LUXHP LuxUrban Hotels Inc

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 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): May 16, 2024

 

LuxUrban Hotels Inc.

(Exact Name of Registrant as Specified in Charter)

 

Delaware		001-41473		82-3334945
(State or Other Jurisdiction of Incorporation)		(Commission File Number)		(IRS Employer Identification No.)

 

2125 Biscayne Blvd, Suite 253, Miami, Florida		33137
(Address of Principal Executive Offices)		(Zip Code)

 

Registrant’s telephone number, including area code: (877) 269-5952

 

N/A

(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))

 

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. ☐

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class		Ticker symbol(s)		Name of each exchange on which registered
Common Stock, $0.00001 par value per share		LUXH		The Nasdaq Stock Market LLC
13.00% Series A Cumulative Redeemable Preferred Stock, $0.00001 par value per share		LUXHP		The Nasdaq Stock Market LLC

 

 

 

Item 1.01 Entry into a Material Definitive Agreement.

 

On May 17, 2024, LuxUrban Hotels Inc. (the “Company”) entered into a reservation termination agreement (the “Reservation Termination Agreement”) with Greenle Partners LLC Series Alpha P.S (“Greenle Alpha”) and Greenle Partners LLC Series Beta P.S. (“Greenle Beta” and together with Greenle Alpha, “Greenle”), pursuant to which Greenle agreed to the termination of a reservation of 6,000,000 (six million) shares of Company common stock, $0.00001 par value per share (the “Common Stock”), that had been reserved for Greenle on the books and records of the Company’s transfer agent (the “Reservation Termination Shares”) as follows: (i) 3,000,000 (three million) shares of Common Stock issuable from time to time in connection with a prior commercial agreement between the parties, of which no shares had been issued to date; and (ii) 3,000,000 (three million) shares issuable upon exercise of Company warrants to purchase Common Stock held by Greenle, under which no shares had been issued to date. Greenle also agreed not to demand the issuance of any Reservation Termination Shares or exercise any of the warrants for the issuance of any Reservation Termination Shares until the Effective Date (as defined below) and that its rights to receive any such shares is suspended through such date. A copy of the Reservation Termination Agreement is attached hereto as Exhibit 10.1. The summary description above is subject in its entirety to the full text of the Reservation Termination Agreement.

 

On May 17, 2024, the Company entered into an Exchange Agreement (the “Exchange Agreement”) with Brian Ferdinand, consultant to and former CEO of and director of the Company, pursuant to which Mr. Ferdinand relinquished 7,500,000 (seven million five hundred thousand) shares of Common Stock that he beneficially owned through THA Holdings LLC (the “Exchange Agreement Shares”) in exchange for a warrant to acquire 7,500,000 (seven million five hundred thousand) shares of Common Stock with an exercise price of $0.01 (one cent) per share (the “Exchange Agreement Warrant”). This Exchange Agreement Warrant shall be exercisable, in whole or in part, commencing the date that is the first day after the date the Charter Amendment is filed and effective with the Secretary of State of the State of Delaware and ending on the ten-year anniversary of the date such Exchange Agreement Warrant was issued. The exchange was completed on May 20, 2024, at which time the shares were deemed terminated. Mr. Ferdinand will file a Schedule 13D Amendment and Form 4 with the SEC in connection with the Exchange Agreement transactions.

 

A copy of the Exchange Agreement is attached hereto as 10.2 and a copy of the form of the Exchange Agreement Warrant is attached hereto as Exhibit 4.1. The summary description above is subject in its entirety to the full text of the Exchange Agreement and Exchange Agreement Warrant.

 

Item 5.03. Amendments to Articles of Incorporation or Bylaws.

 

On May 16, 2024, the Company’s board of directors and stockholders representing 50.67% ownership and thereby a quorum and majority of the voting power of the Company’s outstanding capital stock (the “Majority Stockholders”) acted via Joint Action by Written Consent in Lieu of a Meeting of the Stockholders and Meeting of the Board of Directors to, among other things, amend the Company’s Certificate of Incorporation (the “Charter”, such amendment to the Charter, the “Charter Amendment”, such Action by Written Consent as approves and adopts the Charter Amendment the “Action”) to increase the number of shares of capital stock authorized for issuance to 220,000,000 (two hundred twenty million) shares, consisting of 200,000,000 (two hundred million) shares Common Stock and 20,000,000 (twenty million) shares of 13.00% Series A cumulative redeemable preferred stock, $0.00001 par value per share (the “Preferred Stock”, the increase to the authorized Common Stock and Preferred Stock the “Authorized Stock Increase”). Before taking the Authorized Stock Increase into effect, as described further below, 100,000,000 (one hundred million) shares are authorized for issuance, including 90,000,000 (ninety million) shares of Common Stock and 10,000,000 (ten million) shares of Preferred Stock.

 

The Company will file an information statement (the “Information Statement”) with the Securities and Exchange Commission (SEC) on Schedule 14C, promptly mail the same to all its stockholders upon clearance by the SEC or expiration of any applicable review or waiting period, and cause the Charter Amendment and the 2022 Plan Amendment to become effective only on the date (the “Effective Date”) immediately after the waiting periods prescribed by Regulation 14c-2 thereunder have expired.

 

A copy of the Amendment to be filed with the Secretary of State of the State of Delaware on the Effective Date to effectuate the Authorized Stock Increase is attached hereto as Exhibit 3.1. The summary description above is subject in its entirety to the full text of the Amendment, which you are encouraged to read.

 

 

Item 5.07. Submission of Matters to a Vote of Security Holders.

 

The information included in Item 5.03 is incorporated by reference into this item to the extent required.

 

Among other things, the Action also approved, adopted and resolved that the Company amend its 2022 Long-Term Incentive Equity Plan to increase the number of shares of capital stock authorized for issuance from 3,000,000 (three million) shares of Common Stock to 8,000,000 (eight million) shares of Common Stock (the “2022 Plan Amendment”). Promptly following the Effective Date, the Company will file a new Registration Statement on Form S-8 covering all shares issuable under the 2022 Plan as amended by the 2022 Plan Amendment.

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits

 

Exhibit		Description
3.1		Certificate of Amendment, to be filed with the Secretary of State of the State of Delaware upon the Effective Date.
4.1		Form of the Exchange Agreement Warrant of the Company issued to Mr. Ferdinand.
10.1		Reservation Termination Agreement by and among the Company and Greenle, dated as of May 17, 2024.
10.2		Exchange Agreement by and among the Company and Mr. Ferdinand, dated as of May 17, 2024 and consummated May 20, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

 

SIGNATURE

 

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.

 

Dated: May 22, 2024	LUXURBAN HOTELS INC.
	By:	/s/ Shanoop Kothari
		Name:	Shanoop Kothari
		Title:	Co-Chief Executive Officer & Chief Financial Officer

 

 

Exhibit 3.1

 

CERTIFICATE OF AMENDMENT TO THE

CERTIFICATE OF INCORPORATION OF
LUXURBAN HOTELS INC.

 

LuxUrban Hotels Inc. (the “Corporation”), a corporation organized and existing under and by virtue of the General Corporation Law of the State of Delaware (the “DGCL”) and pursuant to the provisions of Section 242 of the DGCL, does hereby certify as follows:

 

FIRST: The name of the Corporation is LuxUrban Hotels Inc., and the date of filing of the Certificate of Formation (the “Existing Certificate”) of the Corporation with the Secretary of State of the State of Delaware was March 4, 2016 (with its certificate of conversion changing it from a limited liability company to a corporation filed with the Secretary of State of Delaware on January 4, 2022).

