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 2, 2021
| Ecoark Holdings, Inc. |
| (Exact name of registrant as specified in its charter) |
| Nevada | 000-53361 | 30-0680177 | ||
| (State or other jurisdiction
of incorporation) |
(Commission File Number) | (IRS Employer Identification No.) |
| 303 Pearl Parkway Suite 200, San Antonio, TX | 78215 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: 1-800-762-7293
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)) |
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).
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. ☐
Securities registered pursuant to Section 12(b) of the Act: None
Item 1.01 Entry into a Material Definitive Agreement.
On March 2, 2021, Ecoark Holdings, Inc. (the “Company”) entered into a Consulting Agreement (the “Consulting Agreement”) with Centrecourt Asset Management LLC, a New York limited liability company (the “Consultant”), and Richard Smithline solely for the purpose of Section 12 thereof. Pursuant to the Consulting Agreement, the Company agreed to issue to the Consultant $675,000 of shares of the Company’s common stock, par value $0.001 per share, (the “Common Stock”), as compensation for the financial advisory services to be provided by the Consultant thereunder and for services previously rendered by the Consultant. The number of shares of Common Stock to be issued to the Consultant will be determined based on the lower of $8.05 per share, which is the closing price of the Common Stock on February 2, 2021, and (ii) the closing price of the Common Stock on the date of the effectiveness of a registration statement which the Company agreed to file by April 1, 2021 or as soon thereafter as is commercially reasonable at the request of the Consultant pursuant to a Registration Rights Agreement entered into by and between the Company and the Consultant concurrently with the Consulting Agreement for purposes of registering the sale of all such shares by the Consultant or its designees (the “Registration Rights Agreement”).
Under the Consulting Agreement, the Company also agreed to pay the Consultant such other fees as are mutually agreed by the parties, and to indemnify the Consultant for certain losses and liabilities incurred by the Consultant in performing services for the Company pursuant thereto.
The shares of Common Stock issuable pursuant to the Consulting Agreement were not registered under the Securities Act of 1933 (the “Act”) and will be issued to the Consultant in reliance upon the exemption from registration contained in Section 4(a)(2) of the Act and Rule 506(b) promulgated thereunder.
The foregoing description of the Consulting Agreement and the Registration Rights Agreement does not purport to be complete and is qualified in its entirety by the Consulting Agreement filed as Exhibit 10.1 and the Registration Rights Agreement filed as Exhibit 10.2 to this Current Report on Form 8-K and in each case incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
To the extent required by Item 3.02 of Form 8-K, the information contained in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
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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.
| March 8, 2021 | Ecoark Holdings, Inc. | |
| By: | /s/ Randy S. May | |
| Randy S. May Chief Executive Officer | ||
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Exhibit 10.1
Ecoark Holdings, Inc.
303 Pearl Parkway Suite 200,
San Antonio, TX
Attn.: Mr. Randy May
Chief Executive Officer
March 2, 2021
Dear Mr. May:
This letter agreement (this “Agreement”), when executed by the parties hereto, will memorialize our understanding and constitute an agreement between Ecoark Holdings, Inc., a Nevada corporation (collectively with its subsidiaries, the “Company”) and Centrecourt Asset Management LLC , a New York limited liability company (“Centrecourt Asset Management”) and Richard Smithline, individually solely for the purpose of Section 12 (“Smithline”), pursuant to which the Company agrees to retain Centrecourt Asset Management and Centrecourt Asset Management agrees to be retained by the Company under the terms and conditions set forth below:
1. The Company hereby retains Centrecourt Asset Management to provide it with financial advisory services. As compensation for the financial advisory services to be provided by Centrecourt Asset Management to the Company pursuant to this Agreement and for services previously rendered by Centrecourt Asset Management, the Company shall pay to Centrecourt Asset Management or its designee the following: (i) a number of shares of Common Stock in the Company equal in value to $675,000 (such shares to be valued at the lesser of (i) the closing price of the Common Stock on February 2, 2021 and (ii) the closing price of the Common Stock on the date of the effectiveness of the registration statement set forth below) to be delivered at the request of Centrecourt Asset Management in order to be included in the registration statement referred to below, and (ii) such other fees as are mutually agreed by the parties. The Company agrees to register the shares of Common Stock to be delivered as designated by Centrecourt Asset Management in a registration statement to be filed by the Company on April 1, 2021 or as soon thereafter as commercially reasonable at the request of Centrecourt Asset Management and to keep such registration statement effective in order that such shares may be sold in an orderly manner by Centrecourt Asset Management or its designees. The parties have executed a registration rights agreement, dated the date hereof, which governs the obligations of the parties with respect to the registration of the shares to be delivered as designated by Centrecourt Asset Management (the “Registration Rights Agreement”).
