EX1A-3 HLDRS RTS.4 11 engenavis_ex34.htm STOCK AGREEMENT - GARCIA engenavis_ex34.htm

EXHIBIT 3.4

 

NEXTGEN ENERGIES, INC.

RESTRICTED STOCK PURCHASE AGREEMENT

 

THIS AGREEMENT is made May 1, 2017, between NextGen Energies, Inc., a Delaware corporation (the “Company”), and RUDY GARCIA, an individual (the “Purchaser”).

 

WHEREAS, the Purchaser is an employee, advisor or consultant of the Company and Purchaser’s participation is considered by the Company to be important for the Company’s continued growth; and

 

WHEREAS, incident to the formation of the Company, the Company is willing to sell to the Purchaser, and the Purchaser desires to purchase, shares of Common Stock according to the terms and conditions contained herein.

 

THEREFORE, the parties agree as follows:

 

1. SALE OF STOCK. THE COMPANY HEREBY AGREES TO SELL TO THE PURCHASER AND THE PURCHASER HEREBY AGREES TO PURCHASE AN AGGREGATE FIFTY SIX THOUSAND AND SEVENTY SEVEN (56,077) OF SHARES OF THE COMPANYS COMMON STOCK (THE SHARES”), AN AGGREGATE PURCHASE PRICE OF $5.61, AS DETAILED BELOW:

 

NUMBER OF SHARES

PURCHASE PRICE

56,077 SHARES

AT THE PRICE OF $0.0001 PER SHARE FOR AN AGGREGATE PURCHASE PRICE OF $5.61.

 

2. PAYMENT OF PURCHASE PRICE. THE PURCHASE PRICE FOR THE SHARES SHALL BE PAID BY CASH, CHECK, CANCELLATION OF INDEBTEDNESS OR COMBINATION THEREOF.

 

3. REPURCHASE OPTION:

 

(a) In the event of any voluntary or involuntary termination of the Purchaser’s employment by or consulting or advisory services to the Company for any or no reason (including death or disability) before all of the Shares are released from the Company’s repurchase option (see Section 4), the Company shall, upon the date of such termination (as reasonably fixed and determined by the Company) have an irrevocable, exclusive option for a period of ninety (90) days from such date to repurchase all or any portion of the Unreleased Shares (as defined in Section 4) at such time at the original purchase price per share of $0.0001 per share (the “Repurchase Price”). Said option shall be exercised by the Company by written notice to the Purchaser or Purchaser’s executor (with a copy to the Escrow Holder) and, at the Company’s option, (i) by delivery to the Purchaser or Purchaser’s executor with such notice of a check in the amount of the purchase price for the Shares being repurchased, or (ii) by cancellation by the Company of an amount of the Purchaser’s indebtedness to the Company equal to the purchase price for the Shares being repurchased, or (iii) by a combination of (i) and (ii) so that the combined payment and cancellation of indebtedness equal such repurchase price. Upon delivery of such notice and the payment of the purchase price in any of the ways described above, the Company shall become the legal and beneficial owner of the Shares being repurchased and all rights and interests therein or relating thereto, and the Company shall have the right to retain and transfer to its own name the number of Shares being repurchased by the Company.

 

 
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(b) Whenever the Company shall have the right to repurchase Shares hereunder and the Company shall elect not to exercise such option, the Company may designate and assign one or more employees, officers or shareholders of the Company or other persons or organizations to exercise all or a part of the Company’s purchase rights under this Agreement and purchase all or a part of such Shares; provided that if the fair market value of the Shares to be repurchased on the date of such designation or assignment (the “Repurchase FMV”) exceeds the Repurchase Price of the Shares to be repurchased, then each such designee or assignee shall pay the Company cash equal to the difference between the Repurchase FMV and the Repurchase Price of the Shares which such designee or assignee shall have the right to repurchase.

 

4. RELEASE OF SHARES FROM REPURCHASE OPTION.

 

(a) The Shares will be released from the Company’s Repurchase Option pursuant to the table below (each, a “Release Date”); so long as the Purchaser’s service to the Company has not been terminated or otherwise cancelled prior to such Release Date.