 

SECOND: The Board of Directors of the Corporation (the “Board”), acting in accordance with the provisions of Section 242 of the DGCL, duly adopted and approved resolutions to amend the Existing Certificate.

 

THIRD: The Existing Certificate is hereby amended by restating in its entirety Article Fourth as follows

 

“FOURTH. The total number of shares of all classes of stock which the Corporation shall have authority to issue is 220,000,000 shares, consisting of (i) 200,000,000 shares of Common Stock, $0.00001 par value per share (“Common Stock”), and (ii) 20,000,000 shares of Preferred Stock, $0.00001 par value per share (“Preferred Stock”). The Board of Directors of the Corporation is expressly granted authority to issue shares of the Preferred Stock in one or more series and to fix for each such series such voting powers, full or limited, and such designations, preferences and relative, participating, optional or other special rights and such qualifications, limitations or restrictions thereof as shall be stated and expressed in the resolution or resolutions adopted by the Board of Directors providing for the issue of such series (a “Preferred Stock Designation”) and as may be permitted by the GCL. The number of authorized shares of Preferred Stock may be increased or decreased (but not below the number of shares thereof then outstanding) by the affirmative vote of the holders of a majority of the voting power of all of the then outstanding shares of the capital stock of the Corporation entitled to vote generally in the election of directors, voting together as a single class, without a separate vote of the holders of the Preferred Stock, or any series thereof, unless a vote of any such holders is required pursuant to any Preferred Stock Designation.

 

FOURTH: This Certificate of Amendment to the Existing Certificate was duly approved and adopted, pursuant to the provisions of Section 242 of the DGCL, by unanimous written consent of the Board, and was duly approved and adopted by written consent of the holders of the requisite majority of the outstanding Common Stock of the Corporation in accordance with Section 228 of the DGCL.

 

 

[Signature Page Follows]

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

IN WITNESS WHEREOF, this Certificate of Amendment to the Certificate of Incorporation of Chicken Soup for the Soul Entertainment Inc. has been executed by the Chief Executive Officer of this Corporation on this __ day of ______, 2024.

 

	Name:	Shanoop Kothari
	Title:	Chief Executive Officer

 

 

 

Exhibit 4.1

 

THIS WARRANT HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY STATE SECURITIES LAWS, AND MAY NOT BE OFFERED, SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS REGISTERED UNDER THE ACT, AND ANY APPLICABLE STATE SECURITIES LAWS OR AN EXEMPTION FROM REGISTRATION IS AVAILABLE. THIS WARRANT MUST BE SURRENDERED TO THE COMPANY OR ITS TRANSFER AGENT AS A CONDITION PRECEDENT TO THE SALE, TRANSFER, PLEDGE OR HYPOTHECATION OF ANY INTEREST IN ANY OF THE SECURITIES REPRESENTED HEREBY.

 

NUMBER W-FE-1

[       ] WARRANTS

 

THIS WARRANT WILL BE VOID IF NOT EXERCISED PRIOR TO THE EXPIRATION DATE

(DEFINED BELOW)

 

LUXURBAN HOTELS INC.

 

WARRANT

 

THIS WARRANT CERTIFIES THAT, for value received THA Holdings LLC, is the registered holder (the “Holder”) of a warrant or warrants (the “Warrant(s)”) and is entitled to purchase up to seven million, five hundred thousand (7,500,000) fully paid and non-assessable shares of common stock, par value $0.00001 per share (“Shares”), of LUXURBAN HOTELS INC., a Delaware corporation (the “Company”) at a purchase price per Share (the “Exercise Price”) of $0.01 per share (as adjusted from time to time in accordance with this Warrant). This Warrant is issued pursuant to that certain exchange agreement, dated as of May 17, 2024 (“Issuance Date”), between the Company and the Holder (the “Exchange Agreement”) and is entered into prior to the underwritten public offering of common stock by the Company pursuant to the underwriting agreement between the Company and Roth Capital Partners, LLC (as underwriter) (such agreement the “Underwriting Agreement”, such offering the “Offering”). The Warrant represented by this certificate is referred to herein as the “Warrant Certificate”.

 

1.	Term and Exercise of Warrants.

 

	(a)	Subject to the terms and conditions set forth herein, this Warrant shall be exercisable, in whole or in part, commencing the date (the “Exercisable Date”) that is (1) day after the date an amendment to the certificate of incorporation of the Company, as amended (the “Charter”, such amendment the “Charter Amendment”) to increase the Company’s authorized capital from 100 million shares (currently comprised of 90 million shares of common stock and 10 million shares of preferred stock) to 220 million shares (comprised of 200 million shares of common stock and 20 million shares of preferred stock) is filed and effective with the Secretary of State of the State of Delaware and ending on the ten-year anniversary of the Issuance Date (the “Expiration Date”).
	(b)	The Warrant entitles the holder thereof to purchase Shares from the Company, commencing on the Exercisable Date upon surrender of this Warrant, delivery of the Notice of Exercise form attached hereto (the “Notice of Exercise”) duly executed to the office of the Company, LUXURBAN HOTELS INC., Attention: Chief Financial Officer, 2125 Biscayne Blvd, Suite 253, Miami, FL 33137 shanoop@luxurbanhotels.com (or such other office or agency of the Company as it may designate by notice in writing to the Holder at the address of the Holder appearing on the books of the Company) and payment of the Exercise Price (by cash or by check or bank draft payable to the order of the Company or pursuant to Section 1(d) below) whereupon the Holder shall be entitled to receive from the Company a stock certificate representing the number of Shares so purchased. In no event will the Company be required to net cash settle any warrant exercise. Notwithstanding anything to the contrary contained herein, this Warrant shall not be exercisable until the Charter Amendment is effective with the State of Delaware.

 

 

(c)

The Holder shall have the right, in lieu of paying the Exercise Price in cash, to surrender a number of Warrants having a Fair Market Value equal to the aggregate Exercise Price (a “Cashless Exercise”).

 

“Fair Market Value” shall mean, as of any particular date of determination, (i) if the Shares are then traded or quoted on a nationally recognized securities exchange, inter-dealer quotation system or over- the-counter market (a “Trading Market”), the average closing price or last sale price of the Shares reported for the five (5) business days prior to the applicable date of determination (or, if the Shares have not been actively trading during the 5 business days prior to the applicable date of determination, the last sale price of the Shares for the business day immediately prior to the applicable date of determination) and (ii) if the Shares are not traded or quoted on a Trading Market, the Board of Directors of the Company (the “Board”) shall determine the fair market value of a Share in its reasonable, good faith judgment, subject to the Holder’s right to dispute such determination as provided in Section 1(d) below

 

In the event of such a Cashless Exercise, the number of Shares to be issued to the Holder shall be determined as follows:

 

X = Y[(A - B)/A]

 

X = the number of Shares to be issued to the Holder

 

Y = the number of Shares with respect to which this Warrant is being exercised

 

A = the Fair Market Value of one Share

 

B = the Exercise Price

 

	(d)	In the case of any dispute as to the determination of Fair Market Value, any closing price or sales price of the Shares, the arithmetic calculation of the Exercise Price or the number of Shares for which this Warrant is exercisable, or any other computation required to be made hereunder, if the Holder and the Company are unable to settle such dispute within five business days (or such longer period as the parties may agree), then either party may elect to submit the disputed matter(s) for resolution by an independent accountant, appraiser or investment bank with relevant experience mutually acceptable to the Company and the Holder. Such independent party’s determination of such disputed matter(s) shall be binding upon all parties absent demonstrable error, and the Company and the Holder shall each pay one half of the fees and expenses of the independent party.
	(e)	If, upon the Expiration Date, the Fair Market Value of one Share (or other security issuable upon the exercise hereof) is greater than the Exercise Price in effect on such date, then this Warrant shall automatically be deemed to be exercised on a Cashless Exercise basis as of the Expiration Date as to all the Shares for which it shall not previously have been exercised, and the Company shall, within a reasonable time, deliver a certificate representing the Shares issued upon such exercise to the Holder (and if the Company’s shares are uncertificated, the Company shall deliver reasonably satisfactory evidence to the Holder signifying the valid issuance of such uncertificated shares).

