JX Luxventure Group Inc 6-K, filed Aug 29, 2024
JX Luxventure Group Inc. (JXG)
About this 6-K
JX Luxventure Group Inc filed this 6-K on August 29, 2024.
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 OF THE
SECURITIES EXCHANGE ACT OF 1934
For the month of August 2024
Commission File Number 001-35715
JX Luxventure Limited
(Translation of registrant’s name into English)
Bin Hai Da Dao No. 270
Lang Qin Wan Guo Ji Du Jia Cun Zong He Lou
Xiu Ying District
Haikou City, Hainan Province 570100
People’s Republic of China
(Address of principal executive offices)
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 ☐
Debt Exchange and Issuance of Series E Convertible Preferred Stock.
On August 23, 2024, JX Luxventure Limited, a corporation duly organized under the laws of the Republic of Marshall Islands (the “Company”), issued a negotiable, transferrable, due on demand, promissory note, without an interest (the “Original Note”), in the principal amount of $3,000,000 (the “Principal Amount”) to Huidan Li, the Co-Chairman of the board of directors of the Company (the “Original Noteholder”). The Principal Amount of the Original Note represented the amount of the continuous advances of funds to the Company by the Co-Chairman for a period of over two (2) years.
On August 26, 2024, the Company entered into the Note Transfer and Assignment Agreement (the “Assignment Agreement”) with the Original Noteholder and eight (8) investors (the “Assignees” or the “Holders”), pursuant to which on the same date the Original Noteholder sold, transferred, and assigned the Original Note and, collectively, all of his rights, title and interest in, to and under the Original Note to the Assignees, with each Assignee being assigned all of the Original Noteholder’s rights, title and interest in, and to the principal amount of $375,000 (the “Assignment”), and the Company recognized each Assignee as the owner of the Assignment, and issued to each Assignee a new promissory note in the principal amount of $375,000 (the “New Note”) on the same terms as the Original Note.
On August 26, 2024, the Company and the Holders entered into a debt exchange agreement (the “Exchange Agreement”), pursuant to which, the Holders agreed to cancel the total amount of the Company’s indebtedness under the New Note issued to each Holder in exchange for the issuance of shares of a new series of the Company’s preferred stock, designated as Series E Convertible Preferred Stock (the “Series E Stock”), pursuant to the terms and subject to conditions set forth in the Exchange Agreement. The closing of the transactions contemplated by the Exchange Agreement (the “Closing”) is scheduled to occur on or before September 26, 2024, subject to certain conditions, including, among other things (i) the Company’s submission of Listing of Additional Shares Notification Form with Nasdaq Capital Market at least 15 calendar days prior to the issuance of the shares of Series E Stock; (ii) obtaining the shareholder approval for the issuance of 20% or more of the Company’s issued and outstanding share capital, as required by Nasdaq Marketplace Rule 5635; and (iii) filing of the Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock (the “Certificate of Designation of Series E Stock”) with the Registrar of the Corporation under the Marshall Island Business Corporations Act (the “BCA”), establishing the Series E Stock. Upon satisfaction of the closing conditions, at the Closing, the Company will issue an aggregate of 1,000,000 shares of Series E Stock (the “Series E Shares”) to the Holders (each Holder will be issued 125,000 Series E Shares) at the exchange price of $3.00 per share, in consideration of cancellation of the total outstanding debt by the Company to the Holders under the New Notes.
Pursuant to the terms of the Certificate of Designation of Series E Stock, Series E Shares features a stated value of $3.00 per share and are convertible to shares of the Company’s common stock at the conversion rate of 1 for 10, such as each Series E Share to be converted into 10 shares of the Company’s common stock without the payment or any additional consideration by the Holder thereof. Such conversion is subject to the following schedule: (i) up to 30% of the Series E Shares issued to each Holder may be converted by such Holder at any time from the date of the issuance; (ii) up to additional 30% of the Series E Shares counted on the date of the issuance may be converted by such Holder at any time after 90 days from the date of the issuance; (iii) up to 40% of the Series E Shares counted on the date of the issuance may be converted by such Holder after six (6) months from the date of the issuance. If any Series E Shares remain outstanding on or after March 14, 2025, the Company will have the right, but not the obligations, to require the Holder of such Series E Shares to convert them into the number of fully paid and non-assessable shares of common stock as would result from multiplying the number of Series E Shares by 10. Holders of Series E Shares vote together with holders of shares of common stock on a one-for-one basis, without regard to the number of shares of common stock into which each Series E Share is convertible, have no special dividend rights, and ranks equally to our common stock with respect to rights upon liquidation.
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The transactions related to the issuance of the Original Note, the New Notes, the Exchange Agreement and the issuance of the Series E Shares and shares of common stock issuable upon conversion of Series E Shares (the “Conversion Shares”) were unanimously approved by the board of directors of the Company. The transactions related to the issuance of Series E Shares and the Conversion Shares were approved by the holders of approximately 55% of the capital stock of the Company.
The issuance of the Original Note and the New Notes described above were exempt from registration requirements under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), as transactions by an issuer not involving any public offering. The issuance of the Series E Shares and the Conversion Shares will be exempt from registration requirements under Section 4(a)(2), Rule 506(b) of Regulation D (“Regulation D”) and/or Regulation S, as promulgated by the Securities and Exchange Commission (the “SEC”) thereunder.
The foregoing descriptions of the Original Note, the New Notes, the Assignment Agreement, the Exchange Agreement, and the Form of Certificate of Designation of Series E Stock do not purport to be complete and are qualified in their entirety by reference to the full text of such documents, copies of which are attached to this Current Report on Form 6-K as Exhibits 4.1, 4.2, 10.1, 10.2, and 10.3 respectively, and incorporated herein by reference.
EXHIBIT LIST
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
| Date: August 29, 2024 | JX Luxventure Limited | |
| By: | /s/ Sun Lei | |
| Sun Lei | ||
| Chief Executive Officer | ||
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Exhibit 4.1
NEGOTIABLE PROMISSORY NOTE
FOR VALUE RECEIVED, and subject to the terms and conditions set forth herein, JX LUXVENTURE LIMITED, a corporation duly organized under the laws of the Republic of Marshall Islands (hereinafter the “Maker”), hereby unconditionally promises to pay to the order of Huidan Li, the Co-Chairman of the board of directors of the Maker, or his successors or assigns (the “Noteholder”), the principal amount of Three Million Dollars ($3,000,000) (the “Principal Amount”), to be paid in lawful money of the United States of America, which shall be legal tender in payment of all debts and dues, public and private, at the time of payment, as provided in this Negotiable Promissory Note (as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms, the “Note”) as of the 23rd day of August 2024 (the “Effective Date”). The Noteholder and the Maker hereinafter are referred to as the “Parties.” Except as otherwise provided herein, the outstanding Principal Amount of the Note shall not bear interest from the Effective Date until the Principal Amount is paid in full.
1. Payment. The Parties agree and acknowledge that the Principal Amount represents the total outstanding amount due under this Note as of the Effective Date and shall be payable by the Maker to the Noteholder upon demand. The Noteholder may elect to demand the total Principal Amount or any portion thereof by providing a demand notice specifying the date when the payment of the total Principal Amount, any portion thereof, or the outstanding amount due, if less than the Principal Amount, is due. The date provided in any demand notice sent from the Noteholder to the Maker shall be referred to as the “Maturity Date”. In the event any required payment on this Note is not received by the Noteholder within ten (10) days after said payment is due, the Maker shall pay the Noteholder a late charge of $200. The Parties agree that said charge is a fair and reasonable charge for the late payment, and shall not be deemed a penalty.
2. Prepayment. The Maker may make prepayments hereunder, to reduce the Principal Amount. In the event of such prepayments, the Noteholder shall allow at least thirty (30) days from the date of such prepayment before demanding the Maker to pay the total remaining outstanding amount due under the Note.
3. Representations and Warranties of the Market.
The Maker hereby represents and warrants to the Noteholder on the date hereof as follows:
(a) The Maker is corporation duly formed, validly existing and in good standing under the laws of the Republic of Marshall Islands;
(b) Power and Authority. The Maker has the power and authority, and the legal right, to execute and deliver this Note and to perform its obligations hereunder;
(c) The execution and delivery of this Note by the Maker and the performance of its obligations hereunder have been duly authorized by all necessary limited liability company action in accordance with all applicable laws of the Republic of Marshall Islands. The Maker has duly executed and delivered this Note;
(d) No consent or authorization of, filing with, notice to or other act by, or in respect of, any governmental authority or any other person is required in order for the Maker to execute, deliver, or perform any of its obligations under this Note;
(e) The execution and delivery of this Note and the consummation by the Maker of the transactions contemplated hereby do not and will not violate any provision of the Maker’s organizational documents or any law or order applicable to the Maker or by which any of its properties or assets may be bound; or constitute a default under any material agreement or contract by which the Maker may be bound.
