lender, the Senior Lenders may take such actions with respect to the Senior Debt as the Senior Lenders in their sole discretion, may deem appropriate, including, without limitation, terminating advances to the Obligor, increasing the principal amount (which may include any DIP Financing), extending the time of payment, increasing applicable interest rates, renewing, compromising or otherwise amending the terms of any documents affecting the Senior Debt and any Collateral, and enforcing or failing to enforce any rights against the Obligor or any other person. No such action or inaction shall impair or otherwise affect the Senior Lenders’ or the Agent’s rights hereunder.

 

 

14. This Agreement shall bind any successors or assignees of a Subordinated Lender and shall benefit any successors or assigns of the Senior Lenders and/or the Agent. This Agreement is solely for the benefit of Subordinated Lender, the Senior Lenders and the Agent and not for the benefit of the Obligor or any other party. Subordinated Lender has not assigned or transferred any of the Subordinated Debt, any interest therein or any collateral or security pertaining thereto and will not assign or transfer the same to any person unless such transferee has entered into a subordination agreement in respect of the Subordinated Debt in form and substance reasonably satisfactory to Senior Lenders and the Agent.

 

15. Subordinated Lender hereby waives the right to assert any claim or cause of action to avoid any transfer to the Senior Lenders contemplated by and made pursuant to the Senior Loan Documents that may exist by virtue of any federal or state statute providing for such avoidance.

 

16. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one instrument.

 

17. This Agreement was negotiated in the State of New York, which State the parties agree has a substantial relationship to the parties and to the underlying transaction embodied hereby, and in all respects, including matters of construction, validity and performance, this Agreement and the obligations arising hereunder shall be governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and performed in such State and any applicable law of the United States of America.

 

18. This Agreement represents the entire agreement with respect to the subject matter hereof, and supersedes all prior negotiations, agreements and commitments. Subordinated Lender is not relying on any representations by the Senior Lenders or the Obligor in entering into this Agreement, and Subordinated Lender has kept and will continue to keep itself fully apprised of the financial and other condition of the Obligor. This Agreement may be amended only by written instrument signed by Subordinated Lender, the Senior Lenders and the Agent. The Subordinated Lender has reviewed and is familiar with the of the Senior Loan Documents.

 

[signature pages follow]

 

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the date first above written.

 

	SUBORDINATE LENDERS

 

 

	SENIOR LENDERS
	/s/ Joseph Allen Johnston
	Rose Capital
	/s/ Lelainya Ferguson
	Name:	Lelainya Ferguson
	Title:	Manager

 

[Senior Lender and Agent Signature Pages to Subordination Agreement]

 

 

	AGENT:
	PAUL VASSILAKOS, AS ADMINISTRATIVE
	AND COLLATERAL AGENT FOR SENIOR LENDERS
	By:	/s/ Paul Vassilakos

 

 

	OBLIGOR
	FOREVER 8 FUND, a Delaware limited liability company
	By:	/s/ Kevin O’Donnell
	Name:	Kevin O’Donnell
	Title:	Authorized Representative

 

[Obligor’s Signature Page to Subordination Agreement]

 

 

 

Exhibit 10.3

 

INTERCREDITOR AGREEMENT

 

INTERCREDITOR AGREEMENT (this “Agreement”) dated as of this 15th day of March, 2024, by and among Paul Vassilakos, an individual residing at 234 5^th Ave, Suite 509, New York NY 10001 (together with his successors and permitted assigns, solely in his capacity as the administrative and collateral agent for the Secured Lenders “Agent” (as defined below), the undersigned lenders (together with its successors and permitted assigns), the “Secured Lenders”, and each individually a “Secured Lender”), and FOREVER 8 FUND, LLC, a Delaware limited liability company having its principle place of business at 101 Larry Holmes Drive, Suite 313, Easton, PA 18042 (together with its successors and permitted assigns, the “Company”; collectively with the Secured Lenders described herein, the “Parties”, and each individually a “Party”).

 

A. WHEREAS, the Company has requested and/or obtained certain loans or other credit accommodations from certain Secured Lenders (which loans, credit accommodations and debts are or may be from time to time be secured by assets and property of the Company, pursuant to the terms of: (i) the Series C Loan and Security Agreements, Promissory Notes and transaction documents dated October 19, 2023 (the “Series C Loan Agreement”) and (ii) the Series D Loan and Security Agreements, Promissory Notes and transaction documents dated March 15, 2024 (the “Series D Loan Agreement” and capitalized terms used therein but not defined herein shall have the respective meanings give such terms in the Series C Loan Agreement and the Series D Loan Agreement by and among (1) the Company, as a borrower, (2) the other loan parties party thereto, (3) the Secured Lenders, and (4) the agents and (ii) each other Loan Documents executed by the Company in favor or for the benefit of the Secured Lenders and/or the Agent, collectively “the Senior Loan Documents”. Copies of the Series C Loan Agreement and the Series D Loan Agreement are attached hereto as Exhibit A and Exhibit B respectively;

 

WHEREAS, the Company’s Loan Obligations to each of the Secured Lenders are secured by security interests granted by the Company (and by certain of its subsidiaries party to the Notes) to each of them in certain assets as described more fully in Senior Loan Documents (all such assets, collectively, the “Collateral”); and

 

WHEREAS, the Secured Lenders, as a material inducement for each of them to make or maintain their respective Loans and in consideration thereof, expressly contemplate and intend (i) that the Company’s Loan Obligations to them under their respective Loan Agreements and Notes shall rank pari passu in all respects (including, without limitation, in right and priority of payment and repayment of principal, interest, and all fees and other amounts) to one another, without priority over one another, and (ii) that the security interests held by each of the Secured Lenders in the Collateral shall rank pari passu in all respects to one another, without priority over one another, all as described more fully, and subject to the terms and conditions set forth, in this Agreement;

 

 

NOW, THEREFORE, in consideration of the premises and of the mutual covenants and agreements set forth herein, and for other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree with one another as follows:

 

1. Each of the Secured Lenders hereby confirms and agrees that (a) the security interests in the Collateral held by them under their respective Notes shall rank pari passu, equally and ratably in all respects to one another, without priority over one another, regardless of the order of time in which such security interests or any claims with respect thereto arise, attach or are perfected by filing, recording, possession, control or otherwise, and (b) the Company’s Loan Obligations to them under their respective Notes shall rank pari passu, equally and ratably in all respects (including, without limitation, in right and priority of payment and repayment of principal, interest, and all fees and other amounts) to one another, without priority over one another.

 

2. Without limiting the generality of any other provision of this Agreement (including, without limitation, under Paragraph 4 hereof) that provides for the survival of certain of the Parties’ obligations hereunder, this Agreement, and all of the Parties’ respective obligations arising hereunder or with respect hereto, shall (a) continue in full force and effect so long as any of the Loan Obligations remain outstanding and (b) be reinstated if at any time any payment of or distribution with respect to any of the Loan Obligations is rescinded or must otherwise be returned by a Secured Lender upon the insolvency, bankruptcy or reorganization of the Company or otherwise, all as though such payment or distribution had not been made. No defect in, invalidity of, or absence or loss of priority under this Agreement or the Notes shall affect the Secured Lenders’ respective rights against the Company in respect of the Loans.

 

3. Each Secured Lender shall (a) promptly notify the other Secured Lenders of any Acceleration Event under such Secured Lender’s Note (or of any default by the Company under any other agreements or documents executed in connection therewith) known to such Secured Lender and not reasonably believed to have been previously disclosed to such other Secured Lenders; (b) provide such other Secured Lenders with such information and documentation as either such other Secured Lender may reasonably request in order to protect their respective interests with respect to the Loans; and (c) subject to the terms of this Agreement, reasonably cooperate with such other Secured Lenders with respect to any and all collections, foreclosure procedures, and other collection or enforcement actions at any time commenced or initiated against the Company or otherwise in respect of the Collateral securing the Loan Obligations. Each Secured Lender agrees that it shall not (and hereby waives any right to) take any action to challenge, contest, or support any other person in challenging or contesting, in any proceeding, the validity, perfection, priority or enforceability of a lien securing any Loan Obligations held, or purported to be held, by or on behalf of another Secured Lender.

 

 

4. The Secured Lenders hereby designate and appoint Paul Vassilakos as their sole and exclusive administrative and collateral agent (in such capacity, the “Agent”) to act on behalf of all Secured Lenders, subject to the terms of this Agreement, with respect to (a) enforcing the Secured Lenders’ rights and remedies, and the Company’s obligations, under the Notes and with respect to the Loan Obligations and (b) dealing with, and securing and enforcing the Secured Lenders’ rights and remedies and the Company’s obligations with respect to, the Collateral (including, without limitation, foreclosing and realizing on all or any portion of the Collateral in case of an Acceleration Event, releasing all or any portion of the Collateral, and filing and refiling any financing statements, continuation statements or other documents under the New York Uniform Commercial Code or otherwise with respect to the Collateral). The Agent shall not be liable, responsible or accountable to the other Secured Lenders or the Company for (and the other Secured Lenders and the Company hereby agree to and shall defend, indemnify and hold the Agent harmless from and against any and all liability, cost, damage or expense whatsoever with respect to) any act, failure to act, error or omission by the Agent in acting as Agent hereunder, except in cases of the Agent’s own fraud or willful misconduct. The Agent shall not be deemed to be a fiduciary or to have any fiduciary duties to the other Secured Lenders or the Company. The Secured Lenders shall, promptly upon demand by the Agent, share equally all out-of-pocket fees, costs and expenses incurred by the Agent in acting as Agent hereunder (including, without limitation, all attorneys’ fees, related expenses, filing fees and other charges incurred in connection with (i) the preparation, execution, delivery and administration of the Loan Documents and any amendments, modifications or waivers of the provisions thereof and (ii) the enforcement, collection, perfection or foreclosure of the Notes, the Loan Obligations and the Collateral; collectively, “Enforcement Costs”) to the extent not promptly paid or reimbursed by the Company in accordance with the following proviso; provided, however, that notwithstanding the foregoing, the Company shall, promptly upon demand by the Agent, pay directly (or, at the Agent’s option exercisable in his sole discretion, reimburse the Agent for) all Enforcement Costs. The Company further agrees to and shall defend, indemnify and hold each Secured Lender harmless from and against any and all costs, fees (including, without limitation, attorneys’ fees and related expenses), charges, expenses, liabilities, damages, claims, actions, suits or proceedings incurred by such Secured Lender in connection with this Agreement, the Loans, the Notes or the Loan Obligations, unless caused by such Secured Lender’s own fraud or willful misconduct. All of the foregoing indemnities and hold-harmless provisions shall (x) continue indefinitely and (y) survive termination of this Agreement, discharge of the Notes and the Loan Obligations, and foreclosure or release of the Collateral.

 

5. This Agreement shall constitute the Agent’s legal right, power and authority (collectively, the “authority”) to perform the actions described in Paragraph 4 hereof. The Agent shall use his reasonable, good-faith efforts to keep the other Secured Lenders reasonably apprised of any actions taken by the Agent under this Agreement. The Agent shall have the authority to employ and consult with attorneys, accountants and other professionals with respect to the actions, or contemplated actions, of the Agent under this Agreement. The Agent shall be under no duty to take (or to forebear from taking) any action, to pay any money, or to incur any fees, costs, charges or expenses in regard to the performance of the actions described in said Paragraph 4 unless he is advanced sufficient funds, either by the Company or by the other Secured Lenders, as described in this Agreement. Each Party shall sign all such further documents and instruments, if any, as the Agent may reasonably request to enable the Agent to perform the actions described in said Paragraph 4. Upon providing the other Secured Lenders with at least ten (10) business days’ prior written notice, the Agent may elect not to further perform any of the actions of an Agent under this Agreement. Upon receipt of any such notice, the Secured Lenders shall have the right to appoint a successor Agent by unanimous consent. If no such successor shall have been appointed by the Secured Lenders, and shall have accepted such appointment, within thirty (30) days after the retiring Agent gives notice of its resignation, then the retiring Agent may, on behalf of the Secured Lenders, appoint a successor Agent, which shall be a bank or financial institution that acts as an administrative agent in secured financings in the ordinary course of its business. The Agent shall not be deemed to have knowledge of any matter unless and until the Agent shall have received actual knowledge of such matter, and the Agent shall not be charged with constructive notice of any such matter.

 

 

6. Nothing in this Agreement shall impair, limit, relieve or otherwise affect the Company’s Loan Obligations to each Secured Lender under such Secured Lender’s Note. The Company shall make all payments and prepayments in respect of its Loan Obligations ratably to all Secured Lenders entitled to the respective category of payment.. Notwithstanding the occurrence of an Acceleration Event with respect to its Loan, no Secured Lender may accelerate the Company’s Loan Obligations under its Note, nor exercise any of its other rights or remedies thereunder, except in accordance with Paragraph 4 hereof. Upon the occurrence of an Acceleration Event: (a) all collections received by the Agent in respect of the Loan Obligations shall be distributed by him ratably to the Secured Lenders according to the respective Loan Obligations then owing to each, after the payment of all costs, expenses and fees incurred by the Agent in collecting or enforcing same; and (b) should any payment, distribution or proceeds be received by a Secured Lender with respect to such Secured Lender’s Loan in excess of such Secured Lender’s ratable share of the outstanding Loan Obligations, prior to the satisfaction in full of the Loan Obligations, such Secured Lender shall promptly pay or deliver to each of the other Secured Lenders their respective, ratable portions thereof in the form received. The Company may not prepay a Note at any time, in whole or in part, unless either such prepayment is made ratably to all Secured Lenders according to their respective Loan Obligations or the Secured Lenders otherwise agree in writing to such prepayment.