 

2.	Issuance of Shares; Holder’s Exercise Limitations; No Fractional Shares.

 

(a)

Within three business days after the exercise of this Warrant and the clearance of the funds in payment of the applicable Exercise Price (if any) (the “Delivery Deadline”), the Company, at its expense, shall issue to the registered holder of such Warrant a certificate or certificates, or book entry position, for the number of Shares to which he, she or it is entitled, registered in such name or names as may be directed by him, her or it. Upon any exercise of the Warrant for less than the total number of full Shares provided for herein, there shall be issued to the registered holder hereof or the registered holder’s assignee a new Warrant Certificate covering the number of Shares for which the Warrant has not been exercised.

 

 

(b)

If, at the time of exercise, the Company has a transfer agent (the “Transfer Agent”), then upon the exercise of this Warrant in whole or in part, the Company shall, at its expense, take all necessary action, including (if necessary) obtaining and delivering an opinion from its counsel, to ensure that the Transfer Agent shall issue Shares in the name of the Holder (or its nominee) or such other persons as designated by the Holder and in such denominations to be specified in the applicable Notice of Exercise. The Company represents and warrants that if the Unrestricted Conditions set forth in Section 6 below are met, the Shares will be free-trading, and freely transferable, and will not contain a legend restricting the resale or transferability of the Shares and that no instructions other than the foregoing instructions will be given to the Transfer Agent.

 

(c)

If the Transfer Agent is participating in the DTC Fast Automated Securities Transfer (“FAST”) program, upon written request of the Holder and in lieu of delivering physical certificates representing Shares to be delivered under or in connection with this Warrant Certificate, the Company shall use its commercially reasonable efforts to cause the Transfer Agent to electronically transmit the Shares to the Holder by crediting the account of the Holder’s prime broker with the DTC through its Deposit Withdrawal Agent Commission (“DWAC”) system. The time periods for delivery and penalties described herein shall apply to the electronic transmittals described herein. Any delivery not effected by electronic transmission shall be effected by delivery of physical certificates.

 

	(d)	If the Company fails to transmit, or cause the Transfer Agent to transmit, to the Holder the Shares by the Delivery Deadline, then the Holder will have the right to rescind such Warrant exercise.
	(e)	In addition to any other rights available to the Holder, including the right to rescind the exercise as provided above, if as a result of a failure to deliver the Shares by the Delivery Deadline (so long as the failure to deliver the Shares is not caused by any action or inaction by the Holder) (a “Delivery Failure”) the Holder is required by its broker to purchase (in an open market transaction or otherwise) or the Holder’s brokerage firm otherwise purchases shares of the Company’s capital stock to deliver in satisfaction of a sale anticipated to be made by the Holder of all or portion of such Shares which are the subject of such Delivery Failure (an “Anticipated Sale”), then the Company shall (i) pay in cash to the Holder the amount by which (x) the Holder’s total purchase price (including brokerage commissions, if any) for the shares of the Company’s capital stock so purchased exceeds (y) an amount equal to the product of (A) the number of Shares that the Holder anticipated to sell in such Anticipated Sale, multiplied by (B) the Exercise Price that would have been payable for such Shares, and (ii) at the option of the Holder, either reinstate the portion of this Warrant and equivalent number of Shares in respect of which such Delivery Failure occurred or deliver to the Holder the number of Shares that would have been issued had the Company timely complied with its obligations hereunder to issue such Shares upon such exercise. The Holder shall provide the Company written notice indicating the amounts payable to the Holder, together with applicable confirmations and other evidence reasonably requested by the Company.
	(f)	The Company shall not affect any exercise of this Warrant, and a Holder shall not have the right to exercise any portion of this Warrant, to the extent that after giving effect to such issuance after exercise as set forth on the applicable Notice of Exercise, the Holder (together with each person or other entity that directly, or indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the Holder (the “Affiliates”), and any other Persons acting as a group together with the Holder or any of the Holder’s Affiliates), would beneficially own in excess of the Beneficial Ownership Limitation (as defined below). For purposes of the foregoing sentence, the number of shares of Company common stock beneficially owned by the Holder and its Affiliates shall include the number of shares of Company common stock issuable upon exercise of this Warrant with respect to which such determination is being made, but shall exclude the number of shares of Company common stock which would be issuable upon (i) exercise of the remaining, nonexercised portion of this Warrant beneficially owned by the Holder or any of its Affiliates and (ii) exercise or conversion of the unexercised or nonconverted portion of any other securities of the Company (including, without limitation, any other Company common stock Equivalents) subject to a limitation on conversion or exercise analogous to the limitation contained herein beneficially owned by the Holder or any of its Affiliates. Except as set forth in the preceding sentence, for purposes of this Section 1(e), beneficial ownership shall be calculated in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder, it being acknowledged by the Holder that the Company is not representing to the Holder that such calculation is in compliance with Section 13(d) of the Exchange Act and

 

 

the Holder is solely responsible for any schedules required to be filed in accordance therewith. To the extent that the limitation contained in this Section 1(e) applies, the determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable shall be in the sole discretion of the Holder, and the submission of a Notice of Exercise shall be deemed to be the Holder’s determination of whether this Warrant is exercisable (in relation to other securities owned by the Holder together with any Affiliates) and of which portion of this Warrant is exercisable, in each case subject to the Beneficial Ownership Limitation, and the Company shall have no obligation to verify or confirm the accuracy of such determination. In addition, a determination as to any group status as contemplated above shall be determined in accordance with Section 13(d) of the Exchange Act and the rules and regulations promulgated thereunder. For purposes of this Section 1(e), in determining the number of outstanding shares of Company common stock, a Holder may rely on the number of outstanding shares of Company common stock as reflected in (A) the Company’s most recent periodic or annual report filed with the Commission, as the case may be, (B) a more recent public announcement by the Company or (C) a more recent written notice by the Company or the Transfer Agent setting forth the number of shares of Company common stock outstanding. Upon the written or oral request of a Holder, the Company shall within two Trading Days confirm orally and in writing to the Holder the number of shares of Company common stock then outstanding. In any case, the number of outstanding shares of Company common stock shall be determined after giving effect to the conversion or exercise of securities of the Company, including this Warrant, by the Holder or its Affiliates since the date as of which such number of outstanding shares of Company common stock was reported. The “Beneficial Ownership Limitation” shall be 9.99% of the number of shares of the Company common stock outstanding immediately after giving effect to the issuance of shares of Company common stock issuable upon exercise of this Warrant. The Holder, upon notice to the Company, may increase or decrease the Beneficial Ownership Limitation provisions of this Section 2(f), provided that the Beneficial Ownership Limitation in no event exceeds 9.99% of the number of shares of the Company common stock outstanding immediately after giving effect to the issuance of shares of Company common stock upon exercise of this Warrant held by the Holder and the provisions of this Section 2(f) shall continue to apply. Any increase in the Beneficial Ownership Limitation will not be effective until the 61st day after such notice is delivered to the Company. The provisions of this paragraph shall be construed and implemented in a manner otherwise than in strict conformity with the terms of this Section 2(f) to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Beneficial Ownership Limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such limitation. The limitations contained in this paragraph shall apply to a successor holder of this Warrant.