 

Release Date

Shares Released

Upon the Company obtaining an aggregate of at least $1,000,000 in equity or debt

financing after the First Qualified Financing. An aggregate 56,077 Shares, subject to quarterly vesting of 7,009 over a two-year

period. Occurred on June 10, 2017

7,009

September 10, 2017

7,009

December 10, 2017

7,009

March 10, 2018

7,010

June 10, 2018

7,010

September 10, 2018

7,010

December 10, 2018

7,010

March 10, 2019

7,010

 

(b) If Purchaser’s service to the Company is terminated by the Company without Cause (as defined in Section (g) below) before the first anniversary of this Agreement, the number of Shares that would have been released from the Company’s repurchase option if the termination occurred one calendar quarter after the actual date of termination shall be released from the Company’s repurchase option.

 

(c) If Purchaser’s service to the Company is terminated because of death or disability, the number of Shares that would be released from the Company’s repurchase option on the next Release Date following the date of Purchaser’s death or disability shall be released from the Company’s repurchase option on such date.

 

(d) Any of the Shares which have not yet been released from the Company’s repurchase option are referred to herein as “Unreleased Shares.”

 

(e) The Shares which have been released from the Company’s repurchase option shall be delivered to the Purchaser at the Purchaser’s request.

 

(f) Notwithstanding anything set forth in this Section 4, if Purchaser’s service to the Company is involuntarily terminated within one year of the merger or reorganization of the Company with or into another corporation, entity or person or the sale of all of or substantially all of the Company’s assets to another corporation, entity or person (unless if immediately after such merger, reorganization or sale of assets, at least 51% of the capital stock or equity interests in such other corporation, entity or person are owned by persons who owned in the aggregate at least 51% of the capital stock of the Company immediately before such merger, reorganization or sale of assets), the greater of (i) 25% of the Unreleased Shares, or (ii) the amount of Shares that would have been released from the Company’s repurchase option up to one year after the date of termination of Purchaser’s services, shall be released from the Company’s repurchase option.

 

 
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(g) “Cause” shall mean any one or more of the following occurrences:

 

(i) Purchaser’s repeated failure to follow the reasonable directions of the Board of Directors, the Executive Chairman or the Chief Executive Officer;

 

(ii) Purchaser’s engaging in willful misconduct which is demonstrably and materially injurious to the Company’s business or reputation;

 

(iii) Purchaser’s committing a felony, an act of fraud against, or the misappropriation of material property belonging to the Company; or

 

(iv) Purchaser’s breaching in any material respect the terms of this Agreement, any employment, independent contractor, consulting or advisor agreement, or any confidentiality or proprietary information agreement between Purchaser and the Company; and

 

a determination by the Board of Directors of the Company to authorize a for Cause termination after the occurrence of (i), (ii), (iii) or (iv) as set forth above.

 

5. RESTRICTION ON TRANSFER. EXCEPT FOR THE ESCROW DESCRIBED IN SECTION 6 OR THE TRANSFER OF THE SHARES TO THE COMPANY OR ITS ASSIGNEES AS CONTEMPLATED BY THIS AGREEMENT, NONE OF THE SHARES OR ANY BENEFICIAL INTEREST THEREIN SHALL BE TRANSFERRED, ENCUMBERED OR OTHERWISE DISPOSED OF IN ANY WAY UNTIL THE RELEASE OF SUCH SHARES FROM THE COMPANY’S REPURCHASE OPTION IN ACCORDANCE WITH THE PROVISIONS OF THIS AGREEMENT, OTHER THAN BY WILL OR THE LAWS OF DESCENT AND DISTRIBUTION.

 

6. ESCROW OF SHARES.

 

(a) The Shares issued under this Agreement shall be held by the Secretary of the Company or its designee (the “Escrow Holder”), along with a stock assignment executed by the Purchaser in blank, until the expiration of the Company’s option to repurchase such Shares as set forth above.

