EXHIBIT 10.3

 

EXECUTION COPY

 

AMENDMENT AGREEMENT

 

 This agreement (this “Amendment Agreement”) is entered into as of March __,
2019, by and between ShiftPixy, Inc., a Wyoming corporation with offices located
at 1 Venture Suite 150, Irvine CA 92618 (the “Company”) and the undersigned (the
“Investor”, and together with the Company, the “Parties”).

 

Reference is hereby made to (a) the 8% Senior Secured Convertible Notes Due
September 4, 2019 (the “Existing June Notes”) and (b) the 8% Senior Secured
Convertible Notes Due December 31, 2019 (the “Existing December Notes”, and
together with the Existing June Notes, the “Existing Notes”), in each case,
issued by the Company prior to the date hereof and outstanding as of the date
hereof. Capitalized terms not defined herein shall have the meaning as set forth
in the Existing Notes.

  

Reference is further made to those certain Senior Convertible Notes (the “New
Notes”, and together with the Existing Notes, the “Applicable Notes”) and
Warrants to Purchase Common Stock (the “New Warrants”) to be issued by the
Company pursuant to that certain Securities Purchase Agreement, dated March 11,
2019, by and between the Company and the investors party thereto (the
“Securities Purchase Agreement”).

 

Effective on the date the Company and each holder of Applicable Notes,
severally, have executed and delivered to the Company an agreement in the form
of this Amendment Agreement (the “Effective Date”), the Applicable Notes are
hereby amended to (x) reduce the Floor Price to $1.00 (as adjusted for stock
splits, stock dividends, stock combinations, recapitalizations and similar
event), (y) permit the amortization of the Note at the Floor Price at a time the
Amortization Conversion Rate would (without regard to the Floor Price) be below
the Floor Price then in effect with the written consent (which may be given by
e-mail) of the Investor and (z) prohibit the Amortization Conversion Rate from
exceeding the Floor Price then in effect.

 

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On the Effective Date, the Applicable Notes are further amended such that,
notwithstanding anything in the Applicable Notes to the contrary, the Company
shall not issue any shares of Common Stock upon conversion or exercise (as the
case may be) of the Applicable Notes or the New Warrants or otherwise pursuant
to the terms of the Applicable Notes or the New Warrants, if the issuance of
such shares of Common Stock (taken together with (x) each issuance of such
shares upon the conversion of the Existing December Notes and the New Notes and
exercise of the New Warrants and otherwise pursuant to the terms of the Existing
December Notes, the New Notes and the New Warrants and (y) upon conversion on or
after the date hereof of the Existing June Notes and otherwise on or after the
date hereof pursuant to the terms of the Existing June Notes) would exceed the
aggregate number of shares of Common Stock which the Company may issue upon
conversion or exercise (as the case may be) of the Applicable Notes and the New
Warrants and otherwise pursuant to the terms of the Applicable Notes or the New
Warrants without breaching the Company’s obligations under the rules or
regulations of the Principal Market (the number of shares which may be issued
without violating such rules and regulations, including rules related to the
aggregate of offerings under NASDAQ Listing Rule 5635(d), the “Exchange Cap”),
except that such limitation shall not apply in the event that the Company (A)
obtains the approval of its stockholders as required by the applicable rules of
the Principal Market for issuances of shares of Common Stock upon conversion or
exercise (as the case may be) of the Applicable Notes, the New Warrants or
otherwise pursuant to the terms of the Applicable Notes or the New Warrants in
excess of such amount or (B) obtains a written opinion from outside counsel to
the Company that such approval is not required, which opinion shall be
reasonably satisfactory to the Investor. Notwithstanding anything in the
Existing Notes to the contrary, until such approval or such written opinion is
obtained, no holder of Applicable Notes or New Warrants (each an “Existing
Buyer”) shall be issued in the aggregate, upon conversion or exercise (as the
case may be) of any Applicable Notes or any of the New Warrants or otherwise
pursuant to the terms of the Applicable Notes or the New Warrants, shares of
Common Stock in an amount greater than the product of (i) the Exchange Cap
multiplied by (ii) the quotient of (A) the aggregate principal amount of
Applicable Notes held by (or issued to, as applicable) such Existing Buyer as of
the Closing Date (as defined in the New Notes) divided by (B) the aggregate
principal amount of all Applicable Notes held by (or issued to, as applicable)
the Existing Buyers as of the Closing Date (with respect to each Existing Buyer,
the “Exchange Cap Allocation”). In the event that any Existing Buyer shall sell
or otherwise transfer any of such Existing Buyer’s Applicable Notes, the
transferee shall be allocated a pro rata portion of such Existing Buyer’s
Exchange Cap Allocation with respect to such portion of such Applicable Notes so
transferred, and the restrictions of the prior sentence shall apply to such
transferee with respect to the portion of the Exchange Cap Allocation so
allocated to such transferee. Upon conversion and exercise in full of an
Existing Buyer’s Applicable Notes and New Warrants, the difference (if any)
between such Existing Buyer’s Exchange Cap Allocation and the number of shares
of Common Stock actually issued to such Existing Buyer upon such Existing
Buyer’s conversion in full of such Existing Buyer’s Applicable Notes and
exercise in full of such New Warrants shall be allocated to the respective
Exchange Cap Allocations of the remaining Existing Buyers of Applicable Notes
and New Warrants on a pro rata basis in proportion to the shares of Common Stock
underlying the Applicable Notes and New Warrants then held by each such Existing
Buyer. At any time after the earlier to occur of (x) the Stockholder Approval
Date (as defined in the Securities Purchase Agreement) and (y) the Stockholder
Meeting Deadline (as defined in the Securities Purchase Agreement), in the event
that the Company is prohibited from issuing shares of Common Stock pursuant to
this paragraph (the “Exchange Cap Shares”), the Company shall pay cash in
exchange for the cancellation of such shares of Common Stock at a price equal to
the sum of (i) the product of (x) such number of Exchange Cap Shares and (y) the
greatest Closing Sale Price (as defined in the New Notes) of the Common Stock on
any Trading Day (as defined in the New Notes) during the period commencing on
the date the applicable Existing Buyer delivers the applicable conversion (or
exchange) notice with respect to such Exchange Cap Shares to the Company and
ending on the date of such issuance and payment under this paragraph and (ii) to
the extent such Existing Buyer purchases (in an open market transaction or
otherwise) shares of Common Stock to deliver in satisfaction of a sale by such
Existing Buyer of Exchange Cap Shares, any Buy-In Payment Amount, any brokerage
commissions and other out-of-pocket expenses, if any, of such Existing Buyer
incurred in connection therewith (collectively, the “Exchange Cap Share
Cancellation Amount”); provided, that no Exchange Cap Share Cancellation Amount
shall be due and payable to such Existing Buyer to the extent that (x) on or
prior to the applicable Share Delivery Deadline, the Exchange Cap Allocation of
an Existing Buyer is increased (whether by assignment by an Existing Buyer of
Applicable Notes and/or New Warrants or all, or any portion, of such Existing
Buyer’s Exchange Cap Allocation or otherwise) (an “Exchange Cap Allocation
Increase”) and (y) after giving effect to such Exchange Cap Allocation Increase,
the Company delivers the applicable Exchange Cap Shares to such Existing Buyer
(or its designee) on or prior to the applicable share delivery deadline.

