Nexentis Technologies Inc 8-K, filed Mar 23, 2020
Nexentis Technologies Inc. (NXTS)
About this 8-K
Nexentis Technologies Inc filed this 8-K on March 23, 2020.
Items reported
- Item 2.03: New debt or off-balance-sheet obligation
- Item 3.02: Unregistered sale of equity
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 23, 2020
SAVE FOODS, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation)
| 000-56100 | 26-468460 | |
| (Commission File Number) | (I.R.S. Employer Identification No.) |
Habarzel 7, Tel Aviv, Israel, 6971011
(Address of principal executive offices) (Zip Code)
Tel: +972 72 2116144
(Registrant’s telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| [ ] | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| [ ] | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| [ ] | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| [ ] | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||
| N/A | N/A | N/A |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item 3.02 Unregistered Sales of Securities Convertible or Exercisable into Equity Securities
As of March 23, 2020, Save Foods, Inc. (the “Company”) entered into a series of convertible loan agreements (each a “CLA”) with certain lenders (the “Lenders”) to sell (i) convertible promissory notes with an aggregate principal amount of US$529,000 (the “Notes”), and (ii) warrants to purchase, in the aggregate, 440,834 shares of the Company’s common stock, par value US$0.0001 (the “Common Stock”) at an exercise price of US$1.20 per share. The outstanding loan amount will mature on the earlier of (i) the third anniversary of each CLA or (ii) a deemed liquidation event (as defined therein), and the Lenders may convert all or any portion of the Notes at any time prior to the one-year anniversary of each issuance into shares of Common Stock at a conversion price of US$1.20 per share. The Notes will bear interest at a rate of 5% per annum. The loan amount represented by the Notes will be repaid to the Lenders according to the following schedule: (i) the principal amount represented by the Notes will be repaid in twenty-four (24) equal monthly installments commencing on the twenty-fifth (25) month following the closing of each CLA, and (ii) the interest accrued on the loan amount will be paid in two (2) bi-annual installments, commencing on the first anniversary of the first payment of that principal amount.
Each of such issuance was exempt from registration under the Securities Act of 1933, as amended, or the Securities Act, in reliance on Section 4(a)(2) of the Securities Act and/or Regulation S under the Securities Act.
Item 9.01 Exhibits.
(d) Exhibits.
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 hereunto duly authorized.
| SAVE FOODS, INC. | ||
| By: | /s/ Dan Sztybel | |
| Name: | Dan Sztybel | |
| Title: | Chief Executive Officer | |
| Date: March 23, 2020 | ||
Exhibit 10.1
THE SECURITIES DESCRIBED HEREIN, INCLUDING THE (1) SECUIRITES ISSUABLE UPON CONVERSION OF THE PROMISSORY NOTES, OR (2) SECURITIES UNDERLYING THE WARRANTS, HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY U.S. STATE SECURITIES LAWS, AND MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED, HYPOTHECATED, EXCHANGED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE SECURITIES ACT AND UNDER APPLICABLE STATE SECURITIES LAWS OR THE COMPANY SHALL HAVE RECEIVED AN OPINION OF COUNSEL FOR THE HOLDER, REASONABLY SATISFACTORY TO THE COMPANY AND ITS COUNSEL, THAT REGISTRATION OF SUCH SECURITIES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.
CONVERTIBLE LOAN AGREEMENT
THIS CONVERTIBLE LOAN AGREEMENT (this “Agreement”), dated as of this ___ day of _______ (the “Effective Date”), is entered into by and between Save Foods, Inc., a Delaware corporation (the “Company”) and the lenders listed under Schedule A hereto (each a “Lender” and collectively the “Lenders”).
RECITALS
WHEREAS, contemporaneous with the execution of the Agreement, the Company has contemplated the execution of a certain securities purchase agreement (the “Purchase Agreement”), by and between certain investors (the “Investors”) and the Company, pursuant to which such investors have agreed to purchase units consist of both (i) shares of the Company’s common stock, par value US$0.0001 (the “Common Stock”), and (ii) warrants to purchase shares of Common Stock on substantially the same terms as those issued pursuant to the Agreement.
WHEREAS, the Lender have agreed to fund bridge loan in an aggregate amount of US$ ________ (the “Loan Amount”), in consideration for the issuance to the Lender of each of the following, the amount of which shall be equal to each Lender’s respective contribution, as set forth in Schedule A: (i) promissory notes, in the form attached hereto as Exhibit A (each a “Note” and collectively, the “Notes”), and (ii) warrants, in the form attached hereto as Exhibit B (each a “Warrant” and collectively, the “Warrants”) to purchase shares of Common Stock, of which shall be on the same terms as issued to those investors pursuant to the Purchase Agreement, and each of the foregoing on the terms and conditions set forth in this Agreement (the “Financing”).