2. The Company shall reimburse Centrecourt Asset Management for any and all reasonable expenses incurred by Centrecourt Asset Management in the performance of its duties hereunder, and Centrecourt Asset Management shall account for such expenses to the Company by submission of vouchers reasonably satisfactory to the Company setting forth in reasonable detai1 the amount and reason for such cost or expense.
3. All obligations of Centrecourt Asset Management contained in this Agreement shall be subject to Centrecourt Asset Management's reasonable availability for such performance, in view of the nature of the requested service and the amount of notice received. Centrecourt Asset Management shall devote such time and effort to the performance of its duties hereunder as Centrecourt Asset Management shall determine is reasonably necessary for such performance. Centrecourt Asset Management may look to such others for such factual information, investment recommendations, economic advice and/or research, upon which to base its advice to the Company hereunder, as it shall deem appropriate. The Company shall furnish to Centrecourt Asset Management all information relevant to the performance by Centrecourt Asset Management of its obligations under this Agreement, or particular projects as to which Centrecourt Asset Management is acting as advisor, which will permit Centrecourt Asset Management to know all facts material to the advice to be rendered, and all materials or information reasonably requested by Centrecourt Asset Management. In the event that the Company fails or refuses to furnish any such material or information reasonably requested by Centrecourt Asset Management, and thus prevents or impedes Centrecourt Asset Management's performance hereunder, any inability of Centrecourt Asset Management to perform shall not be a breach of its obligations hereunder.
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4. Nothing contained in this Agreement shall limit or restrict the right of Centrecourt Asset Management or of any partner, affiliate, employee, agent or representative of Centrecourt Asset Management, to be a partner, director, officer, employee, agent or representative of, or to engage in, any other business, whether or not of a similar nature to the Company's business, nor to limit or restrict the right of Centrecourt Asset Management to render services of any kind to any other corporation, firm, individual or association.
5. Because Centrecourt Asset Management will be acting on your behalf, it is Centrecourt Asset Management’s practice to receive indemnification. A copy of Centrecourt Asset Management’s standard indemnification provisions (the “Indemnification Provisions”) is attached to this Agreement and is incorporated herein and made a part hereof.
6. This Agreement may not be transferred, assigned or delegated by any of the parties hereto without the prior written consent of the other party hereto; provided that Centrecourt Asset Management may assign its rights to payment to an affiliate without the prior written consent of the Company.
7. The failure or neglect of the parties hereto to insist, in any one or more instances, upon the strict performance of any of the terms or conditions of this Agreement, or their waiver of strict performance of any of the terms or conditions of this Agreement, shall not be construed as a waiver or relinquishment in the future of such term or condition, but the same shall continue in full force and effect.
8. Any notices hereunder shall be sent to the Company and to Centrecourt Asset Management at their respective addresses. Any notice shall be given by hand delivery, email transmission or overnight delivery or courier service, against receipt therefor, and shall be deemed to have been given when received. Either party may designate any other address to which notice shall be given by giving written notice to the other of such change of address in the manner herein provided.
9. This Agreement has been made in the State of New York and shall be construed and governed in accordance with the laws thereof without giving effect to principles governing conflicts of law.
10. This Agreement contains the entire agreement between the parties as to the subject matter hereof, may not he altered or modified, except in writing, and signed by the party to be charged thereby, and supersedes any and all previous agreements between the parties relating to the subject matter hereof.
11. This Agreement shall be binding upon the parties hereto and their respective heirs, administrators, successors and permitted assigns.
