Exhibit 10.39

 

CONSULTING AGREEMENT

 

THIS CONSULTING AGREEMENT (the “Agreement”) is entered into as of February 19,
2019 by and between FlexShopper, Inc., a Delaware corporation (the “Company”),
and XLR8 Capital Partners LLC (“Consultant”).

 

RECITALS

 

WHEREAS, the Company desires to engage Consultant to provide certain services
with respect to the Company's business as set forth herein; and

 

WHEREAS, Consultant represents that it has experience providing such services
and desires to provide those services to the Company, all as more specifically
set forth below.

 

NOW, THEREFORE, in consideration of the promises and the respective covenants
and agreements of the parties herein contained, the parties hereby agree as
follows.

 

1. Consulting Engagement; Term. The Company hereby engages Consultant, and
Consultant hereby accepts such engagement by the Company, as a consultant and
advisor with respect to the matters specifically set forth herein. The term of
this Agreement (the “Term”) shall commence on March 1, 2019 and continue for
twelve (12) months unless terminated earlier as herein provided and may be
extended upon written agreement between the Company and Consultant.

 

2. Consulting Services.

 

(a) During the Term, Consultant shall devote such time as is necessary, which in
any event shall be not less than 100 hours per month, to serve as an advisor and
consultant to the Company by advising on retailer partnerships, management
consulting and mentoring services, marketing consulting and call center and
collection optimization related to both lease-to-own and loan products as well
as any other matters agreed upon by the Agent (as defined below) and the
Company’s Chief Executive Officer (collectively, the “Services”). Consultant
represents and warrants to the Company that it is able to provide the Services
in a professional manner consistent with this type of engagement. The parties
understand and further agree that, during the Term of the Agreement, Consultant
is not restricted from providing similar consulting services to other companies;
provided, that any such other activities shall not materially interfere with the
Services.

 

(b) The parties expect that the Services will primarily be provided by Devon
Cohen and various others with specific experience and knowledge that Consultant
believes could benefit the Company (the “Agent”). The Agent will be available
for meetings and discussion as reasonably requested by the Company with the
executive officers of the Company and the Company’s other advisors and/or
consultants. During the Term, the Agent may accompany Howard Dvorkin to meetings
of the Company’s Board of Directors and attend such meetings in a non-voting
observer capacity.

 

 

 

 

3. Compensation. In consideration of the Services to be rendered as set forth
herein, Company shall compensate Consultant as follows:

 

(a) On the last day of each calendar month during the Term, the Company shall
pay to Consultant $20,000 in cash.

 

(b) On the last day of each calendar month during the Term, the Company shall
issue to Consultant and/or its designee(s), subject to (i) any such designee
executing any documents as may be reasonably requested by the Company in
connection therewith and (ii) applicable securities laws, warrants to purchase
an aggregate of 40,000 shares of the Company’s common stock (“Common Stock”) at
a strike price per share equal to the greater of $1.25 or 110% of the closing
price of a share Common Stock on the Nasdaq Capital Market on the last trading
day of such calendar month (or, if the Common Stock is not then listed on the
Nasdaq Capital Market, 110% of the Fair Market Value, as such term is defined in
the Company’s 2018 Omnibus Equity Compensation Plan, of a share of Common
Stock), subject to customary adjustments in the event of a stock dividend or a
subdivision or combination (i.e., by reverse stock split) of outstanding shares
of the Company’s common stock (“Warrants”). The Warrants will expire on June 30,
2023. In the event that Consultant designates an individual to receive Warrants,
the Company may issue to such designee stock options under the Plan having
substantially similar terms as the Warrants. The underlying shares of Common
Stock shall be deemed fully earned, fully paid and non-forfeitable upon
issuance.

 

(c) Consultant may be eligible to receive additional Warrants as bonus payment
as determined by the Compensation Committee of the Company’s Board of Directors,
in its sole discretion at the end of the Term. The Compensation Committee will
consider additional warrants based upon Consultant’s tangible results that are
at a minimum aligned with bonus equity grants to senior management of the
Company.

 

(d) The Company shall not withhold any applicable federal, state, or local
taxes, including payroll taxes and income tax withholding, and Consultant
represents and warrants that he, she, or it shall report the Fee as taxable
income on his, her, or its federal, state, and local tax returns as required by
applicable law

 

4. Termination. This Agreement may be terminated prior to the expiration of the
Term: (a) after August 8, 2019, by any party for any or no reason upon thirty
(30) days’ prior written notice to the other party; or (b) by the Company
immediately for Consultant’s failure to provide adequately the Services as
determined by the Compensation Committee of the Company’s Board of Directors.

 

5. Expenses. No expenses paid or incurred by Consultant in connection with the
performance of the Services shall be subject to reimbursement by the Company
unless any such expenses are expressly pre-approved in writing by the Company’s
Chief Executive Officer as reimbursable.

