Company: BLNE
Filing Date: 2025-02-05
Form Type: DEF 14A
Source: 0001493152-25-005006
Chunk: 51

Company: Beeline Holdings, Inc.
Filing Date: 2025-02-05
Form: DEF 14A
Chunk 51
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, whereupon each Note will bear interest at a rate of 18% per annum. If the Note remains outstanding for 180 days, the Note also requires a special one-time interest payment of 30% which will increase the principal of each Note accordingly. Upon the occurrence of an event of default, each Investor also has the right to require the Company to pay all or any portion of the Note at a 25% premium. Further, the Company is required to prepay the Notes in connection with certain sales of securities or assets at each Investor’s election in an amount equal to 35% of the gross proceeds from such sales. The Company also has the right to prepay all, but not less than all, of the outstanding amounts under the Notes, at its election. The Notes contain certain restrictive covenants, including covenants precluding the Company and its subsidiaries from incurring indebtedness, transferring assets, changing the nature of its business, and engaging in certain other actions, subject to certain exceptions.

Pursuant to the Securities Purchase Agreement, the Company entered into a Shareholder Pledge Agreement by and among the Company and the Investors, under which the Company pledged the Company’s equity in Spirits, to secure its obligations under the Notes and related agreements. Spirits concurrently entered into a Security and Pledge Agreement by and between Spirits and the investors, under which Spirits granted a security interest in all of its property and assets to secure the obligations of the Company under the Notes and related agreements. Further, Spirits and Nicholas Liuzza, Chief Executive Officer of Beeline, entered into a Guaranty in favor of the investors pursuant to the Securities Purchase Agreement. Under the Guaranty, both Spirits and Mr. Liuzza guaranteed the Company’s obligations under the Notes and related agreements.

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Concurrently with the Securities Purchase Agreement, the Company entered into a Registration Rights Agreement with each investor under which the Company agreed to file a registration statement to register the shares of common stock underlying the Note Warrants within 30 days of the closing, and to cause such registration to be declared effective within 60 days thereafter (or 120 days thereafter if such registration statement is subject to a full review). The registration statement became effective January 13, 2025; unless our shareholders approve Proposal 1 and our authorized common stock is increased, the common stock underlying the Note Warrants may not be issued or sold.

The Company also entered in three forms of side letters with the investors which (i) permitted one investor which with an