Freight Technologies, Inc 6-K, filed Feb 11, 2022
Freight Technologies, Inc. (FRGT)
About this 6-K
Freight Technologies, Inc filed this 6-K on February 11, 2022.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of February, 2022.
Commission File Number 001-38172
HUDSON CAPITAL INC.
(Translation of registrant’s name into English)
Mr. Warren Wang, Chief Executive Officer
19 West 44th Street, Suite 1001,
New York, NY 10036
Telephone: (970) 528- 9999
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F ☒ Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Entry into a Definitive Material Agreement
ATW Securities Purchase Agreement
On December 13, 2021, Hudson Capital entered into a securities purchase agreement (the “Purchase Agreement”) with ATW Opportunities Master Fund, L.P. (“ATW”) pursuant to which Hudson Capital agreed to sell for an aggregate purchase price of $862,000, a pre-funded warrant (the “Warrant”) to purchase 431,000 ordinary shares (the “Securities Purchase”). The closing of the Securities Purchase would be subject to customary closing conditions.
On December 16, 2021, both Hudson Capital and ATW entered into an Amendment No. 1 to the Purchase Agreement (“Amendment No. 1”) to (i) amend Section 2.1 of the Purchase Agreement to increase the subscription amount to $2,355,000 and amend the Warrant to purchase 1,177,500 ordinary shares instead and (ii) amend Section 5.1 of the Purchase Agreement to provide that the closing of the Securities Purchase shall occur before the Merger. With the exception of these amendments, all other provisions of the Purchase Agreement remain the same.
On February 10, 2022, Hudson Capital, ATW and ten investors (“Assignees”) entered into an Assignment of Securities Purchase Agreement to assign the right to purchase 677,750 pre-funded warrants (the “Assignee Warrants”) for a per warrant purchase price of $2.00 (for an aggregate purchase price of $1,356,178) and the related obligations under the Purchase Agreement from ATW to the Assignees (the “Assignees’ Securities Purchase”). The assignment and the aforesaid Assignees’ Securities Purchase closed on February 10, 2022. The Assignees also notified Hudson Capital and exercised their right to convert the Assignee Warrants into ordinary shares on the same day.
The net proceeds from the Assignees’ Securities Purchase, after expenses, will be approximately $1,356.178, which will be used to fund a loan to Freight App, Inc. (the “Fr8App Loan” and “Fr8App” respectively) evidenced by a promissory note issued by Fr8App to Hudson Capital dated February 10, 2022 (the “Promissory Note”).
The Assignee Warrants and the ordinary shares underlying the Assignee Warrants are issued pursuant to the prospectus included in the Company’s Registration Statement on Form F-3 (Registration No. 333-233408), which was filed with the Securities and Exchange Commission (the “Commission”) on August 22, 2019 and was declared effective on September 19, 2019, and a prospectus supplement that will be filed with the Commission on the closing of the Securities Purchase.
The preceding description of the aforementioned agreement and securities does not purport to be complete and is qualified in its entirety by reference to the Assignment of Securities Purchase Agreement, form of Assignee Warrant and Promissory Note, which are filed as exhibits to this report and incorporated herein by reference.
Exhibits
Participants in the Solicitation
Hudson Capital and its directors and executive officers may be deemed participants in the solicitation of proxies from Hudson Capital’s shareholders with respect to the merger. A list of the names of those directors and executive officers and a description of their interests in Hudson Capital will be included in the prospectus/proxy statement for the proposed merger and be available at www.sec.gov. Additional information regarding the interests of such participants will be contained in the prospectus/proxy statement for the proposed merger when available. Information about Hudson Capital’s directors and executive officers and their ownership of ordinary shares of Hudson Capital is set forth in Hudson Capital’s Annual Report on Form 20-F, dated May 5, 2021, These documents can be obtained free of charge from the sources indicated above.
Fr8App and its directors and executive officers may also be deemed to be participants in the solicitation of proxies from the shareholders of Hudson Capital in connection with the proposed merger. A list of the names of such directors and executive officers and information regarding their interests in the proposed merger will be included in the prospectus/proxy statement for the proposed merger.
Forward Looking Statements
This Form 6-K includes “forward-looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. Hudson Capital’s and Fr8App’s actual results may differ from their expectations, estimates, and projections and, consequently, you should not rely on these forward-looking statements as predictions of future events. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions (or the negative versions of such words or expressions) are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, Hudson Capital’s and Fr8App’s expectations with respect to future performance and anticipated financial impacts of the proposed acquisition, the satisfaction of the closing conditions to the proposed acquisition, and the timing of the completion of the proposed acquisition.
These forward-looking statements involve significant risks and uncertainties that could cause the actual results to differ materially from those discussed in the forward-looking statements. Most of these factors are outside Hudson Capital’s and Fr8App’s control and are difficult to predict. Factors that may cause such differences include, but are not limited to: (1) the occurrence of any event, change, or other circumstances that could give rise to the termination of the definitive merger agreement (the “Agreement”); (2) the outcome of any legal proceedings that may be instituted against Hudson Capital or Fr8App following the announcement of the Agreement and the transactions contemplated therein; (3) the inability to complete the proposed acquisition, including due to failure to obtain approval of the shareholders of Hudson Capital and stockholders of Fr8App, certain regulatory approvals, or satisfy other conditions to closing in the Agreement; (4) the occurrence of any event, change, or other circumstance that could give rise to the termination of the Agreement or could otherwise cause the transaction to fail to close; (5) the impact of COVID-19 pandemic on Fr8App’s business and/or the ability of the parties to complete the proposed acquisition; (6) the inability to obtain or maintain the listing of Hudson Capital’s shares of common stock on Nasdaq following the proposed merger; (7) the risk that the proposed acquisition disrupts current plans and operations as a result of the announcement and consummation of the proposed merger; (8) the ability to recognize the anticipated benefits of the proposed merger, which may be affected by, among other things, competition, the ability of Fr8App to grow and manage growth profitably, and retain its key employees; (9) costs related to the proposed merger; (10) changes in applicable laws or regulations; (11) the possibility that Hudson Capital or Fr8App may be adversely affected by other economic, business, and/or competitive factors; (12) risks relating to the uncertainty of the projected financial information with respect to Fr8App; (13) risks related to the organic and inorganic growth of Fr8App’s business and the timing of expected business milestones; and (14) other risks and uncertainties indicated from time to time in the prospectus/proxy statement on the Form S-4, relating to the proposed merger, including those under “Risk Factors” therein, to be filed by Hudson Capital and in Hudson Capital’s other filings with the SEC. Hudson Capital cautions that the foregoing list of factors is not exclusive. Should one or more of these risks or uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those indicated or anticipated by such forward-looking statements. Hudson Capital and Fr8App caution readers not to place undue reliance upon any forward-looking statements, which speak only as of the date made. Hudson Capital and Fr8App do not undertake or accept any obligation or undertaking to release publicly any updates or revisions to any forward-looking statements to reflect any change in their expectations or any change in events, conditions, or circumstances on which any such statement is based.
No Offer or Solicitation
This Form 6-K shall not constitute a solicitation of a proxy, consent, or authorization with respect to any securities or in respect of the proposed merger. This Form 6-K shall also not constitute an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any states or jurisdictions in which such offer, solicitation, or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, or an exemption therefrom.
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, thereunto duly authorized.
| Date: February 11, 2022 | HUDSON CAPITAL INC. | |
| By: | /s/ Warren Wang | |
| Name: | Warren Wang | |
| Title: | Chief Executive Officer | |
Exhibit 5.1
| Our ref | BQS/774536-000010/31003364v4 |
Hudson Capital Inc.
Kingston Chambers
PO Box 173
Road Town
Tortola, VG1110
British Virgin Islands
11 February 2022
Dear Sirs
Hudson Capital Inc.