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:
| 1. | The Loan. |
| 1.1. | The Loan. On the Effective Date, each Lender shall, severally and not jointly with the other Lenders, fund the relevant portion of the Loan Amount in the amount specified opposite such Lender’s name under Schedule A hereto by wire transfer in immediately available funds to one of the accounts specified by the Company on Schedule B hereto. As consideration for the Loan Amount, each Lender shall be entitled to receive the following: |
| 1.1.1. | Notes: Notes payable in US$ (the aggregate amount actually disbursed to the Company by the Lenders pursuant to this Agreement, the “Principal Amount”) with a face value equal to the portion of the Loan Amount specified opposite such Lender’s name under Schedule A hereto; and |
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| 1.1.2. | Warrants: Warrants to purchase shares of Common Stock in the amount equal to such Lender’s relevant portion of the Loan Amount to purchase shares of Common Stock divided by $1.2, each with a strike price of US$1.2. |
| 1.2. | Interest. Each Note shall bear interest from the date of its issue at the rate of five percent (5%) per annum, compounded annually (the Principal Amount together with any accrued and unpaid interest, the “Loan Amount”). | |
| 1.3. | Repayment. Unless otherwise converted as provided herein, repayment of the Loan Amount shall be made as follows: (i) the Principal Amount shall be repaid in twenty four (24) equal monthly installments, starting on the twenty fifth (25th) month following of the Effective Date, and (ii) the interest accrued on the Loan Amount shall be paid in two (2) bi-annual installments, commencing on the first anniversary of the first payment of the Principle Amount. | |
| 1.4. | Repayment at Maturity. If not converted or repaid earlier pursuant to the provisions of the Agreement, the outstanding Loan Amount, plus any accured but unpaid interest, shall be repaid by the Company to the Lenders in cash on the earliest to occur of (i) the third anniversary of the Effective Date or (ii) the consummation of a Deemed Liquidation (as defined in the COI (as defined below) (either of (i) or (ii) the “Maturity Date”). |
| 2. | Conversion of the Loan Amount. |
| 2.1. | Option to Convert. At any time following the 6th monthly anniversary of the issuance of such Note, each Lender may individually and at its sole and absolute discretion convert all or a portion of their respective outstanding Loan Amount as reflected on the books and records of the Company (the “Conversion Amount”) into Company’s Common Stock at the Conversion Price (as defined below), with each date on which such conversion is effected being a “Conversion Date”. | |
| “Conversion Price” US$1.20 per share, subject to any recapitalization, stock split, stock dividend or reverse stock split. |
| 2.2. | Mechanics of Conversion. |
| 2.2.1. | Notice of Conversion. In the event a Lender exercises its conversion right pursuant to Section 2.1 above, it shall notify the Company thereof in writing, providing resonable details, no later than 14 days prior to the designated Conversion Date. | |
| 2.2.2. | No Fractional Shares. Conversion of any portion of the Loan Amount into Common Stock shall be calculated based on the aggregate outstanding Loan Amount to be converted. No fractional securities shall be issued to any Lender, and the number of shares of Common Stock to be issued shall be rounded to the nearest whole number. | |
| 2.2.3. | Delivery of Notes. Each Lender shall, immedialy prior to any conversion of the Loan Amount, deliver the original of its Note for cancellation (or a notice to the effect that the original Note has been lost, stolen or destroyed and an agreement acceptable to the Company whereby the relevant Lender agrees to indemnify the Company from any loss incurred by it in connection with the Note); provided, however, that upon any conversion of the Loan Amunt set forth in this Section 2.1, the relevant Notes shall be deemed converted and of no further force and effect, whether or not they are delivered for cancellation as set forth in this Section 2.2.3. | |
| 2.2.4. | Issuance. The Company shall, immediately and not later than seven (7) business days following any conversion of the Loan Amount, issue and deliver to the relevant Lenders a stock certificate representing the number of shares of Common Stock to which such Lenders shall be entitled upon conversion of the relevant portion of the Loan Amount. |
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| 2.2.5. | Due Issuance. Upon any conversion of the Loan Amount as set out above, the shares of Common Stock to be issued pursuant to such conversion shall be duly authorized, validly issued, fully-paid, non-assessable and free and clear of any pre-emptive rights, pledges, liens, claims, encumbrances or third party rights of any kind, other than as set forth in the Company’s certificate of incorporation as shall then be in effect (the “COI”), and any other agreement to which the Lenders are party governing the subject matter, as shall be in effect from time to time. |
| 3. | Repayment of the Loan upon an Event of Default. |
| 3.1. | Upon the occurrence and during the continuance of any Event of Default, the Lenders whose portion of the Loan Amount exceeds a majority of the aggregate outstanding Loan Amount (the “Majority Lenders”) may, with or without notice to the Company, declare the entire unpaid principal balance of the Notes and any accrued and unpaid interest and reimbursable expenses thereon immediately due and payable, whereupon the Notes and all amounts owing thereunder shall forthwith become due and payable without presentment, demand, protest, or further notice of any kind, all of which are expressly waived by the Company, and each Lender will have all rights and remedies available to it hereunder or under applicable law; provided, however, that upon the occurrence of any Event of Default under subsections (a) and (b) of Section 3.2, all Notes shall, without the taking of any action by any Lender, immediately become due and payable. All such rights and remedies are cumulative and none is exclusive. In the event that the Lenders or any subsequent permitted holders of any Notes shall, in connection with the occurrence of an Event of Default, exercise or endeavor to exercise any of its remedies under a Note, the Company shall pay on demand all reasonable costs and expenses incurred in connection therewith including, without limitation, reasonable attorneys’ fees, and such Lenders may seek judgment for all such amounts in addition to all other sums due hereunder. The Company hereby agrees not to take any action to obstruct, impede, or infringe upon the Lenders’ enforcement of their rights, benefits, and remedies under this Agreement or the Notes and to cooperate fully with any and all actions taken by Lenders pursuant to this Agreement or the Notes or in the exercise of any rights granted to Lenders hereunder and thereunder or under applicable law. | |
| 3.2. | For purposes of this Agreement, an “Event of Default” shall mean any of the following: (a) the Company shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian of itself or of all or a substantial part of its property, (ii) admit in writing its inability to pay its debts generally as they mature, (iii) make a general assignment for the benefit of its or any of its creditors, (iv) be dissolved or liquidated, or (v) commence a voluntary case or other proceeding seeking liquidation, reorganization or other relief with respect to itself or its debts under any bankruptcy, insolvency or other similar law now or hereafter in effect or consent to any such relief or to the appointment of or taking possession of its property by any official in an involuntary case or other proceeding commenced against it; (b) proceedings for the appointment of a receiver, trustee, liquidator or custodian of the Company or of all or a substantial part of the property thereof, or an involuntary case or other proceedings seeking liquidation, reorganization or other relief with respect to the Company or the debts thereof under any bankruptcy, insolvency or other similar law now or hereafter in effect shall be commenced and an order for relief entered or such proceeding shall not be dismissed or discharged within 60 days of commencement, (c) any representation or warranty of the Company made herein or in any agreement executed in connection herewith Note shall have been false or misleading when made in any material respect, which breach, if curable, is not cured within 30 days after the earlier of written notice from the Majority Lenders or actual discovery by the Company, and (d) the Company shall fail to observe and perform any material covenant, condition, or agreement under this Agreement any Note or other agreement or instument executed in connection herewith, which failure, if curable, is not cured within 30 days after the earlier of written notice from the Majority Lenders or actual discovery by the Company, and (e) any other event, occurrence or circumstance which is deemed to be a default under any other agreement or instrument with respect to any other debt owed or incurred by the Company. |