 

7. Each Secured Lender may transfer and assign (collectively, “assign” and, correlatively, “assignment”), in whole but not in part, its rights and claims under this Agreement to any entity or trust that is affiliated with and controlled by such Secured Lender upon three (3) business days’ prior written notice to each of the other Parties; provided that (a) any such attempted assignment to an unaffiliated third party shall require the other Parties’ prior written consent, which consent shall not be unreasonably delayed, and (b) any such permitted assignee shall acknowledge in writing to each of the other Parties such assignee’s express agreement to be bound by the terms of this Agreement. No assignment or delegation of the Company’s rights or obligations under this Agreement shall be made or be effective absent the prior written consent of all Secured Lenders. This Agreement is solely for the benefit of, and shall bind solely, the Parties and their respective successors and permitted assigns, and no other person or persons shall have any right, benefit, priority or interest under or because of the existence of this Agreement.

 

8. Each Party hereby represents and warrants that it has full right, power and legal authority to enter into this Agreement and to incur and perform its obligations hereunder. Each Secured Lender hereby agrees not to amend or modify its Note, or any other documents executed in connection with the Company’s Loan Obligations to such Secured Lender, without the prior written approval of each other Secured Lender, if any, whose rights hereunder, or whose priority to the Collateral, could be adversely affected by such amendment or modification.

 

9. Within ten (10) business days after a request therefor by any Secured Lender (the “Requesting Secured Lender”) made not more frequently than once per calendar quarter, the Secured Lender of whom such request is made (the “Responding Secured Lender”) shall furnish to the Requesting Secured Lender a written letter addressed to the Requesting Secured Lender which states (a) the principal amount then outstanding on the Responding Secured Lender’s Note, (b) whether the Responding Secured Lender has given notice to the Company of the existence of any Acceleration Event under the Responding Secured Lender’s Note and (c) if not, that to the best of the Responding Secured Lender’s knowledge no condition or event which constitutes (or which, after notice or lapse of time or both, would constitute) an Acceleration Event thereunder exists or has occurred, or, if any such condition or event does exist or has occurred, specifying in reasonable detail the nature and period of existence thereof.

 

 

10. This Agreement shall be governed by, and construed and enforced in accordance with, the substantive laws of the State of New York applicable to contracts made between residents of that state, entered into and to be wholly performed within that state, notwithstanding the Parties’ actual states of residence or legal domicile if outside that state and without reference to any conflict of laws or similar rules that might otherwise mandate or permit the application of the laws of any other jurisdiction. Any action, suit or proceeding relating to this Agreement shall be brought exclusively in the courts of New York State sitting in the Borough of Manhattan, New York City, or in U.S. District Court for the Southern District of New York, and, for all purposes of any such action, suit or proceeding, each of the Parties hereby irrevocably (a) submits to the exclusive jurisdiction of such courts, (b) waives any objection to such choice of venue based on forum non conveniens or any other legal or equitable doctrine, and (c) waives trial by jury and, in the case of the Company, the right to interpose any set-off or counterclaim, of any nature or description whatsoever, in any such action, suit or proceeding.

 

11. No Party’s rights or remedies under this Agreement are intended to be exclusive of any other right or remedy available to such Party, whether at law, in equity, by statute or otherwise, but shall be deemed cumulative with all such other rights and remedies. No failure by a Party to exercise, or any delay by a Party in exercising, any of such Party’s rights or remedies hereunder shall operate as a waiver thereof. A waiver by any Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to such Party’s exercise of that same or of any other right or remedy which such Party would otherwise have on any future occasion. No forbearance, indulgence, delay or failure by any Party to exercise any of such Party’s rights or remedies hereunder or with respect to the Loan Obligations, nor any course of dealing between or among the Parties, shall operate as a waiver of any such right or remedy, nor shall any single or partial exercise of any such right or remedy preclude any other or further exercise thereof or the exercise of any other right or remedy. A Party shall not, by any course of dealing, indulgence, omission, or other act (except a further instrument signed by such Party) or failure to act, be deemed to have waived any right or remedy hereunder or with respect to the Loan Obligations, or to have acquiesced in any breach of any of the terms of this Agreement. No modification, rescission, waiver, forbearance, release or amendment of any term, covenant, condition or provision of this Agreement shall be valid or enforceable unless made and evidenced in writing, expressly referring to this Agreement.

 

12. The terms and provisions of this Agreement are severable. In the event of the unenforceability or invalidity of one or more of the terms, covenants, conditions or provisions of this Agreement under federal, state or other applicable law in any circumstance, such unenforceability or invalidity shall not affect the enforceability or validity of such term, covenant, condition or provision in any other circumstance, or render any other term, covenant, condition or provision of this Agreement unenforceable or invalid.

 

 

13. All notices, demands or other communications (collectively, “notices”) hereunder relating to any matter set forth herein shall be in writing and made, given, served or sent (collectively, “delivered”) by (a) certified mail (return receipt requested) or (b) reputable commercial overnight courier service (Federal Express, UPS or equivalent that provides a receipt) for next-business-morning delivery, in each case with postage thereon prepaid by sender and addressed to the intended recipient at its address set forth in the first paragraph of this Agreement (or at such other address as the intended recipient shall have previously provided to the sender in the same manner herein provided); provided that copies of any such notice to Forever 8 LLC or the notice shall also be sent to them at 306 S. New Street Suite 110, Bethlehem, PA 18015, and emailed to them at legal@8co.holdings. Any such notice sent as so provided shall be deemed effectively delivered (i) on the third business day after being sent by certified mail, (ii) on the next business morning if sent by overnight courier for next-business-morning delivery or (iii) on the day of its actual delivery to the intended recipient (as shown by the return receipt or proof-of-delivery), whichever is earlier.

 

14. This Agreement may be executed in counterparts, each of which when duly signed and delivered shall be deemed for all purposes hereof to be an original, but all such counterparts shall collectively constitute one and the same instrument; and any Party may execute this Agreement by signing any such counterpart. Any signature delivered by facsimile or email transmission (in scanned .pdf format or the equivalent) shall be deemed to be an original signature.

 

15. This Agreement shall inure to the benefit of, and be binding upon, each of the Parties and their respective successors and permitted assigns. The provisions of this Agreement are, and are intended, solely for the purpose of defining the relative rights of the Secured Lenders between and amongst themselves. This Agreement constitutes the entire agreement, arrangement and understanding, written or oral, among the Secured Lenders (or between any of them) with respect to its subject matter, superseding and merging all prior and contemporaneous negotiations, discussions, agreements, arrangements and understandings, written or oral, between or among any of them relating thereto; and there are no representations, warranties, agreements, arrangements or understandings, written or oral, among the Secured Lenders (or between any of them) with respect to the subject matter of this Agreement other than as set forth in this Agreement. There are no intended third-party beneficiaries of this Agreement, except as may be expressly provided herein.

 

Signature page follows immediately below

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	AGENT
	/s/ Paul Vassilakos

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	SECURED LENDERS
	/s/ Joseph Allen Johnston
	Rose Capital
	/s/ Lelainya Ferguson
	Name:	Lelainya Ferguson
	Title:	Manager

 

 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first written above.

 

	COMPANY: FOREVER 8 FUND, LLC
	/s/ Kevin O’Donnell
	By:	Kevin O’Donnell
	Title:	Authorized Representative

 

 

 

Exhibit 10.4

 

AGREEMENT

 

Reference is made to that certain Membership Interest Purchase Agreement, dated September 14, 2022 (the “MIPA”), by and among Eightco Holdings Inc. (formerly Cryptyde, Inc.) (the “Purchaser”), Forever 8 Fund, LLC (“Forever 8”), the members of Forever 8 set forth on the signature pages thereto (the “Sellers”) and Paul Vassilakos, in his capacity as representative of the Sellers (the “Sellers’ Representative”). Reference is also made to those certain Seller Notes issued to the Sellers pursuant to the MIPA. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in the MIPA.

 

WHEREAS, the Parties wish to amend certain provisions of the Seller Notes as provided for herein; and

 

WHEREAS, pursuant to Section 8.12 of the MIPA, the Sellers’ Representative has full power and authority in each Seller’s name and on each Seller’s behalf to act on such Seller’s behalf in the absolute discretion of the Sellers’ Representative with respect to all matters relating to the MIPA, the other Ancillary Documents (including the Seller Notes) and the transactions contemplated thereunder;

 

NOW, THEREFORE, in consideration of the premises, representations, warranties, covenants and agreements contained herein, and certain other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:

 

	1.	Forgiveness of Certain Accrued Interest. The Sellers shall forgive, without the payment of any additional consideration, accrued interest on the Seller Notes in an aggregate amount of $3,006,896 with each Seller forgiving interest in the amounts set forth on Schedule A attached hereto.
	2.	Conversion of Certain Accrued Interest. The Sellers shall convert $1,148,000 of accrued interest on the Seller Notes into shares of Purchaser Common Stock at $0.82 per share, with each Seller converting the amount of interest into shares of Purchaser Common Stock at the price and in the amounts set forth on Schedule B attached hereto. The Sellers’ Representative confirms each Seller’s representations and warranties set forth on Schedule C attached hereto with respect to the receipt of Purchaser Common Stock provided for hereunder. Purchaser shall use its reasonable best efforts to file a registration statement with the Securities and Exchange Commission covering the resale of the shares of Purchaser Common Stock to be issued hereunder as soon as possible after the date hereof and to cause such registration statement to be declared effective within 90 days from the date hereof.
	3.	Deferral of Required Payments. The aggregate $11,500,000 payment of principal that was due to the Sellers under the Seller Notes on February 28, 2024 in the individual amounts set forth on Schedule D attached hereto shall be deferred until October 30, 2024 (the “Deferred Amount”). Interest shall be deferred and accrue on the Seller Notes at the Contract Rate until October 30, 2024.

 

 

	4.	Representations and Warranties. Each of the Parties hereby represents and warrants to the other Parties that (a) such Party has all necessary power and authority to execute and deliver this Agreement, (b) the execution and delivery of this Agreement has been duly authorized and approved, (c) no other entity or governing body action on the part of such Party is necessary to authorize the execution and delivery by such Party of this Agreement; and (d) this Agreement has been duly executed and delivered by such Party and, assuming due authorization, execution and delivery of this Agreement by the other Parties hereto, constitutes a legal, valid and binding obligation of such Party, enforceable against such Party in accordance with its terms and conditions, subject to applicable bankruptcy, insolvency, moratorium, or other similar Laws relating to creditors’ rights and general principles of equity. The Purchaser further represents and warrants that the Purchaser SEC Documents filed since September 14, 2022 (i) at the time they were filed and, if amended, as of the date of such amendment, complied in all material respects with all applicable requirements of the Securities Act or the Exchange Act or the Sarbanes-Oxley Act of 2002, as amended, as the case may be, and the rules and regulations promulgated thereunder, and (ii) did not, at the time they were filed, and, if amended, as of the date of such amendment, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements made therein, in the light of the circumstances under which they were made, not misleading.
	5.	Counterparts; Electronic Delivery. This Agreement and each other document executed in connection with the transactions contemplated hereby, and the consummation thereof, may be executed in counterparts, all of which shall be considered one and the same document and shall become effective when one or more counterparts have been signed by each of the Parties and delivered to the other Party, it being understood that all Parties need not sign the same counterpart. Delivery by electronic transmission to counsel for the other Party of a counterpart executed by a Party shall be deemed to meet the requirements of the previous sentence.
	6.	Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware applicable to contracts made and performed in such State, without reference to such State’s principles of conflict of laws.
	7.	Drafting of this Agreement. Each Party acknowledges and agrees that this Agreement has been prepared by Graubard Miller (“GM”) solely in its role as counsel to the Sellers and the Sellers’ Representative. GM is not acting as legal counsel nor providing any legal representation or consultative services to Forever 8 or the Purchaser. Accordingly, the Purchaser has been advised to seek the advice of other counsel in connection with the negotiation and preparation of this Agreement. Notwithstanding the foregoing, Purchaser is paying the legal fees and disbursements of GM incurred in connection with the documentation of this Agreement.

 

 

IN WITNESS WHEREOF, the undersigned have caused this Agreement to be executed as of March 17, 2024.

 

	EIGHTCO HOLDINGS INC.
	By:	/s/ Brett Vroman
	Name:	Brett Vroman
	Title:	CFO
	FOREVER 8 FUND, LLC
	By:	/s/ Paul Vassilakos
	Name:	Paul Vassilakos
	Title:	President
	SELLERS’ REPRESENTATIVE, on behalf of the Sellers
	/s/ Paul Vassilakos
	Paul Vassilakos

 

 

Exhibit 10.5

 

First Amendment

To

General Release and Severance Agreement

 

This First Amendment to General Release and Severance Agreement (this “Amendment”), dated as of March 17, 2024 is made and entered into by and between Brian McFadden (“Employee”) and Eightco Holdings Inc., a Delaware corporation (formerly and including Cryptyde, Inc.) (the “Company”) for the purpose of amending that certain General Release and Severance Agreement by and between Employee and the Company, dated as of February 26, 2024 (the “Severance Agreement”). Terms used in this Amendment with initial capital letters that are not otherwise defined herein shall have the meanings ascribed to such terms in the Severance Agreement.

 

WHEREAS, the parties mutually desire to modify certain provisions that would otherwise apply to Employee’s resignation from the Board of Directors of the Company pursuant to the Severance Agreement.

 

NOW, THEREFORE, in consideration of the mutual provisions, conditions, and covenants contained herein, and other good and valuable consideration, the adequacy of which is hereby acknowledged, the parties hereby agree as follows:

 

1.

The second sentence of Section 1 of the Severance Agreement is hereby deleted and replaced with the following:

 

Notwithstanding the foregoing, Employee shall remain a director of the Company under the standard terms, conditions, and bylaws of the Company from the Separation Date through March 17, 2024, or such other date as otherwise agreed by the parties, at which time Employee shall resign from the Board of Directors of the Company.