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12. Upon effectiveness of this agreement, (i) Smithline acknowledges on his behalf and on behalf of all affiliates, as defined by Rule 405 under the Securities Act of 1933, that except for the obligations under this agreement and the Registrations Rights Agreement , neither the Company or any subsidiary, officer or director has any liability to Centrecourt Asset Management, Smithline or any affiliate of Smithline and (ii) the Company acknowledges on its behalf and on behalf of all affiliates, as defined by Rule 405 under the Securities Act of 1933, that except for the obligations under this agreement and the Registrations Rights Agreement referred to above, neither Smithline, Centrecourt Asset Management, or any subsidiary, officer or director has any liability to the Company or any affiliate of the Company.
If you are in agreement with the foregoing, please execute two copies of this letter in the space provided below and return them to the undersigned.
| Yours truly, | |
| Centrecourt Asset Management LLC |
| By: | /s/ Richard Smithline | |
| Name: | Richard Smithline | |
| Title: | Chief Executive Officer, and on behalf of himself and his affiliates. |
ACCEPTED AND AGREED TO
AS OF THE DATE FIRST ABOVE
WRITTEN:
Ecoark Holdings, Inc.
| By: | /s/ Randy May | |
| Name: | Randy May | |
| Title: | Chief Executive Officer |
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INDEMNIFICATION PROVISIONS
Ecoark Holdings, Inc., a corporation (collectively with its Subsidiaries, and future subsidiaries, the “Company”), agree to indemnify and hold harmless Centrecourt Asset Management LLC, a New York limited liability company (“Centrecourt Asset Management”), and each of its members, officers, directors and affiliates, including without limitation, Puritan Partners, LLC a New York Limited Liability Company, from and against any and all losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses and disbursements (and any and all actions, suits, proceedings and investigations in respect thereof and any and all legal and other costs, expenses and disbursements in giving testimony or furnishing documents in response to a subpoena or otherwise are each a “Liability”), including, without limitation, the costs, expenses and disbursements, as and when incurred, of investigating, preparing or defending any such action, suit, proceeding or investigation (whether or not in connection with litigation in which Centrecourt Asset Management is a party), directly or indirectly, relating to, based upon, arising out of, or in connection with, its acting for the Company under the Agreement, dated as of February [23], 2021 between the Company and Centrecourt Asset Management to which these indemnification provisions are attached and form a part (the “Agreement”), except to the extent that any such Liability is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from Centrecourt Asset Management' gross negligence or willful misconduct. The Company also agrees that Centrecourt Asset Management shall not have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company for or in connection with the engagement of Centrecourt Asset Management, except to the extent that any such liability is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) to have resulted primarily and directly from Centrecourt Asset Management's gross negligence or willful misconduct.
The indemnification provisions contained herein shall be in addition to any liability which the Company may otherwise have to Centrecourt Asset Management or the persons identified below in this sentence and shall extend to the following: Centrecourt Asset Management, its affiliated entities, partners, employees, legal counsel, agents and controlling persons (within the meaning of the federal securities laws), and the officers, directors, employees, legal counsel, agents and controlling persons of any of them. All references to Centrecourt Asset Management in these indemnification provisions shall be understood to include any and all of the foregoing.
If any action, suit, proceeding or investigation is commenced, as to which Centrecourt Asset Management proposes to demand indemnification, it shall notify the Company with reasonable promptness (but any failure by Centrecourt Asset Management to notify the Company shall not relieve the Company from its obligations hereunder except to the extent the Company is damaged by such failure); and the Company shall promptly assume the defense of such action, suit, proceeding or investigation, including the employment of counsel (reasonably satisfactory to Centrecourt Asset Management) and payment of fees and expenses. Notwithstanding the foregoing sentence, Centrecourt Asset Management shall have the right to retain counsel of its own choice to represent it and such counsel shall, to the extent consistent with its professional responsibilities, cooperate with the Company and any counsel designated by the Company, but the fees and expenses of such counsel employed by Centrecourt Asset Management shall be at the expense of Centrecourt Asset Management unless (i) the employment of such counsel shall have been authorized in writing by the Company in connection with the defense of such action, (ii) the Company shall not have promptly employed counsel reasonably satisfactory to Centrecourt Asset Management, or (iii) counsel appointed to represent Centrecourt Asset Management shall have reasonably concluded that there is a conflict of interest that precludes such counsel from representing the Company or its affiliates and Centrecourt Asset Management and its affiliates, in such event such fees and expenses shall be borne by the Company and the Company shall not have the right to direct the defense of such action on behalf of Centrecourt Asset Management. The Company shall be liable for any settlement of any claim against Centrecourt Asset Management made with the Company's written consent, which consent shall not be unreasonably withheld. The Company shall not, without the prior written consent of Centrecourt Asset Management, settle or compromise any claim, or permit a default or consent to the entry of any judgment in respect thereof, unless such settlement, compromise or consent includes, as unconditional term thereof, the giving by the c1aimant to Centrecourt Asset Management of an unconditional release from all liability in respect of such claim.