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| 3.3. | If any event of repayment under this Section 3 occurs prior to the conversion or repayment of the Loan Amount in accordance with the terms herein, the Majority Lenders may (a) declare an amount equal to the Loan Amount plus interest at a rate of 8% per annum from the date of declaration due and payable and demand immediate payment thereof; and (b) pursue any legal or equitable remedies that are available. |
| 4. | Representations and Warranties of the Company. |
The Company hereby represents and warrants to the Lenders that the following shall be true as of the date hereof:
| 4.1. | Organization. The Company is a corporation duly formed, validly existing under the laws of the State of Delaware, with full corporate power and authority to enter into and perform its obligations under this Agreement. | |
| 4.2. | Authorization. All corporate action on the part of the Company (including its stockholders) necessary for the authorization, execution, delivery, and performance of all of the Company’s obligations under this Agreement has been taken prior to the date hereof. This Agreement, when executed and delivered by or on behalf of the Company, shall constitute the valid and legally binding obligations of the Company, legally enforceable against the Company in accordance with their respective terms. The shares of Common Stock, when issued and delivered (if any), will be validly issued, fully paid and other than as set forth in (i) the COI, as in effect at the pertinent time, and (ii) any other agreement governing the subject matter, as shall be in effect from time to time, free and clear of any pre-emptive rights, pledges, liens, claims, encumbrances or third party rights of any kind. No consent, approval, order, license, permit, action by, or authorization of or designation, declaration, or filing with any governmental authority on the part of the Company is, required that has not been obtained by the Company in connection with the valid execution, delivery and performance of this Agreement, including the issuance of the shares of Common Stock. | |
| 4.3. | No Breach. The execution and delivery of this Agreement or compliance by the Company with the terms and provisions hereof, will neither conflict with, or result in a breach or violation of, any of the terms, conditions and provisions of the Company’s COI, or other governing instruments of the Company, nor, to the Company’s knowledge will such execution and delivery of this Agreement or compliance by the Company with the terms and provisions hereof, conflict with or result in a breach or violation of, any of the terms, conditions and provisions of (i) any judgment, order, injunction, decree, or ruling of any court or governmental authority, domestic or foreign, (ii) any agreement, contract, lease, license or commitment to which the Company is a party or to which it is subject, or (iii) applicable law. Such execution, delivery and compliance does not and will not, (a) to the Company’s knowledge give to others any rights, including rights of termination, cancellation or acceleration, in or with respect to any agreement, contract or commitment referred to in this paragraph, or to any of the properties of the Company or (b) otherwise require the giving of any notice to, making any filing with, or obtaining any authorization, consent, qualification, order or approval from any governmental authority or agency, or any third party, in order to consummate the transactions contemplated by this Agreement. | |
| 4.4. | Offering. Subject in part to the truth and accuracy of the representations set forth in this Section 4 of this Agreement, the receipt of the Principal Amount from the Lenders and the sale and issuance of the shares of Common Stock, as contemplated by this Agreement, are exempt from the registration requirements of the U.S. Securities Act of 1933, as amended (the “Securities Act”), , and neither the Company nor any authorized agent acting on its behalf will take any action hereafter that would cause the loss of such exemption. |
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| 4.5. | Capitalization. The authorized and issued share capital of the Company on a fully diluted as converted basis is as set forth on Schedule 4.5 hereto (the “Cap Table”), which, for the avoidance of any doubt, shall reflect, as of the date hereof, (i) the number of Notes currently issued pursuant to the Agreement, (ii) the number of shares of Common Stock issued to Investors pursuant to the Purchase Agreement, and (iii) the number of Warrants issued to both the Investors pursuant to the Purchase Agreement and Lenders pursuant to the Agreement. Except as set forth in the Cap Table, there are no outstanding or authorized subscriptions, options, warrants, calls, rights, commitments, or any other agreements of any character directly or indirectly obligating the Company to issue (a) any additional capital stock; or (b) any securities convertible into, or exchangeable for, or evidencing the right to subscribe for, any capital stock. The Company has obtained valid waivers of any and all rights (preemptive rights, participation rights or other) that any other parties, including shareholders of the Company, have or may have, as of the date hereof, as a result of the consummation of the transactions under this Agreement. | |
| 4.6. | No Third Party Rights. The Company’s property and assets are not subject to any pledge, lien, mortgage, encumbrances or other third party rights. | |
| 4.7. | Financial Statements. The Company’s recent financial statements, including the Company’s audited consolidated financial statements as of and for the year ended December 31, 2018 and subsequent interim periods thereafter, are available to the public at the website maintained by the U.S. Securities and Exchange Commission (the “Commission”) at www.sec.gov (the “Financial Statements”). The Financial Statements (a) fairly present in all material respects the results of operations, cash flow and financial position of the combined business of the Company and its subsidiaries for the periods covered thereby in accordance with US GAAP and (b) have been prepared in accordance with US GAAP applied on a consistent basis as of the dates and for the periods set forth in the balance sheets included therein and the results of operations for the periods covered thereby. All proper and necessary accounting books and records have been maintained by the Company, are in its possession and contain accurate information in accordance with US GAAP consistently applied relating to all transactions to which the Company has been a party. The Company maintains a standard system of accounting established and administered in accordance with US GAAP, and will continue to maintain such a system. Except as set forth in the Financial Statements, the Company has no known or unknown liabilities, contingent or otherwise, other than (x) liabilities incurred in the ordinary course of business subsequent to the period ended on December 31, 2018, and (y) obligations under contracts and commitments incurred in the ordinary course of business and not required under US GAAP to be reflected in the Financial Statements. | |
| 4.8. | Intellectual Property. |
| 4.8.1. | In this section: “Company Intellectual Property” means any of the following in any jurisdiction throughout the world: (i) all patents, patent applications and inventions of any type; (ii) trademarks, trademark applications, service marks, logos, trade names, domain names, corporate names and other product or service designations, together with all the good will associated with any of the foregoing and all registrations and applications for registration in connection therewith; (iii) copyrightable works, tradenames, copyrights, and registrations and applications for registration in connection thereof; and (iv) trade secrets (as such are determined under applicable law), licenses, domain names, mask works, know-how (including inventions (whether patentable or non-patentable, and whether reduced to practice or not)), research and development information, plans, proposals, designs, methods, techniques, processes, computer software programs or applications, technical data, tangible or intangible embodiments of any of the foregoing, or licenses in, to or under any of the foregoing (collectively, “Intellectual Property”), and in any and all such cases as are necessary to or used by the Company in the conduct of the Company’s business as now conducted and as presently proposed to be conducted |
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“Encumbrance” means restrictions on or conditions to transfer or assignment, or other liens, mortgages, judgments, pledges, charges, easements, security interests, encumbrances or restrictions of any kind.