 

2.

The Severance Agreement, except as modified by this Amendment, shall remain in full force and effect.

 

[SIGNATURE PAGE FOLLOWS]

 

 

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed and delivered as of the date set forth on the first page hereof.

 

EIGHTCO HOLDINGS INC.			BRIAN MCFADDEN
/s/ Paul Vassilakos			/s/ Brian McFadden
Name:	Paul Vassilakos
Title:	CEO

 

 

 

Exhibit 10.6

 

GENERAL RELEASE AND SEVERANCE AGREEMENT

 

This General Release and Severance Agreement (the “Agreement”), dated as of March 17, 2024 is made and entered into by and between Kevin O’Donnell (“Employee”) and Eightco Holdings Inc., a Delaware corporation (formerly and including Cryptyde, Inc.) (the “Company”). The Company and the Executive shall be referred to herein as the “Parties.”

 

For good and valuable consideration, receipt of which is hereby acknowledged, in order to effect a mutually satisfactory and amicable separation of employment from the Company and to resolve and settle finally, fully and completely all matters and disputes that now or may exist between them, as set forth below, Employee and the Company agree as follows:

 

1. Separation from Employment. Effective March 17, 2024 (the “Separation Date”), Employee’s employment with the Company ceased and he relinquished all offices, positions, and any authority with the Company and any affiliates of the Company, provided that Employee will continue as a non-employee director of the Board of Directors of the Company. Employee acknowledges and agrees, except for the payments described hereunder, Employee has no rights to any other wages and/or other compensation or remuneration of any kind due or owing or owed from the Company, including, but not limited, to all wages, commissions, reimbursements, bonuses, advances, vacation pay, severance pay, vested or unvested equity or stock options, awards, and any other incentive-based compensation or benefits to which Employee was or may become entitled or eligible. Except as set forth herein, any equity awards previously granted to Employee shall continue to be governed by the terms of the applicable equity plan and award agreements.

 

2. Continuing Obligations/Compliance. As of the Separation Date, the amended and restated employment agreement between the Parties with an effective date of October 21, 2022 (the “Employment Agreement”) shall terminate forever and no party shall have any further obligation or liability thereunder, except that Employee acknowledges and agrees that Employee shall remain bound by, and agrees to comply with, any obligations that survive an employment termination as set forth in the Employment Agreement, including, without limitation those set forth in the Employee Confidential Disclosure, Invention Assignment, Non-Competition, Non-Solicitation and Non-Interference Agreement that was attached as Attachment A to the Employment Agreement. Employee shall further remain bound by, and agrees to comply with, any obligations that survive an employment termination as set forth in any other agreement or employee policy to which he became subject during and in connection with his employment with the Company, including without limitation his continuing obligation to maintain the confidentiality of the Company’s confidential information and other restrictive covenants. Employee acknowledges that Employee has returned all Company property and information.

 

3. Consideration. In consideration of this Agreement and the release herein, and his compliance with his obligations hereunder and under the Confidentiality Agreement, the Company will provide Employee with the following:

 

(i) Accrued but unpaid base salary through the Separation Date in the amount of $[138,000], less all lawful and authorized withholdings and deductions, to be paid as soon as practicable following the Effective Date (as defined below);

 

(ii) Severance equal to 24 months of Employee’s base salary, less all applicable lawful and authorized withholdings and deductions (the “Cash Severance”), under the Employment Agreement and the Parties have agreed to engage in good faith negotiations for the Company’s form of payment to be in either cash or stock awards as soon as practicable following the Effective Date (as defined below), but no later than March 15^th of the following year;

 

 

(iii) reimbursement of Employee during the remaining term of employment of the Employment Agreement commencing on the Separation Date and continuing through and including September 27, 2024 (the end of the of the premiums associated with Employee’s continuation of health insurance for Employee and Employee’s family pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”), provided Employee timely elects and is eligible to continue to receive COBRA benefits (less all applicable tax withholdings), payable in accordance with the Company’s normal expense reimbursement policy;

 

(iv) reimbursement of expenses incurred by the Company and paid by the Employee, payable in accordance with the Company’s normal expense reimbursement policy; and

 

(v) full vesting of any earned, outstanding, and unvested shares of the Company’s common stock subject to the Company’s 2022 Long-Term Incentive Plan.

 

Notwithstanding the foregoing, in the event the Company determines, in its reasonable discretion, that payment of the Cash Severance would jeopardize the Company’s ability to continue as a going concern, then in accordance with Treasury Regulation § 1.409A-3(d), the Company shall not pay the Cash Severance until the first taxable year in which it is able to make such payment without jeopardizing the Company’s ability to continue as a going concern.

 

4. Transition Services. Following the Separation Date, Employee agrees to reasonably cooperate and make himself reasonably available to assist with the transition of Employee’s positions, offices, authority, duties, or responsibilities with the Company. Employee also agrees to assist with the execution of all documents and all other instruments which the Company shall deem necessary to accomplish any such transition. Employee acknowledges that he will continue as a non-employee director of the Board of Directors of the Company.

 

5. Cooperation. Employee agrees to reasonably cooperate and make himself reasonably available to the Company (and its representatives and advisors) in any pending or future governmental or regulatory investigation, inquiry, or request for information, or civil, criminal, or administrative proceeding or arbitration, in each case involving the Company. Employee agrees that, upon reasonable notice and without the necessity of the Company’s obtaining a subpoena or court order, he shall reasonably respond to all reasonable inquiries of the Company about any matters concerning the Company or its affairs that occurred or arose during his employment by the Company, of which matters he has knowledge or information.

 

 

6. Release of Claims. For and in consideration of the right to receive the consideration described in Section 3 of this Agreement, Employee fully and irrevocably releases and discharges the Company, including all of its affiliates, parent companies, subsidiary companies, employees, owners, directors, officers, principals, agents, insurers, and attorneys (collectively, the “Releasees”) from any and all actions, causes of action, suits, debts, sums of money, attorneys’ fees, costs, accounts, covenants, controversies, agreements, promises, damages, claims, grievances, arbitrations, and demands whatsoever, known or unknown, at law or in equity, by contract (express or implied), in tort, or pursuant to statute, or otherwise (collectively, “Claims”) arising or existing on, or at any time prior to, the date this Agreement is signed by Employee. Such released Claims include, without limitation, Claims relating to or arising out of: (i) Employee’s hiring, compensation, benefits and employment with the Company, (ii) Employee’s separation from employment with the Company, and (iii) all Claims known or unknown or which could or have been asserted by Employee against the Company, at law or in equity, or sounding in contract (express or implied) or tort, including claims arising under any federal, state, or local laws of any jurisdiction that prohibit age, sex, race, national origin, color, disability, religion, veteran, military status, pregnancy, sexual orientation, or any other form of discrimination, harassment, or retaliation, including, without limitation, under the Age Discrimination in Employment Act; the Older Workers Benefit Protection Act; the Americans with Disabilities Act; Title VII of the Civil Rights Act of 1964; the Rehabilitation Act; the Equal Pay Act; the Family and Medical Leave Act, 42 U.S.C. §1981; the Civil Rights Act of 1991; the Civil Rights Act of 1866 and/or 1871; the Sarbanes Oxley Act; the Employee Polygraph Protection Act; the Uniform Services and Employment and Re-Employment Rights Act; the Worker Adjustment Retraining Notification Act; the National Labor Relations Act and the Labor Management Relations Act; the Florida Human Civil Rights Act and any other similar or equivalent state laws; and any other federal, state, local, municipal or common law whistleblower protection claim, discrimination or anti-retaliation statute or ordinance; claims arising under the Employee Retirement Income Security Act of 1974, as amended; claims arising under the Fair Labor Standards Act; claims related to the COVID-19 pandemic and related mandates, policies and/or protocols; or any other statutory, contractual or common law claims.

 

7. No Legal Actions. Employee represents that he has not filed or caused to be filed any lawsuit, complaint, or charge against any Releasees in any court, any municipal, state, or federal agency, or any other tribunal. Employee further represents that he has no unasserted claims (whether by his or any other individual or entity) against the Company currently in existence, and no unreported workplace injuries or occupational diseases. To the fullest extent permitted by law, Employee agrees that he will not sue or file a complaint in any court, or file or pursue a demand for arbitration, pursuing any Claims released under this Agreement, or assist or otherwise participate in any such proceeding. Employee represents and warrants further that he has not assigned or conveyed to any other person or entity any of his rights vis-à-vis the Releasees, including any of the Claims released in this Agreement. He further expressly waives any claim to any monetary or other damages or any other form of recovery in connection with any proceeding made by his in violation of this Agreement.

 

8. No Interference. Nothing in this Agreement is intended to interfere with Employee’s right to report possible violations of federal, state or local law or regulation to any governmental or law enforcement agency or entity (including, without limitation, the Securities and Exchange Commission), or to make other disclosures that are protected under the whistleblower provisions of federal or state law or regulation. Employee further acknowledges that nothing in this Agreement is intended to interfere with Employee’s right to file a claim or charge with, or testify, assist, or participate in an investigation, hearing, or proceeding conducted by, the Equal Employment Opportunity Commission (the “EEOC”), any state human rights commission, or any other government agency or entity. However, by executing this Agreement, Employee hereby waives the right to recover any damages or benefits in any proceeding Employee may bring before the EEOC, any state human rights commission, or any other government agency or in any proceeding brought by the EEOC, any state human rights commission, or any other government agency on Employee’s behalf with respect to any claim released in this Agreement; provided, however, for purposes of clarity, Employee does not waive any right to any whistleblower award pursuant to Section 21F of the Securities Exchange Act of 1934 or any other similar provision.

 

 

9. Review. Employee acknowledges that: (a) this Agreement is written in terms and sets forth conditions in a manner which Employee understands; (b) Employee has carefully read and understands all of the terms and conditions of this Agreement; (c) Employee agrees with the terms and conditions of this Agreement; and (d) Employee enters into this Agreement knowingly and voluntarily. Employee acknowledges that Employee does not waive rights or claims that may arise after the date this Agreement is executed, that Employee has been given 21 days from receipt of this Agreement in which to consider whether Employee wanted to sign it, that any modifications, material or otherwise made to this Agreement do not restart or affect in any manner the original 21 day consideration period, and that the Company advises Employee to consult with an attorney before Employee signs this Agreement. The Company agrees, and Employee represents that Employee understands, that Employee may revoke Employee’s acceptance of this Agreement at any time for 7 days following Employee’s execution of the Agreement and must provide notice of such revocation by giving written notice to the Company. If not revoked by written notice received on or before the 8th day following the date of Employee’s execution of the Agreement, this Agreement shall be deemed to have become enforceable and on such 8th day (the “Effective Date”).

 

10. No Further Services. Employee agrees that he will not seek, apply for, accept, or otherwise pursue employment, engagement, or arrangement to provide further services with or for the Company, as an employee, independent contractor or otherwise, except as provided herein.

 

11. Non-Disparagement. Employee agrees that Employee will not, directly or indirectly, disclose, communicate, or publish any disparaging, reckless or maliciously untrue information concerning the Company’s products, services, customers, or business policies. Nothing in this Agreement is intended to prevent Employee from testifying truthfully in any legal proceeding, and nothing in this provision is intended to interfere with Employee’s right to engage in the conduct set forth in Section 8 of this Agreement, nor is it intended to interfere with any rights afforded to Employee under Section 7 of the National Labor Relations Act.

 

12. Confidentiality of Agreement. Employee and Company agree to keep both the fact of this Agreement and the terms of this Agreement confidential, and Employee will not disclose the fact of this Agreement or the terms of this Agreement to anyone other than Employee’s spouse/registered domestic partner, attorney or accountant/tax advisor, unless otherwise required to under applicable law or regulation or at the request of any regulator after, to the extent legally permissible, after providing reasonable notice in writing to the Company, and a reasonable opportunity to challenge any such disclosure.

 

 

13. Governing Law/Venue. This Agreement shall be governed by and construed under the laws of the State of Florida. Venue of any litigation arising from this Agreement or any disputes relating to Employee’s employment shall be in the federal and state courts situated in Florida. Employee consents to personal jurisdiction of the federal and state courts situated in Florida for any dispute relating to or arising out of this Agreement or Employee’s employment, and Employee agrees that Employee shall not challenge personal or subject matter jurisdiction in such courts. The Parties also hereby waive any right to trial by jury in connection with any litigation or disputes under or in connection with this Agreement.

 

14. Voluntary. This Agreement is executed voluntarily and without any duress or undue influence on the part or behalf of the Parties hereto.

 

15. Acknowledgment. Employee acknowledges and agrees that the payments and other consideration provided herein are consideration to which Employee is not otherwise entitled except pursuant to the terms of this Agreement, and are being provided in exchange for Employee’s compliance with his obligations set forth hereunder.

 

16. No Admission of Liability. This Agreement shall not in any way be construed as an admission by the Company or Employee of any acts of wrongdoing or violation of any statute, law or legal right.

 

17. No Third-Party Beneficiaries. Except as expressly provided to the contrary in this Agreement, no third party is intended to be, and no third party shall be deemed to be, a beneficiary of any provision of this Agreement. Employee agrees that all Releasees shall be express third-party beneficiaries of this Agreement (and the release of Claims contained herein), and shall be permitted to enforce the terms of this Agreement as if they were Parties hereto.

 

18. Sole Agreement and Severability. Except as set forth herein, this Agreement is the sole, entire and complete agreement of the Parties relating in any way to the subject matter hereof. No statements, promises or representations have been made by any party to any other party, or relied upon, and no consideration has been offered, promised, expected or held out other than as expressly set forth herein, provided only that the release of claims in any prior agreement or release shall remain in full force and effect. The covenants contained in this Agreement are intended by the Parties hereto as separate and divisible provisions, and in the event that any or all of the covenants expressed herein shall be determined by a court of competent jurisdiction to be invalid or unenforceable, the remaining parts, terms or provisions of this Agreement shall not be affected and such provisions shall remain in full force and effect.