4. Enforceability. The Note is a valid, legal and binding obligation of the Maker, enforceable against the Maker in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
5. No Waiver; Cumulative Remedies. The Maker hereby waives all applicable exemption rights, and also waives presentment, protest and demand, notice of protest, demand and dishonor, and suit against Maker and expressly agrees that the Maturity Date of any payment hereunder, may be extended from time to time without in any way affecting the liability of the Maker. The remedies of the Noteholder, in accordance with applicable laws of the Republic of Marshalls Islands shall be cumulative and concurrent, and may be pursued singularly, successively or together, at Noteholder’s sole discretion, and may be exercised as often as occasion therefor shall arise. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
6. Successors and Assigns. This Note may be assigned, transferred or negotiated by the Noteholder to any individual or entity at any time without notice to or the consent of the Maker. The Maker may not assign or transfer this Note or any of its rights hereunder without the prior written consent of the Noteholder. This Note shall inure to the benefit of and be binding upon the Parties hereto and their permitted assigns.
7. Notices. All notices, requests or other communications required or permitted to be delivered hereunder shall be delivered in writing to such address as a Party may from time to time specify in writing. If such notice is (i) mailed by certified or registered mail or sent by hand or overnight courier service, it shall be deemed to have been given when received, (ii) sent by facsimile during the recipient’s normal business hours, it shall be deemed to have been given when sent (and if sent after normal business hours shall be deemed to have been given at the opening of the recipient’s business on the next business day) and (iii) sent by e-mail, it shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment).
8. Waiver of Notice. The Maker hereby waives presentment, demand for payment, protest, notice of dishonor, notice of protest or nonpayment, notice of acceleration of maturity and diligence in connection with the enforcement of this Note or the taking of any action to collect sums owing hereunder.
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9. Expenses. The Maker shall be responsible for all costs, expenses and fees incurred by the Parties in connection with the transactions contemplated hereby, including the negotiation, documentation and execution of this Note.
10. Governing Law. This Note and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Note and the transactions contemplated hereby shall be governed and construed to be construed according to the applicable laws of the Republic of the Marshall Islands.
11. Waiver of Jury Trial. MAKER AND NOTEHOLDER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY, WAIVE THE RIGHT WHICH EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING, LITIGATION OR COUNTERCLAIM BASED HEREON, OR ARISING OUT OF, UNDER, ON OR IN CONNECTION WITH THIS NOTE, THE LOAN SECURED HEREBY AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION THEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.
12. Entire Agreement. This Note constitutes the entire agreement and understanding of the Parties in respect of its subject matters and supersedes all prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate to the subject matter hereof. Delivery of an executed counterpart of a signature page to this Note by facsimile or in electronic format (i.e., “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Note.
13. Amendments and Waivers. No term of this Note may be waived, modified or amended except by an instrument in writing signed by both of the Parties hereto. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.
14. Headings. The headings of the various Sections and subsections herein are for reference only and shall not define, modify, expand or limit any of the terms or provisions hereof.
15. Severability. If any term or provision of this Note is found to be invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Note or invalidate or render unenforceable such term or provision in any other jurisdiction.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Maker has executed this Note as of the Effective Date.
| JX LUXVENTURE LIMITED | ||
| By: | /s/ Sun Lei | |
| Sun Lei | ||
| Chief Executive Officer | ||
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Exhibit 4.2
FORM OF NEGOTIABLE PROMISSORY NOTE
FOR VALUE RECEIVED, and subject to the terms and conditions set forth herein, JX LUXVENTURE LIMITED, a corporation duly organized under the laws of the Republic of Marshall Islands (hereinafter the “Maker”), hereby unconditionally promises to pay to the order of ____________, or his successors or assigns (the “Noteholder”), the principal amount of Three Hundred Seventy-Five Thousand Dollars ($375,000) (the “Principal Amount”), to be paid in lawful money of the United States of America, which shall be legal tender in payment of all debts and dues, public and private, at the time of payment, as provided in this Negotiable Promissory Note (as the same may be amended, restated, supplemented or otherwise modified from time to time in accordance with its terms, the “Note”) as of the 26th day of August 2024 (the “Effective Date”). The Noteholder and the Maker hereinafter are referred to as the “Parties.” Except as otherwise provided herein, the outstanding Principal Amount of the Note shall not bear interest from the Effective Date until the Principal Amount is paid in full.
1. Payment. The Parties agree and acknowledge that the Principal Amount represents the total outstanding amount due under this Note as of the Effective Date and shall be payable by the Maker to the Noteholder upon demand. The Noteholder may elect to demand the total Principal Amount or any portion thereof by providing a demand notice specifying the date when the payment of the total Principal Amount, any portion thereof, or the outstanding amount due, if less than the Principal Amount, is due. The date provided in any demand notice sent from the Noteholder to the Maker shall be referred to as the “Maturity Date”. In the event any required payment on this Note is not received by the Noteholder within ten (10) days after said payment is due, the Maker shall pay the Noteholder a late charge of $200. The Parties agree that said charge is a fair and reasonable charge for the late payment, and shall not be deemed a penalty.
2. Prepayment. The Maker may make prepayments hereunder, to reduce the Principal Amount. In the event of such prepayments, the Noteholder shall allow at least thirty (30) days from the date of such prepayment before demanding the Maker to pay the total remaining outstanding amount due under the Note.
3. Representations and Warranties of the Market.
The Maker hereby represents and warrants to the Noteholder on the date hereof as follows:
(a) The Maker is corporation duly formed, validly existing and in good standing under the laws of the Republic of Marshall Islands;
(b) Power and Authority. The Maker has the power and authority, and the legal right, to execute and deliver this Note and to perform its obligations hereunder;
(c) The execution and delivery of this Note by the Maker and the performance of its obligations hereunder have been duly authorized by all necessary limited liability company action in accordance with all applicable laws of the Republic of Marshall Islands. The Maker has duly executed and delivered this Note;
(d) No consent or authorization of, filing with, notice to or other act by, or in respect of, any governmental authority or any other person is required in order for the Maker to execute, deliver, or perform any of its obligations under this Note;
(e) The execution and delivery of this Note and the consummation by the Maker of the transactions contemplated hereby do not and will not violate any provision of the Maker’s organizational documents or any law or order applicable to the Maker or by which any of its properties or assets may be bound; or constitute a default under any material agreement or contract by which the Maker may be bound.
4. Enforceability. The Note is a valid, legal and binding obligation of the Maker, enforceable against the Maker in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the enforcement of creditors’ rights generally and by general equitable principles (whether enforcement is sought by proceedings in equity or at law).
5. No Waiver; Cumulative Remedies. The Maker hereby waives all applicable exemption rights, and also waives presentment, protest and demand, notice of protest, demand and dishonor, and suit against Maker and expressly agrees that the Maturity Date of any payment hereunder, may be extended from time to time without in any way affecting the liability of the Maker. The remedies of the Noteholder, in accordance with applicable laws of the Republic of Marshalls Islands shall be cumulative and concurrent, and may be pursued singularly, successively or together, at Noteholder’s sole discretion, and may be exercised as often as occasion therefor shall arise. The rights, remedies, powers and privileges herein provided are cumulative and not exclusive of any rights, remedies, powers and privileges provided by law.
6. Successors and Assigns. This Note may be assigned, transferred or negotiated by the Noteholder to any individual or entity at any time without notice to or the consent of the Maker. The Maker may not assign or transfer this Note or any of its rights hereunder without the prior written consent of the Noteholder. This Note shall inure to the benefit of and be binding upon the Parties hereto and their permitted assigns.
7. Notices. All notices, requests or other communications required or permitted to be delivered hereunder shall be delivered in writing to such address as a Party may from time to time specify in writing. If such notice is (i) mailed by certified or registered mail or sent by hand or overnight courier service, it shall be deemed to have been given when received, (ii) sent by facsimile during the recipient’s normal business hours, it shall be deemed to have been given when sent (and if sent after normal business hours shall be deemed to have been given at the opening of the recipient’s business on the next business day) and (iii) sent by e-mail, it shall be deemed received upon the sender’s receipt of an acknowledgment from the intended recipient (such as by the “return receipt requested” function, as available, return e-mail or other written acknowledgment).