 

(b) The Escrow Holder is hereby directed to permit transfer of the Shares only in accordance with this Agreement or instructions signed by both parties. In the event further instructions are desired by the Escrow Holder, Escrow Holder shall be entitled to rely upon directions executed by the Executive Chairman or a majority of the authorized number of the Company’s Board of Directors, exclusive of the Purchaser, if applicable. The Escrow Holder shall have no liability for any act or omission hereunder while acting in good faith in the exercise of Escrow Holder’s own judgment.

 

(c) If the Company or any assignee exercises its repurchase option hereunder, the Escrow Holder, upon receipt of written notice of such option exercise from the proposed transferee, shall take all steps necessary to accomplish such transfer.

 

(d) When the repurchase option has been exercised or expires unexercised or a portion of the Shares has been released from such repurchase option, upon Purchaser’s request, the Escrow Holder shall promptly cause a new certificate to be issued for such released Shares and shall deliver such certificate to the Purchaser.

 

 
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(e) Subject to the terms hereof, the Purchaser shall have all the rights of a shareholder with respect to such Shares while they are held in escrow, including, without limitation, the right to vote and to receive any cash dividends declared thereon. If, from time to time during the term of the Company’s repurchase option, there is (i) any stock dividend, stock split or other change in the Shares, or (ii) any merger or sale of all or substantially all of the assets or other acquisition of the Company, any and all new, substituted or additional securities to which the Purchaser is entitled by reason of Purchaser’s ownership of the Shares shall be immediately subject to this escrow, deposited with the Escrow Holder and included thereafter as “Shares” for purposes of this Agreement and the Company’s repurchase option.

 

7. INVESTMENT REPRESENTATIONS, RESTRICTIONS ON TRANSFER. IN CONNECTION WITH THE PURCHASE OF THE SHARES, THE PURCHASER REPRESENTS TO THE COMPANY THE FOLLOWING:

 

(a) Purchaser is aware of the Company’s business affairs and financial condition and has acquired sufficient information about the Company to reach an informed and knowledgeable decision to acquire the securities. Purchaser is purchasing these securities for investment for Purchaser’s own account only and not with a view to, or for resale in connection with, any “distribution” thereof within the meaning of the Securities Act of 1933, as amended (the “Securities Act”).

 

(b) Purchaser understands that the securities have not been registered under the Securities Act by reason of a specific exemption therefrom, which exemption depends upon, among other things, the bona fide nature of Purchaser’s investment intent as expressed herein. In this connection, Purchaser understands that, in view of the Securities and Exchange Commission (“Commission”), the statutory basis for such exemption may not be present if Purchaser’s representations meant that capital gains period under the tax statutes, for a deferred sale, for a market rise, for a sale if the market does not rise, or for a year or any other fixed period in the future.

 

(c) Purchaser further acknowledges and understands that the securities must be held indefinitely unless they are subsequently registered under the Securities Act or an exemption from such registration is available. Purchaser further acknowledges and understands that the Company is under no obligation to register the securities. Purchaser understands that the certificate evidencing the securities will be imprinted with a legend which prohibits the transfer of the securities unless they are registered or such registration is not required in the opinion of counsel satisfactory to the Company.

 

(d) Purchaser is aware of the adoption of Rule 144 by the Commission, promulgated under the Securities Act, which permits limited public resale of securities acquired in a nonpublic offering subject to the satisfaction of certain conditions.

 

(e) Purchaser further acknowledges that, in the event all of the requirements of Rule 144 are not met, compliance with Regulation A or some other registration exemption will be required; and that, although Rule 144 is not exclusive, the staff of the Commission has expressed its opinion that persons proposing to sell private placement securities other than in a registered offering and other than pursuant to Rule 144, will have a substantial burden of proof in establishing that an exemption from registration is available for such offers or sales and that such persons and the brokers who participate in the transactions do so at their own risk.

 

(f) Purchaser agrees, in connection with the Company’s initial underwritten public offering of the Company’s securities, (1) not to sell, make short sale of, loan, grant any options for the purchase of, or otherwise dispose of any shares of Common Stock of the Company held by Purchaser (other than those shares included in the registration) without the prior written consent of the Company or the underwriters managing such initial underwritten public offering of the Company’s securities for one hundred eighty (180) days from the effective date of such registration, and (2) further agrees to execute any agreement reflecting (1) above as may be requested by the underwriters at the time of the public offering.