 

[SIGNATURE PAGE FOLLOWS]

 

 

PLEASE READ CAREFULLY. THIS GENERAL RELEASE AND SEVERANCE AGREEMENT INCLUDES A RELEASE OF ANY AND ALL CLAIMS, KNOWN OR UNKNOWN, AGAINST THE COMPANY.

 

EIGHTCO HOLDINGS INC.			KEVIN O’DONNELL
/s/ Paul Vassilakos			/s/ Kevin O’Donnell
Name:	Paul Vassilakos
Title:	CEO

 

 

 

Exhibit 10.7

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of March 17, 2024 (the “Effective Date”) and is entered into by and between Paul Vassilakos (the “Executive”) and Eightco Holdings Inc., a Delaware corporation (formerly and including Cryptyde, Inc.) (the “Company”). The Company and the Executive shall be referred to herein as the “Parties.”

 

RECITALS

 

Whereas, the Company desires for the Executive to be employed as the Executive Chairman & Chief Executive Officer of the Company, and the Executive desires to be employed by the Company as its Executive Chairman & Chief Executive Officer;

 

Whereas, the Company and the Executive desire to set forth in writing the terms and conditions of their agreement and understandings with respect to the employment of the Executive as the Company’s Executive Chairman & Chief Executive Officer;

 

WHEREAS, the Executive previously entered into an Employment Agreement dated October 16, 2022 with Forever 8 Fund LLC and Cryptyde, Inc. (the “Prior Employment Agreement”) and the Parties wish to supersede and replace such agreement in its entirety with this Agreement; and

 

Whereas, the Company hereby employs the Executive, and the Executive hereby accepts employment with the Company for the period and upon the terms and conditions contained in this Agreement.

 

Now, Therefore, in consideration of the mutual promises and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound, the Parties hereby agree as follows:

 

ARTICLE I.

Services to be Provided by THE EXECUTIVE

 

A. Position and Responsibilities. The Executive shall be employed and serve as Executive Chairman & Chief Executive Officer of the Company, subject to the direction of the Board of Directors of the Company (the “Board”). The Executive shall have such duties and responsibilities commensurate with the Executive’s title and function of such office and as the Board may reasonably require of the Executive from time to time. The Executive acknowledges and agrees that the Executive shall observe and comply with all of the Company’s Policies and Procedures, which may change from time to time, including, but limited to, the Employee Handbook and other onboarding documents.

 

B. Performance. During the Executive’s employment with the Company, the Executive shall devote on a full-time basis all of the Executive’s time, energy, skill and reasonable best efforts to the performance of the Executive’s duties hereunder in a manner that will faithfully and diligently further the business and interests of the Company, and shall exercise reasonable best efforts to perform the Executive’s duties in a diligent, trustworthy, good faith and business-like manner, all for the purpose of advancing the business of the Company. The Executive shall at all times act in a manner consistent with the Executive’s position.

 

 

C. Restrictive Covenants. The Executive’s employment is conditioned on the execution of and compliance with the Employee Confidential Disclosure, Invention Assignment, Non-Competition, Non-Solicitation and Non-Interference Agreement attached hereto as Attachment A, which the Executive must sign on or before the Executive’s first day of employment.

 

ARTICLE II.

Compensation for SErvices

 

As compensation for all services the Executive will perform under this Agreement, the Company will pay the Executive, and the Executive shall accept as full compensation, the following:

 

A. Base Salary. The Company shall pay the Executive an annual salary of $300,000, less applicable payroll deductions and tax withholdings (the “Base Salary”) for all services rendered by the Executive under this Agreement. The Company shall pay the Base Salary in accordance with the normal payroll policies of the Company.

 

B. Equity Awards and Bonuses. The Company may pay the Executive additional compensation, at its sole and absolute discretion, as set forth in Attachment B.

 

C. Other Bonuses/Compensation. Based on the individual performance of the Executive and/or of the Company, the Company’s Compensation Committee of the Board and the Board may award to the Executive additional compensation in their sole and complete discretion, including but not limited to additional grants in the Company’s 2022 Long-Term Incentive Plan.

 

D. Expenses. The Company agrees that, during the Executive’s employment, it will reimburse the Executive for out-of-pocket expenses reasonably incurred in connection with the Executive’s performance of the Executive’s services hereunder, including first class air travel for flights of 3 hours or more, quality hotels and rental cars, entertainment and similar executive expenditures, , upon presentation by the Executive of an itemized account of such expenditures, with supporting receipts in compliance with the Company’s expense reimbursement policies. Reimbursement shall be in compliance with the Company’s expense reimbursement policies.

 

E. Paid Time Off. The Executive shall be entitled to four (4) weeks of paid vacation and five (5) paid personal days per calendar year (collectively, the “Paid Time Off”), to be taken in such amounts and at such times as shall be mutually convenient for the Executive and the Company. Any Paid Time Off not taken by the Executive in one year shall be carried forward to subsequent years. If all such Paid Time Off is not taken by the Executive before the termination of this Agreement, the Executive shall be entitled to receive a payout of accrued, unused Paid Time Off upon termination (for any reason), less applicable payroll deductions and tax withholdings. The Executive shall also be entitled to any paid holidays as designated by the Company.

 

 

F. Health and Other Medical. The Executive shall be eligible to participate in all health, medical, dental, and life insurance employee benefits as are available from time to time to other employees (and their families) of the Company (to the extent the Executive is eligible under the general provisions thereof), including a Life Insurance Plan, Medical and Dental Insurance Plan, and a Long Term Disability Plan (the “Plans”), as such Plans may be modified, amended, terminated, or adopted from time to time by the Company in its sole discretion. The Company shall pay all premiums with respect to such Plans. To the extent that any and all such reimbursements or payments by the Company are includable in Executive’s gross income and taxable, then the Company shall, on or before June 1 of the year after the payment is made, reimburse the Executive for such taxes.

 

G. Savings Plan. The Executive will be eligible to enroll and participate, and be immediately vested in (to the extent legally possible and in accordance with existing Company benefit plans), all Company savings and retirement plans, including any 401(k) plans.

 

H. Directors and Officers Liability Insurance. The Company will provide liability insurance coverage protecting the Executive and the Executive’s estate, to the extent permitted by law against suits by fellow employees, shareholders and third parties and criminal and regulatory investigations arising out of any alleged act or omission occurring with the course and scope of the Executive’s employment with the Company. Such insurance will be in an amount not less than five million dollars ($5,000,000). The Company shall also enter into a standard indemnification agreement with the Executive in the form as set forth in Attachment C (the “Indemnification Agreement”).

 

I. Financial Planning. The Company shall reimburse the Executive for all legal, and accounting costs, fees, and expenses incurred each year by the Executive in connection with (a) income tax preparation and (b) estate planning, provided that the aggregate annual expenses to be reimbursed shall not exceed Twenty Thousand Dollars ($20,000). To the extent that any and all such reimbursements or payments by the Company are includable in Executive’s gross income and taxable, then the Company shall, on or before June 1 of the year after the payment is made, reimburse the Executive for such taxes.

 

ARTICLE III.
Term; Termination

 

A. Term of Employment. The Agreement’s stated term and employment relationship created hereunder will begin on the Effective Date and will remain in effect for two (2) years, unless earlier terminated in accordance with this Article III (the “Initial Employment Term”). This Agreement shall be automatically renewed for successive one (1) year terms after the Initial Employment Term (each one-year period, a “Renewal Term” and the Initial Employment Term and Renewal Term are collectively referred to as the “Term of Employment”), unless either party sends written notice to the other party at least sixty (60) days before the end of the then-existing Term of Employment, of such party’s desire to terminate this Agreement at the end of the then-existing Term of Employment, in which case this Agreement will terminate at the end of the then-existing Term of Employment, or unless earlier terminated in accordance with this Article III. The Executive will serve the Company during the Term of Employment.

 

 

B. Termination. Upon termination of the Executive’s employment, the Company shall pay the Executive (i) any unpaid Base Salary accrued through the date of termination, (ii) any accrued and unpaid vacation, paid time off or similar pay to which the Executive is entitled as a matter of law or Company policy, (iii) any unreimbursed expenses properly incurred prior to the date of termination (items (i), (ii) and (iii) hereafter referred to as the “Accrued Obligations”) and (iv) any additional payments as set forth below in the event of termination without Cause (defined below) by the Company, for Good Reason (defined below) by the Executive or as a result of the Executive’s Death or Disability. The Accrued Obligations shall be payable in a lump sum within the time period required by applicable law, and in no event later than thirty (30) days following termination of employment. Any outstanding stock option or other stock awards held by the Executive as of the date of termination shall be subject to the terms of the applicable award agreements.

 

(i) Expiration of the Agreement, Termination for Cause, or Voluntary Resignation. In the event the Executive voluntarily resigns without Good Reason, the Company may, in its sole discretion, shorten the notice period and determine the date of termination without any obligation to pay the Executive any additional compensation other than the Accrued Obligations and without triggering a termination of the Executive’s employment without Cause (as defined below). In the event the Agreement expires, the Company terminates the Executive’s employment for Cause or the Executive voluntarily resigns without Good Reason, or as a result of the Executive’s Disability (defined below) or death, the Company shall have no further liability or obligation to the Executive under this Agreement following the date of termination of employment.

 

For purposes of this Agreement, “Cause” means termination because of: (a) an act or acts of fraud or gross negligence by the Executive in the performance of the Executive’s duties as an employee of the Company causing demonstrable and material injury to the Company, provided that the Company has given written notice describing in detail the act of gross negligence asserted and which act, if capable of being cured, as reasonably determined by the Company, has not been cured within thirty (30) days after such notice or such longer period of time if the Executive proceeds with due diligence not later than ten (10) days after such notice to cure such act; (b) Embezzlement by the Executive of funds or property of the Company; and (c) a willful and material breach by the Executive of any material obligation of this Agreement or any other agreement to which the Executive and the Company (and/or any affiliate) are parties, causing demonstrable and material injury to the Company, following, if curable, written notice by the Company to the Executive which shall specify in reasonable detail the circumstances and breach asserted, and there shall be no Cause with respect to any such circumstances if cured by the Executive within sixty (60) days after such notice or such longer period of time if the Executive proceeds with due diligence not later than ten (10) days after such notice to cure such breach; provided, however, that termination of the Executive’s employment shall not be deemed to be for Cause unless and until the Company delivers to the Executive a copy of a resolution duly adopted by the affirmative vote of not less than a majority of the Board (after reasonable written notice is provided to the Executive and the Executive is given an opportunity, together with counsel, to be heard before the Board), finding that the Executive has engaged in the conduct described in any of (a)-(c) above.

 

 

(ii) Termination Without Cause or for a Resignation for Good Reason. In the event the Executive’s employment is terminated by the Company without Cause or by the Executive for Good Reason, the Executive shall receive, in addition to the Accrued Obligations, the following, subject to the execution and timely return by the Executive of a release of claims in the form to be delivered by the Company, which release shall, by its terms, be irrevocable no later than the sixtieth (60^th) day following the termination of employment: (a) severance pay in an amount equal to the Executive’s Base Salary as of the date of termination for twelve (12) months, less applicable payroll deductions and tax withholdings, payable in a lump sum immediately following the effective date of the release of claims (further, provided that if the time period for execution and revocation of the release of claims begins in one taxable year and ends in a second year, no payment shall be made until the second taxable year); (b) full vesting of any unvested equity awards subject to the terms of the Company’s 2022 Long-Term Incentive Plan and the Company’s form award agreement; and (c) reimbursement of the Executive for the premiums associated with Executive’s continuation of health insurance for the Executive and the Executive’s family pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) through the end of the Term, provided the Executive timely elects and is eligible to continue to receive COBRA benefits (less all applicable tax withholdings), payable in accordance with the Company’s normal expense reimbursement policy.

 

For purposes of this Agreement, “Good Reason” means termination because of a (x) material breach by the Company of this Agreement or any other agreement to which the Executive and the Company (and/or any affiliate) are parties, including, without limitation, a material diminution in the Executive’s authority, duties, or responsibilities; (y) a material reduction in the level of support, services, and budget that are reasonably necessary for the performance of Executive’s duties hereunder; (z) a reduction in Executive’s Base Salary, or a reduction or adverse change in Executive’s cash or stock bonus opportunities, including a reduction or adverse change in Executive’s eligibility to achieve and/or receive any such cash or stock bonuses; (aa) an adverse change in the Executive’s title, authority, duties, or responsibilities (other than temporarily while the Executive is physically or mentally incapacitated or as required by applicable law); (bb) an adverse change in the reporting structure applicable to the Executive and (cc) Change in Control (including any termination of the Executive within six months of a Change in Control). In such event, the Executive shall give the Company written notice thereof which shall specify in reasonable detail the circumstances constituting Good Reason, and there shall be no Good Reason with respect to any such circumstances if cured by the Company within thirty (30) days after such notice.

 

For purposes of this Agreement, “Change in Control” means any of the following: (i) sale or exchange of all or substantially all of the assets of the Company, (ii) a merger or consolidation involving the Company where the Company is not the survivor in such merger or consolidation (or the entity ultimately owning or controlling such entity), (iii) a liquidation, winding up, or dissolution of the Company or (iv) an assignment for the benefit of creditors, foreclosure sale, voluntary filing of a petition under the Bankruptcy Reform Act of 1978, or an involuntary filing under such act which filing is not stayed or dismissed within forty-five (45) days of filing. Notwithstanding the foregoing, in the event that any amounts or benefits are payable hereunder in connection with a Change in Control constitute “non-qualified deferred compensation” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), then an event shall not constitute a Change in Control for purposes of this Agreement unless it also constitutes a change in the ownership or effective control of the Company under Section 409A of the Code.