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In order to provide for just and equitable contribution, if a claim for indemnification pursuant to these indemnification provisions is made but it is found in a final judgment by a court of competent jurisdiction (not subject to further appeal) that such indemnification may not be enforced in such case, even though the express provisions hereof provide for indemnification in such case, then the Company, on the one hand, and Centrecourt Asset Management, on the other hand, shall contribute to the losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses, and disbursements to which the indemnified persons may be subject in accordance with the relative benefits received by the Company, on the one hand, and Centrecourt Asset Management, on the other hand, and also the relative fault of the Company, on the one hand, and Centrecourt Asset Management, on the other hand, in connection with the statements, acts or omissions which resulted in such losses, claims, damages, obligations, penalties, judgments, awards, liabilities, costs, expenses or disbursements and all relevant equitable considerations shall also be considered. No person found liable for a fraudulent misrepresentation shall be entitled to contribution from any person who is also found liable for such fraudulent misrepresentation. Notwithstanding the foregoing, Centrecourt Asset Management shall not be obligated to contribute any amount hereunder that exceeds the amount of fees previously received by Centrecourt Asset Management pursuant to the Agreement.
Neither termination nor completion of the engagement of Centrecourt Asset Management referred to above shall affect these indemnification provisions which shall then remain operative and in full force and effect.
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Exhibit 10.2
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (“Agreement”) is entered into as of the 2nd day of March, 2021 by and among Ecoark Holdings, Inc., a Nevada corporation (the “Company”) and Centrecourt Asset Management LLC, a New York limited liability company (the “Investor”).
WHEREAS, the Company has agreed to provide certain registration rights to the Investor in order to induce the Investor to enter into that certain Consulting Agreement dated the date of this Agreement.
Now, therefore, in consideration of the mutual promises and the covenants as set forth herein, the parties hereto hereby agree as follows:
1. Definitions. Unless the context otherwise requires, the capitalized words and terms defined in this Section 1 shall have the meanings herein specified for all purposes of this Agreement, applicable to both the singular and plural forms of any of the terms herein defined.
“Agreed Value” means $675,000.
“Agreement” means this Registration Rights Agreement, as the same may be amended, modified or supplemented in accordance with the terms hereof.
“Board” means the Board of Directors of the Company.
“Common Stock” means the Company’s authorized common stock, as constituted on the date of this Agreement, any stock into which such Common Stock may thereafter be changed and any stock of the Company of any other class, which is not preferred as to dividends or assets over any other class of stock of the Company and which is not subject to redemption, issued to the holders of shares of such Common Stock upon any re-classification thereof.
“Commission” means the Securities and Exchange Commission or any other governmental body at the time administering the Securities Act.
“Company” has the meaning assigned to it in the introductory paragraph of this Agreement.
“Company Securities” has the meaning any securities proposed to be sold by the Company for its own account in a registered public offering.
“Effective Date” has the meaning assigned to it in Section 3(a) of this Agreement.
“Event” has the meaning assigned to it in Section 2(b) of this Agreement.
“Event Date” has the meaning assigned to it in Section 2(b) of this Agreement.
“Exchange Act” means the Securities Exchange Act of 1934 (or successor statute).
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“Excluded Forms” means registration statements under the Securities Act on Forms S-4 and S-8, or any successors thereto.