We have acted as counsel as to British Virgin Islands law to Hudson Capital Inc. (the “Company”) in connection with the Company’s registration statement on Form F-3 (file number 333-233408) (the “Registration Statement”) under the Securities Act of 1933, as amended, filed with the U.S. Securities and Exchange Commission (the “Commission”) and declared effective on September 19 2019 relating to the offering of ordinary shares of the Company of US$0.005 each (the “Ordinary Shares”), share purchase contracts, share purchase units, warrants (the “Warrants”), debt securities, rights or units and having an aggregate offering price not to exceed US$50,000,000 and the prospectus supplement (the “Prospectus Supplement”) to be filed with the U.S. Securities and Exchange Commission on or about the date of this opinion and pursuant to the Assignment Agreement (as defined below), the Company shall issue warrants to certain assignees to purchase 677,750 Ordinary Shares (the “Assignee Warrants”).
| 1 | Documents Reviewed |
We have reviewed originals, copies, drafts or conformed copies of the following documents:
| 1.1 | The public records of the Company on file and available for public inspection at the Registry of Corporate Affairs in the British Virgin Islands (the “Registry of Corporate Affairs”) on 9 February 2022 and updated on 11 February 2022, including the Company’s Certificate of Incorporation and its Memorandum and Articles of Association dated 20 December 2021 (the “Memorandum and Articles”). |
| 1.2 | The records of proceedings available from a search of the electronic records maintained on the Judicial Enforcement Management System from 1 January 2000 and available for inspection on 11 February 2022 at the British Virgin Islands High Court Registry (the “High Court Registry”). |
| 1.3 | The written resolutions of the board of directors of the Company dated 10 February 2022 (the “Resolutions”) and the corporate records of the Company maintained at its registered office in the British Virgin Islands. |
| 1.4 | A Certificate of Incumbency dated 9 February 2022, issued by Maples Corporate Services (BVI) Limited, the Company’s registered agent (the “Registered Agent’s Certificate”). |
| 1.5 | A certificate of good standing dated 11 February 2022 in respect to the Company issued by the Registrar of Corporate Affairs in the British Virgin Islands (the “Certificate of Good Standing”). |
| 1.6 | A Director’s Certificate dated 10 February 2022 (the “Director’s Certificate”). |
| 1.7 | A Securities Purchase Agreement originally dated 13 December 2021 (as amended pursuant to an amendment agreement dated 16 December 2021) between the Company and ATW Opportunities Master Fund L.P. (the “Securities Purchase Agreement”). |
| 1.8 | An Assignment Agreement dated 10 February 2022 (the “Assignment Agreement”) between the Company, ATW Opportunities Master Fund L.P. and each assignee party thereto (each the “Assignee”). |
| 1.9 | The prefunded ordinary share purchase warrants to be entered into by the Company and each Assignee dated 9 February 2022 and 10 February 2022 (as the case may be) (the “Warrant Documents”). |
| 1.10 | The Registration Statement. |
| 1.11 | The Prospectus Supplement. |
The documents listed in paragraphs 1.7 to 1.11 inclusive above shall be referred to collectively herein as the “Documents”.
| 2 | Assumptions |
The following opinions are given only as to, and based on, circumstances and matters of fact existing and known to us on the date of this opinion letter. These opinions only relate to the laws of the British Virgin Islands which are in force on the date of this opinion letter. In giving the following opinions, we have relied (without further verification) upon the completeness and accuracy, as at the date of this opinion letter, of the Registered Agent’s Certificate, the Certificate of Good Standing, the Director’s Certificate and the Resolutions. We have also relied upon the following assumptions, which we have not independently verified:
| 2.1 | The Documents have been or will be authorised and duly executed and unconditionally delivered by or on behalf of all relevant parties in accordance with all relevant laws (other than, with respect to the Company, the laws of the British Virgin Islands). |
| 2.2 | The Documents are, or will be, legal, valid, binding and enforceable against all relevant parties in accordance with their terms under the laws of the State of New York (the “Relevant Law”) and all other relevant laws (other than, with respect to the Company, the laws of the British Virgin Islands). |
| 2.3 | The choice of the Relevant Law as the governing law of the Documents has been made in good faith and would be regarded as a valid and binding selection which will be upheld by the courts of the State of New York and any other relevant jurisdiction (other than the British Virgin Islands) as a matter of the Relevant Law and all other relevant laws (other than the laws of the British Virgin Islands). |
| 2.4 | Where a Document has been provided to us in draft or undated form, it will be duly executed, dated and unconditionally delivered by all parties thereto in materially the same form as the last version provided to us and, where we have been provided with successive drafts of a Document marked to show changes to a previous draft, all such changes have been accurately marked. |
| 2.5 | Copies of documents, conformed copies or drafts of documents provided to us are true and complete copies of, or in the final forms of, the originals. |
| 2.6 | All signatures, initials and seals are genuine. |
| 2.7 | The capacity, power, authority and legal right of all parties under all relevant laws and regulations (other than, with respect to the Company, the laws and regulations of the British Virgin Islands) to enter into, execute, unconditionally deliver and perform their respective obligations under the Documents. |
| 2.8 | That all public records of the Company which we have examined are accurate and that the information disclosed by the searches which we conducted against the Company at the Registry of Corporate Affairs and the High Court Registry is true and complete and that such information has not since then been altered and that such searches did not fail to disclose any information which had been delivered for registration but did not appear on the public records at the date of our searches. |
| 2.9 | There is no contractual or other prohibition or restriction (other than as arising under British Virgin Islands law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the Documents. |
| 2.10 | No monies paid to or for the account of any party under the Documents represent or will represent proceeds of criminal conduct (as defined in the Proceeds of Criminal Conduct Act (2013 Revision, as amended)). |
| 2.11 | There is nothing under any law (other than the laws of the British Virgin Islands) which would or might affect the opinions set out below. We have not made any investigation of the laws, rules or regulations of any jurisdiction other than the laws of the British Virgin Islands. |
| 2.12 | Each director disclosed his interest (if any), in the manner prescribed in the Memorandum and Articles prior to passing any of the Resolutions adopted by the board of directors of the Company. |
| 2.13 | There is nothing contained in the minute book or corporate records of the Company (which we have not inspected) which would or might affect the opinions set out below. |
| 2.14 | The completeness and accuracy of the Director’s Certificate. |
| 2.15 | That the issuance and sale of and payment for the Ordinary Shares and the Assignee Warrants will be in accordance with the Registration Statement and Prospectus Supplement (and any applicable supplement thereto). |
| 2.16 | The Ordinary Shares to be issued pursuant to the Assignee Warrants in accordance with the Securities Purchase Agreement, Assignment Agreement and the Warrant Documents will, when issued, be issued out of the authorised but unissued Ordinary Shares of the Company and are issued for cash consideration not less than the par value for such Ordinary Shares. |
| 3 | Opinions |
Based upon, and subject to, the foregoing assumptions and the qualifications set out below, and having regard to such legal considerations as we deem relevant, we are of the opinion that:
| 3.1 | The Company is a company limited by shares incorporated with limited liability under the BVI Business Companies Act (as Revised) (the “Act”), is in good standing at the Registry of Corporate Affairs, is validly existing under the laws of the British Virgin Islands and possesses the capacity to sue and be sued in its own name. |
| 3.2 | Based solely on our review of the Memorandum and Articles, the Company is currently authorised to issue an unlimited number of shares divided as follows: |
| (a) | An unlimited number of ordinary shares with a par value of US$0.005 each; |
| (b) | An unlimited number of series A preferred shares with a par value of US$0.0001 each designated as follows: |
| (i) | An unlimited number of series seed preferred shares with a par value of US$0.0001 each; |
| (ii) | An unlimited number of series A1-A preferred shares with a par value of US$0.0001 each; |
| (iii) | An unlimited number of series A1-B preferred shares with a par value of US$0.0001 each; |
| (iv) | An unlimited number of series A2 preferred shares with a par value of US$0.0001 each; and |
| (v) | An unlimited number of series A4 preferred shares with a par value of US$0.0001 each; |
| (c) | An unlimited number of series B preferred shares with a par value of US$0.0001 each; and |
| (d) | An unlimited number of blank preferred shares with no par value each. |
| 3.3 | The Ordinary Shares to be issued by the Company to the Assignees, upon exercise of the Assignee Warrants, as contemplated by the Registration Statement, Prospectus Supplement, Securities Purchase Agreement, Assignment Agreement and the Warrant Documents have been duly authorised for issue and when issued by the Company against payment in full of the cash consideration as set out in the Securities Purchase Agreement, Assignment Agreement, Prospectus Supplement and the Warrant Documents and in accordance with the terms set out in the Registration Statement, Prospectus Supplement, Securities Purchase Agreement, Assignment Agreement and the Warrant Documents, such Ordinary Shares will be validly issued, fully paid and non-assessable |
| 3.4 | The execution, delivery and performance of the Warrant Documents has been authorised by and on behalf of the Company and, once the Warrant Documents have been executed and delivered by any director of the Company, the Warrant Documents will constitute the legal, valid and binding obligations of the Company enforceable in accordance with their terms. |
| 4 | Qualifications |
The opinions expressed above are subject to the following qualifications:
| 4.1 | The obligations assumed by the Company under the Documents will not necessarily be enforceable in all circumstances in accordance with their terms. In particular: |