 

 

(iii) Termination as a Result of Death or Disability. In the event of the Executive’s Disability (defined below) or death, the Executive shall receive, in addition to the Accrued Obligations, the following, subject to the execution and timely return by the Executive (or in the case of death, the estate) of a release of claims in the form to be delivered by the Company, which release shall, by its terms, be irrevocable no later than the sixtieth (60^th) day following the termination of employment: (a) severance pay in an amount equal to the Executive’s Base Salary as of the date of termination for one (1) month, payable in a lump sum immediately following the effective date of the release of claims (further, provided that if the time period for execution and revocation of the release of claims begins in one taxable year and ends in a second year, no payment shall be made until the second taxable year) and (b) full vesting of any unvested equity awards subject to the terms of the Company’s 2022 Long-Term Incentive Plan and the Company’s form award agreement.

 

For purposes of this Agreement, “Disability” means termination as a result of the Executive’s incapacity or inability, the Executive’s failure to have performed the Executive’s duties and responsibilities as contemplated herein for one hundred and eighty (180) business days or more within any one (1) year period (cumulative or consecutive), because the Executive’s physical or mental health has become so impaired as to make it impossible or impractical for the Executive to perform the duties and responsibilities contemplated hereunder, with or without reasonable accommodation.

 

ARTICLE IV.
Miscellaneous Provisions

 

A. Governing Law. The Parties agree that the Agreement shall be governed by and construed under the internal laws of the State of Florida. In the event of any dispute regarding this Agreement, the Parties hereby irrevocably agree to submit to the exclusive jurisdiction of the federal and state courts situated in Florida, and the Executive agrees that the Executive shall not challenge personal or subject matter jurisdiction in such courts. The Parties also hereby waive any right to trial by jury in connection with any litigation or disputes under or in connection with this Agreement.

 

B. Headings. The paragraph headings contained in this Agreement are for convenience only and shall in no way or manner be construed as a part of this Agreement.

 

C. Severability. In the event that any court of competent jurisdiction holds any provision in this Agreement to be invalid, illegal or unenforceable in any respect, the remaining provisions shall not be affected or invalidated and shall remain in full force and effect.

 

 

D. Reformation. In the event any court of competent jurisdiction holds any restriction in this Agreement to be unreasonable and/or unenforceable as written, the court may reform this Agreement to make it enforceable, and this Agreement shall remain in full force and effect as reformed by the court.

 

E. Entire Agreement. This Agreement and the Indemnification Agreement constitutes the entire agreement between the Parties, and fully supersedes any and all prior agreements, understanding or representations between the Parties pertaining to or concerning the subject matter of this Agreement, including, without limitation, the Prior Employment Agreement. No oral statements or prior written material not specifically incorporated in this Agreement shall be of any force and effect, and no changes in or additions to this Agreement shall be recognized, unless incorporated in this Agreement by written amendment, such amendment to become effective on the date stipulated in it. Any amendment to this Agreement must be signed by all parties to this Agreement. The Executive acknowledges and represents that in executing this Agreement, the Executive did not rely, and has not relied, on any communications, promises, statements, inducements, or representation(s), oral or written, by the Company, except as expressly contained in this Agreement. The Parties represent that they relied on their own judgment in entering into this Agreement.

 

F. Waiver. No waiver of any breach of this Agreement shall be construed to be a waiver as to succeeding breaches. The failure of either party to insist in any one or more instances upon performance of any terms or conditions of this Agreement shall not be construed as a waiver of future performance of any such term, covenant or condition but the obligations of either party with respect thereto shall continue in full force and effect. The breach by one party to this Agreement shall not preclude equitable relief or the obligations hereunder.

 

G. Modification. The provisions of this Agreement may be amended, modified or waived only with the prior written consent of the Company and the Executive, and no course of conduct or failure or delay in enforcing the provisions of this Agreement shall be construed as a waiver of such provisions or affect the validity, binding effect or enforceability of this Agreement or any provision hereof.

 

H. Assignment. This Agreement shall be binding upon and inure to the benefit of the Parties hereto and their respective heirs, successors and permitted assigns. The Executive may not assign this Agreement to a third party. The Company may assign its rights, together with its obligations hereunder, to any affiliate and/or subsidiary of the Company or any successor thereto or any purchaser of substantially all of the assets of the Company.

 

 

I. Code Section 409A.

 

(i) To the extent (A) any payments to which the Executive becomes entitled under this Agreement, or any agreement or plan referenced herein, in connection with the Executive’s termination of employment with the Company constitute deferred compensation subject to Section 409A of the Code; (B) the Executive is deemed at the time of the Executive’s separation from service to be a “specified employee” under Section 409A of the Code; and (C) at the time of the Executive’s separation from service the Company is publicly traded (as defined in Section 409A of Code), then such payments (other than any payments permitted by Section 409A of the Code to be paid within six (6) months of the Executive’s separation from service) shall not be made until the earlier of (1) the first day of the seventh month following the Executive’s separation from service or (2) the date of the Executive’s death following such separation from service. Upon the expiration of the applicable deferral period, any payments which would have otherwise been made during that period (whether in a single sum or in installments) in the absence of this Article IV, Section I shall be paid to the Executive or the Executive’s beneficiary in one lump sum, plus interest thereon at the Delayed Payment Interest Rate (as defined below) computed from the date on which each such delayed payment otherwise would have been made to the Executive until the date of payment. For purposes of the foregoing, the “Delayed Payment Interest Rate” shall mean the national average annual rate of interest payable on jumbo six-month bank certificates of deposit, as quoted in the business section of the most recently published Sunday edition of The New York Times preceding the Executive’s separation from service.

 

(ii) To the extent any benefits provided under Article III, Section B(ii)-(iii) above are otherwise taxable to the Executive, such benefits shall, for purposes of Section 409A of the Code, be provided as separate in-kind payments of those benefits, and the provision of in-kind benefits during one calendar year shall not affect the in-kind benefits to be provided in any other calendar year.

 

(iii) In the case of any amounts payable to the Executive under this Agreement, or under any plan of the Company, that may be treated as payable in the form of “a series of installment payments,” as defined in Treas. Reg. §1.409A-2(b)(2)(iii), the Executive’s right to receive such payments shall be treated as a right to receive a series of separate payments for purposes of Treas. Reg. §1.409A-2(b)(2)(iii).

 

(iv) It is intended that this Agreement comply with or be exempt from the provisions of Section 409A of the Code and the Treasury Regulations and guidance of general applicability issued thereunder, and in furtherance of this intent, this Agreement shall be interpreted, operated, and administered in a manner consistent with such intent.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK. SIGNATURE PAGE FOLLOWS.]

 

 

IN WITNESS WHEREOF, the Company and the Executive have caused this Agreement to be executed on the date first set forth above, to be effective as of that date.

 

EXECUTIVE:
Paul Vassilakos
/s/ Paul Vassilakos
COMPANY:
EIGHTCO HOLDINGS, INC.
/s/ Brett Vroman
By:	Brett Vroman
Title:	CFO

 

 

Exhibit 10.8

 

INDEMNIFICATION AGREEMENT

 

This Agreement, made and entered into as of the 17th day of March, 2024 (this “Agreement”), by and between Eightco Holdings Inc., a Delaware corporation (the “Company”), and Paul Vassilakos (“Indemnitee”):

 

WHEREAS, highly competent persons may be reluctant to serve as directors, officers, employees, fiduciaries and other agents (“Representatives”) of corporations unless they are provided with adequate protection through insurance or adequate indemnification against risks of claims and actions against them arising out of their service to and activities on behalf of such corporations; and

 

WHEREAS, the Board of Directors of the Company has determined that difficulties in attracting and retaining such persons are detrimental to the best interests of the Company’s stockholders and that the Company should act to assure such persons that there will be increased certainty of such protection in the future; and

 

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify such persons as set forth herein so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified; and

 

WHEREAS, Indemnitee is willing to serve, continue to serve and/or to take on additional service for or on behalf of the Company on the condition that Indemnitee be so indemnified;

 

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

 

Article I
DEFINITIONS

 

For purposes of this Agreement the following terms shall have the meaning given here:

 

1.01 “Board” shall mean the Board of Directors of the Company.

 

1.02 “Change of Control” shall mean the first of the following events to occur:

 

(a)

there is consummated a merger or consolidation to which the Company or any direct or indirect subsidiary of the Company is a party if the merger or consolidation would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) less than 51% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation; or

 

 

	(b)	the direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) in the aggregate of securities of the Company representing fifty percent (50%) or more of the total combined voting power of the Company’s then issued and outstanding securities is acquired by any person or entity, or group of associated persons or entities acting in concert; provided, however, that for purposes hereof, the following acquisitions shall not constitute a Change of Control: (A) any acquisition by the Company or any of its subsidiaries, (B) any acquisition directly from the Company or any of its subsidiaries, (C) any acquisition by any employee benefit plan (or related trust or fiduciary) sponsored or maintained by the Company or any corporation controlled by the Company, (D) any acquisition by an underwriter temporarily holding securities pursuant to an offering of such securities, (E) any acquisition by a corporation owned, directly or indirectly, by the members of the Company in substantially the same proportions as their ownership of stock of the Company, (F) any acquisition in connection with which, pursuant to Rule 13d-1 promulgated pursuant to the Exchange Act, the individual, entity or group is permitted to, and actually does, report its beneficial ownership on Schedule 13G (or any successor Schedule); provided that, if any such individual, entity or group subsequently becomes required to or does report its beneficial ownership on Schedule 13D (or any successor Schedule), then, for purposes of this paragraph, such individual, entity or group shall be deemed to have first acquired, on the first date on which such individual, entity or group becomes required to or does so report on Schedule 13D, beneficial ownership of all of the voting securities of the Company beneficially owned by it on such date, and (G) any acquisition in connection with a merger or consolidation which, pursuant to Section 1.02(a) above, does not constitute a Change of Control; or
	(c)	there is consummated a transaction contemplated by an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity, at least 51% of the combined voting power of the voting securities of which are owned by members of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale; or
	(d)	the members of the Company approve any plan or proposal for the liquidation of the Company, or
	(e)	a change in the composition of the Board such that the “Continuity Directors” cease for any reason to constitute at least a majority of the Board. For purposes of this clause, “Continuity Directors” means (A) those members of the Board who were directors on the date hereof and (B) those members of the Board (other than a director whose initial assumption of office was in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) who were elected or appointed by, or on the nomination or recommendation of, at least a majority of the then-existing directors who either were directors on the date hereof or were previously so elected or appointed;
	(f)	such other event or transaction as the Board shall determine constitutes a Change of Control

 

.

1.03 “Company” has the meaning set forth in the introductory paragraph above. For purposes of this Agreement, references to the “Company” shall include, in addition to the resulting Company, any constituent Company (including any constituent of a constituent) absorbed in a consolidation or merger which, if its separate existence had continued, would have had power and authority to indemnify its Representatives, so that any person who is or was a Representative of such constituent Company, or is or was serving at the request of such constituent Company as a Representative of another Company, partnership, joint venture, trust or other enterprise, shall stand in the same position under this Agreement with respect to the resulting or surviving Company as he or she would have with respect to such constituent Company if its separate existence had continued.

 

1.04 “Corporate Status” describes the status of a person who is or was a Representative of the Company or, while a Representative of the Company, is or was serving at the express written request of the Company as a Representative of another Enterprise, including service with respect to an employee benefit plan.

 

1.05 “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

 

1.06 “Effective Date” means the date set forth in the introductory paragraph above.

 

1.07 “Enterprise” shall mean the Company and any other corporation, company, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the express written request of the Company as a Representative.

 

1.08 “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements, costs, expenses and obligations paid or incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, or being or preparing to be a witness in a Proceeding (including attorneys’ fees and related disbursements, judgments, fines, excise taxes or penalties under the Employee Retirement Income Security Act of 1974, as amended from time to time (“ERISA”), and any other penalties and amounts paid or to be paid in settlement thereof). Expenses also shall include, without limitation, (i) expenses incurred in connection with any appeal resulting from, incurred by Indemnitee in connection with, arising out of, in respect of or relating to, any Proceeding, including, without limitation, the premium, security for, and other costs relating to any cost bond, supersedes bond, or other appeal bond or its equivalent, (ii) for purposes of Section 8.05 of this Agreement only, expenses incurred by Indemnitee in connection with the interpretation, enforcement or defense of Indemnitee’s rights under this Agreement, by litigation or otherwise, (iii) any federal, state, local or foreign taxes imposed on Indemnitee as a result of the actual or deemed receipt of any payments under this Agreement and (iv) any interest, assessments or other charges in respect of the foregoing.

 

 

1.09 “Good Faith” shall mean Indemnitee having acted in good faith and in a manner Indemnitee reasonably believed to be in or not opposed to the best interests of the Company, and with respect to any criminal Proceeding, in a manner in which Indemnitee would have had no reasonable cause to believe Indemnitee’s conduct was unlawful. Notwithstanding the foregoing definition, the Indemnitee shall not be deemed to have acted in “Good Faith” in instances where the Indemnitee has been finally adjudicated by a court of competent jurisdiction to have acted in a grossly negligent manner. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not, of itself, create a presumption that the person did not act in good faith and in a manner which the person reasonably believed to be in or not opposed to the best interests of the Company and, with respect to any criminal action or proceeding, have reasonable cause to believe that the person’s conduct was unlawful.

 

1.10 “Independent Counsel” means a law firm, or an attorney employed by or serving as a member of a law firm, that is experienced in matters of corporation law and/or limited liability company law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party, or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’ s rights under this Agreement.