	(g)	No fraction of a Share will be issued upon any exercise of a Warrant. If the holder of a Warrant would be entitled to receive a fraction of a Share upon any exercise of a Warrant, the Company shall, upon such exercise, issue or cause to be issued only the largest whole number of Shares issuable on such exercise (and such fraction of a Share will be disregarded).
	(h)	For purposes of Rule 144, it is acknowledged and agreed that (i) the Shares issuable upon any exercise of this Warrant in any Cashless Exercise transaction shall be deemed to have been acquired on the Issuance Date, and (ii) the holding period for any of the Shares issuable upon the exercise of this Warrant in any Cashless Exercise transaction shall be deemed to have commenced on the Issuance Date.

 

3.	Exchange and Registry of Warrant.

 

	(a)	Warrant Certificates, when surrendered at the office of the Company by the Holder in person or by attorney duly authorized in writing, may be exchanged without payment of any service charge, for another Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants.
	(b)	Upon due presentment for registration of transfer of the Warrant Certificate at the office of the Company, a new Warrant Certificate or Warrant Certificates of like tenor and evidencing in the aggregate a like number of Warrants shall be issued to the transferee in exchange for this Warrant Certificate, without charge except for any applicable tax or other governmental charge.

 

 

(c)

The Company shall keep and properly maintain at its principal executive offices a register for the registration of this Warrant and any transfers thereof. The Company may deem and treat the person in whose name this Warrant is registered on such register as the Holder thereof for all purposes, and the Company shall not be affected by any notice to the contrary, except any assignment, division, combination or other transfer of this Warrant effected in accordance with the provisions of this Warrant.

 

4.	Anti-Dilution Adjustments.

 

(a)

Adjustments for Change in Shares.

 

	i.	In the event that, after the Issuance Date and prior to the exercise in full of this Warrant, the outstanding the number of Shares shall be subdivided (by distribution, subdivision or otherwise), into a greater number of Shares, the number of Shares issuable on the exercise of each Warrant then in effect shall, concurrently with the effectiveness of such subdivision, be equally, ratably and proportionally increased, as determined in good faith by the Board, which determination shall be final and binding on the Holders absent manifest error. In the event the outstanding Shares shall be combined or consolidated, by reclassification or otherwise, into a lesser number of Shares, the number of Shares issuable on the exercise of each Warrant then in effect shall, concurrently with the effectiveness of such subdivision, be equally, ratably and proportionally decreased, as determined in good faith by the Board, which determination shall be final and binding on the Holders absent manifest error.
	ii.	In the event that, after the Issuance Date and prior to the exercise in full of this Warrant, the Shares are exchanged for, or converted into, another form of equity security of the Company or of any other entity, this Warrant shall be exercisable for an equivalent number of such equity securities, at an equivalent Exercise Price, in each case as determined by the Board acting reasonably, so as to provide the Holder with rights equitably equivalent to the rights held by the Holder by virtue of this Warrant in effect immediately prior to such exchange or conversion, and each reference herein to the Shares issuable on exercise of this Warrant shall be deemed to be a reference to such other equity securities.

 

(b)

Other Dividends and Distributions. If the Company shall make or declare, or fix a record date for the determination of holders of equity securities entitled to receive, a dividend or any other distribution payable in cash, securities of the Company or other property, then, and in each such event, the Company shall ensure that provisions are made so that the Holder shall receive upon exercise of this Warrant, in addition to the number of the Shares receivable thereupon, the kind and amount of cash, securities of the Company or other property which the Holder would have been entitled to receive had this Warrant been exercised in full into the Shares on the date of such event and had the Holder thereafter, during the period from the date of such event to and including the date this Warrant is exercised, retained such cash, securities or other property receivable by them as aforesaid during such period, giving application to all adjustments called for during such period under this Section with respect to the rights of the Holder; provided, that no such provision shall be made if the Holder receives, simultaneously with the distribution to the holders of equity securities, a dividend or other distribution of such securities, cash or other property in an amount equal to the amount of such securities, cash or other property as the Holder would have received if this Warrant had been exercised in full into the Shares on the date of such event.

 

(c)

Certain Events. If any event of the type contemplated by the provisions of this Section but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features) occurs, then the Board shall make an appropriate adjustment in the number of the Shares issuable upon exercise of this Warrant so as to protect the rights of the Holder in a manner consistent with the provisions of this Section; provided, that no such adjustment pursuant to this Section 4(c) shall increase the Exercise Price or decrease the number of the Shares issuable hereunder.

 

 

	(d)	Notice of Adjustment. Upon the occurrence of each adjustment or readjustment of the number of Shares issuable on the exercise of each Warrant, the Company (at its expense) shall promptly compute such adjustment or readjustment in accordance with the terms hereof and furnish to the Holder a notice setting forth (1) such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based and (2) the number of Shares issuable on the exercise of each Warrant at the time in effect.
	(e)	Closing of Books. The Company will not close its stockholder books or records, other than in the ordinary course, in any manner which prevents the timely exercise of this Warrant, pursuant to the terms hereof.
	(f)	Miscellaneous. All calculations hereunder shall be made to the nearest cent or to the nearest twentieth decimal place of a fractional Share, as the case may be.

 

5.

Adjustment as required for Stock Exchange Compliance. This Warrant shall be automatically adjusted as required to maintain compliance by the Company with the listing rules and other regulations of the stock exchange upon which the Company’s securities are listed (the “Exchange”). The Exchange is presently the Nasdaq Stock Market, LLC.

 

6.	Transferability; Compliance with Securities Laws.

 

	(a)	This Warrant may not be transferred or assigned in whole or in part without compliance with all applicable United States, state, and foreign securities laws by the transferor and transferee (including the delivery of investment representation letters and legal opinions reasonably satisfactory to the Company, if requested by the Company). Subject to such restrictions, prior to the Expiration Date, this Warrant and all rights hereunder are transferable by the Holder hereof, in whole or in part, at the office or agency of the Company referred to in Section 1(b) above. Any such transfer shall be made in person or by the Holder’s duly authorized attorney, upon surrender of this Warrant together with the Form of Transfer attached hereto properly endorsed.
	(b)	The Holder of this Warrant, by acceptance hereof, acknowledges that this Warrant and the Shares issuable upon exercise hereof are being acquired solely for the Holder’s own account and not as a nominee for any other party, and for investment, and that the Holder will not offer, sell, or otherwise dispose of this Warrant or any Shares to be issued upon exercise hereof except under circumstances that will not result in a violation of the Securities Act or any state or foreign securities laws. Upon exercise of this Warrant, the Holder shall, if reasonably requested by the Company and if required by applicable law or regulation, confirm in writing, in a form satisfactory to the Company, that the Shares so purchased are being acquired solely for Holder’s own account and not as a nominee for any other party, for investment, and not with a view toward distribution or resale.
	(c)	The Shares have not been registered under the Securities Act, and this Warrant may not be exercised except by (1) the original purchaser of this Warrant from the Company or (2) an “accredited investor” as defined in Rule 501(a) under the Securities Act. Each certificate representing Shares issued on exercise of this Warrant or other securities issued in respect of such Shares upon any stock split, stock dividend, recapitalization, merger, consolidation or similar event, shall be stamped or otherwise imprinted with a legend substantially in the following form (in addition to any other legend required under applicable securities laws):