“Person” means any individual, corporation, partnership, trust, limited liability company, association or other entity.
| 4.8.2. | To the Company’s knowledge, no product or service marketed or sold (or currently proposed to be marketed or sold) by the Company violates or will violate any license, or infringes, misappropriates, breaches or otherwise violates any Intellectual Property rights of any Person. Other than with respect to commercially available software products under standard end-user object code license agreements, there are no outstanding options, licenses, agreements, claims, Encumbrances or shared ownership interests of any kind relating to the Company Intellectual Property, nor is the Company bound by or a party to any options, licenses or agreements of any kind with respect to Intellectual Property of any other Person. The Company has not received any communications alleging that the Company has violated or, by conducting its business, would violate any of the patents, trademarks, service marks, tradenames, copyrights, trade secrets, mask works or other proprietary rights or processes of any other Person. To the Company’s knowledge, no proceedings, claims, or actions have been instituted or are pending against the Company or are threatened, that challenge the right of the Company with respect to the use or ownership of the Company Intellectual Property. | |
| 4.8.3. | Each agreement pursuant to which the Company is granted a license to use of the Company Intellectual Property is in full force and effect, and is a legal, valid and binding license to the Company of its respective Company Intellectual Property, and there is no default or breach by the Company, or, to the Company’s knowledge, by any other party, in the timely performance of any material obligations required to be performed thereunder. | |
| 4.8.4. | All personnel (including employees, agents, consultants and contractors), who have contributed to or participated in the conception and/or development of the Company Intellectual Property on behalf of the Company, have executed nondisclosure agreements with the Company and either have been a party to a “work-for-hire” and/or other arrangement or agreements with the Company in accordance with, and as applicable under, applicable law that has accorded the Company full and exclusive ownership of all rights whatsoever in all tangible and intangible property and Company Intellectual Property rights thereby arising or relating thereto. Each employee and consultant has assigned to the Company all Intellectual Property rights he or she owns that are related to the Company’s business as now conducted or as presently proposed to be conducted. | |
| 4.8.5. | To the Company’s knowledge, (i) the computer programs and data owned, licensed to or otherwise used by the Company are, have been, and shall continue to be, validly owned, licensed or otherwise used by the Company, and (ii) the use by the Company of such computer programs or data does not violate, has not violated and is not expected to violate any rights of any Person. | |
| 4.8.6. | The Company is and has been in compliance in all material respects with all applicable laws relating to the collection, storing, transfer and retrieval of information relating to any person. The Company has not had any data breach, and all databases owned, controlled, held or used by the Company and required to be registered have been properly registered, and the data therein has been used by the Company solely as permitted pursuant to such registration. |
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| 4.8.7. | The Company has taken security measures to protect the secrecy, confidentiality and value of all the Company Intellectual Property, which measures are reasonable and customary in the industry in which the Company operates. |
| 4.9. | Litigation. There is no claim, action, suit, proceeding, arbitration, complaint, charge or any investigation pending or, to the Company’s knowledge, currently threatened (i) against the Company or any officer or director of the Company; (ii) that questions the validity of this Agreement or the right of the Company to enter hereto, or to consummate the transactions contemplated by this Agreement or (iii) that would reasonably be expected to have, either individually or in the aggregate, a Material Adverse Effect. Neither the Company nor, to the Company’s knowledge, any of its officers, directors or key employees is a party or is named as subject to the provisions of any order, writ, injunction, judgment or decree of any court or government agency or instrumentality (in the case of officers, directors or key employees, such as would directly or indirectly affect the Company). There is no action, suit, proceeding, arbitration, complaint, charge or any investigation by the Company pending or which the Company intends to initiate. The foregoing includes, without limitation, actions, suits, proceedings or investigations pending or threatened in writing (or any basis therefor known to the Company) involving the prior employment of any of the Company’s employees, their services provided in connection with the Company’s business, or any information or techniques allegedly proprietary to any of their former employers, or their obligations under any agreements with prior employers. | |
| “Material Adverse Effect” means a materially adverse effect on the business, assets (including intangible assets), liabilities, financial condition, property, or results of operations of the Company. | ||
| 4.10. | Compliance with Other Instruments. The Company is not in violation or default (i) of any provisions of its certificate of incorporation or bylaws, as the same may be amended from time to time (ii) of any instrument, injunction, judgment, order, writ or decree, (iii) under any note, indenture or mortgage, or (iv) under any lease, agreement, con tract or purchase order to which it is a party or by which it is bound or (v) of any provision of federal or state statute, rule or regulation applicable to the Company, the violation of which would have a Material Adverse Effect. | |
| 4.11. | Tax Return and Payments. The Financial Statements make full provisions for all taxation for which the Company was, or may hereafter become, liable or accountable in respect of or by reference to any income, profit, receipt, gain, transaction or distribution which was earned, accrued, received, realized, entered into, paid or made on or before the date hereof. There are no material federal, state, county, local or foreign Taxes due and payable by the Company which have not been timely paid. There are no accrued and unpaid federal, state, country, local or foreign Taxes of the Company which are due, whether or not assessed or disputed. There have been no examinations or audits of any tax returns or reports by any applicable federal, state, local or foreign governmental agency. The Company has accurately prepared and duly and timely filed all federal, state, county, local and foreign tax returns and reports required to have been filed by it and there are in effect no waivers of applicable statutes of limitations with respect to taxes for any year. The Company has withheld and paid to the appropriate governmental entity, or is holding for payment not yet due to such governmental entity, all amounts required to be withheld from employees of the Company, including all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third party, and is not liable for any arrears of wages, Taxes, penalties, or other sums for failure to comply with any of the foregoing. |