8. Waiver of Notice. The Maker hereby waives presentment, demand for payment, protest, notice of dishonor, notice of protest or nonpayment, notice of acceleration of maturity and diligence in connection with the enforcement of this Note or the taking of any action to collect sums owing hereunder.
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9. Expenses. The Maker shall be responsible for all costs, expenses and fees incurred by the Parties in connection with the transactions contemplated hereby, including the negotiation, documentation and execution of this Note.
10. Governing Law. This Note and any claim, controversy, dispute or cause of action (whether in contract or tort or otherwise) based upon, arising out of or relating to this Note and the transactions contemplated hereby shall be governed and construed to be construed according to the applicable laws of the Republic of the Marshall Islands.
11. Waiver of Jury Trial. MAKER AND NOTEHOLDER HEREBY KNOWINGLY, VOLUNTARILY, AND INTENTIONALLY, WAIVE THE RIGHT WHICH EITHER MAY HAVE TO TRIAL BY JURY IN RESPECT OF ANY ACTION, PROCEEDING, LITIGATION OR COUNTERCLAIM BASED HEREON, OR ARISING OUT OF, UNDER, ON OR IN CONNECTION WITH THIS NOTE, THE LOAN SECURED HEREBY AND ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION THEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF EITHER PARTY.
12. Entire Agreement. This Note constitutes the entire agreement and understanding of the Parties in respect of its subject matters and supersedes all prior understandings, agreements, or representations by or among the Parties, written or oral, to the extent they relate to the subject matter hereof. Delivery of an executed counterpart of a signature page to this Note by facsimile or in electronic format (i.e., “pdf” or “tif”) shall be effective as delivery of a manually executed counterpart of this Note.
13. Amendments and Waivers. No term of this Note may be waived, modified or amended except by an instrument in writing signed by both of the Parties hereto. Any waiver of the terms hereof shall be effective only in the specific instance and for the specific purpose given.
14. Headings. The headings of the various Sections and subsections herein are for reference only and shall not define, modify, expand or limit any of the terms or provisions hereof.
15. Severability. If any term or provision of this Note is found to be invalid, illegal or unenforceable in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other term or provision of this Note or invalidate or render unenforceable such term or provision in any other jurisdiction.
[Signature Page Follows]
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IN WITNESS WHEREOF, the Maker has executed this Note as of the Effective Date.
| JX LUXVENTURE LIMITED | ||
| By: | ||
| Sun Lei | ||
| Chief Executive Officer | ||
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Exhibit 10.1
Note Transfer and Assignment AGREEMENT
This Note Transfer and Assignment Agreement (this “Agreement”) is made and entered into as of August 26, 2024, among JX Luxventure Limited, a corporation established under the laws of the Republic of Marshall Islands (the "Company"), Li Huidan (the “Assignor”) and investors listed on the signature pages (each, an “Assignee” and, collectively, the “Assignees”).
WHEREAS, the Assignor is the sole legal and record owner of a negotiable promissory note, due on demand (the “Original Note”), issued by the Company to the Assignor on August 23, 2024 in the original principal amount of $3,000,000 (the “Principal Amount”); and
WHEREAS, the Assignor wishes to assign to the Assignees the Original Note and the right to require the Company to repay the Principal Amount under the Original Note, with each Assignee to be assigned a portion of the Original Note representing the principal balance of $375,000 (the “Assignment”), for such consideration and on such terms as set forth below.
NOW THEREFORE, in consideration of the above premises and the mutual representations, warranties, covenants and agreements hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:
1. Purchase Price. Simultaneous with the execution and delivery of this Agreement, each Assignee shall deliver to the Assignor the sum of $375,000 (the “Purchase Price”), which amount shall represent full payment and satisfaction for the Assignment.
2. Assignment of Agreement. Subject to the payment of the Purchase Price by each Assignee, the Assignor hereby assigns to the Assignees, collectively, all of his rights, title and interest in, to and under the Original Note, with each Assignee being assigned all of Assignor’s rights, title and interest in, and to the Assignment. Effective as of the date hereof, (i) the Assignor shall have no further interest in the Original Note and (ii) the Company shall recognize each Assignee as the owner of the Assignment, and shall issue to each Assignee a new note in the principal amount of $375,000 (the “New Note”).
3. Representations of the Company.
The Company hereby represents and warrants to each Assignee the following:
(a) The Company is a corporation duly organized, validly existing and in good standing under the laws of the Republic of Marshall Islands, with full power and authority to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.
(b) The Company has the absolute and unrestricted right, power, legal capacity and authority to enter into and perform its obligations under the Original Note and this Agreement, to carry out its obligations thereunder and hereunder and to consummate the transactions contemplated hereby. Assuming the due authorization, execution and delivery by the Assignor and each Assignee, this Agreement, when executed and delivered by the other parties, will be a valid and binding obligation of the Company, enforceable against it in accordance with its terms. This Agreement has been duly executed and delivered by the Company.
(c) Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will conflict with, or (with or without notice or lapse of time, or both) result in a termination, breach or violation of (i) any instrument, contract or agreement to which the Company is a party or by it is bound, or (ii) any law, ordinance, judgment, decree, order, statute, or regulation, or that of any other governmental body or authority, applicable to the Company.
(d) Upon execution and delivery of this Agreement, the Company will recognize each Assignee as having full title and interest in the Assignment and will issue to each Assignee the New Note. The amount of the Assignment represents a bona fide indebtedness of the Company to each Assignee, (the Principal Amount represents a bona fide indebtedness of the Company to all Assignees), and is due and payable in accordance with the terms thereof.
(e) No consents, permits or other approvals of any kind are necessary in order to transfer the Assignment to the Assignee.
(f) Neither the Company nor any of its affiliates is party to or threatened with, any litigation, suit, action, investigation, proceeding or controversy before any court, administrative agency or other governmental authority relating to or affecting the Note or the Company.
4. Representations of the Assignor.
The Assignor hereby represents and warrants to the Company and the Assignee the following:
(a) The Assignor has the absolute and unrestricted right, power, legal capacity and authority to enter into and perform her obligations under this Agreement, to assign the Assigned Note to the Assignee as contemplated herein, carry out her obligations hereunder and to consummate the transactions contemplated hereby. Assuming the due authorization, execution and delivery by the other parties, this Agreement, when executed and delivered by the Assignor, will be a valid and binding obligation of the Assignor, enforceable against her in accordance with its terms.
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(b) Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will conflict with, or (with or without notice or lapse of time, or both) result in a termination, breach or violation of (i) any instrument, contract or agreement to which the Assignor is a party or she is bound, or (ii) any law, ordinance, judgment, decree, order, statute, or regulation, or that of any other governmental body or authority, applicable to the Assignor.
(d) The Assignor is the sole owner of the Original Note, and no other party has any lien, charge, claim, option, preferential arrangement or restrictions of any kind, on the Note. Upon the consummation of the transactions contemplated hereby, the Assignee will have full title and interest in the Assignment.
(e) The transfer of the Assignment to each Assignee will not give rise to any rights or claims by any third party.
(f) No consents, permits or other approvals of any kind are necessary in order to transfer the Assignment to each such Assignee.
(g) Neither the Assignor nor any of her affiliates is party to or threatened with, any litigation, suit, action, investigation, proceeding or controversy before any court, administrative agency or other governmental authority relating to or affecting the Note or the Assignor.
(h) Effective as of the execution and delivery of this Agreement, the Assignor shall have no rights in or to the Assignment or against the Company with respect to the Assignment or the Original Note.
5. Representations of the Assignees.
Each Assignee, severally, and not jontly, hereby represents and warrants to the Company and the Assignor the following:
(a) Such Assignee has the absolute and unrestricted right, power, legal capacity and authority to enter into and perform his obligations under this Agreement, to carry out his obligations hereunder and to consummate the transactions contemplated hereby. This Agreement has been duly executed and delivered by such Assignee.
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(c) No filing with, authorization from or consent or approval of any governmental body, agency, official or authority or any other third party is necessary or required to be made or obtained to enable such Assignee to enter into, and to perform his obligations under, this Agreement.
(d) Assuming the due authorization, execution and delivery by the Company and the Assignor, this Agreement, when executed and delivered by such Assignee, will be a valid and binding obligation of such Assignee, enforceable against him in accordance with its terms.
(e) Neither the execution and delivery of this Agreement, nor the consummation of the transactions contemplated hereby, will conflict with, or (with or without notice or lapse of time, or both) result in a termination, breach or violation of (i) any instrument, contract or agreement to which such Assignee is a party or by which he is bound, or (ii) any federal, state, local or foreign law, ordinance, judgment, decree, order, statute, or regulation, or that of any other governmental body or authority, applicable to the Assignee or his assets or properties.