 

2

 

 

6. Representations, Warranties and Covenants of Consultant.

 

(a) Consultant hereby represents and warrants that it has full power and legal
right and authority to execute, deliver, and perform under this Agreement.

 

(b) Consultant hereby covenants and agrees to indemnify and hold harmless the
Company and its affiliates, and their respective former and current directors,
officers, employees, agents, successors and assigns, from and against and in
respect of: (i) any and all losses and damages resulting from any
misrepresentation or breach of any warranty, covenant or agreement by Consultant
made or contained in this Agreement, and (ii) any and all actions, suit,
proceedings, claims, demands, judgments, costs and expenses, including
attorney’s fees, incident to the foregoing.

 

(c) Consultant represents, warrants, covenants and agrees that:

 

(i) the Warrants (including the shares of Common Stock issuable upon the
exercise of the Warrants, the “Securities”) have not been registered under the
Securities Act of 1933, as amended (the “Securities Act”), or applicable state
securities laws and, therefore, cannot be resold or otherwise disposed of unless
they are subsequently registered under the Securities Act and such laws, or
unless an exemption from such registration is available;

 

(ii) Consultant is an accredited investor within the meaning of Rule 501(a) of
Regulation D promulgated under the Securities Act;

 

(iii) Consultant acknowledges that this offer and sale of the Securities is
intended to be exempt from registration under the Securities Act;

 

(iv) Consultant has received, carefully read and understands in their entirety:
(1) this Agreement, (2) the Company’s recent filings under the Securities
Exchange Act of 1934, as amended (the “Exchange Act”), (3) all information
necessary to verify the accuracy and completeness of the Company’s
representations, warranties and covenants made herein and filed under the
Exchange Act; and (4) written (or verbal) answers to all questions Consultant
submitted to the Company regarding an investment in the Company; and Consultant
has relied on the information contained therein and has not been furnished with
any other documents, offering literature, memorandum or prospectus with respect
thereto;

 

(v) Consultant: (1) has obtained, in Consultant’s judgment, sufficient
information to evaluate the merits and risks of an investment in the Company;
and (2) has sufficient knowledge and experience in financial and business
matters to evaluate the merits and risks associated with such investment and to
make an informed investment decision with respect thereto;

 

3

 

 

(vi) the Securities are being acquired for its own account for investment and
not for the benefit or account of any other person or entity and not with a view
to, or in connection with, any resale or distribution thereof; Consultant fully
understands and agrees that he must bear the economic risk of the investment in
the Securities for an indefinite period of time because, among other reasons,
the Securities have not been and will not be registered under the Securities Act
or under the securities laws of any state, and, therefore, are “restricted
securities” and cannot be resold, pledged, assigned or otherwise disposed of
unless they are subsequently registered under the Securities Act and under the
applicable securities laws of such states or an exemption from such registration
is otherwise available; and

 

(vii) Consultant has determined that the Securities are a suitable investment
and has adequate means to provide for current cash needs and possible
contingencies, and Consultant’s financial condition is such that it can afford
to bear all risks associated with the acquisition of the Securities. Consultant
hereby acknowledges that an investment in the Securities is subject to a high
degree of risk, lacks liquidity and that Consultant has the financial capacity
to hold the Securities purchased hereby for an indefinite period and that it
could bear a complete loss of this investment.

 

(d) Consultant hereby acknowledges that any certificates representing the
Securities will contain a legend substantially as follows:

 

THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933 (THE “SECURITIES ACT”) AND SUCH SECURITIES MAY NOT BE OFFERED, SOLD,
PLEDGED OR OTHERWISE TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT RELATED THERETO OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO
THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED UNDER THE SECURITIES ACT OR
ANY APPLICABLE STATE SECURITIES LAWS.

 

7. Independent Contractor Status.

 

It is expressly understood and agreed that this is a consulting services
agreement only and does not constitute an employer/employee relationship.
Accordingly, Consultant agrees that Consultant shall be solely responsible for
the payment of its own taxes or sums due to the federal, state or local
governments, office overhead, workers compensation, fringe benefits, pension
contributions and other expenses. Consultant, including the Agent, is an
independent contractor and the Company shall have no right to control the
activities of Consultant other than to require Consultant to provide the
Services in a professional manner pursuant to the terms and conditions of this
Agreement. Consultant shall have no authority to bind the Company except as
provided for by Company in writing.

 

4

 

 

8. Covenants of the Company.

 

(a) The Company hereby covenants and agrees to indemnify and hold harmless
Consultant and its affiliates, and their respective former and current
directors, officers, employees, agents, successors and assigns, from and against
and in respect of: any and all losses and damages resulting from any (i)
misrepresentation or breach of any warranty, covenant or agreement by the
Company made or contained in this Agreement, (ii) any willful misconduct or
gross negligence on the part of the Company or any of its officers, directors,
agents or employees; and (iii) any and all actions, suit, proceedings, claims,
demands, judgments, costs and expenses, including attorney’s fees, incident to
the foregoing.