| (a) | enforcement may be limited by bankruptcy, insolvency, liquidation, reorganisation, readjustment of debts or moratorium or other laws of general application relating to protecting or affecting the rights of creditors; |
| (b) | enforcement may be limited by general principles of equity. For example, equitable remedies such as specific performance may not be available, inter alia, where damages are considered to be an adequate remedy; |
| (c) | where obligations are to be performed in a jurisdiction outside the British Virgin Islands, they may not be enforceable in the British Virgin Islands to the extent that performance would be illegal under the laws of that jurisdiction; and |
| (d) | some claims may become barred under relevant statutes of limitation or may be or become subject to defences of set off, counterclaim, estoppel and similar defences. |
| 4.2 | To maintain the Company in good standing under the laws of the British Virgin Islands, annual filing fees must be paid to the Registry of Corporate Affairs. |
| 4.3 | The obligations of the Company may be subject to restrictions pursuant to United Nations sanctions as implemented under the laws of the British Virgin Islands and/or restrictive measures adopted by the European Union Council for Common Foreign and Security Policy extended to the British Virgin Islands by the Order of Her Majesty in Council. |
| 4.4 | Under section 42 of the Act, the entry of the name of a person in the register of members of a company as a holder of a share in a company is prima facie evidence that legal title in the share vests in that person. A third party interest in the shares in question would not appear. An entry in the register of members may yield to a court order for rectification (for example, in the event of inaccuracy or omission). |
| 4.5 | Under British Virgin Islands law, the register of members is prima facie evidence of title to shares and this register would not record a third party interest in such shares. However, there are certain limited circumstances where an application may be made to a British Virgin Islands court for a determination on whether the register of members reflects the correct legal position. Further, the British Virgin Islands court has the power to order that the register of member maintained by a company should be rectified where it considers that the register of members does not reflect the correct legal position. As far as we are aware, for the purposes of the opinion given in paragraph 3.3, there are no circumstances or matters of fact known to us on the date of this opinion letter which would properly form the basis for an application for an order for rectification of the register of members of the Company, but if such an application were made in respect of the Ordinary Shares issued pursuant to the Assignee Warrants, the validity of such shares may be subject to re-examination by a British Virgin Islands court. |
| 4.6 | Except as specifically stated herein, we make no comment with respect to any representations and warranties which may be made by or with respect to the Company in any of the documents or instruments cited in this opinion or otherwise with respect to the commercial terms of the transactions the subject of this opinion. |
| 4.7 | In this opinion letter, the phrase “non-assessable” means, with respect to the issuance of shares, that a shareholder shall not, in respect of the relevant shares and in the absence of a contractual arrangement, or an obligation pursuant to the memorandum and articles of association, to the contrary, have any obligation to make further contributions to the Company’s assets (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil). |
We hereby consent to the filing of this opinion letter as an exhibit to the Registration Statement and to the references to our firm under the heading “Legal Matters” in the prospectus included in the Registration Statement. In providing our consent, we do not thereby admit that we are in the category of persons whose consent is required under section 7 of the Act or the Rules and Regulations of the Commission thereunder.
We express no view as to the commercial terms of the Documents or whether such terms represent the intentions of the parties and make no comment with regard to warranties or representations that may be made by the Company.
The opinions in this opinion letter are strictly limited to the matters contained in the opinions section above and do not extend to any other matters or documents not referred to herein or any circumstance, fact or event that occurs after the date of this legal opinion that may alter, affect or modify the opinions expressed herein.
This opinion letter is addressed to and for the benefit solely of the addressee.
Yours faithfully
Maples and Calder
Schedule
Director’s Certificate
Hudson Capital, Inc.
Kingston Chambers
PO Box 173, Road Town
Tortola, VG1110
British Virgin Islands
| To: | Maples and Calder |
| 5th Floor, Ritter House | |
| PO Box 173, Road Town | |
| Tortola, VG1110 | |
| British Virgin Islands |
10 February 2022
Hudson Capital, Inc. (the “Company”)
We, the undersigned, being the directors of the Company, are aware that you are being asked to provide an opinion letter (the “Opinion”) in relation to certain aspects of British Virgin Islands law. Unless otherwise defined herein, capitalised terms used in this certificate have the respective meanings given to them in the Opinion. I hereby certify that:
| 1 | The Memorandum and Articles remain in full force and effect and are unamended. |
| 2 | The Resolutions were duly passed in the manner prescribed in the Memorandum and Articles (including, without limitation, with respect to the disclosure of interests (if any) by directors of the Company) and have not been amended, varied or revoked in any respect. |
| 3 | The Company is authorised to issue an unlimited number of shares divided as follows: |
| (a) | An unlimited number of ordinary shares with a par value of US$0.005 each; |
| (b) | An unlimited number of series A preferred shares with a par value of US$0.0001 each designated as follows: |
| (i) | An unlimited number of series seed preferred shares with a par value of US$0.0001 each; |
| (ii) | An unlimited number of series A1-A preferred shares with a par value of US$0.0001 each; |
| (iii) | An unlimited number of series A1-B preferred shares with a par value of US$0.0001 each; |
| (iv) | An unlimited number of series A2 preferred shares with a par value of US$0.0001 each; and |
| (v) | An unlimited number of series A4 preferred shares with a par value of US$0.0001 each; |
| (c) | An unlimited number of series B preferred shares with a par value of US$0.0001 each; and |
| (d) | An unlimited number of blank preferred shares with no par value each. |
| 4 | The Company has issued 7,535,897 Ordinary Shares and such Ordinary Shares have been duly authorised and are validly issued as fully-paid and non-assessable. The Company has not issued any other class of Shares. |
| 5 | The members of the Company (the “Members”) have not restricted the powers of the directors of the Company in any way. |
| 6 | The directors of the Company at the date of the Resolutions and at the date of this certificate were and are as follows: Warren Wang, Ming Yi, Hong Chen, Xiaoyue Zhang and Hon Man Yun. |
| 7 | The minute book and corporate records of the Company as maintained at its registered office in the British Virgin Islands and on which the Registered Agent’s Certificate were prepared are complete and accurate in all material respects, and all minutes and resolutions filed therein represent a complete and accurate record of all meetings of the Members and directors (or any committee thereof) (duly convened in accordance with the Memorandum and Articles) and all resolutions passed at the meetings, or passed by written resolution or consent, as the case may be. |
| 8 | The Company has not created any charges over any of its property or assets. |
| 9 | Prior to, at the time of, and immediately following execution of the Assignment Agreement, Prospectus Supplement and the Registration Statement the Company was, or will be, able to pay its debts as they fell, or fall, due, and the transactions to which the Assignment Agreement, Prospectus Supplement and the Registration Statement relate will not cause the Company to become unable to pay its debts as they fall due. The Company has entered, or will enter, into the Assignment Agreement, Prospectus Supplement and the Registration Statement for proper value, not with an intention to defraud or wilfully defeat an obligation owed to any creditor and the transactions contemplated thereby do not and will not give any creditor an unfair preference. |
| 10 | Neither the Company nor any of its subsidiaries (if any) has an interest in any land in the British Virgin Islands. |
| 11 | The directors of the Company consider the transactions contemplated by the Assignment Agreement, Prospectus Supplement and the Registration Statement to be of commercial benefit to the Company and has acted in good faith in the best interests of the Company, and for a proper purpose of the Company, in relation to the transactions which are the subject of the Opinion. |
| 12 | To the best of my knowledge and belief, having made due inquiry, the Company is not the subject of legal, arbitral, administrative or other proceedings in any jurisdiction. Nor have the directors or the Member taken any steps to have the Company struck off or placed in liquidation, nor have any steps been taken to wind up the Company. Nor has any receiver been appointed over any of the Company’s property or assets. |
| 13 | The Company has at no time had employees in the British Virgin Islands. |
| 14 | To the best of my knowledge and belief, having made due inquiry, there are no circumstances or matters of fact existing which may properly form the basis for an application for an order for rectification of the register of members of the Company. |
| 15 | The Documents have been, or will be, authorised and duly executed and delivered by or on behalf of all relevant parties in accordance with all relevant laws. |
| 16 | No invitation has been made or will be made by or on behalf of the Company to the public in the British Virgin Islands to subscribe for any of the classes of Shares. |
| 17 | The Ordinary Shares underlying the Warrants to be issued pursuant to the Assignment Agreement, Prospectus Supplement and the Warrants have been, or will be, duly registered, and will continue to be registered, in the Company’s register of members. |
| 18 | The Company is not a central bank, monetary authority or other sovereign entity of any state and is not a subsidiary, direct or indirect, of any sovereign entity or state. |
| 19 | There is no contractual or other prohibition or restriction (other than as arising under British Virgin Islands law) binding on the Company prohibiting or restricting it from entering into and performing its obligations under the Documents. |
We confirm that you may continue to rely on this certificate as being true and correct on the day that you issue the Opinion unless we shall have previously notified you in writing personally to the contrary.