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| 4.12. | Corrupt Practices. Neither the Company nor any of its directors, officers or, to its knowledge, employees have made, directly or indirectly, any payment, promise to pay or gift, or promise to authorize such a promise or gift, of any money or anything of value, directly or indirectly, to (i) any “foreign official” (as defined in the U.S. Foreign Corrupt Practices Act) for the purpose of influencing any official act or decision of such official or inducing him/her to use his/her influence to affect any act or decision of a governmental authority, or (ii) any foreign political party, official thereof or candidate for foreign political office for the purpose of influencing any official act or decision of such party, official or candidate, or inducing such party, official or candidate to use his/her/its influence to affect any act or decision of a foreign governmental authority; in the case of both (i) and (ii), in order to assist the Company or any of its affiliates to obtain or retain business for, or direct business to, the Company or any of its affiliates. Neither the Company nor any of its directors, officers or employees has made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment of funds or received or retained any funds in violation of any law, rule or regulation. |
| 5. | Representations and Warranties of the Lenders. |
Each Lender, severally and not jointly, hereby represents and warrants to the Company as follows:
| 5.1. | Authorization. That it has all requisite power and authority to execute and deliver this Agreement and other agreements contemplated hereby or which are ancillary hereto and to consummate the transactions contemplated hereby and thereby. This Agreement constitutes a legal, valid and binding obligation enforceable against it in accordance with its terms. | |
| 5.2. | Accredited Investor. That it is an Accredited Investor (as defined under the Securities Act) and has knowledge and experience in financial and business matters and is capable of assessing the risks and merits involved in its investment in the Company pursuant to the terms of this Agreement. Such Lender has had the opportunity to conduct an independent examination of the Company’s business, financial or legal affairs and condition and is entering this Agreement after conducting the same, or in its own discretion and at its own risk, after electing not to conduct an independent examination. The foregoing shall not limit any of the Company’s representations, covenants or undertakings under this Agreement, and such Lender’s rights to rely thereon. | |
| 5.3. | Regulation S. Such Purchaser makes the following representations related to Regulation S under the Securities Act, if appliacble: (i) it is not a “U.S. Person” as that term is defined in Rule 902 of Regulation S under the Securities Act; and received all communications relating to the issuance of the Securities, and executed all documents relating thereto, outside the United States; (ii) is located outside of the United States, as such terms are defined in Rule 902 of Regulation S under the Securities Act, and the Purchaser is acquiring the shares of Common Stock in an offshore transaction executed in reliance upon the exemption from registration provided by Regulation S under the Securities Act, and (iii) it agrees to resell the Securities only in accordance with the provisions of Regulation S, or pursuant to another available exemption from the registration requirements of the Securities Act, and further agrees not to engage in hedging transactions with regard to such Securities unless in compliance with the Securities Act. | |
| 5.4. | That it has entered into this Agreement solely for its own account. |
| 6. | Senior Debt; Additional Agreements. |
| 6.1. | Senior Debt. The Loan Amount shall be senior in right of repayment to all existing and future indebtedness of the Company, excluding the Company’s outstanding debt to Bank Hapoalim in the amount of $US 15,000, as of the date hereof. |
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| 6.2. | Restrictions on Shares. The Lenders understand that the shares of Common Stock shall be “restricted securities” within the meaning of Rule 144 under the Securities Act and may not be sold, pledged, assigned or transferred and must be held indefinitely in the absence of (i) an effective registration statement under the Securities Act and applicable state securities laws with respect thereto, or (ii) an opinion of counsel satisfactory to the Company that such registration is not required. The certificates for each of the shares of Common Stock shall bear the following or similar legend (in addition to such other restrictive legends as are required or deemed advisable under any applicable law or any other agreement to which the Company is a party): |
“THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR UNDER THE SECURITIES LAWS OF ANY STATES. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND THE APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. UNLESS SOLD PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.”
Each Lender consents to the Company making a notation on its records or giving instructions to any transfer agent of the Securities in order to implement the restrictions on transfer set forth and described herein.
| 6.3. | Removal of Legends. Notwithstanding the foregoing, the legend set forth above shall be removed and the Company shall issue a certificate without such legend, if (i) such shares of Common Stock are registered for resale under the Securities Act, (ii) such shares of Common Stock are sold or transferred pursuant to Rule 144 (assuming the transferor is not an Affiliate of the Company), (iii) such shares of Common Stock are eligible for sale under Rule 144 with no volume limitations, or (iv) if such legend is not required under applicable requirements of the Securities Act (including controlling judicial interpretations and pronouncements issued by the the Commission). | |
| 6.4. | Registration Statement. Following the Effective Date, the Company shall use commercially reasonably efforts to prepare and file with the Commission one registration statement on Form S-1 (or such other form of registration is then available to effect a registration for resale of shares) (the “Registration Statement”), covering the resale of the shares of Common Stock underline the Warrants, and which shall use commercially reasonably efforts to have this Registration Statement effective within a commercially reasonable period of time thereafter. | |
| 6.5. | Prepayment Option Upon Future Financing. In the event the Company plans to consummate a financing (whether by issuing equity or debt), other than pursuant to the Purchase Agreement, the Company shall provide prior written notice of ten (10) days to the Lenders of the anticipated occurrence of any financing, upon which each Lender may elect, at its option, to demand the prepayment of the of the Loan Amount, provided that the aggregate prepayment amount shall not exceed 10% of the original issue price of the financing round (allocated pro rate among the Lenders in the event of excess demand). |
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| 6.6. | Additional Agreements. For so long as any Loan Amount remains outstanding, or until the conversion thereof in whole, the Company shall not, without the prior written consent of the Majority Lenders, (i) create, incur, assume, or suffer to exist (x) any Indebtedness beyond existing Indebtedness, except for Indebtedness under this Agreement, or debt incurred in the ordinary course of business or (y) any mortgage, pledge or other security interest over all or substantially all of the assets of the Company or over any individual material asset of the Company or (ii) declare or pay a dividend, either in cash or in kind, on any of the Company’s shares or otherwise redeem or repurchase any of its stock or make other payments or distributions to the Company’s shareholders. |
“Indebtedness” means, without duplication, all indebtedness, determined in accordance with US GAAP other than trade payables and receivables in the ordinary course of business, including, without duplication, (i) borrowed money (other than intercompany indebtedness), (ii) bonds, debentures, notes or similar instruments, (iii) obligations evidenced by letters of credit, bankers’ acceptances and similar facilities to the extent drawn upon by the counterparty thereto, (iv) all indebtedness secured by a purchase money mortgage or other liens to secure all or part of the purchase price of property subject to such mortgage or lien, and (v) any guarantee (whether or not secured by liens) of any of the foregoing.