 

THE SHARES OF COMMON STOCK EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), OR ANY APPLICABLE STATE SECURITIES LAWS AND MAY NOT BE SOLD, TRANSFERRED OR OTHERWISE DISPOSED OF UNLESS THERE IS AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS COVERING ANY SUCH TRANSACTION OR UNLESS THE COMPANY SHALL HAVE RECEIVED AN OPINION OF ITS COUNSEL THAT REGISTRATION OF SUCH SHARES UNDER THE SECURITIES ACT AND UNDER THE PROVISIONS OF APPLICABLE STATE SECURITIES LAWS IS NOT REQUIRED.

 

 

7.	Removal of Restrictive Legends. Neither this Warrant nor any certificates evidencing the Shares or any other equity securities issuable or deliverable under or in connection with this Warrant shall contain any legend restricting the transfer thereof in any of the following circumstances: (i) while a registration statement covering the sale or resale of the Shares is effective under the Securities Act; (ii) following any sale of this Warrant, any of the Shares or any other equity securities issued or delivered to the Holder under or in connection herewith pursuant to Rule 144; (iii) if this Warrant, the Shares or any other equity securities are eligible for sale under Rule 144(b)(1); or (iv) if such legend is not required under applicable requirements of the Securities Act (including judicial interpretations and pronouncements issued by the staff of the Commission) (collectively, the “Unrestricted Conditions”). If the Unrestricted Conditions are met at the time of the issuance of the Shares, the Company shall cause its counsel, at its expense, to issue a legal opinion to the Transfer Agent, if required by such Transfer Agent to effect the issuance of the Shares or any other shares of equity securities issuable or deliverable under or in connection with this Warrant, as applicable, without a restrictive legend or removal of the legend hereunder. If the Unrestricted Conditions are met at the time of issuance of the Shares, then the Shares shall be issued free of all legends.
8.	Payment of Taxes. The Company will from time to time promptly pay all taxes and charges that may be imposed in respect of the issuance or delivery of shares upon the exercise of Warrants, but the Company shall not be obligated to pay any transfer taxes in respect of the Warrants or such shares.
9.	Representations and Warranties. The Company represents and warrants to, and agrees with, the Holder as follows:

 

	(a)	Due Organization. The Company is a corporation duly organized, validly existing, and in good standing under the laws of the state of its formation and has all requisite corporate power and authority to carry on its business as now conducted. The Company is duly qualified to transact business and is in good standing in each jurisdiction in which the failure to so qualify would have a material adverse effect on its business or properties.
	(b)	Authorization; Binding Obligation. This Warrant has been duly executed by the Company and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of this Warrant. Except as may be limited by applicable bankruptcy, insolvency, reorganization or similar laws relating to or affecting the enforcement of creditors’ rights, all corporate action has been taken on the part of the Company, its officers, directors, and stockholders necessary for the authorization, execution and delivery of this Warrant. The Company has taken all corporate action required to make all the obligations of the Company reflected in the provisions of this Warrant the valid and enforceable obligations they purport to be. The issuance of this Warrant and the Shares issuable upon exercise of this Warrant will not be subject to preemptive rights of any stockholders of the Company. No consent, waiver, approval, authorization, exemption, registration, license or declaration is required to be made or obtained by the Company, other than those which have been made or obtained, in connection with (i) the execution or enforceability of this Warrant or (ii) the consummation of any of the transactions contemplated hereby, including the issuance of the Shares upon exercise of this Warrant.
	(c)	Compliance with Other Instruments. The authorization, execution and delivery of the Warrant will not constitute or result in a default or violation of any law or regulation applicable to the Company or any term or provision of the Company’s Certificate of Incorporation or bylaws, or any material agreement or instrument by which it is bound or to which its properties or assets are subject.

 

(d)

Valid Issuance. This Warrant, and all the Shares which may be issued upon the exercise of this Warrant, and all securities, if any, issuable upon conversion of the Shares, shall, upon issuance, be duly authorized, validly issued, fully paid and non-assessable, and free of any liens and encumbrances (including preemptive or similar rights) except for restrictions on transfer provided for (i) in this Warrant, (ii) under applicable federal and state securities laws, or (iii) in the Charter. Based in part upon the representations and warranties of the Holder in this Warrant, this Warrant and all the Shares issuable upon exercise of this Warrant will be issued in compliance with all applicable federal and state securities laws. The Company covenants that it shall at all times cause to be reserved and kept available out of its authorized and unissued capital stock such number of the Shares and other securities for which this Warrant may be exercisable or for which the Shares may be convertible as will be sufficient to permit the exercise in full of this Warrant.

 

 

(e)

No Violation; Registration. The Company shall take all such actions as may be necessary to ensure that all the Shares are issued without violation by the Company of any applicable law or governmental regulation or any requirements of any trading market or securities exchange upon which shares of the Company’s common stock or other securities constituting the Shares may be listed at the time of such exercise (except for official notice of issuance which shall be immediately delivered by the Company upon each such issuance). If the Unrestricted Conditions are satisfied at the time of exercise of this Warrant, the Company shall cause the Shares, immediately upon such exercise, to be listed on any such trading market or securities exchange upon which shares of common stock or other securities constituting the Shares are listed at the time of such exercise.

 

10.	No Rights as a Stockholder; No Liability. Except as specifically set forth herein, this Warrant, by itself, does not entitle the registered holder thereof to any of the rights of a stockholder of the Company, including, without limitation, the right to receive dividends, or other distributions, exercise any preemptive rights to vote or to consent or to receive notice as stockholders in respect of the meetings of stockholders or the election of directors of the Company or any other matter. No provision hereof, in the absence of any affirmative action by the Holder to exercise this Warrant to purchase the 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 stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.
11.	No Impairment.

 

(a)

Notwithstanding anything herein to the contrary, nothing contained in this Warrant shall affect, limit or impair the rights and remedies of the Holder or its affiliates (x) in their capacity as a lender, creditor, or similar, as applicable, to the Company or any of its subsidiaries or affiliates, or (y) pursuant to any other agreements or instruments entered into by the Holder (or its affiliates) and the Company or any of its subsidiaries or affiliates. Without limiting the generality of the foregoing, neither the Administrative Agent (as defined in the Loan Agreement) nor any of its affiliates, in exercising their rights as lenders will have any duty to consider (i) its (or its affiliates’) status as a direct or indirect shareholder of the Company and its subsidiaries, (ii) its (or its affiliates’) direct or indirect ownership of the Shares of the Company or any of its subsidiaries, or (iii) any duty it (or its affiliates) may have to any other direct or indirect shareholders of the Company and its subsidiaries, except as may be required under the applicable loan documents.