(f) Each such Assignee has reviewed, or had an opportunity to review, all of the filings made by the Company with the Securities and Exchange Commission, (the “SEC”) including without limitation the “Forward Looking Statements” disclaimers contained therein. In addition, such Assignee has reviewed and acknowledges it has such knowledge, sophistication, and experience in securities matters, and understands the risks related to the Company, including without limitation to, the “Risk Factors” in the Form 20-F filed on May 15, 2024 with respect to the fiscal year ended December 31, 2023.
(g) Each such Assignee understands that the New Note, and any securities which the Company and the Assignee might agree to convert the New Note into, has not been registered under the U.S. Securities Act of 1933, as amended (the “1933 Act”), or any other securities laws. Such Assignee will not sell, offer to sell, assign, pledge, hypothecate or otherwise transfer the New Note unless pursuant to an effective registration statement under the 1933 Act, or unless an exemption from registration is available.
(h) Each such Assignee is acquiring the Assignment for its own account and not with a present view towards the public sale or distribution thereof, except pursuant to sales registered or exempted from registration under the 1933 Act.
6. Indemnification. Each Assignor shall indemnify and hold harmless each of the Company and the Assignor and its respective officers, directors, shareholders, employees, trustees, agents, beneficiaries, affiliates, representatives and their successors and assigns from and against any and all damages, losses, liabilities, taxes and costs and expenses (including, without limitation, attorneys’ fees and costs) resulting directly or indirectly from any inaccuracy, misrepresentation, breach of warranty or nonfulfillment of any of the representations and warranties of Assignor in this Agreement or in any certificate or document delivered by the Assignor pursuant to this Agreement, or any actions, omissions or statements of fact inconsistent with in any material respect any such representation or warranty.
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7. Miscellaneous.
(a) This Agreement shall be governed by and construed in accordance with the internal laws of the Republic of Marshall Islands.
(b) If any covenant or agreement contained herein, or any part hereof, is held to be invalid, illegal or unenforceable for any reason, such provision will be deemed modified to the extent necessary to be valid, legal and enforceable and to give effect of the intent of the parties hereto.
(c) This Agreement constitutes the entire agreement between the parties with respect to the subject matter hereof. This Agreement supersedes all prior agreements between the parties with respect to the subject matter hereof or thereof. There are no representations, warranties, covenants or undertakings with respect to the subject matter hereof other than those expressly set forth herein or in the other agreements referenced herein.
(d) This Agreement may not be amended or modified except by the express written consent of the parties hereto. Any waiver by the parties of a breach of any provision of this Agreement shall not operate or be construed as a waiver of any subsequent breach thereof or of any other provision.
(e) This Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties hereto and their respective successors and permitted assignees.
(f) The parties hereto intend that this Agreement shall not benefit or create any right or cause of action in or on behalf of any person other than the parties hereto.
(g) Each of the parties agrees that this Agreement shall be deemed to have been jointly and equally drafted by them and that the provisions of this Agreement therefore shall not be construed against a party or parties on the ground that such party or parties drafted or was more responsible for the drafting of any such provision(s). The parties further agree that they have each carefully read the terms and conditions of this Agreement, that they know and understand the contents and effect of this Agreement and that the legal effect of this Agreement has been fully explained to its satisfaction by counsel of its own choosing.
(h) The parties hereto agree to execute and deliver such further documents and instruments and to do such other acts and things any of them, as the case may be, may reasonably request in order to effectuate the transactions contemplated by this Agreement.
(i) This Agreement may be executed in counterparts and by facsimile or other electronic means, each of which shall be deemed an original and all of which together shall constitute one and the same instrument.
[Remainder of Page Intentionally Omitted; Signature
Page to Follow]
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IN WITNESS WHEREOF, each of the undersigned has caused this Assignment Agreement to be executed by its duly authorized officer or representative as of the date first above written.
| JX LUXVENTURE LIMITED | ||
| By: | /s/ Sun Lei | |
| Sun Lei | ||
| Chief Executive Officer | ||
| ASSIGNOR | ||
| /s/ Huidan Li | ||
| Huidan Li | ||
| ASSIGNEES: | ||
| /s/ Bai Jing | ||
| Bai Jing | ||
| /s/ Kong Xiang Hua | ||
| Kong Xiang Hua | ||
| /s/ Liu Wei | ||
| Liu Wei | ||
| /s/ Zhang Jian Xin | ||
| Zhang Jian Xin | ||
| /s/ Wang Bao Jun | ||
| Wang Bao Jun | ||
| /s/ Huang Zhen | ||
| Huang Zhen | ||
| /s/ Gao Xiujin | ||
| Gao Xiujin | ||
/s/ Zhizhong Zhang |
||
Zhizhong Zhang |
||
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Exhibit 10.2
DEBT EXCHANGE AGREEMENT
THIS DEBT EXCHANGE AGREEMENT (this “Agreement”), dated August 26, 2024, is entered into by and among JX Luxventure Limited, a corporation established under the laws of the Republic of Marshall Islands (the “Company”) and individuals or entities listed on the signature pages (each, a “Holder” and, collectively, the “Holders”).
WHEREAS, as of the date of this Agreement, the Company’s total outstanding indebtedness due to all Holders is $3,000,000 (the “Total Indebtedness”), and
WHEREAS, each Holder is the owner and holder of the Company’s negotiable promissory note, dated August 26. 2024. due on demand (the “New Note”), in the principal amount of $375,000, which amount constitutes all indebtedness due and payable by the Company to such Holder and also a portion of the Total Indebtedness; and
WHEREAS, each Holder desires to convert all indebtedness due and payable by the Company to such Holder under the New Note issued to such Holder, into 125,000 shares of the Company’s new series of preferred stock, par value $0.0001 per share, designated as Series E Convertible Preferred Stock, having the relative rights, preferences and privileges as set forth in the Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock (the “Certificate of Designation of Series E Stock”), a form of which is attached hereto as Exhibit A, and to effectuate such conversion on the terms and conditions provided for in this Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby agree as follows:
1. The Exchange.
(a) Issuance of Series E Shares; Cancellation of Indebtedness. Subject to the terms and conditions of this Agreement, at the Closing (as defined below), the Company shall issue to each Holder 125,000 shares of Series E Convertible Preferred Stock (the “Series E Shares”) out of maximum 1,000,000 shares of Series E Convertible Preferred Stock authorized for issuance pursuant to the terms of the Certificate of Designation of Series E Stock, in exchange for the cancellation of all indebtedness owed by the Company to each such Holder pursuant to the terms of the New Note issued to each such Holder (the “Exchange”).
(b) Exemption from Registration Requirements. It is the intent of the parties that the Exchange be effectuated pursuant to an exemption from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”), pursuant to Section 3(a)(9), or Section 4(a)(2) or Regulation S promulgated thereunder.
(c) Release. Subject to the terms and conditions of this Agreement, at the Closing, each Holder hereby releases, waives, discharges and relinquishes any and all rights, claims, demands, contentions and causes of action of every kind, nature, character and description whatsoever, whether known or unknown, suspected or unsuspected, apparent or concealed, fixed or contingent, arising from the New Note on or before the Closing Date, which it now has or hereafter may be entitled to claim against the Company, its directors, officers, managers, members, agents and employees (the “Released Parties”), including but without limiting the generality of foregoing, all claims arising from or in connection with or otherwise resulting from any matter, event, state of facts, claim, contention or cause whatsoever, occurring or existing in connection with or relating to the debt evidenced by the Note on or before the Closing Date (collectively, the “Claims”). Each such Holder agrees that the waiver and release described in this Section 1(c) applies to all Claims, whether or not such Holder currently knows about them or suspects that they exist. Notwithstanding anything to the contrary expressed or implied herein, however, none of the foregoing released Claims shall include any claims against a Released Party arising by reason of such Released Party’s breach of this Agreement. In addition, none of the foregoing releases extend to any breach of this Agreement, and no remedies for any such breach are being released herein.
2. Closing and the Closing Deliveries.
The Closing shall occur on or before September 26, 2024 (the “Closing Date”) at the office of the Company or as to be agreed by the parties to this Agreement, subject to the satisfaction of all conditions set forth below:
(a) At least two (2) business days prior to the Closing Date, the Company shall have established the Series E Convertible Preferred Stock by filing the Certificate of Designation of Series E Stock with the Registrar of the Corporation of the Company, in accordance with applicable provisions of the Marshall Islands Business Corporations Act (the “BCA”).