“Fair Market Value” shall mean: (i) if the principal trading market for such securities is a national securities exchange or the OTCQB (or a similar system then in use), the last reported sales price on the principal market on the Event Date or if the Event Date is not a trading day, the trading day immediately prior to such an Event Date; or (ii) if (i) is not applicable, and if bid and ask prices for shares of Common Stock are reported by the principal trading market or the Pink Open Market , the average of the high bid and low ask prices so reported on the Event Date or if the Event Date is not a trading day on the trading day immediately prior to such Event Date. Notwithstanding the foregoing, if there is no last reported sales price or bid and ask prices, as the case may be, for the day in question, then Fair Market Value shall be determined as of the latest day prior to such day for which such last reported sales price or bid and ask prices, as the case may be, are available, unless such securities have not been traded on an exchange or in the over-the-counter market for 30 or more days immediately prior to the day in question, in which case the Fair Market Value shall be determined in good faith by, and reflected in a formal resolution of, the board of directors of the Company.
“Filing Date” has the meaning assigned to it in Section 2(a) of this Agreement.
“Investor” has the meaning assigned to it in the introductory paragraph of this Agreement.
“Non-Registered Shares” has the meaning assigned to it in Section 2(b) of this Agreement.
“Person” includes any natural person, corporation, trust, association, company, partnership, joint venture, limited liability company and other entity and any government, governmental agency, instrumentality or political subdivision.
The terms “register” “registered” and “registration” refer to a registration effected by preparing and filing a registration statement on other than any of the Excluded Forms in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement.
“Registrable Securities” means (i) the Common Stock issuable to the Investor and (ii) any securities of the Company issued with respect to such Common Stock by way of a stock dividend or stock split or in connection with a combination, recapitalization, share exchange, consolidation or other reorganization of the Company.
“Rule 144” is defined in Section 9 of this Agreement.
“Selling Expenses” means all selling commissions, finder’s fees and stock transfer taxes applicable to the Registrable Securities registered by the Investor and all fees and disbursements of counsel for the Investor.
“Securities Act” means the Securities Act of 1933 (or successor statute).
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“Trading Day” means a day on which the principal Trading Market is open for trading.
“Trading Market” means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market or the New York Stock Exchange, OTCQB or OTCQX (or any successors to any of the foregoing).
2. Required Registration.
(a) On or about April 1, 2021 (the “Filing Date”), the Company shall file with the Commission a registration statement on Form S-3 or such other form as may be appropriate in order to permit the Investor to publicly sell its shares of Common Stock issuable under the Consulting Agreement.
(b) If: (i) the registration statement is not filed on or prior to the Filing Date; or (ii) the Company fails to cause the registration statement to be declared effective by the Effective Date (any such failure or breach being referred to as an “Event,” and the date on which such Event occurs being referred to as the “Event Date”), then, until the applicable Event is cured, the Company shall pay to the Investor, in cash, or in Common Stock at Fair Market Value at the Company’s option, as liquidated damages and not as a penalty, an amount equal to 1.0% of the Agreed Value for each 30 day period (prorated for partial periods), up to a maximum of 6%, during which such Event continues uncured. While such Event continues, such liquidated damages shall be paid not less often than every 30 days. Any unpaid liquidated damages as of the date when an Event has been cured by the Company shall be paid within seven Trading Days following the date on which such Event has been cured by the Company. Notwithstanding anything herein to the contrary, to the extent that the registration of any or all of the Registrable Securities by the Company on a registration statement is prohibited (the “Non-Registered Shares”) as a result of rules, regulations, positions or releases issued or actions taken by the Commission (including its Division of Corporation Finance or any other part of its staff) pursuant to its authority with respect to Rule 415 (or successor rule) and the Company has registered at such time the maximum number of Registrable Securities permissible upon consultation with the Commission (including its Division of Corporation Finance or any other part of its staff), then the liquidated damages described in this Section 2(b) shall not be applicable to such Non-Registered Shares.