 

(b) The Company shall use commercially reasonable efforts to name Consultant as
an additional insured under its applicable insurance policies.

 

9. Confidentiality and Publicity.

 

(a) Except as required by law or court order, Consultant will keep confidential
any trade secrets or confidential or proprietary information of the Company
which are now known to Consultant or which hereinafter may become known to
Consultant and Consultant shall not at any time directly or indirectly disclose
or permit to be disclosed any such information to any person, firm, or
corporation or other entity except with the prior written permission of the
Company. Consultant acknowledges and agrees that breach of this confidentiality
provision by Consultant and/or anyone employed by or otherwise associated with
Consultant may also constitute a violation of federal and/or state securities
and other laws. For purposes of this Agreement, “trade secrets or confidential
or proprietary information” includes information that is unique to or about the
Company or its business and is not known or generally available to the public,
including, but not limited to, information obtained by attending meetings of the
Company’s board of directors. Notwithstanding the foregoing, Consultant
acknowledges that no confidential information of the Company is necessary to be
shared with Consultant in order for it to perform the Services.

 

(b) Consultant will not use any trade name, trademark, service mark, or logo of
the Company (or any name, mark, or logo confusingly similar thereto) in any
advertising, promotions, or otherwise, without the Company’s prior written
consent or as described herein. Consultant will not issue press releases or
publicity relating to the Company or this Agreement or reference the Company or
its affiliates in any brochures, advertisements, client lists or other
promotional materials without the Company’s prior written consent.

 

10. Miscellaneous Provisions.

 

(a) Notices. Any notice, request, demand or other communications required or
permitted pursuant to this Agreement shall be in writing and shall be deemed to
have been properly given if delivered in person or by courier or other overnight
carrier, by certified or registered mail, postage prepaid and return receipt
requested, or by electronic mail to each party hereto at the address indicated
below or at any other address as may be designated from time to time by written
notice to each party. Such notice shall be deemed given upon delivery.

 

5

 

 

If to Consultant: XLR8 Capital Partners, LLC   6360 NW 5th Way, Suite 200
Fort Lauderdale, FL 33309

 

If to the Company: FlexShopper, Inc.   2700 North Military Trail, Ste. 200
Boca Raton, FL 33431   Attention: Chief Executive Officer

 

(b) Survival. In the event of any termination of this Agreement, Sections 7, 9
10 and 11 hereof shall survive and continue in effect.

 

(c) Assignment. This Agreement may not be assigned by the Company or Consultant
without the other party’s written consent.

 

(d) Entire Agreement. This Agreement constitutes the entire agreement between
the parties hereto relating to the subject matter hereof, and supersedes all
prior written or oral agreements, commitments or understandings with respect to
the matters provided for herein, and no modification shall be binding unless set
forth in writing and duly executed by each party hereto.

 

(e) Modification of Agreement. Any modification of this Agreement or additional
obligation assumed by either party in connection with this Agreement shall be
binding only if evidenced in writing signed by each party or an authorized
representative of each party.

 

(f) Binding Effects. This Agreement shall be binding upon and inure to the
benefit of the parties hereto their respective heirs, executors, administrators
and successors, including any corporation with which or into which the Company
may be merged or which may succeed to its assets or business.

 

(g) Headings. The headings or captions of this Agreement are inserted only as a
matter of convenience and for reference and in no way define, limit, extend or
scope of this Agreement or the intent of any provisions hereof.

 

(h) Identification. Whenever required by the context of this Agreement, the
singular number shall include the plural, and the word “person” or “party” shall
include a corporation, limited liability company, firm, partnership, or other
form of association.

 

(i) Waiver. The waiver by any party to this Agreement of a breach of any
provision of this Agreement or the failure of either party to insist upon the
performance of any of the terms and conditions of this Agreement shall not be
deemed a continuing waiver or a waiver of any subsequent breach of that or any
other provision of this Agreement.

 

(j) Counterparts. For the convenience of the parties hereto, this Agreement may
be executed in one or more counterparts, which shall each be considered an
original.

 

(k) Severability. If any provision of this Agreement shall be declared invalid
or unenforceable, the remainder of this Agreement will continue in full force
and effect so far as the intent of the parties hereto can be carried out.

 

(l) Recitals. The recitals set forth at the beginning of this Agreement are
incorporated by reference in and made a part of this Agreement.

 

11. Governing Law. This Agreement shall be governed by and construed under the
laws of the State of Delaware (irrespective of its choice of law principles).

 

[Signature page follows]

 

6

 

 

FLEXSHOPPER, INC.   XLR8 CAPITAL PARTNERS, LLC           By: /s/ Brad Bernstein
  By: /s/ Devon M. Cohen Name:  Brad Bernstein   Name:  Devon M. Cohen Title:
Chief Executive Officer   Title: Authorized Person

 

[Signature Page to Consulting Agreement]