(b) At least 15 calendar days prior to the Closing Date and the issuance of the Series E Shares and shares of common stock; $0.0001 par value per share (the “Common Stock”) issuable upon conversion of Series E Shares (the “Conversion Shares”), the Company shall have submitted a Listing of Additional Shares Notification Form with Nasdaq Capital Market (“Nasdaq”) relating to the issuance of the Series E Shares and the Conversion Shares,
(c) Prior to the Closing, the shareholders of the Company approved the issuance of 20% or more of the Company’s issued and outstanding share capital pursuant to the terms of this Agreement and the Certificate of Designation of Series E Stock, as required by Nasdaq Marketplace Rule 5635.
(d) On or prior to the Closing Date, the parties shall deliver to each other a duly executed copy of this Agreement;
(e) On the Closing Date; each Holder shall deliver to the Company a copy of the New Note for cancellation.
(f) On the Closing Date, the Company shall issue or instruct the Company’s transfer agent to issue, as applicable, the number of Series E Shares to each Holder indicated on the signature page hereto in non-certificated, electronic form and provide the statement of ownership of these Series E Shares to the Holder; such Series E Shares will be free and clear of all liens and encumbrances, except for restriction on transfer under the Securities Act.
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3. Representations and Warranties of the Company. As of the date of this Agreement and as of the Closing, the Company hereby represents and warrants to the Holders that the following representations and warranties are true and complete as of each respective date:
(a) Organization and Standing. The Company is a corporation duly organized, validly existing and in good standing under the laws of the Republic of Marshall Islands, with full power and authority to own, lease, use and operate its properties and to carry on its business as and where now owned, leased, used, operated and conducted.
(b) Authority. The Company has all requisite corporate power and authority to own and operate its properties and assets and to carry on its business as presently conducted and as proposed to be conducted.
(c) Corporate Power. The Company has all requisite legal and corporate power and authority to execute and deliver this Agreement and the other agreements contemplated hereby, to effectuate the Exchange, to sell and issue the Shares and to carry out and perform its obligations under the terms of this Agreement.
(d) Authorization. All corporate action on the part of the Company and its officers, directors and stockholders necessary for the (i) authorization, execution, delivery and performance of this Agreement, (ii) authorization, sale, issuance and delivery of the Shares and (iii) performance of all of the Company’s obligations hereunder have been taken or will be taken prior to the Closing. This Agreement has been duly executed by the Company and constitutes (or will constitute) the valid and legally binding obligation of the Company, enforceable against the Company in accordance with its terms, subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies.
(e) No Conflicts; Consents. The execution, delivery and performance by the Company of this Agreement and the documents to be delivered hereunder, and the consummation of the transactions contemplated hereby, do not and will not: (a) violate or conflict with the articles of incorporation or bylaws of the Company, each as amended to date; (b) violate or conflict with any judgment, order, decree, statute, law, ordinance, rule or regulation applicable to the Company; (c) conflict with, or result in (with or without notice or lapse of time or both) any violation of, or default under, or give rise to a right of termination, acceleration or modification of any obligation or loss of any benefit under any agreement or other instrument to which the Company is a party. No consent, approval, waiver or authorization is required to be obtained by the Company from any person in connection with the execution, delivery and performance by the Company of this Agreement or the consummation of the transactions contemplated hereby, other than the filing of a Current Report on Form 6-K with the Securities and Exchange Commission (the “SEC”).
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(f) Valid Issuance of Series E Stock. On the date of the Closing, the Company established the Series E Convertible Preferred Stock in accordance with applicable provisions of the BCA. The Series E Shares, issuable pursuant to the terms of this Agreement, have been duly authorized and, when issued, sold and delivered in compliance with the provisions of this Agreement, will be duly and validly issued, fully paid and nonassessable. The Conversion Shares, issuable subject to shareholder approval, will be duly and validly issued, fully paid and nonassessable. The Series E Shares and the Conversion Shares will be free and clear of any liens or encumbrances; provided, however, that such shares shall be subject to restrictions on transfer imposed under the Securities Act or other applicable US securities laws. None of the Series E Shares and the Conversion Shares will be subject to any preemptive rights or rights of first refusal.
4. Representations and Warranties of each Holder. As of the date of this Agreement and as of the Closing, each Holder, separately, and not jointly, hereby represents and warrants to the Company that the following representations and warranties are true and complete as of each respective date:
(a) Organization and Standing. If such Holder is an entity, the Holder is duly organized, validly existing under, and by virtue of, the laws of the state of its incorporation or formation, as the case may be, and is in good standing under such laws.
(b) Corporate Power. Each such Holder has all power and authority to execute and deliver this Agreement, purchase the Series E Shares, effectuate the Exchange, and carry out and perform its obligations under the terms of this Agreement and the transactions contemplated hereby.
(c) Authorization. All action on the part of each such Holder necessary for the authorization, execution, delivery and performance of this Agreement, the purchase of the Series E Shares, and the performance of all of the Holder’s obligations hereunder have been taken or will be taken prior to the Closing. This Agreement has been duly executed by the Holder and constitutes the valid and legally binding obligation of each such Holder, enforceable against such Holder in accordance with its terms, subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors and rules of law governing specific performance, injunctive relief or other equitable remedies.
(d) For Holder’s Account. Each such Holder represents and confirms that the Shares to be issued to the Holder in the Exchange are being and will be acquired for such Holder’s own account, not as nominee or agent, and not with a view to the resale or distribution of any part thereof.
(e) Accredited Investor, Non-US Person and Investment Experience.
(i) If such Holder is a U.S. person, such Holder is an accredited investor, as such term is defined in Regulation D promulgated under the Securities Act. Such Holder represents that he/she/its and its representatives are experienced in evaluating and investing in securities of companies similar to the Company and that such Holder can bear the economic risk of an investment in the Series E Shares and the Conversion Shares and has such knowledge and experience in financial and business matters that it is capable of evaluating the merits and risks of the investment in the Company’s equity securities in exchange for the New Note.
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(ii) If such Holder is not a U.S. person, as defined in Regulation S of the Securities Act, and is not an Affiliate (as defined in Rule 50l(b) under the Securities Act) of the Company and is not acquiring the Series E Shares and the Conversion Shares for the account or benefit of a U.S. Person,
| (a) | such Holder was outside of the United States at the time of the origination of contact concerning this Agreement and the date of the execution and delivery of this Agreement; |
| (b) | such Holder will not, during the period commencing on the date of issuance of the Series E Shares and ending on the six month anniversary of such date, or such shorter period as may be permitted by Regulation S or other applicable securities law (the “Restricted Period”), offer, sell, pledge or otherwise transfer the Conversion Shares, issuable upon conversion of Series E Shares in the United States, or to a U.S. Person for the account or for the benefit of a U.S. Person, or otherwise in a manner that is not in compliance with Regulation S; each such Holder will, after expiration of the Restricted Period, offer, sell, pledge or otherwise transfer the Conversion Shares only pursuant to registration under the Securities Act or an available exemption therefrom and, in accordance with all applicable state and foreign securities laws; |
| (c) | the transactions contemplated by this Agreement have not been pre-arranged with a buyer located in the United States or with a U.S. Person and are not part of a plan or scheme to evade the registration requirements of the Securities Act; neither such Holder nor any person acting on his or its behalf has undertaken or carried out any activity for the purpose of, or that could reasonably be expected to have the effect of, conditioning the market in the United States, its territories or possessions, for any of the Company’s securities. |
| (d) | Each such Holder agrees not to cause any advertisement of the Series E Shares and the Conversion Shares to be published in any newspaper or periodical or posted in any public place and not to issue any circular relating to the Securities, except such advertisements that include the statements required by Regulation S under the Securities Act, and only offshore and not in the U.S. or its territories, and only in compliance with any local applicable securities laws. |
(f) Ownership of the Debt. Each such Holder is the exclusive beneficial and record owner of the New Note. Each such Holder has good, valid and marketable title to said New Note, free and clear of all liens, mortgages, charges or other encumbrances and any preemptive or subscription rights, and has not assigned or otherwise transferred or granted any interest in the Note to any person.
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(g) No Consents. Each such Holder is not required to obtain any order, consent, approval or authorization of any person or entity in connection with the execution and delivery of this Agreement or the Exchange.
(h) Information on the Company. Each such Holder has been furnished with all information it has requested from the Company and considered all factors the Holder deems material in deciding on the advisability of converting the New Note, to the Series E Shares. Each such Holder has reviewed, or had an opportunity to review, all of the filings made by the Company with the SEC including without limitation the “Forward Looking Statements” disclaimers contained therein. In addition, such Assignee has reviewed and acknowledges it has such knowledge, sophistication, and experience in securities matters, and understands the risks related to the Company, including without limitation to, the “Risk Factors” in Form 20-F filed on May 15, 2024 with respect to the fiscal year ended December 31, 2023.