 

(b)

The Company shall not, by amendment of its Charter or bylaws, through any shareholders, voting or similar agreement, or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms to be observed or performed by it hereunder, but shall at all times in good faith assist in the carrying out of all the provisions of this Warrant and in the taking of all such action as may reasonably be requested by the Holder in order to protect the exercise rights of the Holder against dilution or other impairment, consistent with the tenor and purpose of this Warrant. Without limiting the generality of the foregoing, the Company (x) will not increase the par value of any the Shares above the then-applicable Exercise Price, (y) will take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Shares upon the exercise of this Warrant, and (z) will use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

 

12.

Effect of Headings. The section headings herein are for convenience only and are not part of this Warrant and shall not affect the interpretation thereof.

 

13.

Modification and Waiver. This Warrant and any provision hereof may be changed, waived, discharged or terminated only by an instrument in writing signed by the party against which enforcement of the same is sought.

 

14.

Notices. Any notice, request or other document required or permitted to be given or delivered to the Holder or the Company shall be delivered through email, or shall be sent by certified or registered mail, postage prepaid, to the Holder at its address as shown on the books of the Company or to the Company at the address indicated therefor in the first paragraph of this Warrant.

 

 

15.

Governing Law. This Warrant shall be construed and enforced in accordance with, and the rights of the parties shall be governed by, the laws of the State of New York.

 

16.

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 provided herein. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to the Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by the Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

 

17.

Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors and permitted assigns of the Company and the successors and permitted assigns of the Holder. The provisions of this Warrant are intended to be for the benefit of the Holder from time to time of this Warrant and shall be enforceable by the Holder or holder of the Shares.

 

 

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its duly authorized officer.

 

Dated: May 20, 2024
	LUXURBAN HOTELS INC.
	By:	/s/ Shanoop Kothari
	Name:	Shanoop Kothari
	Title:	Chief Executive Officer

 

Accepted and Acknowledged by:

 

THA HOLDINGS LLC
By:	/s/ Brian Ferdinand
Name:	Brian Ferdinand
Title:	Manager

 

 

[Signature Page to Warrant]

 

 

Exhibit 10.1

 

Reservation Termination

(May 17, 2024)

 

Reference is made to the letter agreement (“April 2024 Agreement”), dated April 12, 2024, between LuxUrban Hotels Inc. and each of Greenle Partners LLC Series Alpha P.S (“Greenle Alpha”) and Greenle Partners LLC Series Beta P.S. (“Greenle Beta” and together with Greenle Alpha, “Greenle”) and the Modification thereto, dated as of May 10, 2024 (the “May 2024 Modification” and, together with the April 2024 Agreement, the “Waiver”). Any capitalized terms not defined herein shall have the meanings ascribed to them in the April 2024 Agreement or the May 2024 Modification, as applicable.

 

In accordance with the terms of the Waiver, the Company has previously instructed its transfer agent, Continental Stock Transfer & Trust Company (“Continental”), to reserve the following shares against the Company’s authorized capital for potential future issuance to Greenle:

 

a. 3,000,000 Supplemental Waiver Shares issuable from time to time in connection with the May 2024 Modification, of which no shares have been issued to date; and

 

b. 3,000,000 shares issuable upon exercise of common stock purchase warrants held by Greenle, under which no shares have been issued to date.

 

All of the foregoing unissued shares (an aggregate of 6,000,000 shares) which have been reserved on the records of Continental are referred to herein as the “Reserved and Unissued Shares.” This Reserve Termination does not affect any other shares that are reserved at Continental with respect to Greenle (7,440,000 shares) under the April 2024 Agreement, the May 2024 Modification and the Revenue Share Agreements, all of which reserves shall remain in place and there shall be no limitation on Greenle’s ability to request such shares as permitted under the applicable agreements.

 

In order to consummate in May 2024 a proposed underwritten offering by the Company of shares of its common stock with Roth Capital Partners, LLC acting as lead underwriter (the “Proposed Public Offering”), without exceeding the Company’s current authorized capital, Greenle hereby agrees that:

 

1. It will not demand the issuance of any Reserved and Unissued Shares or exercise any of the warrants for the issuance of any Reserved and Unissued Shares until the Charter Amendment Date (as defined below) and its rights to receive any such shares shall be suspended through such date.

 

2. Greenle hereby authorizes Continental to terminate the reservation of the Reserved and Unissued Shares on its books and records.

 

 

The Company hereby represents and warrants and covenants to Greenle and Continental that:

 

a. On May 16, 2024, the Company’s board of directors and the holders of a majority of the Company’s outstanding shares of common stock resolved by written consent (the “Written Charter Amendment Consent”) in lieu of a meeting to amend the Company’s certificate of incorporation to increase its authorized capital stock from 100 million shares, comprised of 90 million shares of common stock and 10 million shares of preferred stock, to 220 million shares, comprised of 200 million shares of common stock and 20 million shares of preferred stock (the “Charter Amendment”). A copy of the Written Charter Amendment Consent is attached hereto as Exhibit A.

 

b. The Company will file a preliminary information statement on Schedule 14C with respect to the actions under the Written Charter Amendment Consent (the “Preliminary Information Statement”) within five (5) calendar days of the earlier of (i) the consummation of the Proposed Public Offering and (ii) termination or abandonment of the Proposed Public Offering. As soon as practicable, upon clearance of the Preliminary Information Statement with the Securities and Exchange Commission, the Company will file and mail to the Company’s stockholders a definitive information statement. Pursuant to Rule 14c-2(b) of the Securities Exchange Act, the actions approved by the Written Charter Amendment Consent will not become effective until the date that is twenty (20) calendar days after such definitive information statement is first mailed or otherwise delivered to holders of the Company’s common stock as of the applicable record date and the charter amendment is filed with the Secretary of State of the State of Delaware. The Company will file the Charter Amendment with the Secretary of State as soon as practicable following the expiration of the Rule 14c-2(b) period. The date the Charter Amendment is deemed filed with the Secretary of State of the State of Delaware is referred to herein as the “Charter Amendment Date.”

 

c. Prior to the effectiveness of the Charter Amendment, without Greenle’s written consent, the Company will not permit any transaction or event (whether by means of a share exchange or tender offer, a liquidation, consolidation, recapitalization, reclassification, combination or merger of the Company or a sale, lease or other transfer of all or substantially all of the Company’s consolidated assets) or a series of related transactions or events pursuant to which 50% or more of the Company’s outstanding common stock is exchanged for, converted into or constitutes the right to receive cash, securities or other property.

 

d. Promptly (and in any case within five (5) calendar days) following the Charter Amendment Date, the Company will send Continental new instructions (in the form attached hereto as Exhibit B) to reserve the Reserved and Unissued Shares. In the event the Company fails to timely send such new instructions to Continental, the Company will pay Greenle a cash penalty for each day beyond such five (5)-day period equal to 1% of the market value of the Reserved and Unissued Shares (based on the average last sale price of a share of the Company’s common stock for the ten (10) trading days ending on the Charter Amendment Date).

 

4. Continental is hereby jointly instructed by the Company and Greenle to immediately terminate the reservation of all Reserved and Unissued Shares on its books and records and to immediately provide notice of such termination to the parties by execution of this Agreement as indicated below.

 

5. Except as set forth herein, all terms and provisions of the April 2024 Agreement, the May 2024 Modification and the Agreements shall continue in full force and effect.