| Signature: | _________________________________ | |
| Name: | 10 February 2022 | |
| Title: | Director |
Exhibit 10.1
ASSIGNMENT OF SECURITIES PURCHASE AGREEMENT
This Assignment Agreement (the “Assignment Agreement”), dated February 10, 2022 is entered into between Hudson Capital, Inc., a British Virgin Islands company (the “Company”), ATW Opportunities Master Fund L.P. (the “Assignor”) and parties set forth on Schedule I hereto (each, an “Assignee” and collectively the “Assignees”).
WHEREAS the Company and the Assignor have previously entered into a Securities Purchase Agreement dated December 13, 2021 as amended by Amendment No. 1 to the Agreement dated December 16, 2021 (as amended, the “Agreement”);
WHEREAS, the Agreement provided for the purchase by the Assignor of 1,177,500 pre-funded warrants of the Company for an aggregate purchase price of $2,355,000;
WHEREAS, assignment of the Agreement requires the consent of the parties thereto;
NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Assignment Agreement, and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Company, the Assignor and the Assignees agree as follows:
1. Defined terms not otherwise defined herein shall have the meaning given to them in the Agreement and provisions of the Agreement not otherwise amended hereby shall continue in full force and effect.
2. The Assignor hereby assigns its right to purchase that number of pre-funded warrants for a per warrant purchase price of $2.00 each Assignee as set forth on Schedule I hereto and the related obligations under the Agreement to the Assignee (the “Assignment”) and the Company hereby consents to the Assignment. The Company hereby agrees that the Assignees shall be entitled to all other rights under the Agreement along with Purchaser (other than to purchase additional pre-funded warrants) including, without limitation, Section 4.7 of the Agreement.
3. The Assignees and the Company agree that the closing of the Assignment may occur prior to the closing of the remainder of the transactions contemplated by the Agreement. The Assignees and the Company further agree that the funding of the purchase price shall be made into an escrow account to be established at Loeb & Loeb LLP in accordance with the instructions set forth on Schedule II hereto.
5. Except as set forth herein or unless the context indicates otherwise, all references to the “Purchaser” in Article II shall be deemed to refer to each Assignee.
6. Each of the representations and warranties set forth in Section 3.2 of the Agreement that are being made by the Purchaser shall be deemed to be made by each of the Assignees.
7. This Agreement may be executed in one or more counterparts.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be duly executed by their respective authorized signatories as of the date first indicated above.
HUDSON CAPITAL INC.
|
Address for Notice: 19 West 44th Street, Suite 1001 New York, NY 10036 | ||
By: |
/s/ Warren Wang |
Fax: | |
| Name: | Warren Wang | ||
| Title: | Chief Executive Officer | ||
| With a copy to (which shall not constitute notice) | ||
Sichenzia Ross Ference LLP 1185 Avenue of the Americas, 31st Floor New York, NY 10036 Attention: Benjamin Tan, Esq. |
| ATW OPPORTUNITIES MASTER FUND L.P. | Address for Notice: 7969 NW 2nd Street, #415 Miami, FL 33126 | ||
| By: | ATW Partners Opportunities Fund GP, LLC |
Fax: | |
| By: | /s/ Antonio Ruiz-Gimenez, Jr. |
||
| Name: | Antonio Ruiz-Gimenez, Jr. |
||
| Title: | Member | ||
| With a copy to (which shall not constitute notice): | |
Loeb & Loeb LLP 345 Park Avenue New York, NY 10154 Attention: Mitchell Nussbaum, Esq. |
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK
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ASSIGNEE:
FEA FR8 LLC |
Address for Notice: | ||
By: |
Fax: | ||
| By: | /s/ Andrew Intrater | ||
| Name: | Andrew Intrater | ||
| Title: | Manger | ||
ASSIGNEE:
| Yuri Kokush | Address for Notice: | ||
| By: | Fax: | ||
| By: | /s/ Yuri Kokush | ||
| Name: | |||
| Title: | |||
ASSIGNEE:
| Ignacio Mounetou | Address for Notice: | ||
| By: | |||
| By: | /s/ Ignacio Mounetou | ||
| Name: |
|
Fax: | |
| Title: | |||
ASSIGNEE:
| Grays West Ventures LLC | Address for Notice: | ||
| By: | Fax: | ||
| By: | /s/ Edmundo Gonzalez | ||
| Name: | Edmundo Gonzalez | ||
| Title: | Manager | ||
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ASSIGNEE:
| Winston J. Churchill | Address for Notice: | ||
| By: | Fax: | ||
| By: | /s/ Winston J. Churchill | ||
| Name: | |||
| Title: | |||
ASSIGNEE:
| M&M Energy Investors LLC | Address for Notice: | ||
| By: | Fax: | ||
| By: | /s/ Kerry Miller | ||
| Name: | Kerry Miller | ||
| Title: | Partner | ||
ASSIGNEE:
| Michael Richter | Address for Notice: | ||
| By: |
/s/ Michael Richter |
Fax: | |
| By: | |||
| Name: | |||
| Title: | |||
ASSIGNEE:
| Sharbaugh Trust | Address for Notice: | ||
| By: | Fax: | ||
| By: | /s/ John Justin Churchill | ||
| Name: | John Justin Churchill | ||
| Title: | Trustee | ||
ASSIGNEE:
| The Ezrah Charitable Trust | Address for Notice: | ||
| By: |
|
Fax: | |
| By: | /s/ David Cohen | ||
| Name: | David Cohen | ||
| Title: | Trustee | ||
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SCHEDULE I
| ASSIGNEE | NUMBER OF WARRANTS | AGGREGATE PURCHASE PRICE | ||||||
| FEA FR8 LLC | 65,022 | $ | 130,108 | |||||
| Yuri Kokush | 93,241 | $ | 186,575 | |||||
| Ignacio Mounetou | 13,004 | $ | 26,022 | |||||
| Grays West Ventures LLC | 6,502 | $ | 13,011 | |||||
| Winston J. Churchill | 13,004 | $ | 26,022 | |||||
| M&M Energy Investors LLC | 2,341 | $ | 4,684 | |||||
| Michael Richter | 3,411 | $ | 6,826 | |||||
| Sharbaugh Trust | 2,604 | $ | 5,211 | |||||
| The Ezrah Charitable Trust | 478,620 | $ | 957,718 | |||||
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SCHEDULE II
[FUNDING INSTRUCTIONS FROM ESCROW]
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Exhibit 10.2
PREFUNDED ORDINARY SHARE PURCHASE WARRANT
HUDSON CAPITAL, INC.
| Warrant Shares: | Initial Exercise Date: February 10, 2022 |
THIS PREFUNDED ORDINARY SHARE PURCHASE WARRANT (the “Warrant”) certifies that, for value received, or its assigns (the “Holder”) is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date hereof (the “Initial Exercise Date”) and until this Warrant is exercised in full (the “Termination Date”) but not thereafter, to subscribe for and purchase from Hudson Capital, Inc., a British Virgin Islands company (the “Company”), up to ordinary shares (as subject to adjustment hereunder, the “Warrant Shares”) . The purchase price of one Warrant Share under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).