| 7. | Use of Proceeds. The Loan Amount shall be used by the Company for general corporate purposes in accordance with the Company’s budget, including the Company’s legal and other expenses relating to the transactions contemplated by this Agreement. |
| 8. | Tax Consequences. Any taxes, levies, charges and other duties or other amounts, that are levied or due in connection with the repayment or conversion of the Loan Amount under this Agreement, shall be borne by the Lenders. In the event that pursuant to any law or regulation, tax is required to be withheld at source from any repayment or conversion, the Company shall withhold said tax at the rate set forth in the certification issued by applicable tax authority at the rate determined by said law or regulation, unless such Lender has presented the Company with a valid tax withholding exemption certificate issued by the applicable tax authority. In the event that no such withholding tax certificate was delivered by a Lender to the Company, such Lender shall pay the Company the withholding amount, in cash, prior to and as a condition precedent to the conversion of the Loan Amount and under this Agreement. Each Lender shall be exclusively responsible for complying with any reporting obligations, as may be applicable as a result of this Agreement. |
| 9. | Miscellaneous. |
| 9.1. | Further Assurances. Each of the parties hereto shall perform such further acts and execute such further documents as may reasonably be necessary to carry out and give full effect to the provisions of this Agreement and the intentions of the parties as reflected hereby. | |
| 9.2. | Governing Law. This Agreement shall be governed by and construed according to the laws of the State of Delaware, without regard to principles of conflict of laws. The parties hereto irrevocably submit to the exclusive jurisdiction of any court of competent jurisdiction located in Delaware in respect of any dispute arising out of or in connection with this Agreement or the transactions contemplated hereby. Except as otherwise expressly limited herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, assigns, heirs, executors, and administrators of the parties hereto. | |
| 9.3. | Assignment. None of the rights, privileges, or obligations set forth in, arising under, or created by this Agreement may be assigned or transferred by either Party, provided that a Lender may transfer its rights hereunder to any permitted transferee of Notes and/or Warrants. |
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| 9.4. | Entire Agreement; Amendment and Waiver. This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof and supersedes any prior agreements between the parties with respect to such subject matter. Any term of this Agreement may be amended and the observance of any term hereof may be waived (either prospectively or retroactively and either generally or in a particular instance) only with the written consent of the Company and the Majority Lenders, provided that any change which creates increased liabilities on a Lender shall require such Lender’s consent and provided further that any Lender may waive, with respect to itself, the observance of any term hereof (either prospectively or retroactively and either generally or in a particular instance). | |
| 9.5. | Notices. All notices and other communications required or permitted hereunder to be given to a party to this Agreement shall be in writing and shall be faxed, e-mailed or mailed by registered or certified mail, postage prepaid, or otherwise delivered by hand or by messenger, to the addresses as set forth above. Any notice sent in accordance with this Section shall be effective (i) if mailed, seven (7) business days after mailing, (ii) if sent by messenger, upon delivery, and (iii) if sent via facsimile or e-mail, upon transmission and electronic confirmation of receipt or (if transmitted and received on a non-business day) on the first business day following transmission and electronic confirmation of receipt. | |
| 9.6. | Delays or Omissions. No delay or omission to exercise any right, power, or remedy accruing to any party upon any breach or default under this Agreement, shall be deemed a waiver of any other breach or default theretofore or thereafter occurring. | |
| 9.7. | Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be unenforceable under applicable law, then such provision shall be excluded from this Agreement and the remainder of this Agreement shall be interpreted as if such provision were so excluded and shall be enforceable in accordance with its terms; provided, however, that in such event this Agreement shall be interpreted so as to give effect, to the greatest extent consistent with and permitted by applicable law, to the meaning and intention of the excluded provision as determined by such court of competent jurisdiction. | |
| 9.8. | Counterparts. This Agreement may be executed in one or more counterparts. | |
| 9.9. | Waiver of Conflict; Acknowledgment. Each of the Company and the Lenders acknowledges and agrees that it was advised, prior to the date hereof, that the law firm Meitar Liquornik Geva Leshem Tal is representing the Company and certain Lenders in connection with this Agreement and the transactions contemplated hereby, that the Company and such Lenders have previously provided their consent to the foregoing in accordance with the applicable rules and that no other Lender shall have any right, claim or demand against any party, such law firm or any of its employees, partners or representatives with respect to the foregoing. |
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IN WITNESS WHEREOF, the parties have signed this Convertible Loan Agreement as of the date first written above.
| THE COMPANY: | ||
| Save Foods, Inc. | ||
| By: | ||
| Name: | ||
| Title: | ||
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IN WITNESS WHEREOF, the parties have signed this Convertible Loan Agreement as of the date first written above.
| THE LENDERS: | ||
| By: | ||
| Name: | ||
| Amount: | ||
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Schedule A
| Name | Itinial Loan Amount | |
| US$ | ||
| Total | US$ |
Exhibit 10.2
THIS NOTE, THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF AND THE SECURITIES ISSUABLE UPON CONVERSION THEREOF HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER foreign OR STATE SECURITIES ACTS, nor has a prospectus with respect to such Note and securities been filed with ANY SecuritiES Authority. THEY MAY NOT BE SOLD, OFFERED FOR SALE, PLEDGED OR HYPOTHECATED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION STATEMENT AS TO THE SECURITIES UNDER SAID ACT OR THE FILING OF SUCH A PROSPECTUS OR AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY THAT SUCH REGISTRATION IS NOT REQUIRED.
SAVE FOODS, INC.
CONVERTIBLE PROMISSORY NOTE
| Principal Amount: $__ | Issue Date: _______ |
WHEREAS, SAVE FOODS, INC., a Delaware corporation (the “Company”), is raising bridge financing in the form of, inter alia, loans convertible into equity of the Company, in an aggregate amount of up to US$___ (the “Loan”), in accordance with a Convertible Loan Agreement, dated as of _____ (the “Effective Date”), among the Company and certain lenders thereto (the “Loan Agreement”), and ______(the “Lender”) has funded a portion of the Loan in an amount equal to the Principal Amount (as set forth above).
NOW, THEREFORE, FOR VALUE RECEIVED, the Company promises to pay to the Lender in lawful money of the United States of America, the sum of the Principal Amount as set forth above (the “Principal Amount”), plus any accrued but unpaid interest, on the earlier of (i) the third anniversary of the Effective Date or (ii) the consummation of a Deemed Liquidation (as defined in the Loan Agreement), unless converted in accordance with the terms of this Convertible Promissory Note (this “Note”) and the Loan Agreement.
The following is a statement of the rights of Lender and the conditions to which this Note is subject, and to which Lender, by the acceptance of this Note, agrees:
1. Interest. The Principal Amount shall bear interest from the date of its issuance at the rate of five percent (5%) per annum, compounded annually (the Principal Amount together with any accrued and unpaid interest, the “Holder Loan Amount”).
2. Repayment. Unless otherwise converted as provided in the Loan Agreement and the terms of this Note, repayment of the Holder Loan Amount shall be made as follows: (i) the Principal Amount shall be repaid in twenty four (24) equal monthly installments, starting on the twenty fifth (25th) month following of the Effective Date, and (ii) the interest accrued on the Holdert Loan Amount shall be paid in two (2) bi-annual installments, commencing on the first anniversary of the first payment of the Principle Amount.