 

 

[Signature Page Follows]

 

 

Agreed and executed as of the date first-written above:

 

	LuxUrban Hotels Inc.
	By:	/s/ Shanoop Kothari
	Name:	Shanoop Kothari
	Title:	Chief Executive Officer

 

	Greenle Partners LLC Series Alpha P.S.
	By:	/s/ Alan Uryniak
	Name:	Alan Uryniak
	Title:	Manager

 

	Greenle Partners LLC Series Beta P.S.
	By:	/s/ Alan Uryniak
	Name:	Alan Uryniak
	Title:	Manager

 

 

Exhibit 10.2

 

Exchange Agreement

 

This Exchange Agreement (this “Agreement”), dated as of May 17, 2024, is made by and between LuxUrban Hotels Inc. (the “Company”), and THA Holdings LLC (the “Holder”).

 

WHEREAS, the Holder owns, among other equity in the Company, an aggregate of 7,500,000 shares (the “Exchange Shares”) of the Company’s common stock, $0.00001 per share (the “Common Stock”);

 

WHEREAS, subject to the terms and conditions set forth in this Agreement and pursuant to Section 3(a)(9) of the Securities Act of 1933, as amended (the “Securities Act”), the Company desires to exchange with the Holder, and the Holder desires to exchange with the Company, the Exchange Shares held by such Holder for 7,500,000 common stock purchase warrants (the “Exchange Warrants”) in the form attached hereto as Exhibit A;

 

NOW, THEREFORE, IN CONSIDERATION of the mutual covenants contained in this Agreement, and for other good and valuable consideration the receipt and adequacy of which are hereby acknowledged, the Company and the Holder agree as follows:

 

1. Terms of the Exchange. The Company and Holder agree that the Holder will exchange the Exchange Shares and will relinquish any and all other rights it may have in and under the Exchange Shares for the Exchange Warrants and that this election to so exchange is irrevocable and that the Company is relying on same.

 

2. Closing. The Exchange Shares shall be deemed surrendered and terminated and the Exchange Warrants issued concurrently with the execution of this Agreement.

 

3. Instruction to Transfer Agent. The parties hereto shall jointly and promptly provide a copy of this Agreement to Continental Stock Transfer & Trust Company (“CST”) and the Holder and the Company’s Chief Financial Officer shall provide CST with written notice to immediately terminate the Exchange Shares on its books and records.

 

4. Instruction to Brokerage. The Holder shall immediately contact the brokerage(s) holding the Exchange Shares and have all Exchange Shares returned to CST immediately.

 

5. Further Assurances. The Exchange shall be deemed consummated upon execution of this Agreement and the delivery of the Exchange warrants concurrently herewith and shall be irrevocable. Each party shall do and perform, or cause to be done and performed, all such further acts and things, and shall execute and deliver all such other agreements, certificates, instruments and documents, as any other party may reasonably request in order to carry out the intent and accomplish the purposes of this Agreement and the consummation of the transactions contemplated hereby.

 

 

6. Representations and Warranties of the Holder. The Holder represents and warrants as of the date hereof as follows:

 

a. Authorization; Enforcement. The Holder has the requisite power and authority to enter into and to consummate the transactions contemplated by this Agreement and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by the Holder and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Holder and no further action is required by the Holder. This Agreement has been (or upon delivery will have been) duly executed by the Holder and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Holder enforceable against the Holder in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

b. Tax Advisors. The Holder has reviewed with its own tax advisors the U.S. federal, state, local and foreign tax consequences of the transactions contemplated by this Agreement. With respect to such matters, the Holder relied solely on such advisors and not on any statements or representations of the Company or any of its agents, written or oral. The Holder understands that it (and not the Company) shall be responsible for its own tax liability that may arise as a result of this investment or the transactions contemplated by this Agreement.

 

c. Information Regarding Holder. Holder is an “accredited investor,” as such term is defined in Rule 501 of Regulation D promulgated by the United States Securities and Exchange Commission (the “Commission”) under the Securities Act, is experienced in investments and business matters, has made investments of a speculative nature and has purchased securities of companies in private placements in the past and, with its representatives, has such knowledge and experience in financial, tax and other business matters as to enable the Holder to utilize the information made available by the Company to evaluate the merits and risks of and to make an informed investment decision with respect to the proposed purchase, which represents a speculative investment. Holder has the authority and is duly and legally qualified to purchase and own the Exchange Warrants and underlying Common Stock. Holder is able to bear the risk of such investment for an indefinite period and to afford a complete loss thereof.

 

d. Legend. The Holder understands that the Exchange Warrants (and any shares of Common Stock issued upon exercise thereof) will be issued pursuant to an exemption from registration or qualification under the Securities Act and applicable state securities laws, and except as set forth below, the securities shall bear any legend as required by the “blue sky” laws of any state and a restrictive legend in substantially the following form (and a stop-transfer order may be placed against transfer of such stock certificates):

 

THESE SECURITIES AND THE SECURITIES ISSUABLE UPON THEIR EXERCISE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND MAY NOT BE TRANSFERRED UNLESS PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, A “NO-ACTION” LETTER FROM THE UNITED STATES SECURITIES AND EXCHANGE COMMISSION (THE “COMMISSION” OR THE “SEC”) WITH RESPECT TO SUCH TRANSFER, A TRANSFER MEETING THE REQUIREMENTS OF RULE 144 OF THE COMMISSION, OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY SUCH TRANSFER IS EXEMPT FROM SUCH REGISTRATION.

 

 

e. Restricted Securities; Nasdaq. The Holder understands that: (i) the Exchange Warrants (and shares of Common Stock issuable upon exercise thereof) have not been and are not being registered under the Securities Act or any state securities laws, and may not be offered for sale, sold, assigned or transferred unless (A) subsequently registered thereunder, (B) the Holder shall have delivered to the Company (if requested by the Company) an opinion of counsel to the Holder, in a form reasonably acceptable to the Company, to the effect that such securities to be sold, assigned or transferred may be sold, assigned or transferred pursuant to an exemption from such registration, or (C) the Holder provides the Company with reasonable assurance that such securities can be sold, assigned or transferred pursuant to Rule 144 or Rule 144A promulgated under the Securities Act (or a successor rule thereto) (collectively, “Rule 144”); and (ii) any sale of such securities made in reliance on Rule 144 may be made only in accordance with the terms of Rule 144, and further, if Rule 144 is not applicable, any resale of such securities under circumstances in which the seller (or the Person through whom the sale is made) may be deemed to be an underwriter (as that term is defined in the Securities Act) may require compliance with some other exemption under the Securities Act or the rules and regulations of the SEC promulgated thereunder. The Holder understands that the Exchange Warrants contain a provisions that such warrants are amendable and modifiable as may be required to comply with any Nasdaq rules or requirements.

 

7. Representations and Warranties of the Company. The Company hereby makes the following representations and warranties to the Holder:

 

a. Authorization; Enforcement. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other agreements entered into by the parties hereto in connection with the transactions contemplated by this Agreement (collectively, the “Exchange Documents”) and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement by the Company and the consummation by it of the transactions contemplated hereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors of the Company or the Company’s stockholders in connection therewith, including, without limitation, the issuance of the Exchange Warrants have been duly authorized by the Company’s Board of Directors and no further filing, consent, or authorization is required by the Company, its Board of Directors or its stockholders. This Agreement has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except: (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors’ rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

 

b. Organization and Qualification. Each of the Company and its subsidiaries (the “Subsidiaries”) are entities duly organized and validly existing and in good standing under the laws of the jurisdiction in which they are formed, and have the requisite power and authorization to own their properties and to carry on their business as now being conducted and as presently proposed to be conducted. Each of the Company and each of its Subsidiaries is duly qualified as a foreign entity to do business and is in good standing in every jurisdiction in which its ownership of property or the nature of the business conducted by it makes such qualification necessary, except to the extent that the failure to be so qualified or be in good standing would not have a Material Adverse Effect. As used in this Agreement, “Material Adverse Effect” means any material adverse effect on (i) the business, properties, assets, liabilities, operations (including results thereof), condition (financial or otherwise) or prospects of the Company or any Subsidiary, individually or taken as a whole, (ii) the transactions contemplated hereby or in any of the other Exchange Documents or (iii) the authority or ability of the Company to perform any of its obligations under any of the Exchange Documents. Other than its Subsidiaries, there is no Person (as defined below) in which the Company, directly or indirectly, owns capital stock or holds an equity or similar interest. “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity and any governmental entity or any department or agency thereof.