 

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The revised forms of the Existing June Notes and the Existing December Notes (in
each case, after giving effect to the foregoing amendments), respectively, are
hereby attached hereto as Exhibit A and Exhibit B, respectively.

 

For the purposes of Rule 144 of the Securities Act (“Rule 144”), the Company
acknowledges that the holding period of each Applicable Note (and any shares of
Common Stock issuable upon conversion thereof) after the Effective Date shall be
identical to the holding period of such Applicable Note immediately prior to the
Effective Date, commencing on the date of initial issuance of such Applicable
Note, and the Company agrees not to take a position contrary to this paragraph.
The Company acknowledges and agrees that in connection with any resale of Common
Stock issuable upon conversion of the Applicable Notes after the Effective Date
pursuant to Rule 144, the Investor shall solely be required to provide
reasonable assurances that such shares of Common Stock are eligible for sale,
assignment or transfer under Rule 144, which shall not include an opinion of
such Investor’s counsel. The Company shall be responsible for any transfer agent
fees or Depository Trust Company fees or legal fees of the Company’s counsel
with respect to the removal of legends, if any, or issuance or transfer of such
shares of Common Stock in accordance herewith.

 

The obligations of the Investor under this Agreement are several and not joint
with the obligations of any other Existing Buyer (each an “Other Investor”), and
the Investor shall not be responsible in any way for the performance of the
obligations of any Other Investor under any other agreement (each, an “Other
Agreement”). Nothing contained herein or in any Other Agreement, and no action
taken by the Investor pursuant hereto, shall be deemed to constitute the
Investor and Other Investors as a partnership, an association, a joint venture
or any other kind of entity, or create a presumption that the Investor and Other
Investors are in any way acting in concert or as a group with respect to such
obligations or the transactions contemplated by this Agreement or any Other
Agreement and the Company acknowledges that, to the best of its knowledge, the
Investor and the Other Investors are not acting in concert or as a group with
respect to such obligations or the transactions contemplated by this Agreement
or any Other Agreement. The Company and the Investor confirm that the Investor
has independently participated in the negotiation of the transactions
contemplated hereby with the advice of its own counsel and advisors. The
Investor shall be entitled to independently protect and enforce its rights,
including, without limitation, the rights arising out of this Agreement, and it
shall not be necessary for any Other Investor to be joined as an additional
party in any proceeding for such purpose. The parties hereto hereby further
acknowledge and agree that each Other Agreement shall be negotiated separately
with each Other Investor and shall not in any way be construed as the Investor
or any Other Investor acting in concert or as a group with respect to the
purchase, disposition or voting of securities of the Company or otherwise.