(i) Each such Holder has been afforded the opportunity to ask questions of and receive answers from duly authorized officers and/or other representatives of the Company and any additional information that the Holder had requested. The Holder has also reviewed all information including the terms hereof and of the Series E Convertible Preferred Stock, with their counsel and professional tax or economic advisers and understands the risks relating hereto.
(j) Compliance with the Securities Act. Each such Holder understands and agrees that the Series E Shares have not been registered under the Securities Act or any applicable state securities laws, by reason of their issuance in a transaction that does not require registration under the Securities Act (based in part on the accuracy of the representations and warranties of Holder contained herein), and that the Conversion Shares must be held indefinitely unless a subsequent disposition is registered under the Securities Act or is exempt from such registration.
(k) No other representations. Each such Holder is not relying on the Company, or its affiliates or agents with respect to economic considerations involved in this investment. Each such Holder has relied solely on its own advisors. No representations or warranties have been made to the Holder by the Company, or any officer, employee, agent, affiliate or subsidiary of the Company, other than the representations of the Company contained herein, and in effectuating the Exchange the Holder is not relying upon any representations other than those contained herein.
(l) Shares Legend. The Series E Shares and the Conversion Shares, when issued, shall bear the following or similar legend:
“THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED. AND MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT UNDER SUCH SECURITIES ACT OR ANY APPLICABLE STATE SECURITIES LAW OR AN OPINION OF COUNSEL REASONABLY SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.”
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If the Series E Shares and the Conversion Shares to be issued to not U.S. Persons (as defined in Regulation S under the Securities Act), the following legend will be placed on such securities:
“THE SECURITIES ARE BEING OFFERED TO NOT U.S. PERSONS (AS DEFINED IN REGULATION S UNDER THE SECURITIES ACT OF 1933, AS AMENDED (“THE SECURITIES ACT”)) AND WITHOUT REGISTRATION WITH THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNDER THE SECURITIES ACT IN RELIANCE UPON REGULATION S PROMULGATED UNDER THE SECURITIES ACT.”
TRANSFER OF THESE SECURITIES IS PROHIBITED, EXCEPT IN ACCORDANCE WITH THE PROVISIONS OF REGULATION S, PURSUANT TO REGISTRATION UNDER THE SECURITIES ACT, OR PURSUANT TO AVAILABLE EXEMPTION FROM REGISTRATION. HEDGING TRANSACTIONS MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.”
(m) Communication of Offer. The offer for the Exchange was directly communicated to each such Holder by the Company. At no time was the Holder presented with or solicited by any leaflet, newspaper or magazine article, radio or television advertisement, or any other form of general advertising or solicited or invited to attend a promotional meeting otherwise than in connection and concurrently with such communicated offer.
(n) Restricted Securities. Each such Holder understands that the Series E Shares and the Conversion Shares, when issued pursuant to the terms of the Certificate of Designation of Series E Stock, have not been registered under the Securities Act and such Holder will not sell, offer to sell, assign, pledge, hypothecate or otherwise transfer any of the Shares unless pursuant to an effective registration statement under the Securities Act, or unless an exemption from registration is available. Notwithstanding anything to the contrary contained in this Agreement, such Holder may transfer (with an opinion of counsel satisfactory to the Company and its counsel) the Conversion Shares to its Affiliates (as defined below), provided that each such Affiliate is either an “accredited investor” under Regulation D and such Affiliate agrees to be bound by the terms and conditions of this Agreement. For the purposes of this Agreement, an “Affiliate” of any person or entity means any other person or entity directly or indirectly controlling, controlled by or under direct or indirect common control with such person or entity. Affiliate includes each subsidiary of the Company. For purposes of this definition, “control” means the power to direct the management and policies of such person or firm, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.
(o) No Governmental Review. Each such Holder understands that no United States federal or state agency or any other governmental or state agency has passed on or made recommendations or endorsement of the Exchange or the Shares or the suitability of the Exchange nor have such authorities passed upon or endorsed the merits of the Exchange.
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(p) Correctness of Representations. Each such Holder represents that the foregoing representations and warranties are true and accurate as of the date hereof and shall survive the issuance and delivery of the Series E Shares. If, in any respect, those representations and warranties shall not be true and accurate prior to the Closing Date, the undersigned shall immediately give written notice to the Company specifying which representations and warranties are not true and accurate and the reason therefor. It is specifically understood and agreed by such Holder that neither the Company nor its officers or directors has made, nor by this Agreement shall be construed to make, directly or indirectly, explicitly or by implication, any representation, warranty, projection, assumption, promise, covenant, opinion, recommendation or other statement of any kind or nature with respect to the anticipated operations, investment returns, cash flows, profits or losses of the Company.
(q) Survival. The foregoing representations and warranties shall survive the Closing Date for a period of two years.
5. Miscellaneous.
(a) Successors and Assigns. Except as otherwise provided herein, the terms and conditions of this Agreement shall inure to the benefit of and be binding upon the respective successors and assigns of the parties. Nothing in this Agreement, express or implied, is intended to confer upon any party other than the parties hereto or their respective successors and assigns any rights, remedies, obligations, or liabilities under or by reason of this Agreement, except as expressly provided in this Agreement.
(b) Further Assurances. The parties hereto agree to execute and deliver such further documents and instruments and to do such other acts and things any of them, as the case may be, may reasonably request in order to effectuate the transactions contemplated by this Agreement.
(c) Governing Law. This Agreement is to be governed by and construed in accordance with the laws of the Republic of Marshall Islands.
(d) Counterparts. This Agreement shall be executed in counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument. Signatures received by pdf or email shall be deemed to be original signatures.
(e) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.
(f) Notices. Except as may be otherwise provided herein, all notices, requests, waivers and other communications made pursuant to this Agreement shall be in writing and shall be conclusively deemed to have been duly given (a) if delivered personally, when received, (b) if transmitted by facsimile or email, on the date of transmission with receipt of a transmittal confirmation or (c) if by courier service, on the second (2nd) business day following the date of deposit with such courier service, or such earlier delivery date as may be confirmed in writing to the sender by such courier service. A party may change or supplement the addresses given in the signature pages hereto, or designate additional addresses, for purposes of this Section by giving the other party written notice of the new address in the manner set forth above.
(g) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the balance of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms.
(h) Entire Agreement. This Agreement and the documents referred to herein constitute the entire agreement among the parties with respect to the subject matter hereof and no party shall be liable or bound to any other party in any manner by any warranties, representations or covenants except as specifically set forth herein or therein.
[Remainder of Page Intentionally Omitted; Signature Page Follows]
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IN WITNESS WHEREOF, the undersigned, being the duly authorized representatives of the parties, have executed this Agreement as of the date set forth above.
| JX LUXVENTURE LIMITED | ||
| By: | /s/ Sun Lei | |
| Sun Lei | ||
| Chief Executive Officer | ||
| HOLDERS: | ||
| /s/ Bai Jing | ||
| Bai Jing | ||
| /s/ Kong Xiang Hua | ||
| Kong Xiang Hua | ||
| /s/ Liu Wei | ||
| Liu Wei | ||
| /s/ Zhang Jian Xin | ||
| Zhang Jian Xin | ||
| /s/ Wang Bao Jun | ||
| Wang Bao Jun | ||
| /s/ Huang Zhen | ||
| Huang Zhen | ||
| /s/ Gao Xiujin | ||
| Gao Xiujin | ||
| /s/ Zhizhong Zhang | ||
Zhizhong Zhang | ||
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Exhibit 10.3
FORM OF CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF
SERIES E CONVERTIBLE PREFERRED STOCK
OF
JX Luxventure Limited
(Pursuant to Section 35 of the Business Corporations Act of the Marshall Islands)
JX Luxventure Limited, a corporation organized and existing under the laws of the Republic of Marshall Islands (the “Corporation”), does hereby certify:
That pursuant to the authority conferred upon the Board of Directors of the Corporation (the “Board”), by the Amended and Restated Articles of Incorporation of the Corporation (as amended and/or restated from time to time the “Articles of Incorporation”), the Board by unanimous written consent dated August 26, 2024, in accordance with Section 35 of the Business Corporations Act of the Marshall Islands (the “BCA”), duly adopted the following resolutions creating a new series of preferred stock, par value US$0.0001 per share (“Preferred Stock”), designated as “Series E Convertible Preferred Stock”
RESOLVED: That pursuant to the authority vested in the Board by the Articles of Incorporation and the provisions of Section 35(5) of the BCA, a series of Preferred Stock of the Corporation be and hereby is created, and that the designations and number of shares of such series, and the voting and other powers, preferences and relative, participating, optional or special rights and qualifications, limitations and restrictions, of such series of Preferred Stock are as follows:
1. Designation and Number; Defined Terms.
The shares of such series of Preferred Stock shall be designated as “Series E Convertible Preferred Stock” (the “Series E Convertible Preferred Stock”). The number of authorized shares of Series E Convertible Preferred Stock shall be 1,000,000 shares, US$0.0001 par value per share. The initial stated value amount per share of the Series E Convertible Preferred Stock shall be US$3.00 per share (as it may be adjusted from time-to-time, the “Stated Value”). The Series E Convertible Preferred Stock will be converted to shares of Common Stock pursuant to a 1 to 10 ratio. For purposes of this Certificate of Designation, Preferences, Rights and Limitations of Series ED Convertible Preferred Stock (the “Certificate of Designation”), the following definitions shall apply:
“Change of Control” means any sale or transfers of all or substantially all of the consolidated assets of the Corporation and its Subsidiaries that results in the inability of the holders of Common Stock (or other voting stock of the Corporation) immediately prior to such sale, transfer or issuance to designate or elect a majority of the Board, any merger, consolidation, recapitalization or reorganization of the Corporation with or into another entity (whether or not the Corporation is the surviving corporation) that results in that results in the transfer of more than fifty percent (50%) of the outstanding voting power of the Corporation.
“Common Stock” means the Corporation’s common stock, par value US$0.0001 per share.
“Common Stock Equivalents” means any securities of the Corporation which would entitle the holder thereof to acquire at any time Common Stock, including without limitation, any debt, preferred stock, rights, options, warrants or other instrument that is at any time convertible into or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.
“Conversion Dates” with respect to shares of Series E Convertible Preferred Stock means the dates on which such share is to be converted into Common Stock pursuant to Section 5.
“Conversion Shares” means, collectively, the shares of Common Stock issuable upon conversion of the shares of Series E Convertible Preferred Stock in accordance with the terms hereof.
“Conversion Price” means the Stated Value per share of a Series E Convertible Preferred Stock divided by 10, subject to adjustments as set forth in Section 6 herein.
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
“Holder” means a holder of Series E Convertible Preferred Stock.
“Issuance Date” means the date on which all shares of Series E Convertible Preferred Stock are issued by the Corporation.
“Person” shall mean any individual, partnership, firm, corporation, association, trust, unincorporated organization or other entity, as well as any syndicate or group that would be deemed to be a person under Section 13(d)(3) of the Exchange Act.
“Principal Market” means the Nasdaq Capital Market.
“Subsidiary” shall mean any corporation, association, partnership, limited liability company or other business entity of which more than fifty percent (50%) of the total voting power is, at the time, owned or controlled, directly or indirectly, by the Corporation or one or more of the other Subsidiaries of the Corporation or a combination thereof.
“Trading Day” means any day on which the Common Stock is traded on the Principal Market.
2. Rank and Dividend Rights. Except as otherwise provided herein, the Series E Convertible Preferred Stock shall, with respect to rights on liquidation, winding up and dissolution, rank pari passu to the Common Stock and any other classes of capital stock of the Corporation. Holders shall have no dividend rights except as may be declared by the Board in its sole and absolute discretion, out of funds legally available for that purpose. In the event that dividends are paid on any share of Common Stock, the Corporation shall pay a dividend on all outstanding shares of Series E Convertible Preferred Stock in a per share amount equal (on an as-if-converted to Common Stock basis) to the amount paid or set aside for each share of Common Stock.
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3. Liquidation, Dissolution, or Winding-Down. In the event of any dissolution, liquidation or winding up of the Corporation (a “Liquidation”), whether voluntary or involuntary, the Holders shall be entitled to participate in any distribution out of the assets of the Corporation on an equal basis per share with the holders of the Common Stock. For the purposes of such distribution, Holders shall be treated as if all shares of Series E Convertible Preferred Stock had been converted to Common Stock immediately prior to the distribution. A Change of Control transaction shall not be deemed to be a Liquidation for purposes of this Designation.
4. Voting Rights.
(a) Voting Generally. With respect to any and all matters presented to the stockholders of the Corporation for their action or consideration (whether at a meeting of stockholders of the Corporation, by written action of stockholders in lieu of a meeting or otherwise), except as provided by law or by the provisions of Section 4(b) below, each Holder shall be entitled to vote with the holders of outstanding shares of Common Stock, voting together as a single class, as-if-converted to Common Stock on a one-for-one basis, without regard to the number of shares into which each share of Series E Convertible Preferred Stock is convertible, pursuant to Section 5 herein as of the record date for such vote or written consent or, if there is no specified record date, as of the date of such vote or written consent.. Each holder of outstanding Shares of Series E Convertible Preferred Stock shall be entitled to notice of all stockholder meetings (or requests for written consent) in accordance with the Corporation’s bylaws.
b. Limitations on Corporate Actions. Notwithstanding anything to the contrary in Section 4(a) above, as long as any shares of Series E Convertible Preferred Stock are outstanding, the Corporation shall not, without the written consent or affirmative vote of the holders of the then-outstanding shares of Series E Convertible Preferred Stock, consenting or voting (as the case may be) as a separate class from the Common Stock, either directly or by amendment, merger, consolidation or otherwise:
(i) amend its Articles of Incorporation in any manner that adversely affects the rights of the Holders;
(ii) alter or change adversely the voting or other powers, preferences, rights, privileges, or restrictions of the Series E Convertible Preferred Stock contained herein or alter or amend this Certificate of Designation; or
(iii) enter into any agreement with respect to any of the foregoing.
5. Conversion.
a. Shares of Series E Convertible Preferred Stock shall be converted at the option of the Holder thereof, in whole or in part, at the conversion rate of 1-for-10, without the payment or any additional consideration by the Holder thereof, subject to the following schedule:
(i) each Holder may convert up to 30% of the total outstanding shares of Series E Convertible Preferred Stock held by such Holder into the number of fully paid and non-assessable shares of Common Stock resulting from multiplying the number of Series E Convertible Preferred Stock such Holder wants to convert by 10 (based on the conversion rate of 1-for-10) at any time from the Date of the Issuance;
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(ii) each Holder may convert up to an additional 30% of the total outstanding shares of Series E Convertible Preferred Stock, calculated on the Date of the Issuance, into the number of fully paid and non-assessable shares of Common Stock resulting from multiplying the number of Series E Convertible Preferred Stock such Holder wants to convert by 10 at any time after ninety (90) days from the Date of the Issuance;
(iii) each Holder may convert up to the remaining 40% of the total outstanding shares of Series E Convertible Preferred Stock, calculated on the date of their issuance, into the number of fully paid and non-assessable shares of Common Stock resulting from multiplying the number of Series E Convertible Preferred Stock such Holder wants to convert by 10 at any time after six (6) months from the Date of the Issuance.
(iv) If any shares of Series E Convertible Preferred Stock issued on the Date of the Issuance remain not converted on or after March 14, 2025, the Company will have the right, but not the obligations, to require the Holder of such shares of Series E Convertible Preferred Stock to convert such shares into the number of fully paid and non-assessable shares of Common Stock as would result from multiplying the remaining number of Series E Convertible Preferred Stock by 10.
b. Beneficial Ownership Limitation. Notwithstanding anything to the contrary set forth in this Certificate of Designation, in no event shall the Company convert any shares of the Series E Convertible Preferred Stock into shares of Common Stock if the number of shares of Common Stock to be issued pursuant to such conversion, when aggregated with all other shares of Common Stock owned by the Holder at such time, would result in the Holder beneficially owning (as determined in accordance with Section 13(d) of the Exchange Act and the rules thereunder) in excess of 9.99% of the then issued and outstanding shares of Common Stock (the “Beneficial Ownership Limitation”).
c. Notice of Conversion. Subject to compliance with the provisions of this Section 5, a Holder shall effect a conversion by providing the Corporation with the form of conversion notice attached hereto as Annex A (a “Notice of Conversion”). Each Notice of Conversion shall specify the number of shares of Series E Convertible Preferred Stock to be converted, the number of shares of Series E Convertible Preferred Stock owned prior to the conversion at issue, the number of shares of Series E Convertible Preferred Stock owned subsequent to the conversion at issue and the Conversion Date on which such conversion is to be effected, which date may not be less than two Trading Days prior to the date the Holder delivers such Notice of Conversion to the Corporation. If no Conversion Date is specified in a Notice of Conversion, the Conversion Date shall be the date that such Notice of Conversion to the Corporation is deemed delivered hereunder. To effect conversions of shares of Series E Convertible Preferred Stock, a Holder shall not be required to surrender the certificate(s) representing such shares of Series E Convertible Preferred Stock to the Corporation unless all of the shares of Series E Convertible Preferred Stock represented thereby are so converted, in which case such Holder shall deliver the certificate representing such shares of Series E Convertible Preferred Stock with the Notice of Conversion.