Section 1. Definitions. Capitalized terms used and not otherwise defined herein shall have the meanings set forth in that certain Securities Purchase Agreement (the “Purchase Agreement”), dated December 13, 2021, as amended by a supplement agreement on December 16, 2021 and Assignment of Securities Purchase Agreement dated February 10, 2022 among the Company and the purchaser signatory thereto.
Section 2. Exercise.
a) Exercise of Warrant. Exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Initial Exercise Date and on or before the Termination Date by delivery to the Company of a duly executed facsimile copy or PDF copy submitted by e-mail (or e-mail attachment) of the Notice of Exercise in the form annexed hereto (the “Notice of Exercise”). Within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period (as defined in Section 2(d)(i) herein) following the date of exercise as aforesaid, the Holder shall deliver the aggregate Exercise Price for the shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank unless the cashless exercise procedure specified in Section 2(c) below is specified in the applicable Notice of Exercise. No ink-original Notice of Exercise shall be required, nor shall any medallion guarantee (or other type of guarantee or notarization) of any Notice of Exercise be required. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender this Warrant to the Company for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Company shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 4:00 p.m. (New York City time) on the Trading Date prior to the Initial Exercise Date, which may be delivered at any time after the time of execution of the Purchase Agreement, the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received by such Warrant Share Delivery Date. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time may be less than the amount stated on the face hereof.
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b) Exercise Price. The aggregate exercise price of this Warrant, except for a nominal exercise price of $0.001 per Warrant Share, was pre-funded to the Company on or prior to the Initial Exercise Date and, consequently, no additional consideration (other than the nominal exercise price of $0.001 per Warrant Share) shall be required to be paid by the Holder to any Person to effect any exercise of this Warrant. The Holder shall not be entitled to the return or refund of all, or any portion, of such pre-paid aggregate exercise price under any circumstance or for any reason whatsoever, including in the event this Warrant shall not have been exercised prior to the Termination Date. The remaining unpaid exercise price per Ordinary Share under this Warrant shall be $0.001 per Warrant Share, subject to adjustment hereunder (the “Exercise Price”).
c) Cashless Exercise. This Warrant may also be exercised, in whole or in part, at such time by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
| (A) | = | as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b)(68) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Bid Price of the Ordinary Share on the principal Trading Market as reported by Bloomberg L.P. (“Bloomberg”) as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) pursuant to Section 2(a) hereof or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered pursuant to Section 2(a) hereof after the close of “regular trading hours” on such Trading Day; |
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| (B) | = | the Exercise Price of this Warrant, as adjusted hereunder; and |
| (X) | = | the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise. |
If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised. The Company agrees not to take any position contrary to this Section 2(c).
“Bid Price” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Share is then listed or quoted on a Trading Market, the bid price of the Ordinary Share for the time in question (or the nearest preceding date) on the Trading Market on which the Ordinary Share is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Ordinary Share for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Ordinary Share is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Share are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Ordinary Share so reported, or (d) in all other cases, the fair market value of a share of Ordinary Share as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
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“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Ordinary Share is then listed or quoted on a Trading Market, the daily volume weighted average price of the Ordinary Share for such date (or the nearest preceding date) on the Trading Market on which the Ordinary Share is then listed or quoted as reported by Bloomberg (based on a Trading Day from 9:30 a.m. (New York City time) to 4:02 p.m. (New York City time)), (b) if OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Ordinary Share for such date (or the nearest preceding date) on OTCQB or OTCQX as applicable, (c) if the Ordinary Share is not then listed or quoted for trading on OTCQB or OTCQX and if prices for the Ordinary Share are then reported on The Pink Open Market (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Ordinary Share so reported, or (d) in all other cases, the fair market value of an Ordinary Share as determined by an independent appraiser selected in good faith by the Purchasers of a majority in interest of the Securities then outstanding and reasonably acceptable to the Company, the fees and expenses of which shall be paid by the Company.
Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 2(c).
| d) | Mechanics of Exercise. |
i. Delivery of Warrant Shares Upon Exercise. The Company shall cause the Warrant Shares purchased hereunder to be transmitted by the Transfer Agent to the Holder by crediting the account of the Holder’s or its designee’s balance account with The Depository Trust Company through its Deposit or Withdrawal at Custodian system (“DWAC”) if the Company is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares to or resale of the Warrant Shares by Holder or (B) this Warrant is being exercised via cashless exercise, and otherwise by physical delivery of a certificate, registered in the Company’s share register in the name of the Holder or its designee, for the number of Warrant Shares to which the Holder is entitled pursuant to such exercise to the address specified by the Holder in the Notice of Exercise by the date that is the earliest of (i) two (2) Trading Days after the delivery to the Company of the Notice of Exercise, (ii) one (1) Trading Day after delivery of the aggregate Exercise Price to the Company and (iii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Company of the Notice of Exercise (such date, the “Warrant Share Delivery Date”). Upon delivery of the Notice of Exercise, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date of delivery of the Warrant Shares, provided that payment of the aggregate Exercise Price (other than in the case of a cashless exercise) is received within the earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period following delivery of the Notice of Exercise. If the Company fails for any reason to deliver to the Holder the Warrant Shares subject to a Notice of Exercise by the Warrant Share Delivery Date, the Company shall pay to the Holder, in cash, as liquidated damages and not as a penalty, for each $1,000 of Warrant Shares subject to such exercise (based on the VWAP of the Ordinary Shares on the date of the applicable Notice of Exercise), $10 per Trading Day (increasing to $20 per Trading Day on the fifth Trading Day after such liquidated damages begin to accrue) for each Trading Day after such Warrant Share Delivery Date until such Warrant Shares are delivered or Holder rescinds such exercise. The Company agrees to maintain a transfer agent that is a participant in the FAST program so long as this Warrant remains outstanding and exercisable. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Company’s primary Trading Market with respect to the Ordinary Shares as in effect on the date of delivery of the Notice of Exercise. Notwithstanding the foregoing, with respect to any Notice(s) of Exercise delivered on or prior to 4:00 p.m. (New York City time) on the Trading Date prior to the Initial Exercise Date, , the Company agrees to deliver the Warrant Shares subject to such notice(s) by 4:00 p.m. (New York City time) on the Initial Exercise Date and the Initial Exercise Date shall be the Warrant Share Delivery Date for purposes hereunder.
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ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of a Holder and upon surrender of this Warrant certificate, at the time of delivery of the Warrant Shares, deliver to the Holder a new Warrant evidencing the rights of the Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.
iii. Rescission Rights. If the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(d)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. Compensation for Buy-In on Failure to Timely Deliver Warrant Shares Upon Exercise. In addition to any other rights available to the Holder, if the Company fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares in accordance with the provisions of Section 2(d)(i) above pursuant to an exercise on or before the Warrant Share Delivery Date, and if after such date the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases, Ordinary Shares to deliver in satisfaction of a sale by the Holder of the Warrant Shares which the Holder anticipated receiving upon such exercise (a “Buy-In”), then the Company shall (A) pay in cash to the Holder the amount, if any, by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the Ordinary Shares so purchased exceeds (y) the amount obtained by multiplying (1) the number of Warrant Shares that the Company was required to deliver to the Holder in connection with the exercise at issue times (2) the price at which the sell order giving rise to such purchase obligation was executed, and (B) at the option of the Holder, either reinstate the portion of the Warrant and equivalent number of Warrant Shares for which such exercise was not honored (in which case such exercise shall be deemed rescinded) or deliver to the Holder the number of Ordinary Shares that would have been issued had the Company timely complied with its exercise and delivery obligations hereunder. For example, if the Holder purchases Ordinary Shares having a total purchase price of $11,000 to cover a Buy-In with respect to an attempted exercise of Ordinary Shares with an aggregate sale price giving rise to such purchase obligation of $10,000, under clause (A) of the immediately preceding sentence the Company shall be required to pay the Holder $1,000. The Holder shall provide the Company written notice indicating the amounts payable to the Holder in respect of the Buy-In and, upon request of the Company, evidence of the amount of such loss. Nothing herein shall limit a Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver Ordinary Shares upon exercise of the Warrant as required pursuant to the terms hereof.