 

1.11 “Proceeding” includes any action, suit, arbitration, alternate dispute resolution mechanism, investigation, administrative hearing or any other threatened, pending or completed proceeding whether civil, criminal, administrative or investigative, other than one initiated by Indemnitee. For purposes of the foregoing sentence, a “Proceeding” shall not be deemed to have been initiated by Indemnitee where Indemnitee seeks to enforce Indemnitee’s rights under this Agreement pursuant to Article VIII of this Agreement.

 

Article II

TERM OF AGREEMENT

 

This Agreement shall continue until and terminate upon the later of: (i) 10 years after the date that Indemnitee shall have ceased to serve as a Representative of the Company or of any other Enterprise which Indemnitee served at the express written request of the Company; or (ii) the final termination of all pending Proceedings in respect of which Indemnitee is granted rights of the indemnification or advancement of expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Article VIII of this Agreement relating thereto.

 

 

Article III

SERVICES BY INDEMNITEE, NOTICE OF PROCEEDINGS

 

3.01 Services. Indemnitee agrees to serve as a Representative. The duties and obligations of a Representative may be set forth in the Company’s Bylaws, as may be amended from time to time (the “Bylaws”). Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law). Indemnitee, by his current and continuing Corporate Status, shall be conclusively presumed to have relied on the rights to indemnity, advance of expenses and other rights contained in this Agreement in entering into or continuing such service.

 

3.02 Notice of Proceeding. Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder.

 

3.03 Duty of Cooperation and Disclosure. In any Proceeding in which Company is advancing Expenses or providing an indemnification to the Indemnitee, the Indemnitee shall fully cooperate with the person, persons, insurers or entities acting on the Company’s or Indemnitee’s behalf, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and relates to the subject Proceeding, and the Company’s indemnification and advancement obligations hereunder shall at all times be subject to the Indemnitee’ s duty of cooperation. At the time of Indemnitee’s request for indemnification, Indemnitee shall disclose to the Company all relevant facts and circumstances within the Indemnitee’s personal knowledge that pertain to the request and underlying dispute.

 

Article IV
INDEMNIFICATION

 

4.01 In General. Notwithstanding any amendment, modification or repeal of the indemnification provisions of the Delaware General Corporation Law, as amended, or other applicable law or the Bylaws after the date of this Agreement, and subject to the exceptions set forth in Section 4.05 herein, if Indemnitee was or is, or is threatened to be made, a party to any Proceeding by reason of Indemnitee’s (a) acts or omissions made in Good Faith and (b) his Corporate Status, the Company shall indemnify Indemnitee to the fullest extent permitted by applicable law in effect on the date hereof and to such greater extent as applicable law may thereafter from time to time permit. The rights to indemnification and to the advancement of expenses conferred in this Agreement shall apply to claims made against an Indemnitee arising out of acts or omissions which occurred or occur both prior and subsequent to the adoption hereof. The rights to indemnification and to the advancement of expenses hereunder shall only apply to a Proceeding initiated by Indemnitee if such Proceeding has been authorized by the Board.

 

 

4.02 Proceedings Other Than Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4.02 if, by reason of Indemnitee’s Corporate Status, Indemnitee was or is, or is threatened to be made, a party to or participant in any Proceeding, other than a Proceeding by or in the right of the Company. Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in Good Faith.

 

4.03 Proceedings by or in the Right of the Company. Indemnitee shall be entitled to the rights of indemnification provided in this Section 4.03 if, by reason of Indemnitee’s Corporate Status, Indemnitee was or is, or is threatened to be made, a party to or is otherwise involved in any Proceeding brought by or in the right of the Company to procure a judgment in its favor. Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in Good Faith. Notwithstanding the foregoing, no such indemnification shall be made in respect of any claim, issue or matter in such Proceeding as to which Indemnitee shall have been adjudged to be liable to the Company unless and only to the extent that the Court of Chancery of the State Delaware or the court in which such action or suit was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, such person is fairly and reasonably entitled to indemnity for such expenses which the Court of Chancery of the State Delaware or such other court shall deem proper.

 

4.04 Indemnification of a Party Who is Wholly or Partly Successful. Subject to the exceptions set forth in Section 4.05 herein, to the extent that Indemnitee was or is, by reason of Indemnitee’s Corporate Status, a party to and is successful, on the merits or otherwise, in defense of any Proceeding, Indemnitee shall be indemnified to the maximum extent permitted by law, against all Expenses, actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding or any claim, issue or matter therein. Subject to the exceptions set forth in Section 4.05, if Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee to the maximum extent permitted by law, against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter. For purposes of this Subsection 4.04 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter, so long as there has been no finding (either adjudicated or pursuant to Article VI) that Indemnitee did not act in Good Faith.

 

4.05 Exceptions. Notwithstanding anything to the contrary herein, the Company shall not be obligated to advance Expenses or indemnify the Indemnitee pursuant to this Agreement with respect to:

 

(a)

Expenses for which the Indemnitee is indemnified pursuant to any directors and officers insurance policy purchased and maintained by the Company (as provided in Article IX). It is specifically understood that the indemnity provided in this Agreement is in excess of any such directors and officers insurance policy and the Indemnitee will look first to the directors and officers insurance policy; or

 

 

	(b)	Remuneration paid to the Indemnitee if it shall be determined by a final judgment or other final adjudication that such remuneration was in violation of law; or
	(c)	Indemnitee’s reimbursement to the Company of any bonus or other incentive-based or equity-based compensation previously received by Indemnitee or payment of any profits realized by Indemnitee from the sale of securities of the Company, as required in each case under the Exchange Act (including any such reimbursements under Section 304 of the Sarbanes-Oxley Act of 2002 or Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act in connection with an accounting restatement of the Company or the payment to the Company of profits arising from the purchase or sale by Indemnitee of securities in violation of Section 306 of the Sarbanes-Oxley Act); or
	(d)	Expenses incurred on account of any Proceeding in which judgment is rendered against the Indemnitee for an accounting of profits made from the purchase or sale by the Indemnitee of securities of the Company pursuant to the provisions of Section l6(b) of the Securities Exchange Act of 1934 and amendments to it or similar provisions of any federal, state or local law; or
	(e)	Expenses incurred on account of the Indemnitee’s conduct which is finally adjudged by a court of competent jurisdiction to have been, or which Indemnitee has admitted facts sufficient for the Independent Counsel or court to reasonably conclude that the Indemnitee’s conduct was: (1) a breach of the duty of loyalty owed to the Company, (2) an act or omission which was not in Good Faith, (3) an act or omission which involved intentional misconduct or, with respect to any criminal Proceeding, a knowing violation of law, or (4) a transaction from which the Indemnitee derived an improper personal benefit; or
	(f)	If a final decision by a court of competent jurisdiction in the matter shall determine that such indemnification is not lawful as against public policy; or
	(g)	Any income taxes, or any interest or penalties related to them, in respect of compensation received for services as a director and/or officer.

 

4.06 Indemnification for Expenses as a Witness. To the extent that Indemnitee is, by reason of Indemnitee’s Corporate Status, a witness in any Proceeding, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by Indemnitee or on Indemnitee’s behalf in connection therewith.

 

 

Article V

ADVANCEMENT OF EXPENSES

 

5.01 Statement of Expenses. The Company shall advance all reasonable Expenses which, by reason of Indemnitee’s Corporate Status, were incurred by or on behalf of Indemnitee in connection with any Proceeding, within thirty (30) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances, whether prior to or after final disposition of such Proceeding. Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall include or be preceded or accompanied by an undertaking by or on behalf of Indemnitee to repay any Expenses if it shall ultimately be determined that Indemnitee is not entitled to be indemnified against such Expenses.

 

5.02 Assumption of Defense. In the event the Company (i) shall be obligated to advance the Expenses for any Proceeding against Indemnitee by a third party and (ii) acknowledges in writing the Company’s obligation to indemnify the Indemnitee with respect to such Proceeding (subject to the terms of this Agreement), the Company shall be entitled to assume the defense of such Proceeding as provided herein. Such defense by the Company may include the representation of two or more parties by one attorney or law firm as permitted under the ethical rules and legal requirements related to joint representations, subject to exceptions set forth below in the event of a potential conflict of interest. Following delivery of written notice to Indemnitee of the Company’s election to assume the defense of such Proceeding and the Company’s acknowledgment of its indemnification obligation with respect to such Proceeding, the approval by Indemnitee (which approval shall not be unreasonably withheld) of counsel designated by the Company and the retention of such counsel by the Company, the Company will not be liable to Indemnitee under this Agreement for any fees and expenses of separate counsel subsequently incurred by Indemnitee with respect to the same Proceeding so long as such Proceeding is diligently defended. For the avoidance of doubt, a potential conflict of interest shall be deemed a reasonable basis for the Indemnitee to withhold consent under this section. If (i) the employment of counsel by Indemnitee has been previously authorized by the Company, (ii) Indemnitee shall have notified the Board in writing that Indemnitee has reasonably concluded that there is likely to be a conflict of interest between the Company (or any other co-clients as provided above) and Indemnitee in the conduct of any such defense, or (iii) the Company fails to employ counsel to assume the defense of such Proceeding, the fees and expenses of Indemnitee’s own counsel shall be subject to indemnification and/or advancement pursuant to the terms of this Agreement. Nothing herein shall prevent Indemnitee from employing counsel for any such Proceeding at Indemnitee’s own expense.

 

 

Article VI

PROCEDURES FOR DETERMINATION OF ENTITLEMENT TO INDEMNIFICATION

 

6.01 Initial Request. To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification. The President or any other officer of the Company shall promptly advise the Board in writing that Indemnitee has requested indemnification.

 

6.02 Method of Determination. A determination (if required by applicable law) with respect to Indemnitee’s entitlement to indemnification shall be made, as follows:

 

	(a)	if a Change in Control has occurred, unless Indemnitee shall request in writing that such determination be made in accordance with clause (b) of this Section 6.02, the determination shall be made by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee.
	(b)	If a Change in Control has not occurred, and subject to Section 6.03, the determination shall be made by (i) a majority vote of the Disinterested Directors, even though less than a quorum; (ii) by a committee of Disinterested Directors designated by majority vote of such Disinterested Directors, even though less than a quorum; (iii) if there are no such Disinterested Directors, by the Independent Counsel in a written opinion to the Board, or (iv) by the Company’s stockholders.

 

6.03 Selection, Payment, Discharge, of Independent Counsel. In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 6.02 of this Agreement, the Independent Counsel shall be selected, paid, and discharged in the following manner:

 

	(a)	If a Change of Control has not occurred, the Independent Counsel shall be selected by the Board, and the Company shall give written notice to Indemnitee advising Indemnitee of the identity of the Independent Counsel so selected.
	(b)	If a Change of Control has occurred, the Independent Counsel shall be selected the by Indemnitee (unless Indemnitee shall request that such selection be made by the Board, in which event clause (a) of this section shall apply) and approved by the Board, which approval shall not be unreasonably withheld, conditioned or delayed.

 

 

	(c)	Following the initial selection described in clauses (a) and (b) of this Section 6.03, Indemnitee or the Company, as the case may be, may, within seven (7) days after such written notice of selection has been given, deliver to the other party a written objection to such selection. Such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirement of “Independent Counsel” as defined in Section 1.10 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is made, the Independent Counsel so selected may not serve as Independent Counsel unless and until a court has determined that such objection is without merit.
	(d)	Either the Company or Indemnitee may petition the Court of Chancery of the State of Delaware or other court of competent jurisdiction if the parties have been unable to agree on the selection of Independent Counsel within (30) days after submission by Indemnitee of a written request for indemnification pursuant to Section 6.01 of this Agreement. Such petition may request a determination whether an objection to the party’s selection is without merit and/or seek the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate. A person so appointed shall act as Independent Counsel under Section 6.02 of this Agreement.
	(e)	The Company shall pay any and all reasonable fees and expenses of Independent Counsel incurred by such Independent Counsel in connection with acting pursuant to this Agreement, and the Company shall pay all reasonable fees and expenses incident to the procedures of this Section 6.03, regardless of the manner in which such Independent Counsel was selected or appointed.
	(f)	Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 8.01(c) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

 

6.04 Company Response. If a determination by the Company that Indemnitee is entitled to indemnification pursuant to this Agreement is required, and the Company fails to respond within sixty (60) days to a written request for indemnity, the Company shall be deemed to have approved the request.

 

6.05 Cooperation. Indemnitee shall cooperate with the person, persons or entity making the determination with respect to Indemnitee’s entitlement to indemnification under this Agreement, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any expenses, costs, disbursements and obligations (including attorneys’ fees) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

 

 

6.06 Payment. If it is determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination.

 

6.07 Reservation of Rights. Notwithstanding anything to the contrary herein, if it is determined that Indemnitee is entitled to indemnification hereunder, the Company shall have the obligation to advance to the Indemnitee any Expenses incurred by Indemnitee in connection therewith; provided, however, that all amounts advanced in respect of such Expenses shall be repaid to the Company by Indemnitee to the extent it shall be determined in a final judgment of a court of competent jurisdiction that Indemnitee is not entitled to be indemnified for such Expenses.

 

Article VII

PRESUMPTIONS

 

7.01 Effect of Other Proceedings. The termination of any action, suit or proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) be conclusive as to the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in Good Faith.

 

7.02 Reliance as Safe Harbor. For purposes of any determination of Good Faith, Indemnitee shall be deemed to have acted in Good Faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or the expert selected with reasonable care by the Enterprise. The provisions of this Section 7.02 shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

 

7.03 Service for Subsidiaries. If Indemnitee is serving as a director, officer, employee or agent of another Enterprise at least 50% of whose equity interests are owned by the Company shall, Indemnitee shall be conclusively presumed to be serving in such capacity at the request of the Company.