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c. Limitation on the Conversion Subject to the Compliance with the Nasdaq Listing Rules. Notwithstanding anything to the contrary set forth in this Certificate of Designations, and in addition to the limitation on conversion set forth in Section 5(b) above, prior to the completing the conversion in accordance with the schedule set forth in Section 5(a) above, the Corporation shall be required to obtain the affirmative vote from the holders of not less than fifty (50%) of the outstanding shares of Common Stock, together with the Holders, voting together as a single class on the one-for-one basis (the “Shareholder Approval”) required by the listing rules of the Principal Market, provided further that if such conversion will result in the issuance of the number of shares of Common Stock equal to ten (10%) or more of the then issued and outstanding shares of Common Stock, such conversion shall be effected no earlier than fifteen calendar days after the date of the submission of a Listing of Additional Shares Form in compliance with the requirements of the Principal Market, and subject to any other applicable laws.
d. Fractional Shares. No fractional shares of Common Stock shall be issued upon conversion of the Series E Convertible Preferred Stock. If applicable, in lieu of any fractional shares to which the Holder would otherwise be entitled, the Corporation shall, in its sole discretion, either pay cash equal to such fraction multiplied by the fair market value of a share of Common Stock as determined in good faith by the Board, or round-up to the next whole number of shares. Whether or not fractional shares would be issuable upon such conversion shall be determined on the basis of the total number of shares of Series E Convertible Preferred Stock the Holder is at the time converting into Common Stock and the aggregate number of shares of Common Stock issuable upon such conversion.
e. Mechanics of Conversion. Subject to compliance with limitations set forth in Sections 5(b) and 5(c), no later than ten (10) Trading Days after each Conversion Date (the “Share Delivery Date”), the Corporation shall issue, or cause to be issued, to all Holders the number of shares of Common Stock being acquired upon the conversion of shares of Series E, Convertible Preferred Stock, in accordance with Schedule 5(a) above, in either (i) uncertificated book-entry form on the stock ledger of the Corporation or (ii) a stock certificate evidencing the shares of Common Stock, and shall send to the registered holder of such shares of Common Stock any notice or statement required by the applicable laws or said certificate. All shares of Series E Convertible Preferred Stock which shall have been converted as herein provided shall no longer be deemed to be outstanding and all rights with respect to such shares shall immediately cease and terminate at the Share Delivery Date, except only the right of the holders thereof to receive shares of Common Stock in exchange therefor as provided herein, and, if applicable, to receive payment in lieu of any fraction of a share otherwise issuable upon such conversion as provided herein.
g. Reservation of Shares Issuable upon Conversion. The Corporation covenants that it will at all times reserve and keep available out of its authorized and unissued shares of Common Stock for the sole purpose of issuance upon conversion of the Series E Convertible Preferred Stock, free from preemptive rights or any other actual contingent purchase rights of Persons other than the Holders, not less than such aggregate number of shares of the Common Stock as shall be issuable upon the conversion of all outstanding shares of Series E Convertible Preferred Stock. The Corporation covenants that all shares of Common Stock that shall be so issuable shall, upon issue in accordance with the terms herein, be duly authorized, validly issued, fully paid and nonassessable.
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6. Certain Adjustments.
a. Subdivision or Combination of Stock. If, at any time while the Series E Convertible Preferred Stock is outstanding, the Corporation shall subdivide (whether by way of stock dividend, stock split or otherwise) its outstanding shares of Common Stock into a greater number of shares, the Conversion Price in effect immediately prior to such subdivision shall be proportionately reduced, and conversely, in case the outstanding shares of Common Stock of the Corporation shall be combined (whether by way of stock combination, reverse stock split or otherwise) into a smaller number of shares, the Conversion Price in effect immediately prior to such combination shall be proportionately increased. The Conversion Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in Section 6(a).
b. Dividends in Stock, Property, Reclassification. If, at any time while the Series E Convertible Preferred Stock is outstanding, the holders of Common Stock (or any shares of stock or other securities at the time receivable upon the conversion of the Series E Convertible Preferred Stock) shall have received or become entitled to receive, without payment therefore:
(i) any Common Stock Equivalents, or any rights or options to subscribe for, purchase or otherwise acquire any of the foregoing by way of dividend or other distribution, or
(ii) additional stock or other securities or property by way of spin-off, split-up, reclassification, combination of shares or similar corporate rearrangement (other than shares of Common Stock issued as a stock split or adjustments in respect of which shall be covered by the terms of Section 6(a) above),
then and in each such case, the Series E Conversion Price shall be adjusted proportionately, and the Holder hereof shall, upon the conversion of the Series E Convertible Preferred Stock, be entitled to receive, in addition to the number of shares of Common Stock receivable thereupon, and without payment of any additional consideration therefor, the amount of stock and other securities and property that such Holder would hold on the date of such exercise had such Holder been the holder of record of such Common Stock as of the date on which holders of Common Stock received or became entitled to receive such shares or all other additional stock and other securities and property. The Series E Conversion Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive event or events described in this Section 6(b).
c. Change of Control At any time while the Series E Convertible Preferred Stock is outstanding, if any Change of Control shall be effected, then lawful and adequate provisions shall be made by the Corporation whereby the Holders shall thereafter have the right to receive (in lieu of the shares of the Common Stock of the Corporation immediately theretofore receivable upon the conversion of the Series E Convertible Preferred Stock) such shares of stock, securities or other assets or property as may be issued or payable with respect to or in exchange for a number of outstanding shares of such Common Stock equal to the number of shares of such stock immediately theretofore purchasable and receivable assuming the full conversion of the Series E Convertible Preferred Stock. In the event of the Change of Control, appropriate provision shall be made by the Corporation with respect to the rights and interests of the Holders to the end that the provisions hereof shall thereafter be applicable, in relation to any shares of stock, securities or assets thereafter deliverable upon the conversion thereof.
7. Status of Series E Convertible Preferred Stock Converted or Reacquired. Shares of Series E Convertible Preferred Stock converted into Common Stock or reacquired by the Corporation in any manner, including shares purchased or redeemed, shall (upon compliance with any applicable provisions of the laws of Marshall Islands) have the status of authorized and unissued shares of the class of Preferred Stock undesignated as to series, and may be redesignated and reissued as part of any series of the preferred stock.
[SIGNATURE PAGE FOLLOWS.]
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IN WITNESS WHEREOF, this Certificate of Designation, Preferences and Rights of Series E Convertible Preferred Stock has been executed by a duly authorized officer of the Corporation on this ______ day of September, 2024.
| JX LUXVENTURE LIMITED | |||
| By: | |||
| Name: | Sun Lei | ||
| Title: | Chief Executive Officer | ||
ANNEX A
NOTICE OF CONVERSION
(TO BE EXECUTED BY THE REGISTERED HOLDER IN ORDER TO CONVERT SHARES
OF
SERIES E CONVERTIBLE PREFERRED STOCK)
The undersigned hereby elects to irrevocably exercise the right to convert the number of shares of Series E Convertible Preferred Stock indicated below into shares of common stock, US$0.0001 par value per share (the “Common Stock”), of JX LUXVENTURE LIMITED, a corporation organized and existing under the laws of the Marshall Islands (the “Corporation”), according to the conditions hereof, as of the date written below. If shares of Common Stock are to be issued in the name of a Person other than the undersigned, the undersigned will pay all transfer taxes payable with respect thereto and is delivering herewith such certificates and opinions as may be required by the Corporation. No fee will be charged to the Holders for any conversion, except for any such transfer taxes.
Conversion calculations:
Date to Effect Conversion: ______________________________________________________________
Number of shares of Series E Convertible Preferred Stock owned prior to Conversion: ________________
Number of shares of Series E Convertible Preferred Stock to be Converted (subject to limitations under Section 5(a): _________________________________________________
Number of shares of Common Stock Resulting from this Conversion using 1-for-10 Conversion Rate: _________________________________________________
Number of shares of Series E Convertible Preferred Stock to be owned subsequent to Conversion: ______________________________________________________
| [HOLDER] | |
| Name: |