 

 
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8. INVESTMENT INTENT. THE SHARE CERTIFICATE EVIDENCING THAT SHARES ISSUED HEREUNDER SHALL BE ENDORSED WITH THE FOLLOWING LEGENDS:

 

 

(a) THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO, OR IN CONNECTION WITH, THE SALE OR DISTRIBUTION THEREOF. NO SUCH SALE OR DISPOSITION MAY BE EFFECTED WITHOUT AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OF 1933.

 

 

 

 

(b) THE SHARES REPRESENTED BY THIS CERTIFICATE MAY BE TRANSFERRED ONLY IN ACCORDANCE WITH THE TERMS OF AN AGREEMENT BETWEEN THE COMPANY AND THE SHAREHOLDER, A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE COMPANY.

 

9. ADJUSTMENT FOR STOCK SPLIT. ALL REFERENCES TO THE NUMBER OF SHARES AND THE PURCHASE PRICE OF THE SHARES IN THIS AGREEMENT SHALL BE APPROPRIATELY ADJUSTED TO REFLECT ANY STOCK SPLIT, STOCK DIVIDEND OR OTHER CHANGE IN THE SHARES WHICH MAY BE MADE BY THE COMPANY AFTER THE DATE OF THIS AGREEMENT.

 

10. TAX CONSEQUENCES. THE PURCHASER HAS REVIEWED WITH THE PURCHASER’S OWN TAX ADVISORS THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THIS INVESTMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT (INCLUDING ANY TAX CONSEQUENCES THAT MAY RESULT UNDER RECENTLY ENACTED TAX LEGISLATION). THE PURCHASER IS RELYING SOLELY ON SUCH ADVISORS AND NOT ON ANY STATEMENTS OR REPRESENTATIONS OF THE COMPANY OR ANY OF ITS AGENTS. THE PURCHASER UNDERSTANDS THAT THE PURCHASER (AND NOT THE COMPANY) SHALL BE RESPONSIBLE FOR THE PURCHASER’S OWN TAX LIABILITY THAT MAY ARISE AS A RESULT OF THIS INVESTMENT OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. THE PURCHASER UNDERSTANDS THAT SECTION 83 OF THE INTERNAL REVENUE CODE OF 1986 (THE “CODE”) TAXES AS ORDINARY INCOME BOTH (I) THE DIFFERENCE BETWEEN THE FAIR MARKET VALUE OF THE SHARES WHEN THE COMPANY GRANTED THE PURCHASER THE RIGHT TO PURCHASE THE SHARES AND THE FAIR MARKET VALUE OF THE SHARES ON THE DATE OF THIS AGREEMENT, AND (II) THE DIFFERENCE BETWEEN THE AMOUNT PAID FOR THE SHARES AND THE FAIR MARKET VALUE OF THE SHARES AS OF THE DATE ANY RESTRICTIONS ON THE SHARES LAPSE. IN THIS CONTEXT, “RESTRICTION” INCLUDES THE RIGHT OF THE COMPANY TO BUY BACK THE SHARES PURSUANT TO ITS REPURCHASE OPTION. IN THE EVENT THE COMPANY HAS REGISTERED UNDER THE EXCHANGE ACT, “RESTRICTION” WITH RESPECT TO OFFICERS, DIRECTORS AND TEN PERCENT (10%) SHAREHOLDERS ALSO MEANS THE PERIOD AFTER THE PURCHASE OF THE SHARES DURING WHICH SUCH OFFICERS, DIRECTORS AND TEN PERCENT (10%) SHAREHOLDERS COULD BE SUBJECT TO SUIT UNDER SECTION 16(B) OF THE EXCHANGE ACT, “RESTRICTION” WITH RESPECT TO OFFICERS, DIRECTORS AND TEN PERCENT (10%) SHAREHOLDERS ALSO MEANS THE PERIOD AFTER THE PURCHASE OF THE SHARES DURING WHICH SUCH OFFICERS, DIRECTORS AND 10% SHAREHOLDERS COULD BE SUBJECT TO SUIT UNDER SECTION 16(B) OF THE EXCHANGE ACT. THE PURCHASER UNDERSTANDS THAT PURCHASER MAY ELECT TO BE TAXED AT THE TIME THE SHARES ARE PURCHASED RATHER THAN WHEN AND AS THE COMPANY’S REPURCHASE OPTION OR 16(B) PERIOD EXPIRES BY FILING AN ELECTION UNDER SECTION 83(B) OF THE CODE WITH THE I.R.S. WITHIN 30 DAYS FROM THE DATE OF PURCHASE.