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v. No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which the Holder would otherwise be entitled to purchase upon such exercise, the Company shall, at its election, either pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the Exercise Price or round up to the next whole share.
vi. Charges, Taxes and Expenses. Issuance of Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such Warrant Shares, all of which taxes and expenses shall be paid by the Company, and such Warrant Shares shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that, in the event that Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant when surrendered for exercise shall be accompanied by the Assignment Form attached hereto duly executed by the Holder and the Company may require, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto. The Company shall pay all Transfer Agent fees required for same-day processing of any Notice of Exercise and all fees to the Depository Trust Company (or another established clearing corporation performing similar functions) required for same-day electronic delivery of the Warrant Shares.
vii. Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
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| e) | Holder’s Exercise Limitations. The Company shall not effect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, pursuant to Section 2 or otherwise, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with the Holder’s Affiliates, and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates (such Persons, “Attribution Parties”)), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of Ordinary Shares beneficially owned by the Holder and its Affiliates and Attribution Parties shall include the number of Ordinary Shares issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of Ordinary Shares which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates or Attribution Parties and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Share Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates or Attribution Parties. Except as set forth in the preceding sentence, for purposes of this Section 2(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 2(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates and Attribution Parties) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 2(e), in determining the number of outstanding Ordinary Shares, a Holder may rely on the number of outstanding Ordinary Shares as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of Ordinary Shares outstanding. Upon the written or oral request of a Holder, the Company shall within one Trading Day confirm orally and in writing to the Holder the number of Ordinary Shares then outstanding. In any case, the number of outstanding Ordinary Shares shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates or Attribution Parties since the date as of which such number of outstanding Ordinary Shares was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(e), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of Ordinary Shares outstanding immediately after giving effect to the issuance of Ordinary Shares upon exercise of this Warrant held by the Holder and the provisions of this Section 2(e) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(e) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant. |
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Section 3. Certain Adjustments.
a) Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise makes a distribution or distributions on its Ordinary Shares or any other equity or equity equivalent securities payable in Ordinary Shares (which, for avoidance of doubt, shall not include any Ordinary Shares issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding Ordinary Shares into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding Ordinary Shares into a smaller number of shares, or (iv) issues by reclassification of Ordinary Shares any shares of capital stock of the Company, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Ordinary Shares (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of Ordinary Shares outstanding immediately after such event, and the number of shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the record date for the determination of stockholders entitled to receive such dividend or distribution and shall become effective immediately after the effective date in the case of a subdivision, combination or re-classification.
b) Intentionally Omitted.
c) Subsequent Rights Offerings. In addition to any adjustments pursuant to Section 3(a) above, if at any time the Company grants, issues or sells any Share Equivalents or rights to purchase stock, warrants, securities or other property pro rata to the record holders of any class of shares (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, that, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Ordinary Shares as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation).
d) Pro Rata Distributions. During such time as this Warrant is outstanding, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Ordinary Shares , by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of Ordinary Shares acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Beneficial Ownership Limitation) immediately before the date of which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Ordinary Shares are to be determined for the participation in such Distribution (provided, however, that, to the extent that the Holder’s right to participate in any such Distribution would result in the Holder exceeding the Beneficial Ownership Limitation, then the Holder shall not be entitled to participate in such Distribution to such extent (or in the beneficial ownership of any Ordinary Shares as a result of such Distribution to such extent) and the portion of such Distribution shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Beneficial Ownership Limitation). To the extent that this Warrant has not been partially or completely exercised at the time of such Distribution, such portion of the Distribution shall be held in abeyance for the benefit of the Holder until the Holder has exercised this Warrant.
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e) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Company, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Company with or into another Person, (ii) the Company or any Subsidiary, directly or indirectly, effects any sale, lease, license, assignment, transfer, conveyance or other disposition of all or substantially all of its assets in one or a series of related transactions, (iii) any, direct or indirect, purchase offer, tender offer or exchange offer (whether by the Company or another Person) is completed pursuant to which holders of Ordinary Shares are permitted to sell, tender or exchange their shares for other securities, cash or property and has been accepted by the holders of 50% or more of the outstanding Ordinary Shares, (iv) the Company, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Ordinary Shares or any compulsory share exchange pursuant to which the Ordinary Shares are effectively converted into or exchanged for other securities, cash or property, or (v) the Company, directly or indirectly, in one or more related transactions consummates a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off, merger or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Ordinary Shares (not including any Ordinary Shares held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination) (each a “Fundamental Transaction”), then, upon any subsequent exercise of this Warrant, the Holder shall have the right to receive, for each Warrant Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, at the option of the Holder (without regard to any limitation in Section 2(e) on the exercise of this Warrant), the number of Ordinary Shares of the successor or acquiring corporation or of the Company, if it is the surviving corporation, and any additional consideration (the “Alternate Consideration”) receivable as a result of such Fundamental Transaction by a holder of the number of Ordinary Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction (without regard to any limitation in Section 2(e) on the exercise of this Warrant). For purposes of any such exercise, the determination of the Exercise Price shall be appropriately adjusted to apply to such Alternate Consideration based on the amount of Alternate Consideration issuable in respect of one Ordinary Share in such Fundamental Transaction, and the Company shall apportion the Exercise Price among the Alternate Consideration in a reasonable manner reflecting the relative value of any different components of the Alternate Consideration. If holders of Ordinary Shares are given any choice as to the securities, cash or property to be received in a Fundamental Transaction, then the Holder shall be given the same choice as to the Alternate Consideration it receives upon any exercise of this Warrant following such Fundamental Transaction. Notwithstanding anything to the contrary, in the event of a Fundamental Transaction, the Company or any Successor Entity (as defined below) shall, at the Holder’s option, exercisable at any time concurrently with, or within 30 days after, the consummation of the Fundamental Transaction (or, if later, the date of the public announcement of the applicable Fundamental Transaction), purchase this Warrant from the Holder by paying to the Holder an amount of cash equal to the Black Scholes Value (as defined below) of the remaining unexercised portion of this Warrant on the date of the consummation of such Fundamental Transaction; provided, however, that, if the Fundamental Transaction is not within the Company’s control, including not approved by the Company’s Board of Directors, Holder shall only be entitled to receive from the Company or any Successor Entity the same type or form of consideration (and in the same proportion), at the Black Scholes Value of the unexercised portion of this Warrant, that is being offered and paid to the holders of Ordinary Shares of the Company in connection with the Fundamental Transaction, whether that consideration be in the form of cash, stock or any combination thereof, or whether the holders of Ordinary Shares are given the choice to receive from among alternative forms of consideration in connection with the Fundamental Transaction; provided, further, that if holders of Ordinary Shares of the Company are not offered or paid any consideration in such Fundamental Transaction, such holders of Ordinary Shares will be deemed to have received common stock of the Successor Entity (which Entity may be the Company following such Fundamental Transaction) in such Fundamental Transaction. “Black Scholes Value” means the value of this Warrant based on the Black-Scholes Option Pricing Model obtained from the “OV” function on Bloomberg determined as of the day of consummation of the applicable Fundamental Transaction for pricing purposes and reflecting (A) a risk-free interest rate corresponding to the U.S. Treasury rate for a period equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date, (B) an expected volatility equal to the greater of 100% and the 100 day volatility obtained from the HVT function on Bloomberg (determined utilizing a 365 day annualization factor) as of the Trading Day immediately following the public announcement of the applicable Fundamental Transaction, (C) the underlying price per share used in such calculation shall be the greater of (i) the sum of the price per share being offered in cash, if any, plus the value of any non-cash consideration, if any, being offered in such Fundamental Transaction and (ii) the highest VWAP during the period beginning on the Trading Day immediately preceding the announcement of the applicable Fundamental Transaction (or the consummation of the applicable Fundamental Transaction, if earlier) and ending on the Trading Day of the Holder’s request pursuant to this Section 3(e) and (D) a remaining option time equal to the time between the date of the public announcement of the applicable Fundamental Transaction and the Termination Date and (E) a zero cost of borrow. The payment of the Black Scholes Value will be made by wire transfer of immediately available funds (or such other consideration) within the later of (i) five Business Days of the Holder’s election and (ii) the date of consummation of the Fundamental Transaction. The Company shall cause any successor entity in a Fundamental Transaction in which the Company is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Company under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(e) pursuant to written agreements in form and substance reasonably satisfactory to the Holder and approved by the Holder (without unreasonable delay) prior to such Fundamental Transaction and shall, at the option of the Holder, deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant which is exercisable for a corresponding number of shares of capital stock of such Successor Entity (or its parent entity) equivalent to the Ordinary Shares acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Ordinary Shares pursuant to such Fundamental Transaction and the value of such shares of capital stock, such number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction), and which is reasonably satisfactory in form and substance to the Holder. Upon the occurrence of any such Fundamental Transaction, the Successor Entity shall succeed to, and be substituted for (so that from and after the date of such Fundamental Transaction, the provisions of this Warrant and the other Transaction Documents referring to the “Company” shall refer instead to the Successor Entity), and may exercise every right and power of the Company and shall assume all of the obligations of the Company under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Company herein.