 

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This Amendment Agreement shall be binding upon, and inure to the benefit of, the
Parties’ successors and assigns, including any entity in which any Party merges,
consolidates or reorganizes.

 

The interpretation and enforcement of this Amendment Agreement shall be governed
by the laws of the State of New York without regard to its conflict of law
rules. The Parties consent to the exclusive jurisdiction of the State and
Federal Courts located in the State and City of New York, for any dispute
arising out of this Amendment Agreement.

 

In any action to enforce the terms of this Amendment Agreement, no right or
remedy herein is intended to be exclusive of any other right or remedy. In any
such action, the prevailing party shall be entitled to its reasonable attorney’s
fees from the opposing party. No forbearance, indulgence, delay or failure to
exercise any right or remedy herein shall operate as a waiver, nor as
acquiescence in any default, nor shall any single or partial exercise of such
right or remedy or the exercise of any other right or remedy operate as a
waiver.

 

All notices or other communications to be sent to the Parties shall be addressed
and sent by Federal Express overnight (such notices deemed served upon mailing)
to the following addresses and by E-mail, unless the Parties hereto are notified
in writing of a different address:

 

If to Investor, to the address below the signature page of the Investor attached
hereto.

 

If to ShiftPixy:

 

ShiftPixy, Inc.

1 Venture Suite 150

Irvine CA 92618

Attention: Chief Executive Officer

 

With a copy to:

 

Kirk Flagg

c/o ShiftPixy, Inc.

1 Venture Suite 150

Irvine CA 92618

 

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This Amendment Agreement constitutes the entire agreement between the Parties
concerning the Waiver. All negotiations between the Parties are merged into this
Amendment Agreement and there are no representations, warranties, covenants,
understandings, agreements, oral or otherwise, in relation thereto between the
Parties other than those incorporated herein and to be delivered hereunder. This
Amendment Agreement may not be changed, modified or altered except by an
agreement in writing, signed by the party against whom enforcement of any
change, modification or alteration is sought.

 

Except with respect to the amendments of the Existing Notes herein, nothing
contained herein and no actions taken pursuant to the terms hereof are intended
to constitute an amendment, waiver, or novation of any agreement and shall not
constitute a release, termination or waiver of any of the liens, security
interests, rights or remedies granted to the Investor in any other agreement or
instrument.

 

The invalidity or unenforceability of any provision or covenant of this
Amendment Agreement shall not affect the validity or enforceability of any other
provision or covenant hereof, and any such invalid provision or covenant shall
be deemed to be severable.

 

This Amendment Agreement shall be construed without regard to the Party or
Parties responsible for the preparation of same and shall be deemed as prepared
jointly by the Parties. Any ambiguity or uncertainty existing herein shall not
be interpreted or construed against any Party.

 

The Parties agree to execute and deliver such further instruments, and to take
such further actions, as may be reasonably necessary or proper to effectuate and
carry the purposes of this Amendment Agreement.

 

The section headings contained in this Amendment Agreement are for the
convenience of reference only and shall not affect the construction of any
provision of this Amendment Agreement. Furthermore, the recitals at the
beginning of this Amendment Agreement are for explanatory purposes only and are
expressly excluded from and not made a part of this Amendment Agreement.

 

This Amendment Agreement may be executed in counterparts, facsimile and/or PDF
copies shall be deemed to be originals, and counterparts together constitute one
and the same instrument.

  

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Please execute this letter in the signature block below if you agree to the
foregoing.

 

 

Sincerely,

 

SHIFTPIXY, INC.

          By:

 

Name:

    Title:  

      

[AMENDMENT AGREEMENT]

 

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As evidenced by the below signature,

the Investor hereby agrees to

this Amendment Agreement as of this 8 day of March, 2019:

 

 

 

 

      By:

Name:

  Title:  

 

[AMENDMENT AGREEMENT]

 

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Address for Notices:

 

 

 

 

 

 

 

 

 

 

 

 

[AMENDMENT AGREEMENT]

  

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