3. Obligations of the Company. If and whenever the Company is required by the provisions hereof to effect or cause the registration of any Registrable Securities under the Securities Act as provided herein, the Company shall:
(a) use commercially reasonable efforts to prepare and file with the Commission a registration statement with respect to such Registrable Securities and use commercially reasonable efforts to cause such registration statement to become effective within 90 days of the date of this Agreement, or such shorter period that the Company’s financial statements for the three and nine months ended December 31, 2020 are not considered stale (the “Effective Date”) and to remain effective;
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(b) use commercially reasonable efforts to prepare and file with the Commission such amendments to such registration statement (including post-effective amendments) and supplements to the prospectus included therein as may be necessary to keep such registration statement effective, subject to the qualifications in Section 4(a), and to comply with the provisions of the Securities Act with respect to the sale or other disposition of all Registrable Securities covered by such registration statement during such period in accordance with the intended methods of disposition by the Investor set forth in such registration statement;
(c) furnish to the Investor such number of copies of such registration statement and of each such amendment and supplement thereto (in each case including all exhibits), such number of copies of the prospectus included in such registration statement (including each preliminary prospectus), in conformity with the requirements of the Securities Act, and such other documents, as each Investor may reasonably request, in order to facilitate the public sale or other disposition of the Registrable Securities owned by the Investor;
(d) use all commercially reasonable efforts to make such filings under the securities or blue sky laws of New York to enable the Investor to consummate the sale in such jurisdiction of the Registrable Securities owned by the Investor;
(e) notify the Investor at any time when a prospectus relating to their Registrable Securities is required to be delivered under the Securities Act, of the Company’s becoming aware that the prospectus included in the related registration statement, as then in effect, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing, and promptly prepare and furnish to the Investor a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not include an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in the light of the circumstances then existing;
(f) otherwise use commercially reasonable efforts to comply with all applicable rules and regulations of the Commission;
(g) to use commercially reasonable efforts to cause Registrable Securities to be quoted on each trading market and/or in each quotation service on which the Common Stock of the Company is then quoted; and
(h) notify the Investor of any stop order threatened or issued by the Commission and take all actions reasonably necessary to prevent the entry of such stop order or to remove it if entered.
4. Other Procedures.
(a) Subject to the remaining provisions of this Section 4(a) and the Company’s general obligation to use commercially reasonable efforts under Section 3, the Company shall be required to maintain the effectiveness of a registration statement until the earlier of (i) the sale of all Registrable Securities, , or (ii) one year from the date of this Agreement. Provided, however, that the Company shall not be required to file any post-effective amendment to any registration statement or file any prospectus supplement under Rule 424(b)(3) of the Securities Act beginning six months from the date of this Agreement unless and until the Company fails to file with the Commission a Form 10-Q or Form 10-K within the time required by the rules of the Commission including Rule 12b-25 (or any successor rule). The Company shall have no liability to the Investor for delays in the Investor being able to sell the Registrable Securities (i) as long as the Company uses commercially reasonable efforts to file a registration statement, amendments to a registration statement, post-effective amendments to a registration statement or supplements to a prospectus contained in a registration statement (including any amendment or post effective amendments), (ii) where the required financial statements or auditor’s consents are unavailable or (iii) where the Company would be required to disclose information at a time when it has no duty to disclose such information under the Securities Act, the Exchange Act, or the rules and regulations of the Commission.
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(b) In consideration of the Company’s obligations under this Agreement, the Investor agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 3(e) herein, the Investor shall forthwith discontinue his sale of Registrable Securities pursuant to the registration statement covering such Registrable Securities until the Investor’s receipt of the copies of the supplemented or amended prospectus contemplated by said Section 3(e) and, if so directed by the Company, shall deliver to the Company (at the Company’s expense) all copies, other than permanent file copies, then in the Investor’s possession of the prospectus covering such Registrable Securities current at the time of receipt of such notice.
(c) The Company’s obligation to file any registration statement or amendment including a post-effective amendment, shall be subject to each Investor, as applicable, furnishing to the Company in writing such information and documents regarding such Investor and the distribution of such Investor’s Registrable Securities as may reasonably be required to be disclosed in the registration statement in question by the rules and regulations under the Securities Act or under any other applicable securities or blue sky laws of the jurisdiction referred to in Section 3(d) herein. The Company’s obligations are also subject to each Investor promptly executing any representation letter concerning compliance with Regulation M under the Exchange Act (or any successor rule or regulation). If any Investor fails to provide all of the information required by this Section 4(c), the Company shall have no obligation to include his Registrable Securities in a registration statement or it may withdraw such Investor’s Registrable Securities from the registration statement without incurring any penalty or otherwise incurring liability to such Investors.