 

THE PURCHASER ACKNOWLEDGES THAT IT IS THE PURCHASER’S SOLE RESPONSIBILITY AND NOT THE COMPANY’S TO FILE TIMELY THE ELECTION UNDER SECTION 83(b), EVEN IF THE PURCHASER REQUESTS THE COMPANY OR ITS REPRESENTATIVES TO MAKE THIS FILING ON THE PURCHASER’S BEHALF.

 

 
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11. GENERAL PROVISIONS.

 

(a) This Agreement shall be governed by the laws of the State of Arizona. This Agreement represents the entire agreement between the parties with respect to the purchase of Common Stock by the Purchaser and may only be modified or amended in writing signed by both parties.

 

(b) Any notice, demand or request required or permitted to be given by either the Company or the Purchaser, pursuant to the terms of this Agreement, shall be in writing and shall be deemed given when delivered personally or deposited in the U.S. mail, First Class with postage prepaid, and addressed to the parties at the addresses of the Parties set forth at the end of this Agreement or such other address as a party may request by notifying the other in writing.

 

(c) Any notice to the Escrow Holder shall be sent to the Company’s address with a copy to the other party not sending the notice.

 

(d) The rights and benefits of the Company under this Agreement shall be transferable to any one or more persons or entities, and all covenants and agreements hereunder shall inure to the benefit of, and be enforceable by the Company’s successors and assigns. The rights and obligations of the Purchaser under this Agreement may only be assigned with the prior written consent of the Company.

 

(e) Either party’s failure to enforce any provision or provisions of this Agreement shall not in any way be construed as a waiver of such provision or provisions, nor prevent that party thereafter from enforcing each and every other provisions of this Agreement. The rights granted both parties herein are cumulative and shall not constitute a waiver of either party’s right to assert all other legal remedies available to it under the circumstances.

 

(f) The Purchaser agrees upon request to execute any further documents or instruments necessary or desirable to carry out the purposes or intent of this Agreement.

 

(g) THE PURCHASER ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE SHARES, PURSUANT TO SECTION 4 HEREOF, IS EARNED ONLY BY CONTINUING SERVICE AS AN EMPLOYEE OR CONSULTANT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED OR PURCHASING SHARES UNDER). THE PURCHASER FURTHER ACKNOWLEDGES AND AGREES THAT THE TRANSACTIONS CONTEMPLATED HEREUNDER AND THE VESTING SCHEDULE SET FORTH HEREIN DO NOT CONSTITUTE AN EXPRESS OR IMPLIED PROMISE OF CONTINUED ENGAGEMENT AS AN EMPLOYEE OR CONSULTANT FOR THE VESTING PERIOD, FOR ANY PERIOD, OR AT ALL.

 

[SIGNATURES ON THE FOLLOWING PAGE]

 

 
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IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the day and year first set forth above.

 

 

PURCHASER

  NextGen Energies, Inc., a Delaware corporation   

 

 

 

By:

  By:   

 

RUDY GARCIA, an individual     Jim LoPresti, CEO, N4 Power  

 

     

Address: 8277 East Sweet Bush Lane

Gold Canyon, Arizona 85118
Email: rgarcia@nextgenenergies.com

 

Address:

8541 E. Anderson Dr, Suite 100

Scottsdale, Arizona 85255

Email: gweiss@beechtreecapital.com

 

 

 

 

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