 

Article VIII
REMEDIES OF INDEMNITEE

 

8.01 Application. This Article VIII shall apply in the event of a Dispute. For purposes of this Article, “Dispute”, shall mean any of the following events:

 

	(a)	a determination is made pursuant to Article VI of this Agreement that Indemnitee is not entitled to indemnification under this Agreement;
	(b)	advancement of Expenses is not timely made pursuant to Article V of this Agreement; or

 

 

	(c)	the determination of entitlement to be made pursuant to Section 6.02 of this Agreement has not been made within sixty (60) days after receipt by the Company of the request for indemnification;
	(d)	payment of indemnification is not made pursuant to Section 4.06 of this Agreement within thirty (30) days after receipt by the Company of a written request therefor; or
	(e)	payment of indemnification is not made within thirty (30) days after a determination has been made that Indemnitee is entitled to indemnification.

 

8.02 Adjudication. In the event of a Dispute, Indemnitee shall be entitled to an adjudication in an appropriate court of the State of Delaware, or in any other court of competent jurisdiction, of Indemnitee’ s entitlement to such indemnification or advancement of Expenses. Indemnitee shall commence such proceeding seeking adjudication within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 8.02.

 

8.03 De Novo Review. In the event that a determination shall have been made pursuant to Article VI of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding commenced pursuant to this Article VIII shall be conducted in all respects as a de novo trial, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination.

 

8.04 Company Bound. If a determination shall have been made or deemed to have been made pursuant to Article VI of the Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding absent (i) a misstatement by Indemnitee of a material fact or an omission of a material fact necessary to make Indemnitee’ s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

 

8.05 Expenses of Adjudication. In the event that Indemnitee, pursuant to this Article VIII, seeks a judicial adjudication to enforce Indemnitee’s rights under, or to recover damages for breach of this Agreement, Indemnitee shall be entitled to recover from the Company, and shall be indemnified by the Company against, any and all Expenses actually and reasonably incurred by Indemnitee in such adjudication, but only if Indemnitee prevails therein. If it shall be determined in such adjudication that Indemnitee is entitled to receive part but not all of the indemnification or advancement of Expenses sought, the Expenses incurred by Indemnitee in connection with such adjudication shall be appropriately prorated.

 

Article IX
NON-EXCLUSIVITY, INSURANCE, SUBROGATION

 

9.01 Non-Exclusivity. The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under the Company’s Certificate of Incorporation, the Bylaws, or under any agreement, vote of stockholders or disinterested directors or otherwise. No amendment, alteration, rescission or replacement of this Agreement or any provision hereof shall be effective as to Indemnitee with respect to any action taken or omitted by such Indemnitee in Indemnitee’s Corporate Status prior to such amendment, alteration, rescission or replacement.

 

 

9.02 Insurance. The Company shall maintain an insurance policy or policies against liability arising out of this Agreement or otherwise.

 

9.03 Subrogation. In the event of any payment under this Agreement, the Company shall be subrogated to any rights of recovery of Indemnitee who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

 

9.04 No Duplicative Payment. The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

 

Article X
GENERAL PROVISIONS

 

10.01 Binding Effect, Etc. This Agreement shall be binding upon and inure to the benefit of any be enforceable by the parties hereto and their respective successors, assigns, including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company, spouses, heirs, executors and personal and legal representatives. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as an officer or director of the Company or of any other enterprise at the Company’s request.

 

10.02 Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever:

 

	(a)	the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby, and
	(b)	to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, which is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested by the provision held invalid, illegal or unenforceable.

 

10.03 No Adequate Remedy. The parties declare that it is impossible to measure in money the damages which will accrue to either party by reason of a failure to perform any of the obligations under this Agreement. Therefore, if either party shall institute any action or proceeding to enforce the provisions hereof, such party against whom such action or proceeding is brought hereby waives the claim or defense that such party has an adequate remedy at law, and such party shall not urge in any such action or proceeding the claim or defense that the other party has an adequate remedy at law.

 

 

10.04 Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

 

10.05 Headings. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

 

10.06 Modification and Waiver. No supplement modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions thereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

 

10.07 Notices. All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if (i) delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (ii) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

 

	If to Indemnitee, to:	the most recent address in the Company’s records.
	If to the Company to:	Eightco Holdings Inc.
		200 9th Avenue North, Suite 220
		Safety Harbor, FL 34695
		Attn: Chief Financial Officer

 

or to such other address as may have been furnished to Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

 

10.08 Governing Law. The parties agree that this Agreement shall be governed by, and construed and enforced in accordance with, the laws of the state of Delaware without application of the conflict of laws principles thereof. No amendment, repeal, adoption or modification of law, shall adversely affect any right or protection of any person granted pursuant hereto existing at, or arising out of or related to any event, act or omission that occurred prior to, the time of such amendment, repeal, adoption or modification (regardless of when any Proceeding relating to such event, act or omission arises or is first threatened, commenced or completed).

 

10.09 Third-Party Beneficiaries. Nothing in this Agreement is intended to confer any rights or remedies under or by reason of this Agreement on any other person or persons other than the parties hereto and their respective successors and permitted assigns. Nothing in this Agreement is intended to relieve or discharge the obligations or liability of any third persons to the Company. Except as expressly set forth in this Agreement, no provision of this Agreement shall give any third parties any right of subrogation or action over or against the Company.

 

10.10 Entire Agreement. This Agreement constitutes the entire agreement and understanding between the parties hereto in reference to all the matters herein agreed upon. This Agreement replaces in full all prior indemnification agreements or understandings between the Company, including any of its subsidiaries, and the Indemnitee, and any all such prior agreements or understandings are hereby rescinded by mutual agreement.

 

[Signature Page Follows]

 

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year first above written.

 

COMPANY	EIGHTCO HOLDINGS INC.
	By:	/s/ Brett Vroman
	Name:	Brett Vroman
	Title:	CFO
INDEMNITEE
	/s/ Paul Vassilakos
	Name:	Paul Vassilakos

 

 

 

Exhibit 10.9

 

NONQUALIFIED STOCK OPTION AGREEMENT

 

EIGHTCO HOLDINGS INC.

2022 LONG-TERM INCENTIVE PLAN

 

1. Grant of Option. Pursuant to the Eightco Holdings Inc. 2022 Long-Term Incentive Plan (the “Plan”) for Employees, Contractors, and Outside Directors of Eightco Holdings Inc., a Delaware corporation (the “Company”), the Company grants to

 

	(the “Participant”)

 

an option (the “Stock Option”) to purchase a total of ________ full shares of Common Stock of the Company (the “Optioned Shares”) at an “Option Price” equal to $________ per share.

 

The “Date of Grant” of this Stock Option is _________________, 2024. The “Option Period” shall commence on the Date of Grant and shall expire on the date immediately preceding the fifth (5^th) anniversary of the Date of Grant, unless terminated earlier in accordance with Section 4 below. The Stock Option is a Nonqualified Stock Option that is intended to comply with the provisions governing nonqualified stock options under the final Treasury Regulations issued on April 17, 2007, in order to exempt this Stock Option from application of Section 409A of the Code.

 

2. Subject to Plan. The Stock Option and its exercise are subject to the terms and conditions of the Plan, and the terms of the Plan shall control to the extent not otherwise inconsistent with the provisions of this Nonqualified Stock Option Agreement (this “Agreement”). The capitalized terms used herein that are defined in the Plan shall have the same meanings assigned to them in the Plan. The Stock Option is subject to any rules promulgated pursuant to the Plan by the Board or the Committee, as applicable, and communicated to the Participant in writing.

 

3. Vesting; Time of Exercise. Except as specifically provided in this Agreement and subject to certain restrictions and conditions set forth in the Plan, the Optioned Shares shall be 100% vested and exercisable on the Date of Grant.

 

4. Term; Forfeiture.

 

a. The unexercised portion of the Stock Option that relates to Optioned Shares which are vested will terminate at the first of the following to occur:

 

i. 5 p.m. on the date the Option Period terminates;

 

ii. 5 p.m. on the date which is twelve (12) months following the date of the Participant’s Termination of Service due to death, Retirement or Total and Permanent Disability;

 

iii. immediately upon the Participant’s Termination of Service by the Company for Cause (as defined herein);

 

iv. 5 p.m. on the date which is three (3) months following the date of the Participant’s Termination of Service for any reason not otherwise specified in this Section 4.a.; or

 

v. 5 p.m. on the date the Company causes any portion of the Stock Option to be forfeited pursuant to Section 7 hereof.

 

 

b. For purposes of this Agreement, the term “Cause” shall have the meaning ascribed to such term in any employment, consulting, or other services agreement in effect by and between the Company and the Participant; provided, however, that at any time there is no such agreement in effect, or if such agreement does not define such term, the term “Cause” shall mean (i) the Participant’s commission of a dishonest or fraudulent act in connection with the Participant’s employment, or the misappropriation of Company property; (ii) the Participant’s conviction of, or plea of nolo contendere to, a felony or crime involving dishonesty or moral turpitude; (iii) the Participant’s inattention to duties, unsatisfactory performance, or failure to perform the Participant’s duties to the Company or any Subsidiary, provided in each case the Company gives the Participant written notice and thirty (30) days to correct the Participant’s performance to the Company’s satisfaction; (iv) a substantial failure to comply with the Company’s policies; (v) a material and willful breach of the Participant’s fiduciary duties in any material respect, provided in each case the Company gives the Participant written notice and thirty (30) days to correct the breach to the Company’s satisfaction; (vi) the Participant’s failure to comply in any material respect with any legal written directive of the Board; or (vii) any act or omission of the Participant which is of substantial detriment to the Company because of the Participant’s intentional failure to comply with any statute, rule, or regulation, except any act or omission believed by the Participant in good faith to have been in or not opposed to the best interests of the Company (without the intent of the Participant to gain, directly or indirectly, a profit to which the Participant was not legally entitled). Any determination of whether the Participant should be terminated for Cause pursuant to this Agreement shall be made in the sole, good faith discretion of the Board, and shall be binding upon all parties affected thereby.

 

5. Who May Exercise. Subject to the terms and conditions set forth in Sections 3 and 4 above, during the lifetime of the Participant, the Stock Option may be exercised only by the Participant, or by the Participant’s guardian or personal or legal representative. If the Participant’s Termination of Service is due to his death prior to the dates specified in Section 4.a. hereof, and the Participant has not exercised the Stock Option as to the maximum number of vested Optioned Shares as set forth in Section 3 hereof as of the date of death, the following persons may exercise the exercisable portion of the Stock Option on behalf of the Participant at any time prior to the earliest of the dates specified in Section 4.a. hereof: the personal representative of his estate or the person who acquired the right to exercise the Stock Option by bequest or inheritance or by reason of the death of the Participant, provided that the Stock Option shall remain subject to the other terms of this Agreement, the Plan, and all Applicable Laws, rules, and regulations.

 

6. No Fractional Shares. The Stock Option may be exercised only with respect to full shares, and no fractional share of stock shall be issued.

 

7. Manner of Exercise. Subject to such administrative regulations as the Committee may from time to time adopt, the Stock Option may be exercised by the delivery of written notice to the Committee setting forth the number of shares of Common Stock with respect to which the Stock Option is to be exercised and the date of exercise thereof (the “Exercise Date”), which shall be at least three (3) days after giving such notice unless an earlier time shall have been mutually agreed upon. On the Exercise Date, the Participant shall deliver to the Company consideration with a value equal to the total Option Price of the shares to be purchased, payable as follows: (a) cash, check, bank draft, or money order payable to the order of the Company; (b) if the Company, in its sole discretion, so consents in writing, Common Stock (including Restricted Stock) owned by the Participant on the Exercise Date, valued at its Fair Market Value on the Exercise Date, and which the Participant has not acquired from the Company within six (6) months prior to the Exercise Date; (c) if the Company, in its sole discretion, so consents in writing, by delivery (including by FAX) to the Company or its designated agent of an executed irrevocable option exercise form together with irrevocable instructions from the Participant to a broker or dealer, reasonably acceptable to the Company, to sell certain of the shares of Common Stock purchased upon exercise of the Stock Option or to pledge such shares as collateral for a loan and promptly deliver to the Company the amount of sale or loan proceeds necessary to pay such purchase price; (d) by requesting the Company to withhold the number of shares otherwise deliverable upon exercise of the Stock Option by the number of shares of Common Stock having an aggregate Fair Market Value equal to the aggregate Option Price at the time of exercise (i.e., a cashless net exercise), and/or (e) in any other form of valid consideration that is acceptable to the Committee in its sole discretion. In the event that shares of Restricted Stock are tendered as consideration for the exercise of a Stock Option, a number of shares of Common Stock issued upon the exercise of the Stock Option equal to the number of shares of Restricted Stock used as consideration therefor shall be subject to the same restrictions and provisions as the Restricted Stock so tendered.

 

 

Upon payment of all amounts due from the Participant, the Company shall cause the Common Stock then being purchased to be registered in the Participant’s name (or the person exercising the Participant’s Stock Option in the event of the Participant’s death) promptly after the Exercise Date. The obligation of the Company to register shares of Common Stock shall, however, be subject to the condition that, if at any time the Company shall determine in its discretion that the listing, registration, or qualification of the Stock Option or the Common Stock upon any securities exchange or inter-dealer quotation system or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary as a condition of, or in connection with, the Stock Option or the issuance or purchase of shares of Common Stock thereunder, then the Stock Option may not be exercised in whole or in part unless such listing, registration, qualification, consent, or approval shall have been effected or obtained free of any conditions not reasonably acceptable to the Committee.

 

If the Participant fails to pay for any of the Optioned Shares specified in such notice or fails to accept delivery thereof, that portion of the Participant’s Stock Option and the right to purchase such Optioned Shares may be forfeited by the Participant.

 

8. Nonassignability. The Stock Option is not assignable or transferable by the Participant except by will or by the laws of descent and distribution.