(d) If any such registration or comparable statement refers to the Investor by name or otherwise as a stockholder of the Company, but such reference to the Investor by name or otherwise is not required by the Securities Act, the rules thereunder or the policy of the Commission’s Staff, then the Investor shall have the right to require the deletion of the reference to the Investor, as may be applicable.
(e) In connection with the sale of Registrable Securities, the Investor shall deliver to each purchaser a copy of any necessary prospectus and, if applicable, prospectus supplement, within the time required by Section 5(b) of the Securities Act.
(f) If the Registrable Securities are eligible for sale under Rule 144, the Investor shall sell the Registrable Securities under Rule 144 rather than the registration statement.
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5. Registration Expenses. In connection with any registration of Registrable Securities pursuant to Section 2, the Company shall, whether or not any such registration shall become effective, from time to time, pay all expenses (other than Selling Expenses) incident to its performance of or compliance, including, without limitation, all registration, and filing fees, fees and expenses of compliance with securities or blue sky laws, word processing, printing and copying expenses, messenger and delivery expenses, fees and disbursements of counsel for the Company and all independent public accountants and other Persons retained by the Company.
6. Reserved.
7. Certain Limitations on Registration Rights. If, at any time prior to the effectiveness of any registration statement filed pursuant to this Agreement, if the Company determines to file a registration statement with the Commission for the public sale of its securities and the managing underwriter of such offering offers to purchase the Registrable Securities for its own account at the same price including underwriting discounts and applicable expenses as paid to the Company, the Investor shall either (i) elect to include its Registrable Securities being registered pursuant to this Agreement in the registration statement covering the sale of the Company’s securities, or (ii) immediately cease its public sales for a period of 90 days following the effective date of the registration statement covering the sale by the Company. Additionally, no Investor may participate in the registration statement relating to the sale by the Company of its Common Stock as provided above unless such Investor enters into an underwriting agreement with the managing underwriter and completes and/or executes all questionnaires, indemnities and other reasonable documents requested by the managing underwriter. The Investor shall be deemed to have agreed by acquisition of its Registrable Securities not to effect any public sale or distribution, including any sale pursuant to Rule 144 under the Securities Act, of any Registrable Securities and to use its best efforts not to effect any such public sale or distribution of any other equity security of the Company (including any short sale) or of any security convertible into or exchangeable or exercisable for any equity security of the Company (other than as part of such underwritten public offering) within 10 days before or 90 days after the effective date of such registration statement. In such event, the Investor shall, if requested, sign a customary market stand-off letter with the Company’s managing underwriter, and to comply with applicable rules and regulations of the Commission.
8. Allocation of Securities Included in Registration Statement. In the case of a registration pursuant to Section 7 for the Company’s account, if the Company’s managing underwriter shall advise the Company and the Investor in writing that the inclusion in any registration pursuant hereto of some or all of (a) the Registrable Securities sought to be registered by the Investor and securities offered by other holders, and (b) the Company’s securities sought to be registered creates a substantial risk that the proceeds or price per unit that will be derived from such registration will be reduced or that the number of securities to be registered is too large a number to be reasonably sold, (i) first, the number of Company securities sought to be registered shall be included in such registration, and (ii) next, the number of Registrable Securities offered by the Investor and securities offered by other holders shall be included in such registration to the extent permitted by the Company’s managing underwriter with the number of Registrable Securities and such other securities being registered determined on a pro-rata basis based on the number of Registrable Securities and securities the participating holders including the Investor desire to have registered; provided, however, that, if the Investor would be required pursuant to the provisions of this Section 7 to reduce the number of Registrable Securities that he may include in such registration, the Investor may withdraw all or any portion of its Registrable Securities from such registration and may resume selling shares under the registration statement (assuming it is effective) referred to in Section 2 after the 90-day lock-up period.