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f) Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of Ordinary Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Ordinary Shares (excluding treasury shares, if any) issued and outstanding.
g) Notice to Holder.
i. Adjustment to Exercise Price. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Company shall promptly deliver to the Holder by facsimile or email a notice setting forth the Exercise Price after such adjustment and any resulting adjustment to the number of Warrant Shares and setting forth a brief statement of the facts requiring such adjustment.
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ii. Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Ordinary Share, (B) the Company shall declare a special nonrecurring cash dividend on or a redemption of the Ordinary Share, (C) the Company shall authorize the granting to all holders of the Ordinary Share rights or warrants to subscribe for or purchase any shares of capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Ordinary Share, any consolidation or merger to which the Company (or any of its Subsidiaries) is a party, any sale or transfer of all or substantially all of its assets, or any compulsory share exchange whereby the Ordinary Share is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be delivered by facsimile or email to the Holder at its last facsimile number or email address as it shall appear upon the Warrant Register of the Company, at least 20 calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Ordinary Share of record to be entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer or share exchange is expected to become effective or close, and the date as of which it is expected that holders of the Ordinary Share of record shall be entitled to exchange their Ordinary Shares of for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer or share exchange; provided that the failure to deliver such notice or any defect therein or in the delivery thereof shall not affect the validity of the corporate action required to be specified in such notice. To the extent that any notice provided in this Warrant constitutes, or contains, material, non-public information regarding the Company or any of the Subsidiaries, the Company shall simultaneously file such notice with the Commission pursuant to a Current Report on Form 6-K. The Holder shall remain entitled to exercise this Warrant during the period commencing on the date of such notice to the effective date of the event triggering such notice except as may otherwise be expressly set forth herein.
h) Voluntary Adjustment By Company. Subject to the rules and regulations of the Trading Market, the Company may at any time during the term of this Warrant, subject to the prior written consent of the Holder, reduce the then current Exercise Price to any amount and for any period of time deemed appropriate by the board of directors of the Company.
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Section 4. Transfer of Warrant.
a) Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender this Warrant to the Company unless the Holder has assigned this Warrant in full, in which case, the Holder shall surrender this Warrant to the Company within three (3) Trading Days of the date on which the Holder delivers an assignment form to the Company assigning this Warrant in full. The Warrant, if properly assigned in accordance herewith, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued.
b) New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated the initial issuance date of this Warrant and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto.
c) Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.
Section 5. Miscellaneous.
a) No Rights as Stockholder Until Exercise; No Settlement in Cash. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(d)(i), except as expressly set forth in Section 3. Without limiting any rights of a Holder to receive Warrant Shares on a “cashless exercise” pursuant to Section 2(c) or to receive cash payments pursuant to Section 2(d)(i) and Section 2(d)(iv) herein, in no event shall the Company be required to net cash settle an exercise of this Warrant.
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b) Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.
c) Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.
d) Authorized Shares.
The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Ordinary Shares a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the Trading Market upon which the Ordinary Shares may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant and payment for such Warrant Shares in accordance herewith, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
Except and to the extent as waived or consented to by the Holder, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.
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Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.
e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Purchase Agreement.
f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, and the Holder does not utilize cashless exercise, will have restrictions upon resale imposed by state and federal securities laws.
g) Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies. Without limiting any other provision of this Warrant or the Purchase Agreement, if the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.
h) Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder by the Company shall be delivered in accordance with the notice provisions of the Purchase Agreement.
i) Limitation of Liability. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of the Holder, shall give rise to any liability of the Holder for the purchase price of any Ordinary Share or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
j) Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.
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k) Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of any Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.
l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.
m) Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.
n) Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.
********************
(Signature Page Follows)
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IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| HUDSON CAPITAL INC. | ||
| By: |  | |
| Name: | Warren Wang | |
| Title: | Chief Executive Officer | |
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NOTICE OF EXERCISE
To:
(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Company pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full, together with all applicable transfer taxes, if any.
(2) Payment shall take the form of (check applicable box):
[ ] in lawful money of the United States; or
[ ] [if permitted the cancellation of such number of Warrant Shares as is necessary, in accordance with the formula set forth in subsection 2(c), to exercise this Warrant with respect to the maximum number of Warrant Shares purchasable pursuant to the cashless exercise procedure set forth in subsection 2(c).
(3) Please issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
The Warrant Shares shall be delivered to the following DWAC Account Number:
_______________________________
_______________________________
_______________________________
[SIGNATURE OF HOLDER]
Name of Investing Entity: ________________________________________________________________________
Signature of Authorized Signatory of Investing Entity: _________________________________________________
Name of Authorized Signatory: ___________________________________________________________________
Title of Authorized Signatory: ____________________________________________________________________
Date: ________________________________________________________________________________________
EXHIBIT B
ASSIGNMENT FORM
(To assign the foregoing Warrant, execute this form and supply required information. Do not use this form to purchase shares.)
FOR VALUE RECEIVED, the foregoing Warrant and all rights evidenced thereby are hereby assigned to
| Name: | ______________________________________ | |
| (Please Print) | ||
| Address: | ______________________________________ | |
Phone Number:
Email Address: |
(Please Print)
______________________________________
______________________________________ | |
| Dated: _______________ __, ______ | ||
| Holder’s Signature: | ||
| Holder’s Address: |
Exhibit 10.3
PROMISSORY NOTE
| US$1,356,178.00 | New York, New York |
February 10, 2022
FOR VALUE RECEIVED, the undersigned, FREIGHT APP, INC., a company organized and existing under the laws of the State of Delaware (“Borrower”), promises to pay to the order of HUDSON CAPITAL INC. (f/k/a China Internet Nationwide Financial Services Inc.), a corporation organized and existing under the laws of the British Virgin Islands (“Lender”), at its office at 19 West 44th Street, Suite 1001, New York, New York, 10036, or at such other place as the holder of this Promissory Note shall specify by written notice to Borrower, in lawful money of the United States of America, the loan amount of ONE MILLION THREE HUNDRED AND FIFTY SIX THOUSAND ONE HUNDRED SEVENTY EIGHT DOLLARS (US$1,356,178.00) (the “Principal Amount”), together with interest thereon as specified herein.
1. Interest. The outstanding Principal Amount due from time to time hereunder shall bear interest at a rate per annum equal to 0.17% from and after the date hereof until the date this Promissory Note is paid in full, whether at maturity or prepayment. Computations of interest shall be made by Lender on the basis of a year of 360 days for the actual number of days elapsed (including the first day but excluding the last day) during any applicable interest period.