3. Conversion. The Holder Loan Amount shall be convertible into shares of the Company’s capital stock in accordance with the terms of the Loan Agreement.
4. Amendments. Any provision of this Note may be amended, waived or modified in accordance with the terms of the Loan Agreement.
5. Waivers. The Company hereby waives notice of default, presentment or demand for payment, protest or notice of nonpayment or dishonor and all other notices or demands relative to this instrument.
6. Governing Law. This Note and all actions arising out of or in connection with this Note shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law provisions of the State of Delaware, or of any other state. Any dispute hereunder will be adjudicated solely in the United States federal and state courts of the State of Delaware.
7. Assignment. None of the rights, privileges, or obligations set forth in, arising under, or created by this Note may be assigned or transferred by the Company or the Lender without the prior written consent of the other party, other than an assignment or transfer by the Lender to one or more of its affiliates which shall not require any prior consent.
8. Further Actions. The parties agree to execute such further instruments and to take such further action as may reasonably be necessary to carry out the intent of this Note.
(Signature Page Follows)
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The Company has caused this Convertible Note to be issued as of the date first written above.
| SAVE FOODS, INC. | ||
| a Delaware corporation | ||
| By: | ||
| Name: | ||
| Title: | ||
[Signature Page to the Convertible Note dated _______]
Exhibit 10.3
NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
SAVE FOODS, INC.
(the
“Corporation”)
Number of Shares of Common Stock of the Corporation, par value $0.0001 each (the “Common Stock”): ________.
Issue Date: _____.
Initial Exercise Date: ______.
This warrant to purchase shares of Common Stock (the “Warrant”) certifies that, for value received, _____ (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 _____, 2020 (the “Initial Exercise Date”), and on or prior to the close of business 36 (thirty-six) months following the Issue Date (the “Termination Date”), provided that, if such date is not a Trading Day, the Termination Date should be the immediate following Trading Day but not thereafter, to subscribe for and purchase from the Corporation, up to _____ shares of Common Stock (the “Warrant Shares”). The purchase price of one Warrant Share 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 either that certain Convertible Loan Agreement (the “Loan Agreement”), dated _____, 2020, among the Corporation and the Holder, or that certain Securities Purchase Agreement (the “Purchase Agreement”), dated _____, 2020, among the Corporation and the Holder, as applicable.
Section 2. Exercise.
a) Exercise of Warrant. Exercise of the 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 Corporation (or such other office or agency that the Corporation may designate by notice in writing to the registered Holder at the address of the Holder appearing on the books of the Corporation) of a duly executed facsimile copy or PDF copy submitted by electronic 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 Warrant Shares specified in the applicable Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank. 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 Corporation 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 Corporation for cancellation within three (3) Trading Days of the date on which the final Notice of Exercise is delivered to the Corporation. 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 Corporation shall maintain records showing the number of Warrant Shares purchased and the date of such purchases. The Corporation shall deliver any objection to any Notice of Exercise within one (1) Business Day of receipt of such notice. The Holder, by acceptance of this Warrant, acknowledges and agrees 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.
In no event will the Corporation be required to net cash settle a Warrant exercise.
b) Exercise Price. The exercise price per Share under this Warrant shall be $1.20, subject to adjustment hereunder (the “Exercise Price”).
c) Cashless Exercise. If at any time after the Initial Exercise Date, there is no effective registration statement registering, or no current prospectus available for, the issuance of the Warrant Shares by the Holder, then 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) = the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise;
(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 Corporation agrees not to take any position contrary to this Section 2(c).
“VWAP” means, for any date, the price determined by the first of the following clauses that applies: (a) if the Common Stock is then listed or quoted on a Trading Market, the daily volume weighted average price of the shares of Common Stock for such date (or the nearest preceding date) on the Trading Market on which the Common Stock are then listed or quoted as reported by Bloomberg L.P. (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 the OTCQB or OTCQX is not a Trading Market, the volume weighted average price of the Common Stock for such date (or the nearest preceding date) on the OTCQB or OTCQX as applicable, (c) if the Common Stock are not then listed or quoted for trading on the OTCQB or OTCQX and if prices for the Common Stock are then reported in the “Pink Sheets” published by OTC Markets Group, Inc. (or a similar organization or agency succeeding to its functions of reporting prices), the most recent bid price per share of the Common Stock so reported, or (d) in all other cases, the fair market value of a share of Common Stock as determined by an independent appraiser selected in good faith by the holders of a majority in interest of the Warrants then outstanding and reasonably acceptable to the Corporation, the fees and expenses of which shall be paid by the Corporation.
d) Mechanics of Exercise.
i. Delivery of Warrant Shares Upon Exercise. The Corporation shall cause its transfer agent (the “Transfer Agent”) to register the Warrant Shares, and credit the account of the Holder with The Depository Trust Corporation (or another established clearing corporation performing similar functions) through its Deposit/Withdrawal At Custodian system (“DWAC”) if the Transfer Agent is then a participant in such system and either (A) there is an effective registration statement permitting the issuance of the Warrant Shares or resale of the Warrant Shares by the Holder or (B) the Warrant Shares are eligible for resale by the Holder without volume or manner-of-sale limitations pursuant to Rule 144, and otherwise by physical delivery of a certificate, registered in the name of the Holder, 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 earlier of (i) two (2) Trading Days and (ii) the number of Trading Days comprising the Standard Settlement Period after the delivery to the Corporation 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 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. As used herein, “Standard Settlement Period” means the standard settlement period, expressed in a number of Trading Days, on the Corporation’s primary Trading Market with respect to the Shares as in effect on the date of delivery of the Notice of Exercise.
ii. Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Corporation shall, at the request of the 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 Corporation fails to cause the Transfer Agent to transmit to the Holder the Warrant Shares pursuant to Section 2(c)(i) by the Warrant Share Delivery Date, then the Holder will have the right to rescind such exercise.
iv. No Fractional Warrant Shares or Scrip. No fractional Warrant Shares shall be issued upon the exercise of this Warrant. As to any fraction of a Share that the Holder would otherwise be entitled to purchase upon such exercise, the Corporation shall be entitled to round down such to the next whole Share.
v. 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 Warrant Shares, all of which taxes and expenses shall be paid by the Corporation, and such Warrant Shares shall be issued in the name of the Holder. The Corporation shall pay all applicable fees and expenses of the Transfer Agent in connection with the issuance of the Warrant Shares hereunder.