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9. Rule 144. For one year from the date of this Agreement, the Company covenants that it will file the reports required to be filed under the Exchange Act and the rules and regulations adopted by the Commission thereunder (or, in the event that the Company is not required to file such reports, it will make publicly available information as set forth in Rule 144(c)(2) promulgated under the Securities Act), and it will take such further action as the Investor may reasonably request, or to the extent required from time to time to enable the Investor to sell their Registrable Securities without registration under the Securities Act within the limitation of the exemption provided by (a) Rule 144 under the Securities Act, as such Rule may be amended from time to time, or (b) any similar rule or regulation hereafter adopted by the Commission (collectively, “Rule 144”). Upon request of the Investor, the Company will deliver to the Investor a written statement as to whether it has complied with such requirements.
10. Severability. In the event any parts of this Agreement are found to be void, the remaining provisions of this Agreement shall nevertheless be binding with the same effect as though the void parts were deleted.
11. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. The execution of this Agreement may be by actual or facsimile signature.
12. Benefit. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their legal representatives, successors and assigns.
13. Notices and Addresses. All notices, offers, acceptance and any other acts under this Agreement (except payment) shall be in writing, and shall be sufficiently given if delivered to the addressees in person, by Federal Express or similar overnight next business day delivery, or by email delivery followed by overnight next business day delivery, as follows:
To the Company: Ecoark Holdings, Inc.
5899 Preston Road #505
Frisco, TX 75034
Attention: Jay Puchir
Email: ________________
With a Copy to: Michael D. Harris, Esq.
Nason, Yeager, Gerson, Harris & Fumero, P.A.
3001 PGA Boulevard, Suite 305
Palm Beach Gardens, FL 33410
Telephone: (561) 686-3307
Email: mharris@nasonyeager.com
To the Investor: At the address on the signature page
or to such other address as any of them, by notice to the other may designate from time to time. Time shall be counted from the date of transmission.
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14. Attorneys’ Fees. In the event that there is any controversy or claim arising out of or relating to this Agreement, or to the interpretation, breach or enforcement thereof, and any action or proceeding relating to this Agreement is filed, the prevailing party shall be entitled to an award by the court of reasonable attorneys’ fees, costs and expenses.
15. Oral Evidence. This Agreement constitutes the entire Agreement between the parties and supersedes all prior oral and written agreements between the parties hereto with respect to the subject matter hereof. Neither this Agreement nor any provision hereof may be changed, waived, discharged or terminated orally, except by a statement in writing signed by the party or parties against which enforcement or the change, waiver discharge or termination is sought.
16. Additional Documents. The parties hereto shall execute such additional instruments as may be reasonably required by their counsel in order to carry out the purpose and intent of this Agreement and to fulfill the obligations of the parties hereunder.
17. Governing Law. This Agreement and any dispute, disagreement, or issue of construction or interpretation arising hereunder whether relating to its execution, its validity, the obligations provided herein or performance shall be governed or interpreted according to the internal laws of the State of New York.
18. Reserved.
19. Section or Paragraph Headings. Section headings herein have been inserted for reference only and shall not be deemed to limit or otherwise affect, in any matter, or be deemed to interpret in whole or in part any of the terms or provisions of this Agreement.
20. Force Majeure. The Company shall be excused from any delay in performance or for non-performance of any of the terms and conditions of this Agreement caused by any circumstances beyond its control, including, but not limited to, any Act of God, fire, flood, or government regulation, direction or request, or accident, interruption of telecommunications facilities, pandemic, labor dispute, unavoidable breakdown, civil unrest or disruption to the extent that any such circumstances affect the Company’s ability to perform its obligations under this Agreement or the ability of the Commission to perform its responsibilities under the Securities Act.
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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed personally or by a duly authorized representative thereof as of the day and year first above written.
| THE COMPANY: | ||
| ECOARK HOLDINGS, INC. | ||
| By: | /s/ Randy May | |
| Randy May | ||
| Chief Executive Officer | ||
| INVESTOR: | |
| CENTRECOURT ASSET MANAGEMENT LLC | |
| /s/ Richard Smithline | |
| Signature | |
| Richard Smithline | |
| Printed Name of Investor | |
| Chief Executive Officer | |
| Title of Authorized Signatory if Investor | |
| is a corporation or other entity | |
| Signature of spouse or co-owner, if any | |
| Address of Investor |
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