 

9. Rights as Stockholder. The Participant will have no rights as a stockholder with respect to any of the Optioned Shares until the issuance of a certificate or certificates to the Participant or the registration of such shares in the Participant’s name for the shares of Common Stock. The Optioned Shares shall be subject to the terms and conditions of this Agreement. Except as otherwise provided in Section 10 hereof, no adjustment shall be made for dividends or other rights for which the record date is prior to the issuance of such certificate or certificates. The Participant, by his execution of this Agreement, agrees to execute any documents requested by the Company in connection with the issuance of the shares of Common Stock.

 

10. Adjustment of Number of Optioned Shares and Related Matters. The number of shares of Common Stock covered by the Stock Option, and the Option Prices thereof, shall be subject to adjustment in accordance with Articles 11 - 13 of the Plan.

 

11. Nonqualified Stock Option. The Stock Option shall not be treated as an Incentive Stock Option.

 

12. Voting. The Participant, as record holder of some or all of the Optioned Shares following exercise of this Stock Option, has the exclusive right to vote, or consent with respect to, such Optioned Shares until such time as the Optioned Shares are transferred in accordance with this Agreement; provided, however, that this Section shall not create any voting right where the holders of such Optioned Shares otherwise have no such right.

 

13. Specific Performance. The parties acknowledge that remedies at law will be inadequate remedies for breach of this Agreement and consequently agree that this Agreement shall be enforceable by specific performance. The remedy of specific performance shall be cumulative of all of the rights and remedies at law or in equity of the parties under this Agreement.

 

 

14. Participant’s Representations. Notwithstanding any of the provisions hereof, the Participant hereby agrees that he will not exercise the Stock Option granted hereby, and that the Company will not be obligated to issue any shares to the Participant hereunder, if the exercise thereof or the issuance of such shares shall constitute a violation by the Participant or the Company of any provision of any law or regulation of any governmental authority. Any determination in this connection by the Company shall be final, binding, and conclusive. The obligations of the Company and the rights of the Participant are subject to all Applicable Laws, rules, and regulations.

 

15. Investment Representation. Unless the shares of Common Stock are issued to the Participant in a transaction registered under applicable federal and state securities laws, by his execution hereof, the Participant represents and warrants to the Company that all Common Stock which may be purchased hereunder will be acquired by the Participant for investment purposes for his own account and not with any intent for resale or distribution in violation of federal or state securities laws. Unless the Common Stock is issued to him in a transaction registered under the applicable federal and state securities laws, all certificates issued with respect to the Common Stock shall bear an appropriate restrictive investment legend and shall be held indefinitely, unless they are subsequently registered under the applicable federal and state securities laws or the Participant obtains an opinion of counsel, in form and substance satisfactory to the Company and its counsel, that such registration is not required.

 

16. Participant’s Acknowledgments. The Participant acknowledges that a copy of the Plan has been made available for his review by the Company and represents that he is familiar with the terms and provisions thereof, and hereby accepts this Stock Option subject to all the terms and provisions thereof. The Participant hereby agrees to accept as binding, conclusive, and final all decisions or interpretations of the Committee or the Board, as appropriate, upon any questions arising under the Plan or this Agreement.

 

17. Law Governing. This Agreement shall be governed by, construed, and enforced in accordance with the laws of the State of Delaware (excluding any conflict of laws rule or principle of Delaware law that might refer the governance, construction, or interpretation of this Agreement to the laws of another state).

 

18. No Right to Continue Service or Employment. Nothing herein shall be construed to confer upon the Participant the right to continue in the employ or to provide services to the Company or any Subsidiary, whether as an Employee, Contractor, or Outside Director, or to interfere with or restrict in any way the right of the Company or any Subsidiary to discharge the Participant as an Employee, Contractor, or Outside Director at any time.

 

19. Legal Construction. In the event that any one or more of the terms, provisions, or agreements that are contained in this Agreement shall be held by a court of competent jurisdiction to be invalid, illegal, or unenforceable in any respect for any reason, the invalid, illegal, or unenforceable term, provision, or agreement shall not affect any other term, provision, or agreement that is contained in this Agreement, and this Agreement shall be construed in all respects as if the invalid, illegal, or unenforceable term, provision, or agreement had never been contained herein.

 

20. Covenants and Agreements as Independent Agreements. Each of the covenants and agreements that is set forth in this Agreement shall be construed as a covenant and agreement independent of any other provision of this Agreement. The existence of any claim or cause of action of the Participant against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the covenants and agreements that are set forth in this Agreement.

 

21. Entire Agreement. This Agreement together with the Plan supersede any and all other prior understandings and agreements, either oral or in writing, between the parties with respect to the subject matter hereof and constitute the sole and only agreements between the parties with respect to the said subject matter. All prior negotiations and agreements between the parties with respect to the subject matter hereof are merged into this Agreement. Each party to this Agreement acknowledges that no representations, inducements, promises, or agreements, orally or otherwise, have been made by any party or by anyone acting on behalf of any party, which are not embodied in this Agreement or the Plan and that any agreement, statement, or promise that is not contained in this Agreement or the Plan shall not be valid or binding or of any force or effect.

 

 

22. Parties Bound. The terms, provisions, and agreements that are contained in this Agreement shall apply to, be binding upon, and inure to the benefit of the parties and their respective heirs, executors, administrators, legal representatives, and permitted successors and assigns, subject to the limitation on assignment expressly set forth herein.

 

23. Modification. No change or modification of this Agreement shall be valid or binding upon the parties unless the change or modification is in writing and signed by the parties; provided, however, that the Company may change or modify this Agreement without the Participant’s consent or signature if the Company determines, in its sole discretion, that such change or modification is necessary for purposes of compliance with or exemption from the requirements of Section 409A of the Code or any regulations or other guidance issued thereunder. Notwithstanding the preceding sentence, the Company may amend the Plan to the extent permitted by the Plan.

 

24. Headings. The headings that are used in this Agreement are used for reference and convenience purposes only and do not constitute substantive matters to be considered in construing the terms and provisions of this Agreement.

 

25. Gender and Number. Words of any gender used in this Agreement shall be held and construed to include any other gender, and words in the singular number shall be held to include the plural, and vice versa, unless the context requires otherwise.

 

26. Notice. Any notice required or permitted to be delivered hereunder shall be deemed to be delivered only when actually received by the Company or by the Participant, as the case may be, at the addresses set forth below, or at such other addresses as they have theretofore specified by written notice delivered in accordance herewith:

 

a. Notice to the Company shall be addressed and delivered as follows:

 

		Eightco Holdings Inc.
		200 9th Avenue North, Suite 220
		Safety Harbor, Florida
		Attn: Chief Financial Officer

 

b. Notice to the Participant shall be addressed and delivered to the most recent address in the Company’s records.

 

27. Tax Requirements. The Participant is hereby advised to consult immediately with his own tax advisor regarding the tax consequences of this Agreement. The Company or, if applicable, any Subsidiary (for purposes of this Section 27, the term “Company” shall be deemed to include any applicable Subsidiary), shall have the right to deduct from all amounts paid in cash or other form in connection with the Plan and this Agreement, any federal, state, local, or other taxes required by law to be withheld in connection with this Stock Option. The Company may, in its sole discretion, also require the Participant receiving shares of Common Stock issued under the Plan to pay the Company the amount of any taxes that the Company is required to withhold in connection with the Participant’s income arising with respect to this Stock Option. Such payments shall be required to be made when requested by the Company and may be required to be made prior to the delivery of any certificate representing shares of Common Stock. Such payment may be made by (a) the delivery of cash to the Company in an amount that equals or exceeds (to avoid the issuance of fractional shares under (c) below) the required tax withholding obligations of the Company; (b) if the Company, in its sole discretion, so consents in writing, the actual delivery by the exercising Participant to the Company of shares of Common Stock that the Participant has not acquired from the Company within six (6) months prior to the date of exercise, which shares so delivered have an aggregate Fair Market Value that equals or exceeds (to avoid the issuance of fractional shares under (c) below) the required tax withholding payment; (c) if the Company, in its sole discretion, so consents in writing, the Company’s withholding of a number of shares to be delivered upon the exercise of the Stock Option, which shares so withheld have an aggregate Fair Market Value that equals (but does not exceed) the required tax withholding payment; or (d) any combination of (a), (b), or (c). The Company may, in its sole discretion, withhold any such taxes from any other cash remuneration otherwise paid by the Company to the Participant.

 

[Remainder of Page Intentionally Left Blank;

Signature Page Follows.]

 

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized officer, and the Participant, to evidence his consent and approval of all the terms hereof, has duly executed this Agreement, as of the date specified in Section 1 hereof.

 

	COMPANY:
	EIGHTCO HOLDINGS INC.
	By:
	Name:
	Title:
	PARTICIPANT:
	Signature
	Name:

 

 

 

Exhibit 99.1

 

Eightco announces Paul Vassilakos as Executive Chairman and

Chief Executive Officer and Certain Balance Sheet

Improvements

 

Easton, PA, March 18, 2024 (GLOBE NEWSWIRE) – Eightco Holdings Inc. (NASDAQ: OCTO) (the “Company” or “Eightco”) today announced that Paul N. Vassilakos has been named as the Company’s Executive Chairman and Chief Executive Officer. Kevin O’Donnell, who served as the Company’s Executive Chairman since October 2021 and Interim Chief Executive Officer for the last month, will remain a member of the Board of Directors (the “Board”). Brian McFadden, a member of the Company’s Board who had previously served as the Company’s Chief Executive Officer, will be resigning from the Board.

 

Mr. Vassilakos co-founded Forever 8 Fund, LLC (“Forever 8”), the Company’s largest subsidiary, in July 2020 and has served as a Managing Director of Forever 8 since such time. Mr. Vassilakos has held Board, CEO and CFO positions on various publicly listed companies throughout his career. Additionally, Mr. Vassilakos founded Petrina Advisors, Inc., a privately held advisory firm, where he provided investment banking advisory services for public and privately held companies, helping them grow and list on national exchanges.

 

“We feel Paul is the right leader for Eightco,” said Kevin O’Donnell, Eightco’s former Executive Chairman and Interim Chief Executive Officer. “Paul’s deep knowledge of the Forever 8 business make him ideally suited to lead Eightco’s growth going forward. We believe his significant public markets experience will help focus Eightco during its road to profitability.”

 

“I am very excited to be joining the Eightco leadership team,” said Mr. Vassilakos. “I believe Forever 8’s business model and talented management team uniquely position it to capitalize on the current e-commerce environment. As the e-commerce industry evolves through consolidation and technology improvements, I believe Forever 8, alongside Eightco’s efforts to reduce ongoing costs at the parent company level, is in a position to provide a cost effective and timely inventory capital solution to e-commerce sellers to help maximize their profits.”

 

The former owners of Forever 8, including Mr. Vassilakos, have also agreed to amend the aggregate $27.5 million principal amount of notes that were received as consideration in the October 2022 sale of Forever 8 to the Company. These amendments include a cancellation of an aggregate of approximately $3.0 million in accrued interest, as well as the conversion of an aggregate of approximately $1.1 million of accrued interest into 1.4 million shares of common stock of Eightco. The former Forever 8 owners also agreed to defer interest and any payments due on the notes until October 30, 2024.

 

About Eightco

 

Eightco (NASDAQ: OCTO) is committed to growth focused around its existing subsidiaries, including Forever 8, an inventory management platform for e-commerce sellers, and Ferguson Containers, Inc., a provider of complete manufacturing and logistical solutions for product and packaging needs, through strategic management and investment. In addition, the company is actively seeking new opportunities to add to its portfolio of technology solutions focused on the e-commerce ecosystem through strategic acquisitions. Through a combination of innovative strategies and focused execution, Eightco aims to create significant value and growth for its portfolio companies and stockholders.

 

 

For additional information, please visit www.8co.holdings

 

Forward-Looking Statements

 

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements in this press release other than statements of historical fact could be deemed forward looking. Words such as “plans,” “expects,” “will,” “anticipates,” “continue,” “expand,” “advance,” “develop” “believes,” “guidance,” “target,” “may,” “remain,” “project,” “outlook,” “intend,” “estimate,” “could,” “should,” and other words and terms of similar meaning and expression are intended to identify forward-looking statements, although not all forward-looking statements contain such terms. Forward-looking statements are based on management’s current beliefs and assumptions that are subject to risks and uncertainties and are not guarantees of future performance. Actual results could differ materially from those contained in any forward-looking statement as a result of various factors, including, without limitation: Eightco’s ability to regain and maintain compliance with the Nasdaq’s continued listing requirements; unexpected costs, charges or expenses that reduce Eightco’s capital resources; Eightco’s inability to raise adequate capital to fund its business; Eightco’s inability to innovate and attract users for Eightco’s products; future legislation and rulemaking negatively impacting digital assets; and shifting public and governmental positions on digital asset mining activity. Given these risks and uncertainties, you are cautioned not to place undue reliance on such forward-looking statements. For a discussion of other risks and uncertainties, and other important factors, any of which could cause Eightco’s actual results to differ from those contained in forward-looking statements, see Eightco’s filings with the Securities and Exchange Commission (the “SEC”), including in its Annual Report on Form 10-K filed with the SEC on April 17, 2023. All information in this press release is as of the date of the release, and Eightco undertakes no duty to update this information or to publicly announce the results of any revisions to any of such statements to reflect future events or developments, except as required by law.

 

For further information, please contact:
Investor Relations
investors@8co.holdings

 

 

v3.24.1

Cover	Mar. 15, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Mar. 15, 2024
Entity File Number	001-41033
Entity Registrant Name	EIGHTCO HOLDINGS INC.
Entity Central Index Key	0001892492
Entity Tax Identification Number	87-2755739
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	101 Larry Holmes Dr.
Entity Address, Address Line Two	Suite 313
Entity Address, City or Town	Easton
Entity Address, State or Province	PA
Entity Address, Postal Zip Code	18042
City Area Code	(888)
Local Phone Number	765-8933
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	OCTO
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false

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