The Holder is aware and agree that any tax consequences arising from the grant or exercise of any Warrant from the payment for Warrant Shares covered thereby or from any other event or act (of the Corporation and/or its Affiliates or the Holder), hereunder, shall be borne solely by the Holder. The Corporation and/or its Affiliates shall withhold taxes according to the requirements under the applicable laws, rules, and regulations, including withholding taxes at source. Furthermore, the Holder hereby accept to indemnify the Corporation and/or its Affiliates and hold them harmless against and from any and all liability for any such tax or interest or penalty thereon, including without limitation, liabilities relating to the necessity to withhold, or to have withheld, any such tax from any payment made to you.
The Holder will not be entitled to receive from the Corporation any Warrant Shares allocated or issued upon the exercise of the Warrant prior to the full payments of any tax liabilities arising from the Warrants, which were granted to the Holder and/or the Warrant Shares issued upon the exercise of the Warrants. For the avoidance of doubt, the Corporation shall not be required to release any share to the Holder until all payments required to be made by the Holder have been fully satisfied.
vi. Closing of Books. The Corporation will not close its shareholder books or records in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
Section 3. Certain Adjustments.
a) Share Dividends and Splits. If the Corporation, at any time while this Warrant is outstanding: (i) pays a share dividend or otherwise makes a distribution or distributions on its Shares or any other equity or equity equivalent securities payable in Shares (which, for avoidance of doubt, shall not include any Shares issued by the Corporation upon exercise of this Warrant), as applicable, (ii) subdivides outstanding Shares into a larger number of Shares, as applicable, (iii) combines (including by way of reverse share split) outstanding Shares into a smaller number of Shares, as applicable, or (iv) issues by reclassification of Shares, or any shares of capital stock of the Corporation, as applicable, then in each case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of Shares, (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of 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 shareholders 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) Fundamental Transaction. If, at any time while this Warrant is outstanding, (i) the Corporation, directly or indirectly, in one or more related transactions effects any merger or consolidation of the Corporation with or into another Person, (ii) the Corporation, 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 Corporation or another Person) is completed pursuant to which holders of 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 Shares, (iv) the Corporation, directly or indirectly, in one or more related transactions effects any reclassification, reorganization or recapitalization of the Shares or any compulsory share exchange pursuant to which the Shares are effectively converted into or exchanged for other securities, cash or property, or (v) the Corporation, 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 or scheme of arrangement) with another Person or group of Persons whereby such other Person or group acquires more than 50% of the outstanding Shares (not including 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 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 Share that would have been issuable upon such exercise immediately prior to the occurrence of such Fundamental Transaction, the number of shares of capital stock of the successor or acquiring corporation or of the Corporation, 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 Shares for which this Warrant is exercisable immediately prior to such Fundamental Transaction. 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 Share, in such Fundamental Transaction, and the Corporation 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 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. The Corporation shall cause any successor entity in a Fundamental Transaction in which the Corporation is not the survivor (the “Successor Entity”) to assume in writing all of the obligations of the Corporation under this Warrant and the other Transaction Documents in accordance with the provisions of this Section 3(b) 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 Shares represented by each Warrant Share acquirable and receivable upon 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 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 “Corporation” shall refer instead to the Successor Entity), and may exercise every right and power of the Corporation and shall assume all of the obligations of the Corporation under this Warrant and the other Transaction Documents with the same effect as if such Successor Entity had been named as the Corporation herein.
c) 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 Shares deemed to be issued and outstanding as of a given date shall be the sum of the number of Shares (excluding treasury shares, if any) issued and outstanding.
d) Notice to Holder. Whenever the Exercise Price is adjusted pursuant to any provision of this Section 3, the Corporation shall 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.
Section 4. Transfer of Warrant.
a) Transferability. This Warrant and all rights hereunder (including, without limitation, any registration rights) are non-transferable.
b) Warrant Register. The Corporation shall register this Warrant, upon records to be maintained by the Corporation for that purpose (the “Warrant Register”), in the name of the record Holder hereof.
c) Representation by the Holder. The Holder, by the acceptance hereof, represents and warrants that it is acquiring this Warrant and, upon any exercise hereof, will acquire the Warrant Shares issuable upon such exercise, for its own account and not with a view to or for distributing or reselling such Warrant Shares or any part thereof in violation of the Securities Act or any applicable state securities law, except pursuant to sales registered or exempted under the Securities Act.
Section 5. Miscellaneous.
a) No Rights as Shareholder Until Exercise. This Warrant does not entitle the Holder to any voting rights, dividends or other rights as a shareholder of the Corporation prior to the exercise hereof as set forth in Section 2(c)(i).
b) Loss, Theft, Destruction or Mutilation of Warrant. The Corporation covenants that upon receipt by the Corporation 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, and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Corporation 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) Fridays, 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 Corporation covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Shares a sufficient number of shares to provide for the issuance of the Warrant Shares and underlying Shares upon the exercise of any purchase rights under this Warrant. The Corporation further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of issuing the Warrant Shares needed for the Transfer Agent to issue the necessary Warrant Shares upon the exercise of the purchase rights under this Warrant. The Corporation 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 applicable Trading Market upon which the Shares may be listed. The Corporation 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 Corporation in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue).
e) Jurisdiction. All questions concerning the construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the provisions of the Loan Agreement or the Purchase Agreement, as applicable.
f) Restrictions. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, 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 the Holder shall operate as a waiver of such right or otherwise prejudice the Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date, if the Corporation willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Corporation 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 Corporation shall be delivered in accordance with the notice provisions of the Loan Agreement or the Purchase Agreement, as applicable.
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 Shares or as a shareholder of the Corporation, whether such liability is asserted by the Corporation or by creditors of the Corporation.
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 Corporation 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.
k) Successors. 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 of the Corporation and the successors of Holder.
l) Amendment. This Warrant may be modified or amended or the provisions hereof waived with the written consent of the Corporation 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.
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(Signature Page Follows)
IN WITNESS WHEREOF, the Corporation has caused this Warrant to be executed by its officer thereunto duly authorized as of the date first above indicated.
| SAVE FOODS, INC. | ||
| By: | ||
| Name: | ||
| Title: | ||
NOTICE OF EXERCISE
To: SAVE FOODS, INC.
(1) The undersigned hereby elects to purchase ________ Warrant Shares of the Corporation pursuant to the terms of the attached Warrant (only if exercised in full), and tenders herewith payment of the exercise price in full in form of United States currency; or
(2) Please register and issue said Warrant Shares in the name of the undersigned or in such other name as is specified below:
_______________________________
(3) The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.
(4) 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: _____________