2. Repayment. All payments made by Borrower hereunder shall be first applied to interest and, thereafter, the balance to Principal Amount. The entire then-outstanding Principal Amount, together with all accrued but unpaid interest thereon, shall become due and payable on September 28, 2022. If any Principal Amount or interest on this Promissory Note falls due on a day which is not a business day for banks in New York, New York, such due date shall be extended to the next succeeding business day and interest shall be payable in respect of any such extension of Principal Amount. In the event that all or any portion of the Principal Amount and/or accrued and unpaid interest thereon should become due and payable by Borrower pursuant to this Promissory Note, whether at maturity as provided above, in connection with a prepayment by Borrower as set forth below, upon acceleration of this Promissory Note in connection with the occurrence and continuation of an Event of Default as provided below, or otherwise, Borrower shall be entitled in its sole discretion to offset any such payment obligation against any and all amounts then-owing by Lender and its affiliates to Borrower, including, without limitation, any such amounts owing by Lender and its affiliates to Borrower pursuant to the Merger Agreement. As used herein, “Merger Agreement” means that certain Merger Agreement among Borrower, Lender, Hudson Capital Merger Sub I Inc. and ATW Master Fund II, L.P. dated as of December 13, 2021, as the same may have been amended through the date of this Promissory Note and from time to time hereafter. Lender hereby consents to any such offset by Borrower.
3. Prepayment. Borrower may prepay this Promissory Note in whole or in part at any time or from time to time without penalty or premium by paying the portion of the then-outstanding Principal Amount to be prepaid, together with accrued interest thereon to the date of prepayment.
4. Events of Default. The occurrence of any of the following shall constitute an “Event of Default” hereunder:
(i) Borrower fails to pay any Principal Amount of this Promissory Note or interest hereunder if and when due, and such failure continues for 14 days;
(ii) the commencement by Borrower of, or the consent by Borrower to, a voluntary case or proceeding under any applicable federal or state or other bankruptcy, insolvency, reorganization or other similar law, or any other case or proceeding to be adjudicated bankrupt or insolvent, or the filing by Borrower of, or consent by Borrower to, a petition or answer or consent seeking reorganization or relief under any applicable federal or state or other law or the appointment or taking possession by a custodian, receiver, liquidator, assignee, trustee, sequestrator, or other similar official of Borrower or any substantial party of Borrower’s property; or
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(iii) an involuntary proceeding shall be commenced or an involuntary petition shall be filed, seeking (A) liquidation, reorganization or other relief in respect of Borrower or its debts or of any substantial portion of its assets under any Federal or state or other bankruptcy, insolvency, receivership or similar law now or hereafter in effect or (B) the appointment of a receiver, trustee, custodian, sequestrator, conservator or similar official for Borrower or for a substantial part of Borrower’s assets in any Federal or state or other jurisdiction, and, in any such case of clause (A) or (B), such proceeding shall continue undismissed and unstayed for thirty (30) days or an order or decree approving or rendering any of the foregoing shall be entered.
5.Remedies. Upon the occurrence of an Event of Default and at any time thereafter during the continuance of such Event of Default, the entire then-outstanding Principal Amount of this Promissory Note, together with all accrued and unpaid interest thereon and all other amounts payable hereunder, to be immediately due and payable, and/or exercise any and all rights, powers or remedies that may be available to Lender under applicable law.
6. Additional Costs; Certain Taxes. In addition to and not in limitation of the foregoing, Borrower further agrees to pay all expenses, including reasonable attorney’s fees and legal expenses, incurred by the holder of this Promissory Note in connection with (a) collecting or attempting to collect any amounts payable hereunder which are not paid when due, whether by acceleration or otherwise or (b) exercising remedies in furtherance of the events set forth in Paragraph 2 or Paragraph 4 above. Any such costs incurred by Borrower will be added to the outstanding Principal Amount and will become immediately due. Any and all payments made by Borrower hereunder shall be made free and clear of, and without deduction for, any present and future taxes (including, without limitation, value-added taxes and withholding taxes), levies, imposts, deductions, charges or withholdings and all liabilities with respect thereto. In addition, Borrower agrees to pay any present or future stamp or documentary taxes or any other excise of property taxes, charges or similar levies which arise from any payment made hereunder or from the execution, delivery or registration of, or otherwise with respect to, this Promissory Note.
7. Transfer of Promissory Note. Borrower may not sell, transfer, assign or convey this Promissory Note without the prior written consent of Lender.
8. Amendment; Modification; Waiver. No amendment, modification or waiver of any provision of this Promissory Note or consent to departure by Borrower therefrom shall be effective unless the same shall be in writing and signed by Lender. No delay or omission on either party in exercising any right hereunder shall operate as a waiver of such right or of any other right of such holder, nor shall any delay, omission or waiver on any one occasion be deemed a bar to or waiver of the same or of any other right on any future occasion.
9. Legal and Tax Representation. Each party to this Promissory Note represents and warrants that it has had the opportunity to seek the advice of independent legal and tax counsel of its choosing, and has either been duly represented or has by its own volition chosen not to be represented in executing this Promissory Note.
10. Successors. The terms and conditions of this Promissory Note shall inure to the benefit of and be binding jointly and severally upon the successors, heirs, survivors and personal representatives of Borrower and shall inure to the benefit of any holder, its legal representatives, and successors.
11. Breach of Promissory Note. No breach of any provision of this Promissory Note shall be deemed waived unless it is waived in writing. No course of dealing and no delay on the part of Lender in exercising any right will operate as a waiver thereof or otherwise prejudice Lender’s rights, powers, or remedies. No right, power, or remedy conferred by this Promissory Note upon Lender will be exclusive of any other rights, power, or remedy referred to in this Promissory Note, or now or hereafter available at law, in equity, by statute, or otherwise.
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12. Waiver of Presentment. All parties to this Promissory Note hereby waive presentment for payment, notice of dishonor, protest, and notice of protest of this Promissory Note.
13. Governing Law. The validity, construction and performance of this Promissory Note will be governed by the laws of the State of New York, excluding that body of law pertaining to conflicts of law. Any controversy or dispute arising out of or relating to this Promissory Note shall be brought exclusively in the United States District Court for the Southern District of New York, or, if such court does not have subject matter jurisdiction, in the State courts of the State of New York located in New York County. Borrower and Lender hereby irrevocably accept and submit to the exclusive jurisdiction and venue of such courts in personam, with respect to any such controversy or dispute, and waive any claim that such forum is inconvenient or any similar claim. THE PARTIES HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM THAT IS RELATED TO OR ARISES OUT OF THIS PROMISSORY NOTE OR THE ACTS OR FAILURE TO ACT OF OR BY LENDER IN THE ENFORCEMENT OF ANY OF THE TERMS OR PROVISIONS OF THIS PROMISSORY NOTE. To the extent that Lender has or hereafter may acquire any immunity from jurisdiction of any court or from any legal process (whether through service or notice, attachment prior to judgment, attachment in aid of execution, execution or otherwise) with respect to itself or its property, Lender hereby irrevocably waives such immunity in respect of this Promissory Note, and, without limiting the generality of the foregoing, agrees that the waivers set forth in this Paragraph 13 shall have the fullest scope permitted under the Foreign Sovereign Immunities Act of the United States of 1976 or are intended to be irrevocable for purposes of such Act.
[Signatures to follow]
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IN WITNESS WHEREOF, Borrower and Lender have executed this Promissory Note the day and year first written above.
| BORROWER: | ||
| FREIGHT APP, INC. | ||
| By: | /s/ Paul Freudenthaler | |
| Paul Freudenthaler | ||
| Chief Financial Officer | ||
| Address for Notices: | |
| 2001 Timberloch Place - Suite 500 | |
| The Woodlands, TX 77380. | |
| Attention: Paul Freudenthaler, CFO | |
| Email Address: paul.freudenthaler@fr8hub.com |
| With a copy to: | |
| RPCK Rastegar Panchal LLP | |
| One Grand Central Place | |
| 60 East 42nd Street – Suite 2410 | |
| New York, NY 10165 | |
| Attention: Chintan Panchal | |
| Email: chintan.panchal@rpck.com |
| LENDER: | ||
| HUDSON CAPITAL, INC. | ||
| By: | /s/ Warren Wang | |
| Name: Warren Wang | ||
| Title: Chief Executive Officer | ||
| Address for Notices | |
| 19 West 44th Street, Suite 1001 | |
| New York, NY 10036 | |
| Attention: Warren Wang | |
| Email: warren@hudsoncapitalusa.com | |
| With a copy to: | |
| Sichenzia Ross Ference LLP | |
| 1185 Avenue of the Americas, 31st Floor | |
| New York, NY 10036 | |
| Attention: Benjamin Tan, Esq. | |
| Email: btan@srf.law |
| 4 |