 

 

c. No Conflict. The execution, delivery and performance of the Exchange Documents by the Company and the consummation by the Company of the transactions contemplated hereby and thereby (including, without limitation, the issuance of the Securities will not (i) result in a violation of the Certificate of Incorporation (as defined below) or other organizational documents of the Company or any of its Subsidiaries, any capital stock of the Company or any of its Subsidiaries or Bylaws (as defined below) of the Company or any of its Subsidiaries, (ii) except as set forth in the SEC Documents, conflict with, or constitute a default (or an event which with notice or lapse of time or both would become a default) under, or give to others any rights of termination, amendment, acceleration or cancellation of, any agreement, indenture or instrument to which the Company or any of its Subsidiaries is a party, or (iii) result in a violation of any law, rule, regulation, order, judgment or decree (including foreign, federal and state securities laws and regulations and the rules and regulations of Nasdaq (the “Principal Market”) applicable to the Company or any of its Subsidiaries or by which any property or asset of the Company or any of its Subsidiaries is bound or affected except, in the case of clause (ii) or (iii) above, to the extent such violations that could not reasonably be expected to have a Material Adverse Effect.

 

d. No Consents. Neither the Company nor any Subsidiary is required to obtain any consent from, authorization or order of, or make any filing or registration with, any court, governmental agency or any regulatory or self-regulatory agency or any other Person in order for it to execute, deliver or perform any of its respective obligations under or contemplated by the Exchange Documents, in each case, in accordance with the terms hereof or thereof. All consents, authorizations, orders, filings and registrations which the Company or any Subsidiary is required to obtain pursuant to the preceding sentence have been obtained or effected on or prior to the date of this Agreement, and neither the Company nor any of its Subsidiaries is aware of any facts or circumstances which might prevent the Company or any of its Subsidiaries from obtaining or effecting any of the registration, application or filings contemplated by the Exchange Documents. The Company is not in violation of the requirements of the Principal Market and has no knowledge of any facts or circumstances which could reasonably lead to delisting or suspension of the Common Stock in the foreseeable future.

 

e. Securities Law Exemptions. Assuming the accuracy of the representations and warranties of the Holder contained herein, the issuance by the Company of the Exchange Warrants is exempt from registration under the Securities Act. The issuance of the Exchange Warrants is exempt from registration under the Securities Act pursuant to the exemption provided by Section 3(a)(9) thereof. The Company covenants and represents to the Holder that neither the Company nor any of its Subsidiaries has received, anticipates receiving, has any agreement to receive or has been given any promise to receive any consideration from the Holder or any other Person in connection with the transactions contemplated by the Exchange Documents.

 

f. Issuance of Exchange Warrants. The issuance of the Exchange Warrants is duly authorized and upon issuance in accordance with the terms of this Agreement shall be validly issued, fully paid and non-assessable and free from all taxes, liens, charges and other encumbrances with respect to the issue thereof. The issuance of shares of Common Stock upon exercise of the Exchange Warrants are duly authorized and, when issued and paid for in accordance with the Exchange Warrants, will be duly and validly issued, fully paid and non-assessable, free from all taxes, liens, charges and other encumbrances imposed by the Company other than restrictions on transfer provided for in such documents.

 

g. Transfer Taxes. As of the date of this Agreement, all share transfer or other taxes (other than income or similar taxes) which are required to be paid in connection with the issuance of the Exchange warrants to be exchanged with the Holder hereunder will be, or will have been, fully paid or provided for by the Company, and all laws imposing such taxes will be or will have been complied with.

 

 

8. Miscellaneous.

 

a. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns.

 

b. Governing Law; Jurisdiction; Waiver of Jury Trial. This Agreement shall be governed by and construed under the laws of the State of New York, without regard to the choice of law principles thereof. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the State of New York, City of New York for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby, and hereby irrevocably waives any objection that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.

 

c. Severability. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of any provision of this Agreement in any other jurisdiction.

 

d. Counterparts/Execution. This Agreement may be executed in two or more identical counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to the other party. In the event that any signature is delivered by facsimile transmission or by an e-mail which contains an electronic file of an executed signature page, such signature page shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or electronic file signature page (as the case may be) were an original thereof.

 

e. Notices. Any notice or communication permitted or required hereunder shall be in writing and shall be deemed sufficiently given if hand-delivered or sent (i) postage prepaid by registered mail, return receipt requested, or (ii) by facsimile, to the respective parties as set forth below, or to such other address as either party may notify the other in writing.

 

If to the Company, to:

 

LuxUrban Hotels Inc.

2125 Key Biscayne Blvd

Miami, Florida

 

If to a Holder, to the address set forth on the signature page hereto.

 

f. Expenses. The parties hereto shall pay their own costs and expenses in connection herewith.

 

 

g. Entire Agreement; Amendments. This Agreement (and the Exchange Warrants) constitutes the entire agreement between the parties with regard to the subject matter hereof and thereof, superseding all prior agreements or understandings, whether written or oral, between the parties. This Agreement may be amended, modified, superseded, cancelled, renewed or extended, and the terms and conditions hereof may be waived, only by a written instrument signed by all parties, or, in the case of a waiver, by the party waiving compliance. Except as expressly stated herein, no delay on the part of any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any waiver on the part of any party of any right, power or privilege hereunder preclude any other or future exercise of any other right, power or privilege hereunder.

 

h. Headings. The headings used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

 

 

[SIGNATURE PAGES FOLLOW]

 

 

IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day and year first above written.

 

	LUXURBAN HOTELS INC.
	By:	/s/ Shanoop Kothari
		Shanoop Kothari
		Chief Executive Officer

 

	THA HOLDINGS LLC
	By:	/s/ Brian L. Ferdinand
		Brian L. Ferdinand
		Manager

 

	Address:

 

v3.24.1.1.u2

Cover	May 16, 2024
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 16, 2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-41473
Entity Registrant Name	LuxUrban Hotels Inc.
Entity Central Index Key	0001893311
Entity Tax Identification Number	82-3334945
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	2125 Biscayne Blvd
Entity Address, Address Line Two	Suite 253
Entity Address, City or Town	Miami
Entity Address, State or Province	FL
Entity Address, Postal Zip Code	33137
City Area Code	(877)
Local Phone Number	269-5952
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Common Stock 0. 00001 Par Value Per Share [Member]
Title of 12(b) Security	Common Stock, $0.00001 par value per share
Trading Symbol	LUXH
Security Exchange Name	NASDAQ
Series A Cumulative Redeemable Preferred [Member]
Title of 12(b) Security	13.00% Series A Cumulative Redeemable Preferred Stock, $0.00001 par value per share
Trading Symbol	LUXHP
Security Exchange Name	NASDAQ

---